Tag: Western Australia

Posted on

Morning News Bites – October 15

De Grey Mining Presents Hemi Discovery at Diggers.

Glenn Jardine, the Managing Director of De Grey Mining, presented to the Diggers and Dealers forum on Wednesday and gave an update on the Hemi project in the Malina Gold Province situated in the Pilbara.

The first thing Glenn mentioned was the similarity of the geological settings between the Yilgarn in the south of the state to the Malina Province in the Pilbara where the Hemi discovery has been made.  He noted that the discovery is not only transformational to the Pilbara but its importance to the company in the future.

The Hemi system spans ~3,000 metres North–South and ~2,000 metres East–West consisting of four main deposits being the Aquila, Brolga, Crow and Falcon.  Currently there are six drill rigs on site to hopefully prove up more resources.  Glenn showed a video set to the soundtrack “You have to have Faith” by George Michael, which gave a time-lapse of the drilling program with the drillholes being depicted in colour code to represent mineralisation grades.  It was an impressive way to show how the progress to date has occurred.

Other targets have been identified that De Grey believe could reveal an extension of the Hemi prospect.  With major infrastructure of gas and electricity within 20 kilometres of Hemi and Port Hedland, a major service centre just up the road, De Grey are in an ideal position to have low mining costs when the time comes.

For a long time, the share price of De Grey bumped along around the 5c range then rose to ~40c before drifting back to 5c and then making a stellar rise this year to sit now at about $1.30.  De Grey is determined to continue the value to their shareholders as they explore for more gold in this new Tier1 project.

Already sitting on 2.2Moz resource without the Hemi findings, the shareholders are sure to be rewarded in the future. (This is not to be taken as financial advice, it is only the opinion of the writer)

Red5 Limited Updated JORC for Great Western Deposit

Red5 (RED) has released an updated JORC for their Great Eastern gold deposit located just 55 kilometres south from the Darlot processing plant.  870,000t has been identified as containing 70,300oz total resource at about 2.5g/t.  One assay came back at 11.18g/t over three metres.

The first part of the mine will be an open pit that is expected to yield, over 13 months, about 35,500ozs before an underground operation commences to mine the rest of the ore body.

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.

“Our recent drilling programs have reinforced the quality of the deposit, with in-fill drilling increasing the higher confidence Measured and Indicated categories within the Mineral Resource to over 80 per cent. In addition, we are looking forward to seeing results from deeper RC drilling designed to test high-grade gold mineralisation in deeper parts of the Great Western deposit, which currently remains open.

“The satellite ore feed from Great Western enables us to transition and progressively scale down our current underground mining operations at King of the Hills over the remainder of the year, as we prepare to start construction of the proposed new 4Mtpa bulk mining and processing operation in line with the recently- completed Final Feasibility Study.”

Drilling Commences at CleanTEQ Sunrise Project.

A drill rig mobilised to the CleanTEQ (CLQ) Sunrise Project (NSW) site has commenced a six-hole diamond core drill program. The program is aiming to intersect the dunite structures at depth (targeting 400-600m below surface) which are proposed to be the source of the platinum in the Sunrise laterite at surface.

The Sunrise laterite hosts a significant platinum resource of 103.1 Mt @ 0.33 g/t Pt for 1,076,170 ounces of platinum, using a 0.15 g/t Pt cut-off grade, making it one of the largest platinum resources in Australia. Of this total resource, approximately 90% (metal content) is in the measured and indicated categories. While the average grade over the global resource is relatively low, areas of significantly higher-grade platinum mineralisation exist within the resource envelope.

An area of high-grade platinum mineralisation has been defined within the Sunrise laterite resource, forming a newly-classified Phoenix Platinum Zone.

Despite extensive drilling over previous decades, only a handful of holes have been drilled beneath the Sunrise laterite.  Given the high platinum grades near surface and historic intercepts beneath the laterite, a program of work has commenced to test the structural geology of the Tout Intrusive Complex and to establish a platinum resource that will either integrate with the development of the Sunrise nickel-cobalt-scandium mine, or be developed as a stand-alone operation.

Wildcat Resources Commences Airborne Magnetic Survey in the Pilbara.

Wildcat Resources has commenced exploration activities at the Bolt Cutter Project in the Mallina Province – Pilbara Western Australia. Wildcat Resources has a dominant land position with three applications (E45/5613, E45/5623, E45/5612) in the under-explored Mallina Province – WA.

The Company has reviewed the historical data on the project and has identified that better magnetic resolution will allow for more efficient planning of the upcoming exploration campaigns.

The Mallina Basin is a large and highly prospective gold province and yet is grossly under explored. The exploration maturity of the Mallina Basin is lower than many other gold regions in WA, and recent exploration successes there may indicate that there is significant untested potential of the region.

It is adjacent to the newly discovered Hemi project that has turned out to be a major discovery for the area.  Given the recent significant exploration success by De Grey, the region could be viewed as having the potential to become a World Class Province.  Potential for other types of mineralisation in the region will also be investigated by Wildcat.

Golden Mile Resources Identifies Gold Mineralisation at Benalla.

Golden Mile Resources, has released an update of the first phase aircore drilling program on the Benalla Gold Trend at its Leonora East Gold Project located in the North-Eastern Goldfields of WA.

This maiden drilling program tested three of the four priority targets identified by the Company’s previous geochemical auger sampling over the Benalla Gold Trend. Target BGT2 also displayed a coincident magnetic anomaly, identified by the recent airborne magnetic survey, similar in nature to Kin Mining’s Cardinia Hill prospect.

