Page 1

RESOURCE Volume 5, Issue 1

GLOBAL NETWORK

Mining, renewable energy and oil & gas worldwide

SPEAKS TO ASX

MARKS

THE SPOT

FO R AUS T R ALIAN - LISTED MIN E RS WWW.RESOURCEGLOBALNETWORK.COM


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MINING | Brookfield Multiplex

WELCOME

Australia is one of biggest markets in the global mining industry. It hosts an enormous variety of valuable mineral ores under its vast expanses, which have been subject to exploration and extraction activity for hundreds of years. Therefore, it is only natural that this massive mining sphere has an established world class trading platform, and this is provided by the Australian Securities Exchange. Here, issuers ranging from juniors to the big hitters have access to a large pool of funds in a jurisdiction that is steeped in mining expertise. This month, RGN leads with an exclusive ASX feature which delves into exactly what makes the exchange one of the most attractive listing spaces for miners of all shapes and sizes. Joining the exchange are several ASX-listed companies including Metal Bank, who enjoyed a strong 2017 that was marked by exploration success at its Triumph project

Executive Team Editor Jacob Ambrose Willson Content Manager Michelle Madureira Content Director (APAC and Americas) David Hunter Creative Director Hugo Currie ICT Director Stuart Clark Contributors Steve Bartrop David Coe

in Queensland. We also speak to the leaders of two Australia-based gold explorers in Middle Island and Egan Street and catch up with Daniel Betts at Hummingbird, after its Yanfolila

Managing Director Simon Curran

mine in Mali achieved first gold pour. Other ASX companies spotlighted are lead producer Galena Mining, copper force CuDeco and Permian crude oil seekers Winchester Energy. RGN is also pleased to welcome two guest columnists in social media strategist David Coe and commodities researcher Steve Bartrop. Both offer tailored insights into the Australian-listed mining market. Finally, to our readers attending this year’s Mining Indaba in Cape Town, we look forward to seeing you at the event. We hope you enjoy this issue and encourage you to connect with us on email, Facebook and Twitter. Thanks for reading!

Jacob Ambrose Willson Jacob Ambrose Willson, Editor

RGN is published by Anderson Murray Media: a diverse media and information services company focused on creating and distributing engaging content to business leaders across the globe. Anderson Murray Media Fulham Green, 69-79 Fulham High Street, Main Reception, Bedford House, London SW6 3JW Tel. +44 (0)207 148 5630

VISIT US ONLINE AT WWW.RESOURCEGLOBALNETWORK.COM


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CONTENTS

ASX

NEWS 14 Global resources news Our selection of mining, oil & gas and renewable energy stories from the last month

ASSOCIATIONS 22 ASX The premier single board exchange for all mining companies

COLUMNS 34 David Coe A vital lesson in social media savvy for all ASX-listed miners 46 Steve Bartrop Leading commodities researcher tracks a Pilbara conglomerate gold rush

MINING 54 Metal Bank ASX Targeting near surface high-grade discoveries in Queensland’s historic goldfields 66 Middle Island Resources ASX Significant gold assets in Western Australia and West Africa


METAL BANK

MIDDLE ISLAND


CONTENTS

EGAN STREET RESOURCES 76 Egan Street Resources ASX Single asset WA gold explorer looks to form the basis for growth 88 Galena Mining ASX A high-grade, low-capex development strategy at the Abra deposit 102 Universal Coal ASX Taking its thermal coal production to the next level 118 Hummingbird Resources Pouring first gold at Yanfolila 134 CuDeco ASX Australia’s new force in copper

MINING SERVICES 148 Whittens Group A family-run construction business with Australian mining expertise

OIL & GAS 160 Winchester Energy ASX Australian junior taking on the Permian heavyweights

APPOINTMENTS & EVENTS 172 Appointments Notable appointments in the resources industry from the past month 173 Events Our pick of the top mining, oil & gas and renewable energy events happening around the world in the months to come


GALENA MINING

UNIVERSAL COAL

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“It was a pleasure working with the RGN team. The entire process - from the initial interview to the layout and finished piece - was seamless and professional. ” Orlee Wertheim Head of Business Development, Global Mining, Toronto Stock Exchange TSX Venture Exchange


12

Testimonials

Over the course of the last 12 months the RGN of all sorts and sizes across the oil and ga Here is what a

“I found the process that you conducte

and I am indeed most pleased with the

“The RGN team are a highly professiona Kennedy in particular being incredibly easy to speak to and col speaks for itself – informative, relevant and well-composed.” -

“It was a pleasure working with Jack Ke initial interview to the layout and finish with the quality and look of the final fe Global Mining, Toronto Stock Exchange

“The magazine is really one of the best I have seen so far on the impressed with the quality of the interview, article and graphic Buffalo Coal

“We consider RGN to be an informative resource sector and it was a pleasure w - Dwayne Finch, General Manager, Good

“RGN and its editor Jack Kennedy produced a quality piece on N to send to our shareholders, customers and suppliers. It was a professional team of people.” - Guy Bourassa, President & CEO,


Resource Global Network

N team have interviewed over 150 companies as, mining and renewable energy sectors. few have said:

ed to be very professional

e resultant article.” - Tony Gilby, MD & CEO, Tlou Energy

al and resourceful team, with Jack llaborate with. The magazine itself Jason Lee, CEO, Indodrill

ennedy and the RGN team. The entire process – from the hed piece – was seamless and professional. We are pleased eature.” - Orlee Wertheim, Head of Business Development, e/TSX Venture Exchange

e global mining industry. I am really c design.” - Rowan Karstal, CEO,

e and professional publication supporting the Australian working with Jack Kennedy to bring this article to fruition.” dline

Nemaska Lithium that we are proud real pleasure working with this , Nemaska Lithium

13


14

NEWS | Brookfield Multiplex MINING

GLOBAL RESO

Our selection of mi renewable energy news


Resource Global Network 15

OURCES NEWS

ining, oil & gas and s from around the world


16

NEWS

GLENCORE TO DOUBLE COBALT PRODUCTION IN PREPARATION FOR MAJOR ROLE IN EV REVOLUTION Glencore (LSE:GLEN) is looking to consolidate its position in the burgeoning electric vehicle (EV) market by doubling its cobalt production over the next two years. Cobalt is one of several elements (including lithium and zinc) which are crucial components in batteries that power EVs and smartphones, with prices for cobalt more than doubling in the last year as the EV revolution revs up. Glencore’s Toronto-listed subsidiary Katanga Mining will increase its cobalt production in Democratic Republic of Congo to 34,000 tonnes by 2019, up from the current 20,000 tonnes a year guidance laid out by Glencore’s CEO Ivan Glasenberg in August.

The Swiss-based commodities giant has held discussions with Volkswagen, Tesla, Apple and other battery makers about signing supply contracts. “There’s a lot of customers who want to lock in supply,” said Glasberg. DRC is home to 60% of the world’s cobalt supply, and aims to take a larger share of earnings from the energy metal after lawmakers recently approved legislation to increase royalties to 3.5% from 2% and introduce a profit windfall tax.


Resource Global Network 17

ARTIFICIAL NORTH SEA ISLAND COULD BECOME WORLD’S LARGEST WIND POWER FARM Dutch energy company TenneT has unveiled ambitious plans to build the North Sea Wind Power Hub, an artificial island which could supply renewable energy to 80 million Europeans by as early as 2027. TenneT’s plans outline how a 6km² island will be created in the Dogger Bank region of the North Sea, before being populated with thousands of wind turbines. Dogger Bank is a shallow area of the sea, located around 125km off the East coast of the UK, which has consistently recorded high wind readings. The electricity produced from the turbines would then provide power, via long distance cables to six European countries – the Netherlands, the UK, Belgium, Norway, Germany and Denmark. Wider plans within the North Sea Wind Power Hub project involves the construction of an airport, harbours and crucially converters which change wind-generated electricity from AC to DC. “It’s crucial for industry to continue with the cost reduction path,” said Rob van der Hage, who manages TenneT’s offshore wind grid development programme. “The big challenge we are facing towards 2030 and 2050 is onshore wind is hampered by local opposition and nearshore is nearly full. It’s logical we are looking at areas further offshore.” Current cost estimates for the project stand at US$1.75 billion, with TenneT likely to shoulder much of this figure.

C e


18

NEWS

PETROBRAS TO JOIN OIL AND GAS CLIMATE INITIATIVE Brazil’s state-run oil firm Petrobras has revealed it will join the Oil and Gas Climate Initiative (OGCI) after it signed a letter of engagement to become a member of the global industry body. OGCI was launched in 2014 as a voluntary CEO-driven organisation which intends to lead the international oil and gas industry’s response to climate change. The body aims to increase the ambition, speed and scale of initiatives undertaken as individual companies try to reduce the greenhouse gas footprint across their core businesses. As a member of OGCI, Petrobras will collaborate with a number of major oil players in the organisation including BP, Saudi Aramco, Shell, CNPC, Eni, Pemex, Repsol, Statoil and Total. OGCI’s existing members account for more than a quarter of global oil and gas production. “By joining OGCI, one of the industry’s leading initiatives on climate change response, Petrobras renews its commitment to reducing emissions and to a more efficient energy matrix and reinforces its strategic command to be fully prepared for a low carbon world,” said Petrobras CEO Pedro Parente. OGCI’s billion-dollar investment arm also supports the development and low emissions technology. In December last year, OGCI Climate Investments joined the Breakthrough Energy Coalition (BEC), co-founded in 2015 by Bill Gates. BEC aims to accelerate the commercialisation of new energy technologies which could limit the impact of climate change.


Resource Global Network 19

DE BEERS PLANS TO TACKLE CONFLICT MINING THROUGH BLOCKCHAIN TECH ADOPTION Anglo American’s diamond-producing subsidiary De Beers is looking to launch the first industry-wide blockchain platform this year which will enable greater tracking of gems being traded across the globe. The world’s largest diamond producer by value has led industry efforts to implement a blockchain system which will trace each diamond on its journey throughout the entire value chain, from mine to consumer, making sure their authenticity and that they aren’t from conflict zones. The mining sector, particularly the diamond market, has continued to be afflicted by issues such as illegal and conflict-driven mining as well as the prevalence of counterfeit and synthetic stones.

However, a blockchain database of transactions maintained by a network of computers on the internet would go some way to tackling these issues, according to De Beers’ chief executive Bruce Cleaver. “Diamonds hold enduring value and represent some of life’s most meaningful moments, so it’s essential to provide assurance that a diamond is conflict-free and natural,” he said. “We are very excited about this initiative and the benefits it could deliver across the diamond value chain, from producers through to retailers and consumers.”

