RESOURCE Volume 7, Issue 2
GLOBAL NETWORK
Mining, renewable energy and oil & gas worldwide
POWERING A LOW CARBON WORLD THE MINED MATERIALS NEEDED FOR THE GLOBAL ENERGY TRANSITION
RESOURCEGLOBALNETWORK.COM
EDITORIAL
COVID-19 offers glimpse into a decarbonised world, now mining must help deliver it.
A
t the time of writing this note, the devastating scale and impact of the COVID-19 (coronavirus) pandemic is only just being comprehended by healthcare systems, governments and citizens around the world.
Jacob Ambrose Willson Editor
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 James Jeary (CRU Group) Trevor Keel (World Gold Council) 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.
The flu-like virus is believed to have originated in late 2019 in the city of Wuhan – a key economic centre and transportation hub in central China, and it has since spread around the globe with 802,748 confirmed cases, 39,016 deaths and 172,319 recoveries as of March 31st. While travel restrictions across Hubei Province are only now being lifted and businesses in Wuhan starting to reopen after two months of lockdown to contain the spread of the virus, other regions and countries outside the epicentre are only just entering periods of mass lockdown. It goes without saying that to effectively fight this unprecedented threat to humanity, we must closely follow medical guidelines, support healthcare systems and wait for scientists to deliver a vaccine. However, the implications of the coronavirus outbreak on the global economy in 2020 are nonetheless concerning. The world’s top economists are united in predicting a global recession this year despite considerable support from central banks and governments. Schroder Economics Group predicts a 3.1% contraction as the global economy heads for its worst year for activity since the 1930s. However, one outcome from the collapse in economic activity around the world has been the recovery of
ecosystems from the effects of sustained human activity and environmental contamination. The canals of Venice have cleared and nature is returning to the famed waterways, while air pollution in New York has fallen by nearly 50%. An unexpected decline in carbon dioxide emissions this year has offered a glimpse into a low carbon future that must be delivered in the coming decades to prevent permanent ecological catastrophe. In supplying a plethora of metals and minerals to multiple industries with green credentials, the mining industry is set to play a vital role in the decarbonisation of the global economy. This issue of RGN provides an in-depth analysis of the materials required to deliver low carbon outcomes in two key sectors: Electricity and transport. The long-read feature is complimented by a selection of company spotlights in the lithium and uranium mining spheres. The likes of Mali Lithium and Sayona Mining will supply lithium chemicals to the voracious EV market, while uranium development companies Vimy Resources and Eclipse Minerals are laying the foundations for the decarbonisation of electricity grids around the world. Finally, this issue includes an article written by World Gold Council consultant Trevor Keel on the underemphasised role of gold in the fight against coronavirus. Trevor explains how tiny gold particles are being used in medical diagnostic tools that are been drastically assembled for frontline testing of the virus.
Jacob Ambrose Willson jacob@resourceglobalnetwork.com
Anderson Murray Media Fulham Green, 69-79 Fulham High Street, Main Reception, Bedford House, London SW6 3JW | Tel. +44 (0)207 148 5630
a r
CONTENTS
NEWS 6 Global resources news Our selection of mining, oil & gas and renewable energy stories from the last year
MINING FOR THE FUTURE
10
COVER STORY 10
Mining for the future
How the mining industry will play a central role in the fight against climate catastrophe
COLUMNS 28 James Jeary (CRU Group) CRU Group analyst James Jeary considers the likelihood of an impending ‘lithium cliff’
VIMY RESOURCES
42
34 Trevor Keel (World Gold Council) World Gold Council consultant considers how gold could play a crucial role in the fight against coronavirus
MINING 42 Vimy Resources Mining a cleaner tomorrow
ECLIPSE M E TA L S
56
56 Eclipse Metals Advancing a smorgasbord of uranium tenements in Australia’s Northern Territory
68 Sayona Mining A central role in the development of QuÊbec as a lithium hub for the battery markets 80 Mali Lithium Owner of the world’s largest uncommitted hard rock lithium reserve 94 Superior Gold Strong fundamentals in place for this Western Australian gold producer
S AYO N A MINING
68
EVENTS 108 Events Our pick of the top mining, oil & gas and renewable energy events happening around the world in the months to come
MALI LITHIUM
80 SUPERIOR GOLD
94
NEWS
OIL PRICES PLUMMET BY 26% AS OPEC DEAL COLLAPSES Oil had its worst day of trading in 29 years on March 9th after Saudi Arabia slashed its official selling prices and made plans to ramp up crude output, in response to Russia’s refusal to back an OPEC-led supply cut extension last week. The collapse of a longstanding agreement between OPEC and its oil producing allies (known as OPEC+) sent the global oil market into disarray, with Brent crude prices down 26% to US$33.46 per barrel – its lowest point since February 2016. Meanwhile, West Texas Intermediate crude shrank by 28% to $29.80 a barrel to record its biggest decline on record, surpassing a 33% fall in January 1991 triggered by the start of the first Gulf War.
Saudi Arabia’s plans to boost its crude output above 10 million barrels per day (bpd) in April resemble a sharp U-turn from its pledge last week to contribute to an additional 1.5 million bpd supply cut with OPEC. However, after Russia refused to commit to the supply cuts the prospect of an oil pricing war between the world’s two largest producers will exacerbate the ongoing effect of the coronavirus outbreak on the oil market. Prices had already dropped by 20% this year prior to the collapse of the OPEC deal.
6
NEWS
Mining, oil & gas and renewable energy news from around the world ANGLO AMERICAN SECURES SOLAR POWER DEAL FOR BRAZILIAN IRON ORE MINES Anglo American has signed a 15-year contract worth US$190 million with Atlas Renewable Energy that will see the latter supply solar energy to the former’s iron ore mining operations in Brazil. The Latin American renewable energy company will supply electricity to the mining giant’s operations through the Atlas Casablanca photovoltaic solar plant, located in the State of Minas Gerais. The Atlas Casablanca solar plant has an installed capacity of 330MW with more than 800,000 modules and is expected to supply about 9TWh during the life of the contract with Anglo commencing in 2022.
By 2022, Anglo aims to power its Brazilian operations entirely by renewable energy as part of the Anglo American Sustainable Mining Plan, which has among its goals to reduce its CO2 emissions by 30% by 2030. “With this agreement and the contract for the construction of a wind power plant in Bahia signed in December, we will now be sourcing 90% of our energy from renewable sources, leading to a 40% reduction in CO2 emissions associated saidLARGEST Anglo’s OWNERwith OF our THEactivities,” WORLD’S Brazil CEO Wilfred Bruijn. UNCOMMITTED HARD ROCK LITHIUM
RESERVE
The agreement between Anglo and Atlas resembles the largest ever solar energy purchase and sale contract in Brazil.
7
NEWS
METALS AND MINING MODERATELY EXPOSED TO COVID-19 OUTBREAK: MOODY’S REPORT The global metals and mining sector will be ‘moderately exposed’ to the effects of the ongoing COVID-19 (coronavirus) outbreak, according to a recent global sectors report by Moody’s. The US-based financial services company cautioned that the global spread of coronavirus will significantly slow economic growth, impacting sectors with varying severity based on each’s level of exposure. “A large number of sectors will be moderately exposed globally, often because of the secondary effects of the outbreak and in some cases trade in global commodities,” Moody’s wrote. “This applies in particular to the Oil
& Gas and Metals & Mining sectors, which will suffer as a result of the fall in commodity prices.” However, analysts at Moody’s believe many producers have become more robust since the last commodity prices slump of 2015-16, which ravaged smaller, less-diversified mining companies. Now, more global, higher-rated companies are better able to withstand a market downturn, according to Moody’s. The firm cut its GDP growth forecast for the advanced G-20 economies to 1.0% in 2020, down from 1.7% in 2019, and revised its forecast for the emerging G-20 to 3.8% in 2020, down from 4.2% in 2019, including a substantive slowdown in China. 8
NEWS
Mining, oil & gas and renewable energy news from around the world MINING MAJORS BHP AND RIO TINTO ANNOUNCE PLEDGES TO FIGHT CORONAVIRUS As mining operations around the world are being suspended or wound down, companies including BHP and Rio Tinto have made pledges to help prevent the spread of coronavirus. On March 29, BHP launched an US$8 million plan to help mitigate the spread of coronavirus in Chile, where the world’s biggest miner operates the Escondida and Pampa Norte copper mines. This follows the company’s decision to exclude contractors from its Chilean operations for 15 days, as the number of confirmed cases in the South American country reaches 2,139, including seven deaths.
BHP said the plan involves an early detection programme that includes 150.000 rapid tests able to provide results in 24 hours, 10 units for sampling and mobile tents and permanent units, among other measures. Meanwhile, Rio Tinto has pledged a further $25 million to support global grassroots community coronavirus preparedness and recovery, taking its total contributions to around $60 million in 2020. “COVID-19 is a human tragedy and we all have to play our part as the pandemic spreads,” said OWNER OF THE WORLD’S LARGEST chief executive J-S Jacques. “Rio Tinto’s first UNCOMMITTED HARD ROCK LITHIUM priority remains the health and safety of all of RESERVE our employees and communities.” Despite pressure to significantly reduce or suspend its operations, Rio is continuing to run most of its assets around the world. 9
MINING FOR
M AT E R I A L S N E E D E D F O R
How the mining industry will play a central
Written by Jacob 10
COVER STORY | MINING FOR THE FUTURE
THE FUTURE
A LOW C ARBON WORLD
l role in the fight against climate catastrophe
b Ambrose Willson 11
According to a UN Environment study published in 2019, extractive industries are responsible for half of the world’s carbon emissions, with the extraction and processing of metals and other minerals responsible for 26% of these environmentally degrading emissions1. While this finding does not sit favourably with the heightening anti-climate change zeitgeist of our current times, it does belie the critical importance of mined materials in our modern world. The plethora of metals and minerals pulled from the ground have myriad applications in construction, transport, healthcare consumer technology and many more vital industries.
12
COVER STORY | MINING FOR THE FUTURE
in Melbourne last year and
stationary energy storage
outside the Prospectors &
facilities at mine sites.
