RGN Vol 6 Iss 8

RESOURCE Volume 6, Issue 8

GLOBAL NETWORK

Mining, renewable energy and oil & gas worldwide

‘S BEST OF

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MINING | Brookfield Multiplex

WELCOME

Welcome to the last issue of RGN in 2019 – our annual ‘best of’ issue. The global mining industry ebbed and flowed over the course of the year with several key trends emerging. The most recognisable trend was the increasing volume of mergers and acquisitions in the gold sector.

The Barrick-Randgold mega-merger at the end of 2018 triggered a domino effect of consolidation in the gold space, and was soon followed by Newmont’s $10 billion acquisition of Goldcorp to create the world’s biggest gold producer.

A flurry of smaller deals took place throughout the year as the gold sector looked to combine quality assets and improve efficiencies against a backdrop of soaring prices for the safe haven metal.

Conversely, copper endured another volatile year as the US-China trade war rumbled on, and lithium prices also struggled despite the battery metals revolution showing no signs of slowing down.

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

Unfortunately, numerous health and safety disasters reared their ugly heads in 2019. The security of tailings dams was thrusted into the spotlight after 270 people were killed by a tailings dam collapse in Brazil.

Meanwhile, one of Australia’s largest trade unions called for a safety reset after nine mineworkers died on the job last year. A terror attack which killed 39 mine employees in Burkina Faso also raised safety concerns across West Africa, one of the best performing regions in the mining industry.

RGN paid close attention to the mining sector’s responses in the wake of these tragic incidents, while also covering in detail the developing trends of the year. In this issue, we have put forward a selection of the most interesting and diverse mining companies that have been featured in the magazine this year.

We hope you enjoy our run-through of the year and give thanks to our featured companies, advertisers, contributors and readers for your support in 2019. See you at the 2020 Investing in African Mining Indaba in Cape Town!

Jacob Ambrose Willson Jacob Ambrose Willson, Editor

RGN is published by Anderson Murray Media: a diverse media and information services company focused on creating and distributing engaging content to business leaders across the globe.

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

VISIT US ONLINE AT RESOURCEGLOBALNETWORK.COM

CONTENTS

PROSPECT RESOURCES

NEWS 8 Global resources news Our selection of mining, oil & gas and renewable energy stories from the last year 14 RGN on-site Mines and Money 2019 review 28 RGN 2019 testimonials Glowing feedback from several RGN clients over the course of 2019

BEST OF 2019: MINING 32 Prospect Resources Glittering prospects for this miner in the African lithium space 46 Hummingbird Resources RGN checks in with Hummingbird Resources’ MD Dan Betts 60 AfriTin Mining Building the African tin champion 74 Roxgold Canadian mining company goes for gold in West Africa

HUMMINGBIRD RESOURCES

AFRITIN MINING

CONTENTS

CAPITAL DRILLING 88 Capital Drilling Capitalising on rising exploration spending in the West African market 104 Lepidico Lithium chemicals company undertakes rapid transformation 116 Nusantara Resources Awak Mas: Indonesia’s next large scale gold mine 130 Consolidated Zinc Owner of the high grade Plomosas mine in Mexico 142 First Mining Gold A closer look at two unique gold assets in a premier mining jurisdiction 156 Adventus Mining The Ecuadorian opportunity

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

NUSANTARA RESOURCES

CONSOLIDATED ZINC

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NEWS | Brookfield Multiplex MINING

GLOBAL RESO

Our selection of mi renewable energy news

OURCES NEWS

Resource Global Network

ining, oil & gas and s from around the world

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NEWS

GOLD HITS THREE MONTH HIGH TO CAP BEST YEAR SINCE 2010 The price of gold reached its highest level in over three months during the last week of December to cap a stellar 2019 performance by the precious metal – its best year in nearly a decade.

Spot gold rose to $1,524.20 per ounce, its highest level since September 25th, when gold enjoyed an unusually strong and sustained surge over the summer months.

Meanwhile, US gold futures rose 0.4% to $1,524.70 per ounce.

Gold recorded its best year since 2010 having gained nearly 19% over the last 12 months, predominantly due to an ongoing trade war between the US and China which has put a strain on the global economy.

CMC Markets analyst Margaret Yang Yan said one of the main drivers behind gold’s recent gain is the weakening dollar price, before adding that prices are also rising on bargain hunting in year end.

The dollar slipped against a basket of rivals, making gold cheaper for holders of other currencies.

“However, the upside is kind of limited because quantitative easing or rate cutting cycle has come to an end for now and we don’t see a possibility of any rate cuts in 2020,” Yan said.

Resource Global Network 11

NEWMONT GOLDCORP TO PRODUCE 7% OF THE WORLD’S GOLD IN 2019 Newmont Goldcorp is expected to produce 8.4 million ounces of gold in 2019, equating to 7.1% of total global output, after becoming the world’s largest gold producer through its merger with Goldcorp.

The new gold giant’s main rival, and JV partner in the Nevada goldfields, Barrick Gold has been estimated to produce 5.6 million ounces this year, while Kinross Gold should produce 2.8 million ounces, according to latest figures from GlobalData.

Newmont’s total gold production will come from 29 mines currently in operation around the world, compared to Barrick’s 21 operating

gold mines and the 13 sites owned by Kinross.

Newmont is also currently advancing another 15 projects.

However, after completing the US$10 million takeover of Goldcorp earlier this year, Newmont is expected to announce the sale of between $1 billion and $1.5 billion in assets over the next two years.

Until then, most of the company’s operations will be in the Americas (72%), with Canada and the US collectively accounting for 67.5% of its total assets, followed by Australia (18%), Peru (6%), and Argentina (3.6%).

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NEWS

ICMM MEMBERS VOW TO CREATE INTERNATIONAL STANDARD FOR TAILINGS DAMS The International Council on Mining and Metals (ICMM) will develop a new international standard for tailing facilities, in the wake of the fatal dam burst at a mine in the Brazilian town of Brumadinho in January.

CEO’s from ICMM’s 27 member companies met in Miami in February to discuss the creation of a new standard for tailings dams that will be informed by a review of current global best practices in the mining industry, and beyond.

ICMM expects the standard to create a step change for the mining industry, after it was rocked by a second fatal dam burst in under four years, both of which occurred at Vale mine sites in Brazil.

The standard will be further defined through the review process but is expected to include: A global and transparent consequence-based tailings facility classification system, a system for credible, independent reviews of tailings facilities and requirements for emergency planning.

Tom Butler, ICMM’s chief executive officer, said: “While the standard would become a member commitment, ICMM will encourage others to join us in advocating for it to be adopted more broadly.”

The organisation will engage with representatives from civil society, communities, industry, investors, and multilateral bodies, to determine the detailed scope of the review.

Resource Global Network 13

ANGLO AMERICAN’S NEW PERUVIAN COPPER MINE ‘A LICENCE TO PRINT MONEY’ Anglo American’s US$5.3 billion Quellaveco copper project has been labelled a ‘generational asset’ and ‘a licence to print money’ by the CEO of its Peruvian operations Tom McCulley.

Quellaveco is one of the world’s largest undeveloped copper deposits, located in the Moquegua region of Peru. The mine will produce 330,000 tonnes of copper per year for the first five years of the project, starting in 2022.

“This is not going to be a 30-year mine.

My personal opinion is that it is going to be closer to 100 years,” said McCulley at a briefing in Lima and reported by the Financial Times in October.

According to a company presentation seen by the newspaper, the reserves at Quellaveco have only been defined to a depth of 400 metres, but drill samples suggest mineralisation could extend to 1,000 metres.

Two adjacent copper mines have been in production for more than four decades at much greater depths than Quellaveco, and exploration outside the main project areas has suggested there could be another major deposit within Anglo’s tenements.

Copper is forecast to play a vital role in the world’s low carbon energy transition, with demand set to dramatically increase from the renewable energy and electric vehicle industries.

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MINING | Mines and Money 2019

MINES AND M

MAYUR RESOURCES

Developing an industrial minerals and power generation platform in Papua New Guinea reports back from another fruitful M

Resource Global Network

MONEY 2019

Mines and Money conference in London

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MINING | Mines and Money 2019

The industry-renowned Mines and Money conference returned to London in the last week of November and confirmed its status as Europe’s premier mining investment event, with attendance up 20% on the 2018 show. Over the course of the three days, 621 investors connected with mining companies from around the world, 254 speakers graced the main stage for sessions covering a wide range of salient topics in the mining sector, and 155 exhibitors - ranging from exploration juniors to established producers promoted themselves on the main floor. There was also a packed social agenda at the conclusion of each day, including the annual gala dinner and awards, which unfolded on the evening of day two.

As always, the conference was opened by Mines and Money’s global head of content and research Andrew Thake, who laid out the three-day agenda in his welcome address to gathered delegates on the main stage.

Key themes of the 2019 event included the importance of ESG in mining, the rise of resource nationalism, increasing appetite

Resource Global Network

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MINING | Mines and Money 2019

Resource Global Network for M&A (particularly in the gold space), battery metals, bridging the gap between exploration, development and production and much more.

The most notable keynote speech on day one was delivered by Ivanhoe Mines founder and co-chairman Robert Friedland. The mining industry legend covered a wide range of topics from the China-US trade war to global warming, before memorably quipping that “copper demand is going to be psychedelic!”

Outside the main stage, the exhibitor floor buzzed with activity and around 500 meetings took place at the Mines and Money Connect lounge on day one alone – a 50% year-on-year increase. The service once again proved to be an efficient matchmaking tool for companies and investors throughout the event.

The highly anticipated Mining Pitch Battle also kicked off on day one, with the first category won by India-focused gold firm Panthera Resources, after corporate operations officer Tony Truelove delivered a compelling company presentation.

Day two kicked off with the Toronto Stock Exchange’s head of business development – global mining, Dean McPherson, delivering a welcome address which outlined how and why Toronto remains the home of global mining financing.

In his presentation McPherson revealed that in the year to date, the TSX had welcomed

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MINING | Mines and Money 2019

TSX and TSXV head, business development global mining Dean McPherson

Resource Global Network

more new listings from the mining space

for the mining sector, once market certainty

than its two nearest competing exchanges

prevails.

combined, despite being faced with challenging macro-conditions in the shape of

After the conclusion of the day two schedule,

economic headwinds throughout 2019.

around 500 delegates and mining industry leaders headed to the venue for the annual

On the main stage, a seven-member panel

Mines and Money gala dinner and awards

attempted to answer the question of whether

ceremony. The glitzy evening celebrated the

the recent spate of gold M&A mania is good

companies and individuals who exhibited

for the mining industry, in one of several Big

outstanding achievement in 2019.

Debate sessions over the course of the day.

ASX-listed base and precious metals explorer The day was bookended in the exploration

Adriatic Metals won the exploration discovery

theatre with a discussion on whether the UK

award and its chief Paul Cronin was awarded

can remain a major mining finance centre in

CEO of the year in the emerging company

a post-Brexit environment. The panel agreed

category.

that while Brexit-related uncertainty has hurt the LSE, there should be no reason why

Meanwhile, Mark Cutifani took home the big

London cannot remain a key finance hub

gong for mining CEO of the year after his

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MINING | Mines and Money 2019

Resource Global Network

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MINING | Mines and Money 2019

stellar work at the helm of Anglo American,

midday, a carefully-picked panel debated the

and First Quantum Minerals CEO Philip

future direction of the EV and battery metals

Pascall won the Lifetime Achievement award.

industry. The panel flagged concerns relating to future supply of battery metals from the

The third and final day of Mines and Money 2019 was characterised by a focus on EVs and the continuing rise of battery metals. At

mining space.

