RGN Vol 6 Iss 2

RESOURCE Volume 6, Issue 2

GLOBAL NETWORK

Mining, renewable energy and oil & gas worldwide

AUSTRALIA’S RESOURCES SECTOR:

TRANSPORTING EXPERTISE AND FUNDING AROUND THE WORLD RESOURCEGLOBALNETWORK.COM

“Resource Global Network was dedicated to learning the different aspects of our story and integrating them into well-polished feature articles.

It was a pleasure working with them.”

Richard Young, president & CEO, Teranga Gold

MINING | Brookfield Multiplex

WELCOME

Australia’s deep mineral resource riches have been turning the wheels of economic development in the country since the very first discoveries in the 19th century, which spawned the creation of stock markets where commodities could be openly traded.

Ever since boat loads of explorers from Europe flocked to Australia’s Eastern shores during the first great gold rush of the 1850s, the resources industry has maintained a distinctly international flavour.

And while the domestic market continues to thrive, as evidenced by a latest government forecast estimating resources export values at AUS$278 billion in 2018–19, Australia’s pioneering explorers have been more than ready to apply their deeprooted knowledge across several prospective jurisdictions around the world.

This issue of RGN provides a snapshot of the continued propagation of Australian expertise and funding for resources projects around the world, featuring a host of mining and oil & gas companies using the Australian Stock Exchange (ASX) as a launch pad for their international projects.

We spotlight Australia’s growing investment in Africa’s mining sector with features on Prospect Resources and their much-discussed Arcadia Lithium Project in Zimbabwe, gold-focused Cardinal Resources in Ghana and Tanga Resources - who have recently expanded into Namibia.

Brisbane-based Mayur Resources also present their industrial metals focus in the nearby high growth market of Papua New Guinea, before we move into an oil & gas mini-focus. Tlou Energy will soon provide much needed electricity to Botswana and the Southern Africa region, while Melbana Energy have moved into Cuba’s underexplored hydrocarbons sector.

You can read these and more company profiles in the issue, along with the usual news round up from the first quarter the year, which has proved to be an exciting period for the global resources sector.

Jacob Ambrose Willson, Editor

Jacob Ambrose Willson

Executive Team Editor Jacob Ambrose Willson Content Director (APAC and Americas) David Hunter Creative Director Hugo Currie ICT Director Stuart Clark Managing Director Simon Curran

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

CONTENTS

TANGA RESOURCES

NEWS 10 Global resources news Our selection of mining, oil & gas and renewable energy stories from the last month

CONTRIBUTORS 18 Noel Ong (Samso) A five-point plan for investing in small-cap ASX resources companies

MINING 30 Tanga Resources On the road towards base and precious metals exploration in Namibia 40 Mayur Resources Developing an industrial minerals and power generation platform in Papua New Guinea

MAYUR RESOURCES

PROSPECT RESOURCES

CONTENTS

TLOU ENERGY 54 Prospect Resources Glittering Prospects for this miner in the African lithium space 66 Cardinal Resources Gold exploration in Ghana’s underexplored Northeast 80 Podium Minerals Providing an alternative supply of PGMs to the world market 90 Andromeda Metals On the path to industrial metals production in South Australia

OIL & GAS 104 Tlou Energy A sustainable energy source for Botswana and Southern Africa 116 Melbana Energy Unlocking reserves in Cuba’s underexplored offshore oil basins

APPOINTMENTS & EVENTS 128 Appointments Notable appointments in the resources industry from the past month 129 Events Our pick of the top forthcoming mining, oil & gas and renewable energy events

PODIUM MINERALS

ANDROMEDA METALS

MELBANA ENERGY

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10

NEWS | Brookfield Multiplex MINING

GLOBAL RESO

Our selection of mi renewable energy news

Resource Global Network 11

OURCES NEWS

ining, oil & gas and s from around the world

12

NEWS

TECHNOLOGY TO ALTER 77% OF AUSTRALIAN MINING JOBS IN NEXT FIVE YEARS: EY REPORT A new report compiled by global accountancy firm EY for the Minerals Council of Australia (MCA) has found that 77% of Australian mining jobs will be enhanced or redesigned due to technology within the next five years.

The research, titled The Future of Work: the Changing Skills Landscape for Miners, looked into the impact of technology adoption and innovation across the mining value chain and the job market.

The report found that employment projections are set to increase over the next five years, despite automation affecting a small proportion of occupations which would decrease in demand.

“Innovation, people and skills combined with technological advances will deliver a more globally competitive minerals sector that delivers fulfilling careers in highly paid, highly-skilled jobs,” said MCA chief executive Tania Constable.

“New technology and innovative practices will enhance the performance and productivity of 42% of Australian mining jobs, with a further 35% of occupations being redesigned and upskilled leading to more valuable employment opportunities.

“Automation will give the opportunity for reskilling into other areas,” she added.

Resource Global Network 13

BOTSWANA RETAINS SPOT AS BEST RANKED AFRICAN JURISDICTION FOR MINING The Fraser Institute’s Annual Survey of Mining Companies has ranked Botswana as the most attractive African jurisdiction in the world for mining and investment.

The Southern African nation was ranked 32nd in the world on the Investment Attractiveness Index ahead of South Africa, which was the next highest ranked African jurisdiction in 43rd place.

“Botswana is again the highest ranked jurisdiction in Africa on policy, ranking 12th (of 83) in 2018,” said the report, which is now in its 21st year.

The survey rated 83 jurisdictions around the world based on their geologic attractiveness

for minerals and metals, and the extent to which government policies encourage or deter exploration and investment.

“The survey is an attempt to assess how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration investment,” the report added.

While Botswana held onto its position as the highest-ranking African jurisdiction, South Africa improved on its 2017 ranking of 48th out of 91 global mining jurisdictions, after the government published a revised Mining Charter last year.

14

NEWS

BARRICK DROPS $18 BILLION NEWMONT BID TO FORM NEVADA JV Barrick Gold has dropped its US$18 billion hostile bid for Newmont Mining after the two gold mining giants agreed on a deal to combine their operations in the US state of Nevada.

The joint venture company will be operated

by Barrick under a 61.5% stake, with Newmont holding the remainder, and will become the world’s largest gold producer with an annual production of 4.1 million ounces.

The breakthrough deal was finally reached after weeks of bad-tempered retorts between both firm’s leaders, which threatened to derail the Nevada operations merger that has been in the offing for 20 years.

In the wake of the deal, Barrick’s CEO Mark Bristow called Newmont’s boss Gary Goldberg his ‘new partner’, just weeks after labelling him a ‘loser’. In rejecting Barrick’s hostile bid, Goldberg called the offer ‘egocentric’.

However, the mood changed when the pair began negotiations in New York last week, after some of Newmont and Barrick’s largest shareholders indicated their preference for a joint venture over a takeover of Newmont.

Resource Global Network 15

NEWMONT INCHES CLOSER TO $10 BILLION GOLDCORP TAKEOVER WITH SPECIAL DIVIDEND OFFER Newmont Mining Corp has won the support of at least two key investors for its US$10 billion takeover of Goldcorp after offering an 88-cents-per-share dividend to shareholders.

The gold mining giant said in a regulatory statement that the immediate cash payment would represent a portion of the savings from a separate agreement with Barrick Gold Corp.

Newmont investors welcomed news of the dividend payment, after previously opposing the deal on grounds that Goldcorp shareholders benefited too much from it.

“Although the dividend is small, it is a step in the right direction,” said Paulson & Co in an emailed statement. “Since the Newmont board and other significant shareholders are

supportive of the revised terms, we will no longer oppose the transaction.”

Meanwhile, the stance of Newmont’s third largest shareholder, Van Eck International Investors stance, also softened in the wake of the special dividend announcement.

“We’re very pleased with Newmont’s decision,” said Joe Foster, portfolio manager at Van Eck. “Companies always claim they’re going to create synergies. It’s great to see Newmont putting their money where their mouth is and giving us a payout up front.”

Newmont’s friendly bid to buy Goldcorp is set to create the world’s largest gold producer.

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18

COLUMNS | Noel Ong

FIVE POINTS YOU NEED TO KNOW BEFORE INVESTING

A five-point plan for investing in small-

Resource Global Network

G IN A SMALL-CAP RESOURCE COMPANY ON THE ASX

-cap ASX resources companies by Noel Ong - founder and principal, Samso

19

COLUMNS||Ian Noel Thomson Ong 20 COLUMNS

How many times have you been approached to look at a company that is raising money, doing an RTO, an IPO or merely being asked to buy on the market? We all know that investing in a small-cap resource company on the ASX can be very challenging.

When you look at this industry, many commentators have compared the process much like going to the casino. In many aspects, I agree, but every gambler has a system that uses science to explain the process. It is this science if applied properly that can increase your chances of getting a good result from investing in a small-cap resource company on the ASX.

of the research may sound like a foreign language or that they don’t see the full

Investing in a small-cap resource company on

spectrum of activities behind the scene and

the ASX is something of a unique beast as it

don’t realise that what they read and see is

deals with the blue sky but yet requires a lot

not necessarily a result in reality.

of the first principle of investing, DYOR (Do Your Own Research).

In my opinion, there are many factors to put on a checklist. However, let’s discuss

The issue with the average punter and those

those that are probably more relevant, more

that are new to the industry is that much

important or more critical. These points

ResourceGlobal GlobalNetwork Network 21 Resource

NOEL ONG - SAMSO Samso provides bespoke research and presentation for clients to engage their customers or investors.

Bespoke research is useful for clients who require a two-way flow of communication with their customer/ investor base by utilising a social media strategy.

are not a saviour of a decision but give an excellent guide to what you would want to know, before investing in a small-cap resource company on the ASX. So, what are the points to look out for?

With over 30 years of experience, it usually only takes a quick five minutes of reading and investor deck, an Information memorandum

Organic content allows audiences to feel a real sense of sincerity when you share your business strategy. This allows your business to stand out among the sea of social media traffic.

Samso has nearly 30 years of experience in developing business ideas and concepts in the Australasian region.

It has worked primarily in the mineral resource industry, capital markets and corporate finance.

22

COLUMNS | Noel Ong

“The technical merits of a project are not the headline numbers. It is about possible production numbers and it is about the intrinsic value that it has which makes it a viable project” Noel Ong, founder and principal, Samso or presentation for me to decide if I need to

to the ‘sharks’ in return for the share price

spend any more of my time.

heading north.