C e


22

COVER STORY | ASX


Resource Global Network

23

ASX

The premier single board exchange for all mining companies


24

COVER STORY | ASX

The Australian Securities Exchange (ASX) is unquestionably one of the world’s premier stock markets with a total market capitalisation of around AUS$1.8 trillion, putting it into the top 10 of listed exchange groups globally. However, in terms of capital raised from IPOs and follow-ons in the mining sector, ASX regularly finds itself in the top three international stock markets since the year 2000, along with the London (LSE/ AIM) and Toronto (TMX) markets. ASX is comprised of several sectors, the largest of which are financials and resources, particularly the mining sector which contributes 21% to the total market capitalisation and 46% of its listed companies. The Sydney-based exchange has been with the mining industry throughout all of its historical fluctuations, most recently in 2015 when a commodities price crash onset a difficult period for the sector. Yet as prices steadily recover the exchange has witnessed a flurry of activity amongst investors and issuers alike. With nearly half of its listed entities originating from the mining industry, listing and capital raising on ASX is highly correlated


Resource Global Network

25


26

COVER STORY | ASX

ASX’s head of listings and issuer services Eddie Grieve


Resource Global Network with commodity prices, therefore when prices across the sector grinded to a new nadir a few years ago, the exchange had its quietest year for new mining listings in a decade, according to ASX’s head of listings and issuer services Eddie Grieve. “In 2015, we had just three mining IPOs but immediately bounced back to 13 in 2016 and

Steeped in mining history However, ASX will always be closely associated with the mining industry, owing to Australia’s long history of resource exploration stretching back to the 19th century when the great gold rush and mineral boom coincided with the first formation of stock exchanges in Australia.

in 2017 to date we’ve had 26, so you can see

“We have a long history and a unique

the improvement,” says Grieve.

combination of mining expertise. It’s a great mining centre but it’s also a very strong

“It’s also evident in the capital raising stakes

equity capital market,” says Grieve.

where in 2016 we had $2.8 billion raised and this year [2017] we have raised $5.4 billion

A key factor underpinning ASX’s strength as

already.”

an equity market is Australia’s compulsory superannuation system, which has

Although the mining industry remains

significantly contributed to it having the

the largest listed sector on ASX, there has

largest pool of funds under management

been increased movement towards sector

in the Asia Pacific region, in excess of $2.2

diversification in recent years, which is

trillion.

something that executive general manager of listings, issuer services and investment

This massive pool of investable funds in

products Max Cunningham is quick to point

Australia is expected to further increase to

towards.

more than $6 trillion by 2030, giving ASX an incredibly strong basis on which to grow in

“Whilst we’ve probably been hit with the

the next decade or so and solidify its position

worst mining recession for the last 20-

as a premier hub for mining listings.

30 years, the listing franchise part of our business concurrent to that period was

“We have a very knowledgeable investor

probably having its best period in a decade,

base, a strong community of analysts and an

which was due to other sectors, most notably

ecosystem of professionals across several

tech.”

spheres such as accounting and law, all of whom have mining expertise,” proclaims

The exchange has also had plenty of success

Grieve.

with regards to geographic diversification, attracting companies from countries like New Zealand, Israel and the US.

“We have found that ASX is often a centre

27


28

COVER STORY | ASX

South32 listing ceremony


ResourceGlobal GlobalNetwork Network 29 Resource

“We have a very knowledgeable investor base, a strong community of analysts and an ecosystem of professionals across several spheres such as accounting and law” – Eddie Grieve, head of listings and issuer services for projects based in Western Australia, but people come to tap into this expertise not only for projects in Australia, but projects globally as well such as those in Africa and Latin America.” Another string to ASX’s bow is its long term affiliation with the Australasian Joint Ore Reserves Committee (JORC) Code, which was developed in the 1970s to provide a mandatory system for the reporting of resources and reserves within ASX listing rules. The JORC Code has since developed into an international blueprint for mining disclosure standards, after being adopted into Canada’s NI 43-101 mineral projects framework, along with other leading exchanges in countries like the US, South Africa, the UK/Europe, Chile and Peru. Furthermore, while the corporate governance requirements of ASX go towards engendering investor confidence, the Australian mining industry and regulators have worked together over the years to ensure that


30

COVER STORY | ASX the regulatory environment is robust but not overly prescriptive, another attractive element of listing on ASX.

Single board Unlike several major global exchanges where separate boards have been created catering to the junior market (such as London’s AIM and the TSXV of Toronto), ASX is comprised of just one primary board. Cunningham views this key differentiator in an overwhelmingly positive light. “One of the things where we are very favourable compared to most major exchanges is that we have only one single board and that means you get universal connectivity with every investor in the market,” he says. “I think it’s a key competitive advantage for us in the resource-mining sector and other international sectors where we are competing for listings.” Cunningham reveals that ASX did have a second board back in the 1980s, but it proved unpopular with investors and junior companies felt the arrangement created a sense of being a second class listing among those on the second board. Now instead of having a smaller board, ASX has a minimum listing criteria which is set at an appropriate level for junior and early stage mining companies, which also protects from the risk of having companies enter at too early a stage.


Resource Global Network

Kirkland Lake Gold listing ceremony

31


32

COVER STORY | ASX

Max Cunningham

executive general manager of listings, issuer services & investment products


Resource Global Network

With this in mind, ASX claims to have

ASX continues to vie with rival exchanges for

nurtured a long list of mining companies

international supremacy in the public listing

from budding juniors into mid and large-cap

space, particularly in the global mining sector.

players, and in some cases into international

In fact, during the 2016/17 period to date

mining giants.

ASX was the number one exchange in terms of number of IPOs ahead of LSE and TSX,

“We say cheekily that the mining community

which Grieve and Cunningham attribute to

is the home of the start-up. All these big

its unique structure and the wealth of mining

companies like BHP and Rio Tinto to some

expertise across the exchange.

extent were start-ups that were funded on the ASX in the very early stages.”

“I think for a long time to come ASX will be a global home for the mining sector, both for

A more recent example is the meteoric rise

issuers and investors,” predicts Cunningham.

of Fortescue Metals Group (FMG), which was

“I think it will be a dominant sector for us in

formed in the mid-2000s but has quickly risen the small, mid and large-cap space.” to become the 13th largest mining company in the world after listing on ASX.

33


34

COLUMNS | David Coe

ENGAGING N


Resource Global Network

NEW INVESTORS SAFELY By David Coe, managing editor of Investor Torque

35


COLUMNS||Ian David Thomson Coe 36 COLUMNS

Engaging investors through social media is easier – and can be more compliant – than many directors of listed companies fear. It can also be more powerful. Yes, Australia does have one of the most rigorous compliance regimes among global financial markets. However, it is possible for public companies to take their news direct to tens of thousands of investors, traders, stock brokers, wealth advisers, analysts, business journalists and others – and be compliant. One of the ASX resource sector’s most active users of social media is Fortescue Mining. In a single month last year, it reached 358,868 on Twitter. A junior gold developer did even better. Stonewall Resources reached 785,760 in a single month thanks to multiple retweets from local champions near its projects in South Africa. Other junior resource companies regularly reach 100,000 every month. Big companies may enjoy plenty of press coverage but social media’s reach allows junior and mid-cap companies to level the playing field by attracting investors who follow them. A misconception of many directors is that social media cannot help their companies.


ResourceGlobal GlobalNetwork Network 37 Resource

DAVID COE David Coe leads a company that is using social media to transform the way listed companies reach and engage new shareholders. As managing editor of Investor Torque, he and his global team have helped companies listed in Australia, London and Toronto communicate direct to hundreds of thousands of investors, traders, stock brokers, business journalists, wealth advisers, analysts and others from the financial markets and beyond. David’s career has straddled finance journalism and investment banking. His successes include creating a document for Macquarie Bank that brought in $12 million in its first 2 weeks and redesigning the business pages of The Australian. For tips and techniques with investor social media, click on www.investortorque.com Follow @InvestorTorque on Twitter.


38

COLUMNS | David Coe After all, an iron ore miner does not sell any more iron to a Chinese steel mill because of its Facebook page. A mineral or energy explorer does not even have a product to sell. But let’s start at the start. To avoid accusations of selective disclosure, Australian public companies must keep the whole market informed and that means releasing material information to the ASX first and continuously. The Australian situation contrasts with the US, where public companies can release material information on social media first. There, companies just let the market know in advance which social channels the information will be released on. Some commentators say this difference makes Australian companies gun-shy about using social media for investor relations. The advantage of Australia’s tighter rules is that all company announcements can be found first in one spot – the ASX website. But, as Victoria University finance lecturer Maria Prokofieva said last year when releasing the results of a study into 3,516 ASX announcements, individual investors are limited in time and resources and are unable to track all securities and releases of all new information. This means, she said: “Companies that


ResourceGlobal GlobalNetwork Network 39 Resource

Smart ways to use social media Here are eight ways a mining company can use social media and build its own community of investorfollowers:

1. Share industry and sector media coverage. As well as news reports about your commodity markets, share relevant research, government or regulatory changes, and financial blogs.

2. Post photos and videos of drilling, exploration camps, and conferences. Show the CEO on stage or photos of people at your exhibit booth.

3. Link to analyst reports and trading information. Best practice is to share the good with the bad – you can’t highlight only your upgrades. Some companies are even tweeting about Moody’s or S&P ratings. 

4. Share corporate news such as biographies of new directors, press releases, charity work, and awards.

5. Live-tweet site visits and annual meetings as well as analyst and investor days.

6. Post details of conference call dial-ins.

7. Ask questions to provoke discussions among investors.

8. Direct followers from one social media channel to others, such as tweeting links to the corporate blog or posting on LinkedIn about a drone fly-through video on YouTube.


40

COLUMNS | David Coe

The view from overseas The mushrooming use of social media to engage investors is being fuelled by developments in North America.

The new era in investor relations started in 2012 when the US securities regulator, the Securities and Exchange Commission, gave its approval for companies to make material disclosures on social media.

The New York Stock Exchange then started giving tips to companies on how to use investor social media. The tips included live tweeting of annual meetings and investor days.

In 2013, Bloomberg began feeding tweets about companies, industries and markets to its subscribers. More recently, it began supplying data on social media sentiment about companies to its subscribers.

Bloomberg said when it launched its Twitter feed: “Twitter provides a fast and easy way to disseminate press releases and other market-moving information.”

put extra effort to reach their investors Since then, the NYSE and Nasdaq started provid-

are rewarded. They are able to grab the

ing social media campaigns to support com-

investors’ attention.”

panies listing on their boards so that the IPOs would be as successful as possible.

To stay compliant while reaping those rewards, savvy companies release their news

In 2016, the CBOE created benchmark perfor-

to the ASX first and then amplify it on social

mance indexes based on social media senti-

media.

ment.

Having potential new shareholders know your company’s story and understand its


ResourceGlobal GlobalNetwork Network 41 Resource

What the authorities think Guidance from the ASX makes it clear that listed companies are obliged to monitor what is being said about them on social media.

Companies do not have to respond to every rumour but the ASX does require them to respond in a timely manner if the rumour appears to contain credible facts and is having a material impact on a company’s share price or traded volume.

The regulator, the Australian Securities and Investments Commission (ASIC), last year acknowledged that social media was emerging as a creative and innovative tool for companies and brokers to market IPOs. In a report, ASIC recognised that smaller companies saw social media as an attractive, relatively cheap way of achieving minimum spreads and subscriptions so that their IPOs did not fall over.

However, it warned that all communications on social media had to meet the spirit and letter of the law.

investment case helps with raising capital, increasing market liquidity, narrowing bid-

One area that concerned ASIC was online inves-

ask spreads, increasing website visits, and

tor forums where people used false names to

mobilising shareholders in a crisis.

discuss investments and IPOs. It said investors should not rely on this information because the

Ms Prokofieva said her research revealed

posts might be misleading or even deceptive,

powerful ways that junior companies were

and might undermine the advertising provisions

using social media for investor relations:

of the Corporations Act.

“Smaller companies have less press coverage and financial analysts following, and are generally less visible to investors.


42

COLUMNS | David Coe


ResourceGlobal GlobalNetwork Network 43 Resource “However, these less visible companies tend to be more effective in employing Twitter to engage with investors. “Unlike other common ways to promote the existing financial information, for example business press and financial analysts, social media gives companies more control.” Social media can also be used to protect a company’s reputation when it comes under attack. Social media strategist Des Walsh says: “It is all about share of voice. People will talk about you and it is your choice whether to join the conversation or leave it to the critics. “If you say nothing, your critics win the argument by default.” The Australasian Investor Relations Associations (AIRA) agrees. Its CEO, Ian Matheson, said AIRA advises listed companies to consider introducing a company-driven social media presence as a trusted source of company information to counter information generated by third parties.

How the game is changing It seems simple enough. Listed companies tell the ASX about their activities and the market is fully informed. But that is where the challenge lies for junior explorers and all the other companies outside the top 200. They struggle for broker


44

COLUMNS | David Coe

and press coverage so they can feel like they

Social media is quickly changing the game as

are shouting into an empty room when they

it allows companies to talk direct to investors.

make their announcements.

And the rate of change is accelerating.