Developers Association of Canada (PDAC) conference in
To give prominent recent
Toronto in March.
examples, Australian mining giant BHP last year traded its
The coal mining industry has
existing coal contracts across
been the primary recipient of
its Chilean copper operations
these vitriolic protests, but with
for renewable energy supply
coal plant economics rapidly
deals, while Anglo American
deteriorating and investor
signed a US$190 million solar
interest in freefall, this once
energy contract in March with
ubiquitous form of energy
Atlas Renewable energy for its
seems to be running out of
iron ore operations in Brazil.
steam. Meanwhile, a recent Carbon Tracker Initiative report
These are just two instances
found that building new wind
of many similar progressive
and solar plants will soon be
moves across the mining
cheaper than existing coal-fired
sector and they all command
power stations in every major
column inches in their own
global market2.
right, but this particular editorial will focus on the
This economic argument,
cluster of mined materials
allied with the growing ESG-
that are going to be required
focused investment culture of
in large quantities to deliver
the present day, is compelling
lower carbon outcomes in
Nonetheless, a bubbling
mining companies of all shapes
two massive global sectors:
crescendo of anti-mining
and sizes to do their bit for the
Transport and electricity.
rhetoric has recently
environment, with those at
manifested itself in ugly
the vanguard implementing
protests on the fringes of the
a wide range of operational
Cleaning up the power industry
International Mining and
changes, including the adoption
The transition towards a
Resources Conference (IMARC)
of renewable energy and
cleaner, greener global
13
14
COVER STORY | MINING FOR THE FUTURE
electricity sector has
greenhouse gas emissions has
accelerated at a rapid pace
provided the impetus for the
during the last decade,
creation of evolving national
driven primarily by greater
and regional renewable energy
investment in solar and wind
targets around the world since
projects, with technological
the Paris Agreement.
advances drastically pushing down the costs associated with
For example, the European
developing these operations.
Union (EU) is targeting at least a 32% share for renewable
Global renewable energy
energy in the bloc’s total
capacity has quadrupled in
electricity mix by 2030, along
the last 10 years, according to
with at least a 40% cut in
figures released by the UN last
greenhouse gas emissions
year, increasing from 414GW in
(from 1990 levels) and a
2010 to approximately 1,650GW 32.5% improvement in energy today3. Unsurprisingly, this
efficiency.
makes renewables that fastest growing area of the global
So far, the results have been
energy industry.
encouraging with recent data indicating that renewable
The watershed moment for
energy now accounts for a
the renewable energy sector
third of global power capacity
arrived in 2015 when 189 UN
following the addition of
nations agreed to limit the
171GW in 2018, although the
increase in global average
International Renewable
temperature to well below 2 °C
Energy Agency (IRENA)
above pre-industrial levels in
warned in January that the
the Paris climate accord.
share of renewable energy in power needs to more than
The ratification in
double by 2030 to advance the
international policy of this
global energy transformation4.
agreement to reduce global
15
Transforming transport
during the last two decades
But since around 2010,
major changes have begun to
technological and commercial
The global transport sector
gather pace in the automobile
developments, along with
– primarily comprised of
industry.
generous government
road, rail, air and marine
16
incentives, have pushed hybrid
transportation - accounted
While electric-powered
and fully electric vehicles (EVs)
for over 24% of global carbon
vehicles have existed in
to the forefront of the global
emissions in 2016, according
various rudimentary forms
automobile industry, based
to International Energy
for nearly 200 years, they have
on the premise that they are
Agency (IEA) data5.
largely played second fiddle to
an environmentally cleaner
the fossil fuel burning internal
alternative to gas guzzling ICE
Of the total global transport
combustion engine (ICE)
vehicles.
emissions, 72% come from
vehicle throughout this era
road vehicles, therefore
of expanding consumer car
While the presence of fossil
making the automobile sector
ownership around the world.
fuels in the global electricity
one of the largest contributors
sector means that EVs cannot
to global warming6. However,
yet be deemed zero carbon
COVER STORY | MINING FOR THE FUTURE
emitting devices, almost
significantly higher quantities
usage is that at the heart of
all major car makers have
to build electric-powered
every EV is an electric motor
followed the lead of Tesla in
vehicles7.
built predominantly with
manufacturing various electric
copper, steel and permanent
models with rapidly improving
Dr copper
specifications encompassing
One of those vital metals in
shorter battery charging cycles
EV production is copper. In
and longer driving ranges.
a comparison study, the UBS
As such, copper demand from
Evidence Lab found that
the EV market is expected
With EVs set to make up more
there is 80% more copper
to increase by 1.7 million
than half of global passenger
in a Chevrolet Bolt (EV), in
tonnes by 2027. To put this in
car sales by 2040 and
comparison to a similar-sized
perspective, this figure is just
completely dominate the bus
Volkswagen Golf (ICE)8.
shy of China’s entire copper
market, auto manufacturers
magnets comprised of rare earth elements (REEs).
production in 2017. China
are scrambling to secure
The primary reason for this
is the world’s third largest
supply of the metals needed in
massive increase in copper
producer of copper9.
17
Another recent report from Wood Mackenzie found that more than 250% of additional copper is required for the 20 million EV charging points that will be installed worldwide by 2030 to support the burgeoning sector10. Meanwhile, as a highly efficient conductor of electricity, copper demand from the renewable energy sector is rising exponentially. Increases in solar and wind energy capacity up to 2027 will raise copper demand by 813,000 tonnes annually, according to a Navigant Research study. This resembles an increase of 56% on copper demand seen in 201811. These predictions make for uncomfortable reading in the global mining industry, which is struggling to keep up with copper demand in the shortterm. In January, Chilean state copper commission Cochilco forecasted that the global copper market would move into deficit in 2020, and this
18
COVER STORY | MINING FOR THE FUTURE
was before major producers announced supply cuts to stem the spread of the COVID-19 pandemic12. In addition, new large scale copper discoveries have become less frequent around the world over the last decade, which is putting more pressure on the longer-term supply and demand dynamics of the nascent EV industry. The renewable energy and EV sectors urgently require more discoveries and investments akin to Anglo American’s US$5.3 billion Quellaveco project in Peru. The mine will produce 330,000 tonnes of copper per year for the first five years of the project, although its life could extend to nearly 100 years.
“In the burgeoning EV market, auto manufacturers will require a steep increase in the production of copper, lithium, nickel, cobalt, REEs and many other materials to support growing demand for EVs”
19
Battery metals
lithium production set to triple
Despite this massive demand
within five years13.
for copper, by far the most important component of an EV
In the ever-evolving lithium
is the lithium-ion battery. Each
market the supply and demand
Tesla battery weighs about
situation requires regular
540 kg – 25% of the total mass
monitoring, as do the same
of the car – and is comprised
dynamics in two other battery
of a range of battery metals
metals vital to the EV industry
including lithium, nickel,
– nickel and cobalt.
cobalt, graphite, and more. Nickel is a key element in In the lithium market, prices
lithium-ion batteries because
tumbled in 2019 due to
the metal is required to
oversupply stemming from
stabilise battery cathodes,
an influx of spodumene
enabling longer battery life
concentrate from new hard
and less susceptibility to fires.
rock lithium projects around
EV makers are increasingly
the world (particularly
adopting higher nickel cathode
in Western Australia),
chemistries in their batteries,
augmenting supply from the
creating a strong pricing
traditional brine operations
environment.
concentrated in South America.
20
Nickel usage in batteries is
In the short term, nickel
expected to grow from 70,000
production is expected to
However, with increased EV
tonnes in 2017 to 240,000
fall significantly this year, as
production set to push demand
tonnes by 2023, and in a recent
major producer Indonesia’s
for lithium chemicals up to
note the Bank of America
nickel ore export ban comes
700,000 metric tonnes by 2025
stated that the projected 13.6
into effect. Some of this
according to BloombergNEF,
million EVs sold in 2025 would
production loss will be offset
there are some fears that
result in the need for 690,000
by growth in Philippines and
the market could flip into
tonnes of new nickel supply
stable production in other
undersupply, even with
within that time frame14.
countries, however long-term
COVER STORY | MINING FOR THE FUTURE
HARD ROCK LITHIUM LEPIDOLITE ORE
supply worries need to be
to meet demand. The findings
which has been plagued with
remedied by investment in
suggest that cobalt demand
environmental and child
new capacity15.
could reach 430,000 tonnes in
labour concerns in recent
the next decade, which is 1.6
years.
It’s a similar story in the
times today’s capacity.
cobalt market, which is also
With cobalt supply in the
used as a cathode material in
Additional challenges in the
DRC set to be disrupted in
lithium-ion batteries. Recent
cobalt market include the
2020 due to the COVID-19
research from MIT suggests
fact that 60% of global supply
outbreak and with only
there’s not enough ability to
comes from the Democratic
limited new supply to come
mine and process the material
Republic of the Congo (DRC),
online in the coming years,
21
EV battery manufacturers are
according to the Mercenary
increasingly looking to reduce
Geologist Mickey Fulp, alarm
The nuclear proposition
their reliance on cobalt. For
bells rung across the tech
The rapid development of
example, General Motors
sector when China threatened
renewable energy capacity
recently unveiled a new
an embargo on its REE
over the last decade has
battery system that will cut
supply17.
provided one part of the
cobalt usage by 70%16.
solution to the prospect of Even though Chinese
a decarbonised future in
restrictions never materialised
the global electricity sector,
last year, REE consumers
however renewables should
Another collection of
used the opportunity to
not and cannot be championed
important metals in the global
ramp up discussions about
as a silver bullet for the anti-
transition towards a clean-tech
building and strengthening
climate change movement.
economy are REEs. These 17
supply chains outside of
chemical elements – many
China. While production from
The intermittent nature
of which have magnetising
new operations is growing
and low energy density of
properties - are used in EV
in countries like the US,
renewables means that other
motors, along with solar
Myanmar and Australia, the
baseload sources must be
panels, wind turbines and
vast majority of downstream
included in a holistic and low
many other technologies.
processing capacity remains
carbon energy mix. As such,
concentrated in China. This
the nuclear power sector
The most discussed and in-
is where the challenge lies for
is experiencing a revival in
demand REEs are neodymium
the sector going forward.
interest around the world.
together as NdPr), and they
And with the neodymium rare
The nuclear industry was
hit the headlines last year
earth magnets market alone
plunged into a deep freeze
during the escalating trade war
predicted to grow at a CAGR
by the Fukushima disaster
between the US and China.
of 8.5% from 2019 to 2025, the
of 2011, which compelled
race is on amongst producers
shellshocked countries such as
Historically, China has
to accommodate increased
Japan and Germany to suspend
produced up to 98% of the
REE uptake in the EV and
their entire nuclear operations
world’s rare earths and
renewable energy sectors.
indefinitely.