You will be surprised at the numerous name

Let’s try and make this simple and discuss

changes that projects can go through with a

some of the critical points that I think one

new concept or a new super idea over and

must check before throwing our hard-earned

over again. The predominant motive for

money into the hands of these ‘sharks’. In

investors in this sector is to make money and

my normal checklist are these items to be

make good capital gains.

considered:

Otherwise, you would buy BHP (ASX: BHP),

1 – Technical Merits

Rio Tinto (ASX: RIO), National Australia Bank

All projects have a specific component that

(ASX: NAB) or Westpac Bank (ASX: WBC).

will make it happen or not. A good friend of

Investors in this sector tend to turn a blind

mine once told me that all diamond mines

ResourceGlobal GlobalNetwork Network 23 Resource have something unique that will make it

2.5g/t. The example I have given there is

viable. If not for that component, the mine

almost on two extremes of the spectrum,

will never happen. He said, look at Argyle

meaning that the first may not work and the

Diamond mine, it’s the pink diamonds that

second is practically a discovery.

make it viable.

2 – Corporate News

You could also add the marketing of its

Corporate activities are the most contentious

browns as cognac and champagne diamonds

point for investors and vendors of projects.

was anything but a spectacular stroke of

In reality, most plays are in a public company

genius. Take Ellendale diamond mine, the

scenario and where everyone is going to

yellow diamonds kept the company going,

make lots of money from the share price

and as soon as that marketing game finished

going up. For companies that are in the ASX,

the company was in administration.

it is common for vendors of projects to be paid in part or in full with company shares.

On the other side is the Letseng Diamond mine in Lesotho. Letseng is characterised by

The share price going up is what vendors

extremely low grade ore and is known for

are all hoping will provide them a payday

producing huge diamonds, having the highest soon. Under present ASX listing rules, in most percentage of large diamonds, giving it the

cases, vendors of projects have their shares

highest dollar value per carat of any diamond

escrowed for up to 12 months or at least 12

mine. The world average is roughly US$81

months (the shares are held and not allowed

per carat, while Letseng averaged over $1,894 to sell until a particular time in the future). per carat for the first six months of 2007.

This is where the problem starts for My point is that the technical merits of a

everyone. Everyone benefits with a rising

project are not the headline numbers. It is

share price, and if your drill hole does not

about possible production numbers. It is

come right, that is not going to be good for

about the intrinsic value that it has which

all shareholders. As companies ‘make money’

makes it a viable project. Also, depending on

through placements, the company wants

your investment strategy, are you looking

as high a price as possible before they start

for capital gain while the story is in high

issuing shares for new money. As you can

momentum or when it comes to production?

see, the ingredients for mining the market

Again, these are essential factors to consider.

begins, and with all schemes, it just gets worse as time goes.

In many gold projects, investors get excited with big numbers, but they need to realise

The term ‘mining the market’ is very well used

that an interception of say 5 metres at 125g/t

and the losers are the shareholders, and the

is markedly different from 150 metres at

smaller you are, the more insignificant your

24

COLUMNS | Noel Ong

Resource Global Network thoughts and feelings are to the company.

My relationship with brokers is in a

Sweet deals are very commonly placed to ‘the

ubiquitous phrase; the broking industry

boys club’ to average their cost down while

gives you the umbrella when it has stopped

the smaller shareholders are ignored.

raining. It is very frustrating, but I do

3 – People

understand why that is the case. The brokers are only interested in no lose stories, and

The management team/directors need

they negate bad stories by being lined with

to be compatible with the activities of the

options and shares that are or will be ‘in the

company. As the company is a non-income

money’.

generating spending machine, those paid an income need to be doing their best to reduce

This is a commercial world, and that is a

the expenditure.

simple truth. Hence, when these guys start coming to you, be very aware that all the

A mineral resource company with AUS$5

walls are lined, and you are the fuel that the

million in the bank is not going to have a lot

vehicle needs to get going. They are given the

of money left if they are paying themselves

incentive to approach you and compensation

a high wage and employing everyone under

has been given to them in case they lose you

the sun. I would go further in saying that the

as a client.

directors who are geologists should be the ones sitting on drill rigs.

Brokers play an essential role in helping companies to promote, however I am open

There are too many examples of directors

to thinking that in today’s social media

who are on a high wage and not making any

world, companies can do a lot of promotion

real effort to reduce the spending. For a small

internally with the right personnel.

company, controlling cash is a significant issue as the cost of operating a public

Don’t get me wrong. I am not saying that the

company and making sure you get the stories

brokers are all shonky hub stealing people

and maintaining market expectations is very

in suits. What I am saying is that they are in

difficult.

this business to make money. The everyday

4 – Brokers

investor is also in this business to make money. All I am alerting to is that investors

The broking industry is not doing well at this

should understand the motive of the

time as there is a downturn in the small-cap

introduction.

sector. My 30 years in this industry have taught me that the broking industry is one

There is always going to be a level of

that is very robust. It is incredible how they

conflict of interest as they make money for

can survive for this long.

companies in getting you to invest, but that is just the nature of the game. The other way

25

26

COLUMNS | Noel Ong

to look at this is that you would not get the

Nickel and Copper are showing good signs

opportunity to make money without them.

of recovery, and simple commodities such

5 – Market Perception of the Commodity

as iron ore are now back in favour. As I tell my associates, I don’t need to have lithium as I don’t need an electric car, but I need the

Market perception of the commodity is

essential metals to have that car. The next

obvious, and as I explained in my previous

EV story could be hydrogen or tungsten or

blogs with zinc, market perception may not

vanadium, but I need the nickel, copper and

necessarily be the market reality. In the first

the iron in any of those scenarios.

part of 2018, I started telling people that I believed simple commodities like nickel and

Gold is a good example. After the crash in

copper would flourish.

1999, it was $240 per ounce, and today it is over $1,300 per ounce. Market perception, in

At that time, cobalt was still the darling with

my opinion, takes into consideration, timing,

many commentators always saying ‘get cobalt

price upside and demand upside. When all

and all your worries will be over’. At that time,

three points are aligned, then, in my opinion,

I think Cobalt pricing was near US$92,000.

that is a good thought.

As I write today, the price of cobalt is around $32,000.

Resource Global Network

Conclusion

illegal manner, what I mean is that they have

It is never easy to decide what is a good

positioned themselves well over time in

investment or the right timing and I am not

projects that are in their portfolio.

professing that I am an expert. The more I write, the more there is to share, and

To get a good look into whether the

suddenly I realise that there is an endless

investment is a good move, one needs to

amount of minefields that I have seen and

understand how the market works in this

heard over my 30 years.

industry. It is easier for the likes of myself to understand if there are any big holes in

For example, it was only recently that I realise

the presentation, but it is also impossible

that no more than five personalities control

to say that a bad reputation means a bad

the whole mineral resource small-cap sector

investment. In some cases, you can make a

in Australia. Everyone else feeds from them

lot of money with a functional promoter with

and deals are done in a myriad of ways in

a lousy project. Sometimes, it is the opposite.

companies that are related to or friendly to these identities. I don’t mean that in some

aj

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30

MINING | Tanga Resources

Resource Global Network

TAN G A MELBANA ENERGY RE SO U RCES

Unlocking reserves in Cuba’s underexplored offshore oil basins On the road towards base and precious metals exploration in Namibia

31

32

MINING | Tanga Resources

In 2018, ASX-listed Tanga Resources decided to shift its focus from gold exploration in Tanzania to precious and base metals in a new African jurisdiction – Namibia. Tanga initially acquired the Joumbira Zinc Project and followed it up with the Hagenhof CopperCobalt Project in August 2018.

Chief executive Matthew Bowles explains that part of the reason for the move into Namibia was in response to the recent changes to the Tanzanian mining code. “From our perspective, this had a fairly significant impact on investor sentiment into the country, and when you are a junior explorer it impacts you even more so,” he says. Most recently, Tanga has expanded its relationship with Namibia’s state-run Epangelo Mining, further cementing the company’s position in this attractive jurisdiction.

All of these attributes are factored into the

When searching for a new host country,

projects all within the highly prospective

Tanga saw in Namibia significant exploration

Damara Orogenic Belt – a highly mineralised

potential, an established mining industry

geological formation running through

with a long history of metal production,

Namibia.

excellent infrastructure in place and a

Fraser Institute’s Annual Survey of Mining Companies, which consistently ranks the Southwest African country highly in terms of being an attractive destination for mining and investment.

For instance, in its latest report Fraser ranked Namibia as the fourth highest African jurisdiction for mining and investment and the 61st highest in the world – which is no mean feat for a sparsely populated country of 2.6 million.

“For us, it was about moving to a stable jurisdiction, with significant geological upside, that was open for business from a mining and exploration point of view. A number of major mining companies are already operating in country, including B2Gold, Rio Tinto and Vedanta Zinc.

“On top of that, there is excellent infrastructure in Namibia, which is probably some of the best in Africa, and that has really helped us to decide where we want to be.”

Tanga has been in Namibia for almost 12 months and has spent much of this time on the ground reviewing several regions and

friendly attitude towards exploration and

Epangelo Mining JV

development.

The company began its ascent into Namibia by partnering with the government for the

Resource Global Network

33

34

MINING | Tanga Resources exploration and development of the Joumbira Tanga conducted a small diamond drill Project, via an earn-in agreement with

campaign in May last year which confirmed

Epangelo. The project offers potential for a

the existence of high grade zinc, lead and

large high grade zinc-lead-silver orebody over

silver mineralisation zones within a much

a vastly underexplored licence covering 210

larger lower grade mineralised zone.

km².

Most notably, zinc mineralisation of up Tanga’s relationship with Epangelo has

to 15% was intersected, within a broader

further blossomed since the initial alliance

+40 metres zone of moderate grade in

was formed at Joumbira. In February

the final three holes of the campaign, and

2019, the company signed another earn-in

mineralisation remains open in all directions,

agreement with Epangelo to further increase

which provides significant resource potential.

its ground position in Namibia to over 1,700 km².

The Hagenhof Project Despite the initial exploration results of the

“Our strategy has always been to expand

Joumbira project, Tanga has since refocused

our presence and build a new footprint in

its near-term priorities on the Hagenhof

Namibia and our relationship with Epangelo

Copper Project after the outright acquisition

has supported us in doing this,” reveals

of 100% interest in the 197 km² licence in

Bowles.

