RGN Vol 8 Iss 4 by Anderson Murray Media

RESOURCE Volume 8, Issue 4

GLOBAL NETWORK

Mining, renewable energy and oil & gas worldwide

ESG

RISES TO THE FOREFRONT OF THE MINING INDUSTRY

How close adherence to the principles of ESG can create a sustainable sector and a better world FEATURING

EDITORIAL

When mining gets ESG right, the world becomes a better place

“

This is an enormous opportunity for our sector. I think mining will shift from being a backwater, 19th century industrial revolution, belching coal thing to being an integral part of the green future of this planet.” These are the strong words of Anglo Pacific Group CEO Julian Treger, who was speaking on a panel considering the importance of ESG in mining sector merger and acquisitions during Mines and Money’s Online Connect roadshow in May.

Jacob Ambrose Willson Editor

Executive Team Editor Jacob Ambrose Willson Content Director (APAC and Americas) David Hunter ICT Director Stuart Clark Managing Director Simon Curran Contributors Remi Piet (Embellie Advisory) Matt Geiger (MJG Capital) 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. Disclaimer: The opinions expressed in this publication are not necessarily those of the publishers. Whilst every effort is made to ensure accuracy the publisher and editor cannot be held responsible for any inaccurate information supplied and/or published. Copyright: The copyright for all material published in this magazine is strictly reserved.

Anderson Murray Media

As regular readers of RGN will know, there is a pressing need for greater supply of a plethora of metals and minerals to power the global clean energy transition, from the lithium and nickel in electric vehicle (EV) batteries to the copper in solar panels, wind turbines and electricity grids that will recharge those EVs. These are just three examples from a long list of essential mined materials for the transition. However, it is the responsibility of all players in the global mining sector – however junior or giant – to ensure that the process of mineral extraction does not create negative impacts on the people and environment where it is produced and processed. This idea is not a new one in the industry, with individual actions and overarching industry standards previously defined around loose categories such as ‘sustainable development’ or ‘corporate social responsibility’, until the ‘environmental, social, governance’ thematic really took off.

Driven by a new generation of climateconscious investors also attuned to ongoing social and governance issues, the rise of ESG in the last five years has led to a multitude of new international standards aimed at improving the mining sector’s ability to make a positive contribution to society while advancing the energy transition. Nowadays, the positive impacts of the mining industry far outweigh the negatives, as evidenced in the last yearand-a-half by the wide-ranging support mining companies regularly lent to stakeholders throughout the COVID-19 pandemic. However, recent catastrophes such as the Brumadinho dam collapse in 2019 and Rio Tinto’s destruction of a sacred Aboriginal site at Juukan Gorge prove that there is still much that needs to be done to repair the industry’s reputation to large parts of civil society. This issue of RGN features two relatively new organisations that have taken up a role in the growing ESG movement within the resources space. The Electric Mine Consortium highlights a trifecta of ‘environmental, economic and health value’ to be gained via mine electrification. Meanwhile, The Copper Mark provides water-tight assurance of responsible copper production for its growing membership. The ESG credentials of each of the five featured mining companies in this issue have also been promoted, with Indonesia-focused Sihayo Gold and green graphite developer Black Rock Mining offering prime examples of an ESG focus driving positive outcomes for all stakeholders.

Jacob Ambrose Willson

Fulham Green, 69-79 Fulham High Street, Main Reception, Bedford House, London SW6 3JW | Tel. +44 (0)207 148 5630

jacob@resourceglobalnetwork.com

a j r

CONTENTS NEWS 6 Global resources news Our selection of mining, oil & gas and renewable energy stories from the last month ELECTRIC MINE CONSORTIUM

COLUMNS 12 Remi Piet (Embellie Advisory) How miners across Latin America can ensure the feasibility of their projects with greater ESG investments 22 Matt Geiger (MJG Capital) Natural resources investment advisor Matt Geiger returns with a follow-up article on the copper-gold ratio in 2021

THE COPPER MARK

ESG ASSOCIATIONS 34 Electric Mine Consortium Miners, service companies and OEMs unite to support the electrification of mine sites 44 The Copper Mark The new global standard for responsibly sourced copper

GUANA JUATO S I LV E R CO M PA N Y

BLACK ROCK MINING

MINING

56 Guanajuato Silver Company A diamond in the rough silver-gold opportunity in Guanajuato, Mexico

70 Black Rock Mining The countdown to first production begins at one of the highest quality graphite mines in the world 84 Sihayo Gold Tangible near-term production and real exploration upside in Indonesia 94 Canuc Resources IOCG discovery potential in an historic Mexican silver mining district 108 Viking Mines Breathing new life to a past producing gold mine in WA’s Eastern Goldfields

S I H AYO GOLD

EVENTS 120 Events Our pick of the top mining, oil & gas and renewable energy events happening around the world in the months to come

CANUC RESOURCES

NEWS

RESPONSIBLE MINERALS INITIATIVE LAUNCHES NEW MINING ESG STANDARD

US-based Responsible Minerals Initiative (RMI) has launched a new ESG standard which seeks to further improve conditions for workers, the environment and communities across the mining sector. The Responsible Minerals Assurance Process (RMAP) ESG Standard seeks to help miners navigate expectations by providing a set of criteria right through the supply chain, from mineral processors to smelters and refiners. RMI – which counts more than 400 member companies – identified four major areas of focus for mining companies: environment, social obligations, occupational health and safety provisions and governance requirements.

“The RMI’s ESG Standard offers the most comprehensive set of environmental, social and governance requirements globally for facilities sourcing and processing minerals,” said Responsible Business Alliance vice president of responsible sourcing Leah Butler. “This Standard will help companies meet government, investor, customer and regulatory requirements, such as the expectations set by EU due diligence frameworks and the London Metals Exchange (LME).” In 2019, the LME – the world’s biggest market for industrial metals – introduced responsible sourcing standards covering all metals traded on the exchange, compelling producers to apply additional scrutiny to their supply chains to comply with the new standards. 6

NEWS

Mining, oil & gas and renewable energy news from around the world THE COPPER MARK RECEIVES ASSURANCE APPLICATIONS FROM SIX NEW OPERATIONS

The Copper Mark – an assurance framework organisation promoting responsible copper production practises – has received applications from six new participating sites and two new partner businesses. Five of the six operations are US-based mines majority owned by Freeport-McMoRan, namely: Bagdad, Chino, Tyrone, Safford and Sierrita. The sixth is Southern Peaks Mining’s Compañía Minera Condestable SA site in Peru. These sites will now begin a process of assessment based on the Copper Mark’s Assurance Process. The framework aims to demonstrate the copper industry’s responsible production practices and industry contribution to the United Nations SDGs. Moreover, fabricator organisations Nexans and Halcor have both joined the Copper Mark as partners which use or rely on copper in their businesses. Both have made a public commitment to the Copper Mark’s vision and objectives promoting responsible copper production. With these additions, the Copper Mark now has 10 industry partners and 23 participating sites. “We are delighted to secure new partners in Nexans and Halcor, both of which recognise the vital importance of the sustainable production of copper, both for the local communities within which the copper industry operates and for the wider green transition,” said The Copper Mark’s executive director Michèle Brülhart.

NEWS

EUROPE’S FIRST ESG-FOCUSED GOLD MINING ETF TO LAUNCH ON LSE THIS MONTH

Europe’s first gold mining exchange traded fund (ETF) with an ESG-focused mandate will launch on the London Stock Exchange in July. The AuAg ESG Gold Mining UCITS ETF tracks an index that ranks gold miners for ESG characteristics and only includes the sector’s 25 ‘best in class’ companies for ESG risk, based on screening from independent specialists Sustainalytics. Created in partnership with boutique precious metals and green tech-focused AuAg Funds, the ETF will allow ESG-focused investors a unique opportunity to participate in the gold mining sector.

The fund is equally weighted to avoid concentration risks in larger gold miners. However, the possible underweighting of a few dominant mega-companies may also provide a beneficial return profile for the ETF in a bull market for gold and gold miners. “We’re delighted to launch the AuAg ESG Gold Mining UCITS ETF (ESGO) which allows investment in the companies that extract precious metals, with an active ESG approach,” said AuAg chief executive Eric Strand. “Mining is an industry that has seen vast improvements in all aspects of ESG, but standards vary across regions and companies. ESGO helps investors get exposure towards gold mining companies with the best ESG credentials and invest in the sector more responsibly.” 8

NEWS

Mining, oil & gas and renewable energy news from around the world STATE OF PLAY REPORT FINDS AUSTRALIAN MINERS ANTICIPATE ELECTRIFICATION

A new survey of over 450 Australian mining executives has found that mine electrification is widely expected to take place over the next 20 years, in one of the most pressing transformational imperatives for the industry. Around 89% of respondents in the State of Play’s 2021 electrification survey said they think mine sites will electrify within the next 20 years, while over 60% expect the next generation of mines to be all-electric. In support of the electrification thematic, the State of Play platform earlier this year created the Electric Mine Consortium, which is comprised of several mining and service companies from across the value chain.

The collaborative organisation is predicated on a trifecta of health, environmental and economic benefits that can be attained with mine electrification. Notably, 91% of respondents in the survey think electrification will spur new business models, while 53% would electrify for cost reasons. State of Play co-founder Graeme Stanway told Australian Mining that electric equipment would allow for a shift to a clean future for mining where machinery is safe, automated and battery-powered. “This would effectively cut out two of the biggest issues in mining: carbon impact and particulate exposure and result in zero carbon emission mines,” he said.

ESG performance The road forward for

How miners across Latin America can ensure the feasibility of their pr 12

MINING | REMI PIET (EMBELLIE ADVISORY)

e in Latin America: r the extractive sector

rojects with greater ESG investment, by Remi Piet (Embellie Advisory) 13

The overall ESG performance of extractive industries has been coming under increasing scrutiny from investors and stakeholders over the last decade at least. Two factors will only further this trend in the next few years: 1) Higher international standards, including new regulations on transparency of supply chains in the mineral sector. 2) Regular opposition from local communities affected by extractive projects. Both will strengthen the need for better ESG strategies, in particular at the regional and local levels. These growing demands and tensions can be found in all mining jurisdictions, but it is particularly the case in Latin America as proven by recent election results and social unrest fuelled in part by anti-mining sentiments. Investors and operators in Latin America now understand that they need to better assess above-ground risks and deliver on ESG commitments if they want to ensure the sustainability of their investments and the social licence to operate of

MINING | REMI PIET (EMBELLIE ADVISORY)

their projects. The question of how to achieve this has been central to many of the Zoom webinars that we have attended in the last year.