Rare earth elements
and praseodymium (known
although this has come down to around 60% in recent years
22
COVER STORY | MINING FOR THE FUTURE
However, in recent years some
the role of nuclear in a low
“The currently depressed
of the frenzied reactions to
carbon electricity mix, and
uranium market has caused
the disaster have softened and
this is reflected in the number
not only a sharp decrease
been replaced by a broader
of reactors currently under
in uranium exploration
understanding of nuclear
construction. 423 reactors
activities…but also the
energy as a dispatchable and
are to be built or are in
curtailment of uranium
efficient source of electricity
construction in established
production at existing mines,”
with low carbon emissions.
markets like the US and
said the WNA in its latest
Canada, as well as new players
nuclear fuel report22.
Nuclear plants are powered
such as China, Saudi Arabia
by pellets of uranium which
and India20.
are inserted into fuel rods and
However, there are hopes of a gradual rebalancing in the
used in a nuclear reactor to
These new investments will
market and these were raised
create steam to drive turbines
provide annual growth of 2%
in March when uranium giant
and generate electricity. This
in the nuclear power sector up
Cameco shuttered its large
process emits zero carbon
to 2040 according to the World
scale Cigar Lake mine in
emissions and makes nuclear
Nuclear Association (WNA),
Canada for at least a month
one of the cleanest sources of
with an additional 247 million
in response to the COVID-19
energy in the world.
pounds (Mlbs) of uranium
outbreak, giving prices a short-
needed annually to power the
term boost.
In addition, the high energy density of uranium - a single
reactors21. With the world’s largest
uranium pellet has the same
Uranium
energy as 1,000 kg of coal –
While the WNA described
Mlbs per annum McArthur
and the significantly smaller
known world resources
River operation – in care
uranium mine – Cameco’s 18
geographic footprint of nuclear of uranium as ‘more than
and maintenance since mid-
power plants compared to that
adequate’ to satisfy reactor
2018 and the world’s biggest
of solar and wind farms have
requirements to 2040 and
uranium producing country
further garnished the nuclear
beyond, the market is
– Kazakhstan – also shuttering
sector’s reputation19.
oversupplied and low prices
supply, some observers expect
are preventing companies
a structural shortage to take
Many governments around
from converting these
hold in the next few years.
the world have woken up to
resources into production.
23
A potential supply deficit in
environment, the extraction
sector for key metals and
the mid-term uranium market
of resources will continue to
minerals which are set to
provides a promising price
produce carbon emissions for
receive rapidly increasing
outlook, with sustained higher
the foreseeable future.
demand from the power and
uranium prices providing a
transport sectors over the next
boon to mining companies
However, this should not mean
with shovel ready projects. The
that the anti-climate change
unlocking of these uranium
movement should sharpen
In the burgeoning EV market,
resources will play a vital
its tools, point them at the
auto manufacturers will
role in the global transition
mining industry and call for
require a steep increase in the
to cleaner energy supply
a blanket ban on the activity,
production of copper, lithium,
throughout the 2020s and
given the aforementioned
nickel, cobalt, REEs and many
beyond.
plethora of mined materials
other materials to support
that are absolutely essential
growing demand for EVs, but
in the delivery of a low carbon
there are supply concerns for
future.
almost all of these metals in
Concluding thoughts The introduction to this article
24
decade and beyond.
the short to mid-term.
highlighted the significant
Instead, there should be
carbon footprint of the global
a concerted effort from
Some of these metals,
mining industry. Although
governments, institutional
particularly copper and REEs,
the sector is collectively
lenders and retail investors
will also be needed in greater
making solid progress towards
towards supporting
supply by the renewable
reducing its impact on the
exploration across the mining
energy industry, as the
world transitions towards a decarbonised electricity mix predominantly comprised of solar, wind and uraniumfuelled nuclear energy sources. Increasing global capacity of renewable energy and nuclear power will not only reduce carbon emissions by cutting the need for fossil fuels in electricity production, but also improve the credentials of EVs as a low carbon mode of transport, as the electricity powering the vehicles will be inherently cleaner. To conclude, the move towards decarbonisation in the electricity and transport sectors is absolutely essential if the world wishes to divert from total climate catastrophe in the coming decades, and the extraction of several indemand metals and minerals via mining is going to play a vital and enduring role in the low carbon transition.
.................................................................................................................................................................................
COVER STORY | MINING FOR THE FUTURE
S O U R C ES 1.
2.
3.
4.
https://www.theguardian.com/ environment/2019/mar/12/ resource-extraction-carbonemissions-biodiversity-loss https://carbontracker.org/ coal-developers-risk-600-billionas-renewables-outcompeteworldwide/ https://www.envirotech-online. com/news/business-news/44/ breaking-news/how-much-hasrenewable-energy-capacitygrown-in-the-2010s/50582 https://www.irena.org/ newsroom/pressreleases/2019/ Apr/Renewable-Energy-NowAccounts-for-a-Third-of-GlobalPower-Capacity http://resourceglobalnetwork. com/2020/01/13/renewableenergy-capacity-must-doubleto-achieve-climate-safety-irena/
5.
https://webstore.iea.org/co2emissions-from-fuel-combustion2018-highlights
6.
https://www.ipcc.ch/site/ assets/uploads/2018/02/ipcc_ wg3_ar5_chapter8.pdf
7.
https://about.bnef.com/blog/ electric-transport-revolution-setspread-rapidly-light-mediumcommercial-vehicle-market/
8.
https://www.visualcapitalist. com/how-much-copper-is-in-anelectric-vehicle/
9.
Ibid.
10. https://www.woodmac.com/ news/opinion/copper-poweringup-the-electric-vehicle/
in-2020-price-up-to-285-per-lb. html 13. https://about.bnef.com/blog/willthe-real-lithium-demand-pleasestand-up-challenging-the-1mt-by2025-orthodoxy/ 14. https://www.benchmarkminerals. com/membership/nickel-theoften-forgotten-battery-metal/ 15. https://www.wired.co.uk/article/ cobalt-battery-evs-shortage 16. https://www.theverge. com/2020/3/4/21164513/gmev-platform-architecture-batteryultium-tesla 17. https://investingnews.com/daily/ resource-investing/critical-metalsinvesting/rare-earth-investing/ rare-earth-outlook/ 18. https://skyline-gazette. com/2020/03/24/neodymiumrare-earth-magnets-market-2020global-industry-analysis-segmentstop-key-players-drivers-andtrends-to-2025/ 19. https://www.vimyresources. com.au/index.php/component/ edocman/riu-explorersconference-february-2020/ viewdocument/330?Itemid=121 – Slide 10 20. Ibid – Slide 13 21. https://www.world-nuclear.org/ information-library/current-andfuture-generation/world-energyneeds-and-nuclear-power.aspx 22. https://world-nuclear-news.org/ Articles/Nuclear-fuel-report-seesupward-trend
11. https://copperalliance.org/ wp-content/uploads/2019/04/ fact-sheet-renewables-tosignificantly-increase-copperdemand-by-2027.pdf 12. https://www.metalbulletin. com/Article/3916524/Cochilcoforecasts-global-copper-deficit-
25
Building a Multi-Asset Mid-Tier West African Gold Producer
TSX: TGZ OTCQX: TGCDF
Lithium Supply reaction requir
CRU Group analyst James Jeary considers the likelihood of an impen
28
COMMENT | JAMES JEARY (CRU GROUP)
red to prevent looming deficit
nding ‘lithium cliff’
29
Over the past three months, a combination of higher demand expectations and further supply cutbacks has resulted in the possibility of the global lithium market entering a sustained deficit in several years’ time. However, the reality is more nuanced. There remains ample new supply in the pipeline in the form of underused capacity, closed mines and brownfield expansions which will be accelerated as a result of an expected deficit. We expect that rising demand and an uptick in prices will stimulate the gradual return of this supply, reducing the likelihood of deficit. While we need price growth to stimulate new supply, we do not expect a price shock akin to what was seen in 20162018.
Production cutbacks continue as miners dash for cover The downturn in the lithium market over the last 12 months has stimulated a wide range supply cutback measures, with most of these being in Australia. We have summarised these cutbacks in figure 1.
The ‘Lithium Cliff’ is looming… or is it? If one were to take a snapshot of current supply plans and expected demand it would appear that the lithium market is about to swing into
FIGURE 1 (DATA : CRU)
a sustained deficit from 2022
future, taking only existing
onwards, ushering in the
operating or committed
‘lithium cliff’ which has long
supply, then one could
been theorised by perpetual
construct a scenario where the
market bulls. (figure 2)
market appears to be on the cusp of an extreme shortage.
However, this is not our base case view and CRU urges
A more nuanced method of
caution when considering a
analysis is required as supply
supply-demand balance in
will be more reactive and new
isolation. If one extends the
sources of supply will enter the
supply-demand balance for any
market. One must look at the
commodity far enough into the
30
COMMENT | JAMES JEARY (CRU GROUP)
supply pipeline as a whole, not just confirmed or operating projects. The extreme deficits shown in the chart above, do not account for ‘probable’ lithium projects – and even in a high demand scenario (1 million tonnes by 2025), there is enough supply pipeline to keep the market relatively well-supplied (assuming that a good portion of this supply comes online in a timely fashion). This supply will not be stimulated until there is enough demand and price support to merit it. CRU’s current base case for the next five years can be seen in figure 3.