August last year.

“We get on really well with the Epangelo

Once again, the company is utilising

team. They like that we are exploring

geological reports on the licence from the

in-country and we share with them our

1970s to guide its initial exploration targeting

technical ideas, and they will provide some of

at the project. Historical drilling undertaken

their input and thoughts on our exploration.

by Phelps Dodge in 1972 returned results of 18 metres @ 0.9% copper from 93 metres,

“It’s a very good relationship on both sides

including 12 metres @ 1.08% copper from 96

and we are looking forward to making a

metres, including 3 metres @ 2.37% copper

discovery in the future that will be of benefit

from 96 metres and 24 metres @ 0.88%

to all stakeholders.”

copper from 74 metres.

Returning to Joumbira, the project was first

This historical data has confirmed copper

drilled in the 1970s with some fairly advanced and cobalt mineralisation at Hagenhof, but and interesting results emerging from the

Bowles reveals that the area has never been

campaigns, according to Bowles. “We will

assayed for gold.

look to repeat some of those results as we advance the project.”

Resource Global Network

35

“It was about moving to a stable jurisdiction, with significant geological upside, that was open for business from a mining and exploration point of view.�

Matthew Bowles, chief executive Tanga Resources

36

MINING | Tanga Resources

ResourceGlobal GlobalNetwork Network 37 Resource “That is quite exciting for us and when we undertake the drilling at Hagenhof, we are going to be assaying for a multi-commodity analysis, so we hope there might be gold in the system as well.”

Tanga will conduct a 1,200 metres RC drilling programme before the end of H1 2019, with the ultimate goal to confirm some of the historical results and test the potential scale at Hagenhof.

“The main gossan at Hagenhof outcrops for over 400 metres and from the historical drilling we know the mineralisation plunges to the Southwest, so this drill programme is initially to confirm those historical results

Capital Drilling, a leading provider of exploration and production drilling services, are proud to partner with Tanga Resources to deliver their drilling projects in Tanzania.

www.capdrill.com

|

info@capdrill.com

and also to test the depth and plunge of that mineralisation,” says the chief executive.

“We are now looking to expand and build our team around him and have already got

Tanga recently announced the appointment

two other Namibian exploration geologists

of vastly experienced Namibian geologist

working with Wynand. It’s important for us to

Wynand Slabbert as the company’s

use the local resources.”

exploration and country manager, a move which Bowles thinks is critical for Tanga’s

The situation in Tanzania

ongoing growth strategy in Namibia.

The Tanga management team is also closely monitoring developments in the Tanzanian

“When you have overseas projects, you want

mining industry in relation to the Hanang

to build a team that is based in-country.

Gold Project – the company’s original

Wynand’s appointment is vital for Tanga, as

exploration project before it expanded into

we look to build our presence in Namibia

Namibia.

from a management position.

Located in a highly prospective region of the “Wynand is an exceptional geologist with 10-

Archaean Greenstone Belt, Tanga owns 400

15 years of experience working as a senior

km² of prospecting licences for the project,

geologist for AngloGold Ashanti in Africa, at

which possesses over 50 km of potential

Navachab Gold Mine in Namibia and Siguiri

strike along a major mineralised corridor,

Gold Mine in Guinea.

with multiple high priority targets.

38

MINING | Tanga Resources

However, Tanzania’s mining sector has

and Tanga is adopting a ‘watch and wait’

fallen into a state of inertia over the last two

approach so that it can see with greater

years, after a material change to the Mining

clarity when deciding how to operate in the

Code, while a dispute continues between the

future.

government and Acacia Mining, in relation to the latter allegedly under-declaring export

“A lot of the circumstances arose because

revenues.

of the issues between the Tanzanian government and Acacia Mining. We are

Tanzania has since increased its royalties on

waiting to see how they are resolved before

mineral exports including gold and uranium,

we look to revisit and crank up exploration

and project participation interest, which

again in-country,” explains Bowles.

has served to negatively impact investor sentiment into the mining sector.

Building a footprint in Namibia

Nonetheless, resolution negotiations

Since pivoting away from Tanzania, Tanga has

between the government and Acacia’s parent

applied a strategic approach to building its

company Barrick Gold are progressing

presence in Namibia on the back of several

Resource Global Network

geological assessments and an evolving

Despite adopting a new multi-commodity

relationship with the state mining investment

focus through the Namibian projects,

company Epangelo.

Bowles is hopeful that the company can still demonstrate its trademark expertise in the

“Having Epangelo as a JV partner is a

field of gold exploration.

complementary move for us and a great endorsement of our company when you

“While we are primarily chasing copper at

consider that we already have two farm-in

Hagenhof, there are some gold signatures

agreements with them. I believe we have built there too. We’ve got some pretty exciting the foundations of a very strong precious and

copper targets at Hagenhof, but we are

base metals company in Namibia.”

certainly not overlooking the gold potential in the region as well,” concludes Bowles.

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MINING/ENERGY | Mayur Resources

MAYUR RESOURCES Developing an industrial minerals and power generation platform in Papua New Guinea

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MINING/ENERGY | Mayur Resources

Mayur Resources holds a unique portfolio of resources and energy projects in Papua New Guinea (PNG) – a Pacific island state which Mayur believes offers significant and unrecognised potential as a developing nation on the doorstep of several major economies across the Asia Pacific (APAC) region. The company’s diversified portfolio encompasses a pipeline of exploration and development projects across industrial minerals, cement, power generation, coal, copper and gold – many of the key building blocks for a developing country.

Mayur’s executive management team benefits from extensive strategic and operational expertise across the resources sector, with executive director Tim Crossley and managing director Paul Mulder offering +20 years of experience across a broad range of commodities.

“We’ve been able to build a team of

“We essentially have a management team

PNG’s medium-term economic outlook is

with an experienced leader in each business

described as ‘optimistic’ by the World Bank,

division, for example we have a CEO of lime

and having hosted the APEC Leaders’ Summit

and cement, COO in mineral sands and an

in 2018, investment in large-scale resource

executive in power generation,” Mulder tells

projects is set to continue underpinning

RGN.

economic growth in the country.

respected, proven individuals who bring demonstrated capability in their respective fields of expertise. Yes, we have a diverse portfolio but we’ve been able to construct a nimble and highly resourceful team together with an outcome-focused approach.”

Papua New Guinea PNG has been recognised by Mayur as an increasingly attractive jurisdiction to operate in for several reasons: It has proven mineral potential and a well-established mining sector, with a supportive government, a stable legislative environment and favourable fiscal and tax regimes all set against a backdrop of sustained population growth.

“PNG offers a huge amount of opportunity given that it is underdeveloped when you compare it the rest of its APAC neighbours and its first world neighbours such as Australia and New Zealand.

“With an electrification rate of just 13% of the population, there has been limited economic development in PNG compared to what there could be if they had an electrified nation, and that is where we see a big opportunity,” Mulder adds.

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MINING/ENERGY | Mayur Resources

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The government has also made a strong

“The government is very focused on

commitment to diversify the economy away

attracting investors and having them stay for

from just the next LNG or mining mega-

the long term. In the past they have offered

project, and towards new growth sectors

very attractive incentive packages to attract

which will play a vital role in the nation’s

capital. We operate in a world where there

development.

is competition for capital which is globally mobile, and it will gravitate to jurisdictions

“This diversification will give rise to additional

that provide the best risk-reward returns,”

opportunities within each of those sectors

says Mulder.

where energy and building materials are fundamental, which is where our focus is – industrial minerals and energy.”

Central Cement and Lime project Mayur’s flagship development is the Central

The government has also fostered a distinct

Cement and Lime (CCL) project, a new

pro-investment environment in recent years,

vertically integrated cement project, based

driven largely by the state-run Investment

on two large scale, high quality limestone

Promotion Authority, which encourages

deposits near PNG’s capital Port Moresby.

foreign investment across a wide range of sectors, including resources.

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MINING/ENERGY | Mayur Resources

A definitive feasibility study (DFS) was

“I think this DFS demonstrates the significant

completed for the CCL project in January

value that is currently residing latent in PNG

2019 with very attractive economics,

that can be realised via ongoing support

including a post-tax ungeared NPV of US$352

from the government, the community and

million, an IRR of 23.9% and project payback

developers coming together to unlock the

of 5.2 years. The project offers a range of

opportunity, not only to displace PNG’s

final cement and lime products targeting

current reliance on imports, but also to

both domestic and export markets.

establish a new export industry.”

Life of project revenue has been estimated at

With a MOU signed for gas supply from the

$4,792 million with EBITDA of $3,540 million

nearby ExxonMobil PNG LNG plant, Mulder’s

over an estimated 30-year project life. The

excitement centres on the fact that CCL is a

project hosts over 380 million tonnes (Mt)

ring-fenced project that is not reliant on any

of limestone resources and a maiden ore

other inflows from outside PNG.

reserve of 78Mt has also been declared.

ResourceGlobal GlobalNetwork Network 47 Resource

In doing so, the project will provide a much

“The market is sophisticated and will look at

cheaper cement and lime product for the

diversity of supply, security of supply and at

domestic market, while also emerging as

the same time it will be making sure it has

an extremely competitive alternative supply

access to cheap, high quality, reliable inflow

source in other nearby markets such as

of cement and lime, and that’s what we are

Australia and New Zealand, which currently

going to provide.”

import around 45% of their needs from Japan, China and Vietnam.

Next steps for the CCL project will see Mayur conclude compensation agreements with

“We are three times closer than these

the local community, submit a mining lease

countries when you look at proximity to the

application in H1 2019 and award EPC design

market in Australia and New Zealand. That

and engineering contracts, while finalising

is not just a little bit closer, it is order of

product offtake and project financing

magnitudes closer to that market,” Mulder

arrangements by H2 2019.

stresses.