Assay results from the program have identified multiple intersections of gold mineralisation across two mineralised structures that could represent continuations of Kin Mining’s neighbouring East Lynne and Collymore Trends.

The gold mineralisation is generally hosted in a felsic volcanic unit with associated quartz veining, disseminated sulphides (mostly pyrite, up to 5%) and potassic alteration, on or near the contact with surrounding mafic volcanic units. This style and setting are similar to the neighbouring Cardinia area.

A second phase of AC drilling at Benalla will commence next week, this will complete the remaining holes at target BGT3, as well as testing target BGT1, an undrilled 1km long auger geochemical anomaly of up to 387ppb Au, along with further follow up drilling at targets BGT2 and BGT4.

Posted on

Morning News Bites – October 14

It was another great day at Diggers with a diverse range of miners presenting. We will give you a snapshot of some presentations, which will include iron ore and nickel.

Mount Gibson Iron (MGX) was the first of the iron ore producers to kick off proceedings with Peter Kerr, their CEO, presenting. With their Koolan Island operations now in full swing the mine is producing the highest grade hematite at 65.2% and on track to export between 1.8 – 2.1Mwmt this financial year.  With cash costs expected to be around $65/Mwmt they will be looking at ways to reduce this in case the price of iron ore comes off its highs in the next year or two.  They are bullish though and looking at ways the mine life can be increased beyond the current five year plan. CAPEX has been high this year and some of that was the building of the new airstrip on the island.

Their Mid-West operations are low grade but the company is making the most of the high iron ore prices and mining continues in this region.  Extension Hill sales will continue into next year and the Shine project is expected to progress to targeted sales in mid 2021. With the company cash flow positive, debt free and providing a dividend, shareholders must be very pleased with how they are positioned in the market.

Fortescue Metals (FMG) presented and their CEO Elizabeth Gaines delivered. Elizabeth is taking the company to new highs and not just in production values. It is how they are achieving those production levels that is of some interest.  But first lets look at the eye watering figures.

178.2mt was shipped in FY19 up a healthy 6% on the previous year. C1 costs were just under US$13/wmt and a healthy dividend of A$1.76 per share was paid to lucky shareholders. Billions of dollars are to be spent on capital works across several projects, but with high prices and low costs you would expect the payback time to be small. The forecasts for production and costs in FY21 are very similar to the last financial year.

Fortescue is investing heavily in its personnel and the diversification of the workforce is opening up opportunities for people that may otherwise find it difficult to obtain work in this sector.  As an example there is a 14% employment rate of aboriginal workers across their Pilbara operations.  For a company of this size it is a credit that they are offering so many opportunities to aboriginal people.  Like other companies they are also experiencing higher participation rates with women in the workforce and currently 19% of the workforce is women.  Who better to lead this company than Elizabeth herself who is overseeing exciting times in the iron ore sector.

Legend Mining (LEG) had Managing Director, Mark Wilson present at Diggers and he was keen about the prospects of this junior nickel explorer. They are currently focused on the Fraser Range area, north of the Nova mine now owned by IGO.  They have some big players supporting them, mainly the Creasy Group and IGO, who have substantial holdings on the share registry.

They have nearly 3,100 square kilometres of land to explore and some early results are promising.  In one hole they have 19.8 metres at 2.71% nickel from about 230 metres below surface. Mawson and Hurley projects are showing a lot of promise and they believe that in these areas the resource will be bigger than what was modelled.  From current visual drill results they believe Mawson is open to the East and West.

The company is bullish on the future of nickel and believe they are in the right sector, with the right resource at the right time to make the most of the EV and battery storage market.

Poseidon Nickel (POS) presented at Diggers with Peter Harold the Managing Director addressing the attendees. It seems that nickel explorers and producers are more upbeat than they have been for a long time and Poseidon is no exemption. The presentation included a quote from Elon Musk which said: “I’d just like to re-emphasize, any mining companies out there, please mine more nickel”, and Poseidon is keen to do just that.

Their current projects include the Mt Windarra mine near Laverton, Black Swan and Silver Swan just outside Kalgoorlie and Lake Johnston near Norseman. A study is currently underway to check the feasibility of recommencing mining at the Emily Ann mine site that feeds into the Lake 1.5Mtpa Lake Johnston Mill.  Historically it has produced nickel at 3.5% and they believe they have a resource there that could produce 52kt.

The Windarra project is interesting because they believe they are sitting on 180,000oz of gold in the tailings from historical mining in the area. If they can turn those ounces into money they believe that it will pay for ongoing exploration and mining activities at the other sites.

Poseidon could be one nickel play to keep an eye on if all the plans fall into pace.

Listening to the presentations it is apparent that nickel just could be the new gold.  All the nickel companies that have presented so far have been very bullish on their outlook. Talk of the EV market about to take off, battery storage to be an even bigger market and the price slowly creeping up augers well for nickel miners.  Could we see nickel prices reach the highs of just over a decade ago or will it be a lot more subdued this time around, if it happens?  If I can be parochial, it would be great to see nickel surge and breathe new life back into towns like Kambalda. It is well placed for it to happen and if Kambalda booms, Kalgoorlie rockets.

Gold has been and looks like being a strong performer as well for miners and what were less than optimal projects are being looked at. Depending on who talk to there is still mutterings about gold hitting $10,000 per ounce. Good luck if that happens but I feel that in general the economy will be down the gurgles if that occurred.