FIGURE 2 (SOURCE CRU)
James Jeary (CRU Group) James Jeary is an Analyst within the Base Metals team at CRU Group, based in London. He is responsible for supplyside developments at the mine and refinery stage of the lithium market and is the Editor of CRU’s molybdenum market analysis. James graduated from the Royal School of Mines, Imperial College London, with an MSci in Geology in 2016. During his time at university, James visited a host of mines and projects to examine exploration, mining and processing techniques, and completed an internship as a Minerals Processing Researcher at the University of Cape Town.CRU’s latest Lithium Market Outlook was published during the week commencing March 30th. Please contact james.jeary@ crugroup.com for more information.
aj
31
“A more nuanced method of analysis is required as supply will be more reactive and new sources of supply will enter the market. One must look at the supply pipeline as a whole, not just confirmed or operating projects”
FIGURE 3 (DATA : CRU)
We are not on the cusp of another 2017-2018 price run
we estimate that over two
This distinction is extremely
thirds of all new supply came
important when discussing
from the development of
price expectations. The 2015-
greenfield projects, as shown
2019 greenfield expansion in
in figure 4.
the lithium sector naturally required a very heavy price
CRU believes that prices will
By contrast, CRU expects that
stimulus to bring on new
need to increase in the mid-
just 16% of new supply over
supply, with contract prices
term in order to stimulate new
the next five years will come
temporarily reaching 75% over
supply. At first glance, this
from greenfield projects, with
the marginal cost producer at
situation might appear to be
much of the remaining 84%
times – and spot prices at one
similar to the price run and
coming from better capacity
point being an estimated 300%
supply response that we saw
utilisation at existing projects.
premium to costs.
in 2017-2019. Some industry
This is illustrated in figure 5.
participants expect that prices
By comparison, the supply
are likely to creep back up to 2017-2018 levels as the ‘new normal’ (~$14/kg LCE in 2018, $real 2018). However, again CRU urges caution. Today’s lithium market has changed radically compared to even a few years ago. Between 2015 and 2019, FIGURE 4 (DATA : CRU)
32
COMMENT | JAMES JEARY (CRU GROUP)
FIGURE 5 (DATA : CRU)
response we will see in the
sector, could cause temporary
coming years will not require
price spikes as miners race
as strong a price increase due
to produce enough supply
to the nature of where that
for the impending e-mobility
supply is coming from – and
transition over the coming
much of the additional supply
decade.
could even come online at today’s prices, once the
But in commodities, high
demand is there for it.
demand growth does not necessarily mean high prices.
There is no doubt that
Prices will be volatile in the
lithium’s strong demand
future, but we believe that it
growth profile means that the
is unlikely they will remain at
battery metal has a bumpy
2016-2018 levels for a sustained
road ahead. Mismatches in
period.
“Today’s lithium market has changed radically compared to even a few years ago. Between 2015 and 2019, we estimate that over two thirds of all new supply came from the development of greenfield projects”
supply and demand, as well as bottlenecks in the refinery
33
Gold’s hidden role in diagnosing
World Gold Council consultant Trevor Keel considers how gold could 34
COMMENT | TREVOR KEEL (WGC)
g disease; COVID-19
d play a crucial role in the fight against coronavirus 35
Gold and COVID-19 have found themselves in the same sentence regularly over the last few weeks; the recent outbreak of the virus and subsequent elevation of the situation to a pandemic status by the World Health Organization (WHO) has rocked the global economy. My colleagues at the World Gold Council have blogged about a range of impacts of COVID-19 on gold this month, from the US Federal Reserve’s recent rate cut to the ongoing gold-backed ETF inflows. However, there is another aspect to gold’s role in our society which tends to receive much less attention: it is a critical component in many diagnostic test kits.
36
Having worked in the healthcare sector for several years prior to joining the mining and metals industry, I have always enjoyed discussing the subtle (and often unknown) links between the two. I consider medical diagnostics to be one of the most important of these links; to cut a long story short, tiny spherical particles of gold have been used as ‘indicators’ in lateral flow assays (LFAs) for over 40 years. You may not recognise the terminology, but ‘LFA’ technology is in everyday use
MALARIA LFAS IN USE IN TANZANIA . LF WHICH PROVIDE A RELIABLE YES/NO D UTES. TESTS CAN BE USED IN ANY SETT CIALIST EQUIPMENT OR ADMINISTRATI DOWN THE TEST STRIP WITH THE PATIE DROP OF BLOOD) AND, IF MALARIA IS P CHANGING THE COLOUR TO A DEEP PU COLOUR CHANGE WOULD NOT OCCUR, IMPOSSIBLE TO DETERMINE VISUALLY.
all over the world in staggering numbers.
LFAs are simple diagnostic tools, which provide a reliable
To contextualise this statement,
yes/no determination within
the WHO estimate that 412
15-20 minutes. Tests can be
million malaria LFAs were
used in any setting, and do not
sold in 2018, with over 250
require specialist equipment
million of these purchased and
or administration. The gold
distributed by National Malaria
particles travel down the test
Programmes worldwide.1 Tests
strip with the patient sample
are produced for dozens of life-
(in this case, a single drop
threatening illnesses, meaning
of blood) and, if malaria is
that the total annual number
present, collect on the test
of LFAs is likely to comfortably
line changing the colour to a
exceed half a billion. And the
deep purple. Without the gold,
vast majority of these contain a
this colour change would not
tiny quantity of gold.2
occur, making the outcome
COMMENT | TREVOR KEEL (WGC)
and cost. Almost all of them require samples to be taken and sent off to a centralised laboratory for analysis which can be slow and expensive, especially during times of crisis. Fortunately, diagnostics firms have responded resolutely to this pandemic. At the time of writing, the Foundation for
FAS ARE SIMPLE DIAGNOSTIC TOOLS, DETERMINATION WITHIN 15-20 MINTING, AND DO NOT REQUIRE SPEON. THE GOLD PARTICLES TRAVEL ENT SAMPLE (IN THIS CASE, A SINGLE PRESENT, COLLECT ON THE TEST LINE URPLE. WITHOUT THE GOLD, THIS , MAKING THE OUTCOME OF THE TEST
Innovative New Diagnostics’ (FIND) COVID-19 database details almost 200 diagnostics which are either commercially available or in development, and they have also announced
of the test impossible to
two evaluation programmes
determine visually.
which will help ensure data on the performance of
But what has all of this got
the key tests are available
to do with COVID-19? Well,
to healthcare authorities
given the nature of the current
worldwide.3
pandemic, quick and accurate diagnosis is absolutely critical
The majority of these tests are
to help understand, track and
lab-based (so-called molecular
tackle the outbreak. There
diagnostics), but increasing
is already a huge range of
numbers of first-generation
diagnostic tools available
biomarker LFAs are being
to governments around the
registered and evaluated,
world, but these can be limited
many of which are gold-
by two key parameters: speed
based. One of the first
Trevor Keel (World Gold Council) Trevor has over 15 years of experience in the development, commercialisation and analysis of new technologies across a range of sectors. As an independent consultant he has worked with various organisations, focusing primarily on both the role and demand for metals and new materials in technical applications. He is currently a senior consultant to both the gold and silver industries, and prior to this he led the World Gold Council’s technology sector. Trevor began his career as a chemist and project manager at the pharmaceutical group GlaxoSmithKline, and holds a PhD in nanotechnology and degree in chemistry.
aj
37
companies to do so was US-
This LFA was utilised in
Companies are also now
based BioMedomics, whose
China at the beginning of the
developing LFAs which can
COVID-19 rapid test identifies
outbreak and has now received
identify the virus directly.
the presence of biomarkers
CE-mark certification for use
For example, leading UK
from the body’s immune
in Europe.4 Biomedics’ LFA
diagnostics firm Mologic
response to COVID-19 instead
is under evaluation by the US
recently announced receipt
of looking for the virus itself,
Food and Drug Administration
of a large grant from the
and can help determine if a
(FDA) in the USA5 and the
UK government to develop
person has been infected with
company is reportedly in
a COVID-19 LFA.7 Larger
COVID-19 even after the virus
the process of supplying the
companies like Mologic have
is no longer present.
Kuwaiti government with
strong partnerships and supply
400,000 kits for immediate
chains already in place, so the
deployment.6
38
COMMENT | TREVOR KEEL (WGC)
authorities worldwide appear
FOOTNOTES:
to be accelerating the route
1 WHO World Malaria Report
to market for new COVID-19 diagnostics. The FDA, for example, has recently published guidelines to this effect.8 The financial sector has always regarded gold as a safe and stable store of value, particularly during times of stress. Similarly, gold has been the material of choice in the LFA diagnostics space for 40 years because of its unique physical properties, and gold particles are likely to be at the heart of many of the new COVID-19 LFAs we see certified for use around the development, manufacture
world in the coming weeks and
and delivery of new LFA
months. These diagnostics will
diagnostics can be achieved
help to complement lab-based
quickly.
testing, and further equip healthcare professionals and
The availability of such
scientists to understand and
diagnostic kits is determined
track the pandemic across a
on a country-by-country
broad range of settings.
basis, and the speed to market generally depends on that
2019. https://www.who.int/ publications-detail/worldmalaria-report-2019 2 LFAs utilise gold in nanoparticulate form, meaning every test contains a minute quantity of metal. Demand for gold in the sector is effectively immaterial with respect to supply and demand in the wider gold market. 3 FIND, accessed 13 Mar 2020. www.finddx.org/ covid-19/ 4 Biomedomics Press Release, accessed 8 Mar 2020. www.biomedomics.com/ biomedomics-receives-ce-ivdcertification-for-its-new-covid19-igm-igg-rapid-test-for-novelcoronavirus/ 5 NCBC news article, accessed 16 Mar 2020. www.ncbiotech. org/news/biomedomicsseeks-fda-ok-covid-19-rapiddiagnostic 6 Kuwait News Agency report, accessed 16 Mar 2020. www. kuna.net.kw/ArticleDetails. aspx?id=2879288&language=en 7 Mologic Press Release, accessed 6 Mar 2020. www. mologic.co.uk/mologicawarded-c-1-million-by-ukgovernment-to-develop-rapiddiagnostic-test-for-covid-19/ 8 FDA COVID-19 update, accessed 16 Mar 2020. www. fda.gov/news-events/pressannouncements/coronaviruscovid-19-update-fda-providesmore-regulatory-relief-duringoutbreak-continues-help
country’s specific regulatory requirements. However,
39
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VIM
RESOU
Mining a clean
42
MINING | VIMY RESOURCES
MY
URCES
ner tomorrow
43
Vimy Resources’ vision statement is ‘mining a cleaner tomorrow’. It is a clever double entendre referring not only to nuclear power as the cleanest source of reliable energy, but the way in which the ASX-listed company intends to mine; with low residual impact and realtime rehabilitation. Nuclear energy is emerging as one of the few low carbonemitting, 24/7 power sources that can help achieve the IPCC’s goal of a 1.5C limit on global warming. While renewables have grown significantly along with energy storage technology, their intermittency and low energy density means that other baseload sources must be included in a holistic energy mix.