Some initiatives aim to help junior companies

If you are not a user of social media, the

reach investors, such as the ASX subsidising

change may be invisible. If you are, the

broker research into smaller companies

change is unmistakable both in Australia and

and events companies hosting investor

around the finance world.

conferences. Stanford University’s Graduate School of However, it is still a struggle for many of the

Business investigated the impact of social

2,000 or so companies worth less than $1

media on the financial markets.

billion to be heard, known and understood by the market.

And the results?

Or at least it has been.

Assistant professor of accounting Beth


ResourceGlobal GlobalNetwork Network 45 Resource • 40% use Facebook for investor-related material • 44% use SlideShare for investor-related material • 29% use YouTube for investor-related material • 18% use their corporate blog for investorrelated material • 88% have a company page on LinkedIn It found the top four sectors that are using Twitter to share investor material are natural resources, technology, services and consumer goods. The take-up of social media by companies is being matched by professional investors. A survey of 476 professional investors and analysts by the Brunswick Group found their use of Twitter almost trebled from 11% to 30% in one 12-month period. However, they are watching and listening rather than Blankespoor said: “When companies use

trumpeting their own ideas.

social media to amplify announcements made through traditional channels like

It also found that company blogs were the

press releases, they are able to spread the

most trusted source of investor relations

information more broadly and get narrower

material on social media with 52% of

spreads and greater market depth.”

professional investors and analysts reading them.

A global study of 800 public companies by Q4 Web Systems found:

What actions did they take? 24% said blogs had prompted them to make an investment

• 63% use Twitter for investor-related material

and 12% said Twitter had prompted them to make an investment.

http://investortorque.com

b a j


46

COLUMNS | Steve Bartrop

CONGLOMERATE GOLD IN THE


Resource Global Network

E PILBARA, WESTERN AUSTRALIA By Dr Stephen Bartrop, executive director at Breakaway Research

47


COLUMNS||Ian Steve Thomson Bartrop 48 COLUMNS

In recent months there has been a Pilbara conglomerate gold rush that has been occurring in the background which has driven some significant outperformance in a number of stocks. This is highlighted below in significant share price movements between June 30 and November 10 2017.

The idea of a Witwatersrand paleoplacer conglomerate analogue in Australia has been mooted around the Nullagine region in WA

The analogy of the gold mineralisation

for many years and several groups have

discovered in the Pilbara is the famous

explored this target, reported Barry Dawes

Witwatersrand gold deposits of South Africa

in a recent article. Small gold recoveries had

which considered to be a major accumulation

been reported along the Northwest and

of alluvial gold in thin layers of conglomerate

Northeast rim outcrops of the basal unit of

(ie rocks made up of other rocks and

the Fortescue Basin, but have not previously

generally deposited in some active riverine

been recognised as having economic

environment) rocks.

significance.

Fossickers led the way‌

The Fortescue Basin is a mafic (iron

In recent years, prospectors from

and magnesium-rich) volcanic rock

Karratha, have been fossicking with metal

dominated sedimentary formation that sits

detectors along a 10km zone of outcrop of

unconformably over the Pilbara Craton. The

conglomerates and have been successful

basin dips about 3-5% to the South. The age

in locating gold nuggets. It has been noted

of the Fortescue Basin is the same as the

that Karratha has the highest number of

Witswatersrand basin and the stratigraphy is

boats per capita in Australia and the highest

quite similar.

number of metal detectors per capita! The Beaton’s Creek paleoplacer conglomerate Their shallow diggings have actually left a

deposit at Nullagine was in more recent years

clear geochemical signature over about 8km

actively explored by Canadian company Novo

for professional explorers to follow and the

Resources as a Witwatersrand target. The

prospective conglomerate unit appears to

deposit is multiple stacked alluvial gold reefs

be the basal unit of the Fortescue Group

and Novo considers it a major target for low

sediments.


ResourceGlobal GlobalNetwork Network 49 Resource

cost near surface mining. Sumitomo has an option to farm in. This project has resources of 6.4Mt @ 2.7g/t (558koz) made up of measured and indicated resources of 3.39Mt @ 2.7g/t and inferred resources of 3.0Mt @ 2.7g/t. Novo Resources became intrigued with the success of the prospectors, subsequently revising its strategies and over the past year acquired extensive tenement around Karratha. Recognition of a larger scale to these other conglomerates led to Novo Resources acquiring the Comet Well tenements and consequently in July 2017 entering into a joint venture with Artemis Resources at the contiguous Purdy’s Reward tenement which is the actual surface outcrop and an opportunity to economically test the concept. Gold nuggets in the shape of watermelon seeds have been found throughout the thickness of the strata. In addition, quite high volumes of fine gold have accompanied the larger nuggets.

STEVE BARTROP Steve’s professional experience spans 30 years, and covers periods in both the mineral industry and financial sector. With a geology background, Steve worked in mineral exploration, feasibility studies and project evaluation as well as mine production. Steve has experience in commodities ranging from gold, platinum group metals, tin, base metals and bauxite. This included work in North America (including Alaska), Indonesia and Australia. In the financial sector, Steve has been involved in research, merger and acquisition activity, corporate transactions and IPOs spanning more than 15 years, including within major global investment banks.


50

COLUMNS | Steve Bartrop

Conglomerate gold nuggets from Purdy’s Reward (source: Artemis Resources).

Conceptual Cross Section of Basal Conglomerates Extending 10km down dip Source: Novo Resources).

One of the most exciting developments which assayed 11.7g/t. However, the important has the potential to provide scale to the

basal units were evidently not assayed.

mineralisation is the discovery that CRA had drilled a 2,200 metres vertical hole deeper in

This hole was about 65km away from Comet

the basin in the 1980s.

Well/Purdy’s Reward to the South so the continuity down dip is possibly very high with

This hole had intersected conglomeratic sediments at a depth of 1,756 metres that

the dip only 3-5 degrees.


ResourceGlobal GlobalNetwork Network 51 Resource

Source: DeGreys Mining

Recent trenching bulk samples at Purdy’s

has tenements at Louden’s Patch in the

Reward recovered gold grades up to 67 g/t

Fortescue Basin and has received funding

and some further trenching work with metal

from Kirkland Lake.It is the potential size of

detectors was beamed live into the recent

the deposits which has driven the speculative

Denver Gold Conference. It is available at the

share price increases.

following link: https://www.youtube.com/ watch?v=Z-YK4r6VUoc

The Chairman of Novo, Dr Quinton Hennigh, is a highly regarded geologist and his view

Novo is now undertaking a programme

of the formation of the Witwatersrand

to further test the surface outcrop with

was through precipitation of the gold from

trenching and some innovative 17.5 inch

seawater and this allows for very large areas

large diameter RC drilling rigs in a two month

to collect the gold.

programme that is intended to demonstrate down dip continuity by end 2017.

The areas covered by Novo’s tenements are over 10,000 km2 and, like coal deposits

Novo is cashed up for a big exploration

or iron ore deposits, tend to be quite

programme while Artemis has the 450

continuous. The question is now whether

ktpa Radio Hill Mill capable of fast tracking

gold mineralisation in the conglomerate has

processing if exploration proves successful.

a similar continuity!

Another ASX gold explorer, De Grey Mining,

www.breakawayresearch.com

b a j


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54

MINING | Metal Bank | ASX

M E TA L Targeting near surface high-grade discover


Resource Global Network

L BANK ies

in Queensland’s historic goldfields

55


56

MINING | Metal Bank | ASX

2017 will go down as a highly successful year for Queenslandbased Metal Bank. The ASXlisted mining junior is advancing a succession of near surface high-grade discoveries at its flagship Triumph gold project in Southeast Queensland. Under a highly experienced management team led by chair Inés Scotland, a legendary mining executive and founder of Citadel Resource Group, Metal Bank has been able to attract healthy sums of capital to fund exploration stage activity. After the success of the last 12 months, this explorer is ready to further build its story through definition of near surface high-grade gold resources to support a mining operation comprised of multiple open pits at Triumph. RGN speaks to managing director Tony Schreck.

The Triumph project “Exploration success over the past 12

maiden resource figure in the middle of this year, with the aim of developing multiple shallow open pits into a mining operation.” While the last year has seen a definite acceleration in terms of good news coming out of the Triumph project, this fruitful period has largely been a function of four years of exploration discovery success across the project with drilling only really just starting to test the pipeline of new targets revealing near surface high-grade gold mineralisation and also bulk tonnage gold potential. Schreck and exploration manager Trevor Wright were both instrumental in putting the Queensland gold projects together and have built a highly competent team which specialises in discovery. An important part of the team’s recent work has centred on demonstrating a compelling link between the near surface high-grade mineralisation discoveries at Triumph with bulk tonnage style gold-copper-molybdenite mineralisation. Similar examples of these bulk tonnage style systems in Queensland include the Kidston (3.7Moz Au), Mt Leyshon (3.5Moz Au) and Ravenswood (3Moz Au) mines.

months has now intersected high-grade gold mineralisation on four main targets with

Drilling programmes have taken place

excellent scope to expand that further with

on four targets so far across the 15km²

the current drilling programme,” reveals

gold system, all of which have produced

Schreck.

enticing drill intersections. For example, drill intercepts at the Bald Hill prospect returned

“Those high-grade intersections are really

a result of 15 metres @ 10.3g/t Au from a

driving our confidence of putting out a

depth of 9 metres.


Resource Global Network

57


58

MINING | Metal Bank | ASX

intercepts of 10 metres @ 26.9g/t Au from 51

2017/18 drilling programme

metres, Big Hans delivered 18 metres @ 4g/t

“We have 5,000 metres of drilling planned

Au from surface and Super Hans returned 3

over December and January,” says Schreck.

metres @ 6.5g/t Au from 6 metres depth.

“We expect that initial results will be released

Meanwhile, New Constitution produced

from early 2018 with the primary focus on Metal Bank has a cash balance of $5.5 million

advancing the existing near surface high-

following the completion of a rights issue

grade gold targets and to commence initial

and share placement, providing the company

drilling on other targets in the existing

a strong financial basis to build on these

prospect pipeline.”

intercepts with further drilling, which will target a maiden resource announcement for

A large portion of the drilling will take place

the project.

at Big Hans and Super Hans, which have only received limited drilling so far, with


Resource Global Network

further infill drilling to be pursued at New

Metal Bank will also work on a fifth target

Constitution, where known mineralisation

named Advance, which has only just had soils

extends over a surface distance of greater

completed to date, however Schreck says the

than 250 metres and to a depth of over 150

prospect has a ‘lovely 100 to 1000 pbb gold

metres.

soil anomaly running through it’.

At Bald Hill, Metal Bank has already been

“There are several historical mines at

able to show there is 2.4km of strike on

Advance with records indicating underground

the mineralised structure with just 400

mining to over 100 metres depth with an

metres of this zone drill tested to date, so

average mined grade of 90g/t Au; and has

the programme there will look to extend

never been drill tested. We will certainly

the known mineralisation along that strike

be drilling Advance as part of the current

distance.

programme and this is a great example of how under-explored the project is which

59


60

MINING | Metal Bank | ASX


ResourceGlobal GlobalNetwork Network 61 Resource translates into a fantastic opportunity to add significant value for Metal Bank.” Beyond the defining of a resource in mid2018, the company will begin to craft a scoping study based around multiple open pits on shallow high-grade resources potentially feeding a central processing facility. However, while Metal Bank’s primary focus remains on developing a near term highgrade open pit mining scenario, there is confidence amongst the team that there could be the potential to follow deposits down to depth to sustain underground mining operations. The style of high-grade mineralisation present across the project is very likely to be connected to the mother intrusion that is driving the widespread mineralisation, according to Schreck. “There are many examples of this style of mineralisation in Queensland. We have got good lateral and depth extent on these highgrade structures and ultimately if you follow them along or down they should lead into the bulk tonnage gold system that is driving the whole system. “The high-grade mineralisation is luring and will certainly open up some doors to near term production, but the bulk tonnage mineralisation potential really does open up some fantastic upside on the Triumph project,” says an enthusiastic Schreck.