Iron ore prices are high and the trifecta of nickel, gold and iron ore will see the WA economy bustle along, even when economies in other states are suffering.  Good luck to all the miners and their projects.  May they prosper and I hope that all of WA will benefit because of it.

Posted on

Tonight’s Top Story – Is Nickel The New Gold?

David Southam, Managing Director of Mincor Resources gave a lively presentation about their Kambalda operations and positioning themselves to be a major player in the Nickel sector.

He boldly declared that: “Nickel is the new gold!”, which raised a few eyebrows before going on to give a compelling case. David is sure that we are moving into a third wave of nickel in the Kambalda region. The first was the boom that put Kambalda on the map in the 60s and 70s.  It wasn’t until the 90s, when WMC divested themselves of the mines in the same region that the second wave occurred.  He believes that 2020 is the start of the third wave and Mincor will be well positioned to make the most of it.

They currently have an ore reserve of ~71,000t of contained nickel, they are fully funded to production and have appointed Pit N Portal as their mining contractor. The company has some exciting prospects with Cassini emerging as a major site for them. The Cassini Main site has a mineral resources of1.5Mt @ 4.0% Ni for 58.7kt of contained nickel and Ore Reserves of 1.2Mt @ 3.3% Ni for 40.1kt of contained nickel.

The newly discovered Cassini North site is showing a lot of promise with an Intercept of 2.5m at 6.6% Ni from the first hole.  David believes that it will be very similar to Cassini Main when fully explored.

David got excited when he spoke of the “Golden Mile” which is untested ground between the Durkin North and Long sites. This ground is now controlled by Mincor and David is keen to explore this ground that has yet to be explored and sits between two very lucrative sites.

As you would expect, David was very bullish on Mincor’s prospects, but this is based on his belief that nickel is about to shine again.  With low production costs and a rising nickel price, maybe it is Mincor’s time to have some time in the sun.

Bardoc Gold:

CEO Rob Ryan outlined Bardoc’s operations 40 kilometres North of Kalgoorlie. They currently have a 3Moz resource, a pre-feasibility study completed earlier this year and are well funded with AU$30M cash in bank.

Bardoc have pulled together a series of small projects that now come under one banner. It is anticipated that at current resources they have a mine life of eight years with a production target of 1.02Mozs.  A low cost of production will make the mine a lucrative money spinner for the company.  The plan is to sell 50% of the gold as a concentrate and the remainder in Dore from their Aphrodite.

Bardoc is sitting on ground that is ripe for exploration as there has been insignificant drilling carried out in the area.  This will see the resource grow and a low cost operation could be a going concern for many years to come.

Ramelius Resources.

It seems to be the year for records for this miner.  Production up 17% to 230koz.  Record net profit up $20% to A$113M.  The return to shareholder in dividends doubling from 1c to 2c and the company is now on the ASX200 bourse.

Ramelius is currently operating at about A$1,250 per Oz across its sites after working hard to get their cost management to a satisfactory level.  They have a series of mines around the Mt Magnet area including Vivien, Penny , Galaxy and Morning Star.  The Penny mine has proven to be a high grade resource with average grade of 15g/t.

These are complimented by the Edna May plant at Westonia in the wheatbelt.  Gold from Marda Gold and Edna May mine currently feed this plant.  Tampia mine will be up and running soon with long lead items ordered.  Meanwhile, Symes Find which is nearby is being drilled to prove up resources.

This is a snapshot of what occurred on day one of Diggers and we look forward to bringing you more valuable information from those presenting on day two.

Posted on

Morning News Bites – October 13

This week’s News Bites is dedicated to news coming out of the Diggers and Dealers’ forum currently underway in Kalgoorlie Boulder.

Day one didn’t disappoint, and it started with what many described as the best welcome to country they have ever heard.  Linden Brownley, a proud young Wongutha man, gave the welcome and you could have heard a pin drop in the auditorium.  The Premier, Mark McGowan, opened proceedings in a lively manner, which was well received.  When presentations started it was Bill Beament and Raleigh Finlayson that had everyone glued to their seats, if they could find one, to listen to what was happening with the proposed behemoth.  David Southam from Mincor followed the duo and his presentation was sprinkled with a bit of humour.

Forum Chairman, Jim Walker, welcomed everyone to this years Diggers and looked briefly to the past and what laid ahead for the forum.  He announced that next year the date for the forum will move back to the traditional time around the start of August.  He also paid tribute to the man who has overseen the logistics of putting Diggers together for the past 29 years.  Graham Thomson is hanging his hat up after joining the forum when Geoffrey Stokes kicked it off, and when the Stokes family sold it off the new owners were wise enough to keep him on.  Great job Graham, you should be proud of what you have done.

WA Premier, Mark McGowan:

Mr McGowan was quick to get in a jibe about Clive Palmer, even quipping that it would probably mean another lawsuit from the man.  He did however get down to the serious business and thanked the resource industry for the way they have behaved through the Covid19 restrictions.  He has no doubt that the WA resource sector and associated industries have carried the nation throughout the year, and it has reminded the eastern states of how much the west contributes to the economy.  He thinks it will be WA that leads the nation during the economic recovery, and it will be on the back of the sector that has done a lot of the heavy lifting already.

He said in the early days two pieces of information out of all the data he was receiving concerned him the most.  The first was the potential health implications of the virus if it was to spread through the community unfettered.  The second was the business sectors that would have long lasting consequences from the economic damage wreaked on them if it went unchecked.  The premier said it was a conscious decision to keep the resource sector open and that decision has paid dividends.  He paid tribute to the CME and its CEO, Paul Everingham, for the cooperation with the government in ensuring companies did the right thing.