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MINING/ENERGY | Mayur Resources

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49

Mineral sands Mayur is also developing a new industrial

sands) and a zircon-rich valuable heavy mineral

and mineral sands province in PNG, holding

concentrate by-product.

a portfolio of tenements that stretch across PNG’s Southern coastline and delta regions

At the start of 2019, Mayur secured up to

of the Gulf of Papua. This extensive portfolio

$25 million in funding from China Titanium

provides potential for multiple products and

Resources Holding Limited (CTRH) for the

routes to market.

development of the pilot plant and full-scale operation at Orokolo Bay in return for up to 49%

The most advanced mineral sands project is

of the mineral sands portfolio.

at Orokolo Bay, where a pre-feasibility study (PFS) has been completed which identified

The deal is an attractive one for Mayur, as it

an opportunity to produce fine grain

essentially provides a pathway where its partner

construction sands, titanomagnetite (iron

will develop and fund the project while Mayur

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MINING/ENERGY | Mayur Resources maintains 51% of the $106 million NPV that was demonstrated by the PFS. “We retain around $53 million of the Orokolo Bay economics, which is just shy of our current market cap. So, that one deal essentially reflects the market cap of the company, but it should also be noted that Mayur also keeps 51% of all the other mineral sands projects in the portfolio.

“We have several other projects we will be developing across our tenement area, But the key thing is we have an experienced, proven, low cost mineral sands developer and operator in CTRH, to help bring our projects into production.”

Subsequent to the above, in another important company development Mayur also recently announced the signing of a first binding offtake agreement with a separate Chinese steel group for up to 40% of the vanadium-titano-magnetite product from Orokolo Bay.

Power Generation As previously alluded to by Mulder, PNG’s power generation industry is characterised by a lack of access to electricity for most of the population, and the power that is generated is not only expensive, being dependent on imported liquid fuels, but unreliable too given the lack of investment.

Sensing an opportunity to improve the quantity and quality of electricity supply in PNG, Mayur is developing an environmentally

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MINING/ENERGY | Mayur Resources

“Sector diversification will give rise to additional opportunities within each of those sectors where energy and building materials are fundamental, which is where our focus is – industrial minerals and energy” Paul Mulder, managing director Mayur Resources

sustainable Enviro Energy Park (EEP) in

These industrial users are currently burning

the city of Lae, the country’s industrial and

heavy fuel such as diesel for their electricity

manufacturing hub in Morobe Province.

needs, which is highly polluting and very expensive versus using Mayur’s steam by-

The energy source for the Lae EEP Power

product. Therefore, this alternative has both

Project comes in three different forms in the

economic and environmental benefits for the

shape of solar, woodchip biomass and coal,

users in Lae.

making it a reliable and low carbon source of electricity.

“Our multi-fuel technology for the EEP reduces energy costs by more than half

“We have access to PNG’s own domestic coal

compared to the current practice of burning

resources, which is an extremely low ash, low

imported heavy fuel, and at the same time it

sulphur type that is a lot cleaner than the coal drastically reduces localised air emissions, in Australia uses for its own power generation

terms of noxious gases, as well as the CO2

needs. Another key differentiator of the

footprint.”

project is that it also produces steam as a byproduct, which will be produced extremely

Should all the aforementioned projects reach

cheaply and offered to industrial users in

final investment decisions, Mayur’s positive

Lae.”

Resource Global Network

impact on PNG will be tangible, not only

“The flow on benefits will also extend

in stimulating the economy and boosting

indirectly to education, health and standards

employment, but also from adding value and

of living.”

keeping wealth in-country.

Finally, with Mayur’s market capitalisation “The delivery and construction stages of

currently sitting well below $100 million,

these projects will create employment that

Mulder believes there is a significant

will then transition into the operational

opportunity for upward movement in the

phases. But the wider benefits will be from

company’s share price as these projects are

the multiplier effect of cheaper power and

advanced and ultimately commence revenue

cement that will flow across the economy

generation.

over the +30-year life of the projects,” says Mulder.

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MINING | Prospect Resources

PROSPECT RESOURCES

Glittering prospects for this miner in the African lithium space

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MINING | Prospect Resources

In late 2018, ASX-listed Prospect Resources (Prospect) published a definitive feasibility study (DFS) for its Arcadia Lithium Project in Zimbabwe, a vital step for the company as it works towards near term production from one of the most significant lithium projects in the world.

The DFS confirmed technical and financial viability of the 2.4 million tonnes per annum (Mtpa) plant throughput development and forecasted an average annual production of 212,000 tpa of 6% spodumene concentrates, 216,000 tpa of petalite concentrates and 188,000 lbspa of tantalum over a 12-year mine life. While these production figures convincingly indicate the true potential of the project, the strong economics outlined in the DFS have been most pleasing to Prospect’s managing director Sam Hosack.

“The DFS indicated a robust business model capable of supporting quite a lot of potential turbulence in the market,” says Hosack.

“When you are busy building a DFS you set out to anticipate the business environment variability to ensure the business robustness is factored in.

Zimb

babwe President Emmerson Mnangagwa at Arcadia’s groundbreaking ceremony

Resource Global Network “In a sense you want the project to remain competitive in the most trying circumstances and in this case, it has been very rewarding to know that the Arcadia project is in the lowest capex quartile. That has been a major win for us.�

Capital costs for developing the project are estimated at US$165 million, with operating costs coming in at $285 per tonne for a conventional open pit mining scenario at a LOM strip ratio of 3:1.

Meanwhile, average annual EBITDA has been forecasted at $106 million, contributing to life of mine revenue of $2.93 billion, excluding tantalum credits.

Having been granted a mining lease by the Zimbabwean government in August 2018, and with transport infrastructure already in place at the site which is located just 38 km from capital city Harare, Prospect is fantastically positioned to deliver shareholder returns as it moves from developer to operator at Arcadia.

Returning shareholder value While the Prospect directors and management have known of the potential value held within the Arcadia project for some time, this belief was corroborated by the Hunter Capital Advisors report, which identified Arcadia as a Tier 1 asset in the global lithium space. This validation through independent research has been very comforting to Prospect.

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MINING | Prospect Resources

The report went on to say: “The Arcadia

for any informed investor. We’ve taken a

project keeps standing out as a large

conservative position and have still delivered

tonnage, relatively high grade project

a very robust DFS.”

amenable to open pit mining with a modest capital expenditure required to produce

Furthermore, Hunter Capital’s risk adjusted

lithium concentrates.”

valuation concluded that as it delivers on its strategy, Prospect should experience

“I think it [the external report] serves as

a significant value uplift, towards a price

additional validation of the work performed,

target of AUS$0.14, resulting in a market

and potential identified in the DFS.” says

capitalisation of $304 million. Prospect’s

Hosack. “Projects like this are on a journey

market cap at the time of writing was $45

and what we need to do is communicate

million.

successfully to all of our stakeholders that this project can stand up and stand out.

“Returning shareholder value is our purpose, there is no disputing that. However, the

“It is one thing to have an internal belief, and

journey to delivering shareholder value

there is certainly no lack of internal belief,

requires some sophistication. In essence, we

but we are also very confident that what we

feel that full shareholder value comes when

have displayed in the DFS shows impartiality

we as a business expose ourselves to the

Resource Global Network

upside of the lithium/EV cycle whilst being

The spectacle was a clear demonstration of

well underpinned by demand from the more

the high levels of cooperation between the

stable glass and ceramics market.

public and the private sector in Zimbabwe, as the nation looks to attract investment

“I think our shareholders will get successful

and instigate an economic revival after years

returns as we deliver on our ambitions and

of neglect under former President Robert

the lithium/EV story realises its full potential.”

Mugabe.

Zimbabwe is open for business

“We perceive Zimbabweans as being prepared and ready to make the difficult

The end of 2018 also brought another key

steps forward to recover from the economic

milestone for Prospect when the official

stagnation of the last 15 years,” says Hosack.

groundbreaking ceremony took place for the

“That’s not going to happen just off the back

Arcadia project in December. The ceremony

of government ambition. It will require lots

was opened by the President of Zimbabwe

of fresh investment in conjunction with

Emmerson Mnangagwa and attended by

government economic framework.

various ministers, Australian and Chinese ambassadors and key stakeholders.

“I think we have timed our entry well. We’ve successfully convinced the government of

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MINING | Prospect Resources

the value of this project and managed to

The RRI was conceived by President

gain vital social and stakeholder support that

Mnangagwa in an effort to loosen the

provides us the social licence to operate.

statutory and regulatory burden than newcomers like Prospect are faced with in

“The key message from the groundbreaking

Zimbabwe. The initiative is essentially an

was that we have laid the foundations in

open forum where the investor presents a

the appropriate fashion and have been

timeline of work from which the President’s

recognised as a committed investor in

office can provide direct support to.

Zimbabwe by the government.”

This system allows for transparent dialogue The government also reaffirmed its

between both parties and for Prospect it

commitment to comprehensive reforms to

provides a direct line to the President’s office.

enhance Zimbabwe’s competitiveness and to

“The fact that the President is prepared

attract foreign investors. One example of a

to apply himself and his office through

recent reform Prospect has taken advantage

the initiative shows the government’s

of is the Rapid Results Initiative (RRI).

commitment to expeditiously dealing with our applications and that of our peers.”

ResourceGlobal GlobalNetwork Network 61 Resource

A mining sector with high potential

Nonetheless, new evidence suggests that the tide may be beginning to turn. The 2018

Though the investment drive under President Mining Business Confidence Index (MBCI) Mnangagwa is in full swing, the challenge

found that executives and investors were

of turning around Zimbabwe’s economy is

bullish about the prospects of the mining

substantial, and the mining sector is likely

sector, as shown by the overall MBCI of +21.9,

to play a major role in any recovery, with

compared to -6.6 in 2017.

around 800 mines currently in operation.

Prospect is a clear example of an investor However, these mines have only performed

with a renewed sense of confidence

at around 10% of their US$18 billion per

in Zimbabwe’s mining sector, which is

annum potential since 2009, delivering

evidenced by the firm’s strong commitment

just $2 million in annual revenue as the

to developing exclusively in-country.

national economy faltered and the mining sector became bogged down in legislative

“We currently employ over 100 people in-

bottlenecks.

country, though we do have an executive

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MINING | Prospect Resources

office in Perth,” Hosack reveals. “Then, during

400 people from direct employment and

the construction phase of the project, there

obviously you can multiply this to establish

is likely to be in the order of 1,000 different

indirect employment too.”

skills demanded.