44
MINING | VIMY RESOURCES
Vimy CEO and managing
Uranium fuels nuclear power
Young is a geologist and was
director Mike Young has
plants where controlled fission
born and educated in Canada
noticed a fundamental
of uranium produces heat
where he worked on several
change in public perception
that generates the steam to
uranium projects in Northern
towards nuclear energy. The
drive turbines and generate
Saskatchewan before moving
Fukushima accident influenced
electricity on a large scale.
to Western Australia in the late
opinion for many years, but
Put simply, uranium mining is
1980s. He gravitated towards
as climate change began
vitally important to the world’s
resource geology and 3D
to dominate headlines, the
decarbonising mission.
modelling when it was in its
positives of nuclear came into
infancy and, as a result, was
the ascendancy. And many
Introducing Vimy
countries provide hard data on
Vimy owns the largest
mining projects through his
the efficiency, safety and low
advanced, but undeveloped,
work as a resource consultant.
cost of nuclear; France and
uranium project in Australia.
Canada are two clear examples.
Australia holds the largest
Since then he has built a solid
known uranium resources
reputation in the WA mining
“I like to use electric vehicles
in the world and is the third
community, growing an iron
(EVs) as an example to really
largest producer globally,
ore company (BC Iron Limited)
understand how clean nuclear
behind only Kazakhstan and
from its initial listing to first
power is. Despite the hype,
Canada.
iron ore on ship within four
involved with many successful
years. During those years he
EVs are not emission-free and are only as clean as the power
The company is advancing
met Cheryl Edwardes - now
source used to charge them.
projects in Western Australia
Vimy’s chairman - a former
(WA) and the Northern
WA state politician and ex-
“In Queensland, where
Territory and has a globally
Environment Minister, who
electricity is powered by coal, a
experienced management
shares his passion for the
Tesla 3 will emit 17,500g of CO2
team and board of project
potential of uranium to reduce
per 100 km but in Ontario, a
developers and mine operators.
greenhouse emissions.
Tesla 3 only emits 880g per 100
Their experience and industry
km, 5% of Queensland’s Tesla,
contacts put Vimy at a strong
Alongside Young at the helm
because the grid is powered by
advantage in the obscure and
of the company is chief
nuclear and hydro.”
complex uranium market.
nuclear officer Julian Tapp, an economist who not only
45
manages the dark art of approvals, but has become expert in the uranium market Julian is the chair of the supply working group of the World Nuclear Association. The executive team also includes CFO Marcel Hilmer, a strategic thinker and former CEO of a uranium junior, and GM of geology Xavier Moreau, thought to be one of Australia’s best uranium geologists. Uniquely for a WA junior, Vimy also employs a USbased uranium sales and marketing expert in Scott Hyman. Scott has both buy and sell side experience as he worked for both a supplier, Cameco Corporation, and a utility, Dominion Energy, for almost thirty years and knows the industry and its players in the US very well. Vimy concentrates its sales efforts on the US utilities as they make up 30% of the global market. The team believes deeply that Vimy is best placed to
46
MINING | VIMY RESOURCES
capitalise on the ‘perfect storm’ of a looming supply shortage and a growing demand for nuclear power, due in part to the erstwhile climate emergency. “Looking at uranium production around the world at today’s spot price, very few producers can make money at the current spot price. Not even companies with the lowest cost mines in the world, such as Cameco at McArthur River in Canada, can make money and so that mine is shut until sustainably higher pricing is achieved. “Cameco has shut down an 18 million pounds (Mlbs) per year operation because the low prices aren’t sustainable, and Kazakhstan has curtailed expansion and is scaling back as well. Cameco will not destroy an asset like McArthur River by mining and selling it at low to zero profit. Why would you?
47
“But more importantly for long term investors, exploration has slowed to a trickle and as a result there are few projects that are close to production. The signs of a growing and systemic shortage going forward have become more obvious to many, and Vimy’s activities during the past five years have been predicated on taking advantage of this.” That shortage is being exacerbated by growing uranium demand, particularly in non-OECD countries across Asia and the Middle East, whose governments are seeking ways of providing cheap, low
already in operation. The
production. Uranium supply
emission power that can feed
new power plants will require
contracts are generally written
into national grids 24/7, unlike
an additional 250 Mlbs of
up to three years in advance,
wind and solar power which
uranium every year, in a
so utilities are sharpening
are subject to weather patterns
current market of 170 Mlbs.
their pencils now.
Considering the diverging
When supply becomes
There are currently 493
supply and demand factors,
tight, utilities’ sensitivity to
nuclear reactors in advanced
Vimy expects a structural
cost becomes secondary to
planning stages or under
uranium shortage to take hold
security of supply and so the
construction around the
even before it could be in
next twelve months could
and seasons.
world, adding to the 442
48
MINING | VIMY RESOURCES
The company has been very transparent about its path to production. Financing will be ‘contract-led’ whereby Vimy will need to secure longterm contracts in the US$50s to obtain debt funding. As a result, Vimy seeks to establish long term relationships and contracts with US utilities. “Our long-term plan has always been to write those contracts through 2020 then roll into financing and final investment decision (FID) in early 2021. Therefore, Scott Hyman’s job is critical and so he is constantly in front of the utilities, not only providing them with updates on our
see a significant increase in
Mulga Rock
uranium contracting activity
Vimy’s Mulga Rock project
putting upward pressure on
in WA is Australia’s largest,
contract pricing.
advanced undeveloped
“As a result of that intel, we
uranium project and has
are confident that the uranium
“We’re already seeing the
gained State and Federal
market is on the rebound and
US utilities ramping up their
primary environmental
we will be hosting the grand
contracting activities at a
approvals, completed a
opening of the Mulga Rock
time of slowing supply. It’s
definitive feasibility study
Project in the not too distant
the perfect storm,” Young
(DFS), and is progressing
future. So, it’s contracts in
proclaims.
secondary approvals.
2020, FID in early 2021 and
project, but gaining valuable intelligence on the US market.
then it’s a two-year build for
49
VIM Y R ES O U R CES AT A G L A N C E
the project, so we’d be in
“Mining will be very simple
production late early 2023 just
at Mulga Rock,” Young says.
as the shortage is really taking
“We will use an efficient and
hold.”
cost-effective strip-mining process, where pits are
STOCK TICKER ASX:VMY
MARKET CAPITALISATION US$9.1 million (as of March 30, 2020)
aj
“I like to use EVs as an example to really understand how clean nuclear power is. In Queensland, where electricity is powered by coal, a Tesla 3 will emit 17,500g of CO2 per 100 km but in Ontario, a Tesla 3 only emits 880g per 100 km, 5% of Queensland’s Tesla, because the grid is powered by nuclear and hydro” Mike Young, Vimy Resources CEO and managing director
The Mulga Rock DFS was
backfilled with tailings or
published in January 2018 and
overburden as we go. This
outlines a strategic, long-life
results in very low residual
project with annual uranium
impact to the environment – a
production of 3.5 Mlbs over
mining method that reaffirms
a 15-year life of mine. It also
the ‘cleaner’ in Vimy’s vision
showed a 25% IRR and NPV of
statement.
AUS$530 million on a AUS$490 million capital cost, with the
Alligator River
project reliant on a uranium
Vimy’s ambitions also extend
contract price of US$55-60 per
beyond Mulga Rock after
lb.
acquiring the Alligator River Project in March 2018
A peer review of the DFS in
from Cameco Australia. The
late 2019 found the study to be
project comprises the largest
world class with no design or
granted tenement package in
engineering flaws identified.
the Alligator River Uranium
“The reviewers confirmed
Province of the Northern
that the Mulga Rock DFS is an
Territory – a region which has
outstanding study,” says Young. striking geological similarities with the Athabasca Basin in “Now that almost two years have elapsed, we wanted to revisit the cost input data to
“The Athabasca is the premier
ensure that the capital and
location for uranium deposits
operating costs are up to
in the world because they are
date. We are also investigating
big and they are high grade.
opportunities to reduce capex
Some of the biggest deposits
and opex.
50
Canada.
MINING | VIMY RESOURCES
in the world are located there
Despite these geological
three decades. Cameco’s
such as McArthur River and
similarities, the two uranium
drilling barely scratched the
Cigar Lake.
provinces have received
surface and that’s why we’re so
contrasting levels of
excited about the targets that
“As a geologist, the Alligator
exploration activity over the
have been thrown up by our
River Project really excites
last thirty years. While intense
fieldwork in the area.”
me. The similarities in the
exploration in the Athabasca
geology of the two regions are
Basin has led to a string of
One of Vimy’s targets in the
profound. Both provinces have
massive discoveries, Australia’s
Alligator River tenements
sandstone units lying above
regressive Three-Mines Policy
is the Angularli resource,
the mineralised formations as
(1984-1996) resulted in little
which yielded a positive
well as all the same structural
to no exploration in Alligator
scoping study late in 2018.
and alteration elements.
River.
The inferred mineral resource
Athabasca is where the large
was estimated at 0.91 million
deposits are found and our
“You’ve got this geological
tonnes (Mt), at 1.3% uranium
work so far indicates that will
province that’s really
oxide for 26 Mlbs of uranium.
be the same at Alligator River.”
prospective and hasn’t been explored for uranium for
51
EXECUTIVE OVERVIEW MIKE YOUNG, CEO AND MANAGING DIRECTOR
Young is a geologist and was born and educated in Canada where he worked on several uranium pr before moving to Western Australia in the late 1980s. He gravitated towards resource geology and 3 fancy and was involved with many successful mining projects through his work as a resource consu Since then he has built a solid reputation in the WA mining community, growing iron ore company ing to first iron ore on ship within four years. During those years he met Cheryl Edwardes - now Vim politician and ex-Environment Minister, who shares his passion for the potential of uranium to red
52
MINING | VIMY RESOURCES
“We’ve also drilled some holes
while the Mulga Rock Project
at the Such Wow deposit and
has fifteen years of mine
seen some exciting results
life, Alligator River has the
from that campaign. And late
potential to provide uranium
in last year’s field season,
products far into the future,”
we announced some really
Young explains.
exciting geochemical results from Southern Flank, our
To conclude, Young and Vimy
Jabiluka look-alike.
have high confidence in the improving fundamentals of
“US utilities look at long-
the uranium and nuclear
term reliability of supply and
power industries even after
rojects in Northern Saskatchewan 3D modelling when it was in its inultant. y BC Iron Limited from its initial listmy’s chairman - a former WA state duce greenhouse emissions.
the first three months of 2020 have been dominated by
very few new developments
uncertainty in global markets
that are as advanced as Mulga
due to the outbreak of the
Rock. Certainly, the consensus
COVID-19 pandemic.
view is that the uranium price will rise in the early 2020s
While the virus will certainly
and that’s about the time that
make conditions more
Mulga Rock will come into
challenging in the short term,
development.
uranium demand is inelastic, predictable and is being driven
“On top of all of the
by global decarbonising trends
fundamental uranium
and reactor builds in non-
economics, the COVID-19
OECD countries like Russia,
pandemic is resulting in mine
China, India and Saudi Arabia.
closures which will accelerate the shortage and highlight the
“We’re seeing a curtailment
importance of diversification
of large mines and there are
of supply.”
