RGN Vol 7 Iss 1

RESOURCE Volume 7, Issue 1

GLOBAL NETWORK

Mining, renewable energy and oil & gas worldwide

MINING INDABA 2

0

2

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Optimising growth and investment in the digitised mining economy

ON-SITE AT MINING INDABA

MINING | Brookfield Multiplex

WELCOME

Following up on the landmark 25th annual Investing in African Mining Indaba of 2019 was always going to be a difficult task for the team running the world’s largest mining investment conference. The 2020 event would also be the first Mining Indaba under the Hyve Group following the recent rebrand from ITE Group.

However, despite a year of internal changes the Mining Indaba leaned on its unique perspective of African mining to once again bring together the industry in 2020 for an event that promised to ‘optimise growth and investment in the digitised mining economy’.

Approximately 7,000 delegates descended on Cape Town for the 26th annual Mining Indaba, which provided four content-bursting days and the opportunity for attendees to learn, network and connect with investors in the South African sunshine.

As an exclusive media partner of the Mining Indaba, RGN attended the 2020 conference and provided in-depth coverage throughout the week across our social media platforms. You can read our Mining Indaba review on page 14 to get the full lowdown on what went down at the event.

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 Contributors Michael Cronwright Donald Gibson Alexandre Raymakers Thomas Hillig

In keeping with the Mining Indaba’s focus on driving investment into African mining, this issue features no less than 10 listed mining firms with various projects across sub-Saharan Africa, many of which were represented at the 2020 Mining Indaba.

These include Fortune Mojapelo’s vanadium giant Bushveld Minerals, 2020 junior miner Investment Battlefield runner up Arc Minerals and renowned lithium developer Prospect Resources. You can explore their stories in the following pages, along with many more exciting African mining projects.

Once again, the RGN team would like to extend hearty thanks to the Mining Indaba team for putting on another content-driven show that continues to provide an unrivalled environment for deal-making and investment in the African mining sector.

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

ROXGOLD

NEWS 8 Global resources news Our selection of mining, oil & gas and renewable energy stories from the last year

RGN ON-SITE AT 2020 MINING INDABA 14 Mining Indaba 2020 review The world’s largest mining investment conference returns to Cape Town

ASSOCIATIONS 32 World Gold Council The world’s authority on gold looks ahead in its Gold Outlook 2020 report

COLUMNS 44 Michael Cronwright & Donald Gibson (CSA Global) CSA Group consultants reveal the trends shaping future exploration in African mining 52 Alexandre Raymakers (Verisk Maplecroft) An overview of the growing terrorism threat for miners in West Africa 60 Thomas Hillig (THEnergy) THEnergy-Triogen report analyses how microgrids can be optimised by efficiency improvements of diesel gensets

BUSHVELD MINERALS

AVZ MINERALS

CONTENTS AFRICAN MINING 68 Roxgold West Africa-focused gold firm builds on a transformative 2019 78 Bushveld Minerals At the forefront of the burgeoning vanadium market 88 AVZ Minerals A monstrous lithium project in the DRC 100 Arc Minerals An exciting copper play in the heart of Zambia’s Copperbelt 112 Hummingbird Resources Fully traceable gold supply from drill bit to jeweller 128 Prospect Resources Africa’s most advanced lithium project 140 Teranga Gold Creating value through responsible mining in West Africa 150 African Gold Group The next platform for growth in West Africa 162 Buffalo Coal Breathing new life into the Aviemore coal mine 174 Alphamin Resources A remarkable five-year journey to conflict-free tin production in the DRC

APPOINTMENTS & EVENTS 176 Appointments Notable appointments in the resources industry from the past month 177 Events Our pick of the top forthcoming mining, oil & gas and renewable energy events happening around the world in the months to come

ARC MINERALS

HUMMINGBIRD RESOURCES

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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

ENDEAVOUR MINING ABANDONS $1.9 BILLION CENTAMIN TAKEOVER BID Canada’s Endeavour Mining has dropped its plan to acquire Egypt-focused Centamin for US$1.9 billion as it did not get enough information on the latter’s assets during an assessment.

Centamin’s sole operating asset is the Sukari Gold Mine, located in the Eastern Desert approximately 700 km from Cairo, although the firm is also advancing the Cleopatra project in Egypt and exploration projects in West Africa.

London and Toronto-listed Centamin rejected Endeavour’s takeover proposal in December on the premise that the bid failed to offer enough value to the company’s shareholders. Following this, Endeavour was given an extension to make a formal offer by January 14.

However, Endeavour CEO Sebastien de Montessus said: “The quality of information received during the accelerated due diligence process has been insufficient to allow us to be confident that proceeding with a firm offer would have been in the best interests of Endeavour shareholders.”

The CEO went on to say that Endeavour remain convinced of the strategic rationale of combining the two gold producers to create a diversified company with a high quality portfolio of African assets.

In January, Centamin announced a 51% rise in gold production at the Sukari minein the final quarter of 2019.

Resource Global Network 11

SOUTH AFRICA RECORDS LOWEST EVER MINING FATALITIES IN 2019 South Africa’s ministry of mines has announced that the industry recorded the lowest number of mine deaths on record in 2019, with 51 people killed compared to 81 in the previous year.

“The lowest recorded fatalities in 2019 at 51 shows that there’s a possibility of a fatalityfree mining industry and that’s what we are striving for,” said Minister of Mineral Resources and Energy Gwede Mantashe in comments posted on Twitter.

In a breakdown of the fatalities, the ministry said 19 people died in gold mines last year, 19 in platinum mines, seven in coal mines and there were six fatalities in other types of mine.

The news is a rare bright spot in South Africa’s beleaguered mining industry, which is facing spiralling costs, labour unrest and power insecurity stemming from the Eskom supply crisis.

Following the fatalities update, South Africa’s mining industry body reaffirmed the industry’s commitment to Zero Harm – a forum created to put forward measures to holistically address health and safety.

“While the industry’s safety and health performance during 2019 is a significant progress on what we have been able to achieve in the past, we recognise that our journey is far from over,” said Minerals Council South Africa CEO Roger Baxter.

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NEWS

RENEWABLE ENERGY CAPACITY MUST DOUBLE TO ACHIEVE CLIMATE SAFETY: IRENA The International Renewable Energy Agency (IRENA) has posited that the share of renewables in global power should more than double by 2030 to advance the global energy transformation, achieve sustainable development goals and attain climate safety.

Renewable energy currently supplies 26% of global power, but IRENA’s latest data analysis indicates that this figure should be increased to 57% by the end of the decade.

IRENA’s forecast was contained in a new booklet – 10 Years: Progress to Action – published for the 10th annual Assembly of IRENA, held in Abu Dhabi in January. The booklet charts recent global advances and outlines the measures still needed to scale up renewables.

The agency’s data shows that annual renewable energy investment needs to double from around US$330 billion today to close to $750 billion to deploy renewable energy at the speed required.

“We have entered the decade of renewable energy action, a period in which the energy system will transform at unparalleled speed,” said IRENA director-general Francesco La Camera.

“To ensure this happens, we must urgently address the need for stronger enabling policies and a significant increase in investment over the next 10 years.

Renewables hold the key to sustainable development and should be central to energy and economic planning all over the world.”

Resource Global Network 13

OIL PRICES DROP ON FEARS OF CORONAVIRUS SLOWING DEMAND Oil prices hit three-month lows on January 27th as the death toll from China’s coronavirus reached 81, while several major Chinese cities remained in lockdown to contain the spread of the virus.

RBC Capital Markets said in a report that the lockdown of Chinese cities and cancelled flights threatens one of the steadiest growth areas of global oil demand, with jet fuel accounting for about 15% of demand growth in China.

However, the financial services advisory said fears over weakening jet fuel consumption is currently confined to China despite cases of coronavirus spreading to the US, Europe and Australia.

“This thing is still in the process of rearing its ugly head and that’s why oil is taking this so hard because this could really turn into an acute drop in demand at least for a time,” said John Kilduff, partner at Again Capital LLC in New York.

On January 26th, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman said that OPEC+ would step in to boost oil prices if needed, but affirmed his confidence in the ability of Chinese authorities to contain the new virus.

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MINING | Mining Indaba 2020 review

MINING INDABA 2020 REVIEW

THE WORLD’S LARGEST MINING INVESTMENT CONFERENCE RETURNS TO CAPE TOWN WRITTEN BY JACOB AMBROSE WILLSON

Resource Global Network

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All images/videos credited to Mining Indaba

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MINING | Mining Indaba 2020 review

There aren’t many better places in the world to visit than Cape Town in early February, and there is no mining investment conference in the world larger than the Investing in African Mining Indaba. These are the two key reasons why the Indaba is so revered by the global mining community, from investors through to junior, mid-cap and major companies, governmental ministers and even African heads of state. The 26th annual Indaba took place from February 3-6 2020 and once again delivered a packed agenda over four content-bursting days and a unique platform for a record 7,000 delegates to learn, network and do business in the warm clime of South Africa’s summer.

The 2020 agenda While the Indaba’s core focus continues to be on driving investment into African mining, the designated theme for the 2020 iteration was ‘optimising growth and investment in the digitised mining economy’.

In its first full year under owners Hyve Group, the event organisers sought to provide a comprehensive insight into the forces shaping the ever-evolving technological landscape of the global mining sector, and this was reflected in the expansion of the popular Mining 2050 theme.

Resource Global Network

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MINING | Mining Indaba 2020 review

Prime Minister Ilunga meets Pre

esident Bio

Resource Global Network After receiving great feedback from the 2019 Indaba, Mining 2050 was extended to cover two full days of content which tackled important topics such as artificial intelligence, big data, industry 4.0 and mine digitalisation and automation.

Sustainable development and battery metals also returned to the agenda in 2020 with plenty of engaging presentations and thought-provoking panels taking place for both themes on day two, while new content landed on day four in the form of the General Counsel Forum – a partnership with Africa Legal that considered regional and global trends facing mining lawyers in Africa.

Governmental presence Over the years, the Indaba has provided a strong bridge between mining companies investing in African projects and government representatives on the continent, and this continued in 2020 with 40 African countries represented at the event.

This high profile governmental participation included 38 ministers and two heads of state - Sierra Leone President Julius Maada Wonie Bio and Democratic Republic of Congo (DRC) Prime Minister Sylvestre Ilunga Ilunkamba.

President Bio was first to give an address to a packed audience at the Main Stage on the morning of day one. Popularly referred to as the ‘Father of Democracy’ in Sierra Leone, Bio highlighted the West African nation’s increasing attractiveness as a mining investment destination following fiscal

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MINING | Mining Indaba 2020 review

Olympus & Innov-X Africa booth

Resource Global Network

reforms intended to accelerate economic

provided an open platform for African mining

growth.

ministers to connect with industry leaders, share best practices and strengthen public-

Shortly after Bio’s address, DRC Prime

private relations in the African resources

Minister Ilunga delivered his own speech

sector.

calling on all stakeholders to respect the changes made to the country’s mining code

Though the Indaba was unable to coax

back in 2018, as the resource nationalism

South African President Cyril Ramaphosa

debate rumbles on across Africa.

back to the event after his rare appearance at the 25th anniversary Indaba last year,

The Intergovernmental Summit on day three

Mineral Resources and Energy Minister

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MINING | Mining Indaba 2020 review

South Africa’s Mineral Resources and Energy Minister Gwede Mantashe Gwede Mantashe returned to act as the

“That is a security measure, as Eskom is

government’s mouthpiece to the assembled

grappling with all the crises and problems,

African mining industry.

we must have a fail-safe option of delivering energy,” said Mantashe.

In his South Africa Welcome Address on day one, Minister Mantashe cut straight to

The minister admitted that mining

the heart of the country’s ongoing travails

production in South Africa has suffered

in the mining sector and announced the

as a result of planned power cuts or ‘load-

government’s ambition to start a power

shedding’ as Eskom have come to call it.

generating company outside of crumbling

Mantashe subsequently announced that the

state utility Eskom.

government would allow mining companies

Resource Global Network

Investment Battlefield to generate energy for self-use without a

Now in its third year, the Investment

licence.

Battlefield affords junior miners with a

The Investment Battlefield

market cap under $50 million the chance to go head-to-head in a series of presentations throughout the week, in front of an audience

One of the Indaba’s most popular offerings

of potential investors and a panel of expert

– the Investment Battlefield – returned with

judges.

an extended format in 2020 and a custom built boxing ring, complete with gloves and

The qualifying round of the 2020 Investment

inspirational quotes adorning the walls of the

Battlefield placed entrants intro three

arena.

categories - battery metals, precious metals

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MINING | Mining Indaba 2020 review

RGN team at Imdex networking event

Resource Global Network

RGN’s Simon Curran with South Africa’s rugby captain Siya Kolisi

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MINING | Mining Indaba 2020 review

Resource Global Network and bulk and base metals – and within each commodity the companies were split into early stage exploration and advanced exploration/development.

After winners were selected from each category, the competition progressed to the semi-finals stage on day three, from which four finalists were announced by the judges panel. These companies were EcoGraf, Arc Minerals, RosCan Gold and Tietto Minerals.

The four juniors would do battle for one final time in the Investment Battlefield ring, and after much deliberation the panel of judges deemed ASX-listed gold explorer Tietto Minerals the winner of the 2020 Indaba Investment Battlefield.

After successfully presenting Tietto’s high grade Abujar Gold Project in Côte d’Ivoire, Tietto’s executive director Mark Strizek was handed the 2020 Investment Battlefield trophy, ensuring that the company will return to next year’s event with a complementary exhibition stand.

Following the win, Strizek acknowledged the strength of the competition and said it would give Tietto a chance to raise their profile and gain new investors and shareholders. Tietto was pushed all the way by runner-up Arc Minerals.

London-listed Arc will receive two free passes to the 2021 Indaba for finishing second in the fiercely fought competition. Arc’s finance

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MINING | Mining Indaba 2020 review

Mining Indaba after hours party

Resource Global Network

Investment Battlefield winner Mark Strizek, Tietto Minerals

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MINING | Mining Indaba 2020 review

director Rémy Welschinger delivered a series

topics covered by the programme included

of convincing presentations on the company’s gender diversity and shared value in the large prospective copper package in Zambia.

Young Leaders Programme

mining sector.

The Young Leaders Programme provided a symbolic book end to the 2020 Indaba,

The final day of the 2020 Indaba was all

which focused on optimising growth and

about engaging and developing the next

investment in the digitised mining economy.

generation of mining professionals with the

After a content-packed week and plenty of

return of the Young Leaders Programme in

deal-making behind the scenes, the curtain

partnership with global advisory Brunswick.

closed on the Indaba for another year.

Over 100 students attended the programme

Speaking to RGN after the event, Indaba’s

on day four to discuss what the mining

head of content Tom Quinn said: “Over the

industry can do to bridge the yawning

past couple of editions of Indaba, the goal

generational gap between the current and

has been to raise the bar for content.

next generations of mining leaders. Other

Resource Global Network

Young Leaders Day “This year’s premium content, ranging from

and sustainable development of battery

big picture Main Stage presentations to

metals at the forefront of the agenda.”