The premier noted that WA is the only state not in recession and has committed to keeping the sector going.  He quoted some impressive figures concerning investment and growth and noted that the WA government has a good trading relationship with the likes of China.  WA exports $AU100B in goods to China, mostly iron ore, and from them we import $AU4B, a $AU96B trading surplus that he does not want to jeopardise.

In signing off his speech, he quipped: “It’s time to bet big on WA.”  How many will take the bet on WA and what it has to offer?

Northern Star and Saracen:

Northern Star CEO, Stuart Tonkin, kicked off the presentation running through their operations and production figures for each of their sites.  They also anticipate that production will increase to 1.25Moz in the year 2023 at their three main regions they operate in; Yandal and Kalgoorlie (excluding KCGM) in WA and Pogo in Alaska.

Raleigh Finlayson from Saracen took to the stage and gave an overview of their operations as well as talking about expanding on their mill capacity at both Carosue Dam and Thunderbox processing plants.

But what everyone wanted to hear was Bill and Raleigh’s plan for the Kalgoorlie Superpit that is about to become a super Superpit according to Raleigh.

Bill Beament went though some drilling results of new lodes they are finding in the pit.  He said it was surprising that they have found these since taking over the operation and these new finds are adding to the mine life of the pit.  One grade went 23.8M at 66.1g/t.

Mt Charlotte is having more exploration work and gold is being found in all types of rock structures in the mine.  Infrastructure is being upgraded or improved and some of this has already seen an increase in productivity of 50% in the first six months of their ownership.  The new ownership of the Superpit had also been well received by the workforce.

Raleigh Finlayson spoke about the merger and said the case was so compelling that the companies were able to make the decision easily.  Tier one assets were spoken about and the merged company would continue to look at other tier one assets.

The Superpit has produced an astonishing amount of gold for the size of the area.  Raleigh noted that the Superpit has had 85Moz in resource, which is more than all the combined assets of Saracen.  The good news is that many more millions of ounces are still in the ground, which will see the Superpit being part of Kalgoorlie Boulder for many, many years to come.

Their presentation was well received and with the positive outlook on the Superpit, other companies’ fortunes turning around and delegates feeling a buzz, the resource sector in WA is showing great signs.  The feeling in Kalgoorlie Boulder amongst the locals is that something good is happening and the city is humming more than this correspondent has seen in the last 30 years.

Posted on

Morning News Bites – October 12

The largest mining conference in Australia has kicked off today, with Diggers and Dealers now underway. KCGM set to recruit 700 jobs in Kalgoorlie Boulder as the Premier announces a mining extension has been granted at Super Pit special event.

Beacon Minerals Limited provided an update of activities at the Jaurdi Gold Project, announcing that it  produced 2,790 oz of gold during the month of September 2020. Beacon exceeded its production target from Jaurdi for the September 2020 quarter of 6,400 to 6,800 oz’s, with 7,453 ozs produced during the quarter, approximately 10% above the high‐end guidance and expects production from Jaurdi for the December 2020 quarter to be 6,600 to 7,000 oz’s. Debt $18.0 million (in the form of debentures) to be repaid today one year ahead of the repayment due date. On repayment of the debentures the company will be debt free.

Thomson Resources Ltd has managed to secure the RC drilling rig that undertook the Company’s maiden drilling program at the Yalgogrin Gold Project, for a short follow up drilling program commencing towards the end of October 2020. COVID-19 restrictions and the increased mineral exploration activity has meant that access to drilling rigs has become tight. The Company is pleased that Australian Mineral & Waterwell Drilling Pty Ltd were able to make the drilling rig available for Thomson between commitments to other customers.
Thomson’s drilling program in July 2020 discovered thick low-grade gold mineralisation from surface as well as deeper high-grade lodes, essentially on one north-south drill section. The follow up drilling program is proposed to extend the mineralisation by drilling sections either side of the first drill section and following the
mineralisation east and west. Samples will be analysed for gold and results should be available in November-December.

Ardea Resources Limited has announced that their first ever metallurgical testwork has been undertaken on four metallurgical samples selected from Ardea’s Big Four Gold resource, located on a granted mining lease within the Goongarrie Nickel Cobalt Project (GNCP), 65km north west of Kalgoorlie. It reports very high gold
recoveries from Big Four Gold deposit, with overall gold extractions of 97.7%. Significant proportion of gravity-recoverable gold revealed with potential for stand-alone toll treatment or incorporation into Ardea’s
broader gold strategy.

Terrain Minerals Limited updated the market of the drilling results from Terrain’s maiden RC Drilling Program at Smokebush Gold Project. A total of 12 RC holes (11 holes at the Monza prospect and 1 hole at Target
13) were completed for a total 981 metres as part of this first pass exploration program. The RC Drilling program was carried out over a 200-250m area to improve confidence in grade continuity and orientation identified in historic drilling and to test interpreted extensions to mineralisation. The drilling was concentrated at the Monza prospect area because this was identified as the most advanced target within the Smokebush project for hosting significant gold mineralisation. Multiple significant intersections were returned from drilling associated with shearing and alteration within meta-dolerite and felsic intrusive host rock.