Hosack is also acutely aware of Prospect’s “As the project goes through its cycle, tasks

social responsibility in Zimbabwe, particularly

become more complex but we are comforted

with regards to community training

knowing that Zimbabwean skills can meet

programmes in key fields such as agriculture

our needs. Our final headcount during

and health. “By far the biggest impact we can

the operational phase will be around 300-

have is up-skilling the community that are

Resource Global Network

likely to be employed by us, ensuring they are

Versatile offtake options

healthy and fit for the rigors of the role, while

Zimbabwe is already the world’s fifth largest

developing skills that lead to sustainable

lithium producer and Minister of Mines

prosperity.

Winston Chitando recently stated his belief that the country has the potential to account

“We want to invest heavily into programmes

for 20% of global demand when all known

targeting these outcomes and see these as

lithium resources are being exploited.

preceding the project. So far we have been meticulous in our planning.”

With this in mind, Prospect is determined to be a frontrunner in Zimbabwe’s lithium

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MINING | Prospect Resources

Resource Global Network space, particularly as the EV story gains pace.

However, the company is not just targeting the lithium battery chemicals space. “The competitive advantage that we want to leverage off is the suitability of our product across multiple markets, including ceramics which absorbs around 30% of global lithium production.�

This type of arrangement would allow Prospect to take advantage of established and robust markets such as ceramics and glazing, while also exposing itself to the more exciting and contemporary battery minerals sector, as confirmed by its offtake agreement with Chinese battery metals expert Sinomine.

With a strong DFS under its belt, Prospect will plough forward with engineering, design and construction work in 2019, ahead of a commissioning date in 2020 for its Arcadia project. If the company keeps to this timeline, Prospect will become the largest lithium producer in Africa. Watch this space.

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MINING | Cardinal Resources

CARDINA

Resource Global Network

AL RESOURCES Gold exploration in Ghana’s underexplored Northeast

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MINING | Cardinal Resources

Cardinal Resources has roots in West Africa that go back nearly 30 years, at a time when Nelson Mandela finally walked free after 27 years of imprisonment in South Africa.

At this critical juncture in recent sub-Saharan African history, Archie Koimtsidis walked into West Africa with a motive to explore for gold across the highly prospective region. The Australian-born explorer and a few other Cardinal forefathers soon decided to refine their focus to Ghana, as it was English speaking and already had a relatively well-established mining sector at the time. “It was easier to go to the known rather than the unknown at that time,� explains Koimtsidis.

The team initially focused on the mature gold mining industry in the South of Ghana, which had seen production from a conveyor belt of gold mines since the turn of the 20th century and even earlier in some cases.

However, as part of its early regional scale exploration the company did set foot up in the North, discovering some colluvial gold and an outcrop in one particular location.

Having seen this exploration potential, Koimtsidis vowed to return to the North at some point in the future.

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MINING | Cardinal Resources

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Returning to the North

“There used to be this conception that there

Staying true to his word, Koimtsidis returned

wasn’t any gold up in the North, due to a lack

to the underexplored Birimian terrane of

of understanding of the geology, but we saw

Northeastern Ghana around 15 years ago,

colluvial nuggets close to the surface many

and spent the subsequent years building

years ago, so I begged to differ.”

confidence in the region.

Since these early sightings of gold, Cardinal The geology underpinning Ghana’s Northern

has developed its Bolgatanga project,

territory is more complex compared to

contained within the Paleoproterozoic

the Southwest of the country, which has

Granite-Greenstone Belt in Ghana’s upper

resulted in the majority of mineral explorers

Northeast, close to the Burkina Faso border.

congregating in the latter region during the 1990s and 2000s.

In fact, the closest large-scale producing gold operation is the Youga mine – a 2 million

However, armed with more sophisticated

ounces (Moz) resource located in Burkina

exploration tools, Cardinal has built a

Faso and currently owned by Avesoro

commanding land position in the Northeast,

Resources.

and is slowly reaping the benefits.

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MINING | Cardinal Resources

ResourceGlobal GlobalNetwork Network 73 Resource Back across the border in Ghana, Cardinal

over 2015 and 2016. However, it was not until

enjoys access to a well-established

2018 that real progress began to take shape.

infrastructure network surrounding the Bolgatanga project, which includes a sealed

“We kicked off 2018 with a preliminary

national highway, plus national HV hydro grid economic assessment (PEA),” says Koimtsidis. power and continuous water supply.

“Then a month later we updated the resource and then converted that into a preliminary

With a mining licence granted for 15 years

feasibility study (PFS) in September. So,

renewable, Koimtsidis and co believe that

within nine months we have published a PEA

Northern Ghana could well be a new frontier and a PFS with a sizeable reserve in it.” for gold exploration and mine development in the entire West Africa region.

The Namdini licence

The PFS found that Namdini contains 4.76Moz of gold from a maiden probable

The Bolgatanga project is comprised of

ore reserve estimate

four licence areas, with the Namdini mining

of 129.6Mt at a head

licence the primary focus for Cardinal.

grade of 1.14 g/t gold,

Namdini was purchased in 2014 with

with a 0.5 g/t cut-off

exploration drilling commencing at the site

grade.

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MINING | Cardinal Resources

“We kicked off 2018 with a PEA. Then a month later we updated the resource and then converted that into a PFS in September. Within nine months we have published a PEA and a PFS with a sizeable reserve in it.�

Archie Koimtsidis, CEO/managing director

Resource Global Network Key financial metrics in the study were based on a gold price of US$1,250 per ounce and included a post-tax NPV of $586 million and a post-tax IRR of 38%. All in sustaining costs were calculated at $769 per ounce for the life of mine and 1.8 years was the estimated total project payback time.

This large scale open pit operation will eventually produce 3,975,000 ounces of gold (approximately 125 tonnes) over a 14 year mine life, including 907,000 ounces produced from a 2.5 years long starter pit with an AISC of $599. Furthermore, Namdini remains open along strike and down dip, inviting the possibility of an extended mine life. “One of the key strengths of Namdini is the fact that the processing facility is conventional. There is nothing complex in the processing and everything is off the shelf,� says Koimtsidis.

The PFS outlined a 9.5 million tonnes per annum (Mtpa) process flowsheet with a conventional crush-grind-float-regrind-CIL circuit and a gravity gold circuit designed for free gold. This process will eventually result in the production of gold dorĂŠ bars on-site, a big plus for the company.

For Koimtsidis, the PFS is a significant step in the right direction at Namdini, and it gives the company confidence to progress with a definitive feasibility study (DFS), which has commenced and is anticipated for Q3 of 2019.

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MINING | Cardinal Resources

District exploration

Ndongo East and received new drill results in

In addition to the DFS, Cardinal will also be

the post-wet season.

focusing on district exploration next year.

The firm’s land package at Bolgatanga totals

These assays included intersections of three

close to 900 km² and provides significant

metres at 29.3 g/t gold from 45 metres and

exploration upside from three additional

three metres at 4.1 g/t gold from 122 metres.

licence areas.

Drilling will continue at Ndongo East after the conclusion of the 2018 wet season, with

Around 20 km North of Namdini is the

further results pending. But, one thing for

Ndongo licence area, where six large scale

sure is that Koimtsidis is encouraged by the

targets have been identified and subject to

results so far.

RC drilling, returning several shallow gold intersections.

“The idea with this district exploration is to find some shallow high grade ounces that

In fact, one of these targets yielded a

can be fed into the production facility to give

discovery in July 2018 at Ndongo East,

it some extra NPV,” he says.

after RC drilling returned significant gold mineralisation. Throughout the rest of the

“If our exploration work discovers something

year, Cardinal extended the strike length at

bigger than just shallow pits, than that’s a

Resource Global Network and processing facilities. Cardinal purchased the Subranum project from Newmont Mining and is currently in the process of evaluation ahead of a potential drill programme.

“There is a 5-7 km zone that is possibly mineralised within that licence,” says Koimtsidis. “We need to do some more work on that in the new year.

“That could end up being a standalone project or something that gets shipped down to the other processing facilities further South or sold to some of those miners already with assets in the South.”

Finally, Cardinal will continue to work closely with the communities living in the shadow of its licence areas in Ghana over the course of good problem to have. The plan is to keep

2019 and beyond. As a long-term resident,

investigating these licences for further

Koimtsidis understands the culture of

ounces.”

Ghana, which helps inform the company’s

Possibilities in the South

understanding of what the communities want from an exploration/development company.

Beyond Cardinal’s twin goals of publishing a DFS for Namdini and continuing district

“We work together as a team and they assist

exploration across the Bolgatanga

us as much as we assist them to make sure

project, the company may also decide to

that eventually a mine is built which provides

recommence drilling at its Subranum project

jobs for generations to come. Our situation

in Southern Ghana.

is a little unique. It didn’t start as Cardinal, it started nearly 30 years ago.”

The 69 km² licence straddles the Eastern margin of the Sefwi Gold Belt, an area that is densely populated with producing gold mines

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Building a Multi-Asset Mid-Tier West African Gold Producer

TSX: TGZ OTCQX: TGCDF

AFRICA. IN THE PALM OF YOUR HAND.

ONLINE NOW WWW.AFRICANBUSINESSNETWORK.CO.ZA

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MINING | Podium Minerals

PODIUM

Providing an alternative su

Resource Global Network

MINERALS

upply of PGMs to the world market

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MINING | Podium Minerals

Podium Minerals is an ASXlisted company focused on exploring and developing high value platinum group metals (PGMs) in the Mid West region of Western Australia, where it holds mining leases covering an area of 77 km² over the entire Weld Range Complex (WRC). Prior to listing, Podium had concentrated on consolidating the ownership of the tenements into a single set of mining leases, which included the completion of a Native Title agreement covering the tenements. This incubatory period of Podium’s history was supported by the founding shareholders in the current company who recognised the potential of the assets.

Their belief in the project was rewarded when Podium listed on the ASX in February 2018. Since the IPO, Podium has been able to quickly deliver on promises and demonstrate real value.

Listing on the ASX The importance of the IPO on Podium’s company development is not lost on CEO Tom Stynes, particularly when considering the flurry of drilling that was able to take place in the Parks Reef area of the WRC last year.

Resource Global Network “An IPO brings the necessary funds into the company to allow you to advance the exploration, and that’s what we’ve been doing; proving and demonstrating the targets and the geological hypothesis behind the complex,” he says.

“Being a listed company also gives an opportunity to attract shareholders, and as it does for all junior listed companies, it gives you a platform to keep moving forwards.”