Sustainable Development Day, Battery Metals Day, the Intergovernmental Summit, Young

Everyone at RGN would like to say thank

Leaders programme and our new General

you and congratulations to the Indaba for

Counsel Forum, truly reflects the world-class

another fantastic show and we look forward

audience that join us at Indaba each year.

to the 2021 event, which promises to continue improving the overall experience

“We want to remain bold and apply fresh

for every attendee while offering new and

thinking to all that we do – so this year we’ve

engaging content.

had such topics as ESG investing, climate change, artisanal mining, women in mining

a j

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GOLD | World Gold Council

WORLD GOL

The world’s authority on gold looks ah

Resource Global Network

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LD COUNCIL

head in its Gold Outlook 2020 report

All Imagery Copyright World Gold Council

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GOLD | World Gold Council

One of the standout performers in the global investment market in 2019 was gold, which enjoyed its best year in close to a decade to finish 18.4% higher (in US dollar terms) than it did in 2018.

Changing dynamics in the global geopolitical and economic spheres pushed investor gold demand higher, and these conditions are likely to remain generally supportive of gold in 2020, according to the World Gold Council. The global authority on gold published its Gold Outlook 2020 report in mid-January, which focuses on the interplay between market risk and economic growth that will drive gold demand this year. The report also introduced the council’s new web-based quantitative tool for gold investors – Qaurum. RGN’s editor finds out more in an interview with the Council’s director of investment research, Juan Carlos Artigas.

Jacob Ambrose Willson: Before we get into the Gold Outlook 2020 report, I’d like to ask you about the performance of gold in 2019. What were the key reasons behind gold enjoying its best year since 2010?

Juan Carlos Artigas: There are two major factors that are relevant in explaining gold in 2019. Firstly, the level of financial market uncertainty that investors faced. There was a steady stream of risks popping up last year. It was a collection of various potential concerns that investors had across the world.

These concerns related to trade, geopolitics,

Resource Global Network

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GOLD | World Gold Council

Resource Global Network valuation of the stock market and many other Monetary policy will remain loose. We will not things that kept investors on their toes.

necessarily see central banks cutting rates at the same rate they did last year. Some of

In addition to that, and in part in response

the statements from the Fed and other banks

to the uncertain environment, central banks

is that they are monitoring the situation,

around the world made monetary policy

but more likely than not (and this is a fairly

more flexible, either by reducing interest

consistent view across financial markets),

rates or expanding alternative tools to

interest rates are not likely to increase

monetary policy such as quantitative easing

any time soon and may even continue

or so-called quasi-quantitative measures.

to decrease. This provides an additional

All that reduced the opportunity costs of

level of support for gold, particularly as an

investing in gold as well as other asset

investment.

classes.

We do acknowledge in our outlook that, Of course, once the price of gold started

because of the price performance of gold

to rally that created a third ancillary factor

and the fact that price volatility may remain

which is momentum. When you start to

at the same heightened levels we saw last

see momentum playing in favour of gold,

year, some softness in consumer demand is

you will see more activity in the investment

expected, particularly in jewellery and retail

market, and that’s what happened in 2019.

in key markets like China and India. We saw

This was not only individual and institutional

that in the first three quarters last year and

investors but also central banks adding to

expect that trend to carry into 2020.

gold demand.

It is important to note that India and China JAW: To what extent are we going to see a

have been instituting structural changes to

continuation this year of the trends that

their economies with a view to strengthening

drove gold up in 2019?

local ties and making them less reliant on trade agreements with the West. That should

JCA: We flagged in the Gold Outlook 2020

be more supportive of gold in the long

report our belief that market uncertainty is

term, but in 2020, we may see some of this

not going away this year. It’s not going to be

softness playing on.

exactly the same dynamics as 2019, although some may continue. But as we can see from

JAW: The World Gold Council recently

the first month of the year, new concerns

released its new quantitative tool for gold

are materialising. Different risks are popping

investors – Qaurum. What is the main

up on different fronts and things we are

purpose of this tool?

supposed to have solved in 2019 seem more likely postponed than fully resolved, so risk and uncertainty isn’t going away.

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GOLD | World Gold Council

ResourceGlobal GlobalNetwork Network 39 Resource JCA: We built Qaurum for investors to

appropriately explained by the dynamics of

intuitively understand the interplay of

demand and supply. Demand and supply not

gold’s drivers and how that may impact

only in the sense of purely buying jewellery or

gold’s performance across different

gold-backed ETFs, but also what is happening

macroeconomic scenarios.

in the over-the-counter market.

We wanted to help investors understand

Once you have a full picture of the market

the drivers of gold appropriately and

and how this interacts with the supply side, in

understand how they interact, in part

particular mine supply and recycling, you can

because there is a dual nature to gold. It’s

historically very well explain the behaviour

not just an investment and an asset to utilise

of gold. Gold may not necessarily follow

in periods of risk or uncertainty, it’s also a

traditional gold valuation methods such

productive asset that is used in jewellery

as cash flow modelling because it doesn’t

and the production of electronics. There

have credit risk. But that doesn’t mean

is a dual nature to gold and it is important

that investors cannot value it. In fact, gold’s

for investors to understand that the

valuation is more intuitive because it goes

interaction between these two sides is key to

back to the principle of demand and supply

understanding gold’s long-term performance.

and market equilibrium. The GVF explores how you can utilise market equilibrium to

In the short term, market participants may

establish an appropriate framework to value

focus on gold as an investment with interest

gold.

rates or the dollar as guidance for short-term performance, but once you look at longer-

Qaurum is a web-based tool that utilises an

term performance over a year, five years

econometric model based on the GVF, where

or 20 years, you start to understand the

investors can understand the impact of

interaction between these two sides, which is

different drivers of gold and the performance

key to unlocking gold’s potential.

of gold in three easy steps.

JAW: Can you take me through the

First, users can select a pre-populated

mechanics of Qaurum, in terms of how it

macroeconomic environment developed

will be used by gold investors?

by the think tank Oxford Economics. They publish quarterly different macroeconomic

JCA: Qaurum is powered by our Gold

scenarios based on their models and their

Valuation Framework (GVF). The GVF is

interactions and understanding of investor

a methodology we developed that has

concerns. We take those inputs and allow

been academically validated. It’s based on

investors to select the one they feel more

the principle that the gold price and gold

appropriately reflects their own views.

performance reflect market equilibrium.

In other words, the price of gold can be

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GOLD | World Gold Council Next, users can view how those scenarios may influence demand and supply for gold.

The third step is to calculate the implied performance or change in the price of gold required to ensure that the market is in equilibrium.

The additional powerful feature in Qaurum is that we allow investors to customise their own scenario. Any scenario they see, they can modify if they have a slightly different perspective on some of the key variables driving gold. We bucketed these variables into four categories: 1) Economic expansion 2) Risk and certainty 3) Opportunity costs 4) Momentum.

Economic expansion is the positive link that economic growth has on the procyclical side of gold, in particular jewellery and technology. Risk and uncertainty and opportunity costs tend to influence more of the performance of gold in the context of investment, whether it is by individuals, institutions or central banks. Finally, momentum and trends can influence different aspects and behaviours in the market across various groups.

JAW: Finally, broadly speaking what will the World Gold Council be focusing on over the course of the year? Are there any specific areas or initiatives that will be examined in 2020?

JCA: We often look at the gold market from different perspectives and try to make sure that the market is as transparent and

World Gold Council director of investme research, Juan Carlos Artig

Resource Global Network accessible to investors. We tend to spend time thinking about how we can interact with the industry and various regulating bodies to see how the gold market can become stronger and more accessible.

There has been quite a lot of focus on ESG and climate change in recent years and World Gold Council has been active in this area across a number of fronts. In 2019, we released our Responsible Gold Mining Principles, and continue to focus on the relevance of ESG for investment. In addition, from the perspective of research, we want to make sure that investors properly understand the drivers of gold, how it behaves and why it behaves in the way it does, so that they can feel more comfortable to make strategic decisions on gold.

We also want to help investors not only understand gold in the absolute but how it compares and interacts with other asset classes. For example, gold compared to a broad commodity basket exposure and what may be better in terms of portfolio performance. We published a paper last year comparing the two, highlighting how gold may be a better strategic asset, even if investors still maintain more tactical exposures to broader commodities.

ent gas

aj r

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

TSX: TGZ OTCQX: TGCDF

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COLUMNS | Michael Cronwright and Donald Gibson

EMBRACING EXPL IS D

A look into the trends shaping future exploration budg

Resource Global Network

LORATION: HOW AFRICAN MINING DRIVING A SUSTAINABLE FUTURE

gets for African mining, by Michael Cronwright & Donald Gibson(CSA Group)

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COLUMNS||Ian Michael Thomson Cronwright and Donald Gibson 46 COLUMNS

The mining and exploration sector over the last few years been challenged by a combination of low and volatile commodity prices, poor returns to investors, numerous environmental disasters, negative sentiment around the environment and social governance and as a result struggled to attract and grow investment into the sector. The cannabis and cryptocurrency fad that attracted a lot of investors’ money throughout the last few years from the junior exploration and mining sector seems to have waned.

Money is slowly coming back into the sector with much growth in minerals related to the green economy/clean energy sector.

Conventional metals thriving

is not surprising considering the number of advanced exploration projects from the last peak on exploration almost a decade ago still looking for funding.

Higher precious metal prices, due to current global political tensions and uncertainty around the effect of global pandemics like the recent Coronavirus, are also set to attract investment into exploration for these metals this year.

Gold exploration in places like West Africa and Namibia are likely to benefit the most from the renewed investment into this sector. At the same time, Zimbabwe remains an attractive destination geologically, concerns around the politics are keeping many investors away, and this is the case for several countries in Africa.

Last year saw a contraction in exploration budgets with overall spend dropping 12% in Africa. Globally there has also been a contraction (albeit only 3%) with the most significant budgets going to Latin America and Australia. One positive, according to S&P Global Market Intelligence, is the increase in active exploration companies.

Despite this budget contraction, Tanzania, Namibia and Angola saw budget increases of >30%, with Angola’s doubling from US$18

However, gold and base metals continue to

million in 2018 to $36 million last year. This

attract the most funding and focused mainly

is most likely related to the huge interest

on mine site exploration and advanced

in diamond exploration, which, for the first

project studies, with greenfields projects

time since 2013, saw an increase of 44% from

capturing the smallest part of the pie. This

2018 to $85 million.

ResourceGlobal GlobalNetwork Network 47 Resource

MICHAEL CRONWRIGHT

DONALD GIBSON

Michael is a principal consultant – battery metals coordinator at CSA Global with 21 years’ experience in African geology and exploration across a variety of commodities and significant project management experience.

Donald has consulted widely for public, private and donor organisations across numerous sectors, with over 20 years’ experience in the mining sector.

He has a keen interest in the green energy sector and its impact on exploration and mining. Michael is a QP/CP in lithium, tin and columbotantalite and has a M.Sc. in Exploration Geology from Rhodes University with a dissertation reviewing the pegmatites in Northern Mozambique.

He started his career at the Council for Geoscience in 1999 where he was involved in World Bank mapping and geochemical sampling projects in Mozambique and Madagascar. In 2006 he moved into geological consulting and joined CSA Global in mid-2019.

He helps firms improve their strategic and operational performance across the minerals value chain by developing leadership and organisational capabilities on sustainability management, articulating the business value of sustainability, integrating sustainability within core business practices, and providing assurance on a wide variety of topics and management processes such as integrated and sustainability reporting.

Donald also supports firms (including industry and financial institutions) on mergers, acquisitions and divestitures involving both sell-side and buy-side due diligence, deal preparation and post-merger/acquisition integration.

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COLUMNS | Michael Cronwright and Donald Gibson

Next-gen minerals Although green energy minerals make up a small part of the global exploration budget, particularly in Africa, commodities like cobalt, rare earth elements (REE), tin, lithium, tantalum, graphite, nickel and vanadium have been in the spotlight the last couple of years. This is unlikely to change with the momentum behind the decarbonisation of the energy and transport sectors. The electric vehicle (EV) story is currently dominated by Chinese demand, but once India and the rest of the world start playing catch-up, things are bound to get interesting.

Supply deficits for palladium and rhodium used in catalytic converters are currently pushing prices higher, but fuel cells also require platinum and palladium. The large platinum producers based in South Africa and Zimbabwe are investing in the technology as are the large auto manufacturers like Toyota, Daimler and Hyundai. However, it remains to be seen how the supply-demand dynamics play out once EVs replace internal combustion engines (ICEs) and thus the need for catalytic convertors.

With about a third of the world’s electricity

Currently, the leading technologies driving

forecast to come from renewables by 2024

demand for these commodities are lithium-

(according to a recent BDO report), the

ion batteries, H-fuel cells, wind turbines, solar

shift away from reliance on hydrocarbons

(photovoltaic and concentrated solar) and

for energy generation, centralised energy

Vanadium Redox Flow Batteries (VRFB). These

generation and the ICE is well underway and

are likely to dominate the non-hydrocarbon

will drive demand for these commodities.

based renewable energy sector for the next

This is being bolstered by government

10-15 years.

policy changes and regulations to reduce CO2 emissions and the recognition by big

The recent drop in lithium and cobalt prices

business to achieve the same.

from the highs of 2018 have put a damper

ResourceGlobal GlobalNetwork Network 49 Resource The geopolitics around rare earth elements and China’s control of the market has benefited projects like Peak Resources’ Ngualla project (which includes their Teeside Rare Earth processing hub) in Tanzania, which is likely to be Africa’s first REE producer. Other REE projects also continue to attract interest.

OEMs vertically integrating A major impact on the lack of investment in the exploration and mining sector is that supply for commodities like lithium, cobalt and REE is unlikely to meet future demand and is forcing original equipment manufacturers (OEMs) to integrate their supply chains vertically. An added incentive is the need to improve ESG practices in order to earn or maintain their social licence to operate while still delivering value to investors.

This is being led by OEMS like BMW, BASF, Apple, VW, Intel and Tesla. Cobalt is an excellent example of this. ~70% of the world’s cobalt comes from the DRC, but this supply chain is tainted by child labour and on investor appetite for these projects, but

environmental issues.

little has changed in terms of the positive fundamental outlook for these commodities.

Approximately 20% of this production comes from artisanal mining activity. As a result,

However, this will negatively impact coal and

BMW and BASF have teamed up to clean

oil producer nations like Nigeria who have

up and source cobalt from artisanal mining

started funding exploration through the

rather than abandon the communities

Nationwide Integrated Mineral Exploration

that rely on the income for their survival.

Programme (NIMEP), intended to promote

Similarly, there are also talks between Tesla

non-oil minerals to reduce its reliance on oil.

and Glencore regarding cobalt supply from

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COLUMNS | Michael Cronwright and Donald Gibson

the DRC. Commodities like tin, tantalum

Merging industries

and tungsten sourced from the DRC and

In order to achieve this, we are seeing vertical

surrounding regions have similar issues.

integration and much cross-over between industries, with tech companies becoming

The pressure on companies to clean up

vehicle manufacturers (Tesla), mining

supply chains will continue to increase from

companies becoming energy producers

the public; with initiatives like IRMA (Initiative

(Bushveld Minerals using VRFB technology

for Responsible Mining Assurance) and the

through Bushveld Energy) and rare earth

London Metal Exchange (LME) requiring every miners becoming magnet manufacturers. Oil producer and brand to prove conformance

companies like Shell and BP are also getting

for any metal sold on the exchange,

involved and investing in renewables, storage

irrespective of where or how it is sourced by

and EV charging technology.Â

January 2022. Full compliance is required by 2023.