Lefroy Exploration Limited reported initial results from the multi target drill program that Gold Fields Limited commenced in July 2020 on the company’s tenements over Lake Lefroy. The program is a follow up to the extensive foundation AC drilling that commenced in late January 2019 and is part of the AUD25 million Farm-In and Joint Venture (JV) agreement between Lefroy and Gold Fields that commenced in June 2018. The results from the ten initial RC holes continues to reinforce and advance understanding of the geological prospectivity beneath Lake Lefroy. Significant results include, 9m @ 3.58g/t Au from 96m including 1m @ 18.55g/t Au from 97m. 3m @ 3.25g/t Au from 82m including 1m @ 7.88g/t Au from 82m.  Gold Fields has completed the AUD4 million minimum exploration spend and is required to fund an additional AUD6 million for AFY2021 to earn a 51% interest in the Western Lefroy Joint Venture, which is part of the wholly owned greater Lefroy Gold Project (LGP) located 50km south east of Kalgoorlie.

 

 

Posted on

Today’s Top Story – Western Australia continues to be the envy of the world.

The price of iron ore has never been so important to the Western Australian economy as has been evident in the recently announced state budget.  On the back of soaring iron ore prices, the state government collected nearly $8.45B in royalties from the miners who exported millions of tonnes of the ore to overseas markets, in particular China.

The forecast for the next 12 months shows a similar amount of royalties will be collected before prices start coming off their highs in 2022, or earlier.  It has been a huge windfall for the state and has cushioned the impact of Covid19 on the economy.  While other states’ economies have wallowed, Western Australia has powered on and even produced a healthy surplus for the last financial year.

Whether it was good planning or luck, the decision by the state government to keep miners going, at almost any cost, has proven to be a master stroke.  It didn’t matter if they were mining gold, copper or any other mineral or iron ore, miners ploughed ahead as other industries took a hit.  Fortunately, the mining industry kept alive manufacturers and industry related to the sector.

The state government cannot be complacent though, as it would not take much for the price of iron ore to come off the boil or buyers to disappear.  If Brazil can get Covid19 under control and exports crank up from them, China could well look away from Western Australia as their main source of the ore.  With the sometimes-delicate relationship we have with China it could mean they hit us in the wallet – just because they can.

The price per tonne of iron ore reached a low of $37USD in 2015 and has since soared to be currently sitting at $122USD.  Miners are making the most of it as well as the government and mine expansions are on the increase to cash in on the bonanza.

The miners are also tackling the issue of staffing as the FIFO experience has shown that having workers self-isolate when they travel from interstate is proving costly and is in no way practical.  It isn’t good for workers either who are spending more time away from family, if they are able to travel from interstate.  This is making the companies rethink their strategy of employing someone no matter where they live in Australia and encouraging workers to pack up and move west.

This is creating problems in the housing market across the board as rental vacancies have reached extremely low levels in Perth and major regional centres.  Real estate agencies are experiencing the best sales figures in a long time but unfortunately for sellers the needle is yet to move on house prices.  This will change as supply starts to dry up.  It will probably mean a boon for the state government as stamp duty revenue is sure to increase for them.

During the last mining boom thousands of people flocked to WA to make the most of the circumstances.  When mining went off the boil many returned to the east coast.  Will we see the same happen again and will it be a short term hit or can it be sustained?

Already the unemployment rate in WA has fallen below the expected rate of 8% and likely to fall further if circumstances don’t change because of Covid19.  With changes to Jobkeeper and Jobseeker being phased-in, unemployed people are more likely to seek out employment which will bring the rate down even further.

WA must surely be the envy of the other states, even if the borders are shut to the east coast.  A healthy economy, tourism experiencing healthy numbers from WA locals and mining powering on it all looks rosy for the near future.  Can the government make the most of it and plan wisely for that future?

Posted on

Morning News Bites – October 9

Morning News Bites for October 9

Newcrest Approves Cadia and Lihir Projects

The Newcrest Board has approved two projects moving to the Execution phase, being Stage 2 of the Cadia Expansion Project and the Lihir Front End Recovery Project.

The Cadia project primarily comprises the addition of a second Coarse Ore Flotation circuit in Concentrator 1 and equipment upgrades in Concentrator 2, which are projected to result in: Plant capacity increasing from 33mtpa to 35mpta, LOM gold recoveries increasing by 3.5% and LOM copper recoveries increasing by 2.7% and finally AISC reducing by an estimated $22 per ounce.

Estimated capital cost for Stage 2 is $175m, $5 million lower than the October 2019 estimate with the project scheduled to be completed by late FY22.  If all goes to plan the project will be paid back in a little over four years.

The Lihir front end recovery project comprises the installation of flash flotation and additional cyclone capacity, as well as cyclone efficiency upgrades, to improve grinding classification and reduce gold losses through the flotation circuits. This is projected to result in: LOM gold recoveries increasing by 1.2% and incremental LOM gold production increasing by 244koz.

Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas said “It is an exciting time at Newcrest as we advance our growth pipeline with both of these projects adding value to our existing large scale, long life operations while we pursue the development of Red Chris and Havieron and exploration opportunities globally.”

Wet Screening Plant Construction Commences at Riley Iron Ore Mine.

After the recently completed initial stage of mining and dry screening operations at the Riley Iron Ore Mine the Board of Venture Minerals (VMS) has given the go ahead to proceed with the construction of the Wet Screening Plant with site works (Stage One) having already commenced.

In addition, as part of the Wet Screening Plant construction phase, all required long lead items have been ordered.