Resource Global Network oversupply dynamic, but this will evolve into a deficit quicker than battery manufacturers are currently anticipating.”

The 17th annual Mines and Money conference in London was rounded off by the grand final of the Mining Pitch Battle, after five junior mining companies came through a series of heats throughout the week to reach the final.

Emerging victorious from the final was Canada-focused gold firm Amex Exploration, presented by VP exploration Kelly Malcolm.

The audience voted overwhelmingly for Amex and Kelly received three votes from the fivemember panel of ‘dragon’s den judges to clinch the coveted accolade.

This rounded off another highly successful Mines and Money event in London. All that was left was for Andrew Thake to thank the 2,000+ attendees from across the global mining value chain and welcome them back for the 2020 event.

“We are going to need a lot more of lithium in three or four years’ time,” warned Westbeck Capital Management’s chief investment officer Will Smith. “Currently we have a slight

ar j

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

TSX: TGZ OTCQX: TGCDF

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REVIEW | Testimonials

RGN has spent time garnering feedback from companie Here is what a few e

“RGN is a supportive partner for the wo Council of Australia found RGN staff po opportunities and challenges of the mo

Tania Constable, chief executive, Miner

“We found Jacob and the RGN team’s approach to covering long issues in the mining industry impressive. Working with RGN all complexity behind our research and delivered a feature that w audience.” - Graeme Stanway, co-founder, State of Play

“It was a real pleasure to work with RG readership. The article and interview co went in to ensuring that the content w well.” - Michael Dawes, partner, head o

“Midnight Sun Mining found RGN’s editor Jacob and the rest of and we are impressed by the final product. The design team did CEO and lead director, Midnight Sun Mining

“Thank you RGN for a well-researched a Indonesia’s next major gold mine. We a product as a great platform for industr

Resource Global Network

es featured in the magazine over the course of the year. executives have said:

orld-leading Australian minerals industry. The Minerals ositive, professional, responsive and keen to understand the odern minerals industry while promoting its many strengths.”

rals Council of Australia

ger-burn and more fundamental lowed us to express the rich we were proud to distribute to our

GN, and a great opportunity to get in front of its considerable ome across really well, and I appreciated the efforts that was pitched at the right level and that we came across so of corporate, Memery Crystal

the team to be very professional, d an excellent job.” - Al Fabbro, acting

and well-presented interview on what we believe will be appreciate the balanced perspectives and recommend the ry and suppliers” Greg Foulis, chairman, Nusantara Resources

29

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32

MINING | Prospect Resources

PROSPECT RESOURCES

Glittering prospects for this miner in the African lithium space

Resource Global Network

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MINING | Prospect Resources

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

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

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

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

Zimb

babwe President Emmerson Mnangagwa at Arcadia’s groundbreaking ceremony

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

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

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

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

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

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MINING | Prospect Resources

The report went on to say: “The Arcadia

for any informed investor. We’ve taken a

project keeps standing out as a large

conservative position and have still delivered

tonnage, relatively high grade project

a very robust DFS.”

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

Furthermore, Hunter Capital’s risk adjusted

lithium concentrates.”

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

“I think it [the external report] serves as

a significant value uplift, towards a price

additional validation of the work performed,

target of AUS$0.14, resulting in a market

and potential identified in the DFS.” says

capitalisation of $304 million. Prospect’s

Hosack. “Projects like this are on a journey

market cap at the time of writing was $45

and what we need to do is communicate

million.

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

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

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

journey to delivering shareholder value

there is certainly no lack of internal belief,

requires some sophistication. In essence, we

but we are also very confident that what we

feel that full shareholder value comes when

have displayed in the DFS shows impartiality

we as a business expose ourselves to the

Resource Global Network

upside of the lithium/EV cycle whilst being

The spectacle was a clear demonstration of

well underpinned by demand from the more

the high levels of cooperation between the

stable glass and ceramics market.

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

“I think our shareholders will get successful

and instigate an economic revival after years

returns as we deliver on our ambitions and

of neglect under former President Robert

the lithium/EV story realises its full potential.”

Mugabe.

Zimbabwe is open for business

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

The end of 2018 also brought another key

steps forward to recover from the economic

milestone for Prospect when the official

stagnation of the last 15 years,” says Hosack.

groundbreaking ceremony took place for the

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

Arcadia project in December. The ceremony

of government ambition. It will require lots

was opened by the President of Zimbabwe

of fresh investment in conjunction with

Emmerson Mnangagwa and attended by

government economic framework.

various ministers, Australian and Chinese ambassadors and key stakeholders.

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

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MINING | Prospect Resources

the value of this project and managed to

The RRI was conceived by President

gain vital social and stakeholder support that

Mnangagwa in an effort to loosen the

provides us the social licence to operate.

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

“The key message from the groundbreaking

Zimbabwe. The initiative is essentially an

was that we have laid the foundations in

open forum where the investor presents a

the appropriate fashion and have been

timeline of work from which the President’s

recognised as a committed investor in

office can provide direct support to.

Zimbabwe by the government.”

This system allows for transparent dialogue The government also reaffirmed its

between both parties and for Prospect it

commitment to comprehensive reforms to

provides a direct line to the President’s office.

enhance Zimbabwe’s competitiveness and to

“The fact that the President is prepared

attract foreign investors. One example of a

to apply himself and his office through

recent reform Prospect has taken advantage

the initiative shows the government’s

of is the Rapid Results Initiative (RRI).

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

ResourceGlobal GlobalNetwork Network 39 Resource

A mining sector with high potential

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

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

found that executives and investors were

of turning around Zimbabwe’s economy is

bullish about the prospects of the mining

substantial, and the mining sector is likely

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

to play a major role in any recovery, with

compared to -6.6 in 2017.

around 800 mines currently in operation.

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

with a renewed sense of confidence

at around 10% of their US$18 billion per

in Zimbabwe’s mining sector, which is

annum potential since 2009, delivering

evidenced by the firm’s strong commitment

just $2 million in annual revenue as the

to developing exclusively in-country.

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

“We currently employ over 100 people in-

bottlenecks.

country, though we do have an executive

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MINING | Prospect Resources

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

400 people from direct employment and

the construction phase of the project, there

obviously you can multiply this to establish

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

indirect employment too.”

skills demanded.

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

social responsibility in Zimbabwe, particularly

become more complex but we are comforted

with regards to community training

knowing that Zimbabwean skills can meet

programmes in key fields such as agriculture

our needs. Our final headcount during

and health. “By far the biggest impact we can

the operational phase will be around 300-

have is up-skilling the community that are

Resource Global Network

likely to be employed by us, ensuring they are

Versatile offtake options

healthy and fit for the rigors of the role, while

Zimbabwe is already the world’s fifth largest

developing skills that lead to sustainable

lithium producer and Minister of Mines

prosperity.

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

“We want to invest heavily into programmes

for 20% of global demand when all known

targeting these outcomes and see these as

lithium resources are being exploited.

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

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

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MINING | Prospect Resources

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

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

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

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

ASX:PSC

a j

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MINING | Hummingbird Resources

HUMMINGBIRD RESOURCES

checks in with Hummingbird Resources’ MD Dan Betts

Resource Global Network

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MINING | Hummingbird Resources

2018 was a year of transformation for Hummingbird Resources as the AIM-listed company completed its journey from gold explorer to gold producer at the Yanfolila mine in Mali, West Africa. After ramping up to full-scale production in Q1, the miner went on to pour 91,620 ounces of gold in 2018 – only a few hundred ounces short of its top end revised guidance, after an unusually heavy wet season limited capacity at Yanfolila.

However, the Hummingbird team rose to the challenge and executed a remediation plan to get the operation back on track this year, as it works towards a 2019 guidance of 110-125,000 ounces of gold. Also on the agenda for Hummingbird this year is the construction of a second ball mill at Yanfolila and a near-mine exploration campaign. RGN’s editor catches up with Hummingbird’s managing director Dan Betts, who also discusses the firm’s partnership with Cora Gold and the Dugbe project in Liberia.

Jacob Ambrose Willson: Dan, after reaching nameplate capacity at the Yanfolila mine in Q1 last year, the

Resource Global Network primary target for Hummingbird in 2018 was to maintain those production levels.

What challenges arose over the course of the year and how happy are you with the overall gold output of Yanfolila in 2019?

Dan Betts: 2018 was an important year for us at Yanfolila, with successful ramp up of operations and consistent grade and recoveries coming out of our plant. Of course, the latter part of the year proved slightly more challenging when stability issues were identified at the Komana East pit and a public bridge on the road to site was issued a restrictive weight limit. These issues were a result of unusually heavy wet season.

With our remediation plan nearing completion though, the Group is now in a good position to return to full capacity and continue the cash generation that Yanfolila is capable of. Notwithstanding, we are one of the top 10 UK producers in year one of operation, we’re confident with the guidance figure we’ve given for 2019 and look forward to pouring more gold!

JAW: How will Hummingbird ensure Yanfolila hits its 2019 FY guidance of 110125,000 ounces and therefore ensure the company returns to full profitability?

DB: Last year’s issues have certainly made for a more experienced and skilled team and we can now take what we’ve learned from those challenges to work towards a wholly positive 2019. Our project to install a second ball mill is due to be complete in Q3 and this will

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MINING | Hummingbird Resources

Resource Global Network increase our plant throughput towards the end of the year. All together, these elements will help us deliver on our expectations.

JAW: Hummingbird also embarked on an exploration programme at Yanfolila last year. To what extent have the recent high grade returns from the Gonka and Komana West deposits increased confidence in the extension of the mine life at Yanfolila?

DB: The drilling results have been hugely encouraging. Drilling commenced in July last year and has more recently focused on the resource definition at Gonka, with some further follow up drilling at Komana West.

The results have highlighted the high grade returns from Gonka as well as signified zones at Komana West inside the minable pit shell (previously found outside the resource model). The results collectively give us encouragement that we can increase the mine life at Yanfolila.

JAW: How much further exploration is required across the six near-mine deposits in 2019 in order to convert the maximum amount of resources to reserves?

DB: So far, the Group’s exploration drilling has focused on infilling the open pit resources. Our attentions will now switch to drilling out the underground resources at Gonka, which is very exciting since this is where the highest grades and wider intervals

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MINING | Hummingbird Resources

have been previously drilled by Gold Fields

increase throughput capacity from 1Mtpa to

Ltd, the former licence owner.

1.24Mtpa (+24%) when operating at 100% fresh ore. With our service contractor AMS,

Once the exploration results are received

we are also evaluating ways to streamline

and analysed, we can set out the findings and

operations and allow further throughput on

see how these can benefit the mine life at

an ongoing basis.

Yanfolila, which should be within the course of the year.

JAW: Turning to Hummingbird’s partnership with Cora Gold, how are you

JAW: How important is it for Hummingbird

assisting them with their exploration

to continue developing Yanfolila’s

efforts in Mali near the Yanfolila mine?

facilities as it anticipates further reserve growth?