One continent, many realities Domestic pushes for better ESG performance will take very different forms in Latin America from one country to the next. In Peru, Pedro Castillo watered down his most drastic anti-mining proposals and tempered his campaign rhetoric after the inclusion of moderate leftist economist Pedro Franke in his advising team. Moreover, Castillo does not have the support in Congress to modify the Constitution or increase royalties. His central political campaign promise however was to increase investments in

Remi Piet Remi Piet is a senior partner at Embellie Advisory - a boutique consultancy providing abovethe-ground risk analyses, counter-party risk assessments, ESG due diligence, community/ stakeholders agreements facilitation and social licence to operate solutions to the extractive sector in Latin America and Africa. Remi holds a Phd in Latin American political economy and Master degrees in sustainable development, business administration and economics. Remi has field experience in 70+ countries (Latin America, Africa and the Middle East) working with UN agencies and universities as well as helping investors, extractive companies and local communities reach agreements towards the inclusive development of mining territories.

the education and health sectors, in particular in mining regions, where the mining sector will have to step up its contribution.

In Chile, Elisa Loncon

investments from the mining

- a university professor

sector.

and activist for Mapuche educational rights - was

Similarly, in Argentina,

elected by a new Constitutional

President Alberto Fernandez

Assembly to preside over the

keeps relative support

rewriting of the Constitution.

in mining provinces, in

In Brazil and Colombia, green

comparison with his possible

and left-leaning parties lead in

opponents. He has previously

voting intention for next year’s

called for increased

elections and in Ecuador,

contributions from mining

while investment-friendly

companies.

Guillermo Lasso was elected last April, the ballot showed

The need to harness high

a strong surge of support for

commodity prices, increase

Pachakutik candidates behind

ESG investments and improve

Yaku Perez who almost edged

their return is therefore

Lasso in the first round.

clear for miners across Latin America. Political

To complete the panorama,

interference, economic

the June 6th elections in

conditions during the

Mexico were a relative setback

pandemic and social demands

for Andres Manuel Lopez

all lead towards increased

Obrador at the federal level,

pressure to design ambitious

but his Morena party won

and efficient ESG strategies

11of the 15 governorships,

to secure supplies and the

many in mining states. The

sustainability of investments.

recent reforms to the royalty

disbursement regime (Fondo

On the positive side, there

Minero), which drastically

are also many benefits to

cuts revenues channelled to

increased investor and public

local mining communities,

scrutiny on the ESG impact

will demand greater ESG

of mining companies in Latin

MINING | REMI PIET (EMBELLIE ADVISORY)

America. One of them is the

demanding very different

improved reporting by the

expertise and methodologies.

extractive sector itself on

As our research interviews

its ESG practices. As shown

and perception studies among

by the wave of recently

mining affected communities

published sustainability

in Latin America regularly

reports taking over our

confirm, progress on social

mailboxes, it is undeniable

licence to operate of many

that industrial miners and

projects are limited at best and

investors have increased their

contributions to governance

focus on the issue.

quality are scarce.

If self-reporting has

If mining companies made

obvious methodological

progress in documenting

flaws, one must admit that

their improved environmental

mining companies in Latin

standards, the positive impact

America have a better

of mining investments on the

grasp of the quantification

social wellbeing of affected

of their economic impact

communities and their

on territories and stronger

contribution to improved

monitoring processes of their

governance (the ‘S’ and the

environmental performance

‘G’ of ‘ESG’) is less obvious. To

on the heels of the disastrous

make matters worse, data is

Mariana and Brumadinho

harder to collect to sustain that

dam collapses in Brazil.

claim.

Refocusing on ‘S’ and ‘G’

Similarly in Latin America,

Yet, by definition ESG

stepped up faster than the

performance encompasses

needed regulations to reach

three sets of criteria

free prior informed consent

(Environmental, Social

of communities despite the

and Governance), each

ILO 169 (Indigenous and

environmental regulations

Tribal Peoples Convention,

1989) being ratified by most

obvious. A simple mapping

countries on the continent.

of Sustainable Development

As a result, requested impact

Goals to mining operations

assessments and traditional

offers insights on how to

ESG due diligence ahead of

implement ESG corporate

financing or M&A decisions

strategies towards the

have been skewed towards

sustainable development

environmental compliance

of mining territories and

rather than on the monitoring

communities. But to make that

and analysis of social and

case to mining communities

governance impacts.

in Latin America, companies need to adopt a change of

The reputation of the sector

paradigm.

in Latin America suffered from poor investment

This paradigm change needs

decisions that did not

to include a move away

weigh enough social and

from traditional top-down

governance variables in their

communication or irregular

due diligence methodologies

facilitation of agreements with

and ultimate investment

communities worsened by

decision. Demonstrations

the pandemic restrictions. It

against companies failing to

should start with a transparent

reach community agreements

dialogue on mining

made regular news headlines,

contributions to a territory

explanations has reinforced

disadvantaging sustainably run

including a socialisation of

unreasonable expectations

operations.

best practices in local content,

in local content and reduced

societal contribution and

the spotlight on social and

support to good governance.

governance initiatives.

run mining operation to the

The constant overemphasis on

Mining communities in Latin

improved governance and

the economic contributions

America rarely perceive – and

inclusive development of a

of the mining sector to host

in many cases never receive

territory are important and

territories at the expense

– most of the argued trickle-

of more comprehensive

down benefits of mining

Nevertheless, the potential contributions of a responsibly

MINING | REMI PIET (EMBELLIE ADVISORY)

investments. Many reasons

companies in Latin America

can be underlined as recurring

will have to increase their

causes, from the weakness of

ESG investments to bridge

Best practices and innovative solutions

local institutions to national

the rift of perception and

To end on a positive note,

and regional competition over

communication with local

there are ways to achieve

royalties disbursement.

communities.

this objective for companies willing to harvest the recent

However, wherever you

surge in commodity prices into

place the blame, the result

sustainable investment with

remains the same and mining

communities, reaching ESG

Those could be replicated

Regarding contribution to

goals in the process.

in other jurisdictions by

good governance, several

their peers. In the case

positive developments should

On the Social performance

of projects impacting

also be noted. In terms of

front, best practices have

indigenous communities, a

regulations, some countries

been developed by select

specific approach to inclusive

such as Peru have clarified the

mining companies around

development is needed and

steps for prior consultation

Latin America, each tackling

several good practices guides

processes and others could

a specific need of mining

are available. The challenges

follow relatively soon, such

communities, for example:

are higher around concessions

as Ecuador and Colombia. In

fighting against illiteracy,

plagued by security concerns,

parallel, at national levels,

narrowing the gender gap and

but specific protocols have

the transposition of global

support to entrepreneurship

been developed and are

transparency norms into

through comprehensive

well enforced by several

national recommendations

local content and economic

companies, particularly in

and standards also made

diversification strategies.

Colombia and Mexico.

progress thanks to EITI

MINING | REMI PIET (EMBELLIE ADVISORY)

Remi Piet

For more questions, reach out to the author; Remi Piet, Ph.D. MBA: Co-founder and senior partner, Embellie Advisory

and the IFC among other

social media – such as

actors. Funding sources are

CitizenLab or Bang The Table.

also available for innovative

Those can back traditional

solutions bridging the data

community relations

gap.

initiatives. If managed by a trusted facilitator, they can be

The most interesting

especially useful to shift ESG

development however

communication narratives,

is the confirmation that

build bottom-up initiatives and

technology and innovation

establish a trusted dialogue.

Extractive industry advisor, Emerging Markets Investors Alliance (EMIA) Faculty member, HEC Paris, University of Miami & Devonshire Initiative remipiet@embellieadvisory.me r.piet@umiami.edu

is catching up to help us bridge the governance gap. There are now a handful of solid options in community participation platforms – or geographically localised

Copper, gold, and a f

Natural resources investment advisor Matt Geiger returns 22

MINING | MATT GEIGER (MJG CAPITAL)

false choice – Part 2

s with a follow-up article on the copper-gold ratio in 2021 23

It’s been exactly one year since ‘Copper, Gold, and a False Choice’ was published in RGN’s July 2020 issue. At the time, precious metals were screaming higher in the wake of the coronavirus sell off – with gold reaching an all-time high near US$2,100 per ounce just over a month later. Meanwhile, the price of copper was treading water near $2.75 per pound and seemed to be going nowhere fast, with much of the world still in lockdown. While the prevailing narratives at the time suggested otherwise, the piece argued that “those bullish on gold should rationally also be bullish on copper, at least over the medium term.” This conviction stemmed from the fact that, at that time, gold was more expensive relative to copper than at any point in the last 40 years – with the copper-to-gold ratio sitting at 0.000094, well below the 40-year mean of 0.000160. This disparity in value between the two metals – especially when

MINING | MATT GEIGER (MJG CAPITAL)

Matt Geiger Mr. Geiger is managing partner at MJG Capital, a limited partnership specialising in natural resource investments. The partnership is long-only and holds a concentrated portfolio of resource equities. Investments include explorers, developers, producers, and royalty companies focused on precious metals, energy metals, industrial metals, and ag minerals. Matt is a graduate of the Wharton School at the University of Pennsylvania and previously founded a venture-backed technology company most recently valued at US$150 million.

Source: Copper to Gold Ratio. Longtermtrends. https://www.longtermtrends.net/copper-gold-ratio/

one considered copper’s irreplaceable role in the ongoing decarbonisation of the global economy – didn’t appear sustainable. As noted in last July’s RGN issue: “Put simply, this means that if gold stood still at $1,900 an ounce for the next five years while the copper-togold ratio reverts to its 40year mean, we are looking at roughly $4.75 copper once the process has run its course. This doesn’t take into account the possibility that the mean reversion pendulum overshoots as is often the case, nor does it consider the

MINING | MATT GEIGER (MJG CAPITAL)

Source: ‘The Commodity Bull Needs $10,000-Plus-Copper’. Bloomberg Intelligence. 5/14/21.

possibility that gold prices also rise as the copper-to-gold ratio normalises.” As many readers will be aware, the tables have turned dramatically in the months since. Due in part to a weakening US Dollar, COVIDrelated mine disruptions, and the anticipation of significant infrastructure spending across the developed world, the copper price has rallied by over 50% since last summer – reaching an all-time high of $4.79 per pound in early May. Copper-focused equities, from the explorers to the major producers, have in many cases

significantly outperformed the

What insights can be gleaned,

metal during this move.

if any, from this sudden reversal? To start, it’s accurate

Precious metals, on the other

to say that copper is now fairly

hand, have spent this period

valued relative to gold – at least

consolidating last year’s gains

by historical standards. This

– with the gold price sitting

does not however preclude

roughly 13% below its level in

the mean reversion pendulum

August of last year. This has

from overshooting, as so often

resulted in a sharp spike in

happens in practice. In an

the copper to gold ratio from

extreme scenario where the

0.000094 last July to 0.000145

copper-to-gold ratio overshoots

today. (In other words, the

to levels last seen at the height

value of copper relative to

of the last commodity super

gold has increased by over

cycle, copper could in theory

50% during this period.) In

be priced north of $10 per

the wake of this move, the

pound even if gold were to not

ratio between the two metals

budge an inch from the $1,900

now sits just below the 40-year

level. While this scenario does

mean of 0.000160.