Commenting on this major development for the Company at its Riley Iron Ore Mine, Venture Minerals’ Managing Director Andrew Radonjic, said:  “Venture’s Board has committed to stage one of the Wet Screening Plant construction as part of its continued ramp up towards full scale production. The iron ore price remains strong, and the Company remains focused on determining the best mining and Screening method at the Riley mine to reduce costs and environmental impact so that we can generate jobs, contracting opportunities and returns to our shareholders.”

The Board’s decision to commence Stage One of West Screening Plant construction ensures that progress towards wet Screening continues while finance is finalised for subsequent stages.

The Company continues to work through several advanced financing proposals for completion of the Wet Screening Plant which will enable nameplate production at Riley.

Mount Gibson Iron Ore Updates Shine Iron Ore Project

Mount Gibson Iron Limited (MGX) has released an update on the planned development of the Company’s Shine Iron Ore Project, located 375km northeast of Perth, in the Mid-West region of Western Australia. Shine represents a near term, low capital production opportunity that will further extend Mount Gibson’s 16-year operational presence in the Mid-West region, facilitated by the Company’s established export infrastructure and logistics arrangements.

Mount Gibson has declared Proved and Probable Ore Reserves of 2.8 million dry metric tonnes grading 59.4% Fe, using a 55% Fe cut-off, within an initial “Stage 1” pit development, for a mine life of two years. Mine life could potentially be extended a further two years by developing a “Stage 2” pit subject to market conditions remaining supportive, based on Measured and Indicated Resources within the modelled pit shells.

The Company is currently finalising commercial and permitting requirements to commence development and achieve targeted first ore sales in mid-2021.

Mount Gibson Chief Executive Officer Peter Kerr said: “We are pleased to be able to capitalise on the positive iron ore market conditions by progressing the Shine Iron Ore Project in order to extend our significant presence in the Mid-West, where we have been an established iron ore exporter since 2004. Our detailed review of the project has confirmed Shine as an attractive production opportunity that can be quickly brought on line and appropriately staged to suit market conditions. Importantly, it will also provide continuing employment and export revenue for the Mid-West region.”

Middle Island Resources Release Impressive Results From Drill Campaign.

WA and Northern Territory explorer and aspiring gold developer, Middle Island Resources (MDI) released further significant gold results emerging from the Company’s Phase 2 reverse circulation drilling campaign at its 100%-owned Sandstone gold project in the central goldfields of Western Australia.

More than 50,000m of drilling in Phase 1 and Phase 2 to date in 2020 has been completed, extending several existing Sandstone deposits and identifying five new satellite open pit deposits.

The Phase 2 RC and diamond drilling program predominantly focused on upgrading existing deposits and infilling and extending the five new satellite open pit deposits, McClaren, McIntyre, Ridge, Old Town Well and Plum Pudding, identified by the Phase 1 RC drilling campaign in the first half of CY2020. All new deposits are located on existing Mining Leases within 2.5km of the Company’s 100%-owned gold processing plant, as shown in Figure 1 below.

The Phase 2 drilling campaign was designed to upgrade existing deposits and infill and extend the five new satellite open pit deposits to an Indicated Mineral Resource classification (nominal 20m x 20m drill pattern). Reconnaissance RC drill traverses were also completed across elements of the 1.1km-long Shillington Gap target, interpreted from high resolution airborne magnetic data to lie beneath shallow transported cover between the Shillington and Ridge gold deposits.

Visible Gold at Core Lithium’s Pickled Parrot Prospect.

Visible gold was discovered on the eastern side of Core Lithium’s (CXO) Pickled Parrot Prospect following up higher soil anomalies from earlier results. Additional samples relating to that area have been submitted to a laboratory for assay and will be reported in due course. A new set of quartz veins has also been mapped and sampled immediately to the southeast where there is currently no baseline geochemical data.

PPP was initially identified at the eastern end of a regional soil line originally sampled for lithium in 2019. Based only on moderately elevated Arsenic and Bismuth, re-assay of conventional soil samples collected by Core resulted in an impressive 828ppb Au anomaly.  Further soil sampling over recent weeks has improved the prospectivity of the area with the gold in soil anomaly now peaking at close to 2g/t gold.

PPP has also been geological mapped by Core over recent weeks and found to be the focus of a series of quartz veins in an area of least 300m in length and 100m wide. These veins vary between 1 cm and 10m wide and individually up to 100m long.

Core Lithium’s Managing Director, Stephen Biggins, commented: “To have discovered visible gold at surface at the Pickled Parrot Prospect, in one of the first geological mapping campaigns, is another very promising indication that we are on the right track with this exciting new prospect. We look forward to updating the market as further assay results come to hand.”

 

Posted on

Today’s Top Story – Changes to Superannuation Reporting

Changes to Superannuation Reporting.

There appears to be some welcome changes into how superannuation funds will be scrutinised in the future, hopefully as early as July 2021.

The government is working on making funds more transparent in an attempt to expose those making poor returns for those contributing to them.  The Australian Prudential Regulatory Authority (APRA) will be responsible for testing each fund and any fund that fails the test two years in a row will not be allowed to take on new members.  The testing will be carried out over a rolling eight-year period to smooth out any unusual performances by funds.

The funds will also be more accountable to their members in much the same way ASX listed companies must be to their shareholders.  Details that will need to be disclosed in the proposed changes include: political donations, marketing expenditure, sponsorships, remuneration to executives and payment to industry bodies, trade associations or related parties.

An annual general meeting to face members may also be on the agenda, again, much like publicly listed companies.