Within a month of listing, Podium had commenced its maiden drill programme in the Western zone of Parks Reef and this was followed up by a second campaign targeting the central zone and Keel target in September.

By October, Podium had collated the results of the initial drilling campaign into a maiden JORC mineral resource estimate for Parks Reef, which estimated a total of 340,000 ounces of combined platinum, palladium and gold contained in approximately 2.2 km of the identified 15 km strike length of the reef.

Enhancing the historical data Podium’s mineral resource estimate has built on over 20 km of historical exploration drilling in Parks Reef, which formed part of a wider 60 km drilling database within the mining leases of the WRC. “Parks Reef was started in the 90s by a visionary geologist called Jenny Parks, who observed the geological structure and

83

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Resource Global Network

compared it to the layered intrusions of the

structured resource drilling programme

Bushveld Complex in South Africa.

to systematically demonstrate the mineralisation potential of the WRC,” Stynes

“The lease holder at the time was a company

proclaims.

called Austmin Platinum, and they undertook quite extensive surface drilling, identifying

The WRC lies approximately 40 km West

the existence of the PGM reef and the extents

of the Great Northern Highway between

of the mineralisation.”

the established mining centres of Cue and Meekatharra. Gold is the most predominant

Austmin Platinum however, completed

metal in the region, although base metals

only very limited deeper drilling below the

and iron ore are also abundant and are

supergene (oxide zone), before its parent

mined in the region.

company fell into administration and the resulting fractured ownership of the

“We are located in an established mining

tenements then halted further progress at

area and there are good road links into

the reef.

Geraldton, which has a multi-commodity port that transports concentrates and iron ore. In

“What Podium has done is taken advantage of the historical work and commenced a

terms of location, it’s fairly ideal.”

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MINING | Podium Minerals

“Podium has undertaken a structured resource drilling programme to systematically demonstrate the mineralisation potential of the WRC” Tom Stynes, Podium Minerals CEO In addition to its enviable location, Podium

The company’s confidence was fully justified

also enjoys a unique geological offering in

at the beginning of March, when it released

the WRC, as there has been no primary PGM

an ASX statement confirming that the Parks

mining in Australia to date.

Reef resource had been increased by 118% to 740,000 ounces of combined platinum,

“A focused PGM play is quite unique for

palladium and gold.

Australia and in fact it’s quite unique across most of the globe when you look at the

“The really pleasing part of this news is the

consolidation of PGM production, coming

fact that we are delivering on the targets and

mostly out of Southern Africa and Russia.”

expectations that we put in our prospectus

Another resource update

and exceeding them,” says a jubilant Stynes.

After completing a drilling campaign targeting

“We have been able to do that because

the central zone of Parks Reef at the end of

of the consistency of the mineralisation.

last year, Podium marched into 2019 with a

The more drilling we are doing, the better

firm belief that it could deliver a significant

understanding we are getting of the reef

resource upgrade.

structure, which is allowing us to continue

ResourceGlobal GlobalNetwork Network 87 Resource

very efficient resource drilling. We believe we

understanding the economics, we believe it

can take that forward along the remaining

could be quite significant,” claims Stynes.

strike of the reef.”

Furthermore, the reef remains open at depth Podium was also delighted to report the

and along strike to the East, with more than

presence of additional base metals credits

10 km of strike yet to be assessed. This

in the Parks Reef resource, in the shape of

means that only 30% of the total strike length

copper and nickel mineralisation.

has been incorporated into the current Parks Reef resource.

“We have a zone of significant copper enrichment which lies above the PGM reef,

The tip of the iceberg

but it also overlaps with the top of the PGM

“Our preferred plan is to continue drilling

reef.

along the extents of the reef. The results will define the magnitude of the shallow

“In terms of what that means in a potential

resources and will then allow us to go back in

bulk open pit mining operation, when we

and target infilling of the most enriched parts

come to turning this into a project and

of the reef.”

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MINING | Podium Minerals

Resource Global Network With 70% of the strike still to drill out and

the PGMs, which is where the majority of the

the resource estimate currently standing at

metal value lies, according to Stynes.

over 700,000 ounces of combined PGMs and gold, Stynes is supremely confident that the

“We think the PGM market is a huge

resource will swell beyond the million ounces

opportunity as supply is currently

(Moz) mark.

concentrated out of Southern Africa and Russia, where the mining is energy, labour

“From what we have seen so far, the

and capital intensive, with the majority deep

mineralisation is consistent and one of the

underground developments.

unique features of this reef is that it’s very thick, unlike the typically narrow reefs found

“We believe that the Parks Reef project has

in Southern Africa. The thickness of the

some pretty unique characteristics, in the fact

reef provides opportunity for a simple and

that it is a thick, shallow style deposit, and

efficient mining operation,” says the CEO.

we think a supply out of Australia is a unique opportunity and could potentially be viewed

Podium’s next steps include the necessary

as a strategic supply source.

extension drilling along strike to define the quantum of resources, as well as further

“We see PGMs as a very tight market, with

metallurgical testwork to define a processing

constrained supply and we see plenty of

route. This will then form the basis for

upside opportunities in demand,” concludes

progressing to feasibility studies for a mine

Stynes.

development.

During the last 12 months, Podium has “Parks Reef is still at an early stage of its

identified high value metals with strong

development, but as we have demonstrated,

market fundamentals and growth prospects

the exploration is highly efficient. We believe

through successful exploration in the WRC.

we can continue to advance quickly.”

The next objective for Podium is to continue

Strong PGM fundamentals

drilling along the extents of the reef and define the true resource potential of Parks Reef.

Despite Podium’s discovery of the polymetallic nature of Parks Reef in the last 12 months, the company’s main focus is on

ASX:POD

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MINING | Andromeda Metals

ANDROMEDA METALS On the path to industrial metals production in South Australia

Resource Global Network

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MINING | Andromeda Metals

At the start of 2017, ASX-listed some industrial minerals, according to Marsh.

Australian mining company Adelaide Resources announced “In the Eyre Peninsula of South Australia, we identified a very large resource of halloysiteit would be changing its name kaolin, which is a typical industrial mineral. to Andromeda Metals in Kaolin is one of the biggest industrial preparation of a dramatic shift minerals, with over 30 million tonnes a year in direction for the company, mined, produced and sold around the world. which had operated as a base and precious metals explorer for A unique resource the past 20 years. Following the “But at the Poochera project, we have name change, Andromeda has halloysite-kaolin, which is more of a transitioned from an exploration specialised and unique type of kaolin. It’s quite rare, and as a result has much higher company to a developer and producer of industrial minerals, value.” particularly halloysite-kaolin and high purity alumina (HPA). The project is being advanced in conjunction with Andromeda’s JV partner Minotaur

Exploration, with whom Marsh did some Industrial minerals can be defined as

consultancy work for around nine years

minerals mined and processed for the value

ago on the same project. Therefore, his

of their non-metallurgical properties, which

knowledge of the project and his vast

provides for their use across a wide range of

experience in the kaolin industry made Marsh

industrial and domestic applications.

the perfect candidate to lead Andromeda’s team at Poochera.

“An industrial mineral is used in large volume, typically at a lower value, but in

“The management of Andromeda went

everyday applications such as cars, houses,

through all the information and saw my

rubber, plastics, paint and general industrial

name on some reports I had written at the

uses,” explains Andromeda’s managing

time, and they approached me to head up

director James Marsh.

the project. I was chosen because I have 30 years of experience in kaolins, and I’ve been

Historically speaking, production of

involved from the mining side of the business

industrial minerals in Andromeda’s home

right through to marketing these products.”

market of Australia has been negligible compared to the European market.

The rest of the board at Andromeda contains

However, Australia has some of the world’s

a perfect blend of individuals specialising

biggest and highest purity resources of

in different areas of project management.

Resource Global Network

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MINING | Andromeda Metals

“Company secretary Nick Harding is a very

Halloysite is a rare ‘tubular shaped’ derivative

experienced commercial man and excellent

of kaolin which can carry a commercial value

on the financial modelling side of things,”

of up to $3,000 per tonne for pure halloysite

Marsh reveals.

and up to $1,000 per tonne for a halloysitekaolin hybrid product, compared to $200 per

“Our chairman Rhoderick Grivas has no

tonne for pure kaolin.

direct kaolin experience but he’s taken projects from greenfields right through to

At the Poochera project, Marsh believes that

production in Australia, and Andy Shearer is

Andromeda has probably the world’s biggest

our corporate money man. He has been very

resource of this rare, high value resource.

useful when it comes to raising funds for the

But, the company’s initial attraction to the

company.

project was based on the potential for the halloysite-kaolin to be used as premium

“We have a very robust team, I am the kaolin specialist but we also have got financial

material feed for HPA production.

specialists, project management specialists

Emerging applications

and a fundraising specialist.”

HPA is a processed premium nonmetallurgical alumina product that is characterised by its purity level and used

Resource Global Network

across a range of emerging high-tech

proves that batteries can be made 3.5 times

markets, including artificial sapphire glass

more efficiently using nanocarbon from

(for mobile phone and television screens)

halloysite.

and certain battery storage components, as well as having aeronautical and medical

Further research into halloysite-kaolin

applications.

nanotubes has suggested that it could be used as a carrier of high value materials

“We are looking at HPA and a third round of

in fields such as medicine and agriculture.

tests have confirmed we have a premium for

According to Marsh, there are around 7,000

that material and are the only company in

research papers covering these blue-sky

that area that’s managed to get 99.99% purity

applications of halloysite-kaolin, which are

with only one stage of purification. That

being converted to patents at higher rates

is because the halloysite-kaolin is a much

than any other mineral.

higher purity naturally than standard kaolin.�

Returning to the Poochera project, The company is also undertaking additional

Andromeda has revisited an unpublished

research into nanotubes and halloysite,

scoping study that was previously undertaken

particularly in the battery production space,

by Minotaur, making key modifications to the

and has already got test work back which

production model.

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MINING | Andromeda Metals

“At the Poochera project, we have halloysite-kaolin, which is more of a specialised and unique type of kaolin.

It’s quite rare, and as a result has much higher value” James Marsh, managing director Andromeda Metals

ResourceGlobal GlobalNetwork Network 97 Resource “We plan to initially extract the material as a raw ore and export it overseas to China and possibly Japan, where there is a keen demand for the material at the moment,” says Marsh.