We are also likely to see mining companies going off grid and potentially becoming

With smaller exploration budgets, companies

energy suppliers to communities in remotes

need to ensure they have experienced

areas where mining takes place. Companies

technical teams and technical partners able

are also differentiating themselves with

to deliver maximum value for their spend,

propriety technologies, such as lithium

and able to navigate through the increasingly

explorer Lepidico, whose technologies can

complex ESG and reporting requirements.

deal with non-spodumene pegmatite sources

Similarly, mining companies are also under

like the lepidolite rich Rubicon-Helikon

increasing pressure to be more efficient and

Project in Namibia.

deliver value to their stakeholders while also ensuring they remain sustainable.

Resource Global Network

Project owners and investors need to

With OEMs getting closer to the rock face

remember the projects that will deliver

and the entire supply chain held accountable

value need to be high quality and low-cost.

for their actions, it can only bode well for

However, the factors that constituted a high-

exploration and mining. However, in the

quality project in the past do not necessarily

short term, it may be a bumpy ride as the

apply today in a world where ESG is

various role players get used to a new way of

important, and the geopolitics around energy

doing things.

shapes decisions around finance and project development.Â

While Africa has its challenges, it remains underexplored and underdeveloped. Those

The fact remains that with the global

countries with the right policies, explorers

population growing and nations

and miners with technical teams which

industrialising, the need for commodities will

operate sustainably and responsibly are

continue to grow. Changes in the way the

more likely to be successful and become

world generates and stores electricity and

pioneers in a greener sustainable mining and

travels are also afoot. As markets get used

exploration industry.

to the new normal and industries jockey for position, things are going to remain volatile for a while, and the boom-bust cycles and bubbles will continue.

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COLUMNS |Alexandre Raymakers

TERRORISM RISKS INTENSIFY

An overview of the growing terrorism th

Resource Global Network

FOR GOLD MINERS IN THE SAHEL

hreat for miners in West Africa, by Alexandre Raymakers (Verisk Maplecroft)

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COLUMNS||Alexandre Ian Thomson Raymakers 54 COLUMNS

Insecurity in the central Sahelian states of Burkina Faso, Mali and Niger is coming to a head. Gold mining assets in the three countries remain ripe targets for terrorist groups, keen to gain funds and generate propaganda through the kidnapping of expatriate staff.

Under the current trajectory, we predict the risk premium of extracting gold in the Burkina Faso has seen the greatest negative swing in Ve Sahel will severely diminish the benefits of low operating Mali, which remains at the heart of the costs. The risks to physical current security predicament, is ranked 6th highest globally, sitting between Syria (5th) security of personnel and and Iraq (7th). mine sites are well known, but the proliferating conflict Multifaceted security equally raises numerous challenges are amplifying reputational risks for operational risks The conflict in the central Sahel is complex companies operating in and involves multiple actors with varying region. motivations. However, three entities are at

Burkina Faso, Mali and Niger have all

the centre of the conflict: The Group for the

witnessed deteriorating scores in Verisk

Support of Islam and Muslims (JNIM), Ansarul

Maplecroft’s Terrorism Risk Index since 2017

Islam in Burkina Faso and the Islamic State in

– a trajectory that is liable to continue into

the Greater Sahara (ISGS). These groups have

2020. Burkina Faso and Niger now rank 16th

proved to be resilient, adaptable, and able to

and 17th highest risk globally in the 2020-Q1

evade the brunt of the international counter-

iteration of the index.

terrorism efforts.

ResourceGlobal GlobalNetwork Network 55 Resource

ALEXANDRE RAYMAKERS

erisk Maplecroft’s Terrorism Risk Index since 2017 We believe that the risk to operators will rise, as we remain sceptical that regional and international forces will be able to contain these terrorist groups over the coming year.

The Sahelian security forces have seen their capabilities dwindle under the strain of relentless attacks as they remain hamstrung by endemic corruption within the ranks and a

Alexandre Raymakers is a senior Africa analyst at Verisk Maplecroft, covering Nigeria, the Sahel and other West African countries.

Alexandre is a security specialist who has previously worked for NATO’s Allied Command Operations and in the political risk industry in London.

He is a graduate of the London School of Economics with a BSc in International Relations and History and an MSc in Conflict Studies.

chronic shortage of materiel. Recent attacks on two military outposts in Niger, which killed 150 military personnel also indicate that

military and government targets. The risk

terrorist groups are now more assertive and

remains high for softer targets, such as

have enhanced their military capabilities.

road convoys though. The tragic attack on a SEMAFO convoy in Eastern Burkina Faso on

We do not expect terrorist groups to veer

6 November 2019 best exemplifies the most

from their traditional modus operandi in

direct risk these groups pose to operators,

the next year. They will continue to avoid

and expatriate personnel will remain alluring

attacking mine sites directly and maximise

targets for kidnapping.

their limited capabilities by attacking

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COLUMNS |Alexandre Raymakers

Mines in Burkina Faso are increasingly exposed as terrorist groups create a new epicentre of the conflict.

Banditry is breeding in mining areas as security forces are redeployed

overall level of security provided by Sahelian forces to continue to deteriorate this year.

With Sahelian security forces spread thin,

Although both domestic and international

governments will only be able to retain

security forces have shown a willingness

nominal control over large swathes of their

to intervene when major mining assets are

territory, as they concentrate on counter-

in jeopardy, as at the Inata mine in Soum

terrorism operations. In some cases, the

province in October 2018, we foresee the

security apparatus of Sahelian states have

ResourceGlobal GlobalNetwork Network 57 Resource

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COLUMNS |Alexandre Raymakers

Operators will have to mitigate the rising risk of terrorism across the Sahel by increasing their investments in private security, squeezing profits at mining operations across the region.

Alexandre Raymakers, senior Africa analyst at Verisk Maplecroft

already withdrawn from rural areas to

private security, squeezing profits at mining

focus their assets on the defence of urban

operations across the region.

environments.

a commensurate rise in crime and banditry

Indirect reputational risks are rising as the conflict expands

directly impacting operators. This is likely to

As the conflict intensifies, the indirect

occur in areas thus far spared from terrorist

risk premium grows. As government

incidents, such as in Western Mali, where

security forces withdraw from rural areas,

most major mining assets are located but

governments have sought to out-source their

where security forces have been urgently re-

security obligations to various traditional self-

deployed to the centre of the action.

defence militias.

Operators should be wary of a heightened

Almost all of these militias operate with the

chance of kidnapping attacks on local

tacit or overt support of the government. In

personnel, theft of equipment and hijacking

Burkina Faso, parliament has even gone so

of convoys. Operators will have to mitigate

far as promulgating legislation that would

these risks by increasing their investments in

provide legal recognition and funding to a

This security vacuum is expected to lead to

Resource Global Network to operate, but also with investors. Any unsanctioned interaction could provoke legal action in Western countries, as companies could be seen to be funding terrorist activity or become associated with abuses.

Terrorist groups will spread southwards, along the West African gold vein Terrorist groups are acutely aware of the potential of gold reserves in the region. We expect them to expand Southwards towards Benin, Ghana, Guinea, Togo and Côte d’Ivoire over the coming years - unless security forces can stop them, which is a remote possibility.

Regional governments, aware of the risks, have sought to take measures to contain self-defence group in an effort to reinforce

these groups, but are hindered by their

their depleting security capabilities.

limited capabilities and porous borders.

Saying this, the chance of an attack on a

Operators can expect to have to regularly

major mining asset in Ghana or Côte d’Ivoire

engage with these groups, but extensive

remains low. The groups are more likely to

cooperation with these entities represents a

pool their resources for high-profile civilian

serious reputational risk. Alongside national

targets in urban areas.

security forces, self-defence groups in both Burkina Faso and Mali have been regularly

While the security situation remains poor,

accused of committing serious human rights

with an even more negative trajectory, West

violations against the civilian population.

African gold miners need to be on alert.

The majority of risk still lies in Mali, Burkina

Perceived association with such groups puts

Faso and Niger, although the propensity for

operators’ reputations at risk; not only with

spread is increasing.

local populations, challenging social licence

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COLUMNS | Thomas Hillig

RENEWABLES AND COMBINATIO

THEnergy-Triogen report analyses how microgrids can be

Resource Global Network

D HEAT RECOVERY ARE THE IDEAL ON FOR REMOTE MINES IN AFRICA

e optimised by efficiency improvements of diesel gensets, by Thomas Hillig

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COLUMNS||Ian Thomas Thomson Hillig 62 COLUMNS

In Africa, the year 2019 was the turning point for renewable energy projects at remote mines. More than half a dozen projects were commissioned or announced across Africa. Mining companies have adopted solar and wind power to reduce their energy cost and carbon footprint in a rather lengthy process.

In the last years, successful flagship projects have removed concerns about production loss and independent power producers (IPPs) have started financing solar and wind plants at remote mining sites; IPPs sell electricity to miners on a power purchase agreement (PPA) basis.

To mining companies, the PPA-cash flow is similar to what they are used to from diesel contracts – but it comes with cost reductions.

IPPs are highly specialised in electricity generation, they are also looking at other solutions for cost reduction. It is no surprise that diesel genset efficiency optimisation have also sparked interest.

Diesel engines only convert 40% of the fuel energy into electricity, while the rest is not used. In Africa, diesel-gensets are often not perfectly maintained which has a negative influence on the efficiency. Waste heat

ResourceGlobal GlobalNetwork Network 63 Resource

THOMAS HILLIG Thomas Hillig is the founder and managing director of THEnergy, a boutique consultancy established in 2013 focusing on microgrids/mini-grids and off-grid renewable energy.

For industrial companies, THEnergy develops energy concepts and shows how to become more sustainable – combining experience from conventional and renewable energy with industry knowledge in consulting.

THEnergy also advises investors and energy companies regarding renewable energy opportunities in rapidly changing markets. The initial focus was on commercial and industrial off-grid renewable energy projects, for example in mining, hospitality, telecommunications or on islands.

Driven by investor needs, corporate PPAs, rural electrification and energy access have become additional consulting focuses. THEnergy has led several large-scale due diligence processes in rural electrification.

64

COLUMNS | Thomas Hillig

recovery can reduce diesel consumption by

The report “System optimization of

approximately 7%. The approach is based on

renewable energy microgrids with heat-

conventional steam turbine technology, but

recovery in remote mining” shows that heat

advances have allowed this to be deployed

recovery can also go hand-in-hand with

at a smaller scale. It is already proven in

renewable energy approaches for diesel

applications like biogas engine heat recovery,

reduction. In a time when cost optimisation

biomass combustion, industrial waste heat,

and carbon mitigation are gaining

and geothermal heat.

importance, the question is not which of the two solutions to choose. The answer is to

Waste heat recovery is the low hanging fruit

combine both solutions together.

in the diesel reduction game. Renewables have recently opened the door for new

The Dutch manufacturer Triogen has

approaches because they have increased

developed a containerised “e-box”, a solution

the acceptance of more capital-intensive

that is tailor-made for remote mine sites. It

solutions in the mining industry.

has been designed for easily upgrading any diesel genset without changing its operations and thus without affecting maintenance

ResourceGlobal GlobalNetwork Network 65 Resource Triogen’s technology has accumulated over one million operating hours on 50 installations. The e-box solution has successfully been field-tested for mining applications in extreme conditions as we find them in many locations across Africa. It is now being deployed at the remote site of a blue-chip mining company.

Henning von Barsewisch, CEO of Triogen adds: “Our containerised e-box has created sustained awareness from mining companies, IPPs, diesel genset OEMs and rental companies because of its short payback time of two years and its quick and easy deployability.�

Since the Triogen e-box converts waste heat, it is a zero-carbon technology which addresses the drive for cleaner mining. A or warranty requirements. The solution is

single e-box saves 300,000 litres of diesel

based on the conventional steam turbine

per year. This is approximately the same as

technology, yet is fully automated, compact

a 0.7MW solar power plant in a rather sunny

and simple to install.

region. Annual CO2 reductions amount to 800 tonnes per e-box.

Two standard 20-foot shipping containers are ideally suited for shipping to remote locations In the quickly growing African market of in rural Africa. They are connected to the

renewable energy solutions for remote

exhaust gas stack of diesel gensets and the

mines, efficiency improvements of gensets

e-box generates electricity from the waste

can generate competitive advantages for

heat. The electricity is fed into the local grid,

mining companies and energy providers by

so that diesel gensets do not need to produce pulling all the cost-efficient diesel reduction this power and subsequently consume less

levers of onsite power plants.

fuel.

For more information, please download the report: https://www.th-energy.net/english/platform-renewableenergy-and-mining/reports-and-white-papers/

aj

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68

MINING |Roxgold

ROXGOLD

West Africa-focused gold firm builds on a transformative 2019

Resource Global Network

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70

MINING |Roxgold

2019 was a transformative year “With an average head grade of 9.5 g/t, we produced 142,204 oz of gold, generating for West Africa-focused gold significant free cash flow, while we continue explorer and producer Roxgold. to see improvements on our per tonne The Canadian firm delivered operating costs thanks to the increased a record gold production sum mining and processing rates.” of 142,204 ounces (oz) from its Yaramoko mine in Burkina Côte d’Ivoire expansion Faso over the entire year.

In addition, Roxgold expanded into Côte Yaramoko is an underground d’Ivoire with the acquisition of the Séguéla mine complex comprised of two Gold Project from Newcrest in April. The TSXproducing zones – 55 Zone and listed company quickly got to work at the Bagassi South. The former began advanced exploration project, which hosts the Antenna gold deposit within its 3,298 km operation in October 2016 and has consistently delivered a high land package. return on capital since, while the latter came into commercial The Antenna deposit consists of near surface, potentially open pittable mineralisation production at the end of Q3 in and is located near existing infrastructure 2019. The increased capacity including grid power, transport and water from mining these two deposits resources. allowed Roxgold to process record tonnes in Q4, with the In January, Roxgold announced an updated plant reporting an average NI 43-101 mineral resource estimate of 7.1 throughput rate 30% above million tonnes (Mt) at 2.3 g/t for 529,000 oz of nameplate capacity at over 1,400 gold in Indicated and 5.2 million tonnes (Mt) at 2.8 g/t for an additional 471,000 oz of gold tonnes per day (tpd).

2

in Inferred.

“Yaramoko had an exceptional quarter to finish the year, as we saw record tonnages

“Séguéla has been an exceptional acquisition

from the combined operation of 55

for our company and is really starting to take

Zone and Bagassi South,” says Roxgold’s

shape. When we acquired the project last

president and CEO John Dorward. “This

year, the Antenna deposit was well drilled by

outperformance was achievable due to the

the prior owners.

flexibility built into the plant design and the tireless optimisation work of our team.

“This meant we had a good understanding of what was there, and we recognised that it was very attractive with highly prospective

Resource Global Network

71

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MINING |Roxgold

early and advanced stage opportunities.

g/t gold from 133 metres. In the updated

Since getting our boots on and our drills

resource, Ancien accounted for nearly half of

in the ground we have been excited to see

the new Inferred ounces with 224,000 oz of

indications of the real potential of the project.

gold an exceptionally high grade of 6.6 g/t for a near surface target.

“We understood that Antenna and its 500,000 oz plus of near-surface mineralisation could

Meanwhile, targets like Boulder and Agouti

be the cornerstone deposit for an open pit

continue to demonstrate the near-surface

operation. However, we now believe the real

potential of several of the satellite targets

upside may come from the satellite targets,

surrounding the original Antenna deposit.

including Ancien, Agouti, and Boulder,” Dorward reveals.

