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
27
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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
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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
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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,â€? 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
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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
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Blue Spec Drilling Pty Ltd provides a variety of drilling services including: Reverse circulation Surface diamond drilling Directional drilling Water bores Remote area exploration and camps Blue Spec Drilling employs highly skilled and experienced operators and has a eet of 19 modern multi-purpose drill rigs, which incorporate the latest safety and drilling techniques.
3562829-1
Blue Spec Drilling is based in Kalgoorlie, WA and also has operations in South America.
Blue Spec Drilling Pty Ltd is based in Kalgoorlie, WA and also has operations in South America. Contact Murray Black 0417 973 394 P: 08 9021 3033 www.bluespec.net.au Email: murray@bluespec.net.au
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
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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.
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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.
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OIL & GAS | Tlou Energy
Resource Global Network
105
TLOU ENERGY A sustainable energy source for Botswana and Southern Africa
106
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
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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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