62

MINING | Metal Bank | ASX


Australian Resource Business Global Network

The Eidsvold project

based on the fact that during the early

Metal Bank’s other major development is

mining days of the 19th and 20th centuries,

currently taking the backseat as the company

prospectors only had limited visual and

focuses its energy on progressing Triumph,

panning techniques, which were able to

but nonetheless the Eidsvold project is held

identify outcropping mineralisation but

in very much the same stead owing to its

failed to detect any deeper or undercover

striking geological similarities to Triumph.

mineralisation.

“When we originally completed the project

However, now armed with several modern

generation across Queensland to identify

methods including airborne and ground

these two projects, our criteria was to look

geophysical systems, advanced exploration

around historical goldfields for opportunities

models and modern drilling techniques,

and both Triumph and Eidsvold were centred

Metal Bank aims to open up new project

on historical goldfields that were surrounded

opportunities across and around these

by sediment cover, potentially concealing the

underexplored historical goldfields.

true extent of the gold mineralisation.” Metal Bank’s preliminary work at Eidsvold has The reasoning behind this approach is

already been able to show it is part of a fertile

63


Resource Global Network

Tony Schreck, managing director intrusive complex spanning 250km², which

point now where we are going to commit

has never been recognised before as 90% of

to an airborne EM and magnetics survey

the complex is concealed by sediment cover.

across the whole intrusive complex and that will prioritise our targets ahead of a second

“In the last three months we’ve completed

phase of drilling in mid-2018.”

one of the first drilling programmes on the project. Using the regional spaced

Over the next 12 months, Schreck and his

geophysical data we were able to target a

team at Metal Bank will be doing everything

magnetic low and intersect 3 metres @ 2.3g/t

they can to accomplish the company

Au under 10 metres of sediment cover and

maxim of ‘growth after discovery’, with the

that is a fantastic outcome.

establishment of a maiden resource figure in mid-2018 the next achievable step on the

“That result has transformed Eidsvold to the

path to delivering shareholder growth.

j

65


66

MINING | Middle Island Resources | ASX

MIDDLE ISLAN Significant gold assets in Western Australia and West Africa


Resource Global Network

67

ND RESOURCES


68

MINING | Middle Island Resources | ASX

Rick Yeates began putting Middle Island Resources together in February 2010 on the back of his resignation from Coffey Mining, the firm which bought RSG Global – the company he co-founded back in 1987. Under Yeates’ stewardship, Middle Island quickly accumulated gold assets in West Africa before listing on the ASX in December 2010. Over the next few years, the company consolidated its work in Burkina Faso, Liberia and Niger but was soon halted in its tracks in the latter nation, which blocked the purchase of the Samira Hill gold mine. However, the company bounced back from this setback by widening its exploration lens beyond Africa, acquiring the Sandstone Gold Project in Western Australia in July 2016. This asset, along with the Reo Project in Burkina Faso are the company’s two flagship projects today. After having its fingers burnt in Niger, it quickly became imperative for Middle Island to locate a project which would mitigate shareholder exposure to sovereign risk. Consequently, Middle Island’s conservative and deliberated approach saw it go down the safer, albeit well-trodden, path of mining in Western Australia’s gold fields, acquiring


Resource Global Network

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70

MINING | Middle Island Resources | ASX


Resource Global Network Sandstone after a meticulous three-year search.

Western Australia “We were also very specifically looking for an advanced near-term production asset that had the potential to generate a cash flow from which we would be able to fund further exploration activity,” says Yeates. “Sandstone was a near-term development opportunity because it has a 600,000-tonne processing plant in reasonably good order, and importantly the cost required to refurbish and recommission that project was achievable.” The Sandstone Gold Project is located around 400km Northwest of Kalgoorlie in a mineralabundant region which has seen sustained surface, underground and open-pit mining activity since the 1890s. In excess of one million ounces (1Moz) of gold has been produced from the Sandstone area by a number of mining companies throughout its extensive history, with gold mineralisation occurring in the triangularshaped greenstone belt. Prior to Middle Island assuming ownership of the project, the last resource statement was undertaken by Troy Resources in 2011, which recognised an aggregate of 11 million tonnes (Mt) at 1.4g/t for 480,000oz Au. Middle Island moved quickly to build on these figures, undertaking its own pre-feasibility

71


72

MINING | Middle Island Resources | ASX


ResourceGlobal GlobalNetwork Network 73 Resource study (PFS) in 2016. However, the results

The processing plant at Sandstone has been

concluded that the project’s recommissioning

in care and maintenance since 2010, but

was uneconomical based on the Two Mile Hill

remains in a remarkably healthy condition

and Shillington open-pit deposits alone.

because the area is blessed with fresh ground water.

Yet responding to adversity once again, Middle Island decided to defer a

Therefore, the company will not have to

recommissioning decision and went back

invest vast sums of time and money to

to drilling around the existing deposits to

get the plant back up and running. The

extend and enhance the production profile.

renovation work was fully costed at $9.3 million as part of the PFS.

During the last 10 months the firm has made a number of important discoveries, most

“We are conscious that this [overall cost] is

notably the Two Mile Hill tonalite target,

still a fair hurdle but we are confident we can

which was shown to be mineralised from

get there in the end.”

end-to-end and top-to-bottom after three further diamond drill holes were completed.

With this in mind, Middle Island has pencilled in late December 2017 as the earliest date

“This is a significant result because it

it would be in a position to revisit a mill

highlights the bulk underground mining

recommissioning decision, however Yeates

potential of that target, most likely via sub-

maintains this is dependent on many

level caving, along with the open-pit potential

variables and is by no means guaranteed.

which had already been figured into the original schedule.”

West Africa Middle Island remains active in West Africa,

The other major recent discovery was the

despite exiting from Niger soon after it

identification of gold targets at the Davis

ran into problems, and is still very much

prospect in the Southwest corner of the

committed to the Reo Project in Burkina Faso.

project. “We generated four very cohesive gold-arsenic anomalies down there and have

“The Reo Project was an opportunity that

just completed drilling across two of those,”

was presented by Newmont, as they felt

reveals Yeates.

the project didn’t quite have the potential to come up with the 5Moz target they were

“All these anomalies are within 1km of the

looking for, but we felt it still had plenty of

processing plant which, along with the

merit and were more than content to identify

recently optioned Wirraminna deposit,

a 1-2Moz target.”

could represent a catalyst for the mill recommissioning.”

The subsequent deal was structured as a share sale agreement, meaning that


74

MINING | Middle Island Resources | ASX

Newmont came on board as a cornerstone

However, the project remains in the early

corporate shareholder in the company.

stages and there is still lots of work to be done in the shape of infill drilling, with most

Yeates stresses that having the support of

of the targets defined at a broad, 400-800

a major international miner was crucial for

metre line spacing, which needs to be infilled.

the company from a marketing perspective, especially during the first five years of its

Middle Island is currently prioritising the

existence.

development of the Sandstone project and is hopeful of getting another company on

“In addition, from a geological perspective the board to do the heavy lifting on the Reo project is at the Northern end of the Boromo project, taking it through to feasibility, and HoundĂŠ greenstone belts, where the

although Yeates affirms it will look to

two coalesce. These have proved very

recommence work in its own right should this

prolific belts in terms of gold exploration and not be possible. discoveries.�


Australian Resource Business Global Network contribute up to 5% of its exploration budget each year to social development initiatives in local communities. “It’s just a recognition that those local communities are our hosts and we effectively stay in their villages while we are there. “Our objective is to become a part of the community wherever we go, whether its Western Australia or West Africa. Rather than simply working with the community we endeavour to integrate ourselves as much as possible. “For an exploration company that is a big ask, but I think we have found a good balance, and certainly I am extremely proud of some of the work we have done.” Yeates is adamant that the current outlook for gold across global markets is very good, based on a pure supply and demand In any case, the company is patiently waiting

equation where demand is currently

three pending renewal permits at Reo and

outstripping the identification of new

is naturally reluctant to pull the trigger on

reserves.

further exploration, especially being in Africa where these things take time.

It is this fundamental belief that is underpinning a growing confidence that

Middle Island is also acutely aware of its

Middle Island’s flagship projects in Australia

position in the West African communities

and Burkina Faso will deliver profitable

which share the land on which it explores,

returns when they eventually come online.

and takes great pride in its commitment to

a j

75


76

MINING | Egan Street Resources | ASX

EGAN STREET RE Single asset WA gold explorer looks to form the basis for growth


ESOURCES

Resource Global Network

77


78

MINING | Egan Street Resources | ASX

Egan Street Resources is a young ASX-listed precious metals exploration company backed by a seasoned board of directors and strong management team which is focused on realising the near term potential of the highgrade, low cost Rothsay Gold Project in Western Australia. Rothsay has previously been subject to historical mineral extraction via shallow open pit and underground mining scenarios up until the 1990s, and was purchased by EganStreet in July 2011 when it operated under a previous name Auricup Resources. Since then, EganStreet has used historical data to define a mineral resource at Rothsay and recently commenced a drilling programme, the results of which will be compiled into a definitive feasibility study (DFS) and a maiden reserve due in Q2 of 2018. EganStreet’s activity on the Rothsay project has been directed by successful metallurgist Marc Ducler since his appointment as managing director in July 2016 just after the company rebranded. Ducler brings well over 20 years of experience in the mining industry to the project, having assumed senior on-site


Resource Global Network

79


80

MINING | Egan Street Resources | ASX management positions at mines such as GoldFields’ Agnew Mine, BHP’s Mt Whaleback Mine and FMG’s Cloudbreak Mine. At the time EganStreet felt like a perfect fit for Ducler, who possesses all the skills required to take a project like Rothsay through the development stages and into production. Ducler was attracted to Rothsay for myriad reasons, including the high grade gold mineralisation present at the resource, the low cost entry into production, the wellestablished infrastructural ingredients and crucially the strong shareholder support EganStreet receives. “These high-grade golds present low capital entry opportunities to becoming a material single asset gold producer which then forms the basis for growth. Rothsay ticked that box beautifully,” says Ducler.

A board of mining professionals However, progressing any gold project necessitates a strong team of mining professionals driving forward the development stages, and EganStreet is no different in this respect. The board is dominated by industry experts such as experienced mining engineers Barry Sullivan (chairman) and Lindsay Franker, geologist and non executive director Hedley Widdup and Simon Eley, a commercial solicitor with vast experience in the resources sector.


Resource Global Network

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82

MINING | Egan Street Resources | ASX

The management team is comprised of

at Rothsay which has seen the completion of

geology manager Julie Reid, who counts over

28 diamond drill holes for 9.5km and 57 RC

30 years of experience in exploration and

holes for 5.1km, allowing for the upgrading of

mine geology in Australia, Indonesia and

the mineral resource estimate to 262,000oz

Vietnam, and chief financial officer (CFO)

@ 11.6g/t.

Richard Hill with over two decades of knowhow in the gold industry.

Increasing the mineral resource Since the company first floated on ASX in

Another update to the mineral resource estimate is due in the early weeks of December as further RC and diamond drill results are announced, with Ducler fully expectant of another significant increase to

September 2016, the board and management the figure. team have implemented a development programme based on increasing the mineral

“From a project development front we have

resource estimate at Rothsay, which stood at

also been extremely busy,” Ducler reports.

226,000oz @ 11.3g/t Au.