Drilling Séguéla

“I am very excited by Séguéla’s significant upside potential, notably at the Ancien deposit which remains open at depth

Roxgold has been rigorously testing these

and along strike, as well as the potential

satellite targets over the last six months with

within the Boulder-Agouti corridor and the

considerable success, including the most

additional 22 highly prospective targets that

recent results from Ancien in January, when

have been identified within the Séguéla

a headline hole returned 42 metres of 16.97

Project land package.

Resource Global Network

“We continue to have all hands on deck at

Here Dorward is referring to Roxgold taking

Séguéla, with four rigs turning, and we are

the Yaramoko property from virgin drill

eagerly anticipating further results over the

hole to producing gold mine in five years,

coming months.”

and from feasibility study to commercial production in just two years.

Based on the exciting recent drill results from Ancien and the other satellite deposits,

The company will also be focusing on an

Roxgold revised its timeline of economic

ongoing resource expansion programme

studies for Séguéla to incorporate the

at Yaramoko, which is four years into its

mineral resource growth from outside the

originally outlined seven-year mine life.

Antenna deposit. The company expects to

The operation continues to have a strong

publish a preliminary economic assessment

record of resource and reserve replacement,

(PEA) in Q2 and a feasibility study by the end

maintaining a resource inventory above

of the year.

700,000 oz since starting production.

“We believe Roxgold’s history will repeat itself

Following the completion of the Bagassi

as we look to rapidly advance the project

South decline development, Roxgold expects

towards production on time and at cost.”

to see an increase in capital spend at Yaramoko to secure the future of the mine.

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MINING |Roxgold

“We believe Roxgold’s history will repeat itself as we look to rapidly advance the Séguéla project towards production on time and at cost” John Dorward, Roxgold president and CEO

Resource Global Network At the 55 Zone, Roxgold will develop a dedicated underground drill platform 600 metres below surface for further infill and depth extension drilling in H2. This will also put the company in a position to start testing for parallel mineralised structures which are characteristic of similar shear-hosted systems.

Burkina Faso security concerns Roxgold’s continued investment in the Yaramoko mine provides a much needed vote of confidence to Burkina Faso’s mining sector at a time when investor trust has been severely shaken by a recent fatal attack on several buses carrying mineworkers to a gold mine in Eastern Burkina Faso.

On November 7th, A total of 39 people were killed in the ambush attack on public road approximately 40 km from Canadian firm SEMAFO’s Boungou Mine. Despite this shocking severity of this incident, Roxgold has re-emphasised its faith in Africa’s fourth largest gold producer.

“Burkina Faso is facing some challenging times. However, in my opinion it remains one of the world’s most mining friendly jurisdictions,” Dorward asserts.

“We are fortunate to be operating in Western Burkina Faso, which is a more populated region of the country and, therefore, more secure versus the remote East and Northern portions.

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MINING |Roxgold “Regardless, security is a growing issue, not only for Burkina Faso, but for mining districts worldwide, so we continue to work with the government, our communities, and our employees to ensure we have a safe working environment. Safety starts with people, and we believe that security starts with your relationship with the communities in which you operate.”

As such, Roxgold has made multiple commitments to the communities close to the Yaramoko mine in recent years, from building local supply chains to having a workforce that is over 90% Burkinabé.

Many of these local employees hold permanent senior positions and therefore

John Dorward, Roxgold president and CEO

Resource Global Network take home significantly higher incomes than

price for exploration and development-

what they otherwise would. This money

ready assets,” says Dorward.

supports households, flows through the local economy and contributes to new commercial

“As a high margin producer, with a

activities in the area.

strong technical team, we have the cash

A gold firm with a niche

flows and talent to jump on projects and advance them up the value chain.” This

After witnessing a year of rising prices and

alludes to a broader acquisition strategy

heightened mergers and acquisitions in the

in the West Africa region, building on

gold sector, Roxgold believes it is in a strong

Roxgold’s current position in Burkina Faso

position to take advantage of the current

and Côte d’Ivoire.

conditions in the investor market.

However, Roxgold’s internal targets for “We are seeing the big producers getting

2020 centre on achieving production

bigger while the juniors and developers tread

guidance targets at Yaramoko, advancing

water. This is creating an intriguing niche for

Séguéla towards a construction decision,

companies like us, as we believe we are well

making additional exploration discoveries

positioned to capitalise on the current low

in both countries and ensuring the continued safety and security of its employees and communities in which it operates.

TSX:ROXG OTC:ROGFF

a j

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78

MINING | Bushveld Minerals

BUSHVELD

At the forefront of the burg

Resource Global Network

MINERALS

geoning vanadium market

79

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MINING | Bushveld Minerals

2019 was another busy year for South African vanadium producer Bushveld Minerals.

The London-listed company cemented its position as one of the world’s largest vertically integrated primary producers of vanadium – a unique metal with properties that have traditionally fed the steel manufacturing sector, but more recently its applications have been realised in the emerging energy storage sector. Bushveld added a fourth vanadium asset to its diversified resource base in South Africa’s Bushveld Complex with the acquisition of Vanchem in November 2019. Bushveld also undertook a Transformation Programme at its operational Vametco mine which resulted in record production outcomes in 2019. The company also made progress towards its goals in the exciting vanadium-based energy storage industry, in the shape of investments in Original Equipment Manufacturers (OEMs) redT-Avalon and Enerox.

Integrating Vanchem In November, Bushveld announced it had completed the acquisition of Vanchem – a primary vanadium processing facility with

Resource Global Network

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82

MINING | Bushveld Minerals chemical plant at Vanchem provides

“Research from Navigant forecasts that the

additional feedstock options for vanadium

size of the energy storage market will reach

electrolyte manufacturing, the most

US$50 billion within the next 10 years, which

expensive component in vanadium redox

represents a growth rate of 58% a year to

flow batteries (VRFBs).

exceed 100GWh of capacity by 2027.

Plugging in to energy storage

“While multiple technologies are expected to be successful due to their unique technical

Through the Bushveld Energy platform that

and cost advantages and suitability to local

was launched in 2016, the company aims

conditions, Navigant expects flow batteries

to capture a share of the rapidly emerging

to capture approximately 18% of the market,

energy storage market, where VRFB’s present

which equates to approximately 20GWh of

a compelling proposition in providing long

demand and nearly $10 billion in revenue in

duration storage solutions.

the coming decade.

“VRFBs are well positioned to take a

“In addition, approximately 5.5 tonnes of

significant share of the stationary energy

vanadium is used for per MWh, which means

storage market, on account of their unique

that in 2027 vanadium use in VRFBs could be

features that give them an edge in large

between 50 and 80,000 mtV.”

scale, stationary and long-duration energy storage a beneficiation applications,” plant capable explainsofMojapelo. producing

Bushveld In addition, is Bushveld well positioned has embarked to capitalise on a five-

various vanadium oxides, ferrovanadium and

on this year refurbishment huge projected andvanadium ramp-up demand programme

These advantages vanadium chemicals. include: Long lifespan

from at Vanchem the VRFB which sector willthanks eventually to itsboost globally

cycles with the ability to repeatedly charge/

significant steady state resource production basetoof4,200 550 million mtV per

discharge “The acquisition over 20 is years consistent with minimal with the

tonnes (100% annum, supporting basis)the grading company’s 1.58-2.0% long-term

degradation, company’s long-term low cost strategy per kWhof when acquiring fully

V205of goal inan magnetite 8,400 mtV and annual its lowproduction cost, flexible rate.

used at least existing, low-cost oncescalable daily, scalable brownfield capacity to

and scalable primary vanadium processing

store four assets operating to 10 hours in South of energy Africa to daily expedite and

facilities The Vanchem at Vametco acquisition and Vanchem. serves to diversify

flexibility the development that allows of the for company’s capturing the significant multi-

Bushveld’s mining and processing footprint in

stacked and highvalues gradeof resource energy base,” storagesays in grid

“Bushveld’s South Africa,vertical while also integration creatingstrategy operational

applications.

Bushveld’s CEO Fortune Mojapelo.

and business synergiescase across synergies its assets between providethe flexibility for Vametco, Vanchem the group andto Mokopane deliver onfacilities, the

While VRFBs Vanchem adds notaround only benefit 960 metric the burgeoning tonnes of

entire all of which vanadium are located value suite within byrelative being able to

renewable(mtV) vanadium energy to sector, the group’s perhaps current more annual

produce various proximity and connected vanadium byfeedstocks road and rail. that

significantly,from production the technology the Vametco helps mine, make which

can be converted into electrolytes for VRFBs.”

existing power produced a record systems 2,833more mtV in efficient 2019.

Bushveld’s lofty ambitions in the global

through load balancing and other forms of

energy storage space are also well served

grid savings.

Downstream by the Vanchem acquisition. The existing investments

Resource Global Network

Bushveld further underlined its ambitions

The interim funding creates an investment

in the downstream vanadium-based energy

into a scaled-up VRFB OEM with the potential

storage sector by establishing a VRFB

to become a leading, global battery energy

Investment Platform to lead investments

storage systems supplier, and gives Bushveld

in this space. The platform will allow the

preferential supply rights to the new

company to mobilise additional third-party

company for at least two years.

financing to support VRFB manufacturers’ efforts to scale up their capacity.

In addition to the redT-Avalon investment, Bushveld joined a consortium for the

The first action made by Bushveld under the

acquisition of another VRFB OEM before the

VRFB Investment Platform was to provide

end of 2019, in the shape of Austrian firm

a US$5 million loan to support the merger

Enerox – a pioneering company with over 10

of UK energy storage provider redT with US

years’ experience in the production of VRFBs.

VRFB manufacturer Avalon Battery Corp.

“Bushveld’s participation in this investment “This investment is in line with the company’s

expands our VRFB investment platform,

strategy of building a leading downstream

demonstrates our belief in VRFB technology,

vanadium-based energy storage platform.”

and helps grow both the VRFB and the overall vanadium market,” says Mojapelo.

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MINING | Bushveld Minerals In addition, Bushveld is building a 200MWh vanadium electrolyte production facility in the East London Industrial Development Zone, together with the Industrial Development Corporation to supply local and international VRFB projects.

In 2019, the EIA for the site was completed and tendering for its construction is now in process. Bushveld is also adding a financial product to the electrolyte and rolled out the first vanadium electrolyte rental contract in June 2019 in the US with Avalon.

Project development with energy storage With its dedicated project development team, Bushveld Energy aims to address Africa’s greatest obstacle to faster growth and industrialisation: Reliable electricity supply.

In 2019, Bushveld Energy announced the development of a 1MW mini-grid at the Vametco mining and processing facility.

The mini-grid combines 2.5MW of solar PV generation and 1MWh/4MWh of energy storage using VRFB technology, co-located at the Vametco mine and processing facility.

The project will demonstrate the technical and commercial capability of hybrid minigrids using solar PV and VRFB technology, while reducing the mine’s dependence on the power grid and cutting its CO2 emissions.

The project could also be scaled up further to provide a larger amount of energy in future.

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MINING | Bushveld Minerals The opportunity for energy storage in South

World Bank Energy Storage initiative. On

Africa is even more significant. The country’s

top of that, significant opportunities exist in

Integrated Resource Plan 2019 specifically

the soon to be restarted Renewable Energy

seeks novel ways to improve grid reliability

Independent Power Procurement (REIPP)

and access to power over the long-term, with

programme.

a dedicated allocation of over 2,000MW for new energy storage.

A bright future Despite vanadium prices retreating from

This includes the recently announced

an astronomical three-year run in 2019,

350MW/1400MWh Eskom battery

Bushveld believes the long-term outlook for

programme that is part of an even larger

the market remains strong.

Resource Global Network With its unrivalled asset base in South Africa and its rapidly expanding interests in the stationary energy storage sector, Bushveld finds itself in an excellent position to continue building a fully integrated vanadium company in 2020 and beyond.

Over the next 12 months, the company plans to unlock multiple synergies across the Vametco, Vanchem and Mokopane assets, and will continue advancing Bushveld Energy’s position in the growing VRFB market.

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MINING |AVZ Minerals

AVZ MINERALS A monstrous lithium project in the DRC

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MINING |AVZ Minerals

Scoping out Roche Dure AVZ Minerals’ 60%-owned Manono Lithium and Tin Project “Our exploration consultant spent two weeks mapping the whole project area. He in the Democratic Republic suggested that Roche Dure was the best of Congo (DRC) was recently place to start because it was ‘low hanging christened the ‘Escondida of fruit’. Roche Dure is just 1.6 km of the total lithium’ by the Chinese Ministry 15.5 km strike length at Manono, so we’ve of Land and Agriculture after only touched approximately 10% of the entire they learned of the potential project area.” size of the resource. “We’ve only drilled a small portion of The Roche Dure scoping study was published the total project area and are to the ASX in May 2019 and contained strong economics, including a massive US$2.63 extremely excited that we have billion pre-royalties, pre-tax NPV, a 64% IRR a 400 million tonnes (Mt) JORC resource at 1.65% lithium,” says and a three-year payback time. The scale and longevity of the project was also confirmed AVZ’s managing director Nigel Ferguson. The Manono resource by the study, which was modelled on a 20year mine life based on a 5 million tonnes also includes additional tin and per annum (Mtpa) open pit mine scenario, tantalum credits, making it consuming only 25% of the resource. one of the largest undeveloped spodumene projects in the world. This model provides for annual production of 1.1 Mt at a minimum of 5.8% lithium.

AVZ has only drilled one of six known

However, Ferguson tells RGN it would be

pegmatites across the 188 km2 project area

difficult for the company to justify flooding

– the Roche Dure pegmatite. Roche Dure is

the market with Manono product so AVZ

the ASX-listed company’s initial exploration

plans to recalibrate the annual production

and development focus at Manono,

down to 750,000 tonnes of concentrate,

primarily due to the presence of historical

which puts throughput at 4.5 Mtpa.

geological data from the 1950s and 60s when the area was mined for tin.

“This still allows AVZ flexibility in terms of feeding new clients by increasing production,”

A total of 42 vertical drill holes were made

said Ferguson. “We retain the ability to ‘turn’

to depths of between 50 and 150 metres to

up production to supply new customers if we

produce a lithium concentrate grade of 6.8%

want to.”

at a 10mm crush. Since then, AVZ has drilled 86 drill holes totalling 27,466 metres.

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MINING |AVZ Minerals

A credible offtake partner

several staged expansions to further increase hydroxide production to about 100,000

AVZ is working towards securing its first

tpa, making Yibin Tianyi one of the largest

customer for the lithium produced at

hydroxide suppliers in China.

Manono and is hopeful it will be Chinese lithium chemicals producer Yibin Tianyi

“They have said that by the end of their

Lithium Industry Co after the two struck a

four-phase plant expansion they will need

strategic investment deal in November.

approximately 750,000 tonnes of material.

If they turn to us and say, ‘we need all of

The deal will see Yibin Tianyi take a AUS$14.1

it’, then we can certainly supply it,” says a

million share placement in AVZ for 12% of

confident Ferguson.

the company along with a commitment to agreement for lithium products from the

A phased processing approach

Manono Project.

AVZ has its own plans for processing the

‘negotiate in good faith’ a binding offtake

spodumene ore from Manono but it will take Yibin Tianyi is currently building a 25,000

a phased approach, commencing first with

tpa lithium hydroxide plant in China that

Dense Media Separation (DMS) – a simple

should be completed by June. They plan

process which can produce up to 6.3% lithium oxide without the need for flotation.