53
AFRICA. IN THE PALM OF YOUR HAND.
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Largest primary vanadium resource base of ~550Mt with a grade 1.58-2.02% V₂O₅ in magnetite
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5 Harries Road, Illovo Edge Office Park 2nd Floor, Johannesburg, Gauteng 2196 | info@bushveldminerals.com | www.bushveldminerals.com @BushveldMin_Ltd
Bushveld Minerals
ECLIPSE
Advancing a sm
56
MINING | ECLIPSE METALS
E METALS
morgasbord of uranium/gold tenements in Australia’s Northern Territory
57
Eclipse Metals listed on the ASX at the beginning of 2011 with a smorgasbord of highly prospective uranium tenements in the Northern Territory (NT) of Australia. Just a few months later, however, the Fukushima disaster in Japan destroyed confidence in the nuclear energy industry and severely dented global uranium demand in the short to mid-term. In response to this, Eclipse focused on packages of alternative commodities across the NT and Queensland, including manganese, vanadium and precious metals like gold, platinum and palladium. But, in recent years the rapidly expanding global anti-climate change movement has led to an increased understanding of the role of nuclear energy in a low carbon world and with it the return of palatable investor attitudes towards uranium exploration. As such, Eclipse reignited its interest in the uranium tenements in the NT and
58
has made substantial progress in unlocking these for exploration access since 2018.
MINING | ECLIPSE METALS
A geologist’s heaven
In the Alligator Rivers region,
mineral resource projects in
Eclipse entered into a joint
the region has been securing
Eclipse’s current and primary
venture (JV) with Rio Tinto in
legal exploration agreements
focus is with several uranium,
2016 - a deal that gave the major
with first the Traditional
gold and palladium tenements
access to Eclipse’s uranium
Owners of the region and
in the West Arnhem Land
tenements within an area it
second the Northern Land
region of the NT, East of
had christened the Liverpool
Council (NLC).
Darwin. These prospects are
Project.
Rivers Uranium Province
However, during the ensuing
(ARUP), an area which Eclipse
two-year period Rio Tinto
Working with the Traditional Owners
director Carl Popal describes as
failed to secure project
Over the course of 2019
‘a geologist’s heaven’.
development consent from
Eclipse worked closely with
the local Traditional Owners
the Traditional Owners of
“West Arnhem is a well sought-
in West Arnhem Land. Eclipse
the region and was delighted
after area in the exploration
decided not to renew the
to announce the conclusion
mining world. 96% of past
agreement with Rio Tinto in
of negotiations on a long-
uranium production and 95%
late 2018, instead choosing to
awaited Aboriginal Land
of known uranium resources in
pursue the development rights
Right Agreement for its Devil’s
the NT comes from the ARUP.
independently.
Elbow prospect.
“Most of our neighbours are
West Arnhem Land resembles
In December 2019, consent
big players such as Cameco and
an interesting hotchpotch
was granted by the Traditional
Rio Tinto. They and others have
of natural wonders, large
Owners and ratified by the
delineated some big uranium
scale mineral deposits and
NLC Executive Council. The
deposits like Ranger, which is
ancient indigenous cultures,
subsequent agreement allows
the biggest uranium mine in
of which around 12,000 of the
the company to explore and
the Southern Hemisphere and
total population of 16,000 are
mine within the prospect for
Nabarlek - the world class, high
aboriginal peoples.
its entire lifetime.
mine. But having said that,
Therefore, one of the biggest
In this news release Popal said:
it’s still a very pristine area to
challenges faced by mining
“This bilateral agreement is
explore.”
companies wanting to develop
certainly a great achievement
located within the Alligator
grade uranium and copper
59
60
MINING | ECLIPSE METALS
for the company. The terms
on the Ranger geological fault
of the agreement are quite
line between the Alligator
viable in the current market
River and Goomedeer river.
In search of the big monster
develop the Devil’s Elbow’s full
Devil’s Elbow was first
“Both Uranerz and Cameco
potential, and perhaps turning
discovered by Uranerz
could see there was something
it into a world-class mining
Australia back in the late 1970s
there [at Devil’s Elbow] and
project.”
and early 80s and subsequently
delineated the target zone but
further explored by uranium
they were limited to access the
The Devil’s Elbow prospect
giant Cameco between 2002
ground for drilling. We were
is situated near the shear
and 2008. Samples from
fortunate to pick it up from
zone on the Northern side of
shallow trenching yielded
one of the local prospectors
MacArthur Basin encroaching
high-grade uranium of up to
who was very close to the
on the Pine Creek Oregon and
5.8%, plus precious metals
Traditional Owners.
economy, allowing us to
gold and 28.02 g/t palladium.
assays including up to 31.8 g/t
61
62
MINING | ECLIPSE METALS
“We’d been told that Cameco were challenged by the Traditional Owners and they were limited to access the ground to the South of Ranger Fault line,” Popal explains. The Ranger fault line is a 60 km line with five exploration licences to the North, but none to the South as Cameco were previously limited to land access to explore the targeted areas. Since early 2013 Eclipse has conducted extensive and detailed historical data review over the Devil’s Elbow area and its surrounding tenements, and based on these results
“West Arnhem is a well sought-after area in the exploration mining world. Most of our neighbours are big players such as Cameco and Rio Tinto. They and others have delineated some big uranium deposits in the past”
63
the company has delineated
“Those anomalies were never
project - another Ranger or
several new drill targets to
explored because Cameco
Nabarlek could be in that
the South of the Ranger Fault,
were not able to access that
area. A conceptual target was
which warrant significant
area. But, when we had the
delineated by Cameco but
follow-up exploration activity.
JV with Rio Tinto, we sat
never drill tested.”
down with their geologist and These anomalous structural
geophysicist and discussed this
zones to the South of the
particular area.
Rubbing shoulders with giants
displayed in red, yellow and
“Cameco and Rio Tinto both
The world class Ranger
green patches of a regional
believe that somewhere
Uranium Mine is located
radiometrics map displayed on
within that area there is
within the Kakadu National
page 60.
potential for a monster of a
Park, approximately 65
Devil’s Elbow tenement are
64
MINING | ECLIPSE METALS
km from the Devil’s Elbow
for uranium, but also for gold
in February 2020. The
Prospect, and is operated by a
and palladium across the
extensive data reveals several
subsidiary of Rio Tinto, while
tenement area.
untested targets which will
the Nabarlek Uranium Mine is
be incorporated into Eclipse’s
around 41 km from Eclipse’s
“One of the challenges in that
existing data and mapping
tenement.
area is the fact that it’s under
over the course of this year.
the sea and the tides go up Nabarlek was a very successful
and down throughout the day,
Elsewhere, the company
project with close to US$1
so it’s a tough place to work
has a project further South
billion of value extracted from
during the wet season. There
in central NT called the
the ground between the years
are also massive crocodiles
Ngalia Basin, which is highly
of 1972-79 before the uranium
[not alligators as the name
prospective for uranium and
ore was stockpiled for milling
suggests! - ed] in the area. The
palladium mineralisation.
and processed in the early 80s.
window of opportunity is from
Eclipse will work on the Ngalia
about May-December.
Basin and the Devil’s Elbow
“The Nabarlek and Ranger
prospect in 2020, albeit with
deposits are in fairly close
“We hope to pick up on
a predominant focus on the
proximity to Devil’s Elbow
Cameco’s geophysical results
project in West Arnhem Land.
along the same geological
and expand on the anomalies
system. Nabarlek in particular
towards the South. Subsequent
was a very rich deposit at
to that, also there are some
surface, and there is potential
clear target areas which we can
that in Devil’s Elbow we could
go out and drill. The important
have something similar in
thing for us is to expand on
size.”
the geophysical mapping to
ECL IPSE METALS
AT A G L A N C E
delineate further targets.” Now that Eclipse has secured a lifetime agreement to explore
In addition, Eclipse recently
and mine at the Devil’s Elbow
received some additional
prospect, the company aims
geophysical data on the Devil’s
to execute a work programme
Elbow prospect that was
in 2020 which will include
classified information until
detailed exploration not just
it was released by Cameco
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65
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S AY O N A
A central role in the development of QuĂŠbec
68
MINING | SAYONA MINING
MINING
c as a lithium hub for the battery markets
69
Sayona Mining is a small cap lithium and battery minerals explorer with a 100%-owned subsidiary called Sayona Québec, based out of Montreal in Canada. The ASXlisted company aims to play a leading role in Québec’s emerging lithium industry through its bid for the North American Lithium (NAL) mine, which it aims to restore to profitable operations through the expertise of its world-class bidding team. Combining NAL with its emerging Authier lithium project could provide a substantial boost to the province’s lithium output, with the potential to help deliver a complete value chain through to downstream processing.
70
MINING | SAYONA MINING
The NAL bid
“Our bid support team has
Sayona intends to boost its
already been there and done
lithium portfolio in Québec
that in terms of producing
through the potential
high quality lithium to a world
acquisition of NAL, a company
market, including companies
with a producing lithium mine
such as Altura Mining,
and concentrator located just
which has a producing mine
25 km (as the crow flies) from
in Western Australia, with
Sayona’s flagship Authier
further operational expertise
project.
provided by Primero.