“Then, as a second stage we are looking very closely at dry processing that material onsite.”

The managing director believes that moving to a dry process model will increase the project’s margins by up to four times and reduce shipping costs by half, which will give the company a big financial boost. Plus, there is also the option of wet processing overseas using a toll producer.

“The people we will sell the raw ore to have a very large capacity, so if they could take on our material, we would use them as a toll processor and then export the wet processed material round the rest of the world.”

All three models resemble simple, low-capex options for Andromeda and none of them involve Minotaur’s initial plan to build a wet process plant on-site, which would’ve needed at least $70 million in capex.

Andromeda has already completed dry processing trials in Western Australia and received good results from a commercial operation there. The company also hopes to replicate those trials in China in the coming months and is in discussions for dry processing trials in the US and Germany.

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MINING | Andromeda Metals

Before dry processing trials were able to take

customers who will do their own full-scale

place, Andromeda had to take a 215 tonnes

commercial trials in their end application.

bulk sample from the Poochera project,

That will hopefully give us some legally

of which 40 tonnes were sent to the dry

binding offtake agreements with those

process plant in WA, and some 140 tonnes

customers.”

sent to China in anticipation of dry and wet processing trials there.

Offtake agreements A significant number of Andromeda’s

“That bulk sampling was crucial because we

potential customers are situated in the global

wanted to get the wet and dry processing

ceramics industry, particularly in the high

done on full commercial scale so we could

quality end of the market where halloysite-

prove up the process and get detailed

kaolin is used to produce porcelain or fine

costings for the scoping study.

detail bone china with very high whiteness.

“That process material from those

Halloysite-kaolin is highly valued in this

commercial trials will then go to end

industry and is currently in short supply

Resource Global Network “So far we’ve secured about 208,000 tonnes of indicated offtake agreements from customers,” reveals Marsh. “We will use at least that amount of fully processed material, not the raw ore. It’s probably a lot more now because demand is increasing as China has lost its domestic supply.”

Andromeda is planning to finalise a scoping study for its Poochera project in the first half of 2019 which would then lead into a pre-feasibility study (PFS), although Marsh believes some of the scoping study figures have been done to PFS standard, which should accelerate the process.

The company will also complete dry and wet processing in China before sending the products to its end customers, in order to hopefully sign further offtake agreements.

Then, Andromeda will quickly move on to the after a large number of Chinese mines

mining lease application in the second half of

have been forced to close amid an ongoing

the year.

environmental crackdown on polluting mines by the Chinese government.

Securing environmental and permitting approval would cap off a busy 12-month

“Therefore, those companies from the

timeline for this company which has entered

ceramics sector are very keen to lock in long

the brave and exciting new world of industrial

term supply of this material. Their perception

minerals production.

of Australia is that of a high quality and consistent supplier of minerals.

ASX:ADN

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OIL & GAS | Tlou Energy

Resource Global Network

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TLOU ENERGY A sustainable energy source for Botswana and Southern Africa

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OIL & GAS | Tlou Energy

Tony Gilby is a founding member of onshore gas exploration and power generation company Tlou Energy, which was established after his previous firm Sunshine Gas was taken over by BG Group in 2008. In the wake of the Sunshine Gas deal, Gilby and his team began searching for new opportunities in the gas business around the world, and soon become interested in Botswana. Now CEO and MD of Tlou, Gilby says that diamond rich Botswana ticked all the boxes for an appropriate investment jurisdiction.

“Botswana had the right geology, the right regulatory regime and was generally a good place to invest. That’s why we chose Botswana many years ago.” Since then, Tlou has embarked on a mission to become an independent producer of sustainable power, thereby easing energy supply concerns in Botswana and the Southern Africa region.

In 2009, Tlou commenced exploration activity in Botswana and began prefeasibility drilling at its Lesedi coalbed methane (CBM) project in 2011, before listing on the ASX in 2013. Two years later, Tlou dual listed on the AIM, with Gilby citing

Resource Global Network a greater understanding of African markets amongst the London investor as the chief reason.

Tlou then made a third listing on an international exchange in 2017, this time turning to the domestic market in Botswana. “We listed on the BSE because we wanted to allow Botswana-based funds to invest in the company,� says Gilby.

Independently certified gas Another significant milestone was achieved in 2016 when Tlou achieved the first independently certified gas reserves from CBM in Botswana, which have since been estimated at up to 3.2 trillion cubic feet (tcf).

CBM is a form of natural gas extracted from underground coal seams. The gas freely flows to the surface once the naturally occurring water pressure from within the coal is reduced by pumping. Tlou’s aim is to turn its extensive gas reserves at Lesedi into a source of reliable, clean power for a region which is struggling to meet increasing energy demand.

The Southern African Development Community (SADC) unites approximately 342 million people from 16 countries into one intergovernmental body and also provides a common power grid for much of the region, which is maintained by the Southern African Power Pool (SAPP) - a cooperation of national electricity companies from SADC.

107

Resource Global Network

However, the majority of SAPP’s energy is

The Australian company believes the market

supplied by South Africa’s struggling utility

for its CBM product in Botswana could

Eskom, which puts the entire region in a

potentially be huge, particularly as it can

position of energy insecurity, including

replace high carbon energy sources such

Botswana.

as diesel and coal, with the former being imported at a high cost.

“Botswana relies very heavily on energy coming from Eskom over the border. That

Cleaner, cheaper electricity

puts them in a very exposed position, as any

“CBM produces less CO2 and less particulate

Eskom wobbles will impact the country’s

matter compared to diesel and coal, making

power supply.”

it a much cleaner option,” Gilby states. “It

imports, with more than 50% of its power

would replace imported diesel and domestic Recognising this threat to regional energy

coal, which is often poor quality thermal coal

security, along with a significant local power

that struggles to produce efficient electrical

shortage, Tlou offers Botswana an alternative

energy.”

source of electricity from its Lesedi project, which will incorporate a gas-to-power station

After producing first power from the site

connecting with the national grid and the

adjacent to the Lesedi gas reserves in 2017,

SAPP.

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OIL & GAS | Tlou Energy Tlou received a request for the supply of up to 100MW of CBM from the government of Botswana, in a clear indication that the project is a central part of plans to expand and diversify the country’s energy mix.

Prior to this government tender, Tlou became the first company in Botswana to be granted a mining licence for a CBM project and was also the first to be awarded with an environmental impact statement for a project of this type in the country.

“Environmental regulations in Botswana are very strict and very comprehensive. It took over two years to get our environmental impact statement approved,” Gilby reveals.

ResourceGlobal GlobalNetwork Network 111 Resource “We closely followed their guidelines

“These wells are located in a very favourable

and utilised our international experience

geological environment for gas. Secondly, its

in drilling for hydrocarbons in an

located next to our central gas processing

environmentally sustainable and safe way.”

and power generation facility. Now, the objective is to move to a power generation

Tlou’s extraction method centres on the

mix.”

use of dual lateral pods, each comprising one vertical and two horizontal wells to pull

The company has proposed a staged

gas from Lesedi’s Lower Morupule coalbed

development starting with up to 10MW of

resting between 450-500 metres below

generation that targets first revenue while

surface.

minimising initial capex requirement and connection to the grid via a power generation

Having already produced power from gas

facility. The recently drilled wells are

wells at Lesedi in 2017, the company recently

expected to be sufficient for the first 2MW of

completed another well drilling programme

generation.

located in an area that has been identified for initial project development.

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Resource Global Network

Combining gas and solar

achieve full environmental approval for

In addition, Tlou has also planned for the

the downstream facilities, with landholder

integration of a solar facility at the Lesedi

approval also required in that process. All of

project. “The concept is that an additional

this is anticipated in Q2 19.

solar plant could be bolted on at little additional capex, and it would become an

“The next step is to finalise our PPA/tender

interesting demonstration plant for gas and

with the Botswana government. We are

solar combined facilities.

looking at joining the SAPP as an independent producer in any event, and one of those two

“We’re very excited about the possibility of

needs to come to fruition in order for us to

producing solar energy combined with the

join the grid, providing power to Botswana

base load/peaking potential of our gas,” adds

and exporting it to the SAPP.”

the CEO and MD. Tlou is also exploring other potential At the time of writing, Tlou is in the process

workstreams for its CBM product, which is a

of having the dual lateral pods dewatered

highly versatile gas that can be used across

at Lesedi, after which the wells will reach

many industries, including in petrochemicals

gas flow point in the coming months. Once

and fertiliser and ammonia production.

they are up and running, Tlou hopes to

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OIL & GAS | Tlou Energy

“With enough gas reserves, ammonia and

and growing economy provided a compelling

fertiliser are real possibilities further down

business and investment case. But, the

the track, along with petrochemicals,” Gilby

benefits of its Lesedi CBM project will not

suggests.

be confined to the company’s shareholders, instead they will be spread around Botswana

“However, our near term and primary

and the SADC region.

objective is still to convert our gas to electricity, join the power grid approximately

“The real benefit for Botswana can be

100 km away at a town by the name of

summarised in two broad categories: Energy

Serowe, and then be able to supply electricity

security and job creation,” Gilby proclaims.

to Botswana and the SAPP.”

Spreading the benefits

Despite the completion of the 600MW Morupule B Power Station, Botswana is still

Tlou chose to invest in Botswana over a

vulnerable to rolling blackouts and over-

decade ago because its stable government

reliant on electricity from a faltering Eskom,

Resource Global Network

which means that energy security remains a

“In relation to jobs, a stable, clean source

primary concern across the nation.

of energy encourages a healthy business environment and attracts broader

Gilby believes that Tlou’s CBM gas can

investment in a country. A positive business

contribute to greater energy security, while

and investment community creates much

also playing a major role in the government’s

needed jobs.”

plans to diversify its energy mix and eventually become a net exporter of energy

This is the crux of Tlou’s promise through its

in the coming years.

Lesedi CBM project – clean, reliable power and job creation for Botswana and the wider region of Southern Africa.