DB: We’re encouraged by Cora’s progress in Mali and while we don’t have a part

DB: Developing our capacity is a key objective

in operationally assisting the Group per

and a second ball mill will significantly

se, Yanfolila does provide optionality

IT’S IN OUR DNA TO WORK HARDER Few mining contractors know Africa like we do. For 25 years, we’ve had the mining fleet, people, safety record and know-how to mine productively anywhere in Africa.

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BRINGING MORE TO MINING

54

MINING | Hummingbird Resources for their exploration campaign. Bert Monro, Hummingbird’s head of business development, sits on Cora Gold’s board and is there to lend his extensive experience in the sector.

JAW: How much of a priority will the development of the Dugbe gold project in Liberia be in 2019?

DB: The Dugbe Gold Project currently has a gold resource of 4.2Moz, so it’s a significant asset and one of real value to Hummingbird.

The Dugbe Mineral Development Agreement (MDA) is now going through the final phase of approval from the Liberian Government.

Once this is complete, we will be able to consider our next steps for the project.

JAW: The partnership with Cora (who are also active in Senegal), along with Hummingbird’s own assets in Mali and Liberia, shows a real commitment to West Africa’s gold industry. What can you say about West Africa as an investment jurisdiction and as a world-class gold hub?

DB: West Africa has been a prosperous and important part of Hummingbird’s success.

We’re proud of our in-country relations and what we’ve achieved in the region to date. While we do look at a broad range of projects globally, the region speaks for itself as a prolific gold exploration and production area. Ultimately for us though, it’s about finding the right project for Hummingbird, which comes down to our experience and strengths.

Capital Drilling, a leading full service drilling provider in Africa, is proud to partner with Hummingbird Resources to deliver their drilling projects in Mali.

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Zambia Namibia

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Contact us to discuss how our knowledge and experience can help your project. www.capdrill.com | info@capdrill.com

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MINING | Hummingbird Resources

Resource Global Network JAW: Hummingbird undertook a targeted year-round local community beneficiation programme in 2018, which involved creating employment opportunities for local women and clean water initiatives amongst other areas. What will the company focus on in 2019 as part of its approach to responsible mining?

DB: Last year’s far-reaching responsible mining projects were carried out successfully and we’ll be setting ourselves the same ambitious goals for 2019. The programme has not been published yet but continues our focus on water and sanitation, agriculture, local employment, education and crucially, health. The latter in particular is hugely significant to us and I’m pleased that we’ll be continuing our partnership with Critical Care International (CCI) to deliver an incredibly high standard of healthcare to the mine and local communities.

JAW: Finally, if the main priority for Hummingbird last year was consolidation, what is the stand-out objective for 2019?

DB: The plan for 2019 is to focus on achieving production guidance and completing the second ball mill project to time and budget.

Together with further positive exploration results, we would hope to establish ourselves as a mid-tier mining company in 2019.

AIM:HUM

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Delivering drill hole data We understand it’s about more than just drilling the hole – it’s also vital to obtain quality samples and data from every drill hole.

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MINING | AfriTin Mining

AFRITIN MINING Building the African tin champion

Resource Global Network

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MINING | AfriTin Mining

Tin is an important commodity with multiple uses in modern society that go beyond widely held associations with goods such as tin cans, cups and roofs.

These outmoded beliefs are a misnomer when considering the growing importance of tin in contemporary electronics and other high-tech industries, with latest research indicating that tin can dramatically improve the performance of lithiumion batteries, for example. Tin continues to be one of the better performing commodities on the London Metals Exchange and the global tin market is anticipated to be valued at US$8.23 billion by 2023.

However, the market has been rooted in a deficit for the last five years with demand rising from industrial markets and production falling as a result of depleting global reserves and tightening regulations in China – a world leading tin producer.

This equilibrium pricing scenario in the tin sector is creating a ‘perfect storm’ for a company like AfriTin Mining, according to its CEO Anthony Viljoen. AfriTin is a Londonlisted miner which intends to become the ‘African tin champion’ through the development of its portfolio in Namibia and South Africa.

Resource Global Network

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MINING | AfriTin Mining

“Demand and supply are moving away from

developing the Uis Tin Project in Namibia,

each other quite rapidly and we saw a similar

which is focused on a pegmatite-hosted tin

scenario developing in the vanadium market

deposit that happens to be one of the largest

recently which resulted in prices going up by

open castable deposits of its kind.

1000%. We are excited by that and believe that what we call minor metals offer good

AfriTin holds three project areas at Uis, all

market fundamentals and strong upward

of which saw historical production from

price movement prospects,� says Viljoen.

the mid-20th century up to 1990, when production ceased as a result of depressed

Tin is not an abundantly occurring mineral

tin prices. Therefore, the project comes with

around the world, and large industrial scale

a non-JORC compliant resource of 73 million

deposits are rare outside of the major tin

tonnes (Mt) at 0.136% tin.

producing countries of China, Indonesia and Peru, Bolivia and Brazil from Latin America.

This historic resource is based on a large amount of drilling data conducted by SRK

Africa used to be the fourth biggest exporter

when it was operated by the South African

of tin in the world, but today there are no

state-run company Iscor, and Viljoen has

active industrial scale tin mines in operation.

no reason to believe that the figure is likely

However, AfriTin is in the process of

to change in the company’s imminent JORC resource announcement.

Resource Global Network

A giant tin resource

edition ranking it the fourth best African

In fact, if the non-JORC resource were to be

jurisdiction for mining and investment.

confirmed, it would place Uis in the top 10 tin mines globally and in the top two for Africa,

Returning to the Uis project, AfriTin will

alongside Alphamin’s Bisie project which

publish a JORC-compliant resource before

is being developed deep in the jungle of

the end of H1 2019 ahead of completing a

Democratic Republic of Congo.

scoping study and the commencement of a bankable feasibility study (BFS) by the end of

In comparison, AfriTin stands to benefit from

the year.

a strategically located project within trucking distance to Walvis Bay – a key port town on

While each of these resembles a significant

the coast of Namibia. In addition, AfriTin will

milestone in the near-term development of

be operating in a jurisdiction that encourages

the project, the company is most excited by

foreign investment in the mining sector, and

the extent of the tin mineralisation running

is regulated by a long-established Mining Act.

across the 15 km by 15 km licence area at Uis.

As a result, Namibia consistently ranks highly in the Fraser Institute’s Annual Survey of

“These pegmatite belts where the tin occurs

Mining Companies, with the most recent

run for hundreds of kilometres from the

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MINING | AfriTin Mining coast inland, and some of the belts are

Another exciting development was the recent

more mineralised than others. The ones in

discovery of lithium pegmatites at the ML

the Uis project areas are particularly highly

133 licence of the Uis project, located South

mineralised with tin,” says Viljoen.

of the main NR 134 licence. Viljoen explains how the pegmatites at Uis were formed by

During the four decades of historical tin

prehistoric lava flows which were intruded by

production at Uis, Iscor mined over 12

a variety of elements including tin, tantalite,

different open pits at points where they

niobium, beryllium and lithium.

found the pegmatite belts to outcrop. AfriTin has since conducted a geological mapping

While the ML 133 licence is outside of the

exercise and found another 180 outcropping

current development area at the Uis mine,

pegmatites all with visible tin mineralisation.

the discovery of lithium is encouraging and warrants further mineralogical testing at the

“By historic standards this would be one of

site.

the top 10 biggest tin mines in the world, but by modern standards, this is real behemoth

“It’s a non-core asset for us at this stage, but

of a deposit. We are only focusing on one

it does give us an opportunity to realise value

outcropping pegmatite at the moment, but

from the licence, either by partnering up with

there is so much upside from a resource

someone else or looking to maybe spin it off

perspective, it will take us decades to

on its own in the future,” says the CEO.

evaluate it to its fullest extent.”

ResourceGlobal GlobalNetwork Network 67 Resource

Phased production approach AfriTin has taken an unorthodox approach to the development of the Uis project, in the sense that during the last 12 months the company has begun building a phase 1 processing plant while still in the process of proving up the resource.

“We decided to do the plant and the resource confirmation concurrently because we had access to all of the historic resource information for Uis. The process flow of the circuit is not complex either, being a gravitybased separation.

“So, I’ve been able to get a really crack team of in-house engineers on the job which has given us a lot of confidence to go into phase 1 production while we are concurrently proving up the resource.”

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MINING | AfriTin Mining

Resource Global Network The other major benefit derived from building a phase 1 production facility is the opportunity to generate early cash flows while significantly de-risking the full-scale production phase.

“A phased development approach gives us cash flow rather than having to go back to market all the time, and it gets our tin out into the market,” explains Viljoen.

“When the current demand and supply elements for tin start feeding into the general market we would expect the tin price to tick up and the best way to take advantage of that is to have your tin product circulating in the market.

“Having early production really stamps our focus on the tin market and says that we are a player to watch in the future,” he adds.

AfriTin has been able to utilise the mining expertise that resides in Namibia throughout the process of confirming the resource and building the phase 1 plant for Uis. In fact, the level of expertise and equipment that is available in-country is such that the company has not had to use international suppliers, aside from a few additional components from China.

The company’s main contractors are Windhoek-based Crush Plant, a national subsidiary of South African engineering

Anthony Viljoen, AfriTin Mining CEO

group Osborn, and Metallum Fabrication who provide structural and stainless steel fabrication solutions.

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MINING | AfriTin Mining

Local beneficiation

but the multiplier effect of a large mining

Placing Uis in its geographic context in the

operation is exactly what the communities

Erongo region of Namibia, AfriTin has a duty

need, in terms of job creation and further

to ensure that the local communities benefit

long-term economic beneficiation.

from the project as much as the company will. As such, AfriTin has placed a strong focus

“We are looking at various initiatives for

on community engagement throughout the

employing as many local people as possible,

development.

particularly those semi-skilled people who worked on the mine before it closed. In

There was no natural economic activity in the

general, we plan to upgrade water and

region prior to the historic mine, but since

electricity supply which will have an indirect

operations ended in 1990, the local mining

but definite multiplier effect on economic

communities suffered as the main source of

activities.

economic activity was taken away. “We believe that a happy mine is based on a In recent years tourism has provided some

happy community, so we will look to stick to

respite to conditions of poverty in the region,

that mantra. Our local operating company

Resource Global Network

is 15% owned by a nonprofit organisation

This target would be achieved either

that looks after all of the communities near

through resource expansion at Uis or

the mine. They all have a direct exposure to

from consolidation of other assets in the

profitability and that’s the way sustainable

portfolio, notably the Mokopane project in

mining should happen these days.”

South Africa. In the near term, the company will deliver a number of catalysts for value

When the Uis mine reaches full scale

creation, starting with early production from

production it will produce in the region of

the phase 1 plant.

5,000 tonnes of tin concentrate a year. This rate would make AfriTin a significant player in the global tin market, however Viljoen aims to push the company’s overall production up to 10,000 tonnes a year.

AIM:ATM

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74

MINING | Roxgold

Resource Global Network

ROXGOLD Canadian mining company goes for gold in West Africa

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MINING | Roxgold

Roxgold started life as a junior gold explorer with a joint venture earn-in agreement for the Yaramoko property, located within the gold-rich HoundÊ greenstone belt in Burkina Faso. The company began exploring the property in 2011 and eventually made a discovery with the 55th drill hole of the programme; hence the name 55 Zone. After taking the project through the first rounds of exploration, the 55 Zone emerged as a high grade discovery and a very coherent deposit according to Roxgold’s president and CEO John Dorward. A feasibility study for an underground mine followed in 2014 and commercial production was declared in October 2016. During the last three and a half years of production, the project has consistently delivered a high return on capital, based on double digit grades and low costs.