“A scoping study was released within three months of listing, six months later we

During the last 12 months the company has

released a pre-feasibility study (PFS) that

progressed an aggressive drilling campaign

doubled the production target and tripled the


ResourceGlobal GlobalNetwork Network 83 Resource free cash flow generated to 200,000oz of gold

indicated in the lead up to a maiden resource

production and US$82 million in free cash

declaration.

flow. Simultaneously, the company is aiming “A DFS is currently being completed which

to test the prospectivity of the adjacent

is due in Q2 2018 and our expectation is to

ultramafic rock units that are showing

further increase the production target and

significant historical workings in the shape of

free cashflow with the DFS release.”

multiple 30 metre mine shafts, following the

Shareholder support EganStreet will continue its current drilling

strike of the mineralisation along the footwall and hanging wall contact of the ultramafic unit.

programme to March 2018 safe in the knowledge that its activity is supported

Consequently, EganStreet will also be

strongly by its shareholders, who have

targeting these prospective ultramafic units

supplied ample funding thus far.

along with the drilling programme, as part of its regional exploration work that will

“In September 2017 we completed a $4

commence at the end of 2017 and into early

million placement at 25 cents per share, a

2018.

25% premium to our initial list price,” Ducler reveals.

While the DFS and maiden reserve declaration is not due until Q2 2018, Ducler

“This was also strongly supported with

and his team have complete confidence in

the book closing 60% oversubscribed. We

Rothsay’s ability to deliver profitable returns

currently have $4 million in the bank and are

to its loyal shareholders.

well placed to drill strongly through to March 2018. “There are 48 million in the money options expiring in March next year and this has the potential to provide the majority if not all of the equity portion of the funding required for the development of the Rothsay Project.”

Further drilling

Healthy profit margins

Financial modelling completed at the PFS stage calculated AISC of $765 per oz against a gold price of $1,200 per oz, which represents a healthy profit margin of 57%. Furthermore, at the current gold price of around $1,300 per oz, this margin looks even better. Rothsay’s low AISC margin is shaped by the ‘fantastic’ infrastructure already in place at

This shareholder backing is contributing to

the project, where the portal and decline

EganStreet’s diamond and RC rigs drilling

is already developed down to 142 metres

programme, which is both infill, near mine

below surface, there is tailings storage

extensional and regional in nature and

facility, gazetted access roads, bore fields and

designed to move inferred ounces over to

airstrip.


84

MINING | Egan Street Resources | ASX


Australian Resource Business Global Network

“IN SEPTEMBER 2017 WE COMPLETED A $4 MILLION PLACEMENT AT 25 CENTS PER SHARE, A 25% PREMIUM TO OUR INITIAL LIST PRICE” MARC DUCLER, MANAGING DIRECTOR

In fact, the only significant infrastructural

In addition, as the timing draws closer

development needed at Rothsay is a new

EganStreet will look to fill a number of key

processing plant, with the finance team

management roles for the project, and has

currently working through a DFS for the

already begun this process with the recent

facility, which will be reported in Q2 2018.

appointment of Richard Hill as CFO.

However, there are still a number of boxes

With a DFS and maiden reserve to come

that need to be ticked prior to EganStreet

in mid-2018, EganStreet is within touching

throwing all of its weight behind the

distance of taking its Rothsay Gold project off

development of the Rothsay project,

the ground.

according to Ducler.

Investment decision

Once these crucial milestones have been passed the company can cast its eyes

“That investment decision will be made in Q2

towards first gold pour and the return of

immediately after completion of the DFS and

capital to shareholders that will follow.

securing committed debt financing. We are currently working through the DFS and we

“Longer term the Rothsay project will be our

will finalise this after we update the mineral

platform for growth,” Ducler declares. “If the

resource estimate at the end of Q1.”

opportunity presents we will certainly look to grow EganStreet by greenfields exploration

In the interim, the board and management

and smart acquisitions where we can see that

team will work with regulators to ensure the

value accretion for EganStreet shareholders.”

mining proposal, works approvals and the project management plan are prepared for submission.

j

85


AFRICA’S LEADER

IN MINING AND MINERALS PROCESSING

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88

MINING | Galena Mining | ASX

GA

A high-gr


Resource Global Network

ALENA MINING

rade, low capex development strategy at the Abra deposit

89


90

MINING | Galena Mining | ASX

To say it has been a whirlwind 12 “We expect to make a large profit from a mine life of 10-15 years.” months or so for Galena Mining is an understatement. Around A globally significant a year ago the company existed asset only in the minds of a small The Abra development is a vast lead-silvercadre of executives and mining copper-gold-zinc deposit hosted over a professionals. However, in this 600 metre by 600 metre area within the short space of time Galena has Jillawarra sub-basin of the Mesoproterozoic been brought to life, purchased Edmund Basin, and is possibly the largest its first asset at an incredibly undeveloped lead deposit in the world. marked-down price, listed on the ASX after an unprecedented IPO Despite being first discovered in the 1980s and immediately begun resource and receiving a considerable amount of definition drilling at its asset, exploration attention from several interested the renowned Abra base metals parties, curiously the deposit remains deposit in the Gascoyne region undeveloped until now. of Western Australia. “Previously it was perceived to be a large The spark which led to the creation of Galena

mid to low-grade world-class deposit, that’s

was provided by three founding directors,

what attracted the previous Chinese buyers,”

who swiftly began to build a talented

reveals Turner.

executive team. Adrian Byass, Jonathan Downes and Oliver Cairns have several

However, while the value of the deposit

decades of experience between them in

has always been there for all to see, the

terms of identifying new assets and floating

strategies of those attempting to develop it

new companies.

have fallen short of taking Abra from a worldclass prospect into a fully-producing asset.

This founding trio soon appointed Edward Turner as Galena’s CEO, a geologist of 30

Often, previous owners approached the

years with a wealth of knowledge attained

project with a high production strategy,

from roles encompassing base, precious

based on yielding low to mid-grade ores in

and specialty metals for leading mining

massive quantities.

companies across the globe. This method invariably led to spiralling costs, Putting it simply, Turner tells RGN: “Our aim

which in the case of Chinese miner HNC was

is to prove up a high-grade resource at the

compounded by crashing metal prices in

Abra deposit and get that into production.

2008.


Resource Global Network

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MINING | Galena Mining | ASX


Resource Global Network

“But, we identified that within that large

for just $3.5 million, a snip of the $117 million

deposit there is a lot of high-grade

paid by HNC in the preceding transaction.

mineralisation, and if we can mine at a lower production rate per annum, there will

Unfortunately, the value of the Abra deposit

be much lower capital expenditure on the

quickly depreciated under the weight of the

processing facilities and the profit margin will

global financial crisis and stooping metal

be much higher on the production.

prices, to the dismay of the Chinese owners.

“The deposit covers such a large area that

Now, 10 years later with favourable macro-

previous owners were almost blinded by the

economic conditions returning and new

size of it and didn’t really try to identify the

forces shaping supply and demand currents

higher grade sections of the deposit.”

in the commodity market, Galena is well

Fortunate timing

poised to finally realise the true value of the metal in the ground.

Furthermore, the timing of Galena’s ascent into the Abra deposit is playing a vital role in

Recognising this building value, Galena’s

its development.

directors formed the company with the sole intention of acquiring the Abra deposit and

The company was able to acquire the assets

advancing it via a cost-effective strategy

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MINING | Galena Mining | ASX


ResourceGlobal GlobalNetwork Network 95 Resource based on a lower production rate at a higher grade, which would go a long way to guaranteeing a low capex project with high profit margins. The executives also laid out a clear timeline with regards to heading to the investor market and this was realised on September 7th last year when Galena’s IPO on the ASX raised $6 million in an over-subscribed affair. “It [the IPO] was very significant because it happened after such a short period of time, and was one of the most successful floats on the ASX last year,” reveals Turner. “Our share price has already gone up 600%, so the market has realised there is a lot of value in the asset. It was done in a very short amount of time and we were even drilling within two weeks of the listing.”

Resource definition drilling Immediately after listing Galena began preparations for drilling, including the set up of temporary camps at the resource, which were constructed by Longreach Camps, a well-established national outfit. This rapid move into further drilling activity at Abra is symbolic of the wider pace of development at Galena, with the impressive assay results also providing a tangible validation of the company’s strategy. Following the completion of work by its


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MINING | Galena Mining | ASX


Australian Resource Business Global Network

capable partner DDH1 Drilling, Galena

thereby intersect some of the best high-grade

subsequently released assay results from a

mineralisation within the deposit, and each

12-hole infill programme that confirmed the

hole has been successful so far.”

presence of high-grade lead mineralisation across each hole.

As previously alluded to, prevailing market conditions in the lead industry are also

The pick of the bunch from the assays was a

playing into the hands of Galena.

result of 31.4m @ 14.5% lead and 2.7% zinc within a broader 64.0m interval at a grade

Lead prices of late have reached a 6-year

of 10.6% lead and 1.5% zinc, from a depth of

high, driven by a rapidly expanding global

408m.

vehicle fleet.

“These results prove our geological model for

Turner explains how an increasingly wealthy

the controls on the high-grade mineralisation

Asian consumer market is driving this growth

is correct,” Turner proclaims.

in the automobile industry, which is still dominated by traditional carbon-burning

“We are looking at it from a different

engine cars with lead acid batteries despite

perspective to previous companies and these

a slow transition towards hybrid engine and

holes were designed to test the model and

electric vehicles (EVs).

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MINING | Galena Mining | ASX

Supply-demand dynamics Lead demand has risen 45% in just over 11

With high-grade metal in the ground and lead

years and should continue to rise as the

prices heading skywards, the company has

automobile industry gains greater traction

a strong platform on which to deliver on its

across emerging consumer markets, while

aims and make a significant profit over the

a lack of new lead mines in the pipeline is

next 10-15 years.

contributing to a constrained supply dynamic.

98

Operating in Australia, the world’s number Therefore, these supply-demand factors have one lead exporting country will also only put Galena in a very satisfying situation as it

serve to increase Galena’s chances of success

sits on possibly the largest undeveloped lead going forward. mine in the world.

“OUR AIM IS TO PROVE UP A HIGH-GRADE RESOURCE AT THE ABRA DEPOSIT AND GET THAT INTO PRODUCTION” EDWARD TURNER, CEO GALENA MINING


Resource Global Network

“It’s a huge advantage,” says Turner. “All

Galena will complete a resource estimate

of our consultants, engineers, geologists,

in February 2018, providing the foundation

metallurgists, environmental experts, have

stone for the next phases of the project. A

previous experience and are world leading

pre-feasibility study is due in September

in their expertise at getting these sorts of

followed by a bankable feasibility 12 months

deposits into production efficiently and cost-

later.

effectively.” Finally, with the Abra deposit being within Of this highly specialised supply chain, Turner an already granted mining lease, Galena gives special mention to the work of Paul

will be in a position to get into production

Lyons Aviation and SGS Laboratories, who

by late 2020, which signals the fruition of

provided assaying services from its Perth

the Abra development and the achievement

office.

of Galena’s aim, just three years after the company was born.

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AFRICA. IN THE PALM OF YOUR HAND.

ONLINE NOW WWW.AFRICANBUSINESSNETWORK.CO.ZA


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MINING | Universal Coal | ASX


Resource Global Network

Taking its thermal coal production to the next level

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MINING | Universal Coal | ASX

Universal Coal has passed a number of significant milestones since RGN last touched base with the ASX-listed miner towards the end of 2016. At that point, the company had started underground operations at its 2nd South African mine – the New Clydesdale Colliery (NCC), which joined its existing Kangala facility in the Witbank coalfield of Mpumalanga province. By January 2017, Universal commenced open pit production at NCC before reaching nameplate capacity in the second half of the year. This milestone was sandwiched between the signing of a supply deal with Eskom and the pay out of its maiden shareholder dividend in October 2017, a clear illustration of the progress made by the company last year. The end of 2016 was marked by the finalising of a long-term coal supply agreement with Eskom, which provided a solid platform for Universal to plough ahead with the open pit development at NCC. Under the deal, Universal will supply South Africa’s biggest power utility company with 1.2 million tonnes (Mt) of coal per year for seven years, primarily from the NCC deposit, with the first batch successfully delivered to Eskom in Q2 2017.


Resource Global Network Universal already has in place an eight-year supply deal with Eskom for output from the Kangala mine, which was signed back in March 2013, however it was crucial for the company to seal a similar agreement that established a dependable buyer for the coal produced at NCC.