not seem particularly likely, history tells us that it is within

I will readily admit to having

the realm of possibility.

been surprised at how quickly this process of mean reversion

It is also safe to say that copper

has played out – noting

can no longer be considered a

previously that “it’s unrealistic

contrarian investment like it

to expect the copper-to-gold

was last year. Generalist and

ratio to revert to its mean

ESG-focused investors have

overnight” and that “the

descended into the copper

process will take conviction

arena in recent months,

and years of patience.” This

spurred in part by a Goldman

clearly did not end up being

Sachs report published in April

the case.

declaring that ‘Copper Is The New Oil’. Vancouver and Perth

MINING | MATT GEIGER (MJG CAPITAL)

have caught onto this surge

0.50 to the S&P 500. Similarly,

entered the mining space

of interest, and we’re now

the 0.65 correlation between

– will throw in the towel

seeing newly spawned copper-

the commodity complex (as

regardless.

focused juniors spring into life

measured by the Bloomberg

with unsettling regularity. This

Commodity Spot Index) and

With these near-term

‘flavour of the month’ status

the S&P 500 is near its highest

considerations in mind,

should serve to temper the

level since 1960, according

the red metal’s prospects in

expectations of even the most

to Bloomberg Intelligence.

the medium to long-term

ardent copper bulls, at least in

The implication is that when

remain exceptional. Given its

the short term.

the stock market next rolls

prevalence of uses and limited

over, the price of copper will

substitution risk, there is no

It is notable that the copper

be particularly susceptible

more obvious beneficiary in

price is more correlated to the

to a sharp retracement. This

the ongoing decarbonisation of

broader stock market than at

will have no bearing on the

the global economy. Glencore

any point in the past five years

metal’s long-term prospects,

projects that a 1 million tonnes

– with a correlation of roughly

but many investors – especially

per annum copper annual

those who have only recently

average growth rate will be required to satiate global

MINING | MATT GEIGER (MJG CAPITAL)

demand over the next 30 years,

in the recent past at projects

term, the MJG partnership

which would be double the

like Filo del Sol, Warintza,

is more than comfortable

industry’s growth rate between

Boda, and Stavely, it’s unlikely

investing in companies

2010-2019.

that we’ll see any of these

focused on either metal

assets reach production until

assuming the right company-

It’s difficult to see where

the end of this decade. And

specific boxes are checked.

the supply will come from,

that’s optimistically.

Copper and gold are the two

at least over this coming

highest weighted metals

decade. Freeport-McMoRan

From an investment

within the MJG partnership by

CEO Richard Adkerson is on

perspective, the mantra

a healthy margin – together

record saying that copper

remains very much the same.

comprising just under 50% of

prices could double again

This business is about backing

the overall portfolio – and it’s

from current levels and that it

exceptional people working

likely to remain this way for

would still take his company

on quality assets with enough

the foreseeable future.

five years to bring online

scale to make a difference.

any substantiative additional

Despite some bias towards

supply. While there have

copper over gold in the longer

indeed been discoveries made

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ELECTRIC MINE CONSORTIU

Miners, service companies and OEMs unite to support the ele

MINING | ELECTRIC MINE CONSORTIUM

ectrification of mine sites 35

The overarching aim of the 2016 Paris Agreement on climate change was for all 196 participating countries to work together to limit global warming to well below 2 °C above pre-industrial levels. The landmark accords stated that this could by achieved by nations reducing carbon emissions as soon as possible and achieving net-zero emissions in the second half of the 21st century. In the five years that have passed since the agreement was ratified, governments, scientists and entrepreneurs have committed huge resources into alternative technologies to power the global economy, with electrification identified as a key route into decarbonising the colossal transport and energy sectors, amongst other areas. The mining sector will play a vital role in the successful electrification of the global economy, via the ongoing supply of a plethora of critical minerals and metals to power grids, wind turbines and electric vehicle (EV) batteries, to give three examples. However, the entire extractives industry has taken plenty of flack for its own carbon footprint – not just the coal mining sector. In response to building pressure from modern-day ESG investors, almost all mining companies have already taken progressive steps towards disclosing and reducing their Scope 1 and 2 emissions, but the biggest – and almost total – reductions can be gained by designing, building and acquiring 100% electric mines, according to latest research. In early 2021, a new collaborative organisation – Electric Mine Consortium - was created to accelerate the transition towards fully electric mine sites, which offer not just environmental benefits, but also cost reductions to the operators and health improvements to its employees.

The first seeds of the Electric

the University of Western

drivers and barriers of mine

Mine Consortium were

Australia). Simply titled

electrification along with key

planted in a 2020 research

‘Electrification’, the paper

enabling technologies.

report published by the

was sponsored by the Future

State of Play platform (a

Battery Industries Cooperative

“That research was

partnership between global

Research Centre (FBICRC),

collaborative with quite a few

consulting company VCI and

METS Ignited and Project 412,

miners and service companies,

with the aim to identify the

but what became pretty

MINING | ELECTRIC MINE CONSORTIUM

apparent through it was that

“When we got to the end of

of the Consortium went from

the benefit of electrification

that research piece, we asked

there. But even in the last 18

was profound and pretty

the original mining members

months the interest in this has

inevitable,” says State of Play’s

if they were interested in

stripped initial expectations.”

co-founder Graeme Stanway.

taking it forward and they selfselected around the original

Original members of the

members, and the acceleration

Consortium include well-

MINING | ELECTRIC MINE CONSORTIUM

known players from the mining, services and OEM sectors, including the likes of: Sandvik, Epiroc, OZ Minerals, South32, Gold Fields, Safescape, Dassault Systemes, Energy Vault, Hahn, Horizon Power, 3ME, IGO and Barminco. More recent additions reveal wide-reaching demand for membership to the Consortium, with major Australian producer Evolution Mining recently joining smaller nickel-gold junior Blackstone Minerals on the team. Meanwhile, electric mining light vehicle developer Zero Automotive and hybrid power generation company Zenith Energy have also signed up to the Consortium, showing the breadth of the organisation across the value chain. “The mining members and partners we have in place are leading the process,” Stanway says. “Just simply the composition of the membership has given

GRAEME STANWAY, STATE OF PLAY CO-FOUNDER

a lot of impetus to other

“Therefore, I wasn’t surprised

A rare trifecta

companies to move in this

on the thematic but I was

So, what benefits do this vast

direction. They are banding

surprised by just how eager

array of companies along the

together and creating scale

the companies were to

mining value chain see in

to test technologies and build

collaborate in this form. It is

electrifying mine sites? On

datasets that they can rapidly

rare for the sort of companies

its website, the Consortium

adopt at a lower risk.”

in the Consortium to openly

describes a ‘rare trifecta’ of

work together like this in

environmental, economic

When asked if he was

a fairly broad-based way.

and health value waiting to be

surprised by the level of

But that’s just testament to

realised through the transition.

appetite for a collaborative

the trend and demonstrates

organisation focused on mine

how important it is to these

Aside from the well-

electrification, Stanway points

companies and how interested

documented environmental

out that an ‘ESG force’ has

they are in accelerating to zero

value, Stanway firmly believes

been building in the sector

carbon outcomes.”

that the health benefits

over the last five or six years.

MINING | ELECTRIC MINE CONSORTIUM

associated with the electric

unhealthy levels of diesel

transition deserve more

particulate, so this is a

emphasis, particularly in

big issue in the industry.

Australia where older mines

Notwithstanding the PPE

are mostly powered by diesel-

in place, the first prize is

fired equipment. Research has

to eliminate the hazard,

shown that diesel particulates

which means electrification,

are the second most

particularly in underground

carcinogenic contaminant in

mines.”

the country, therefore posing a significant health threat to

And on the economic side

mine site employees working

of the trifecta, Stanway

amongst toxic diesel fumes.

acknowledges that the mobile equipment required for

“In Australia over a million

electrified mines is currently

workers are exposed to

more expensive than similar

“The mining members and partners we have in place are leading the process. Just simply the composition of the membership has given a lot of impetus to other companies to move in this direction. They are banding together and creating scale to test technologies and build datasets that they can rapidly adopt at a lower risk” Graeme Stanway, State of Play co-founder

equipment for traditional

“These are big cost reductions,

operations, although he likens

to the extent where we’re even

Overcoming the challenges

it to the EV market, where

seeing some of the smaller

The current costs associated

prices continue to come down

entrepreneurial companies

with the electric mine

with scale.

looking for assets that can

transition are one of two major

be electrified, as opposed to

technical hurdles highlighted

Based on research in State of

looking for subsidies. Overall,

by Stanway, with the other

Play’s Electrification research

it’s pretty rare you have such

being the need for greater

paper, a fully electric mine will

an obvious trifecta like this,

renewable energy storage

eventually reduce operating

which is why it’s moving

infrastructure in Australia and

costs by 7-15%, including 30-

quickly.”

other mining jurisdictions

50% savings on energy, 25%

globally.

maintenance costs reduction

and a 40% drop in expenses

The Consortium would also do

relating to ventilation.

well to bridge the gap between

MINING | ELECTRIC MINE CONSORTIUM

to establish electrification performance benchmarks, a business case and future mine designs, and tested mine scale remote energy storage through installation of multiple technologies at multiple sites. The next steps for the Consortium will be to ramp up its data transfer between companies in order to accelerate knowledge sharing and eventual adoption, according to Stanway. “Then I think the team will broaden its outlook to the elements related to zero impact or zero carbon [mining]. There’s quite a few OEMS and mining companies

these current challenges that

areas beyond the challenges

with regards to electric

are potentially holding us

we are currently focusing on;

equipment procurement.

back; the storage challenge,

I’m confident we will address

Stanway also suggests that

the equipment challenge,

those further down the line.”

risk-averse financiers could

the mine design and the

obstruct the path to fully

infrastructure challenges. The

electrified mines.

Consortium is really hitting those hard at the moment.”

“There wouldn’t be a reason for the Consortium if there

So far, the Consortium has

weren’t some challenges to

helped convert a light vehicle

overcome, and none of them

fleet to battery electric across

are insurmountable,” he says.

multiple member mine sites

“The first steps are to nail

and simulated a range of mines and mining methods

TH COP MA

The new glob for responsibly

MINING | THE COPPER MARK

HE PER ARK

bal standard sourced copper

In December 2019, The Copper Mark was created in response to a growing collective awareness of the need for the copper industry to improve its ESG credentials. Initially developed and funded by the International Copper Association (ICA), The Copper Mark was founded on the understanding that a credible assurance framework must be separate from the industry it assesses. Its stated vision is to have all participants in the copper supply chain recognised by their employees, neighbours, customers, investors and civil society as having internationallyaccepted responsible operating practices, while making significant contributions to the UN’s Sustainable Development Goals It seeks to achieve this through partnering with copper producers, refiners, fabricators and even copper recycling outfits. For an organisation within the global copper supply chain to gain affiliation with The Copper Mark, they must commit to meet the requirements of its Assurance Process. Assurance is the process by which The Copper Mark ensures that the claims made by participants are credible and trustworthy, with each site independently verified to meet the standard criteria through a rigorous site-level assessment process. In June 2021, RGN’s editor Jacob Ambrose Willson spoke to The Copper Mark’s executive director Michèle Brülhart, as part of RGN’s deepdive focus on ESG in the mining sector.