A premier gold jurisdiction “We have gone from a virgin drill hole discovery to having a producing gold mine in five years. There are very few jurisdictions

Resource Global Network

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MINING | Roxgold

Resource Global Network where you can legitimately achieve that in that amount of time,” says Dorward.

This reference is a testament to Burkina Faso’s rising status as a premier gold mining jurisdiction on the African continent.

The industry has been booming in recent years, becoming Africa’s fourth largest gold producer in 2017 and Burkina Faso expects to announce another record year of gold output for 2018.

During its time in Burkina Faso, Roxgold has experienced a jurisdiction with a pro-mining and pro-foreign investment stance, along with a permitting process that is clearly established, articulated and not bound in superfluous red tape.

John Dorward, Roxgold president & CEO

Recent security challenges are a genuine concern for Roxgold and the country’s

going to be Roxgold’s next gold mine in West

mining investors, however Dorward remains

Africa.”

steadfast in his belief that Burkina Faso is a premier gold mining jurisdiction.

Roxgold has already started exploration drilling at Séguéla’s Antenna deposit and

Since becoming a cash generative company

has a number of satellite targets that will be

via gold production from 55 Zone, Roxgold

drilled, with the aim of increasing resources

has been able to pay down a significant

and ultimately compiling a preliminary

portion of its project finance debt, while also

economic assessment and a feasibility study

turning to additional developments, most

for Séguéla.

notably making its first acquisition in April.

“We acquired the Séguéla gold project in Côte

2018 operational performance

d’Ivoire from Newcrest for $20 million and

In 2018, the company was able to increase

are in the process of updating the resource

year-on-year gold production by 4% to

statement to be 43-101 compliant. We like

132,656 ounces, with an average head grade

what we’ve seen so far and definitely think it’s

of 13.5 g/t from a record 307,591 tonnes of

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MINING | Roxgold

AUMS advert April-18.indd 1

29-Apr-19 8:09:16 PM

processed ore. Dorward puts this improved

This year, Roxgold’s gold output is set to be

operational performance down to increased

further boosted by the arrival of a second

efficiencies at the mine and mill.

gold producing mine within the Yaramoko project. First ore was produced at Bagassi

“The mill has consistently run above

South in October 2018 and it’s expected to

nameplate capacity. We did a few things in

reach commercial production in Q2 2019.

the original design, such as installing a larger motor in our SAG mill, which has helped us

The successful development of Bagassi South

sustain a higher than nameplate throughput

has been coupled with an expansion of the

capacity.

processing plant at Yaramoko, which was completed in December 2018 and increased

“We have also invested a significant

capacity by nearly 50% from 750 tonnes per

amount of capital upfront in underground

day (tpd) to 1,100 tpd.

development of the mine. Contrary to a lot of underground mines, we are well in front

“This is a significant milestone for us and a

of where we need to be. If there is an issue in

very important addition to the Yaramoko

one part of the mine, there are other areas

mine. Not only does it enable us to support

we can work in and maintain our productivity

the expansion of the processing facility, it

levels. I think it’s been a productivity driven

also brings mutual mitigation to the story.

story,” says Dorward.

ResourceGlobal GlobalNetwork Network 81 Resource

“Underground mining can be a challenging

Services (AUMS) – a division of Australian

business and having a second deposit lowers

contractor Ausdrill.

the overall risk of the project.”

AUMS have been active in the African Roxgold has also identified further resource

underground mining sphere for many

growth potential at both 55 Zone and Bagassi

years and were in fact initial investors into

South, which it will look to explore in the near

Roxgold, participating in equity financing for

term. At 55 Zone, the company has drilled the

the Yaramoko mine. As a result, AUMS and

shoot to a depth of over 1,000 metres and

Roxgold have a strong relationship and a

will publish an updated resource at the end

good alignment of interests.

of Q2. Meanwhile, Roxgold will focus on near surface infill drilling at Bagassi South in the

“They recently won a contract for Bagassi

coming months.

South, which was a 12-month extension

Strong partnerships

of the overall Yaramoko mining contract.

We saw quite a decent reduction in costs

Roxgold has worked closely with a number

to reflect that ongoing relationship and

of service providers in the development

the increased volumes. AUMS are by

and operation of its facilities at Yaramoko,

far our biggest contractor and are quite

including African Underground Mining

embedded with us in terms of the operating procedures.”

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MINING | Roxgold

Resource Global Network In addition, Roxgold has also used Geodrill for exploration work and drilling in Burkina Faso and now in Côte d’Ivoire as well. ATS is Roxgold’s camp and catering contractor, while various construction services have been provided by DRA and Group Five out of South Africa.

“We’ve had a number of significant contractual arrangements and by and large they’ve all been positive for us. We’ve had good interaction with our partners,” Dorward declares.

Local expertise At the Yaramoko mine, Roxgold has made a concerted effort to build a workforce of primarily Burkina Faso nationals, in a show of support to the country which welcomed its arrival into the mining sector.

“We run with a very low level of expatriates and over 90% of our workforce is Burkinabé, many of whom hold senior positions within the operating team.

“There is not a very long history of underground mining in Burkina Faso, so there weren’t as many underground mining engineers in Burkina, but we are now starting to see that develop,” Dorward continues.

During the permitting process, Roxgold also committed to training and hiring locals from around the mine site, running an apprentice programme for youths from the local village.

The apprentices were sent to work with one

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MINING | Roxgold

Resource Global Network

of the company’s construction contractors,

more investment in terms of commercial

gaining valuable skills of the trade. The

activities, shops and small businesses being

apprentices were then hired by Roxgold to

established.”

become a key part of the plant processing and maintenance team.

In addition to bringing lucrative employment opportunities, Roxgold has also organised

Dorward believes that, in addition to local

several community investment programmes

procurement practices, the most important

in the local area, including teacher

single contribution that the company

training, agricultural workshops and solar

has made to the local communities has

electrification for medical centres.

come in the shape of secure full-time jobs.

“We’ve brought a large number of well-paid

“I think as a responsible mining company

permanent positions. They work a full week

and a good neighbour, we are making

and earn significantly higher incomes than

a very positive contribution in the local

what they otherwise would.

communities.”

“That flows through the community and

West African expansion

helps households. It’s a much more

After establishing itself in Burkina Faso,

vibrant community now, you see a lot

Roxgold is now excited to be moving into

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MINING | Roxgold

Côte d’Ivoire with the acquisition of the

“The terrain is very fertile for gold discoveries

Séguéla project. Dorward believes that Côte

and there are several examples of large gold

d’Ivoire has been historically underexplored

deposits in Côte d’Ivoire such as those owned

despite having extensive greenstone belts

by Randgold Resources [now part of Barrick

that run down from Burkina Faso, Mali and

Gold]. We think the property we acquired has

Ghana.

a lot of upside.

Resource Global Network

87

“We have gone from a virgin drill hole discovery to having a producing gold mine in five years. There are very few jurisdictions where you can legitimately achieve that in that amount of time” John Dorward, president and CEO, Roxgold that we are starting to drill. The potential is there to bring those into resource status and ultimately into production. It should be a low capex, high returning operation and will sit very nicely next to Yaramoko.”

After expanding into Côte d’Ivoire, Dorward feels that the company is right at home in West Africa, with a management team that is highly experienced in the region and wellequipped to take on additional projects further down the track.

“West Africa is the most logical area for us to be looking, but good projects are hard to find so we keep an open mind as to what might be available. We stand to benefit from the skill of our team and the significant amount of cash that Yaramoko will be generating in the coming years,” he concludes.

“At Séguéla, the Antenna deposit will get larger but I think the main story will be around the large number of satellite targets

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MINING | Capital Drilling

Resource Global Network

CAPITAL DRILLING

Capitalising on rising exploration spending in the West African market

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MINING | Capital Drilling

Capital Drilling Limited provides a full range of drilling and ancillary services, focusing on the African mineral resources market. The London-listed company prides itself on supporting clients through each phase of the mining cycle, from first stage exploration through to production.

Capital Drilling’s range of services includes blast hole, delineation, directional, exploration, grade control and underground drilling and it has a fleet of 91 modern rigs that can be mobilised to mine sites across the continent.

Since establishing its reputation in Tanzania through its work with AngloGold Ashanti which commenced in 2006 and continues today - the company has secured a steady stream of long-term contracts at Tier 1 operations across Africa, including in Egypt with Centamin and across West Africa with Kinross Gold and Resolute Mining. Underpinning these relationships with blue chip miners is Capital Drilling’s unwavering commitment to safety.

Resource Global Network

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MINING | Capital Drilling “In each of our many services we have a

This safety-first philosophy was faultlessly

similar philosophy: To do the job safely and

adhered to in 2018, as the company achieved

efficiently,” says Capital Drilling’s business

an unblemished safety record with a record

development manager – West Africa, Chris

zero lost time to injury over the course of the

Hall. “Everybody needs to come home at the

year.

end of the day without injury having provided an industry leading service for the customer.”

Resource Global Network

Flourishing financials Capital Drilling also flourished from a financial perspective in 2018, recording a significant increase in both profitability and cash levels. The company exceeded the top end of its revenue guidance, despite a 3% decrease year-on-year to US$116 million.

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MINING | Capital Drilling

Resource Global Network

“We are seeing a definite upturn in the amount of capital raisings going on and the junior market is certainly starting to show some signs of life where it’s been slack in the last few years. Capital Drilling is well positioned to take advantage of that trend” Chris Hall, business development manager – West Africa

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MINING | Capital Drilling

Resource Global Network

Earnings before interest, tax, depreciation

The company also declared a full-year

and amortisation (EBITDA) increased 16% to

dividend of 1.5 cents per share, a 25%

$28.3 million in 2018, while net profit after

increase on the 2017 dividend, and pledged

tax (NPAT) rose 48% to $7.7 million and net

to continue its disciplined approach to capital

cash more than doubled to $10.9 million –

management in order to return excess funds

the highest level since Capital Drilling’s listing.

to shareholders through dividends.

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MINING | Capital Drilling

Resource Global Network

Capital Drilling Rig 84 at Hummingbird Resources mine in Mali

Similar strategic contract growth was

and Burkina Faso. To date, approximately 52

achieved by Capital Drilling last year,

million ounces of gold have been discovered

evidenced by multiple wins with current and

across the sprawling formation.

new customers, along with extensions on major existing long-term mine site contracts.

Wading into West Africa

“We have positioned more rigs in West Africa over the last few years and established entities in various countries in response to

In particular, Capital Drilling placed increasing

increasing demand,” says Hall. “We plan to

focus on expanding into the West African

further expand our fleet to take advantage of

market in 2018. The region has developed

the ongoing activity in the region.

into a thriving mining hub and a world-class centre for exploration in recent years, with

“There are other rigs out in the market,

the largest concentration of exploration

but they tend to be less reliable and not

activity taking place in Africa at 45%.

performing to world class standards, so that is really our focus: to provide customers with

The lion’s share of West African exploration

world class rig maintenance, operation and

work takes place across the richly mineralised safety standards. That will give them accurate Birimian Greenstone Belt, which extends

results quickly and efficiently so they can

through Ghana, Côte d’Ivoire, Guinea, Mali

move on to the next phase of the mine cycle.”