At this short distance, Sayona
“We also have recruited
would be able to blend its
NAL’s former mine manager,
product from Authier with
together with engineers BBA
the spodumene produced
and Hatch and financial
at NAL’s deposit, should the
expertise from Jett Capital
former be successful in its bid
Advisors and PwC.”
for the latter. There is also the possibility to produce battery
Sayona submitted the bid
grade lithium carbonate at
before the stated deadline
NAL’s existing facilities, with
of 2pm (Montreal time) on
necessary investment.
February 21, after which Lynch said he was confident
Sayona’s managing director,
of achieving a successful
Brett Lynch believes a
turnaround at NAL that
significant turnaround is
supports Québec’s lithium
required at NAL to get the mine
strategy.
running at nameplate capacity that Sayona can deliver this
Authier project upgraded
after the company appointed a
Prior to this, some positive
world class team to support its
news concerning the
NAL bid.
company’s other projects
once again, but he is confident
71
72
MINING | SAYONA MINING
has also boosted confidence
With an estimated mining
amongst the Sayona team.
life of some 14 years, Authier could generate up to 176
On November 11, Sayona
valuable new jobs for the
announced a revised definitive
benefit of the local community,
feasibility study (DFS) for the
including First Nations and
Authier project which pointed
other stakeholders.
to its potential as a sustainable and profitable new lithium
Sayona has also been
mine.
progressing a revised environmental impact
In an improvement on the
statement (EIS) alongside
previous DFS completed in
the DFS, considering ways
September 2018, the revised
in which the mine can be
DFS showed an estimated
redesigned to limit its impact
net present value of C$216
on the local environment.
million, up from the $184 million estimated previously.
The additional review of
The study showed a pre-tax
the EIS is a mandatory
internal rate of return of 33.9%
requirement of the rigorous
and estimated capital payback
BAPE (bureau d’audiences
within 2.7 years, based on
publiques en environnement)
annual average spodumene
process stipulated by the
production of 114,116 tonnes
Québec Government, which
(6% Li2O).
obliges new mine developers to conduct wide-reaching
The hard rock Authier project
community engagement
is located around 45 km from
before being granted
the city of Val d’Or in Québec
permission to mine.
- a well-established mining district.
“The project and its impacts are put out openly and transparently in structured,
73
BRETT LYNCH, MANAGING DIRECTOR
formal public meetings
On January 22, Sayona
New deposit
chaired by the government.
announced the lodgement
Also in Québec, Sayona is
We’ve been working with
of its new EIS with Québec’s
increasingly excited by the
several stakeholder groups,
Ministry of the Environment
potential of a new lithium
including the local First
and the Fight against Climate
deposit at its Viau-Dallaire
Nations group and some of
Change. Following further
prospect, located within its
the environmental groups in
public hearings and review,
Tansim project some 82 km
order to fully understand how
the company ultimately
Southwest of Authier.
the project will affect the local
expects project approval under
area.”
the BAPE in late 2020.
On November 19, Sayona announced an exploration
74
MINING | SAYONA MINING
comprising an estimated
Québec’s lithium strategy
five million to 25 million
Recognising the role of
tonnes at an estimated grade
lithium as the key ingredient
of 1.2 to 1.3% Li2O. The
in modern technology, from
mineralisation is open in all
portable consumer technology
directions.
to renewable energy storage
target for Viau-Dallaire,
and electric vehicles, the “The exploration target has
Québec Government has
demonstrated the potential
set out a clear strategy to
for Viau‐Dallaire to become
capitalise on its voluminous
another key part of our
spodumene reserves by
strategy to develop a lithium
establishing a world-leading
hub, supporting Québec’s
lithium hub for the growing
ambitions to generate a
battery markets.
complete lithium value chain,” Lynch said.
“I don’t think there is any government in the world
The exploration target has demonstrated the potential for Viau‐ Dallaire to become another key part of our strategy to develop a lithium hub, supporting Québec’s ambitions to generate a complete lithium value chain” – Brett Lynch, managing director Sayona Mining
“Sayona could potentially
that has a clearer vision and
feed spodumene ore from
mandate on developing its
Authier and Viau‐Dallaire
lithium resources to become
into NAL’s concentrator to
a world leader in battery
generate the necessary quality
production than Québec,”
product for lithium‐ion battery
Lynch declares.
manufacturing.” “That beacon on the hill starts More drilling is under
with the Premier of Québec
consideration for the prospect,
and goes down through the
which ultimately could
ministries.”
become another key part of Sayona’s lithium portfolio in
Lynch is referring to a
Québec.
declaration made in August by Québec’s Premier François
75
“When you look at Québec, there isn’t anywhere more ideally situated to service the future North American demand for battery manufacturing” Legault that lithium is a ‘jewel’ that the province has yet to exploit. The Premier also envisaged a downstream processing industry and the possibility of 100% Québec lithium-ion battery production. It goes without saying that Québec is a resource-rich region with a skilful mining base and all the necessary infrastructure to support new lithium mines, including access to clean and green hydro-electric power. However, the challenge
76
for Québec in the lithium
processing facilities, so that
production. This is a task that
sector will centre on
it can establish itself as a
Québec is perfectly prepared
developing a full value chain,
world-leading jurisdiction
for, according to Lynch.
including downstream
for lithium-ion battery
MINING | SAYONA MINING
“It’s going to be very difficult for anyone else to ship lithium around the world to compete in that North American market,” he claims. For Sayona and Québec, 2020 is suddenly looking like a milestone year as the electric vehicle revolution drives increased demand for lithiumion batteries. “Sayona is in the right place at the right time. We’re very confident of moving forward in 2020 as we help Québec become a leading player in this key industry for the 21st century,” Lynch concludes.
SAYONA M IN I N G AT A G L A N C E
“When you look at Québec,
demand for battery
there isn’t anywhere more
manufacturing. It’s got all the
ideally situated to service
logistical support and is low
the future North American
geopolitical risk.
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77
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80
MINING | MALI LITHIUM
MALI LITHIUM OWNER OF THE WORLD’S LARGEST UNCOMMITTED HARD ROCK LITHIUM RESERVE
81
Despite its name suggesting a focus on just one commodity, Mali Lithium is pursuing a dual strategy in lithium and gold within Mali in West Africa. The ASX-listed firm originally owned gold assets under the name Birimian Gold, but in 2016 – when the lithium boom was just beginning to ramp up – Mali Lithium discovered outcropping lithium pegmatites in the Bougouni region of Southern Mali. The company soon established the Goulamina Lithium Project and has spent the last two and a half years focusing on the prospective area, completing a pre-feasibility study (PFS) in mid-2018. A year later, the company accordingly changed its name to Mali Lithium. That being said, Mali Lithium maintains several exciting gold tenements in Mali, which is Africa’s third largest gold producer. 82
MINING | MALI LITHIUM
Prior to joining Mali Lithium, Evans was COO of Altura Mining and helped build its Pilgangoora Mine in Western Australia alongside Marc Rowley, who now also works for Mali Lithium as project director. Mali Lithium’s process manager Walter Madel is another team member that has joined in the last 18 months with history in WA’s lithium sector.
Pre-feasibility study Mali Lithium’s 100%-owned Goulamina project comprises of a land holding of 100 km in the region of Bougouni, approximately 150 km by road from Mali’s capital, Bamako. After RC and diamond drilling identified several spodumenebearing pegmatites, the company published a PFS for “The senior management team
the project in July 2018.
has had a reasonable turnover
The PFS revealed Goulamina
in the last couple of years,” says
to be the world’s largest
managing director Chris Evans.
uncommitted hard rock lithium
“In fact, we now have a team
reserve, with 31.2 million
of specialists who have had
tonnes (Mt) of ore in reserve at
significant previous experience
a grade of 1.56% lithium oxide.
“Having a full mining permit is the most significant milestone we’ve had to date on the project. With the right funding and partner in place we could start building our mine tomorrow” Chris Evans, Mali Lithium managing director
in the lithium market.”
83
Other metrics included a 16year life of mine (LoM) with 362,000 tonnes per annum average production at 6% spodumene concentrate. The LoM annual average EBITDA was estimated at US$128 million per annum against an AISC of US$319 per tonne of concentrate, although Mali Lithium has been working on ways to optimise the project’s financial and operational metrics ahead of a definitive feasibility study (DFS) due out in May 2020. “We already have a fantastic resource and reserve and I believe we can further optimise them to create more certainty. We have some of our JORC resource in the indicated and inferred category, and we want to drag some of that into the measured.” Mali Lithium is also planning
84
to make infrastructural
savings made in these areas
international engineering
optimisations in the critical
will reduce the company’s
and project delivery group
areas of power, water and the
operational costs in the DFS,
Lycopodium.
nearby road networks. Any
which will be delivered by
MINING | MALI LITHIUM
months after Mali Lithium was awarded an environmental permit. This quick turnaround reflects the relative ease of doing business in Mali’s mining sector. “Working with the Malian government has been an absolute pleasure because they have a very clear mining code that is very easy to understand and has short permitting times. We received our environmental permit four months after submitting it and later received our mining permit soon after submission” A long-established gold industry in Mali means that the Ministry of Mines is staffed with mining professionals who operate at a high standard. This puts the country in strong stead as the mining sector looks to diversify away from gold and into next-gen metals like lithium.
Final project approval
- and thus final approval from the Malian government
Notably, Mali Lithium is set
The Goulamina project
in August last year, just three
to be at the vanguard of Mali’s
obtained a full mining permit
expanding mining industry, as the Goulamina project is the
85
first major development to be
of intent with CRIMM, a
signed the letter of intent to
granted a full permit outside
division of China Minmetals
investigate EPC construction
of the gold sphere in recent
Corporation, relating to the
of our project, but on the back
times, according to Evans.
potential EPC construction of
of that they want to look at
the Goulamina project. State-
offtake and potential funding
“Having a full mining permit is
owned China Minmetals is the
options.”
probably the most significant
largest Chinese-owned mining
milestone we’ve had to date
company and has a long
China Minmetals has spent
on the project. Now we are
history of expertise in lithium
the last 12 months reviewing
fully permitted, with the right
processing and product
and analysing the PFS and
funding and partner in place
marketing.
conducting specialist testwork
we could start building our mine tomorrow.”