Jacob Ambrose Willson:

of those raw materials – or

Michèle, what role does the

‘transition minerals’ as they

copper industry have to play

are sometimes referred to as

in the global decarbonisation

– that is fundamental to allow

vital to ensure that the growing

agenda and why is it vital for

us to move to clean energy.

demand for copper does not

copper to be produced in a

It’s used in batteries for

create negative impacts for

sustainable manner?

electric vehicles (EVs), solar

people and the environment

panels, wind turbines and the

where its produced and

Michèle Brülhart: The

electricity grids that are going

processed.

use of copper is central to

to recharge those EV batteries.

countless renewable energy

So, we really can’t have a clean

That is where systems like The

technologies. It really is one

energy transition without

Copper Mark come in. Our

copper. What that means is it’s

goal is to ensure that copper is

MINING | THE COPPER MARK

responsibly produced so that

One thing to add here, if we’re

scope to cover any entity that

consumers and customers can

looking at mine to end user,

provides a copper product. In

be confident that the copper

is the importance of a value

addition, with decarbonisation

used in their product was

chain approach. The Copper

comes an increasing demand

created responsibly and also

Mark’s current scope identifies

for recycled material. So,

to make sure that investors

responsible production as

what’s the impact of using

are able to continue investing

mining, smelting and refining

more recycled material on

in copper as a sustainable

of copper. However, we’re also

the decarbonisation of the

investment opportunity.

working to add fabrication into

industry itself? And then also

what does it mean to produce

governance challenges facing

as responsible sourcing.

recycled copper responsibly?

the copper industry in 2021?

Responsible sourcing means

There’s a whole range of

there is an expectation to

issues not just linked to the

MB: What you’re seeing are

know where copper is sourced

extraction of copper, but also

often quite content-specific

from, understanding whether

further down the value chain

operations in different

it’s sourced from areas that are

that we need to keep in mind if

countries. There may be

considered conflict-affected

we want to make sure we have

specific issues around water

or with weak governance

a responsible raw material

management, community

structures, and then looking

to enable us to move to clean

engagement and pollution.

at what this means in terms of

energies.

But what we observe overall

risks related to human rights

is a rapidly evolving demand

abuse or support to armed

JAW: Looking broadly across

when it comes to performance

groups, bribery, corruption

the global copper value chain,

around decarbonisation

and other types of risks that

what do you think are the key

of copper itself; ie the

may occur. I think we’ve seen

environmental, social and

carbon footprint and use of

a bit of shift today compared

renewable energies, as well

to three to five years ago, when

MINING | THE COPPER MARK

there was a lot more focus

JAW: How exactly does The

Assessment created by

on just responsible sourcing

Copper Mark seek to help

the Responsible Minerals

and human rights. We’ve seen

players across the copper

Initiative. We then offer

other stories in the news about

value chain tighten up their

guidelines on how to meet

the tailings dam failure in

ESG credentials?

those requirements, whether

Brumadinho, Brazil and the

that concerns engaging with

destruction of cultural heritage MB: We work through our

communities, working to

sites in Australia.

Assurance Framework

reduce the carbon footprint or

predominantly as the core

social and labour conditions at

So, it’s really important to look

element of The Copper Mark.

the operations.

at all ESG issues in copper

We define what it means

today, because if we have too

to be a responsible copper

The second way we help

narrow a focus on a specific

producer in concrete terms

producers is by providing

topic, we risk losing sight of

across all ESG issues. We set

our Assurance Process to

other issues that may be just as

expectations for responsible

help them review their

important.

production: these are the

performance. It starts with

criteria of the Risk Readiness

self-assessments, then goes

“Our goal is to ensure that copper is responsibly produced so that consumers and customers can be confident that the copper used in their product was created responsibly and also to make sure that investors are able to continue investing in copper as a sustainable investment opportunity” Michèle Brülhart, The Copper Mark executive director

into independent reviews

Our participants have to be

and requires on-site audits

fully conformant with all

from independent third

requirements within two

parties for every participating

years of signing up to join The

site. Overall, this is a way

Copper Mark. We regularly

for companies to look at

check in with them and make

the criteria and see if they

sure there is progress in areas

can match that with their

where they need to improve

operations. How do they

on. Again, the improvements

perform against those criteria,

they have made need to be

where are potential gaps?

independently audited and

Getting independent third

validated at the end of the day.

party opinion through the

All of that is the core system

audit itself then allows them to

we operate to try and make

identify areas of improvement.

sure companies move along. But a lot of the work we do is

MINING | THE COPPER MARK

FREEPORT MCMORAN’S THE COPPER MARK-APPROVED CERRO VERDE SITE IN PERU

one-on-one assistance with

so in respect of competition

JAW: What kind of reputation

participants. We’ve spent

and anti-trust laws. This

has The Copper Mark built in

considerable amounts of time

kind of cooperation helps

the industry over the last 18

on the phone and in virtual

companies understand how

months since it was formed?

meetings, going through the

others have dealt with issues

expectations, looking at their

while sharing best practices.

MB: We are still a young

specific circumstances and

Lastly, we invest significantly

organisation, so we need to

looking to provide assistance

in training and capacity

spread the word a bit more

where we can.

building. All our training

widely about who we are

modules are made publicly

and what we do. The positive

Systems like ours also have

available and are typically

news is the fact that we’ve

a benefit in terms of peer

translated into English,

had encouraging levels of

learning. We often see

Spanish and Chinese, so that

early adoption and uptake. We

participants connecting

we provide an entry point for

now have 23 sites from eight

amongst each other to the

as many people as possible.

different companies and that

extent that they are able to do

includes some of the largest

copper mines in the world and

MB: The short answer is

a broad impact and reach into

some of the largest copper

absolutely yes. I don’t think

supply chains. We are trying to

producers. We also have 10

there’s much doubt about that

do our best to raise awareness

partner organisations from

today. We have seen over the

in the industry about that and

the fabricator and end-user

past decade a very rapidly

to also make sure there is a

sectors of the value chain.

evolving trend on responsible

comprehensive approach to

Having these partners on

raw material production,

responsible practises.

board has already sent strong

not just limited to specific

signals in terms of raising the

materials, but an expectation

We often see that companies

profile of the organisation

that what goes into a product

who focus on a single issue will

itself, as has the first addition

is responsibly produced.

then constantly have to adjust

of an Asian-based site earlier

In terms of customer

them and struggle to keep up

this year with LS-Nikko

expectations, we’re observing

with evolving expectations.

Copper joining us with their

an expansion from regulated

That is why we recommend

smelting site in South Korea.

materials to increasingly

and encourage companies to

We’re a very small team and

battery materials as well as

set up robust management

organisation so the extent

these transition minerals that

systems across all ESG areas

to which we can leverage

are critical to the clean energy

so that they are ready for

a broader network within

transition, which includes

whatever new regulations and

the industry and through

copper.

trends or demands that will

our partners to support

come their way, because we

us in raising awareness is

We’re already seeing, in the

do believe it will intensify and

particularly helpful.

EU in particular, legislation

intensify rapidly.

efforts that impact mineral JAW: Should the copper

supply chains. This includes

JAW: Finally, how significant

industry expect new

for example discussions

are the latest addition of

regulations and more

around horizontal due

eight sites and three new

challenging customer and

diligence laws for human

partners (in June and July

investor expectations on

rights, battery regulations or

2021) to The Copper Mark, in

responsible sourcing in the

the EU taxonomy. Whether

terms of demonstrating how

coming years? How should it

they explicitly mention copper

the organisation is quickly

respond to these demands?

today or not, these regulatory

becoming the new standard

efforts can be expected to have

for responsible copper mining?

MINING | THE COPPER MARK

MICHÈLE BRÜLHART, THE COPPER MARK EXECUTIVE DIRECTOR

MB: Every addition is

capture the bulk of the market

important. In the last batch

and really promote responsible they want to ensure their

of sites to have joined us,

practices across the industry.

suppliers are responsible and

it’s great to see further

These latest additions are an

whether that is a consideration

support from one of our

important signal to show that

in their purchasing practices.

biggest participants Freeport

there is increasing awareness

That to us is very encouraging

McMoRan with five additional

across all types of actors in the

and shows that the

sites, but also from smaller

copper industry.

conversation is moving beyond

producers like Southern Peaks

direct ability to decide whether

a handful of companies and

Mining, who have signed up

Equally, the fact that three of

reaching a much broader

one of their sites. That gives

the last four partner additions

segment of the market.

a testament to our mission of

were from the fabricator

moving the whole industry

sector again shows there’s

forward. We’re not just about

an increased awareness.

trying to capture the best

These are direct customers of

performers, we’re trying to

copper products and are the companies that have a very

AFRICA. IN THE PALM OF YOUR HAND.

ONLINE NOW WWW.AFRICANBUSINESSNETWORK.CO.ZA

GUANAJUATO SI

A diamond in the rough silver-gold o

MINING | GUANAJUATO SILVER COMPANY

ILVER COMPANY

opportunity in Guanajuato, Mexico

Experienced Canadian mining executive James Anderson spent seven-and-a-half years leading junior precious metals explorer NuLegacy Gold to drilling success in Nevada’s Cortez Trend, before seeking pastures new South of the Mexico-US border. “I got a chance to take over a company called VanGold; they had what I consider to be a ‘diamond in the rough’ mining project in Guanajuato, Mexico. It’s a city of 150,000 people and it’s been a mining community for 480 years,” Anderson tells RGN. In June 2021, the outfit renamed itself Guanajuato Silver Company to better illustrate the region and commodity it is focused on. “The project itself was a very high grade past producer about 110 years ago. A British and an American company were ostensibly mining two halves of the same epithermal system. In 1906 they decided to merge those two companies. That corporate entity became listed on the NYSE and they mined 400 tonnes per day of very highgrade material up until the time of the Mexican Revolution. The violence of that conflict drove the Americans home and that project just hasn’t had a chance to get going again since then.” The project in question is El Pingüico, which was the highest grade silver-gold mine in the region during its time of operation from 1890 to 1913, when it processed ore in what was then heralded as a state-ofthe-art facility.