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MINING | Capital Drilling

Resource Global Network

In 2018, Capital Drilling doubled its rig

Since increasing its presence in West Africa,

fleet in West Africa to 31 and established

Capital Drilling has seen revenue increase

infrastructure, including offices, warehouses,

from 13% in 2017 to 25% of the group’s total

workshops and accommodation, in Mali and

in the second half of 2018. To continue this

Côte d’Ivoire, adding to existing its facilities in

momentum, Hall has been appointed to

Mauritania.

lead business development and customer

Capturing contracts

relations in West Africa.

In Mali, the company was awarded a contract

“In this role, I make myself available to all

extension with Resolute Mining at its Syama

current and potential customers, making sure

Gold Mine and won new contracts with

we keep in contact so Capital Drilling knows

Hummingbird Resources at its Yanfolila Gold

when tenders are coming and is in a position

Mine. In Mauritania, a maintenance contract

to be on the tender list.”

was secured with Kinross Gold at the Tasiast Mine in addition to existing drilling contracts

Hall previously worked for another

and in Côte d’Ivoire, Capital Drilling secured

global drilling company for over 15 years,

work at Sama Resources’ Samapleu Nickel-

spending eight years looking after business

Copper project.

development of the African business, which was largely focused on West Africa.

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MINING | Capital Drilling

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“We have acquired more rigs in West Africa over the last few years and established entities in various countries in response to increasing demand” “I have a similar role now with Capital Drilling.

on the strategic and financial progress it

It’s a lot more flexible and I’m able to work on

made in 2018. The thriving West African

a variety of projects in different countries, but

market is set to provide the launchpad for

principally it’s a similar process of managing

further growth this year and beyond.

the key relationships with the customers.”

West African expansion

“We are seeing a definite upturn in the amount of capital raisings going on and the

Looking forward, Hall holds a firm belief that

junior market is certainly starting to show

West Africa will provide the largest regional

some signs of life where it’s been slack in

growth opportunity on the continent and

the last few years. Capital Drilling is well

says the company aims to continue the

positioned to take advantage of that trend.

organic growth process in 2019 in much the same way as last year.

“Our offering is second to none. We are efficient, safe and we have high quality

“We’ve already slated increasing rig numbers

equipment and personnel running that

in at least two West African countries

equipment.

because we see the market growing. We will continue to focus on investing in assets and

“Both the juniors coming to market and the

infrastructure in West Africa and maintaining

majors on-site in West Africa need good

our organic growth in the region.”

quality operations and Capital Drilling will provide that, from exploration through to

After a prolonged four-year downturn,

resource management and production.”

exploration spend across Africa has increased for the last two years, which is a positive sign for Capital Drilling as it looks to consolidate

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MINING | Lepidico

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LEPIDICO

Lithium chemicals company undertakes rapid transformation

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MINING | Lepidico

For Perth-based lithium chemical company Lepidico, the 2019 June-ending quarter has been a truly transformational period. In April, the firm announced that its pilot plant project for the production of lithium carbonate, using its patented L-MaxÂŽ technology, had commenced the commissioning phase. This milestone was followed by three significant announcements on May 7th: First, Lepidico confirmed an-all share offer to acquire lithium company Desert Lion Energy Corp, listed on the TSXV. Then it announced a Memorandum of Understanding (MoU) with Abu Dhabi-based chemical manufacturer Gulf Fluor. Finally, Lepidico launched a rights issue to raise up to AUS$10.8 million in new shares.

Factor in the company’s earlier pivot towards lithium hydroxide production, utilising its new LOH-Max™ process, and it is clear to see that Lepidico has undergone a significant metamorphosis since the beginning of 2019.

The successful commissioning of the pilot plant project in Western Australia, onschedule and within budget, delivered a big

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MINING | Lepidico boost to ASX-listed Lepidico, according to

“When we evaluated projects that received

managing director Joe Walsh.

final investment decisions and funding commitments in 2018, they were almost

“It should give our shareholders and potential

exclusively hydroxide projects. Furthermore,

future stakeholders confidence that we can

in various discussions with prospective

deliver on our development plans,” he says.

customers, we were informed that there was

“L-Max® is a new process and this is the first

a strong preference for hydroxide. These was

time that a plant using small scale industrial

factors that we couldn’t ignore.”

equipment has been built.”

Taking into account the industry’s changing The pilot project moved into the operational

preferences, Lepidico consulted with its

phase in May, with first concentrate being fed

major shareholder Strategic Metallurgy to

into the plant towards the end of the month,

begin research and development work on a

after which it will start to produce lithium

novel process to produce lithium hydroxide.

carbonate and the various by-products from the L-Max® process, including sulphate of

In parallel with this, Lepidico had also

potash (SOP).

become aware of a fundamental risk to the

A new processing technology

project associated with the production of sodium sulphate as a by-product from its lithium carbonate process flowsheet.

Lepidico also plans to build LOH-Max™ lithium hydroxide capability into the plant

After a risk review session, the company

later in 2019, also using industrial equipment.

found that long term offtake for the highly soluble by-product may be hard to come by,

“We intend to rapidly advance the

given the increasing maturity of the global

process development for LOH-Max™

sodium sulphate market, which is mainly

to demonstration scale. We’ve got the

used in powdered detergents and pulp and

foundation plant infrastructure now to

paper manufacture.

achieve this and thereby put LOH-Max™ process development onto a fast-track,” says

“While we were looking for a hydroxide

Walsh.

process, we were also keen to develop a process step for the back end of L-Max®

Having closely followed the development

that didn’t lead to the production of sodium

of the lithium market over the last 12-18

sulphate. Those two components are what

months, it became apparent to Lepidico

led to the development of the LOH-Max™

that preferences in the lithium chemicals

process.”

supply chain were shifting towards hydroxide production over carbonate.

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MINING | Lepidico Lepidico began engineering work in June, with a planned four-month schedule for its consultant Lycopodium to complete the required circuit engineering and integrate it into the Phase 1 plant design.

“We have set an aggressive but realistic timeline so we don’t impose too much of a delay on our planned development of the Phase 1 plant project,” says Walsh.

Becoming vertically integrated Lepidico’s recently announced acquisition of Toronto-based Desert Lion Energy represents a major advancement for the company. The merger will create a vertically integrated lithium development company, from the mine all the way to chemical The LOH-Max™ process has been designed to production. treat a lithium sulphate intermediate product that is produced both from L-Max® and from The deal will give Lepidico direct ownership the conventional conversion of spodumene

in Desert Lion’s lepidolite deposits and large

concentrates. Therefore, LOH-Max™ has

exploration package in Namibia, in contrast

broad application within the lithium industry, to its position at the Alvarrões deposit being applicable to most hydrometallurgical

in Portugal where Lepidico has access to

conversion processes that employ sulphur-

lepidolite ore under an offtake agreement

based chemistry.

with the mine owner Grupo Mota.

During the March quarter, Strategic

According to investment research firm Edison

Metallurgy produced the first samples of

Group, the merger will therefore de-risk

lithium hydroxide using the proprietary

Lepidico as an investment proposition from

LOH-Max™ process. Preliminary design work

a strategic and operational perspective, since

also indicated that considerable capital and

it will not be dependent on a single source of

operating cost savings may be realised, as

lepidolite supply.

the LOH-Max™ design had fewer process steps and less mechanical equipment than

“The Desert Lion deal gives us direct

conventional processes.

ownership in our own lepidolite deposit.

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MINING | Lepidico

“We intend to rapidly advance the process development for LOH-Max™ to demonstration scale. We’ve got the foundation plant infrastructure now to achieve this and thereby put LOH-Max™ process development onto a fast-track” – Joe Walsh, Lepidico managing director Furthermore, it will give us an alternate feed

Dhabi-based chemical company Gulf Fluor

source for the Phase 1 chemical plant and/

for the supply of sulphuric acid and land for

or a feed source for a second plant. We are

the construction and operation of its Phase 1

looking at building up a portfolio of assets

Plant Project.

to support our longer-term strategic growth objectives.”

Gulf Fluor operates a large industrial plant in the Industrial City of Abu Dhabi (ICAD) and

These strategic growth objectives

is the largest producer of sulphuric acid - a

were underlined by the subsequent

critical reagent in the L-Max® process - in

announcement that Lepidico had entered

the region. In addition, the firm leases a large

into a supply and marketing alliance with Abu

parcel of land in ICAD on which it is envisaged

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that Lepidico could build its Phase 1 plant

same site of an exisitng sulphuric acid plant.

project.

This negates the requirement for transport, logistics and handling of sulphuric acid,

Lepidico stands to benefit from a number

thereby reducing risk.

of operating advantages should it choose to locate its Phase 1 project in ICAD, including

“ICAD is specifically designed for medium to

the fact that sulphuric acid can be piped

heavy industry and the Gulf Fluor site has its

directly to Lepidico’s plant.

own wharf. It’s got all the infrastructure and services that we need for our Phase 1 project.

“This is the first time we’ve had an opportunity to locate an L-Max® plant on the

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MINING | Lepidico

Resource Global Network “We also completed a study evaluating

Finally, Lepidico undertook a renounceable

whether regional markets exist for our by-

rights offer to raise up to AUS$10.8 million

products. Given the level of construction

which will go towards for the integration of

and agricultural activity happening in the

Desert Lion into the business, the evaluation

broader region, we identified that there are

of Abu Dhabi into the feasibility study for the

sizeable markets for both SOP fertiliser and

Phase 1 plant, the engineering of LOH-Max™

amorphous silica, which can be used as a

into the plant design, plus further resource

building material.”

development and exploration work.

ICAD also has a ‘plug and play’ approach

This neatly encapsulates the intense

towards new industrial developments, which

transformation of Lepidico’s business during

means that the approvals and permitting

the first six months of 2019. It has pivoted

process is expected to be able to be

towards lithium hydroxide production with

completed within three to four months.

the advent of a new processing technology,

Integrating ICAD

become a vertically integrated lithium company and taken the first steps to

Lepidico is currently working on an ICAD

establishing its operations in an exciting, high

trade-off study that will fully evaluate the

growth potential location.

prospect of a plant development in Abu Dhabi. Until the study is completed in late 2019, Lepidico will continue to use the basecase scenario of locating the Phase 1 plant in Canada.

Therefore, the company’s ongoing evaluation of a plant development in Abu Dhabi, along with its incorporation of LOH-Max™ capabilities into the Phase 1 plant has meant that the final feasibility study for the plant is now due in the first half of 2020, at which point Lepidico will seek to finalise its offtake and financing agreements.

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MINING | Nusantara Resources

N U S A N TA R A

Awak Mas: Indonesia’s ne

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RESOURCES

ext large scale gold mine

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MINING | Nusantara Resources

Indonesia’s mining industry has The executive chairman also highlights not always been kind to foreign the vital importance of fostering strong incountry relationships to ensure those positive investors down the years, with a string of high-profile incidents development outcomes he mentions. putting a blot on the sector’s Nusantara has achieved this by employing copybook amongst potential locally across the business and building an investors. However, since the executive team with first-hand experience lifting of a raw ore export ban working in Indonesia. “We are a local in 2016, investor confidence in employer, with local geologists and local the mineral resources sector is people working in the business. Our model, beginning to return. ASX-listed and the Indonesian way of doing business, is to have Indonesians working in the company.

