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.
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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
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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.
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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/
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DO MORE WITH LESS
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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
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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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MINING | Bushveld Minerals
BUSHVELD
At the forefront of the burg
Resource Global Network
MINERALS
geoning vanadium market
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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
81
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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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AFRICA. IN THE PALM OF YOUR HAND.
ONLINE NOW WWW.AFRICANBUSINESSNETWORK.CO.ZA
THE VERTICALLY INTEGRATED PRIMARY VANADIUM PRODUCER
Bushveld Minerals’ vision is to grow into a significant, low cost and vertically integrated company comprising of primary vanadium production, electrolyte manufacturing, development and deployment of Vanadium Redox Flow Batteries in the energy markets. Our value proposition includes: •
Compelling commodity market anchored to steel with burgeoning demand from energy storage market
•
Largest primary vanadium resource base of ~550Mt with a grade 1.58-2.02% V₂O₅ in magnetite
•
Bushveld Minerals owns 2 of the 4 operating primary vanadium production processing facilities, with capacity to scale up production significantly
•
Bushveld Minerals will offer a diversfied product offering for the steel, chemical industry and energy storage market
•
Bushveld Minerals vertical integration strategy into energy storage provides a natural hedge to vanadium price volatility as well as a diversified revenue stream
5 Harries Road, Illovo Edge Office Park 2nd Floor, Johannesburg, Gauteng 2196 | info@bushveldminerals.com | www.bushveldminerals.com @BushveldMin_Ltd
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.
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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? RED_Half page ads.indd 1
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
Resource Global Network Capital Drilling, a leading drilling and mining services provider in Africa, is proud to partner with Hummingbird Resources to deliver their complete drilling service, including horizontal dewatering, for their projects in Mali.
Contact us to discuss how our knowledge and experience can help your project. www.capdrill.com | info@capdrill.com
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
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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.
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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
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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
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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
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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.
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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
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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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MINING | Buffalo Coal
“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
Resource Global Network
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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MINING | Hummingbird Resources MINING | Buffalo Coal
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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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MINING | Buffalo Coal
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
Resource Global Network
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
ResourceGlobal GlobalNetwork Network 181 Resource
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Société de Transports et Messageries au Kivu Sarl | Website : www.tmkcongo.com | Mail : tmk@tmkcongo.com
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
Resource Global Network
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.
Resource Global Network 187
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