Nameplate at NCC Just two months after the Eskom deal was announced, the open pit section of NCC commenced production. Progress continued at a rapid rate over the subsequent months until nameplate capacity was reached in the third quarter of the calendar year. “On the underground section we hit the tonnage [targets] pretty early on in 2016. The open pit has obviously had a significantly greater impact on the total output figures,” says CEO Tony Weber. “We are now hitting those tonnages that we were looking at, which is North of 200,000 tonnes a month at the open pit. Effectively between the underground and the open pit we are doing roughly 300,000 tonnes a month, which has achieved nameplate capacity.” In fact, at the current annualised run rate of close to 2Mt, the colliery is exceeding the tonnages required by Universal’s customers, with 650,000 tonnes heading to the export market annually and 1.2Mt going to Eskom. The prospect of surplus saleable coal from NCC is a welcome one for the company and

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MINING | Universal Coal | ASX

another sign of progression at the mine

sales annualised. This figure represents a

which only reached steady state production

significant degree of growth over a short time

in H2 2017.

according to Weber.

Taking into account the Kangala colliery,

This impressive annualised output level is not

which began producing run-of-mine coal

just a product of the open pit facility at NCC

in April 2014, the company’s current

coming online, but also thanks to Kangala

total run rate stands at around 4.5Mt of

running at 12% above nameplate – another


Resource Global Network

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MINING | Universal Coal | ASX

remarkable achievement of a stellar 12

opportunity and is another really good

months.

success story.”

“At Kangala we are running at about 200,000

Multi-mine production

a month at the moment, which is annualised

The combined achievements at Kangala

at 2.5Mt,” reports Weber. “That’s pretty

and NCC over the last year represents the

much the limit of what we can squeeze it

realisation of a long-term vision for Weber

to in its present state, although we recently

and Universal of achieving multi-mine

bought 80% of the adjoining Eloff block. This

production, but the company is not resting

acquisition gives us an exponential expansion

on its laurels.


Resource Global Network

“These two mines are now fully fledged and

opportunities in terms of acquisitions.

up and running, so we have achieved multimine production, but obviously this is not

“So we are looking at further expansion, but

where we intend to stop.

having said that we also paid our maiden dividend and I think that’s a big ticket item for

“There are opportunities to expand,

2017.

especially at Kangala and opportunities to develop further operations like the Eloff

“We paid a 1 cent dividend and declared

project and also additional brownfields

that it’s over a 6% return on equity from an

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ResourceGlobal GlobalNetwork Network Resource

MINING | Universal Coal | ASX

investor point of view and we don’t intend

doesn’t stop here for Universal, with another

this to be our last dividend in any shape or

significant ramp up in its production

form. We want to be regular payers giving

trajectory targeted over the course of 2018-

something back to our shareholders but also

19.

continuing to grow the company.” As already highlighted, the hard work

Brakfontein and Eloff The company is ready to proceed on its third


Resource Global Network

project, the Brakfontein coal mine in Delmas, “Having got all the permitting in pace at Mpumalanga, having received full licencing

Brakfontein, it’s really now about getting

for the development.

marketing agreements in place for the coal,” Weber stresses.

Brakfontein hosts a JORC 2012 mineral resource of 75.8Mt inclusive of a proven ore

“We have looked at doing this early next

reserve of 9.1Mt.

financial year.”

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MINING | Universal Coal | ASX

Australian Business Network

112


Resource Global Network

First production from Brakfontein is set to

increased tonnage projections for 2018-19,

be achieved in 2018, bringing to fruition a

along with increased output from Kangala.

project which has been in the pipeline since Q4 2014 and which has guided Universal’s

The Eloff acquisition presents Universal

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MINING | Universal Coal | ASX

SSMS_Quarter advert_121x95mm_Sept 2017_Final.pdf

1

2017/09/19

7:53 AM

with a significant expansion opportunity on one of its existing properties, owing to the fact that it lies adjacent to Kangala. With infrastructure already in place, the brownfields expansion will provide a low cost pathway to the long-term

C

development of Kangala, as even on

M

Y

current production rates there is life

CM

well in excess of 40 years on the historic

MY

resources at Eloff, says Weber.

CY

CMY

K

“There is substantial upside potential when you do these kinds of expansions, in terms of bringing value back to the company and we will continue to develop along those lines, creating nodal points excellence in execution

and expanding on the back of those.�


Resource Global Network

Over the next six months Universal will

value accretive growth, while we continue to

look to continue delivering and exceeding

look after all stakeholders, including in the

its promises, chiefly aiming to maintain

communities.

production levels at the 4.5Mt mark in order to satisfy its contractual agreements with

“We often don’t state this, but we plough

Eskom and the export market.

significantly back into the community at Kangala. It’s not just looking after

“Overall, the standout point for us is that

shareholders and employees but looking

we’ve delivered on what we said we were

after all stakeholders. It’s about all the people

going to deliver. We said we were going to

around you.”

become a multi-mine producer and after that we said we would reward shareholders and we’ve done both of those,” Weber assets. “It’s not just about seeking growth, but finding

b j

115


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118

MINING | Hummingbird Resources

HUMMINGBIRD RESOURCES


Resource Global Network

Pouring first gold at Yanfolila

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MINING | Hummingbird Resources

At the start of 2017, RGN spoke to Hummingbird Resources as the West Africa-focused gold miner began to accelerate its flagship low cost, high grade Yanfolila Gold Project in Mali. In little under a year, the AIM-listed outfit has accomplished a long list of undertakings that have taken the project off the ground, from construction and electrification of the plant, building the camp, commissioning of the mill, mobilisation of the mining fleet, local recruitment, training and much more. At the end of Q3, Hummingbird began mining operations at Yanfolila ahead of an anticipated first entry into production by year end. Managing director Daniel Betts talks RGN through Hummingbird’s busy year, explaining how he and his team have ensured the project will be delivered on time and on budget.

The team So often in these near-term developments it is the organisational strength of the managing team that dictates the overall strength of the project, and this notion was not lost on Betts when it came to assembling a senior management team.


Resource Global Network

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MINING | Hummingbird Resources


Resource Global Network “I think we have got the structure right in terms of Hummingbird having a VP for all the major disciplines be that the EPCM, the SHEC, operations, geology and some of those people have been with me for a long time,” says Betts. For example, VP SHEC (safety, health, environment, consultancy) David Hebditch has worked with Betts for several years prior to his arrival on the Yanfolila project, including on the Dugbe Gold Project in Liberia, Hummingbird’s other major gold development in West Africa. Another staunch member of the team is VP Operations William Cook who is responsible for the ongoing running and development of Hummingbird’s operational capability in Mali and Liberia, and has been with the company since the beginning. However, the company has also brought in fresh blood such as Murray Paterson, VP Geology, Wayne Galea, VP EPCM and Shaun Bunn, Senior VP Project Delivery, who have each made significant overseeing contributions to the overall ramp-up in activities at Yanfolila over the last year. The construction of a clearly-defined and compartmentalised management team has allowed the company to maintain a high degree of control over the many different elements of the project, meaning that no detail (however fine or glaring) has escaped the attentions of a Hummingbird supervisor.

123


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ResourceGlobal GlobalNetwork Network 125 Resource

This level of transparency in Hummingbird’s

Major milestone

work has taken on even greater importance

“AMS are very professional, they know exactly

in recent months with the entry of the

what they are doing and run lots of mining

contract mining team African Mining Services

operations in West Africa, but ultimately they

(AMS) on to the project.

are bringing in a $100 million mining fleet and it changes the dynamic of your team and

Overall, Betts believes the transition from

the way you operate as a company massively.

construction of the plant to mobilisation of

the mining fleet has been a smooth one,

“How we have integrated with AMS, managed

which is a testament to the disciplined

the contact with them and ultimately worked

overarching management structure already

together, is a major milestone for the

in place prior to the arrival of AMS.

company. We are currently getting through

“I GUESS THE PROOF IN THE PUDDING OF OUR WORK IS THE FACT THAT WE ARE GOING TO DELIVER ON TIME AND ON BUDGET AND THAT’S A PRETTY RARE FEAT SO I’VE GOT TO BE HAPPY” DAN BETTS, MANAGING DIRECTOR


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MINING | Hummingbird Resources

the strip, have accessed ore and the ROM

so I’ve got to be happy.” After first pour in

pad has been completed.”

December, Yanfolila’s first year capacity will reach 132,000oz au, according to the project’s

Over three million tonnes of material was

2016 definitive feasibility study.

removed and transported during the initial process of top-fill strip mining to prepare the

The DFS was followed up by an optimised

open pit ahead of first pour in December,

new mine schedule outlining the financial

a target which was achieved on time to the

metrics of the project, which revealed a low

delight of Betts.

AISC of $695/oz and after-tax IRR of 60% at a $1,250 gold price. At this price Yanfolila will

“I guess the proof in the pudding of our work

generate over $70 million of free cash flow a

is the fact that we are going to deliver on time year. and on budget and that’s a pretty rare feat


Australian Resource Business Global Network

As if these encouraging returns weren’t

struggle to raise the capital to build that plant

satisfying enough for Hummingbird,

on its own.

Yanfolila’s production profile is set to be further boosted over the next decade by the

“But, based on the current metrics we think

recent deal struck with African Gold Group

we can beneficiate by concentrating that ore

for a conditional 50% interest in the nearby

at site before trucking it to our Yanfolila mine

Kobada Gold Project.

and running it through our CIL circuit, which would take a lot of the capital costs out of

The Kobada project has a measured,

building a standalone mine.

indicated and inferred gold resource of 2.2 million oz (Moz), including 511,000oz

“Effectively overnight we’ve got an additional

of reserves all within trucking distance

resource of 2.2 million ounces and we can

to Yanfolila’s processing plant, which

show the world that Yanfolila is not a short-

provides a tantalising scenario involving the

term project.

transportation of concentrate. “If we can get it to 10 years and 150,000oz a “I think it is one of those rare things in life

year by bleeding in a higher concentrate feed,

where it is a win-win,” proclaims Betts.

then we’ve got a very significant mine on our

“Kobada is a low grade deposit and would

hands.”

127


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Resource Global Network

TIMELAPSE VIDEO YANFOLILA GOLD MINE

Cora Gold

“We had a fantastic portfolio of exploration

Turning away from the Yanfolila project and

licenses but just didn’t have the bandwidth or

towards Hummingbird’s exploration activity,

the budget to explore and they’ve just been

the company struck a significant deal with

sitting there for the last 18 months,” explains

fellow junior Cora Gold, which also has a

Betts.

presence in the Yanfolila Gold Belt across

Mali and Senegal.

“The period of stagnation was frustrating as we like to work our ground hard and give

Ahead of Cora’s listing on the AIM,

ourselves a chance at making the next big

Hummingbird agreed to put some of its own

discovery.”

exploration targets into Cora’s portfolio in return for 33% of the company’s shares.