Anderson reveals that the availability and accessibility of historic stockpiles at El Pingüico put Guanajuato Silver in pole position to acquire another asset - the El Cubo mine and mill complex – located just 8 km away by road. After conducting a considerable amount of due diligence on the asset, which has been on care and maintenance for the last 18 months, Guanajuato Silver finalised the acquisition in March 2021 for an exceptionally low entry fee of US$15 million, given that Endeavour Silver purchased the property for $200 million back in 2012. “When Endeavour closed it in 2019, they did it for a couple reasons but mostly because silver was $16 [per ounce]. Things change quickly in our business. They also closed it because it could no longer offer the returns for a big company like Endeavour, with its billion+ dollar market cap. For us, it’s very different.”

MINING | GUANAJUATO SILVER COMPANY

Instead, Guanajuato Silver

and gold concentrate from the

“We’re not even putting a

saw El Cubo as the perfect

combined project in the fourth

mine into production, we’re

stranded asset that could be

quarter of 2021.

putting a mine and mill back

brought back to life to provide

into production that’s only

project using the El Pingüico

Leading with locals

stockpiles as initial ore feed

The acquisition of El Cubo

things to consider in such a

for the El Cubo mill.

resembles the execution of

short period of time, like who

Guanajuato Silver’s long-

do you sell the concentrate to?

The TSXV-listed company

held strategy to develop a

What kind of terms are you

is wasting no time with

portfolio of past producing

going to get on that? What does

this undertaking and

projects in the Guanajuato

the local community think

anticipates a four to six month

region. This not only offers

about you coming back into

refurbishment period for the

the chance to combine

production?”

El Cubo mill, at which point it

synergistic assets for scale, but

will be ready to process silver

also an opportunity to build a

So, what has Guanajuato

distinctly local company with

Silver learnt with regards to

a broad understanding of the

the wider implications of its

intricacies involved in creating

ambitions in Guanajuato and

a mining project in the

how well does it understand

Mexican context; from geology

the idiosyncrasies of this

to social components, mining

particular mining jurisdiction?

laws and more.

First and foremost, Anderson

the nucleus for a combined

G UA N A JUATO S ILV E R AT A G L A N C E

been suspended for about 18 months, but there’s so many

believes that the operation “If you look at a lot of the

should be run by local experts

other junior companies out

– namely the company’s COO

there, a lot of them will have

Hernan Dorado and his father

STOCK TICKER: TSXV:GSVR

a project in Peru, another in

Gerardo.

MARKET CAPITALISATION: US$93.4 million (as of June 21, 2021)

Mongolia and one more in BC.

I’m sorry but you can’t do that,”

Hernan is a fifth-generation

Anderson stresses.

Mexican mining engineer and has worked on projects all over

MINING | GUANAJUATO SILVER COMPANY

We have a mine here that has been operating for 200 years on-off and there will be people mining here for another 100 years” James Anderson, Guanajuato Silver Company president and CEO

VIDEO

the world, before excelling

The company has also taken

strongly adheres to all local,

to his current position at

the time to learn its position

state and federal regulations,

Guanajuato Silver thanks to his

within the 480-year mining

particularly with regards to

extensive knowledge of the El

history of Guanajuato - where

disposing mine tailings in a

Pingüico deposit.

the continued preservation of

safe and sustainable manner.

the local ecology is of upmost “It’s not a position that a lot

importance - in tandem with

of Mexican mining engineers

best practice mining methods

Valuable stockpiles

get to take on in their own

and corporate governance

The surface stockpile at El

country. I think it makes a big

befitting a 21st century

Pingüico is around 185,000

difference to our employees;

operation.

tonnes of material at 105

having a local voice instructing

g/t silver equivalent (Ag eq)

them every morning, as

As such, Guanajuato Silver

per tonne, according to the

opposed to me telling folks

maintains a strong connection

firm. This is moderate grade

what to do.”

with its local communities and

material by today’s standards,

MINING | GUANAJUATO SILVER COMPANY

but during the mine’s former

it’s about 150,000 tonnes of

around 300 g/t Ag eq per tonne

life over a century ago, it was

material as do the Mexican

– and it floats well in a mill

deemed waste rock.

geological survey, who

according to the company’s

made an estimation back

preliminary metallurgical

“They decided there wasn’t

in 2012, although American

work. The only challenge

enough value in there to

engineering firm Behre

remaining is for the engineers

matter; well it matters to us.

Dolbear & Company were

to figure out how to bring the

We did a 1,000 tonnes bulk

less generous in our recently

stockpile to surface safely.

sample in June last year, so we

completed preliminary

know about the metallurgy

economic assessment [PEA],

“That material is very

and how it will recover in a

giving us around 25,000 tonnes

important. Hernan always

flotation mill and we are very

of material in the underground

says it’s like oxygen for us to

confident on the grade.

stockpile.”

be able to put the thing back into production; knowing that

“Underground, there is

However, the underground

another stockpile. We think

material is of a higher grade –

the material is there to put

through the mill on any given day is vital. “There’s also extensions of the epithermal vein systems below and laterally, which we’ve just started drilling. Our drilling is a little hit and miss right now, because geologically there’s a lot of stuff that we do not know about El Pingüico yet, despite these stockpiles.”

A promising PEA Although preliminary in its nature, Anderson describes the resource estimate in the independent PEA for the combined project as numbers generated ‘on the back of a 214-page envelope’. Published in January this year, Behre put the total indicated resources at 718,655 tonnes for 7.2 million ounces (Moz) Ag eq and total inferred resources at 1.45 million tonnes for 20.3 Moz Ag eq. While the findings of the study certainly indicate a large resource base at the combined project, the figures - particularly the current

MINING | GUANAJUATO SILVER COMPANY

seven-year mine life - don’t

“They’ve been mining these

draw the material out of El

actually do justice to the sheer

structures for 480 years. The

Cubo and El Pingüico at a

size of the mine at El Cubo/

Spanish Conquistadors figured

sustainable rate. “That’s going

El Pingüico and its long-term

out that there’s high grade gold

to be the formula, the magic,

potential.

and silver here within 60 years

the alchemy that allows us to

of Columbus sailing. To me,

be profitable from an early

Many would consider the

that’s remarkable and speaks

point here.”

current mine life for the

to the longevity of these mines.

on real life, PEA-level data and

“We have a big mine here

Gearing up for production

a direct result of the style of

that has been operating for

Guanajuato Silver’s chairman

mineralisation at El Pingüico.

200 years on-off and there

and CEO has always been a big

“It’s very difficult with these

will be people mining here

believer in the precious metals

narrow vein structures to be

for another 100 years,” he

investment thematic, with the

able to drill enough to ever see

declares. Guanajuato Silver

current state of affairs in the

more than five to seven years

plans to mine at a rate of 750

international central banking

of mine life in front of you,”

tonnes per day, in order to

space only strengthening his

project as short, but it is based

Anderson explains.

stance as a gold and silver bull.

MINING | GUANAJUATO SILVER COMPANY

“If every central bank and

utility in manufacturing and

employees to 4,000 and from

every major Western nation’s

electronics. So I think that

zero production to 12 Moz Ag

treasury wants to bastardise

with our business, we have a

eq per annum.

their currency, they can do

huge bull market as a tailwind

it. They have the technology

for what we are doing.”

to do that; it’s called the

“This guy can put a project into production and can put a

printing press. I’m quoting Ben

The recent arrival of former

company into the limelight,”

Bernanke here, but they can

COO of First Majestic Silver

Anderson proclaims. With two

do it.

Ramón Dávila to Guanajuato

excellent assets, including a

Silver’s board of directors

working mill and ready-to-

“In that context, what are

has added further credence

process stockpiles, Guanajuato

the best acting currencies

to the company’s ambitions

Silver is all set to become

in the world? They are gold

for El Cubo and El Pingüico

Mexico’s next significant silver

and silver. Gold especially

in Guanajuato. Dávila has the

and gold producer before the

is a currency, it has very

best CV in Mexican mining

end of the year.

few other utilities. Silver

according to Anderson, after

on the other hand has great

taking First Majestic from two

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CK MINING

n begins at one of the highest quality nes in the world

Of the multitude of metals and minerals set to play a role in the global clean energy transition, graphite continues to be one of the most overlooked by generalist investors across capital markets. Many market observers see graphite’s traditional uses in steel, cement or glass manufacturing, but less are aware of its role as a preferred anode material for the growing battery technology industry. In fact, graphite is the only anode material used in lithium-ion (Li-ion) batteries, which have emerged as the dominant technology powering the electric vehicle (EV) revolution. At this stage, it’s important to differentiate the two types of graphite that are available to the market: Synthetic (produced from coal tar or petroleum) and natural flake graphite (geologically formed and mineable in economic quantities). It is therefore widely accepted that as the global decarbonisation thematic deepens, there will be a significant swing from synthetic blends to natural flake graphite production. This will come at a significant advantage to those in control of large and scalable natural graphite deposits, such as Black Rock Mining and its multi-generational Mahenge Project in Tanzania.

Mahenge is one of the largest

Taking a step back, Black

JORC-compliant flake graphite

Rock’s managing director and

resources globally with 212

CEO John de Vries tells RGN

million tonnes (Mt) at 7.8%

that making a natural flake

total graphitic carbon (TGC),

graphite discovery isn’t the

and a reserve of 70 Mt at 8.5%

difficult part of the process.

TGC; making it the 4th largest

“It conducts and responds

graphite reserve in the world,

incredibly well to several

according to Black Rock.

geophysical methods,” he says.

An enhanced definitive feasibility study in mid-2019

Finding the sweet spot

estimated a total post-tax NPV

“What we’ve found is it’s

of US$1.2 billion for the 26-year

diabolically difficult to

life-of-mine project, with a

commercialise. That’s

four-phase production module

because what you’re trying to

ramping up incrementally to

do is create a specific set of

350,000 tonnes per annum (tpa)

circumstances to create an

in the final phase under the

economic deposit.”

firm’s ‘crawl, walk, run, sprint’ strategy.

Flake size is one of those requirements, de Vries

Over the last four years, Black

explains. The most valuable

Rock has spent time qualifying

form of graphite is large

the resource at Mahenge,

flake, which is used in various

fine-tuning the end product

applications from flame

via a succession of pilot plant

retardants to refractories and

tests and securing vital offtake

aviation. Meanwhile, small

agreements, alongside other

flake (fines) are typically

key project development

utilised in Li-ion batteries,

milestones.

paint, lubricants and pencils.

MINING | BLACK ROCK MINING

“You need enough flake size to add value to your basket, but the problem with large flake is it’s used in a number of different manufacturing processes. These tend to be smaller manufacturing enterprises, so you can’t get a balance sheet that will co-fund you. “Conversely, the fine material goes into steel mills or EVs, where there are big balance sheets that can co-fund you.