A welcome change for super contributors will be the ability to take one superannuation fund from employer to employer, without having to create new accounts that some employers insist on.  This could have a dramatic effect on industry based super funds which have strong ties to unions.

The Productivity Commission has been working on how the testing will be done and Treasury is confident that the methodology will be right.

An issue that will need to be addressed will be the complexity of the reporting system that the funds will be required to do.  Fund members’ eyes could roll back in their head if standard financial reports are issued for them to consume.  A simple reporting system that is easy to read and understand for those that don’t have a financial background will be required if it is to have any meaning.

Another change that should be welcomed by fund members will be the requirement for funds to act in the “best financial interests” of its members.  Previously they only had to act in “the best interest”, which was far too broad a term for it to be truly meaningful.

But what about the government’s responsibility to those contributing to funds?

The maximum someone can contribute to a fund in one financial year is $25,000, after which they are taxed heavily for any additional funds deposited.  If we take a fund member who is approaching retirement, has no debt and accumulating cash in a bank account, why can’t they contribute more?

Currently, banks are offering virtually no return on deposits when compared to even a conservative superannuation fund.  What if the member could salary sacrifice a large portion of their salary into their fund and exceed the $25,000 threshold?  The government could still tax the excess but at a modest level compared to what it is now, and the person would be receiving far greater returns than what the bank is offering.

Afterall, one of the ideas of superannuation is for the person to fund their own retirement without having to rely on any government welfare to get them through.  The long-term savings for the government could be immense for a little pain in the present.  They could limit the pain by only making this option available to those over 60 who are approaching retirement age and more likely to have disposable income that they would like to use to secure their financial future.

Of course, there is also argument about the current and future levels of super contributions by employers.  Some want the level increased at a quicker rate than what is being forecast while others don’t want it increased at all.  For most the argument is about which option is going to be best for them.

Another argument is to abolish superannuation altogether and let individuals manage their own money.  The pros and cons of this are too great to tackle here and it is sure that everyone will have an opinion on this.

Posted on

Morning News Bites – October 8

Morning News Bites for October 8

High Grade Hits at Bellevue.

Bellevue Gold (BGL) has reported that it has discovered a new shallow high-grade shoot at its Bellevue Gold Project in Western Australia.

Bellevue Managing Director Steve Parsons said: “The drilling results on the new Armand lode are outstanding, with high-grade mineralisation intersected near existing development hosted within the Bellevue Shear.

With mineralisation outlined over 450m and remaining open along strike and down dip, Bellevue will press ahead with drilling with a view to including Armand in the next resource upgrade.

The company has also hit some high-grade results close and east of their Deacon lode.  This was discovered when drilling a new location, which was partially financed by the Exploration Incentive Scheme

Bellevue has been aggressive in its drilling campaign while still maintaining the project development.

Mr Parsons said:  “We have earmarked $35 million for exploration spending on a full program of drilling and project development work over the next 15 months.

“This substantial investment is central to our dual-track strategy of driving growth in our inventory through aggressive exploration and resource drilling while also advancing the project towards development and cashflow.

“These parallel work streams will maximise our ability to continue creating value for shareholders in both the short and long term.”

Grades included:  6.1m @ 14.5g/t and 3.7m @ 26.2g/t

Dreadnought Announces Encouraging Drill Results.

Dreadnought Resources Limited (DRE) has announced further results from the 17-hole (1,767m) RC drill program at Metzke’s Find, part of the Illaara Gold-VMS-Iron Ore Project. The latest drill program tested extensions of lode mineralisation at depth and along strike confirming mineralisation along ~280m of strike and to a vertical depth of ~100m.

Dreadnought Managing Director, Dean Tuck, in a statement said: “Metzke’s Find continues to deliver high-grade intercepts while we steadily increase our understanding of the system. Identifying the flat lying offset now indicates that the first five drill holes drilled to the north probably ended short. This learning is significant and reopens ~80m of potential mineralised strike. We look forward to redrilling the main structure to the north as well as diamond drilling to further advance our structural understanding of the mineralised lodes. Furthermore, results from Longmore’s Find and Black Oak should be released in mid-October 2020.”

Illaara is located 190km northwest of Kalgoorlie in the Yilgarn Craton and covers 75kms of strike along the Illaara Greenstone Belt. The land was previously under the control of Newmont and until Dreadnought took over the lease, had very little exploration carried out.  The land was previously earmarked for iron ore exploration, but Dreadnought has focused on the gold potential in the area.

Yandal Releases Further High-Grade Results.

Yandal Resources (YRL) released further results from its current drilling program that shows high-grade gold mineralisation at shallow depths in their Gordons Dam prospect.  36 holes from the RC drill program are still pending and the company is keen to include them in their maiden resource estimate.

A further 10,500 metres of air-core and diamond drilling is expected to be completed in the December quarter.

When releasing the latest results Managing Director Mr Lorry Hughes said: “The potential to define an initial shallow Mineral Resource and subsequent open pit development is becoming clearer as infilling wide-spaced reconnaissance holes with high quality RC holes is proving successful. Very high grades can be a common feature of palaeochannel hosted deposits in the region and they are quite often located close to a primary source or structure.

High grades have been intersected beneath parts of the palaeochannel previously and the exploration plan is to continue to explore for deeper extensions utilising geological and structural observations from the pending diamond core drilling.

In the meantime shallow Air-core drilling will continue to explore for new palaeochannel and bedrock hosted gold trends in order to provide new targets for RC testing”.