However, under a JV with Cora (a company

“FROM HUMMINGBIRD’S POINT OF VIEW THIS DEAL WITH CORA GOLD BECOMES AN ARMS-LENGTH EXPLORATION INCUBATOR FOR US AND I QUITE LIKE THE MODEL” DAN BETTS, MANAGING DIRECTOR

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MINING | Hummingbird Resources


Resource Global Network

Betts has known for a long time) the

As Hummingbird enters into production at

company has been able to free up its

Yanfolila, maintains its position in Liberia at

exploration bandwidth and funding.

the Dugbe project and keeps its exploration

“From Hummingbird’s point of view this

targets open through the shared ownership

deal becomes an arms-length exploration

deal with Cora, Betts reflects on where he

incubator for us and I quite like the model to

wants to take the firm in the coming years.

be honest. “My vision is to build the most profitable, “It lets us focus on growing a mining

efficient gold company I can build and that

company, developing Yanfolila and Kobada

doesn’t need to be just in West Africa. This

but it also gives us access to exploration

is to be driven by the quality of the resource

which is where Hummingbird came from and

and any differentiators our team can bring to

is the bedrock of the industry. We certainly

the table to deliver those resources.”

want to be involved in exploration and I think this is a neat way to do this.”

b a r j

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134

MINING | CuDeco | ASX

CUD Australia’s new


Resource Global Network

DECO force in copper

135


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MINING | CuDeco | ASX

From discovery to development, Australian mining company CuDeco has transformed itself into Australia’s new force in copper. The launch in late 2016 of its Rocklands Copper Mine near Cloncurry, Northwest Queensland is seen as the start of a new era for the emerging company as it taps into potentially electrifying growth in copper demand thanks to the electric vehicle revolution. A decade after its discovery, the Rocklands mine was officially opened in October 2016 in the presence of dignitaries from government and other key stakeholders as they celebrated the new investment and jobs created for the region. The past year has seen the Brisbane-based miner achieve a number of milestones at its flagship project, including the first production of sulphide copper concentrates and the first deliveries of native copper and sulphide concentrates to the Port of Townsville for export to China. The company also recommenced mining operations in March 2017 following the appointment of an external mining contractor. Following record production at Rocklands for the month of November 2017, newly appointed CEO Gongyang Jiang, at the company’s annual general meeting, announced plans to ensure the Rocklands processing plant achieves consistent


Resource Global Network

137


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MINING | CuDeco | ASX


Resource Global Network nameplate production of 3 million tonnes per annum. “The installation of two new C400 cone crushers will help improve reliability and plant uptime, while a new gravity circuit bypass will also lower operating costs. These initiatives, coupled with enhanced copper grades from the pit, will boost operational performance at our mine,” Jiang says. “We are also examining the commissioning of the cobalt/pyrite circuit at Rocklands following the recent surge in cobalt prices, which have doubled over the past year.” Jiang notes that the company had achieved positive cash flows from operating activities of around AUS$10 million during fiscal 2017, a figure that will substantially improve as production hits target. Achieving those targets is a priority of the company’s newly installed leadership team, which aims to instil a culture of continuous improvement across the organisation. In addition to Jiang’s promotion from chief operating officer to chief executive officer, the company confirmed mining executive Peter Hutchison as chairman, while also naming a new general manager for Rocklands, Adam Norton. “The board is confident in Jiang’s ability to drive ongoing improvement, while I am also pleased to move forward in the role of chairman, a move which will provide further stability to the company’s operational

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MINING | CuDeco | ASX


ResourceGlobal GlobalNetwork Network 141 Resource

and corporate governance frameworks,”

in September, with CuDeco acting as a gold

Hutchison said.

sponsor of the ‘C150’ events.

“Mr Norton also is an important addition

“CuDeco may be a relative newcomer to

to our team, and his wealth of experience

Cloncurry, but we are all building our own

including in the Cloncurry region will be

piece of history at our mine,” says the CEO.

vital in ensuring Rocklands delivers on its potential.”

Looking ahead, Queensland’s newest copper producer sees a range of options in

With a workforce of more than 330 at the

extending the life of its Rocklands mine to

end of June 2017, Rocklands is an important

ensure its long-term sustainability.

contributor to the regional economy, particularly due to CuDeco’s focus on local

“We see the potential to leverage off our

employment rather than ‘fly-in, fly-out’

processing plant, which is a world-class

workers.

facility, so the company can extend its production lifespan through exploration

The company’s commitment to community

success, developing existing and new ore

engagement was shown in its support of

bodies and also looking at potentially

Cloncurry’s 150th anniversary celebrations

acquiring other mining companies,” Jiang said.


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MINING | CuDeco | ASX


Australian Resource Business Global Network

He said the processing plant had the ability

electrified transportation and energy storage.

to be configured for different metals and minerals, making it attractive to nearby

A report by the International Copper

mining operations as an outsourced

Association (ICA) pointed to a nine-fold rise

processing plant.

in copper demand over the coming decade, aided by the growth of electric vehicles. The

In September 2017, CuDeco broadened its

number of electric or hybrid cars and buses

sales relationships by entering into a copper

is expected to reach 27 million by 2027, up

concentrate sales agreement with Japanese

from just 3 million in 2017.

trading house Mitsui, adding to its existing offtake agreement with China Oceanwide.

Rising copper demand is also predicted from energy storage, since every kilowatt-hour of a

The mine’s proximity to growing Asian

lithium-ion battery uses 1.1 to 1.2 kilograms

markets has placed it in an enviable position

of copper. Over time, this could result in an

amid an improving outlook for the red metal.

additional 600 kilotonnes of copper demand

In 2017, copper prices hit six-year highs amid

by 2027, according to the ICA.

expectations of an emerging supply deficit, thanks to an improving global economy and

Cobalt is another winner since it is a key

demand from emerging sectors such as

component in the production of lithium-ion

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MINING | CuDeco | ASX

Gongyang Jiang, CEO


Resource Global Network

batteries used in electric vehicles, along with

One of a rare number of explorers that

mobile phones and laptops.

have successfully moved from discovery through to development, CuDeco is confident

“CuDeco has the right assets in the right part

of an exciting future for its key asset as it

of the world, and we are targeting the right

capitalises on changing global technologies

commodities,” Jiang proclaims.

and the increasing demand from fast-growing Asia.

“As the ‘new force in copper,’ we have significant potential to grow our business

For a town with a rich mining heritage, the

further and we are focused on driving our

future appears bright for one of Cloncurry’s

business forward in 2018 and beyond.”

newest miners.

b a j

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148

MINING |Whittens

WHI

A family-run constructi


ITTENS

ion business with Australian mining expertise

Resource Global Network

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MINING |Whittens

Whittens Group was formed in 2001 by Clayton, Tyron and Louise Whitten, who shared a vision to create a family-run business with a nationwide reputation. Since its inception, the contractor has developed into a giant of the Australian construction industry, servicing multiple sub-sectors and working with the biggest and best firms in heavy industries such as oil and gas and mining. The wholly Australian-owned private enterprise provides a full turnkey service to its clients or specialised jobs at any stage of the construction cycle. Over two decades, Whittens has established a stellar reputation for successfully delivering high profile, large projects through closely aligning its approach with the needs of the client. The company has been built with strong family-orientated values at the very foundation and continues to be led by the Whitten family. Clayton and Tyron remain at the forefront in executive director roles, while Louise continues as CEO after amassing over 20 years’ experience in senior management roles. Whittens maintains that the success and gradual expansion of the business over the


Resource Global Network

151


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MINING |Whittens

last 15 years or so is intrinsically linked to

our performance and shaped the identity and

its foundation values. These values extend

culture of our business from day one. Values

across several overarching principles such

are extremely important, especially in a large

as safety, passion, team work, loyalty, hard

company where values can become diluted.

work, and professionalism. These core values underpin the entire business and are a pre-

“Companies don’t perform, people do! If

requisite for all Whittens employees.

you want to attract and retain engaged, productive and passionate people that

“When Clayton, Tyron and I started this

perform in challenging environments, you

business we knew what we wanted to stand

have to work hard at keeping the culture that

for and what we wanted to achieve,” Louise

has made the business a success.

proclaims. “Whittens’ success can largely be attributed “Our values have supported our vision, driven

to a core team of long-term, multi-skilled


Resource Global Network

“COMPANIES DON’T PERFORM, PEOPLE DO! IF YOU WANT TO ATTRACT AND RETAIN ENGAGED, PRODUCTIVE AND PASSIONATE PEOPLE THAT PERFORM IN CHALLENGING ENVIRONMENTS, YOU HAVE TO WORK HARD AT KEEPING THE CULTURE THAT HAS MADE THE BUSINESS A SUCCESS.”

LOUISE WHITTEN, CEO

employees that demonstrate our values

Other tailor-made services provided by

every day.”

the company to its partners are water

Construction capabilities

management, structural, mechanical and

piping (SMP), remedial and ancillary works.

The construction division has consistently delivered high value to its clients across a

“Whittens commenced business in

variety of offerings which include bulk and

residential construction and then moved

detailed earthworks from site clearance,

into commercial and industrial construction.

haulage, excavation and water cartage.

Today, we service many industries including

Whittens also specialises in many forms

infrastructure, oil and gas, mining, defence,

of concrete construction all of which are

energy and utilities.”

underpinned by ISO approved quality systems.

153

Simply glancing at the company’s extensive highlights reel of completed projects begins


154

MINING |Whittens to give an idea of the strength and breadth of its services to the sprawling Australian construction industry. Beginning with water infrastructure, Whittens is currently working alongside UGL WSP JV to deliver the Riverstone Waste Water Treatment Plant for Sydney Water. The scope of the project involves provision of formwork, reinforcement and concrete pouring for the construction of a biological reactor, biological reactor distribution chamber, secondary flow distribution, secondary clarifiers, three off RAS pump stations, tertiary flow distribution chamber, and tertiary clarifier. The company also executed a major bulk and detailed earthworks and concrete project for MMG, at Dugald River. Included amongst the concrete package are major structures such as a reclaim tunnel raft foundation, together with foundations for the SAG, ball and regrind mills. The plant site bulk earthworks comprises the construction of roadworks, drainage, HDPE lined ponds

“Whittens has adapted and diversified and

and tailings storage facility, together with

evolved as opportunities have arisen to grow

the installation of HDPE piping and electrical

and develop the business” says Louise.

cabling. “Today, we employ some of the best people Another standout development which

in our industry. Again, it’s all about our

Whittens took part in was the massive Gorgon LNG project on Barrow Island, WA. The scope of work undertaken involved providing resources for the construction of in-situ concrete works and other civil and underground services as required by the project leaders up to the end of 2015.

“LEADERSHIP IS THE KEY ELE SUCCESS OF A PROJECT IN A R EACH OF OUR LEADERS TO BUSINESS, WE REDUCE MANA QUICK MANAGEMENT DEC LEADERS THE OPPORTUNITY T LOUISE WH


Resource Global Network

people and the performance of our people.

The skills of our people in combination with the systems that we have developed over

time are applied to all projects, regardless of the industry.”

EMENT THAT CAN DECIDE THE REMOTE AREA. WE EMPOWER O ACT LIKE THEY OWN THE AGEMENT LAYERS TO ENSURE CISIONS AND WE GIVE OUR TO SELECT THEIR OWN TEAM” HITTEN, CEO

155

Mining expertise

The national mining industry makes up a significant portion of all construction-related business in Australia, and over the years Whittens has repeatedly tapped into this and developed a strong level of expertise, gaining the trust of clients from junior outfits right up to the biggest mining companies in the world. The first mining project that jumps off the page from Whittens’ portfolio is the massive Roy Hill iron ore project in the Pilbara, WA. Back in 2014, Whittens delivered concrete works to the mine site, which included three ROM walls and the coarse ore stockpile


156

MINING |Whittens

tunnels and vaults. The combined volume

$10 million contract, its sixth major contract

of concrete used by Whittens at the project

win of 2017, for work on Pilbara Minerals’

equated to 16,000m³ of concrete.

Pilgangoora lithium-tantalum mine in WA. Along with the provision of 5,800m³

The quality of the service provided at the

of concrete, Whittens will complete the

Roy Hill mine was confirmed in the fact that

construction of crushing, wet processing

the owners came back for repeat business

and spodumene concentration dressing

with Whittens not long afterwards when the

infrastructure, as well as processing plant

purpose-built iron ore port facility at Port

services.