The next

So, you’re trying to trade off

challenge

a fines to flake ratio where

for graphite

there’s enough fines to attract

developers is to

someone to sponsor you

match the project’s

and enough flake to make

production rate to

it economic. That becomes

the current market size

quite a challenge.”

without distorting the

B L A C K ROCK MIN I N G AT A G L A N C E

STOCK TICKER: ASX:BKT MARKET CAPITALISATION: US$88.9 million (as of July 01, 2021) aj pricing status quo. Once again, there is a balance to be struck between being big enough to be investable, but small enough to not unbalance the market. “We’re really lucky with Mahenge,” de Vries proclaims. “At the grades we’ve got, we can produce 80-85,000 tpy. It’s got a beautiful flakes to fines ratio [around 60:40], the material is strongly differentiated chemically,

MINING | BLACK ROCK MINING

“We can produce 80-85,000 tonnes per year of graphite from Mahenge in the first phase. It’s got a beautiful flakes to fines ratio [around 60:40], the material is strongly differentiated chemically and that is evidenced by POSCO coming on board as a cornerstone offtaker and investor” John de Vries, Black Rock Mining managing director and CEO

and that is evidenced by

This investment is being

The fines from Mahenge’s

POSCO coming on board as

used to support the front-

first phase of production will

a cornerstone offtaker and

end development of the

support POSCO’s recently

investor.”

Mahenge project as Black Rock

stated ambition to become a

prepares to commence the

global leader in the battery

construction phase before the

materials sector within a

end of the year. In addition,

decade, with a particular

A strategic alliance with

POSCO has agreed to provide

focus on graphite-based anode

Korean steel-making giant

a pre-payment facility for

production.

POSCO was first announced in

project financing and will

June 2020, before Black Rock

purchase 100% of the graphite

“We are actually the only

sealed a US$7.5 million equity

fines concentrate from the

graphite developer with a

investment in January 2021,

first phase in an offtake

Western anode producer

giving POSCO a 15% stake in

arrangement.

on board as a cornerstone

Partnering with POSCO

the company.

investor, and we’re still preconstruction. I think that talks

MINING | BLACK ROCK MINING

JOHN DE VRIES, BLACK ROCK MINING CEO AND MANAGING DIRECTOR

a lot about the quality of the

circumstances, according to

chemically pure. We have

chemistry we have at Mahenge

de Vries. Usually, graphite ore

a very low footprint from a

and the amount of work we’ve

contains fluid migration which

refining point of view.”

put in through our pilot plants

creates intercalations and the

and studies.”

subsequent need to refine the

Black Rock also has access to

material for battery materials

hydroelectric grid power and

production.

a railway line will transfer

While the graphite produced from Mahenge has a diversified product mix with

“[Refining the product] creates

of which provide low-carbon

a perfect blend of flake and

a porous and weak flake.

alternatives to traditional

fine material, the project’s

Mahenge’s got a solid flake and

fossil fuel-based power and

green credentials provide an

effectively all we need to do is

transport options.

additional layer of attraction,

remove the intercalation off

particularly to the modern-day

the top of the massive flake.

ESG investor.

So that’s got value

Greener graphite Mahenge’s green credentials come back to its unique geological

its product to market; both

in terms of being

MINING | BLACK ROCK MINING

Staying within the ESG

“We’ve got a long mine life

By the same token, any mine

thematic, Black Rock had

and we really do want to be

developer should fully mitigate

its Resettlement Action Plan

there for a long time, and on

any adverse impacts on the

(RAP) – relating to four villages

a personal level I’d like to be

local population and its access

in close proximity to the

leaving a positive legacy. That

to natural resources such as

Mahenge project - completed

means you’ve got to work with

water, which is regularly a

and approved in September

your community and they

last year. This was a crucial

must feel they are gaining

milestone not just for the

some benefit

smooth development of the

from you being

project, but also from a social

there.”

licence to operate point of view.

bone of contention in other mining jurisdictions globally. In the case of Mahenge, Black Rock has been able to design a dry stack operation as opposed to a wet tailings dam, which means the company won’t be competing with local subsistence farmers for precious water resources. “Getting those [social aspects] right has been a major milestone and certainly our people in Tanzania have done a fantastic job of being able to

However, de Vries is confident

says to our community, our

do that while we’ve not been

that the mining industry is

shareholders and the graphite

able to be on the ground there

now back on track in the

industry in general that

to supervise it,” says de Vries.

country just as Black Rock is

we’re in a position of gaining

entering the final stages of the

confidence that we’ll soon be

project development timeline

doing what we planned to do,

Black Rock’s chief reflects on a

at Mahenge. “We’re certainly

which is operating a mine on

tumultuous period in-country

seeing some good will coming

the hill.”

since the Tanzanian mining

out of the people we’re

code was revised in 2017.

working with in the Tanzanian

The next big milestone

This upheaval in the sector

government to want to make

for the project would be a

was then exacerbated by the

this happen.

confirmation of the long-

Staying on track

emergence of the COVID-19

standing free carried

pandemic and the unexpected

“Starting to front-end load

interest agreement with the

death of Tanzania’s President

our development programme

Government of Tanzania.

John Magufuli earlier this year.

and push through our RAP

Once this is completed, de

MINING | BLACK ROCK MINING

Vries believes Black Rock can

Mahenge’s first phase

year-after-year and pick up a

quickly step into a finance

production rate of 83,000 tpa

decent portion of that market

process with a view to

will come in at around 7.5%

growth.

commissioning the first phase

of the total graphite market

of the project towards the end

of about 1.3 million tpa. By

“Now we’ve qualified

of the 2022.

Black Rock’s estimations, this

Mahenge, all we need to

entrance will not induce a

do is put in additional

With first graphite production

price-based response from

modules. We don’t need that

from the Mahenge project

existing producers, meaning

extensive ramp-up period of

potentially just over a year

the firm’s price gets validated.

qualification. The strategy is

from now, Black Rock is

simply; produce more of the

planning a sensible entry

“But at the projected

same material into the market

to the market under the

growth rates we’re seeing

that already knows what we

aforementioned crawl, walk,

in the market, we’re able to

are capable of producing.”

run, sprint strategy.

effectively drop another 85,000 tpy module on the ground

SIHAYO

Tangible near-term production and

MINING | SIHAYO GOLD

GOLD

d real exploration upside in Indonesia

ASX-listed explorer Sihayo Gold owns a 75% interest in Indonesian miner PT Sorikmas Mining, which provides it with access to the Sihayo-Pungkut 7th Generation Contract of Work (CoW) – a 66,000 hectares mining lease located in the Province of North Sumatra. Indonesia needs no further introduction to those working in the global mining industry, having secured its reputation as one of the leading jurisdictions for mineral extraction in Southeast Asia with several high-quality and high-profile mines developed in-country over several decades across a diverse range of commodities including: copper, gold, tin, bauxite and nickel. Sihayo’s executive chairman Colin Moorhead has played a key role in the development of four mines in Indonesia during his former stints with Australia’s Newcrest Mining and Indonesianlisted producer PT Merdeka Copper Gold Tbk. Possessing an unrivalled understanding of the lay of the land in Indonesia’s mining sector, there is no better person than Moorhead to propel Sihayo into near-term production at the Sihayo starter project before the end of 2023.

environment which is

Overcoming the pandemic

prospective for porphyry

The development of

copper-gold, for epithermal

Moorhead’s fifth mine in-

gold-silver and sediment-

country has been complicated

hosted gold deposits. We have a

by the emergence of a

modest starter open pit project

global pandemic, which has

identified, which is based on a

restricted travel between

resource of 24 million tonnes

Indonesia and Australia over

(Mt) at 2 g/t for 1.5 million

the past year-and-a-bit.

“[The project] is in a geological

ounces (Moz). All of that resource defined to date is of

However, he hails the crew on

the sediment-hosted variety,”

the ground at Sihayo, along

he notes.

with the local government’s COVID-19 containment strategy, which has kept the

MINING | SIHAYO GOLD

company’s local team safe

“In terms of permits, approvals it has all the aforementioned

and able to press on with the

and financing, I’ve been

ingredients in place for a

starter project throughout the

down this well-trodden path

successful long-term mining

ongoing health crisis.

before. I’ve found if you get the

operation, starting with the

formula right you really can

attractive Sihayo starter

During this challenging time,

do well in Indonesia. you need

project.

Moorhead has been able to

strong, trusted local partners,

draw on his vital experience

solid legal tenure for the leases

Starting strong

in mine-building in Indonesia

you’re on and you need the

Sihayo’s most advanced project

despite not being able to

capability on the ground to

is estimated to generate

travel to the project, located

execute.”

US$1.14 billion in gross sales

in a mountainous area

over an initial ~8 years mine

approximately three-and-a-

Following in the footsteps of

life at a flat rate gold price of

half hours South of the world-

previous major foreign mining

$1,800 per ounce, with cash

class Martabe Gold Mine.

investors – including Newcrest, operating costs of $632 per Newmont and Freeport

ounce and at a maximum

McMoRan – Sihayo believes

funding cost of $153 million.

S IH AYO G OLD AT A G L A N C E

STOCK TICKER: ASX:SIH MARKET CAPITALISATION: US$30.5 million (as of June 18, 2021) aj

The project is currently at the

global standard on tailings

permits and approvals stage

which we seek to comply with

with a view to commissioning

as best we can.

and first production in the second half of 2023. At the

“We’re designing a state-of-the-

time of writing, the company

art tailings storage facility and

is working through an AMDAL

Knight Piesold out of Perth is

(an environmental impact

helping us with that. They also

statement type-document),

look after Martabe’s tailing

which will be presented to the

storage facility up the road,

Indonesian Government for

so have very good experience

approval.

in that regard,” Moorhead declares.

“Probably the key now for Sihayo is getting the tailings

Another indispensable part of

storage facility signed off by

the process involves attaining

the Dam Safety Committee

a social licence to operate,

in Indonesia. There is a new

MINING | SIHAYO GOLD

amongst the other tenets of

legged stool. The community

the now universally accepted

and the government trust

environmental, social and

you to sustainably exploit the

governance (ESG) thematic.

resource and make sure the

In fact, Moorhead reveals

benefits are net positive for the

that ESG regulations relating

country and community.

to mine developments could be perceived to be just as

“The employees trust you with

rigorous in Indonesia as it is in

their livelihoods and their

Australia.

safety, and those providing

The three-legged stool “I’m very much of the school

debt and equity need a decent return on the risk they are taking. If you get that balance

“We have a small starter pit project identified, which is based on a resource of 24 million tonnes (Mt) at 2 g/t for 1.5 million ounces (Moz). All of that resource defined to date is of the sediment-hosted variety” Colin Moorhead, Sihayo Gold executive chairman

right, you can be successful. If

of thought that there’s only one one of those legs of the stool way to do mining and that is to

gets too long or too short,

do it properly. I liken it a three-

the thing falls over. My job is balancing that stool.”