Resource Global Network

Meeting with the President of the DRC The company will then consider a two-phase

The DRC is perhaps the single most

addition of a flotation circuit followed by a

important player in the growing battery

hydroxide circuit, although further test work

metals revolution with around 60% of the

is required to match the flotation cells to the

world’s cobalt – a vital component in mobile

exact characteristics of the Manono ore.

phones, laptops, tablets and electric vehicle batteries – produced in the central African

“We are aware of the problems some players

country.

have had in Western Australia by going straight into DMS, flotation and hydroxide

However, the DRC’s struggles with conflict-

plant production all in one go so we need to

driven mining, human rights abuses and

be careful and understand how we progress.

child exploitation at artisanal cobalt mine sites have been well documented during the

“One idea we have is to maintain the

last few years, leading to consumers directly

750,000 tpa throughput and use the rest

pressuring tech manufacturers to clarify their

of the production to feed into a 25,000 tpa

supply chains all the way to source.

hydroxide plant for other clients that want the material for battery manufacturing in the

Conflict-free mining

automotive space, but also for power banks

So, how will AVZ verify to the global lithium

and storage.”

market that its product has been sourced

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MINING |AVZ Minerals from an industrial mining operation and hasn’t been tainted by conflict mining at any stage of the supply chain?

All Manono products will conform to iTSCi standards whereby a ‘source-to-market’ trace will be placed on the material before being sealed in containers and shipped across the world.

“Once it’s tagged to international standards and sealed away it’s hard to say it’s come from anywhere else other than Manono,” Ferguson declares.

As part of AVZ’s wider commitment to the local communities and social engagement, the AVZ Foundation has also been established. The Foundation has supported a local polio vaccination for more than two years and is also funding the construction of a new school and a hospital in the local area, along with many other smaller infrastructure projects.

In addition, AVZ has safely employed more than 800 local people on a casual basis, including 320 displaced artisanal workers, while the Manono project is expected to employ up to 150 local people either directly or indirectly, supporting some 500 families.

A massive two years ahead Ferguson describes this year and 2021 as the ‘crescendo’ of AVZ’s workload at the Manono

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“We’ve only drilled a very small portion of the total project area and we’re very excited by the fact that we have a 400 million tonnes (Mt) JORC resource at 1.65% lithium” Nigel Ferguson, managing director AVZ Minerals

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MINING |AVZ Minerals

Nigel Ferguson, managing director AVZ Minerals Project. The definitive feasibility study is approximately 95% complete at the time of writing and should be published by the end of Q1 2020.

“Once we have the DFS out, I am hoping all of our financing will follow on the back of that.

That’s going to take a bit of effort to organise but if we have Yibin Tianyi onboard it will happen quicker.

“We are talking to a couple of major financiers who are interested in participating,

This opportunity to power the mine from

it’s really a case of getting them to sign on the

a hydroelectric plant is likely to generate

dotted line.”

significant longer-term cost savings for AVZ while also providing an environmentally

In mid-January, AVZ signed an MoU with the

cleaner alternative to the current diesel-

DRC government to investigate the feasibility

powered option.

of refurbishing the Mpiana-Mwanga hydroelectric power station located approximately

Finally, AVZ hopes to strike another

85 km from the proposed Manono mine site.

agreement with the DRC government for

Resource Global Network

the designation of a Special Economic Zone

developers to become involved and set up

(SEZ) for the Manono Project. The creation

new businesses in the local area.

of a SEZ would generate sustainable growth and prosperity and give increased confidence to potential investors and infrastructure

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Compelling commodity market anchored to steel with burgeoning demand from energy storage market

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Largest primary vanadium resource base of ~550Mt with a grade 1.58-2.02% V₂O₅ in magnetite

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Bushveld Minerals owns 2 of the 4 operating primary vanadium production processing facilities, with capacity to scale up production significantly

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Bushveld Minerals vertical integration strategy into energy storage provides a natural hedge to vanadium price volatility as well as a diversified revenue stream

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Bushveld Minerals

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MINING |Arc Minerals

Resource Global Network

ARC MINERALS An exciting copper play in the heart of Zambia’s Copperbelt

Runner-up in the 2020 Mining Indaba Investment Battlefield

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MINING |Arc Minerals

The divestment of gold assets in the Democratic Republic of Congo (DRC) and Slovakia by Arc Minerals in November 2019 was the result of a three-year clean-up process led by the exploration firm’s now chairman Nick von Schirnding. When von Schirnding arrived as a nonexecutive director in February 2017, the company found itself in a quandary relating to the perceived value of its investments across the portfolio.

The vastly experienced mining executive wasted little time in replacing the board of directors and went about revamping the company’s strategy to concentrate more on the African assets. The fresh impetus in the company was also reflected in a rebrand from Ortac Resources to Arc Minerals in early 2018.

Fast forward to 2020 and Arc is solely focused on the Zamsort Copper-Cobalt Project in Zambia following the sales of Casa Gold in the DRC and the Šturec project in Slovakia.

In total the Zamsort/Zaco licence areas

London-listed Arc holds a 66% interest in the

where drilling has intersected pervasive

Zamsort project and a 52.5% stake in Zaco,

mineralisation with grades up to 13.34%

located in the Western Domes Region of the

copper. Elsewhere, the company has rigs

Zambian Copperbelt, in close proximity to

turning at two other anomalies which have

three world-class mines.

also demonstrated mineralisation.

cover 872 km² and includes the Kalaba copper-cobalt project. Arc’s local partner in Zambia is Kopara who have co-funded the development of Zamsort and Zaco.

“Raj and Mahesh Patel (who own Kopara), have been excellent partners. We are very close,” says von Schirnding.

The first drilling commenced with a 11,000 metres drilling programme to delineate a maiden copper and cobalt mineral resource at Kalaba and the company is also constructing a commercial scale demonstration plant at Kalaba to produce copper and cobalt cake.

Results so far have been extremely encouraging, particularly at a few anomalies which have graded 18 metres at 2.35% copper, including 7.6 metres at 4.15% and 28.5 metres at 1.32% copper, including 13 metres grading at 2.32%.

“We have 13 large and well-defined targets that we’ve identified. We’ve also done a lot of comprehensive geophysics and soil sampling across around 850 km² of the licence areas,” says von Schirnding.

Of the targets identified, Cheyeza East is generating the most excitement

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MINING |Arc Minerals

However, the bigger question for Arc at the

of Anglo’s top 30 Zambian copper exploration

moment is whether these anomalies are part

targets for the area. While this is by no

of a wider system of mineralisation within the

means a definite indication of a coherent

company’s licences in the Domes region of

mineralised structure, it does show the

the Zambian Copperbelt.

quality of Arc’s targets across the licence

In the right postcode

area.

“If you look at our neighbours, First Quantum

The plan is to continue drilling at several

Minerals and now Barrick Gold, and their

target areas across the licence areas in 2020

three key operations in the region, they

once the rainy season clears in late March,

contains millions of tonnes of copper

giving Arc time to assess the results from the

resources and if ‘nearology’ is anything to

drilling campaigns of 2019.

go by we may have something potentially similar.”

Targets include a further 4,000 metres at Cheyeza East and 2,000 metres for each of

In addition, Zamsort has historically been

Fwiji, Muswema, Lumbeta and Jatuma, along

explored by Anglo American and hosts nine

with 2,000 metres at a new target called West Lunga.

Resource Global Network

Arc and Kopara will continue to use a local

the company has solidified its relationship

drilling partner called Baba Drilling for its

with Chief Sailunga of the Lunda people in

upcoming campaigns and has also used a

Mwinilunga district. In fact, von Schirnding

Zambian assayer called SGS, in a show of

and his team make every effort to meet the

commitment to the host country.

chief whenever they are on site.

“We are doing a new 10,000 metres drill

Arc is also aiming to make a long-term

programme and we’ve already put millions

impact on the region by supporting various

of dollars into the ground, integrated local

infrastructure projects. For example, the

jobs through drilling and financed a charity

company upgraded a key public road that

in the Mwinilunga area. We like to commit

had fallen into disrepair. This work will not

ourselves wholly to where we operate,” says

only improve access to the mine but also

von Schirnding.

provided a knock-on benefit for the local

Embracing the host country

communities.

While this kind of CSR initiative is an integral

Employing locally has been a key part of Arc’s

part of any mining company’s licence to

strategy at the Kalaba project and in doing so

operate in Africa, Arc feels more than

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MINING |Arc Minerals

“We have 13 large and well-defined targets that we’ve identified. We’ve also done a lot of comprehensive geophysics and soil sampling across around 850 km² of the licence area” Nick von Schirnding, Arc Minerals chairman happy to play its part in the socio-economic

Development,” he says. “Zambia also has

development of the local community

a first-rate legal system which is of great

considering how comfortable it feels

comfort to us - It certainly helps me sleep

operating in Zambia.

better at night!”

Despite some grumblings of discontent

Closer to home at their small London

from other players in the Zambian mining

office, Arc is also sponsoring the Zambian

industry after the government implemented

High Commission involving two projects.

a 1.5 percentage-point increase in minerals royalty taxes (plus a new 10% tax when the

Copper fundamentals

price of copper exceeds US$7,500 per tonne)

Looking at the global copper market,

in September 2018, von Schirnding remains

2019 was another year of price weakness

confident about Arc’s prospects in Zambia.

for the bellwether metal, driven by the ongoing US-China trade war. However,

“First and foremost, we have good relations

Arc views this price weakness as short-

on the ground, going from local chiefs to

term considering the projected supply and

regional government bodies all the way to

demand dynamics for the industrial metal.

the Zambian Ministry of Mines and Mineral

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MINING |Arc Minerals Copper demand is set to soar over the next decade in line with the ongoing electrification of the global energy and transport sectors, while supply has been projected to decrease as new major copper discoveries become a rarity. With this in mind, Arc believes that copper will recover to its previous price level in the medium term.

These solid fundamentals for copper producers only serve to underline the potential attractiveness of Arc’s licences to potential partners. The company has only drilled three anomalies to date in a small section of the Zamsort/Zaco licence areas.

Therefore, the potential for an exciting copper play, of a similar scale to neighbouring multi-million ounce mines operated by First Quantum and Barrick, is there for all interested parties to see.

“We’ve got NDAs with four major mining companies to see if they want to join us in exploring key targets across Zamsort and Zaco. That is very exciting as we are beginning to get noticed on a global horizon. We’ve already received a lot of interest from the majors so watch this space,” concludes von Schirnding.

Resource Global Network

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MINING | Hummingbird Resources

HUMMINGBIRD RESOURCES Fully traceable gold supply from drill bit to jeweller

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MINING | Hummingbird Resources

In its first year of full-scale production at the Yanfolila gold mine in Mali, Hummingbird Resources came through a challenging period to perform well within its 2019 gold output guidance range. The addition of a second ball mill allowed the AIM-listed miner to circumnavigate issues such as an unstable pit wall and damaged local infrastructure resulting from heavy rains.

After successfully executing a remediation plan for the operation in 2019, it was no surprise that RGN found Hummingbird’s managing director Dan Betts in high spirits during an interview in Cape Town at the start of February.

Joining in the conversation was Dan’s brother Charles, managing director of family refining and manufacturing business The Betts Group, who recently launched Single Mine Origin (SMO) – an initiative that provides a fully traceable chain of custody for gold production, starting with the gold produced at Yanfolila.

Resource Global Network Jacob Ambrose Willson: Dan, how pleasing was Hummingbird’s operational performance in 2019, especially given the challenges faced at the beginning of the year?

Dan Betts: We’ve started this year in a lot better place than a year ago. At the beginning of 2019, our guidance was 110125,000 ounces, and we produced a total of 115,649 ounces over the course of the year. Considering the operational challenges we faced at the start of the year, hitting the middle of our guidance was a remarkable achievement and our strong progress was shown by Q4, which was the fourth consecutive quarter of rising producing and reduced costs.

JAW: How significant was the addition of a second ball mill at Yanfolila in terms of improving throughput and lowering costs?

DB: When we commissioned the second ball mill, it was a calculated risk as we had invested a significant sum of money and we were also experiencing operational issues at the time, so to maintain that plan was a big commitment.

The new ball mill gives us that extra throughput, around 13% more, and provides us with more risk mitigation in terms of the grade profile and the different types of ores, blends and flexibility on weather. Without the new ball mill, it would’ve made a difficult period even more challenging.

As with the plant, it was delivered on time and on budget, and it ramped up perfectly.

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MINING | Hummingbird Resources

The ball mill is performing to full capacity

and we’ve been through a lot of people in this

and we are doing 200 tonnes an hour, day in

time and kept the good ones. We work with

day out. Technically it’s been a great success

a lot of contractors and consultants as well,

which is reflected in our strong operational

whether its Capital Drilling, Redis, or Imagri

progress of late.

in-country in Mali. You have to have internal discipline but you’ve also got to have good

JAW: Efficiency seems to be a hallmark

external people.

of Hummingbird. How does the company implement such efficient procedures

Our senior VP for project delivery, Shaun

where items are consistently delivered on

Bunn, has led both these areas and been

time and on budget?

invaluable to us in that regard. He came on board when we were finalising the feasibility

DB: It sounds like a cliché but it’s all about

study for Yanfolila and then led that project

people. It’s taken us 14 years to build a team,

and the ball mill project.

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YOUR PARTNER IN AFRICA We build and maintain complex processing plants in Africa.

We have a general manager on-site and then we have a development team which is led by Shaun, who look at ways to improve Yanfolila and future developments. They also look at other potential projects, undertake

Contact. chris.quainoo@redisgroup.com | +27 72 857 7889

due diligence and provide the checks and

www.redisgroup.com

balances so that the plant is optimised and everybody knows what’s going on.

JAW: The introduction of SMO was another key development last year. Charlie, how long has this been in the pipeline and what inspired you to set up this kind of programme for ethical gold certification?

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2020/02/14 11:25

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MINING | Hummingbird Resources

Charlie Betts: It’s been in the pipeline

The idea is to try and create something

for several years, but it’s only been since

which has mass market capability. You can

Hummingbird was in production that we

make that provenance claim because we

could move SMO forward. The inspiration

are tracking gold all the way from mine to

is simply being exposed to the jewellery

the finished project which gets sent to the

trade as a family business, we see massively

jewelers. I think it’s an exciting opportunity.

increasing demand for provenance and it’s just not available.

DB: I also think our ability to control every stage of the supply chain from drill bit to high

There are a couple of options with Fairmined

end jeweler is unique. Charlie is looking at it

and Fairtrade Gold but there’s a huge

from the end user market, but from the other

premium associated with those. There’s

end of the market, the mining industry is so

also an element of mining corporates all

defensive and beaten up by its critics.

being tarnished with the same brush in the mind of jewelers. I’ve seen how beneficial a

The mining industry should be on the front

responsibly run mine can be to the local area

foot, saying we are industry leaders in all

where it’s operating.

these environmental, social, community and health initiatives. We go to places where there is no progressive sustainable

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development and we provide it. What other

paradigm to just trying to build a mine, it’s

industry does that?

about doing it the right way. This idea could have some really strong momentum behind

If you were to go and build a billion dollar

it in time.

infrastructure development in Cape Town, are you also going to build a school and create

JAW: How big are your ambitions for SMO?

an environmental offset initiative? No other

It’s currently only served by the Yanfolila

industry does it. We pay all our taxes and we

mine, but do you intend to broaden it to

reinvest with massive commitments in the

other gold mines in the region?

local communities.