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OIL & GAS | Melbana Energy

Resource Global Network

MELBANA ENERGY

Unlocking reserves in Cuba’s underexplored offshore oil basins

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OIL & GAS | Melbana Energy

Melbana Energy is a junior oil & gas company that has been listed on the Australian Securities Exchange for the last 20 years. Traditionally, the Melbourne-headquartered firm has regarded Australia’s offshore industry as the core of its portfolio, but in recent years it has looked to diversify into new markets outside of offshore Australia. “We got interested in Cuba in the early 2010s based on technical reports showing it as hydrocarbon rich, relatively underexplored region. With the US embargo we felt there was a limited application of Western techniques to the geology in Cuba,” says Melbana’s CEO Robert Zammit. giving the firm an early mover advantage in Melbana’s technical team is highly experienced in the type of geology

an underexplored oilfield.

reserves according to Zammit, while the

Cuba - open for investment

current board also possesses a deep

Having upheld a socialist political system

reservoir of industry knowledge from

since 1959, Cuba has long been regarded

previous experience with global companies

as an inward-looking nation with foreign

such as ExxonMobil.

investment opportunities few and far

underpinning Cuba’s existing oil & gas

between, and out of the question altogether But crucially, as a small non-American

for companies from the US due to the

company looking at Cuba as an investment

embargo.

destination, Melbana has been able to pursue opportunities that weren’t accessible

However, things are changing on the

to traditional players North of Key West,

Caribbean island. In 2018, after 42 years of

Resource Global Network

Castro-led rule Cuba ushered in a new leader,

“They’ve established a pretty encouraging

and in the early days of his presidency Miguel

framework in terms of tax structure and a

Díaz-Canel began a campaign to attract

legislative framework, and that’s given us

greater foreign investment across several

sufficient comfort to support the investment

sectors, from tourism to infrastructure and

we’ve been making.”

oil & gas.

The Cuban government has recognised the “From our perspective, we’ve had quite a

emerging potential of its oil & gas industry

positive experience in Cuba,” reveals Zammit.

and has thrown its weight behind private

“Since we’ve been active in the country, Cuba

investors in the sector by applying an

has been looking for foreign investment.

attractive tax rate of 15-22.5% and an eight-

The general attitude, all the way from

year tax holiday for oil companies.

government to the people that we have been dealing with, has been very positive.

Almost all of Cuba’s current oil production is drilled from a 750 km² strip along the

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OIL & GAS | Melbana Energy Northwestern coast which runs from the bustling capital city Havana to the resort town of Varadero, however much of Cuba’s Northern basins remain underexplored.

This notion is highlighted by a 2004 US Geological Survey which found that the total undiscovered technically recoverable reserves in the North Cuba Basin stood at 4.6 billion barrels of crude oil, 9.8 Tcf of natural gas and 900 million barrels of natural gas liquids.

Melbana’s challenge is to unlock a portion of the reserves that exist in Cuba’s Northern basins, and Zammit believes the company possesses the technical skills required to do just that. “It’s a different type of geology that applies to the Northern part of the Gulf of Mexico, but it’s certainly a hydrocarbon rich area.

“We know there is oil in the ground in our acreage. Oil has been produced within the boundary area of our Block 9 project and our other asset - Santa Cruz - is an existing oilfield.”

Block 9

opportunities, the national oil company –

Block 9 is comprised of a 2,380 km² footprint

Cuba Oil Union (CUPET) – presented the

along trend from the multi-billion barrel

company with a number of prospects and

Varadero oil field, with the potential for large,

after a number of screening studies, Melbana

Varadero type structures, which was borne

decided that Block 9 was the most attractive.

out by an independent best estimate oil-inplace resource of 15.7 billion barrels.

“That was probably driven by the fact that Block 9 is part of Cuba’s Northern fold belt

Zammit explains that when Melbana

trend where there are currently multiple

first started scouting the country for

producing offshore fields. The trend

Resource Global Network

continues onshore into Block 9 and that gives

More recently, Melbana signed a farmout

us a strategic advantage in terms of cost

agreement with Chinese oil services company

management for drilling.�

Anhui Guangda Mining Investment Co (AGMI) on December 31st 2018, which will see the

After a period of negotiation with CUPET,

latter commit to drilling a minimum of three

Melbana was awarded a 100% participating

wells in Block 9 by July 2020, with the former

interest in the Block 9 area in 2015, on the

retaining a 12.5% share of the profit.

basis of a production sharing contract (PSC) over a +20-year period.

“Farming out is not 100% mandatory, but its almost something we needed to do as

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OIL & GAS | Melbana Energy

“Since we’ve been active in the country, Cuba has been looking for foreign investment. The general attitude, all the way from government to the people that we have been dealing with, has been very positive” Robert Zammit, CEO Melbana Energy

ResourceGlobal GlobalNetwork Network 123 Resource we don’t have a huge balance sheet and the

“Our geoscience team have been working

opportunities we are seeking are really quite

full-time on the structural interpretation for

large for a company of our size,” Zammit

Santa Cruz, based on the data that already

adds.

exists. We have formed a view that this

Santa Cruz Meanwhile, the Santa Cruz project - located approximately 150 km West of Block 9 - is

is an area with most promise in terms of incremental production potential,” Zammit claims.

a different type of asset for Melbana to

The Beehive prospect

manage, being an existing oilfield that

Returning to Australia, the company’s

currently produces in the region of 1,500

Beehive prospect is the largest undrilled

barrels per day.

offshore oil prospect in Australia, and so success there would dwarf any success in

Melbana finalised an incremental oil recovery

Cuba, according to Zammit.

(IOR) contract with CUPET for Santa Cruz in December 2018, which will see the parties

The prospect, located near Darwin off the

share any increase in production that can be

coast of the Northern Territory, is a very

generated above an agreed baseline level.

large isolated carbonate reef that is highly analogous to the Tengiz oil field in the

Additional production will be pursued

Caspian Sea – a huge field with somewhere

by Melbana from surface or downhole

in the region of 6 to 9 billion barrels

equipment or facility upgrades, from re-

recoverable.

working existing wells, side tracking from existing wells and from drilling new wells to

Melbana has partnered with two giants of

access new oil pools.

the global oil & gas sector at the Beehive prospect, in the shape of French major Total

The contract is currently moving through

and Australia’s Santos, who have fully funded

the Cuban ratification process for regulatory

a 3D seismic survey, in return for a further

approval, but this hasn’t stopped Melbana

option to fully fund the Beehive-1 exploration

commencing two optimisation studies at

well.

Santa Cruz.

If either company exercises its option, “One of the studies is based on facility

Melbana would retain a 20% participating

optimisation, looking at what we can do with

interest and be fully carried for the first well

the equipment and any de-bottlenecking we

drilled in WA-488-P.

can do. The other is more geoscience-based, which is where there is more upside for us,

“The independent assessment provided

from what we’ve seen so far.

a best estimate of 388 million barrels of

124

OIL & GAS | Melbana Energy

Cuban Block 9 PSC Meeting - Havana 2018

oil equivalent at a 100% basis. From our

towards it being gas. Whatever it is, oil is

perspective, it’s got enormous upside and

upside and we are surrounded by LNG

it’s very exciting for our shareholders to

infrastructure in that area and domestic gas

have that opportunity.

infrastructure, so we think we’ve got a pretty good opportunity to commercialise it.”

“We actually think it has an 80% chance to be oil, but our partners are more leaning

Melbana is also assessing an interesting

Resource Global Network

“The independent assessment provided a best estimate of 388 million barrels of oil equivalent at a 100% basis. The Beehive prospect has got enormous upside and its very exciting for our shareholders to have that opportunity.”

Tassie Shoal projects, although patience is the name of the game here after the company attained licences through to 2052.

With assets based in two disparate regions of the world in Cuba and Australia, Melbana has a difficult task ahead balancing progress between both jurisdictions.

However, the company’s new Havana office - led by Cuban oil & gas industry veteran Dr. Rafael Tenreyro - will help the company pursue its goals in the North Cuba Basin, while the Melbourne HQ continues to drive the general direction of the business.

After a busy end to 2018, Melbana is well positioned for an even more active next 12 months, which will include drilling at Block 9 in Cuba and preparations for the drilling opportunity to build a shallow offshore

of the Beehive prospect in Australia, if Total

infrastructure hub encompassing one LNG

and/or Santos exercise their option to do so.

plant and two methanol plants through the

ASX:MAY

a j

125

126

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127

128

APPOINTMENTS & EVENTS

APPOINTMENTS ‘Gold bull’ Eric Sprott to leave Kirkland Lake Gold Canadian billionaire mining investor Eric Sprott has announced he will retire as chairman and board member of TSX and ASX-listed Kirkland Lake Gold in May. “During the past five years, we have succeeded in creating a truly unique gold company which continues to have significant upside potential,” Sprott said.

Board member Jeff Parr will succeed the ‘long time gold bull’ as chairman in the interim, pending his re-election at Kirkland Lake’s May 7 AGM.

Peabody appoints Andrea Bertone to board of directors US-based pure-play coal company Peabody has made former Duke Energy International president Andrea Bertone an independent director on the board.

“We welcome Ms. Bertone to the board of directors. She is an accomplished leader with extensive experience both in operations and in the energy industry,” said chairman of the Board Robert Malone.

“Her appointment strengthens the breadth of talent and background of Peabody’s board, and I’m confident that she will bring meaningful value to the company.”

Sempra LNG names new COO and president Lisa Glatch has been named chief operating officer of Sempra LNG, a unit of Sempra Energy, and Justin Bird has also been appointed president.

Glatch possesses over 30 years of engineering and construction experience, as well as the management of multi-billion dollar projects.

Meanwhile, Bird led the development of Sempra’s five North American LNG projects in his prior position as chief development officer for Sempra North American Infrastructure.

GE moves to appoint new CEO for Francophone Africa business General Electric (GE) has made Eric Amoussouga chief executive officer for Francophone Africa, as the company looks towards the next phase of strategy and growth in the region.

Amoussouga will lead the development of diverse programmes with public and private sector projects and partnerships across Francophone Africa.

“We are optimistic about Francophone Africa and the opportunities to develop breakthrough solutions in power, healthcare, aviation and renewable energy,” said President and CEO of GE Africa Farid Fezoua.

Resource Global Network 129

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

Mining Tech South America April 15-16 Santiago Chile

AWEA Wind Power May 20-23 Houston United States

Future of Mining EMEA June 26-27 London United Kingdom

International Mining and Resources Conference + Expo (IMARC) October 28-31 Melbourne Australia

Africa Oil Week November 04-08 Cape Town South Africa

Want to promote your resources event?

Email the editor at editorial@resourceglobalnetwork.com

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