This balancing act is

the local people and natural

believing you. It’s a journey

something that Moorhead has

environment, while also

and we’re on that journey

previously undertaken with

highlighting the new economic

now.”

real pride at Tujuh Bukit in

opportunities available to

East Java and the Gosowong

locals through the gold project.

Three-tiered exploration

That experience in thorough

“It doesn’t matter whether

Sihayo’s journey in North

stakeholder engagement has

it’s Indonesia, West Africa or

Sumatra is underpinned by

shaped Sihayo’s approach to

Australia, you’ve got to treat

a three-tiered exploration

sustainable development in

people with respect if you want

approach: 1) near mine

North Sumatra.

it back,” Moorhead stresses.

exploration targeting

“That respect is hard won by

extensions and repetitions of

The company is working with

your actions, not what you say.

known sediment-hosted gold.

host communities to demystify

If you do what you say you’re

2) advanced exploration at

its aims and responsibilities to

going to do, people will start

the Hutabargot Julu prospect

Mine in North Halmahera.

MINING | SIHAYO GOLD

(located 6 km South of Sihayo

of more modest grade than the

responsive and able to do

as the crow flies). 3) target

expected low tonnage, higher

the task at hand,” he says.

generation work over the

grade resource at Sihorbo.

Other partners include

broader CoW using big data and other modern techniques.

Intertek (labs), Primero Drilling at Hutabargot is

Group (engineering and flow

expected to be completed

design) and AMC Consultants

While the company is working

before the end of Q3 and is

(mining).

diligently across all three

taking place concurrently

sections of the strategy,

with rigs at the Sihayo 2

“We’re now looking to get the

perhaps the most intense

target and starter pit, with the

starter pit into production, get

activity is currently taking

latter receiving engineering-

positive cashflow from that

place at Hutabargot, where a

type drilling along with

operation and use that to grow

diamond drilling campaign

geotechnical and hydrology

the company organically on

is primarily focused on two

work.

what is a really prospective

targets called Sihorbo and Penatapan.

All hands on deck

piece of ground in Indonesia.” Tangible near-term production

“We did a 25-hole scout drilling

This equates to a hive of

and exploration upside is

programme earlier in the year

activity on-site, with 50 people

the key formula for Sihayo’s

across a 10 km2 area. That

working diligently at present

long-term prospects in

generated five or six specific

in the camp, which is located

North Sumatra, along with

areas for follow up. The first

atop a steep hill. “At the

the continuity of its high-

two of those are Sihorbo,

moment, there are only two

quality local partnerships and

which is a high-grade single

ways to get up the hill; walk or

commitments to sustainable

vein target that we’re testing

take a helicopter. And we don’t

development in line with the

with 10 holes to see if we can

have a helicopter right now,”

stringent ESG requirements of

discover a bonanza shoot

Moorhead quips.

modern mining in Indonesia.

there.” Sihayo’s drilling partner is In the coming weeks, the rigs

renowned national outfit PT

will move to the Penatapan

Indodrill, a company which

(which translates to clear

Moorhead has a relationship

view) stockwork target, which

with going back decades. “As

would imply a larger deposit

usual, they’ve been excellent,

Awak Mas Gold Project: Indonesia’s Next Gold Mine Long Life • High Margin • Platform for Growth in Gold

Awak Mas: Long Life / High Margin Gold Project

• 60% longer mine life than global average for operating / developing gold mines (based on Reserves) • US$1,000/oz margin at spot gold price • Reserve grade 2x global development project average

Indonesia: Excellent Gold Mining Destination

• 4th largest gold Reserves internationally • Recently rated top ⅓ of countries for exploration investment attractiveness by the Fraser Institute • 1st choice Indonesian partner • Indonesian based executive and project delivery team • Marsh risk ranking: increasingly attractive mining jurisdiction

Significant discovery opportunities to grow project life and size Indonesia bankable and partner investing alongside shareholders

www.nusantararesources.com • LinkedIn: Nusantara Resources • info@nusantararesources.com • ASX:NUS

CANU

IOCG discovery

MINING | CANUC RESOURCES

C RESOURCES

y potential in a historic Mexican silver mining district

Canuc Resources still bears the name it was christened with in 1954 when it focused exclusively on uranium mining prospects in Canada (Canuc = Canadian nuclear). The company has experienced several evolutions over the ensuing decades, most recently switching its focus from a gold project in Ecuador to silver-gold tenements in Mexico, which is the world’s largest producer of what Canuc describes as ‘the indispensable metal’ – silver – owing to its applications across myriad modern devices. “Electrical conductivity makes silver an indispensable metal in the electrification of the global economy,” explains Canuc president and CEO Chris Berlet. “It’s used in solar panels, circuit panels, cell phones and more, and is more conductive even then copper. On a scale of 0-100, the electrical conductivity of copper would be 96; whereas silver is 100. Charged ions on the surface of silver metal also give it anti-microbial properties,” he says. Berlet joined the board of Canuc in 2008 and was a key driving force behind the company’s interest in the San Javier SilverGold Project, which is located in a historic mining district in Sonora State, Mexico. In addition to San Javier, Canuc operates a group of natural gas wells in the US state of Texas, which provide stable cash flow for the company’s corporate overheads.

MINING | CANUC RESOURCES

Berlet and co were first drawn to the San Javier project in 2009 after they visited an old silver mine and found extensive high to bonanzagrade silver in the veins of underground workings, along with concurrent gold mineralisation. He recalls that the average recorded grade from the artisanal mine workings was 388 g/t silver with a 2 g/t gold credit, while average head grades for today’s producing silver mines is somewhere around 160 g/t silver. “We’d seen reports previously written to the boards of Hecla Mining and Endeavour Silver, written around the 2003 timeframe, recommending purchase of the mine and accumulation of claims along trend,” says Berlet. “While the project was deemed too small by those companies, it presented an opportunity for us - as a private company

at the time - to accumulate

mines; Fresnillo’s now 100%

mineral discoveries,” Berlet

claims along the 3 km trend.

owned La Herradura. The

proclaims.

By 2017, we had 17 contiguous

State also hosts the most

claims and were able to vend

value-accretive recent silver

Canuc has spent the last four

them into Canuc Resources

discovery on the TSX, after

years exploring its principal

by way of an RTO [reverse

the Las Chispas deposit sent

claims across the San Javier

takeover].”

SilverCrest’s stock from 25

project with the intention

cents to C$15.

of making a significant new

The home of Mexican mining

“Mines get permitted in

contain a meaningful gold-

The presence of major mining

Sonora, there’s an experienced

copper endowment.

houses such as Hecla and

labour pool and geology is

Endeavour in Sonora State

conducive to metal inventory

During this period of

is now very much the norm

discovery and mineral

exploration, the company has

in what is one of the busiest

wealth creation. Overall, it’s

gradually built a hypothesis

mining jurisdictions in Latin

a fantastic place to create

around the potential for an

America. Sonora is home to

shareholder value through

IOCG (iron oxide copper

one of Mexico’s largest gold

silver discovery that could also

MINING | CANUC RESOURCES

gold) deposit to exist at San

Geological Engineering at the

Javier. The company’s latest

Colorado School of Mines.

findings provide the most solid evidence yet in support of this

“IOCG potential in the San

theory.

Javier area was first postulated in a site visit report written

IOCG deposits are known for

by Dr Hitzman in 2006.

being very large and extremely

In particular, the report

valuable, high-grade metal

references all the hallmarks of

resources hosted in iron

IOCG deposit types in this area

oxide assemblages. IOCGs

and prerequisites the presence

were only properly classified

of magnetite as indicating

in the 1990s, largely thanks

the lower levels of an IOCG

to the work of Dr Murray W.

system.”

Hitzman, who would later go

CAN U C RESOUR C ES AT A G L A N C E

STOCK TICKER: TSXV:CDA MARKET CAPITALISATION: US$19.3 million (as of June 15, 2021)

on to become the head of the Department of Geology and

IOCG potential

surface showed significant

a width up to 600 metres. In

So when Canuc uncovered

silver in magnetite, with

total, there are five discreet

a sizeable breccia zone

sometimes up to bonanza

magnetic anomalies across the

containing high grade silver

grades of silver reported

company’s claims with silver

mineralisation and extensive

within the magnetite veins.

magnetite in one area and

magnetite zones in September

There’s a chance that the large

copper-gold in another.

last year, the IOCG deposit

magnetic anomalies detected

theory was given a significant

could be massive magnetite

All of the aforementioned

boost. The discovery was made

containing silver. That’s our

features of the system are

at the El Tule claim that had

hypothesis at this stage.”

important hallmarks of IOCG

been acquired from a private Mexican firm in October 2019.

100

geology according to Canuc’s The dimensions of the

chief: “We’ll be drilling into

magnetic anomalies are

these anomalies in the second

“Old mine workings found

impressive enough in that they

half of the year and hope

within the breccia body on

currently show up to 1,000

to confirm the lower levels

metres in strike length with

of an IOCG system, as first

MINING | CANUC RESOURCES

postulated for the San Javier area by Dr Hitzman in 2006.” The TSXV-listed company has fostered a good working relationship with its Mexican drilling partner Minerales y Carbones – the same private metallurgical coal-focused outfit that Canuc acquired the El Tule claim from in 2019. Minerales y Carbones is an extremely credible incountry business partner for Canuc, owing to its decades of experience in the Mexican mineral extraction space. This highly profitable organisation employs around 400 permanent staff and 1,000 contractors. Senior management and engineering staff support its recent pivot into the drilling and prospecting business. “They purchased a new diamond drill and trained a dedicated drill crew who are working with us. This will be everything we need for execution of a successful drill programme at San Javier.

CHRIS BERLET, CANUC RESOURCES PRESIDENT, CEO AND DIRECTOR

101

“Mines get permitted in Sonora, there’s an experienced labour pool and geology is conducive to metal inventory discovery and mineral wealth creation. Overall, it’s a fantastic place to create shareholder value through mineral discoveries” Chris Berlet, Canuc Resources president, CEO and director

10 2

Outside of that we have very

leases covering the current

competent geologists as well

production can support up to

as legal support in Mexico as

12 additional wells, which will

required for defining our title

allow Canuc to accrue cash

and mineral rights.”

flow from these assets for

Crucial cash flow

several years to come.

Away from the San Javier

“Though the cash flow will

project, Canuc continues to

not pay for our drilling in

receive steady cash flow from

Mexico, it does cover our

eight natural gas production

corporate costs and allows

wells that are located around

us to eliminate unnecessary

150 miles North of George

dilution,” Berlet explains.