CB: The opportunity for SMO is massive. In If we can use something like SMO to highlight

terms of the supply side, our ambitions are

and showcase all the good that responsibly

very big and not limited to West Africa. It’s still

run mining companies do, then the end user

a work in progress but the provenance claim

can be proud of it and it becomes a virtuous

is watertight, it’s quite easy to lock that down

circle. This process educates the industry

in terms of segregation because of the access

and the end users and you are both putting

we have. I think the responsibility claim can

pressure on each other to do the right thing.

now be developed further following the

I’m really excited about it. It adds a different

publication of the Responsible Gold Mining

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MINING | Hummingbird Resources Principles (RGMPs). If we bring in another project, which is the intention, utilising the RGMPs will clarify the assessment of such a project as a responsible source.

DB: The vision, for want of a grander word, is to create an accreditation standard that every responsible miner in the world wants to be a part of, and every responsible jeweler in the world wants to be a part of. It’s limitless in its potential.

Only a tiny percentage of gold utilised in the jewellery or investment sectors has a traceable source of origin and having the reassurance of detailed provenance not only attracts a substantial price premium but also gives consumers the peace of mind that it has been responsibly sourced and is doing good. We feel this is a trend that is only going in one direction.

JAW: Having attended the World Gold Council’s session on its RGMPs here in Cape Town, will Hummingbird be complying with these principles?

DB: Absolutely. I think the development of the SMO piece is very strategic and central to Hummingbird. I think that ESG investing across the world, from the retail buyer in jewellery to the investor in BlackRock, is a tidal wave that is not going away. Whilst this may be a box ticking exercise for some, we have an opportunity to make it real and to be the next generation mining company that is at the forefront of this. We want to put all our effort into it.

“Some of the women told me the they never want to return to art to see an initiat Dan Betts, Hummingbird R

e market gardening is fantastic and tisanal mining. It’s really rewarding tive like this work” Resources managing director

Resource Global Network CB: From the SMO side, there is a proliferation of different standards that companies can hold themselves up to. The RGMPs look effective in bringing all the existing standards together and the selfcertification for SMO was based on their principles.

At the session we begun to learn about the assurance process and the implementation of that, and that is something that Hummingbird will have to look at. We want to avoid adding massive cost into the supply chain, because we want to make it available to the mass market without having to charge a large premium.

JAW: Staying with the ESG theme, what new programmes and initiatives have commenced during the last year in the communities surrounding the Yanfolila mine?

DB: In the last 12 months, despite being focused on operational issues, the two main priorities in this area have been community health, where there has been a lot of work on child malnutrition and malaria education, and market gardens.

We’ve built six market gardens where we have provided water, seedstock and land for artisanal miners that have been displaced.

We’ve educated them on how to farm and then we buy the produce. The next step will be to look at putting in solar powered

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MINING | Hummingbird Resources

cold storage units, so they can store the

JAW: Looking forward, what is

vegetables and sell them on the open market. Hummingbird’s strategy for extending the We also built a chicken farm and buy the

life of the Yanfolila mine?

meat from them.

DB: We’ve just announced that we are The idea is that after the mine is gone, we will

recommencing exploration activities at

have built a lasting legacy and they will have

Yanfolila, which is a three-staged strategy.

a sustainable industry. I visited the market

We are looking at underground studies at

gardens recently and saw first-hand the

Komana East, we’re looking at converting

hundreds of mostly women who have taken

resources to reserves, and we’re looking at

up gardening roles. Some of the women told

greenfield exploration, which we haven’t

me the market gardening is fantastic and

done since we bought the project. It’s exciting

they never want to return to artisanal mining.

to be able to recommit funds to encourage

It’s really rewarding to see an initiative like

organic growth. We have significant Indicated

this work. The pride they have in what they

Resources which we are looking to convert to

are doing is amazing. We’ve got market

ore Reserves to further augment our 5-year

gardens, and we have also built a hospital

rolling mine plan. There are also potential

and a school.

M&A opportunities in the region and lots of companies that we could look to JV with and

Resource Global Network

add mine life. We’ve got five years of reserves

here and we need a partner to develop

as the base case and we are looking to then

it. We want to breathe life back into this

add to and improve it.

project which the market currently places no

123

value on, particularly following our focus on JAW: What is the current development

building and ramping up Yanfolila in Mali.

plan for the company’s Dugbe Gold Project in Liberia?

Just to put some basic numbers around the Dugbe project, at a $1,600 gold price, if you

DB: We’ve signed a non-binding term sheet

took $200 an ounce out of the ASIC (which we

with ARX Resources Limited, where if they

believe is possible with newly available lower

deliver $30 million to invest in the project,

cost power options) and if you increase the

we will evaluate an earn-in agreement with

resource by a couple million ounces, you’ve

them. They can earn up to 50% of the project

got an NPV of almost $1 billion, and that’s

if they commit to exploration and complete a

worth zero in Hummingbird’s share price.

definitive feasibility study (DFS).

We haven’t sold this project. We are just Whilst it’s non-binding, the idea is that

trying to unlock the significant value we see

Hummingbird will be undiluted until the

there and want to do that with a partner

delivery of a DFS. We have a massive project

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MINING | Hummingbird Resources

Resource Global Network who also sees the considerable exploration potential to grow the resource and take it to DFS. On completion we can then decide whether to sell or build it ourselves, depending on what is the best way to take it forward.

JAW: Outline what the main company targets are in 2020 from a corporate and operational perspective?

DB: We aim to continue improving operational performance, to build the Hummingbird team and make sure everything is working seamlessly. We want to increase the mine life at Yanfolila, organically or inorganically.

We also want to look at the wider picture and how to grow Hummingbird through potential M&A transactions. At a minimum we aim to be debt free by 2021, at which point we will evaluate how we return value to shareholders.

Leveraging the decade plus of experience we have of building a team with the skills to explore, build and operate a mine affords us a unique opportunity to create a bigger future for Hummingbird and build a multiasset producing gold company.

AIM:HUM

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MINING | Prospect Resources

Africa’s most advanc

PROSPECT

Resource Global Network

ced lithium project

RESOURCES

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MINING | Prospect Resources

Prospect Resources’ flagship venture is the 87%-owned Arcadia Lithium Project in Zimbabwe, which has been progressed from first discoveries to an updated definitive feasibility study (DFS) in less than three years.

The Arcadia deposit, located on the outskirts of capital city Harare, is comprised of low iron spodumene and ultra-low iron petalite ore, and is the 7th largest hard rock lithium project in the world after the ore reserve was recently increased by 39% to 37.4 million tonnes (Mt) at 1.22% lithium and 121 ppm tantalum.

Driving the project forward is a strong management team with a wealth of experience in lithium project development in Africa. The internal team is also supported by tier 1 EPCM partner Lycopodium/ADP and a host of other specialist companies.

SEZ status

from tax relief and exemptions (including 0% corporate income tax for the first five years), the ability to hold and operate foreign currency accounts and exemptions from the requirement to obtain permits for the trading of goods in and out of Zimbabwe.

“The financial and non-financial benefits to Prospect Resources in achieving SEZ status at Arcadia will greatly assist in the financing, development and operation of the mine,” said Prospect managing director Sam Hosack following the approval of the 10-year licence.

After decades of decline under the previous regime, Zimbabwe is starting on the long road to economic recovery, with mining set to play a crucial role. In 2018 Zimbabwe’s mining sector contributed 60% of the country’s national exports and 13% of government revenue.

The government is therefore acutely aware of the importance of the sector to the economy and has taken upmost care to attract foreign investors in the mining sector in recent years, as evidenced by its designation of a SEZ for the Arcadia project.

2019 was a year of consistent news flow

“Mining is fundamental to Zimbabwe’s

for ASX-listed Prospect, starting with the

economic recovery, so we feel we are in the

announcement that Special Economic

right sector and worked hard to obtain full

Zone (SEZ) status had been granted for

government backing. We maintain a very

the Arcadia project by the Zimbabwe

good relationship with the government and

government in February.

in particular the mining ministry.”

SEZ status at Arcadia provides Prospect with an extensive list of benefits ranging

TECHNICAL EXCELLENCE & SURETY IN DELIVERY

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BATTERY METALS

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INDUSTRIAL MINERALS

Lycopodium is an internationally recognised engineering and project delivery group servicing global mineral resource projects and associated mine infrastructure.

Lycopodium’s capabilities extend worldwide and across project size, process complexity and commodity.

Coupled with our reputation in precious and base metals, we have now grown to be a widely recognised services provider to the iron ore, battery metals and industrial minerals industries.

Our demonstrated commitment and proven ability to safely deliver projects on schedule and on budget, quickly ramping up to meet project performance targets, is the cornerstone of our success and repeat client base.

Lycopodium has a diverse team of Industry experts spanning a network of global offices, delivering fit-forpurpose and innovative solutions across all commodity types.

On time. On spec. On budget.

IRON ORE

E minerals@lycopodium.com P +61 8 6210 5222 www.lycopodium.com

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MINING | Prospect Resources

Zimbabwe team, Prospect Resources

The petalite market

Throughout the first half of the year, the

In Q3 Prospect made a secondary listing

firm focused on enhancing its understanding

on the Frankfurt Stock Exchange, a move

of the petalite it will produce alongside

designed to gain greater exposure to the

spodumene at Arcadia, as well as the markets

European market for petalite products and

that consume the mineral.

sophisticated European investors seeking exposure to the battery and the automotive

During this period, Prospect identified a

sector.

unique opportunity to supply technical

Resource Global Network iron lithium concentrate producer in the global market, which has a long history of being supply constrained.

“We anticipate Arcadia becoming one of only two mines in the world capable of producing ultra-low iron petalite and we expect to be the largest player in this natural oligopoly,” Hosack tells RGN. This newfound understanding of Arcadia’s high quality petalite ore led to a shift in commercial focus towards exposure to the European glass and ceramics market, which compelled Prospect to revisit its original DFS that was published in November 2018.

The DFS was subsequently updated and published in December 2019, taking into account changes to the mine plan and design in order to maximise production of ultralow iron petalite, alongside the spodumene destined for the battery minerals markets.

“We were able to integrate a stronger market-driven approach into our mine plan, changing the mine design scheduling and upgrading our JORC resource to reflect the ultra-low iron petalite content for the glass grade ultra-low iron petalite to the glass and ceramics market - the primary consumer of petalite products worldwide.

and ceramics market.”

An optimised DFS The December DFS for the 2.4 million tonnes

Prospect then announced that Arcadia’s

per annum (Mtpa) base case reinforced the

petalite product had passed the stringent

Arcadia project’s geological and financial

product specification requirements of the

merits, positioning Prospect as leading

glass and ceramics market in November and

lithium producer to both the chemical and

confirmed it would be the largest ultra-low

technical markets.

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MINING | Prospect Resources

Improved financial outcomes from

While Prospect has chosen to focus on

the DFS included a 39% increase to

petalite production for the glass and ceramics

the pre-tax NPV10, which now stands

market in the short term, it maintains the

at US$710 million, average annual

view that the battery chemicals sector will be

EBITDA of $168 million for the first

a key driver of lithium demand growth in the

5 years of operation, a $162 million

long term.

capex estimate, $3.42 billion LOM revenue (excluding tantalum credits)

“We now have two target markets: the

and a pre-tax IRR of 71%.

mature glass and ceramics market in Europe and the emerging battery chemicals and

Meanwhile, the Arcadia mine life was

energy storage industries in China. We were

extended by three and a half years

able to leverage the mine plan to reflect

to 15.5 years, further increasing

these markets in the DFS,” says Hosack.

Arcadia’s exposure to long term demand from growing sections

“I think we are now identified as Africa’s

of the lithium battery industry,

leading lithium project. We believe that 2020

including the electric vehicle (EV)

and 2021 will be the major turning point in

sector.

the lithium demand cycle underpinned by growth in electric vehicle (EV) sales, with the

Resource Global Network

market moving into deficit. We think it will be

In December, the company announced

very beneficial to our shareholders to have

it had entered into a Memorandum of

maximum upside exposure to the EV story

Understanding (MoU) with leading energy

whilst benefitting from the security of the

group Uranium One Group, part of the

European glass and ceramics sector.”

Rosatom business. The MoU affords Uranium

Offtake ambitions

One a 90-day exclusivity period in which the companies can negotiate equity investment

Soon to be one of the largest and highest

terms and an offtake deal for at least 51% of

quality producers of ultra-low iron petalite,

Prospect’s future lithium production.

Prospect sees itself as a very strong contender for supply in the glass and

“The offtake discussions with Uranium One

ceramics market and has received a lot of

are progressing and we see them as being

interest from European customers already.

particularly determined to not miss an opportunity like this to secure the volumes

Commencing negotiations with potential

and quantity of product they seek to secure

future customers was another key focus for

for the strategic model,” declares Hosack.

Prospect in 2019, building on the offtake agreement signed in 2018 with Chinese lithium chemical converter Sinomine Resources Group.

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MINING | Prospect Resources

Later in the month, Prospect announced the

significant experience financing projects

appointment of African Export-Import Bank

in Zimbabwe, so the securing of a project

(Afreximbank) to arrange and manage the

finance debt facility with the organisation was

primary syndication of a $143 million project

a major coup for Prospect and provides a

finance debt facility.

strong foundation for full project financing.

Afreximbank is one of the largest

“We worked diligently with Afreximbank to

development banks in Africa and holds

deliver this result which is a reinforcement

Resource Global Network

Africa’s most advanced lithium project After a year of substantial progress in the geological, technical and financial development of the fully permitted Arcadia project, Prospect has reached a crucial phase in the project’s life cycle.

With an updated DFS to reflect Prospect’s dual focus on the glass and ceramics and battery chemicals markets and a clear pathway to funding laid out, this serves as the catalyst for Prospect’s globally significant Arcadia project.

“I think our management has done an excellent job establishing a clear pathway towards financial close and from financial close to first production. We are an advanced development story having de-risked the project throughout 2019, and we have a clear plan to increase our offtake, progress our project finance and deliver our goals as the most advanced lithium project in Africa,” concludes Hosack.

and validation of the strategic importance of our asset, and its credentials as one of the top 10 lithium projects in the world.

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MINING | Teranga Gold

TERA GO

Creating va responsible minin

ANGA OLD

alue through ng in West Africa

Resource Global Network

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MINING | Teranga Gold

In the third quarter of 2019, TSXlisted Teranga Gold achieved first gold pour at its Wahgnion Project in Southwestern Burkina Faso two months ahead of schedule. The commissioning of Wahgnion (Teranga’s second operating mine in West Africa) is a major company milestone, not just because it will boost consolidated production by approximately 50% commencing in 2020, but also because it creates asset diversification across multiple jurisdictions, which can serve to increase the overall valuation of listed mining companies. “Over the last decade, investors have moved away from single-asset companies,” says Richard Young, president and CEO of Teranga Gold. “Having multiple assets reduces risk, and becoming a multi-mine, multi-jurisdictional company can make a positive difference in our valuation.”

After acquiring the project from Gryphon Minerals in 2016, the Teranga team took Wahgnion from exploration to production in less than three years, without a lost time injury during the construction phase.