Some of the results included:  1m @ 73.12g/t Au within 8m @ 11.03g/t Au from 36m and 1m @ 15.13g/t Au within 7m @ 3.48g/t Au from 38m.

Wiluna (WMX) Updates Sulphide Development

Wiluna Mining is advancing its $58m stage-one sulphide expansion project at its Wiluna gold mine, which it said will increase production from circa 60,000 ounces of gold a year to 250k ounces a year by late 2023 when the stage 2 expansion is completed.

In a statement to the ASX the company said that at its last board meeting it was approved the concentrator construction works to be completed by GR Engineering Services.  Construction is planned to start in March next year according to the company’s timetable with commissioning commencing in October.

Milan Jerkovic, Wiluna Mining’s Executive Chair commented: “I’m pleased to report that significant progress has occurred surrounding the sulphide development plan. A significant hurdle was met when the Board of Directors approved the construction of the concentrator and the appointment of GR Engineering to undertake the EPC contract for construction. The timetable is confirmed and the capital requirements for Stage 1 will be fully funded with the expected draw down of the Mercuria second tranche debt facility and work will commence immediately with commissioning planned for September 2021.

The challenge now is to deliver on Stage 1 and scope out the optimum size for Stage 2 given the considerable size of the Wiluna orebody. This will take shape in the Feasibility Study which is currently being undertaken. We are now exactly halfway through our 24 months strategy to turn the Company around, deliver real value to our shareholders and maximise the true potential of the Wiluna Mining Complex. We are delivering on our promises and we plan to execute with precision. The sheer size of Wiluna, which is now the 7th largest gold district under single ownership in Australia, based on JORC Mineral Resources, throws up challenges but nothing worthwhile comes easy and we believe the prize for shareholders of developing this project in a systematic, thorough and staged manner to become a Tier 1 asset in a Tier 1 jurisdiction will be worth it”.

Granny Smith Mine Powered by Renewables.

Continuing its push with renewable energy after its Agnew mine became the first in Australia to be powered with wind-generated electricity, operating a 56MW renewable energy grid, Gold Fields has built a solar system to help power capacity at its Granny Smith operations.

The system has 20,000 solar panels attached to a 2megawatt – 1megawatt battery system to store the energy produced by the panels.  It is expected the solar array will help reduce fuel consumption on the site by more than 10%.

Gold Fields Executive Vice-President Australasia Stuart Mathews is quoted as saying:  “Here in Australia and globally our company is committed to addressing climate change impacts by transitioning towards an energy mix that increasingly embraces renewables and lower carbon fuel sources,” Mathews said.

“The Granny Smith microgrid and the renewable energy solution at our Agnew mine are a clear demonstration of the innovative steps we are taking to ensure the ongoing sustainability of our operations.”

The system was installed by Aggreko and becomes part of the self-contained system on site.

Posted on

Today’s Top Story – Federal Budget 20/21

Federal Budget 20/21

Jobs! Jobs! Jobs! has been the mantra of the federal government since they started “leaking” details of the budget before its official release last night.  And it seems they have put their money where their mouth is.

Employers, no matter how big or small they are, will receive up to $200 a week for each new employee they take on providing they meet certain criteria; employees will be required to work a minimum of 20 hours a week, and must have received the JobSeeker, Youth ­Allowance or parenting payment for at least one of the previous three months.  Employers must show that their payroll has increased as well as number of employees to qualify.

The scheme is to cost $4B over 12 months if the government’s prediction of 450,000 new positions is to be believed and could come in to law on Wednesday if legislation is passed in an omnibus bill to be introduced by the treasurer.  Called JobMaker Hiring Credit it is sure to go done well with employers.

The government is also pending $1.2B on wages subsidies in the hope that 100,000 new apprentices and trainees will enter the workforce.  This could be a huge boost for industries that still require hands on workers for skilled positions and hold back a looming shortfall in experienced tradesmen.

A win for businesses with a turnover of up to $5B will be the write-off on assets up to June 2022.  It is for capital equipment and will be welcome relief for those businesses looking to expand their business or make necessary capital purchases.  The government is hoping it will be a game changer, unlocking investment and boosting the order books of the nation.

Taxpayers have had a win in the budget with across the board tax cuts for all tax brackets.  The percentage of less tax people will be paying ranges from 3.8% for the highest bracket up to 21.4% for the those in the lower bracket; although the dollar figure is higher for the top bracket.

Some will benefit from the changing of the threshold for some of the lower brackets with people being able to earn more before tipping into a higher bracket.  The government has forecast that the extra money the consumers will have will create an extra 50,000 jobs.

The government will lose out on $12.5B in tax takings for this financial year, which will obviously add to the mounting debt expected to be near a trillion dollars.

There are other incentives to get business going in what will be the biggest budget spend this nation has ever seen.  However it is all predicated on the belief that there will be a vaccine for the Covid19 virus that has landed us in this predicament in the first place.  It is a big assumption to make and if a vaccine isn’t forthcoming then the budget forecasts will be doomed for failure.  For the sake of Australia we must hope that the assumption is right.

The Prime Minister and Treasurer have been quick to boast that this is the right budget for the right time to get spending going again.  The question will be, will those receiving the benefits turn it over in to the economy or will they use it to pay down debt or increase savings?  Only in due course will we know the answer to this.  If it does go back in to the economy then the optimistic predictions of the government may come to fruition.  If people hold on to it or just pay down debt then the less than optimal outcome will be pounced upon by the opposition who will make the most of it in the lead up to the next election.