Hedland was being constructed. One of the main challenges faced by Whittens Of the mining projects that Whittens is

in the Australian mining sector is working

currently engaged on, it is undertaking repair

on remote sites, such as those found in the

and renovation work at BHP’s Mt Whaleback

Pilbara region of WA. “Whittens overcomes

iron ore mine in the Pilbara, proving that the

these challenges associated by planning each

company can provide its high-quality services

project well in advance,” reveals Louise.

even at the post-construction stage. “We collaborate closely with our clients and Most recently, the company was awarded a

our project team prior to anyone going to


Australian Resource Business Global Network

site. Leadership is the key element that can

across all its current focus sectors notably the

decide the success of a project in a remote

mining and resources industries.

area. However, one project that it is currently “We empower each of our leaders to act

working on does provide a glimpse into

like they own the business, we reduce

the company’s future business. Whittens is

management layers to ensure quick

constructing concrete bases at the Sapphire

management decisions and we give our

Wind Farm in NSW, and with Australia on

leaders the opportunity to select their own

the cusp of a renewable energy revolution,

team. This has proven to be a very successful

Whittens might just fancy itself to take on all

business model for us.�

the heavy lifting in this burgeoning industry.

Looking forward, Whittens will continue to build on its business with the original family values still at the heart of its endeavours

b j

157


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160

OIL & GAS | Winchester Energy | ASX

WINCHESTER

Austra


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R ENERGY

alian junior taking on the Permian heavyweights

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OIL & GAS | Winchester Energy | ASX

Since RGN last spoke to Winchester Energy the Australian oil and gas junior has been busy developing its position in one of the most bounteous oil basins in the US, the gigantic Permian Basin stretching across Texas and New Mexico, along with further building its board and management team. ASX-listed Winchester was formed in 2014 and quickly snapped up 17,400 net acres in the Permian, a bold and unprecedented move for a junior cap company in the middle of the lowest global oil prices seen in at least a decade. Winchester’s acreage in the Permian’s Eastern shelf provides a multitude of conventional and unconventional oil targets from two ancient formations, which have been subject to extensive drilling in the last year.

prolific basin outside of the Middle East, and we’ve got great leases and expect great drilling opportunities going forward,” asserts managing director Neville Henry. Over the last year, Winchester’s drilling programme has focused on a range of wells, achieving significant success with two vertical

The company’s activity thus far has resulted

wells of over 200 bpd. However, as is the case

in eight producing wells, operating at

with most drilling programmes, results have

varying rates from just a couple of barrels

been hit and miss with other wells returning

per day (bpd) up to 200 bpd, with a view to

in the range of 50 bpd.

completing further drilling on the wells to provide a more uniform overall output.

The greatest basin outside the Middle East “We have eight wells all on production in the Permian, which is probably the most

As a result, the company has had to reconsider its understanding of the reservoir variability of the Ellenburger Formation, one of the oldest oil producing rock formations in the world at close to 400 million years old.


Resource Global Network

The ancient formation has undergone

company with a relatively inexpensive, viable

multiple surface erosional events and then

technique with which to significantly enhance

alteration from hydrothermal fluids prior to

the intersection of oil productive porosity,

the deposition of Pennsylvanian and Permian

fracturing and permeability within the oil-

sequences. Consequently, Winchester has

saturated Ellenburger Formation.

extensively utilised 3D seismic mapping technology to improve its understanding of

In the first well, where the USR technique

the geological formation.

has been successfully used, it has provided Winchester with a ten-fold exposure to oil

“We are currently in the middle of drilling a

and gas bearing zones within the Ellenburger

series of short horizontals from an existing

Formation when compared to a standard

vertical well using ultra-short radius (USR)

vertical well and, as such, is a potential game

drilling technology, exclusive to us in our

changer for the company.

leasehold the company has completed three horizontal lateral legs in its first operation

“Where we are today, we are on the brink of

with USR Drilling as Winchester’s partner.”

proving the viability of this technology as a way to significantly enhance oil production

Drilling results to date have provided

rates and we are preparing to drill a multi-

proof that USR lateral drilling provides the

well programme which will include both

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OIL & GAS | Winchester Energy | ASX


Resource Global Network

similar short multiple horizontal wells and

Henry approached Kopcheff with an offer

limited vertical wells over the next nine

to join the board at Winchester based

months.

on his expertise in the junior cap sector, having taken independent Australian oil

“We believe the enhanced production from

explorer Victoria Petroleum from a market

the USR drilling method at the end of the

capitalisation of US$10 million in 1984 to

initial USR drilling program will create an

around $330 million.

increased positive cash flow that should selffund drilling from that point onwards,” says

“I’d been approached by several junior

Henry.

explorers since my retirement but nothing took my fancy, until Neville approached me,”

Another significant development within the

says Kopcheff.

company in the last year arrived with the appointment of supremely experienced

“They say you should always back people, so

geologist John Kopcheff as non-executive

with Neville and Winchester I agreed to come

chairman.

on board to direct the public announcements side of things and keep the company in the

Kopcheff is well-known across the industry

profile of the investment public in Australia.”

for his exploits spanning a 39-year career, prior to his retirement in 2010.

In addition to having the right people in place

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OIL & GAS | Winchester Energy | ASX

at Winchester, Kopcheff also saw that the

Having Kopcheff at the helm of Winchester’s

company was in a unique position as a junior

public profile has opened up a new dynamic

with a large acreage position in the Permian

for the company while Henry continues to

Basin and production from the get-go, but

lead the process of drilling wells, although

felt it just needed a greater injection of

the former has also been influential in the

publicity across investor markets.

application of a more aggressive drilling programme.


ResourceGlobal GlobalNetwork Network 167 Resource

Henry and Kopcheff agree that an aggressive

Consequently, Winchester has drilled, and

drill programme is what will deliver results

plans to drill, lots of targets and some

(especially in the Permian Basin where

wildcats across the net acreage, but crucially

it is almost impossible to drill a dry hole

has married this aggressive programme with

according to Kopcheff) and ultimately what

a highly technical approach.

shareholders want to see.


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OIL & GAS | Winchester Energy | ASX


Australian Resource Business Global Network

A technological approach With the use of 3D seismic technology, the company has been able to define some enticing stratigraphic traps in the Strawn Formation, particularly at a prospect called Crystal Falls which has a significant resource potential of up to 15 million barrels.

Therefore, Henry and Kopcheff recently visited London and received a welcome reception, attracting interest from a couple of institutional investors. Follow-up road shows in Australia have also resulted in a successful $2.6 million raising from professional investors.

“We are looking at lots of different technological approaches, including how we

Winchester also hired experienced

can improve productivity and recovery from

independent geologist Peter Strachan to

the wells by using chemical treatments to

undertake an independent financial review

get the highest rates of recovery per dollar

of the company, the results of which were

spent,” says Henry.

published in the Strachan Report.

By combining these technical approaches

Kopcheff asserts that Strachan has a ‘healthy

with a large acreage position, Winchester

cynicism’ of oil and gas firms from an

hopes to deliver significantly increased

investment perspective, which is somewhat

shareholder value over the next 18 months

reflected in his valuation of the company at

in a layered fashion, drilling vertical wells,

10.3 cents a share, with a ceiling of 55 cents a

followed by horizontals and laterals.

share.

“If we can layer all the drilling up, you can

“Some of the investors and board members

build a pretty substantial resources base for

thought this was a bit low but I said this is

the company and for the shareholders to

reality, we operate off a low base and go

hang their hat on, with a very low downside,”

upwards,” says Kopcheff. “Certainly, with the

Henry adds.

type of plays we’ve adopted we are looking

at giving the shareholders the opportunity of The company currently finds itself in a

having a higher price and if we are successful

healthy financial position with available cash

we will see it rise.”

and no debt, but needs sustained capital to fund its aggressive drilling plans in the

The Strachan Report was also published

coming years.

without incorporating the Crystal Falls play

“IF WE CAN LAYER ALL THE DRILLING UP, YOU CAN BUILD A PRETTY SUBSTANTIAL RESOURCES BASE FOR THE COMPANY AND FOR THE SHAREHOLDERS TO HANG THEIR HAT ON, WITH A VERY LOW DOWNSIDE,” NEVILLE HENRY, MANAGING DIRECTOR

169


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OIL & GAS | Winchester Energy | ASX

and prior to a successful round of lateral

think people are now becoming aware that

well drilling, which should add an extra slice

there has been a stabilising in the price and

of value on the share price in the eyes of

investors will turn to this sector and see that

shareholders and investors.

there is potential for an improvement in

A changing climate in the oil sector

value.” Winchester is well protected from oil price

The recovery of the oil price, which has

fluctuations on the downside, down to

spilled over the $60 a barrel mark in recent

the mid-$30s thanks to the low costs of its

months will prove to be an additional boon to ongoing activity and the attractive leases it the company, as investors realise that value

has negotiated during the oil price downturn.

is returning to the sector. Winchester hopes that greater pools of capital will be available

“The particular leases we’ve been able to

to be pumped into its drilling programmes.

negotiate during the down turn, when the lessors were willing to negotiate and not be

“I believe the climate is changing within the

too hard on us, has meant we’ve ended up

industry,” contends Kopcheff. “The oil sector

with five leases and each one has a one well

has been beaten down for a long time, but I

per year commitment to extend the entire acreage.”


Resource Global Network

These deals will allow Winchester to maintain position in the Permian, with the potential to its growth even if the oil price was to move

extract a gross resource of up to 30 million

downwards significantly, whereas other

barrels of recoverable oil trapped across two

companies in the Permian have countless

formations.

leases and would have to drill continuously or risk losing their acreage position they spent

With a series of successful drill results under

thousands of dollars on, even if the oil price

its belt, the aim for Henry and Kopcheff is

remains stable.

for Winchester to continue its aggressive drill programme, build production, prove up

Winchester has not only weathered the

its total resource figure across the acreage

storm of the 2014 oil price crash, but turned

and open up new exploration channels with

adversity into opportunity during the down

the ultimate goal of significantly increasing

time to secure a significant net acreage

shareholder value.

j

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172

APPOINTMENTS & EVENTS

APPOINTMENTS ARC Minerals appoints Casa Mining founder in non-exec role Freshly-rebranded ARC Minerals has taken on Casa Mining founder Jonathan de Thierry as a non-executive director on the board of the Africa-focused exploration company. The appointment was announced prior to the miner’s name change, having previously operated under the name Ortac Resources until January 2018. “Jonathan brings a wealth of experience having successfully developed a number of mining projects in the DRC,” said ARC chairman Nick von Schirnding.

Exxon Mobil combines refining and marketing operations, appoints new president ExxonMobil will combine its refining and marketing divisions into a single company with Bryan Milton acting as head of the new enterprise. Milton’s previous role was president of the ExxonMobil Fuels, Lubricants & Specialties Marketing Company, and first joined the oil giant back in 1986. He has held various leadership positions at Exxon, including managing director for ExxonMobil Aviation fuels and president of ExxonMobil Global Services Company.

India-focused renewables firm officially launches making two executive appointments Ayana Renewable Power has appointed Shivanand Nimbargi as its managing director and CEO and made PJ Nayak its new chairman of the recently launched company. The new enterprise is an India-focused clean tech platform, born out of the UK government’s development finance institution CDC Group. Nimbargi and Nayak will drive Ayana’s efforts to develop renewable energy generation capacity for underserved Indian states and in neighboring countries.

Australian mining junior selects Tim Wither as new CEO Western Australia-based junior zinc explorer Symbol Mining has announced the appointment of experienced mining executive Tim Wither as its new CEO. Wither has 17 years of experience in the resources industry, amassed in roles in Australia, India, Africa and South America. “Tim has a tremendous skillset and a great track record,” said Symbol’s chairman Andrew Simpson. “Tim’s appointment significantly strengthens the Symbol executive team.”


Resource Global Network 173

EVENTS Our pick of the top mining, oil & gas and renewable energy events happening around the world in the months to come

Investing in African Mining Indaba February 05-08 Cape Town South Africa Wind O&M EU 2018 February 13-14 Munich Germany International Petroleum Week February 20-22 London UK Doha International Sustainable Energy 2018 March 19-21 Doha Qatar Offshore Technology Conference Asia March 20-23 Kuala Lumpur Malaysia

Want to promote your resources event? Email the editor at editorial@resourceglobalnetwork.com


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RGN Vol 5 Iss 1  
RGN Vol 5 Iss 1