A 2017 feasibility study underlined several attractive project metrics, which were

Resource Global Network improved in the following year when an updated study estimated a measured and indicated mineral resource of 2.4 million ounces (Moz) at 1.6 g/t Au for a 13-year mine life.

The mine is expected to produce 132,000 ounces (oz) of gold annually in the first five years of its life at an all-in sustaining cost of $761 per oz and with a total free cash flow of $311 million. Meanwhile, there is strong potential to increase the mine life further through reserve development programmes.

Ramping up at Wahgnion Teranga will continue to ramp up to commercial production at Wahgnion through the fourth quarter of 2019 and expects to declare commercial production by the end of the quarter. The company is set to produce 30,000-40,000 oz of gold from the operation in 2019.

Teranga has also continued to balance operational achievement with a responsible approach to development in the communities touched by its activities, evident in its handling of a progressive resettlement programme for local families living near the site at Wahgnion.

The phased programme has already resettled around 100 families over the past year, with a further 250 families set to be moved over the next 15 months beginning January 2020, for a total of nearly 500 by 2023.

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MINING | Teranga Gold “We’ve done a lot of work on the structure and compensation for resettlement and earned the trust of our local stakeholders,” Young explains. “We focus on improving the fundamentals such as healthcare, clean water accessibility and food security to these communities.”

In addition, Teranga has hired 30% of its Wahgnion workforce from local communities and in 2018, 92% of Wahgnion’s employees were Burkina Faso nationals. This is another way Teranga mitigates the impact of the mine on the area – a policy characteristic of a company that puts responsible development at the core of its business proposal.

The flagship mine Teranga’s first and flagship mine is Sabodala in Southeastern Senegal. Sabodala is the largest operating gold mine in Senegal, producing approximately 1.8 Moz of gold since the company’s initial public offering in 2010.

“In each of the last two years alone, we’ve mined about 25% more gold than we anticipated at a higher grade and more tonnes. That’s led to higher production from Sabodala, which is a credit to the grade control measures that we’ve implemented,” says Young.

Teranga has a proven track record of consistently replacing the reserves it has mined at Sabodala and the company is currently working through a significant opportunity for reserve growth after it implements a village relocation programme.

Resource Global Network

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The local Sabodala village sits on top of Niakafiri – the largest gold deposit within Sabodala’s mine licence, and so Teranga is in the process of resettling around 600 households using IFC performance standards and international best practices as the benchmark.

“Once the village is relocated in 2020, we will complete the drill programme on the Niakafiri deposit,” says Young. “In parallel, we will commence reserve development programmes elsewhere on the mine licence and regional land package.”

In addition to a strong sustainability mandate considering the needs of all stakeholders, Teranga brought in Environmental Resources Management, a global firm with over 30 years of experience in relocations across Africa, to manage the Sabodala resettlement programme.

“We wanted to bring in a firm with a high level of expertise to complete the relocation in the best way,” notes Young. “We’ve got a board that has instructed us to work with the communities to make sure that these resettlement sites are sustainable and something that our management group, employees and shareholders can be proud of.”

Advancing exploration at Golden Hill Returning to the subject of Burkina Faso, Young and the Teranga board are highly encouraged by the initial resource estimate

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MINING | Teranga Gold at Golden Hill – the company’s most advanced exploration stage asset located on the highly prospective Houndé greenstone belt.

The initial resource estimate provides a solid base from which to grow Golden Hill with 415,000 oz at 2.02 g/t Au in the indicated category and 644,000 oz at 1.68 g/t Au in inferred. As well, the company’s ongoing drilling programme has produced excellent gold mineralisation continuity along trend and to depth.

The company has completed metallurgical test work and preliminary engineering, has a flowsheet locked in and has cemented its sustainability strategy ahead of its expected mine licence application for Golden Hill in 2020.

The company also commenced a 27,000 metres RC and DD drilling and exploration programme at Golden Hill in July 2019.

“The results we’ve seen at Golden Hill to date are very encouraging, and we are optimistic that we’ll continue to make positive exploration findings. We believe that Golden Hill has the makings to become our third gold mine,” Young continues.

Exploring Côte d’Ivoire Teranga recently moved into Côte d’Ivoire, its third jurisdiction in West Africa, as it expands its portfolio and builds its reputation as a leader in West African gold mining.

Australian Resource Business Global Network

“Having multiple assets reduces risk, and becoming a multi-mine, multijurisdictional company can make a positive difference in our valuation” Richard Young, Teranga Gold CEO and president

Côte d’Ivoire is the largest economy in West Africa and it makes up the greatest proportion of any country within the Birimian greenstone belt – the enormous geological formation underpinning the region’s gold abundance – at 35%.

What’s more, Côte d’Ivoire is relatively underexplored compared to neighbouring countries like Ghana, Burkina Faso and Mali as a result of the successive civil wars that rocked the country between 2002 and 2007 and again from 2010 to 2011.

After a sustained period of peace and relative political stability, Côte d’Ivoire is becoming increasingly receptive to foreign investment in the gold industry. Barrick Gold CEO Mark Bristow even hailed Côte d’Ivoire as the number one jurisdiction in Africa for gold exploration.

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MINING | Teranga Gold

“We entered Côte d’Ivoire through two

and three exploration permits, providing a

joint ventures, the first with Miminvest

significant opportunity for scale that is rarely

– a company controlled by our largest

seen in West Africa aside from the shared

shareholder David Mimran. The second

systems in Ghana and Mali.

joint venture relates to the Afema property.

Through these joint ventures, we have three

“We are very encouraged by the Afema land

early-stage exploration projects that look very

package and certainly expect to recommence

attractive.”

our drill programmes when the rainy season ends,” says Young.

The most advanced of the three projects is called Guitry, which yielded encouraging

A true regional player

results from its maiden drill programme

Young also highlights the ease at which

conducted last year. Drilling is set to continue

Teranga has expanded from one jurisdiction

in 2020 across all three prospects.

to three in West Africa, owing to much of the region’s close alignment along linguistic,

Meanwhile, the Afema JV covers an area more than 1,400 km2 including the mine licence

judicial and business lines.

Resource Global Network

“We have focused on French West Africa

jurisdictions, allowing us to leverage our

and countries that are part of the West

skilled team and infrastructure already in

African Monetary Union. Countries in this

place in West Africa.”

organisation have very similar legal systems, labour and environmental laws and similar

With the Wahgnion Project up and running,

mining codes.

Teranga will now turn its attention to reserve development programmes at Sabodala and

“As a result, we’ve been able to move over

Wahgnion and exploration programmes

50 employees from Sabodala to Wahgnion

at Golden Hill and in Côte d’Ivoire, all while

across several key departments. Part of

maintaining its status as the model for

the reason we chose Senegal, Burkina Faso

responsible gold development in West Africa.

and Côte d’Ivoire is because of the easy movement of people through the three

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MINING | African Gold Group

AFRI GOLD G

The next platform for g

ICAN GROUP

growth in West Africa

Resource Global Network

151

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MINING | African Gold Group

African Gold Group (AGG) is a West Africa-focused Canadian exploration and development company listed on the TSX Venture Exchange, with a primary focus on the Kobada Gold Project in Mali – a low cost operation with 122 km² of prospective exploration concessions in the prolific Birimian Greenstone Belt.

The company recently appointed a new corporate leadership pairing in Stan Bharti and Danny Callow, two seasoned mining engineers with a range of complementary skillsets. Throughout his career, COO Callow has taken through to construction several greenfields and brownfields operations across Africa for large corporates, while CEO Bharti has garnered a reputation for developing undervalued assets over the last 30 years.

“Stan had a couple of very good hits in the West African gold space,” says Callow. “He’s highly entrepreneurial, a great mentor and likes to let the operational guys get on with their work. Coupled with myself on the operational side, I think we make a very good CEO/COO team.”

After coming on board in August, Callow recommended initiating an update to the 2016 feasibility study for the Kobada project to include additional data from drilling, geological trenching and regional geology work, ahead of a bankable feasibility.

Resource Global Network

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MINING | African Gold Group

The original feasibility indicates a total

metallurgical test work, and encompasses

resource of over 2 million ounces (Moz)

an infill drilling campaign that resembles

at Kobada, however this estimation only

a significant opportunity to upgrade the

accounts for drilling from a 4 km portion of

reserve at Kobada.

the main shear zone of the property, which is about 12 km in length.

“One of the things I’ve been pushing for is to undertake this final phase of drilling before

“That tells me that we have enough to start,

moving to construction so we can upgrade

but we also believe there is a lot more in the

the resource where we can and make sure

ground, which can give us a phased approach to have incorporated all of the geological to growing this project from a 50,000 oz per

information available to us. This will give us a

annum operation to 100,000 oz and beyond,” much better understanding of the structural Callow declares.

The phased approach

geology, which is important when we go into the design of the open pit and the type of crushers and mills that we need.”

Phase 1 of the pathway to production is designed to enhance confidence in resource

The processing method also needs to be

modelling, mining engineering and advanced confirmed by AGG, which was seen in the

Resource Global Network

2016 study to be gravity concentration only.

listed company out of Toronto I think it’s an

The company is currently undertaking test

important baseline to have.”

work to ensure all stratigraphic boundaries across the orebody are incorporated and

The current ESIA has already been approved

amenable to low cost gravity concentration.

by the Malian government and the Kobada mine is fully permitted, so the Phase 2 drive

Moving into Phase 2, AGG will deliver a

is all about optimising the existing metrics. In

bankable feasibility by April 2020, which

fact, once the bankable feasibility is delivered

will identify an accurate capital costing

in April, AGG can theoretically push the

for the project along with all key long lead

button on construction of the mine.

items and other crucial aspects of the plant design. Phase 2 will also usher in an updated

“I have always worked on the philosophy

environmental social impact assessment

that when you have enough resource to start

(ESIA).

construction of a mine, you should look at a phased approach. We are looking at a 50,000

“I am pushing for the ESIA to be upgraded

oz Phase 1 and then an additional 50,000 oz

to IFC and World Bank guidelines. Even

Phase 2.

though that’s not a requisite for Mali, as a

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MINING | African Gold Group

“The advantage of that is the whole plant

“My opinion on exploration is you should

is designed in a modular fashion so you

never stop drilling while you have good

can easily add to it. At the same time, you

prospects. If you can drill enough to replace

can often fund Phase 2 with cash flow from

every single oz that you take out the ground

Phase 1, and that’s what we’ve done very

with another oz, you extend the life of mine

successfully in the past.”

and also give yourself the opportunity to grow the size of the production.”

This approach makes perfect sense at the Kobada mine, where there is significant

Local procurement

opportunity for resource growth through

Callow and Bharti believe in utilising

additional exploration. Looking to the longer

local partners as much as possible when

term, Callow sees a third phase taking place

developing projects, particularly in

that will poke holes in some of the other

Africa where there is an onus on mining

shear zones within the licences that are

companies to ‘do good’ by supporting local

prospective for mineralisation.

ResourceGlobal GlobalNetwork Network 157 Resource responsibility (CSR) in the Kobada region, and these actions have been a key focus for Callow during the last 12 years of his career.

“CSR is part of our social licence to operate and very often can determine the success or failure of a project. If you think that you can just come into a country, set up base, take all of the resources out the ground and 15 years later leave without leaving a footprint behind, then you will fail.

“In its simplest form, CSR is looking to identify and employ skills from the local community, because what that does is bring money into the local community. The community then begins to improve and develop, and it becomes a self-sustaining model.”

The COO describes the snowball effect precipitated by mining companies employing locally and supporting local enterprises; These small-scale ventures start bringing in more materials and grow into larger supply chains, which in turn supports key

enterprises providing additional goods and

stakeholders in the project vicinity.

services, which leads to the community becoming less dependent on the mine.

At Kobada, AGG has used a local Malian driller and a local construction company for

Another vital part of AGG’s CSR strategy

the camp, among other in-country suppliers

centres on maintaining full transparency

and contractors. The company’s EPCM

with stakeholders in the local communities

partner has been a rare exception to the rule,

through regular communication. This

coming out of South Africa but boasting a

consultation is as much about keeping

strong reputation for delivering gold projects

locals updated of the latest project updates,

in West Africa.

as it is about discovering what the local communities need from AGG in its role as a

Local procurement and community uplift form key tenets of AGG’s corporate social

steward.

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MINING | African Gold Group “Rather than just assuming what is needed by the community, we sit down with them, explain how much is in the CSR budget and ask what they would like us to get involved in.

“That way we can deliver sustainable projects, because at some stage the mine is not going to be there anymore, but if we’ve got thriving agriculture and other little businesses, when we leave those guys can carry on.”

Sitting down with the chief Grounding this point in the context of the Kobada project, Callow refers to a recent meeting with the Kobada Chief Dantoume Diawara and his village elders to discuss the progress of the project and AGG’s plan moving forward.

“Clearly this was the first time this chief has experienced someone sitting down with him and explaining what we’re going to do and when. I outlined our commitments to local employment and local procurement and pledged to visit him on a quarterly basis to provide key updates.” a boardroom table with a PowerPoint In turn, the chief thanked Callow for

presentation, is so important. Instead we sat

employing 12 semi-skilled labourers from the

on plastic chairs with the chief on his veranda

village to help with clean up and preparation

and began a two-way relationship, instead of

for the upcoming drilling campaign, and

just telling him what we will do.”

underlined his commitment to managing the relocation of artisanal miners around the

In conclusion, AGG is running full steam

Kobada concessions.

towards a bankable feasibility for the Kobada project in April next year, at which point it

“I think that meeting with the local people

will be ready to commence construction of

in a very informal way, not sitting around

the mine. But, the development doesn’t end

Resource Global Network

there, as the company’s phased approach

world’s most prospective regions for gold

will see it add increased capacity through

exploration right now. The company would

subsequent resource growth.

certainly look to consolidate into other West African jurisdictions should any opportunity

AGG is also interested in additional

fall in the right investment bracket.

opportunities across West Africa – one of the

TSXV:AGG

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TECHNICAL EXCELLENCE & SURETY IN DELIVERY

PRECIOUS METALS

BATTERY METALS

BASE METALS

INDUSTRIAL MINERALS

Lycopodium is an internationally recognised engineering and project delivery group servicing global mineral resource projects and associated mine infrastructure.

Lycopodium’s capabilities extend worldwide and across project size, process complexity and commodity.

Coupled with our reputation in precious and base metals, we have now grown to be a widely recognised services provider to the iron ore, battery metals and industrial minerals industries.

Our demonstrated commitment and proven ability to safely deliver projects on schedule and on budget, quickly ramping up to meet project performance targets, is the cornerstone of our success and repeat client base.

Lycopodium has a diverse team of Industry experts spanning a network of global offices, delivering fit-forpurpose and innovative solutions across all commodity types.

On time. On spec. On budget.

IRON ORE

E minerals@lycopodium.com P +61 8 6210 5222 www.lycopodium.com

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

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MINING | Buffalo Coal

BUFFALO C

Breathing new life into the Aviemore coal m

COAL

mine

Resource Global Network

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MINING | Buffalo Coal

For several years, Buffalo Coal has been a mainstay in the coal mining town of Dundee in KwaZulu-Natal, a province which is home to a large proportion of South Africa’s coal operations.