W. Bush’s ranch in Crawford,

“That is the reason we have,

Texas. Each of the two

and maintain, these cash flow

MINING | CANUC RESOURCES

103

1 04

MINING | CANUC RESOURCES

assets which are located in a

Referring to the discovery

“We’ve proven the presence

safe jurisdiction. Any money

of mineralised breccia and

of extensive silver, gold

we raise elsewhere goes

extensive magnetite zones

and copper in magnetite.

straight into the ground in

last year, Berlet evokes the old

We’ve studied mineralogy,

Mexico.”

saying ‘where there is smoke

completed magnetic surveys

there is fire’; in this case the

and identified the targets.

A successful outcome at

fire would be a large-scale

We’re set up and fully financed

the San Javier project for

IOCG deposit within the San

for a drill programme on

Canuc Resources would be a

Javier project area.

our 100%-owned claims in

significant silver discovery

a jurisdiction with a great

with additional gold-

“The next step in our process

history for discovery of highly

copper endowment inside

at San Javier is to locate the

economic silver and gold

an overarching IOCG-type

source of the silver at depth

deposits.”

deposit. This is the big prize

and perhaps the mineral rich

that the company is seeking to

chambers in the lower levels

confirm with drilling later this

of an IOCG deposit within our

year.

mineral claim group,” he says.

105

INVESTEC

VIKIN

Breathing new life

10 8

MINING | VIKING MINES

MINES

e into a past producing gold mine in WA’s Eastern Goldfields

109

The historic First Hit gold project, located approximately 150 km Northwest of Western Australia’s famous mining town Kalgoorlie, was most recently mined by Barra Resources in 2001 after they identified high-grade potential within the prospective Ida and Zuleika Shear zones, which are host to many significant gold deposits in the Eastern Goldfields. The former operators mined around 30,000 ounces of gold at ~7.7 g/t, but production from the project proved to be shortlived as Barra curtailed the mine just a year later due to depressed gold prices of around US$320 per ounce in 2002. As a result, the project – which was first discovered back in the 1920s – has remained dormant throughout the last two decades under somewhat ambivalent ownership. That was until ASX-listed explorer Viking Mines acquired the First Hit project in January 2021 via an all-share takeover of Red Dirt Mining and immediately started a first phase drilling campaign that would help bring the historic mine back to life. “On completion of the process we got out on the ground and started drilling very quickly,” says Viking’s CEO Julian Woodcock. “Within three weeks we had a diamond drill rig turning on the property. A few weeks after that we got an air core (AC) rig out.”

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A Viking down under Viking’s ability to mobilise drill rigs at great speed was due in in no small part to the Tier 1 quality of the jurisdiction in which the project is located in. “I’m a bit biased but WA is probably the best jurisdiction in the world to be operating in,” Woodcock tells RGN’s editor. “We’ve got a very stable government, a well understood and respected mining legislation. WA is very focused on the resources sector; it’s a huge driver of GDP for the state and a significant contributor to Australia as a whole. For Viking, we know the rules in which we are operating.” Having worked in WA for over a decade spanning previous roles with three well-known

Woodcock was brought in as

mining companies, Woodcock

CEO of Viking in January of

is completely comfortable with

this year and was appointed

the mining laws and all aspects

managing director in April

relating to Viking’s tenements,

after long-serving board

all of which have secure mining

member Charles Thomas

licences granted on a long-term

confirmed his resignation.

basis.

MINING | VIKING MINES

and geologist Michael Cox and dependable company secretary Dean Jagger. The recovery of a US$5 million payment yet to be received relating to a divestment Viking made in Ghana some years back continues to be a key undertaking for the board, alongside the drilling campaigns at First Hit. Woodcock assures that he and his colleagues are eagerly pursuing the matter and expect a resolution in the near feature with a judgment hearing date set for July 28th. “We’ve got a wide range of skillsets within the management team that covers off the legal, financial, accounting and technical. My experience has been working

Thomas had played an

Meet the team

instrumental role in the

A close-knit corporate team

years, and I’ve spent the last 10

acquisition of the First Hit

has supported Woodcock’s

years in Australia.

project and was very involved

acclimatisation into

in the company’s ASX-related

the business, including

“During that time I’ve been

activities, before deciding that

distinguished lawyer Ray

with Gold Fields, Evolution

the time was right to step away. Whitten (AM), highly experienced corporate advisor

with gold projects for nearly 20

Mining and more recently Gold Road Resources. In those

111

“We’ve got a very stable government, a well understood and respected mining legislation. WA is very focused on the resources sector; it’s a huge driver of GDP for the state and a significant contributor to Australia as a whole” Julian Woodcock, Viking Mines CEO

with very large exploration

A sleuthing exercise

teams and been privileged to

Barra drilled nearly 130

be involved with the discovery

reverse circulation (RC) holes

and growth of several

and three diamond drill (DD)

significant resource projects.”

holes, defining an initial

three companies I’ve worked

resource under the JORC In his latest endeavour,

99 code at the time. Viking

Woodcock is aiming to expand

has been afforded access

on the gold resource identified

to all of the data relating

and mined by Barra at the

to this activity, including

turn of the century, only his

underground development

team are armed with modern

plans and geological

exploration techniques and a

information.

significant catalogue of data

11 2

left behind by the former

“They developed about 1.5 km

operators of the First Hit mine.

of decline over 200 vertical

MINING | VIKING MINES

113

V IK I NG M INES AT A G L A N C E

metres and 1.7 km of cross

This valuable existing data

cuts and ore drives along

provided an effective segue

the ore on 20 metre spaced

into Viking’s Phase 1 drilling

levels and then stopped

campaign at First Hit, which

out part of the orebody. We

commenced in February with

recently managed to get hold

a 2,500 metres DD campaign

of the geological maps of

followed by 5,080 metres of AC

the underground workings

drilling.

which have been very useful

STOCK TICKER: ASX:VKA MARKET CAPITALISATION: US$15.5 million (as of June 25, 2021) ajr

1 14

in building our understanding

“From the DD, we’re gaining

of First Hit. It’s been a bit

new insights into where the

of a sleuthing exercise. We

mineralisation is occurring

find information then look to

underground. That in turn

assimilate it and bring that

is going to help us find

into our exploration process.”

extensions from the known

MINING | VIKING MINES

mineralisation, and help us

Going to market

2021, the company confirmed

look for new shoots as part of

On the back of encouraging

that it was oversubscribed for

our regional AC programme.”

observations in the drill core,

a total sum of A$4 million.

Viking sought to raise capital from the investor market to

“We wanted to keep the

ensure a seamless transition to

diamond rig turning on site,

the Phase 2 campaign. In April

115

FIRST HIT CORE WITH VISIBLE GOLD

as we were encouraged by

testing deeper down below the

1 and 2. On completion of

what we’d seen in the drill

known limits of mineralisation

sampling from the final batch

holes so far and wanted to

and also along strike of the

of diamond core, a total of

continue to step out and look

existing resource.

967 samples will have been

for additional shoots. That

submitted to the MinAnalytical

funding has allowed us to

The company identified some

laboratory in Kalgoorlie for

continue the activity without

old prospectors’ workings

analysis.

having to pause while waiting

along strike to the North and

for results to come through, so

South that would’ve been

Viking is also planning the

we can maintain momentum.”

mined up to as far back as 100

next round of drilling to follow

years ago. They haven’t been

up from the AC programme.

Viking’s Phase 2 DD campaign

tested effectively, according to

When the results are returned

began in earnest following the

Woodcock.

from the lab, the company

successful capital raise, with the exercise intended to test

In mid-June, Viking

the corridors within which the

for extensions around the old

announced it had completed

shear structures that host the

mine workings while looking

its DD campaign, which

gold occur.

for mineralisation in material

encompassed 19 drill holes

left behind by the former

for a combined total of

At that point, it will look to

operators in the early 2000s.

3,924 metres in the phases

start RC drilling to confirm

In addition, the company is

1 16

expects to be able to define

and identify those shear

MINING | VIKING MINES

corridors which essentially are

shuttered during a low gold

years ago. The vein is quite

the pathways (or ‘plumbing’,

price environment.

narrow, up to a metre in width

in Woodcock’s words) for

and that means there’s a bit

where the gold has come into

“There are several

of dilution that occurs, but 7

the underground region. Any

underground mines in the

grams out the ground is very

intersections of additional

region being operated by the

high grade.”

shoots from the RC drilling

likes of St Barbara, Northern

will then be followed up with

Star, Evolution Mining and Ora

Finally, the presence of more

more DD, according to Viking’s

Banda Mining. They have cash

than half a dozen active gold

CEO.

costs that range from A$1000-

processing facilities – some

1,500 range per ounce. That

owned by mining companies,

would leave around $1,000

others by private toll treating

of margin at the current gold

companies – within 150 km

price.

of the First Hit project will

Significant Opportunity Overall, Viking is following a tried and trusted method

provide multiple avenues

for success in gold project

“The reason why the

for Viking to monetise any

development in WA; targeting

opportunity at First Hit is so

additional mineralisation

extensions of known

significant is due to the high

it discovers at the historic

mineralisation at a high-grade,

grade nature of the vein, with

resource.

past producing mine that was

around 7 g/t taken out the ground from the mining 20

1 17

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Mines and Money Online Connect Connecting mining companies with international investors virtually August 31-September 02 | Online The mining sector’s most regular online event returns at the end of August with a stellar line up of miners, investors, financiers and industry professionals. Attendees will be afforded the chance to network, hear market analysis, compare investment opportunities, share knowledge, discuss, debate and most importantly do business in a digital

setting. Free content passes provide access to the keynote presentations, fireside chats, panel discussions, as well as the mining project updates, while investor passes give additional access to the Mines and Money Online Connect meeting platform. Mining company packages also offer concierge assistance throughout the show.

Lithium Battery and Energy Metals Conference 2021 This hybrid event is a must attend for all players in the Australian battery metals space September 01-02 | Perth, Australia + online Following the success of the Lithium and Battery Metals Conferences over the past three years, AusIMM and Murdoch University are excited to host the 2021 Lithium Battery and Energy Metals Conference in Perth and online. The event will showcase the latest research, developments and technologies relating to lithium and its expanding

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IMARC + Expo Where global mining leaders connect with technology, finance and the future October 25-27 | Melbourne, Australia + online With the world’s borders still largely locked down, IMARC will be a hybrid event in 2021, welcoming Australian attendees to Melbourne and international attendees from more than 100 countries via its online platform. Over three packed days, the conference programme will cover all aspects of the mining supply chain, from exploration to investment, production, optimi-

sation through to new technologies and global opportunities. Meanwhile, across the 13,000 m2 expo floor more than 200 leading companies will showcase the latest mining projects, equipment and innovations. As Australia’s most influential mining event of years gone by, IMARC aims to mobilise the industry to collaborate and strike deals via the hybrid format.

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RGN Vol 8 Iss 4

Articles inside

Electric Mine Consortium

Matt Geiger ((MJG Capital)

Global resources news

Remi Piet (Embellie Advisory)