Nusantara Resources is one company that is benefiting from improving conditions for foreign “On the corporate side, our director Boyke Abidin has been with this project for over investors in Indonesia, having made rapid progress at its Awak 20 years, so he knows the local community Mas Gold Project on the island of first-hand and has good relations all the way through to government.”

Sulawesi since its IPO in August 2017.

Delivering the DFS “Indonesia’s mining industry has had an

A little over 12 months after its IPO,

interesting history, and there are many

Nusantara published a definitive feasibility

positive things about operating here,” says

study (DFS) for the Awak Mas project in

Nusantara’s executive chairman Greg Foulis.

October 2018. The company completed over 10,000 metres of drilling ahead of the study

“First and foremost, there is the mineral

in order to prove its new geological model for

endowment in Indonesia from a copper and

the project.

gold perspective. Following that, there have been plenty of recent examples of investors

Awak Mas was first discovered in 1991 but

getting very positive development outcomes

after a series of previous owners failed to

out of Indonesia.”

take the project through to feasibility stage, Nusantara proposed a new geological

Foulis recounts Australian private equity

approach based on an ‘intrusion related’

firm EMR Capital’s US$1.2 billion sale of the

hydrothermal model.

Martabe gold and silver mine last year as a recent example of a foreign investor getting

This different approach to the geology

a strong return in Indonesia.

is what has set Nusantara apart from its

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MINING | Nusantara Resources

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AMC Consultants (AMC) started working with Nusantara in 2017 and was instrumental in the delivery of a definitive feasibility study that confirmed an asset with a 1.1 million ounce gold ore reserve and an 11-year mine life. AMC is currently working with Nusantara to update the project implementation plan.

Under the leadership of David Varcoe, AMC’s team developed a strategy to develop the mine in tropical Sulawesi, overcoming a challenging terrain with a relief of more than 500 metres. Initially, the team completed strategic planning work while the mineral resource was drilled out.

Nusantara then engaged AMC to determine the pit shell size, pit design, mine area layout, production schedule, equipment selection and to develop operating and capital costs. AMC worked with the Nusantara team and other consultants to determine the plant throughput and processing methodology to maximise overall project value.

In addition, AMC provided guidance to assist with planning the next stages of exploration and reserve development drilling. The mining costs were developed using AMC’s proprietary OPMincost Model.

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MINING | Nusantara Resources predecessors and allowed it to progress the project to feasibility stage, according to Foulis.

The DFS included a 2 million ounce (Moz) mineral resource with a grade of 1.4 g/t Au, as estimated by Nusantara’s partner Cube Resources. The company also engaged several other well-credentialled consultants

AMC helps Nusantara mine smarter

on the study.

“AMC Consultants completed the mine planning, estimated mining costs and the ore reserve, DRA Minnovo helped with metallurgical testwork and an Indonesian company called Resindo worked with us on

AMC worked with Nusantara to develop the Definitive Feasibility Study at Awak Mas. This included mining strategy, costs, & project value maximization.

infrastructure and capital cost estimation.

“We have also an opportunity to work with an EPC mining business called PT Petrosea through our partner Indika Energy. We think there is an opportunity to work with them in the construction of this project.”

The DFS also outlined sound economics including a post-tax NPV of US$152 million with 20% IRR, based on a conservative gold price of $1,250 per ounce. The study also built in gold price sensitivity where a 10% rise would see the project’s NPV reach $217 million, with an IRR of 26%.

Prior to publishing the DFS last year, Nusantara achieved another key objective

amcconsultants.com

when it secured a contract of work agreement with the Government of Indonesia for the Awak Mas project.

Resource Global Network

“We have a very good licence situation, we’ve completed the feasibility and brought in a very respectable and significant local partner that is also looking to be diversified in the gold business in Indonesia” Greg Foulis, executive chairman Nusantara Resources

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MINING | Nusantara Resources

“Firstly, we confirmed our licence with the

“We don’t use the word partnership lightly,

Government of Indonesia and had the

this is not just a business transaction. We

five-year period before we move into a

are working very hard on our relationship

mandatory sell-down extended to 10 years.

with this partner, to make this a partnership where everybody brings something to the

“We have a very good licence situation, we’ve

table.

completed the feasibility and brought in a very respectable and significant local partner

“Our partner has financial capability and

that is also looking to be diversified in the

they also have a very good understanding of

gold business in Indonesia.”

business in Indonesia. We also bring a lot of

Introducing Indika Energy

technical and gold industry experience to the equation.”

In December 2018, Nusantara announced

Nusantara is aiming to achieve a project level

that it had formed a strategic partnership

transaction that satisfies both parties and will

with Indonesian cornerstone investor Indika

look to be aligned with its partner to ensure

Energy, who will provide a pathway to project

both debt and equity capital is secured for

level investment in return for a 19.9% interest the project, according to Foulis. in Nusantara.

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MINING | Nusantara Resources

The company has engaged with project

Nusantara’s attention is focused on project

finance banks and observed a track record

enhancement and additional exploration in

of multinational financiers and international

2019.

banks supporting mining projects in Indonesia in recent years, including the large Firstly, Nusantara will seek to enhance the scale Martabe and Tujuh Bukit projects.

project through what Foulis calls ‘mine level geology’ – wherein the company expects

In addition, Nusantara received confirmation positive reconciliation on grade and will test from an independent technical expert that

this concept with additional close spaced

there are no fatal flaws in the Awak Mas

diamond drilling.

project, further strengthening the case for international investment.

“Essentially, in a mining situation we expect to pick up a lot more vertical structure than

“We understand our ability to project

what we are seeing in the resource model

finance and are working through other

and from the wide spaced drilling. That’s

complimentary options as well as what the

what we expect from the mine performance.”

various equity pieces may look like for this project. We are certainly confident that we

Furthermore, the company recently kicked off

will get this project banked, particularly given its first ground-based electrical geophysical the current $1,400 per ounce gold price.”

The icing on the cake

programme in the area surrounding Awak Mas. The programme is lighting up some fantastic structure over an existing satellite

While fast-tracking the development of the

deposit along with extensions to that deposit,

Awak Mas project towards the construction

says Foulis.

stage by 2020, an equally large part of

Resource Global Network

“This is all about the icing on the cake.

“If you look at the scale and location of our

We believe we have an exciting base case

satellite deposits, this is certainly what we

development scenario, but like most gold

call a ‘big system’. We are running a two-

operations we have an extremely high

pronged approach. We want to get this into

expectation of adding a lot of ounces, pre-

production, that’s our number one focus,

development and or when we move into

but we also see very significant exploration

production.”

upside over and beyond our existing footprint.”

Based on the significant opportunity to add further resources through project

Overall, Nusantara has developed into a

enhancement and satellite exploration,

well-credentialled business in Indonesia

Nusantara has strong reason to believe

with strong community and government

it could be sitting on a 5Moz mineralised

support and a local partner that is providing

system.

a pathway to investment for the large scale Awak Mas project.

“We believe that ultimately there are a number of intrusives relating to our mineralisation that certainly have the potential to demonstrate that this is part of a larger porphyry-style system. We also have signs of copper mineralisation that we need to follow up.

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MINING | Consolidated Zinc

CONSOLIDA

Owner of the high grade Plo

Resource Global Network

ATED ZINC

omosas zinc mine in Mexico

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MINING | Consolidated Zinc

The Plomosas Zinc Project in Chihuahua state, Mexico became known to ASX-listed Consolidated Zinc in mid-2014 and became more interesting to the company when a buyin deal materialised for the mine, which has historically operated at three times higher than the average grade of zinc mines around the world.

Located around 350 km from Mexico’s border with Texas, Plomosas was underground mined from around the end of World War II to 1974 at grades of approximately 17% zinc and 7% lead. Based on these outstanding historical grades, Consolidated decided to acquire a 51% interest in the project, which was increased to 90% in December last year. Mexican joint venture partner Retec Guaru currently retains the remaining 10% interest in Plomosas, although Consolidated is pursuing a move to 100% ownership of the mine.

The Mexican dream

“Especially with the increasing levels of trade with the US, Mexico has developed a high-tech market. The country provides very good internet services, infrastructure, communication, medical services – it’s like coming home. It’s fabulous!”

An added bonus for Marwood has been the opportunity to sample Mexico’s worldfamous culinary scene, particularly in Chihuahua where the Texmex dishes are tremendous, according to the MD. From an operational perspective, mining in Mexico goes back over 500 years and the contemporary industry is occupied by some of the largest mining houses in the world, including domestic giant Grupo Mexico and North American powerhouses Newmont Goldcorp and Agnico Eagle Mines.

The presence of these mining majors in Mexico denotes a jurisdiction that is proforeign direct investment in the mining sector, which contributes around 8.3% to industrial GDP and 2.5% to national GDP, while supporting over 370,000 direct jobs and over 1.7 million indirect jobs in 2017.

The only drawback to operating in Mexico comes in the form of high local interest rates of around 18-20%, which necessitate up front payments for many goods and

After buying in to the Plomosas project,

services. This sometimes provides a cash flow

Consolidated found itself entering a

management challenge for Consolidated.

progressive and advanced Mexican economy that is one of the largest in Latin America,

“The cost on a pump or renting a vehicle

says managing director Brad Marwood.

is very high because there is an inherent

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MINING | Consolidated Zinc

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interest charge associated with the US dollar

production taken by the previous owner.

borrowing rate in the space. Whereas, I go across the border into Texas and the

“The mine had been in operation in 2013 but

borrowing rate can be counted on one hand.

without a JORC resource defined. It was very

That brings things down to around half the

much hand to mouth – let’s drill some holes

price,” says Marwood.

and then mine it. That was very unrewarding

Defining the resource

because it didn’t define the ore sufficiently well enough to have continuity of production.

In April 2018, Consolidated defined a JORC

We felt that the better approach was to get a

resource of 1.17 million tonnes (Mt) for

resource defined.

the Plomosas project at an average grade of 14.3% zinc, 2.63% lead and 17g/t silver.

“Given the history of 30 years of operation

Within five months of defining the resource,

from post-WW2 to 1974, we felt confident

the company had commenced mining at the

that the orebody was more like a metronome

operation in September.

in a consistent operational environment and so we didn’t feel the need to drill off to

For Marwood, getting a resource defined was

measured and indicated, and we brought

crucial to re-starting production at Plomosas,

the mine into operation against the inferred

especially given the haphazard approach to

resource.”

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MINING | Consolidated Zinc Operations commenced at the Tres Amigos section of the mine, although the company has recently moved across to the Semioxidised (Sox) area of mineralisation, which is in the original higher grade host environment.

“We’re currently operating, mining and delivering to our process plant at around 27% zinc equivalent. I don’t think there are many operations in the world that can claim that level of head grade,” Marwood claims.

Higher grades, higher revenue Consolidated produced 7,000 tonnes of ore in May 2019 – the first full month that utilised material from the Sox section of the mine.

Providing Global Mineral Processing Solutions

The company had initially laid out plans to increase its monthly production to 10,000 tonnes, but a new toll treatment agreement will allow Consolidated to meet its revenue expectations without hitting the 10,000 tonnes target.

A market leader in safe, quality and cost competitive engineering solutions delivered on

The new offtake deal with Grupo Mexico

time, within budget and in accordance with client

includes an alternative toll treatment

requirements. We have a proven track record of delivering turn-key projects in over 20 countries.

agreement for the Sox material, which will provide a higher revenue per tonne to

Feasibility Studies

Consolidated due to the 27% zinc equivalent

Engineering and Procurement

grade versus the 15.5% grade of the Tres

Design and Construction Project Management and Commissioning

Amigos ore.