The publicly-listed mining company owns two coal assets in the region – the Aviemore and Magdalena collieries, although the latter has been on care and maintenance since late 2018. One of the company’s two processing plants as well as the discard dump (for both anthracite and bituminous discard) is also located on the Magdalena Property. Situated in close proximity to the Aviemore and Magdalena mines is the Coalfields complex, a multipurpose hub that contains Buffalo’s head offices, one processing plant and a 160,000 tonnes per month capacity rail loading facility. Coalfields also houses a third-party owned calcine plant which is operated

by Buffalo to process its calcine product. From Coalfields, Buffalo ships to domestic and export markets a combination of calcine and anthracite. Buffalo also supplied bituminous coal until the recent closure of the Magdalena mine.

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“Unfortunately, the Magdalena mine was

estimated four to five years left of reserves at

becoming an uneconomical operation for

the point of its closure, leaving the door open

us and for the mining contractor we had

for a potential return to mining at Magdalena

in place,” says Buffalo’s interim CEO Emma

should Buffalo devise a lower cost mining

Oosthuizen. “In August 2018, they gave notice

method.

that they would not renew their contract.

As a result, we ceased our bituminous coal

There is also the opportunity for Buffalo

production at the end of October 2018.”

to process third party products at the Magdalena processing plant, which must be

While the costs of running the mine

maintained on an ongoing basis to prevent

had become too large to justify ongoing

erosion over time. The company is also

production at the Magdalena mine,

looking at selling the Magdalena slurry pond

Oosthuizen notes that there were still an

reserves to third parties and leasing the Magdalena adit to a neighbouring mine in the

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future, so the 2018 closure is by no means

we hope to start up next year when we scale

the end of the road for Magdalena.

down from two sections to one section at

Anthracite only production However, what the Magdalena closure has

Aviemore. Balgray can add another five to six years. Finally, there is potential for a longterm project which can add at least another 13 years,” says Oosthuizen.

done is allow Buffalo to focus wholeheartedly on anthracite production from the Aviemore

In the short term, Buffalo increased

mine - where the company’s long-term life-of-

Aviemore’s current reserves via a process

mine (LoM) exists.

called pillar extraction which allowed the company to extend the mine life to Q2 of

“There are two years left of our current remaining reserves at Aviemore. Then we have the medium-term Balgray project which

2022.

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MINING | Buffalo Hummingbird Coal Resources

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Building towards Balgray

“We anticipate that in the next two months

As Aviemore’s current remaining reserves are

we will complete the public participation

being mined out, with the Q2 2022 deadline

process and submit all the required

fast approaching, Buffalo’s mid-term horizons

environmental approval applications. We

are centred on commissioning the Balgray

expect to have the necessary approvals in

project, which involves opening up the old

place by Q3 of this year. Once we have this

Balgray mine on Mpati hill.

environmental approval can we open up the adit again, start construction and get it ready

The Balgray mine, previously operated by

for mining,” says Oosthuizen.

Anglo American, officially closed down in 1967, but the company believes its revival

In terms of bringing Balgray into production,

could add a further five to six years LoM to

Buffalo aims to do this in two stages next

the Aviemore mine.

year to ensure a smooth transition from the current reserves to the Balgray mine. Buffalo

Buffalo has commenced preparatory work

will need to start-up production at Balgray by

for the Balgray project and is currently

Q4 in 2021 to continue the company’s current

working through the final stages of the vital

production profile.

environmental approvals process, which includes public participation.

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The Aviemore North Adit Balgray also resembles an important stepping stone towards Buffalo’s longer-term plans, as the five to six-year extension to the LoM gives the firm time to pursue its longstanding plans for Aviemore North – a project which involves the build of a new adit at the Aviemore mine.

The addition of the Aviemore North Adit could add between 13 to 15 years of LoM, but at a significant capital cost of around R335 million (US$22 million) – a cost which the company would struggle to muster by its own means.

“Subject to what the market is doing and if it does improve, it may be possible to raise part of the capital requirement for the Aviemore North Adit project on our own, but we will most likely need some form of funding to realise the full project,” says Oosthuizen.

Clearing debts In the meantime, Buffalo remains laser focused on paying down its existing longterm debts that were accrued during the coal price collapse between 2012 and 2016, when the company took a R200 million loan from Investec and a smaller sum from private equity fund Resource Capital Funds.

Following the resignation of former CEO Rowan Karstel in February 2019, Oosthuizen stepped into the role of interim CEO. At that point, Oosthuizen was the CFO of Buffalo – a role she held since October 2018. Based

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on her impressive track record in finance

“Having said that, we are also putting in place

roles with mining companies, Oosthuizen

plans to extend Buffalo’s overall LoM, so the

has been tasked with overseeing the current

sooner we settle our debts, the sooner we

mining operations with the primary focus on

can commence construction of our Balgray

Buffalo’s debt repayment strategy.

project.” she adds.

this year. Once we’ve done that it will allow us

Building blocks to the future

to operate more freely. Our main priority is

The Balgray project and Aviemore North adit

to maximise our cash flow so we can pay off

resemble the building blocks of Buffalo’s

our debts as quickly as possible.

long-term future in Dundee – a town that

“The plan is to settle our outstanding debt

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is reliant on the coal industry and has seen

of Dundee, Buffalo must continue to focus

its economy damaged and jobs lost from

on financial prudence while progressing its

previous mine closures and downscaling of

medium and long-term targets at Aviemore.

operations in other key industries.

In order to deliver the economic stimulus of extending Aviemore’s mine life to the town

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MINING | Alphamin Resources

ALPHAMIN

A remarkable five-year journey to co

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RESOURCES

onflict-free tin production in the DRC

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MINING | Alphamin Resources

In June 2019, Alphamin Resources completed C4 commissioning of the processing plant at its Mpama North Tin Project, located deep in the jungle of North Kivu in Democratic Republic of Congo (DRC). The C4 certificate indicates that each plant component can successfully operate with ore material. C5 stage/commercial production – attained when the facility can be run and held at nameplate capacity for 48 hours – was completed by the end of July. This major milestone is a fitting bookend for Alphamin’s remarkable fiveyear journey from concept to full production at Mpama North.

What began with an idea to build a responsibly produced tin mine in an area scarred by conflict and exploitation will end with a globally significant project that will also serve as a major catalyst for socioeconomic development in the region.

“The plant is running remarkably well given the time period its been running for,” says TSXV and JSE-listed Alphamin’s then CEO Boris Kamstra. “We naturally would like to get our recoveries slightly higher and we have plans in place to lift them, but overall the plant is doing very well.

“The mine is producing sufficient material and the grade is surprising us on the upside.

Things are going as smoothly as one could wish.” Construction of Mpama North –

Resource Global Network the first phase of the mine at Bisie – was completed on time and first production was achieved in the second quarter of 2019.

In the following quarter, Alphamin boosted production by 269% to 2,345 tonnes of contained tin and overall plant recoveries improved to 65% in August and September, edging towards the company’s stated target of 72%.

Tin grades mined and processed also increased in Q3 to an average 5.6% Sn, which is expected to taper off to 4-5% Sn during the final quarter of the year. Alphamin said it expects to produce 2,000-2,200 tonnes of contained tin in Q4.

A globally significant tin mine Alphamin believes Bisie is one of the highest grade tin resources in the world, with two known deposits – Mpama North and the adjacent Mpama South, where access work is already taking place to develop the company’s next deposit. There are also additional exploration targets further South.

Current metrics estimate that Mpama North will produce approximately 10,000 tonnes of contained tin a year, based on a mineral resource estimate of 208,100 tonnes in the measured and indicated category.

The 12.5-year underground operation has a short payback period and it should fall into the lowest cost quartile of all tin producers, while generating an average EBITDA of

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MINING | Alphamin Resources

“The plant is running remarkably well given the time period its been running for. The mine is producing sufficient material and the grade is surprising us on the upside” Boris Kamstra – Alphamin Resources CEO

“In addition, whenever we encountered

$110 million per year at tin prices of around

Congo SARL was Alphamin’s choice of mining

$21,000 per tonne, according to Alphamin.

contractor at Mpama North.

However, these figures are currently being

“On the ground, we had Congo River doing

revised by the company in connection with

our earthworks and they were absolutely

a change of mining method. “The mining

exceptional. Getting kit into our region is a

method has always been a challenge and we

challenge, let alone to the mine itself. They

have been faced with the conundrum of how

did all the earthworks and civils impeccably.

artisanal workings, we would get a high volume of water coming to us and we were concerned about the risks of mud rush. In a defensive mode, we went to a cut and fill type mining operation, which we have been doing to date while we get a better feel for the orebody and decide on our optimal mining method.”

South Africa-based Bara Consulting carried out the initial mining study at Mpama North before DRA took over the studies via Tony Cox – a sub-level caving expert. Reliant

to mine efficiently and safely without leaving too much orebody behind,” says Kamstra.

“Then we had Group Five doing all the structured steel, piping and mechanical and

When Alphamin first started drilling the

electrical installation. Locally, we used Busy

orebody back in 2012 it was as much

Bee as our chartered flights partner, ATS is

exploration as it was resource drilling, and a

our catering and camp services provider and

decision to mine using sub-level caves was

TMK our logistics provider.

made using the information provided by core drilling results.

“Our local partners have been quite remarkable in their ability to get things

However, when the company eventually went

moving and keeping us on schedule, all of

in underground and made the first few drill

our sub-contractors and service providers

blasts, several issues quickly became evident.

have been exceptional,” declares Kamstra.

“The host rock was fragmenting far more than the mineralised material which would give us major problems in the flow of the cave.

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MINING | Alphamin Resources

Stimulating local business

Kamstra often discusses the tremendous aptitude for work expressed by the residents

More recently, Alphamin has looked to

of the Bisie region that have been engaged

reverse engineer much of the operational

on the project, and the former CEO lights

components it requires at Bisie, while also

up when asked about the story of one

finding ways of developing enterprises for

man who encapsulates the sheer grit and

local people and integrating small businesses

determination of the local people.

into the project’s supply chain.

“One of our employees is a man called For example, Alphamin is growing a network

Anderson. Before he came to us, he taught

of local small-scale farmers for the camp’s

himself English using YouTube and he had to

fresh vegetable requirements. This centrally

do it after midnight because that’s when data

organised structure is connected to a wider

charges are lower. Since then he has worked

network of farmers in the region, but still

his way up the ranks and today he is one of

gives ATS a single point from which to place

our key control room operators.

their orders. The company is looking to expand this enterprise into other staples

“I walk into the control room one day and

including fish, poultry and eggs.

there is Anderson, sitting behind six screens with three two-way radios blaring out. He

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is sitting at the heart of our operation and

The conflict-free pledge

he’s able to keep the ship steady and going

A fundamental part of Alphamin’s licence to

strongly.

mine is derived from its promise to deliver conflict-free tin in the Bisie region, where

“That gives us an enormous sense of pride

previously up to 2,000 artisanal miners toiled

and it’s nice to see that we are able to find

in rudimentary deposits at the mercy of

people who don’t necessarily have the

armed militias controlling the distribution of

skill required at hand but have more than

tin from the area into global supply chains.

sufficient capacity, willingness and desire to learn how to do it, and then do it very

At one stage this sprawling illegal mining

successfully.”

network hosted 16,000 people at Bisie and accounted for 4% of global tin supply. It

Alphamin ultimately plans to count its entire

soon became apparent to several major

operational staff from the local area, and

corporations that their supply chains were

this is just one way in which the company is

tainted by chaos, misery and death.

making a huge difference in the region which still harbours scars from years of artisanal

In response to this grave realisation, an

conflict-driven mining.

international legislative drive aimed at preventing the proliferation of conflict-

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MINING | Alphamin Resources

driven minerals into supply chains led to the

However, the recent outbreak of the Ebola

development of several initiatives including

virus in the South Kivu and Goma areas of

the Dodd-Frank Act.

the DRC poses a significant risk to Alphamin’s operations, although the company has

“We are delighted to be producing conflict-

enacted strict protocols to prevent the spread

free tin from the very site that was catalytic

of the disease.

in getting conflict minerals recognised and bringing the Dodd-Frank legislation to light,”

An individual carrying the virus is

Kamstra exclaims.

only infectious when they have a high temperature, so Alphamin has erected

“The impact in the area has been enormous,

temperature monitoring stations at several

from massive improvement in safety

important checkpoints. So far there have

and security to the development of local

been no instances of infection within the

businesses. We’ve opened up the logistics to

Bisie area.

the area so now there are shops selling all sorts of produce. Local farmers producing

“We have a rigid system in place whereby you

palm oil and other products are now able

cannot get on the plane in Goma until your

to access broader markets beyond the local

temperature is taken. And when you get off

areas.”

the place it’s taken again and again when you enter the mine site. You’re likely to have your

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temperature taken 12+ times in a day. This

“I think it’s terrific that in the middle of one

allows us to quickly identify potential Ebola

of the most inaccessible areas possible,

carriers to treat them and isolate them from

with every reason why you shouldn’t be

others.”

able to do what we done – there it stands, a

Coming full circle After seeing the Bisie project through from

tin producing mine! And it will produce tin for many years and continue to add to the wellbeing of the area.”

early feasibility to production in just under five years, Kamstra recently decided to step

Alphamin is aiming on extending the life of

down from his role as CEO of Alphamin.

the Bisie mine through the development

Commenting on the legacy he leaves behind,

of the Mpama South deposit, which could

the outgoing boss says: “It’s been a wonderful

be funded by revenue generated from the

privilege to be involved in a project like this

Mpama North ore, as it seeks to cement

and to have been able to influence such an

Alphamin’s position as a long-term catalyst

incredible part of the world for the better.

for socioeconomic development in the region.

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APPOINTMENTS & EVENTS

APPOINTMENTS BP CFO stands down after 34 years at oil giant

BP’s chief financial officer Brian Gilvary has announced his retirement after 34 years of working at the oil major, eight of which were spent in the CFO role.

Gilvary will be succeeded by Murray Auchincloss, who currently holds the same job in BP’s upstream division.

“I have worked closely with Brian for more than two decades and have always valued his financial expertise, strategic guidance and his unwavering dedication to the company,” said outgoing chief executive Bob Dudley.

Adriatic Metals poaches Avesoro CFO Geoff Eyre London-listed Adriatic Metals has made two new management appointments, including Geoff Eyre as chief financial officer.

Eyre will leave his current CFO post at West African gold producer Avesoro Resources, while Philip Cox will also join Adriatic as chief geologist.

“The addition of both Geoff and Phil to the senior management team at Adriatic clearly shows our intent to develop our existing assets into production,” said Adriatic CEO Paul Cronin.

Wind Denmark appoints Camilla Holbech as deputy director Trade body Wind Denmark has named Camilla Holbech as its deputy director following a period of organisational growth.

Holbech will help ensure the continued development of Wind Denmark and lead the organisation’s policy, electricity market and analysis team.

“The 2020s will be a landmark for Denmark’s and the world’s green transition, and in Denmark we have all the prerequisites to show how we think the climate neutrality task should be solved,” said Holbech.

Golden Rim Resources announces non-exec chairman appointment Adonis Pouroulis will become the new non-executive chairman of ASXlisted Golden Rim Resources, replacing the retiring Glenister Lamont.

Over his career, Pouroulis has held numerous senior positions and founded no less than eight mining companies including Petra Diamonds, which grew to become Africa’s largest diamond producer.

Pouroulis will be tasked with guiding the company through a major drilling campaign at its Kouri Gold Project in Burkina Faso.

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EVENTS

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

Energy Storage Summit February 25-26 London UK 8th Asia Offshore Wind Day February 25 Tokyo Japan

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