Consulting Services

In addition to this, the stockpiles at the

Asset Management

mine and mill are currently at full capacity,

Learn more at www.gres.com.au

so Consolidated has had to slow down its

Denver +1 303 881 4401 Perth +61 8 6272 6000

mining rate until the throughput of the

Brisbane +61 7 3838 8000

process plant is increased. The company is working with the owners of the Aldama plant Resource Global Network - Half Page Vertical Consolidated Zinc Limited Feature.indd 1

15/08/2019 8:38:17 AM

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MINING | Consolidated Zinc and has assisted them in the installation of a new mill and flotation cells.

The expansion should significantly boost the plant’s capacity from the current 100 tonnes per day nominal rate to around 250 tonnes per day, which is around 7,500 tonnes per month.

“If we start putting 27% zinc equivalent through the plant at 7,500 tonnes per month, then compared to our aspirations of 10,000 tonnes per month with the Tres Amigos ore, we’re talking about a serious uplift in the revenue stream.”

Resource expansion There is also a significant opportunity to add additional resources to the project through in-mine exploration at Plomosas, and Consolidated is following a cost-effective strategy to unlock those extra resources.

The company is close to completing a dewatering process down to the bottom of Level 10 of the mine, 400 metres below surface.

“With access to Level 10, we can drill very short drill holes up into the orebody and down into the orebody to do our exploration drilling, with far more cost-effective results. Instead of drilling 200 metres for an intersection of 4-5 metres of orebody, we will drill 30-50 metres with a 5 metres intersection.

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MINING | Consolidated Zinc

“We’re currently operating, mining and delivering t I don’t think there are many operations in the Brad Marwood, managing d “Our plan is to get started on that before

Hypothetically speaking, there could be up

the end of the year. A programme of six

to 20Mt of ore available at a grade of 23%

months of drilling should see us achieve the

zinc equivalent over the 4 km mineralised

outcomes that we seek, which is to define

zone, based on historical production within

and drill extensions down dip of the high

the 600 metres area. Consolidated’s mid-

grade Sox mineralisation to the Level 10 area, term exploration strategy revolves around which could be sufficient for multiple years of extending along the 4 km zone to capture the operation.”

extra resources.

There is also near-mine exploration potential “Our target is to define that deposit and at Plomosas, especially given that during 30

build a fit-for-purpose processing plant

years of historical mining 2.5Mt of ore was

with a capacity of up to 0.75Mt per annum,

extracted from just 600 metres of a known mineralised area of 4 km.

Resource Global Network

to our process plant at around 27% zinc equivalent. world that can claim that level of head grade” director - Consolidated Zinc which will produce 50-70,000 tonnes of

rather than diluting shareholders with

zinc concentrate per year,” says Marwood.

additional capital raises for exploration.

“We would also like to set up a long-term

Within a two-year timeframe, the company

relationship with a smelter, preferably in

aims to deliver a full-scale operation at

Mexico.”

Plomosas that is capable of delivering annual profits North of US$50 million.

Right now, Consolidated is offsetting exploration expenditure, putting cashflow into the company and meeting its costs

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MINING | First Mining Gold

MAYUR RESOURCES

First Min

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

ning Gold

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MINING | First Mining Gold

First Mining Gold’s chairman Keith Neumeyer first began building an asset base for his company in the second half of the 2010s, at a time when the capital markets environment was brutal, particularly for junior resource developers. However, the mining investment industry veteran glimpsed an opportunity to pick up high potential projects in trusted jurisdictions when belief in the mining sector was low, and his team went about compiling a list of 10 projects to pursue. After a rigorous screening process, First Mining bought six of those plus a few more shortly after to total eight acquisitions in a 15-month period. Today, the Toronto, US and Frankfurt-listed company has a diversified portfolio of gold assets across North America with a sharp focus on two assets in Ontario, Canada: The Springpole and Goldlund gold projects.

Next, First Mining brought in new COO

The onset of 2019 brought changes to

Gold and Premier Gold Mines and the Magino

the management team at First Mining,

project by Argonaut Gold. These are all 10-

starting with the appointment of new CEO

30,000 tonnes per day operations which have

Dan Wilton in January. The experienced

been permitted in a two-year timeframe, so I

mining finance executive was joined by Mal

think this is one of the best jurisdictions to be

Karwowska in April, both of whom arrived

operating in.”

from mining-focused private equity firm Pacific Road Capital Management.

Ken Engquist to lead the technical and operational teams as the company looks to drive its two flagship projects forward.

Following these managerial changes, Wilton believes that First Mining has the right team set up to execute its vision in Ontario.

“I think we are blessed with these projects being where they are,” Wilton tells RGN on a recent business trip to London. “Four of our projects are in the same region of Northwest Ontario, towards the Manitoba border where there is an established resource economy.”

Mining, forestry and to a lesser extent power generation are the big drivers of industry in this part of the world, and this means that local permit authorities and regulators have a strong understanding of the mining sector going back several decades.

Local regulators are highly cooperative and supportive of mineral development projects according to Wilton, and this is evidenced by Ontario’s recent track record of approving permits for three large-scale open pit gold mines in the last three years.

“There was the Côté project by IAMGOLD and Sumitomo, the Hard Rock project by Centerra

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MINING | First Mining Gold

Resource Global Network

The Springpole Gold Project Located 110 km Northeast of the town of

that we could take recoveries from around the 80% level to the low 90s through flotation and fine grinding.�

Red Lake in Ontario, the Springpole project is one of the largest undeveloped open pit gold

The outcome of improving the recoveries rate

deposits in Canada, capable of producing

by a margin of 10% is a noteworthy drop in

over 400,000 ounces per year at the peak of

the costs per ounce of the project, with direct

its operation.

operating cash costs estimated at $575 per ounce of gold equivalent, and all-in sustaining

First Mining completed an updated

costs (AISC) valued at $611 per ounce of gold

preliminary economic assessment (PEA)

equivalent.

for the project in October this year, which indicated a 12-year mine life with a post-tax

Although initial capital costs went up to $809

net present value of US$841 million and an

million, the overall message that Wilton

internal rate of return of 22%.

took from the PEA is that Springpole is a big enough gold project to be meaningful for any

“The real goal of that study was to update

mining company in the world during the core

the economics and the production profile

part of its mine life.

to incorporate some metallurgical work we had done in 2018-19. The test work indicated

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Are you generating enough value to attract investment? #AskAusencoHow

www.ausenco.com

Resource Global Network

Fracflow Consultants Inc. Environmental, Hydrogeological and Geotechnical Engineering Consultants

St. John’s, NL / Dartmouth, NS Tel: (709) 739-7270 / (902) 468-1317 Email: ffc_nf@nfld.net www.fracflow.com

Packer Test

Fracflow provides a full range of hydrogeological, geotechnical and environmental baseline services to support open pit and underground mine design and water management, especially in fractured bedrock. Collected physical hydrogeological, fracture geometry and aqueous geochemical data are integrated into 3D flow and transport models for prediction of water quality, pit inflows, dewatering design, ecological impacts and pit lake chemistry, on mine closure.

3D Numerical Modeling

Fracture Logging

Piper Plot

“We’re happy with the PEA, but there still is a

While detractors of the project might argue

lot of work to do. Last week we announced

that approval could be difficult to secure,

that we will be taking the project through to

owing to the deposit’s position under the

the pre-feasibility stage (PFS) and we need

shallow bay of a lake, First Mining has

to consider our plan for initial capital costs,

collated seven years of environmental

and we’ll look into our production profile and

baseline work that suggests otherwise.

tailings waste management. Overall, the PEA gave us a good sense of what we need to do

This wealth of information is currently being

in the PFS.”

incorporated into a terms of reference (ToR) document ahead of submission to the

Alongside the technical advancement of the

Ontario environmental ministry by the end

Springpole project, First Mining is progressing

of the year. The ToR will effectively form

along the permitting timeline, which is a

the table of contents for the subsequent

lengthy process to undertake in Ontario, but

environmental impact assessment (EIS)

one that is ultimately reliable once all the

document.

required documents are submitted to the authorities.

Throughout the next 12 months, First Mining will maintain close consultation with key indigenous groups regarding the content

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MINING | First Mining Gold of the EIS, ahead of a formal submission of

important vote of confidence from what I

the document by the end of 2020. At around

think is one of the best engineering groups in

the same time, the company hopes to have

the world for a gold project of this size.”

completed the PFS for Springpole.

The Goldlund Project

“Then the project goes through the

First Mining’s secondary focus in Ontario

environmental assessment process which in

is the Goldlund gold project, located

Ontario typically takes between 18 months

approximately 60 km Northeast of the town

and two years. This timeline would keep us

of Dryden. The property has a strike length

on track for a construction decision in 2023

of over 50 km and has shown strong district

and financing around the same time,” Wilton

scale potential.

projects.

The current resource estimate stands at Global engineering firm Ausenco will

809,200 ounces of gold at 1.96 g/t in the

complete the Springpole PFS, in an

Indicated resource category and 876,954

interesting deal that will see First Mining pay

ounces of gold at 1.49 g/t in the Inferred

the Australian company in shares for their

resource category, although there is

engineering work.

significant exploration potential and several targets identified across the property.

“It’s an interesting model for alignment with our technical partners, and I think it’s an

“We probably under-sell the fact that the

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MINING | First Mining Gold Goldlund deposit as it sits right now is one of the highest- grade open pit projects in Canada. You’re talking about 800,000 ounces of Indicated resources at 2 g/t and approximately 870,000 ounces of Inferred resources at 1.5 g/t that falls into an open pit and we think there is a lot of room to grow that just in the Goldlund Main Zone.”

In addition to the high-grade mineralisation present at Goldlund, the project is blessed with excellent infrastructural links. The property is located next to a provincial highway with existing power lines 20 km away.

However, the real value driver at the Goldlund project is its district scale potential.

This outlook has been evidenced by a string of exciting results from regional prospects, most notably at the Miller target over the last two years.

Miller is located approximately 10 km Northeast and along strike of the current resource area and has been the primary focus of the company’s 2019 drill programme at Goldlund, with visible gold often observed.

The prospect is not currently included in the resource estimate.

“I think Miller is a real example of one of a number of similar type targets that we can test along the big strike of this property,” says Wilton. “Ultimately, we think Goldlund could become a large gold district feeding one central mill.”

“We probably under-sell the that the Goldlund deposit is of the highest grade open pi projects in Canada right now we think there is a lot of roo grow that just in the Main Z Dan Wilton, CEO and directo First Mining Gold

e fact s one it w and om to Zone� or

Resource Global Network

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MINING | First Mining Gold

First Mining has maintained a strong

Having demonstrated the district scale

relationship with its drilling partner from

potential of the project via successful drill

the Springpole project and has retained

programmes at several deposits, First Mining

Winnipeg-based Rodren Drilling’s excellent

is returning to the Goldlund Main Zone for

services for the Goldlund campaigns.

Resource Global Network expansion and infill drilling, which will contribute towards a better understanding of the resource estimate there.

“At some point soon, we will need to wrap some economics around this project and take it through a PEA, which shouldn’t be difficult or take long. We have an opportunity here to demonstrate the robust nature of the project, especially with the grade and strip ratio we think we can achieve in an open pit.”

A big year ahead First Mining is on the brink of a massive year in the development of its headline gold assets in Ontario, with the submission of the EIS and PFS for Springpole earmarked for 2020, while Goldlund is also set to receive more substantial economic assessment next year.

Hitting these milestones will serve to significantly de-risk the projects and demonstrate to the market that quantifiable progress is being made, which should pave the way for greater recognition of this unique opportunity to invest in world-class gold assets in a trusted jurisdiction.

TSX:FF OTCQX:FFMGF FSE:FMG

a j

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MINING | Adventus Mining

ADVE MIN

The Ecuadoria

ENTUS NING

an opportunity

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MINING | Adventus Mining

Ecuador is a relatively small South American country that is rich in natural resources but remains underexplored, despite being located between and sharing geology with the longestablished mining jurisdictions of Peru and Colombia. After the discovery of the world-class Fruta del Norte gold deposit in 2006, the broader international mining community opened its eyes to the untapped geological potential of Ecuador, which is now typified by strong government support for mining activity and modern infrastructure. In particular, it took Lundin Gold’s entry into Ecuador in 2014 with the acquisition of the Fruta del Norte Project from Kinross Gold to kickstart the influx of several major mining houses including BHP, Codelco, Newcrest Mining, Anglo American, Solgold and Fortescue Metals Group.

TSXV-listed Adventus Mining entered Ecuador two years ago after scouring the world for jurisdictions to build a significant base metals company within. The company’s president, CEO and director Christian Kargl-Simard tells RGN that the decision to pivot the company to Ecuador was based on the very strong geological potential of the country.

“We believe it is one of the last frontiers for copper. Located in the Andean Belt, we know about the geological potential to the North in Colombia and Southwards where Peru and Chile are two of the world’s largest copper producers. These geological features extend

Resource Global Network

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MINING | Adventus Mining into Ecuador and it hasn’t been properly explored to date.”

A new era for Ecuadorian mining While there remains plenty of unexplored potential in Ecuador, this year has seen the country evolve into an industrial scale metals producer after the opening of two largescale mines – the Mirador open-pit coppergold project in July, and the Fruta del Norte underground gold mine – nearly 15 years after its discovery.

The Mirador project is a multi-million ounce copper-gold-silver resource operated by a subsidiary of the Chinese consortium CRCCTongguan, while Canada’s Lundin Gold has spent over US$1 billion developing the gold-silver Fruta del Norte deposit over the last five years. Lundin produced first gold in November after receiving the final two permits required to move it into production.

“Ecuador is a mining country with a lot of international funding that continues to help us grow our portfolio of three copper-gold projects. We believe our most advanced project could be the next mine built in Ecuador after these two big ones have reached production.”

Kargl-Simard, a professional metallurgical engineer and former investment banker, first visited Ecuador about 10 years ago after the initial discovery of the El Domo volcanogenic massive sulphide (VMS) deposit in central-West Ecuador. Today, El Domo is

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MINING | Adventus Mining

the most advanced deposit within Adventus’

“It started with the Curipamba earn-in

21,500-hectare Curipamba Project.

agreement, but we have also put together what we call the ‘Exploration Alliance’, which

On this initial visit to the deposit, he met one

is a joint venture that sees us work together

of Ecuador’s most influential geologists Fredy

to find attractive projects in Ecuador,” says

Salazar, who had worked with Newmont

Kargl-Simard.

Mining in the 1990s and now leads an exploration team that has helped discover

Throughout the last two years, Adventus has

around 30 million ounces (Moz) of gold in

reviewed close to 20 exploration projects in

Ecuador over the last 30 years.

the country and it has signed deals on two with Salazar – the Pijili & Santiago projects.

Salazar went on to form Salazar Resources companies listed on the TSXV – in 2007,

Broad in-country expertise

largely keeping the same exploration team

More recently, Adventus has deepened

together that served Newmont so well in

its ties in Ecuador by bringing in one of

the 90s. And so, when Kargl-Simard came

the country’s largest and most respected

knocking on Salazar’s door in 2017, Adventus

private organisations – the Nobis Group –

was able to strike an earn-in agreement with

as a strategic investor. Nobis has business

- one of the first Ecuador-focused mining

Salazar Resources for the Curipamba project.

ResourceGlobal GlobalNetwork Network 163 Resource

interests across the agricultural, real estate,

Curipamba is Adventus’ most advanced

industrial, commercial, construction and

asset, with early indications pointing to

tourism sectors of Ecuador.

a high grade deposit at El Domo close to surface and mineable both by open pit or

“Nobis brings to the table a long history of

underground methods to produce saleable

success and partnerships with government

copper, zinc & lead concentrates, with

institutions that continue to support project

strong precious metals credits

investments which further the economic development of Ecuador.

The preliminary economic assessment (PEA) of May 2019 brought together new infill

“They also have an organisation called the

drilling data from the last 12 months, along

Nobis Foundation which is significantly

with new metallurgical test work from this

augmenting our community development

year and various infrastructure trade-off

activities around our projects. In addition,

studies.

Nobis’ trust in us continues to attract other Ecuadorian and Latin American high net

The result of this new data compilation was

worth investors into Adventus.”

an improved post-tax NPV of $288 million (at 8% discount rate) for the El Domo deposit,

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MINING | Adventus Mining

Resource Global Network a 40% post-tax IRR and a capital cost of $165 million for a 1,750 tonnes per day operation over a 15-year mine life.

“We think this is a really good base for us to grow on, and there is significant optimisation ahead of us on capital and operating costs. In fact, this may be a project where the capital cost decreases as we move from PEA to feasibility study,” suggests the Adventus chief.

Introducing geophysics This year, the company flew an airborne

“Ecuador is a mining country with a lot of international funding that continues to help us grow our portfolio of three copper-gold projects” Christian Kargl-Simard, president, CEO and director Adventus Mining

geophysical survey over the entire Curipamba district for the first time and came out with

began in Q4 of this year, which adds to the

14 new geophysical targets, some of which

over 10 years of baseline environmental work

are deemed very large targets that could be

managed by Salazar since discovery.

porphyry systems.

Adventus plans to start the full feasibility “The goal is to demonstrate that El Domo is

study in H2 next year and complete it by the

not a one resource wonder and that there

summer of 2021. With three roads already

are multiple deposits within the district, such

to the El Domo deposit, there would then be

as additional VMS, epithermal gold, and/

about a one-year construction period, so the

or porphyry. If this is the case, our project

company is targeting first production in 2023.

base and development scale could grow substantially.”

“In the meantime, If we discover something of a similar size to El Domo, or even a porphyry,

In 2020, Adventus aims to turn these targets

that could change the scope of the project

into discoveries while advancing the El Domo

and postpone engineering and construction

deposit at the same time. The key hurdles to

beyond 2023. That’s why we are prioritising

overcome next year include the completion

the exploration work right now, just to make

and submission of the environmental impact

sure there’s no low hanging fruit that can be

assessment (EIA) for El Domo.

discovered after a drill programme.”

The EIA requires up to a year of baseline

Adventus also started geophysics

work and data collection relating to water,

programmes late last year at Pijili & Santiago

fauna, archaeology and other environmental

– the standout projects from the first

considerations. This detailed programme

collection of properties reviewed by the

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MINING | Adventus Mining

Exploration Alliance between Adventus (80%)

“Geologically the area has very strong

and Salazar Resources (20%).

endowment with historical drill holes of over 300 metres at 0.5% copper equivalent

From those geophysical programmes,

from surface, with grades picking up to 0.8%

Adventus was able to highlight 20 potential

copper equivalent at the bottom of the hole.

copper-gold porphyry targets and has been

This substantiates that it’s a mineralised

consolidating groundwork on the best

system and the recent airborne results

targets throughout 2019 for drilling, where

suggest it can be a very big system.

the eventual goal is to announce one or two significant copper-gold porphyry discoveries.

In good company

“Likewise, the Pijili project is adjacent to Southern Copper’s billion tonne copper porphyry project. There is a large system

In particular, Santiago has the potential

there, but we think it could be much larger.

to be a +1 billion tonnes copper porphyry

We’ve been doing a lot of groundwork there

discovery according to Kargl-Simard. This

in preparation for drilling, such as building

view is strengthened by the presence of

a local team and camp facilities. We’ve also

Newcrest and Solgold at properties close to

received water permits on the projects so are

the Santiago project.

Resource Global Network

very excited to be drilling these projects in

firm’s decision looks like a masterstroke. The

2020. We hope our efforts will lead to major

true geological potential of Ecuador is finally

new discoveries.”

being realised, and Adventus is enjoying first mover advantage in one of the world’s last

When Adventus went public in February

great copper frontiers.

2017, it had $11 million in the bank and a licence to go anywhere in the world. The company looked at 240 projects across 25 countries and eventually picked Ecuador.

Now, with so many major mining houses ramping up their investment into the emerging exploration sector in Ecuador, the

TSXV:ADZN OTCQX:ADVZF

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APPOINTMENTS & EVENTS

APPOINTMENTS Petra Diamonds picks Peter Hill as new chairman

Peter Hill has been appointed chairman and non-executive director of Petra Diamonds, succeeding the company’s founder Adonis Pouroulis.

The experienced mining engineer has previously held roles at several global mining companies including Anglo American Corp, Rio Tinto and Consolidated Gold Fields.

“We are delighted that Peter will be joining Petra Diamonds,” said the outgoing Pouroulis. “I am personally delighted that someone of Peter’s calibre and experience will be succeeding me.”

Stuart Gale appointed CFO of Resolute Mining Africa-focused gold miner Resolute Mining has appointed Stuart Gale as chief financial officer with effect from January 20, 2020.

Joining from Fortescue Metals Group, Gale will replace Lee-Anne de Bruin, who will be stepping down after three years in the role since 2017.

“Stuart is an experienced CFO who joins Resolute with exceptional experience in successful financial leadership and positive transformation in the mining industry,” said Resolute CEO John Welborn.

Stratkraft announces new VP for European wind and solar Norway’s renewable energy operator Statkraft has confirmed Birgitte Ringstad Vartdal will join the firm’s corporate management team as new vice president for European wind and solar.

Ringstad Vartdal arrives from a chief executive position at Norwegian shipping firm Golden Ocean, following former vice president Steinar Bysveen’s resignation.

“I am very much looking forward to embarking on this task and contribute to this growth together with the rest of the organisation,” said Ringstad Vartdal.

Centamin appoints CFO as interim CEO

Egypt-focused gold miner Centamin has shuffled its leadership pack in appointing its current CFO Ross Jerrard as interim CEO. In October, Centamin revealed that Andrew Pardey would be stepping down from the CEO role, and more recently announced that Jerrard would take up the role while juggling his CFO responsibilities.

“It is a pleasure to appoint Ross as the interim CEO, giving the company clear leadership during this period of transition,” said chairman Josef ElRaghy

Resource Global Network 173

EVENTS

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

Investing in African Mining Indaba February 03-06 Cape Town South Africa

Energy Storage Summit February 25-26 London UK

Sub Saharan African International Petroleum Exhibition & Conference (SAIPEC) February 25-27 Lagos Nigeria PDAC 2020 March 01-04 Toronto Canada

Future of Mining Australia 2020 March 23-24 Sydney Australia Want to promote your resources event?

Email the editor at editorial@resourceglobalnetwork.com

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