Chinese partners
86
on the Goulamina ore at “China Minmetals expressed
its laboratory in Changsha,
interest in our project at
Hunan province.
that point because of its size
Back in December 2018,
and China’s need for lithium
In the last quarter of 2019,
Mali Lithium signed a letter
projects in the future. They
Mali Lithium announced
MINING | MALI LITHIUM
positive results from its recent
which is quite remarkable
metallurgical testwork in
and shows that our product
cooperation with CRIMM,
is amenable to battery grade
in that the Goulamina ore
chemical conversion. It also
had achieved its target of
showed our product is low in
6% spodumene concentrate
key deleterious elements iron
grade, along with an improved
and mica.�
lithium recovery rate of 87%.
MALI LITHIUM REPRESENTIVES AT 2020 MINING INDABA
M A L I L ITHIU M AT A G L A N C E
Mali Lithium has since In addition, Mali Lithium
commenced a scoping study
has previously had a small
with global engineering firm
sample of its 6% concentrate
Hatch for the downstream
converted into lithium
processing of its spodumene
carbonate for the downstream
concentrate from Goulamina.
battery market.
The standalone study will assess the prospect of
“We made 99.9% concentrate
producing intermediary
on a one-off unoptimised run,
products lithium sulphate and
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ab j
87
lithium oxide ahead of final
two highly prospective gold-
conversion to battery grade
producing tenements in the
lithium chemicals. The study
Massigui area of Southern
should be completed by May.
Mali. Barrick mined the tenements during 2018-19 and
More recently, Mali Lithium
subsequently paid AUS$4.5
signed a deal with Chinese
million in royalties to Mali
civil contractor CHICO for
Lithium until June last year.
early contractor involvement (ECI) at the Goulamina project.
“It was fantastic having those
The agreement, signed in
royalties come in last year.
October last year, will see
Now we want to create some
CHICO price the project’s
more value out of those gold
operational and capital costs to
tenements and we have since
compare against the DFS.
done lots of drilling near the Viper and N’tiola tenements
“CHICO is an experienced
and therefore also near
contractor who is currently
Barrick’s Morila mine.”
constructing and operating
EXECUTIVE OVERV C H R I S E VA N S , M A
in a number of West African
One specific area of interest
countries. The mutual benefit
for Mali Lithium within the
that this relationship will bring
Massigui project is the Koting
to each of our organisations
deposit. London-listed Capital
will be significant,” said Evans
Drilling were deployed to
metres @ 11.1 g/t gold from
following the announcement.
conduct 12 RC drill holes for
100 metres, 12 metres @ 8.92
a total of 1,600 metres at the
g/t gold from 63 metres and
deposit in October 2019.
one metre @ 13.80 g/t gold
The gold portfolio
Prior to joining Mali Lithium, E Marc Rowley, who now also wo member that has joined in the
from 140 metres.
Turning to the other half of
The subsequent assay
the portfolio, Mali Lithium
results were deemed highly
Evans also reveals that the
had in place a joint venture
encouraging, with significant
company is currently having
with Barrick Gold covering
intersections including four
ongoing discussions with Barrick about a continuing
88
MINING | MALI LITHIUM
VIEW NAGING DIRECTOR
Evans was COO of Altura Mining and helped build its Pilgangoora Mine in Western Australia alongside orks for Mali Lithium as project director. Mali Lithium’s process manager Walter Madel is another team e last 18 months with history in WA’s lithium sector. arrangement with the Morila
its exploration activities at
rock lithium project in the
mine and processing facility.
its gold tenements, along
world, and we will soon have
with resource drilling at the
completed our DFS.
Pole position in the lithium race
Goulamina project. “We also have a team
After Mali Lithium raised
“We think we are going to be
with major experience in
AUS$4.23 million in a
extremely well-positioned
developing lithium projects
renounceable rights issue in
over the next 12 months
and on the flip side, we have
October 2019, the company
in terms of our flagship
some gold tenements that can
is well-cashed up to continue
Goulamina project. We are
potentially create value for
the largest uncommitted hard
shareholders.”
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“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
SUPERIOR GOLD
Strong fundamentals in place for this Western Australian gold produ
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MINING | SUPERIOR GOLD
ucer
95
Superior Gold is a Canadian gold producer that owns the Plutonic Gold operations, comprised of the Plutonic underground mine, central mill and the Hermes open pit projects, in the tier one jurisdiction of Western Australia (WA). The Plutonic mine has been in continuous production since 1990 and has produced over 5.5 million ounces of gold during this time, making it one of WA’s largest historic gold producing mines. TSXVlisted Superior aims to produce 80-90,000 ounces of gold in 2020, which would provide the base for the company to ultimately deliver its stated goal of producing 100,000 ounces per annum through the addition of satellite open pit operations.
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MINING | SUPERIOR GOLD
Superior made the difficult
Going underground
decision to sacrifice short-
The five-year plan outlines
term results at the Plutonic
a number of ways in which
operations in order to ensure
Superior will optimise the
its long-term success, posting
Plutonic underground mine
a revised annual production
in order to achieve average
target of 80-85,000 ounces
production from underground
following weaker production in
alone of 70-85,000 ounces per
the third quarter.
annum up to 2024.
The company recovered in
Superior will increase
Q4 to meet its revised annual
efficiencies by focusing on
guidance with 83,035 ounces
four mining fronts instead
of gold produced over the 12
of eight under the previous
months ending December 2019,
mode of operation. In order
although by then the focus had
to achieve this, Superior will
shifted to a freshly devised five-
boost development rates from
year plan for the underground
600 metres per month to more
life of mine (LOM) starting in
than 800 metres per month.
In the second half of 2019,
2020.
Other parameters outlined “We identified some issues
in the five-year plan include
in the middle of last year but
a stope grade of 3.5-4.5
if you look at our quarterly
grams per tonne, all-in
performance, we’ve gradually
sustaining costs averaging
been working towards
less than US$1,100 per ounce,
overcoming those challenges
and a commitment to spend
and setting ourselves on a path
US$6.5 million per year on
to the profitability that we saw
exploration at Plutonic.
back in 2017,” says Superior’s president and CEO Chris
“The five-year plan is all about
Bradbrook.
ensuring that the development
97
in front of us will enable us to maximise grade and enhance flexibility. The ultimate cost reduction is always achieved by maximising grade, because our underground mining costs remain pretty constant, so a reduction in unit cost per ounce is all about improving the grade.” The total underground resource is substantially larger than the quantity of mineralisation included in the LOM, and the expectation is that the ultimate mine life is longer than the five years covered by the LOM.
Corporate reshuffle The company’s five-year plan is a result of detailed analysis and work completed since Superior appointed Keith Boyle as chief operating officer (COO) in April last year. Boyle’s appointment was enacted by Superior in 2019 after determining that the company needed an extra layer of operational expertise and oversight.
98
MINING | SUPERIOR GOLD
“We are in a tier one jurisdiction and we have got one of the biggest gold systems in WA, which is Australia’s biggest gold producing district. We also have infrastructure that allows us the expand rapidly and at low capital” Chris Bradbrook, Superior Gold president and CEO “Keith brings an extra level of operational skill that allows us to focus and keep on track. As part of our new focus, we also added a new general manager last September, Alan Breen. He has got excellent international experience but it was Keith who became the catalyst for the upgrade of the entire operations team.” While bringing in new corporate direction last year, the company has maintained its focus on keeping general and administrative (G&A) costs down. In fact, G&A costs per ounce have remained among the lowest among its peer group since Superior went public in February 2017.
99
“Everything has a per ounce cost, including management and that has been a mantra of ours since I started the company,” Bradbrook proclaims. “That’s what we wanted to do, so that culture is very much ingrained in Superior.”
The open pit opportunity Alongside the new plan for the underground mine at Plutonic, Superior expects to be able to add ounces to its production through the addition of several open pit deposits. The company started commercial gold production from the Hermes open pit in March 2018 but suspended operations in May 2019 ahead of its new five-year plan. Superior is currently working on the optimisation of its open pit resources, including the Hermes deposit, which will CHRIS BRADBROOK, PRESIDENT AND CEO
100
MINING | SUPERIOR GOLD
potentially be combined with the Hermes South project to create a single operation. A resource update for the open pits is expected towards the end of the first quarter or the beginning of the second quarter. “It’s not just the Hermes pit, there are a number of pits which will be included once we finalise the resource update. We expect to put out a revised plan for the open pits soon which will look at adding around 20-30,000 ounces per annum from open pit resources. Considering our 70-85,000 ounces underground target in the LOM, you can see that those combined could get us over 100,000 ounces sustainably.” Currently, it is anticipated that production from the Plutonic East/Perch pit could commence during the second half of 2020, once final mining permits have been received. Other near-term open pit resources include
101
It’s about thinking big and making sure that wherever we drill, we find mineralisation. We think this is a large system and there is a good possibility of finding additional resources. We will be targeting the favourable mafic volcanic host rock and the key structural settings.”
the Salmon and Workshop
Superior’s chief is keen for
deposits.
the company to look for other
Further resource growth
Plutonic-type targets in the area.
Superior is also chasing near
“It’s about thinking big and
surface and underground
making sure that wherever we
reserve and resource
drill, we find mineralisation.
growth this year and is in
“We think this is a large system
the process of creating a
and there is a good possibility
five-year exploration plan to
of finding additional
run alongside the five-year
resources. We will be targeting
underground mining plan.
the favourable mafic volcanic host rock and the key
Most of the easy-to-reach near
structural settings.”
surface resources at Plutonic
10 2
have already been identified
Meanwhile, underground
according to Bradbrook, but
resource expansion has been
MINING | SUPERIOR GOLD
a key focus for Superior
limited exploration and
results as pleasing and said
since it took over the
development to date.
Superior will continue to
Plutonic operations, and this
release drill results in some of
commitment to underground
In December 2019, the
the other key areas of the LOM
exploration has been
company announced positive
plan, including Timor, Indian
underlined in the company’s
results from this area which
and Baltic, in the near future.
five-year mining plan.
illustrated the potential to extend the LOM plan to well
Filling the mills
Back in October, COO Keith
beyond five years. Highlights
Superior is also undertaking
Boyle revealed that Superior’s
of the drill results included: 1)
a calculation of a new global
immediate underground focus
26.0 g Au/t over 5.55 metres; 2)
resource for the Plutonic
would be on establishing four
210.0 g Au/t over 0.60 metres;
mine, the results of which will
key mining fronts, which
and 3) 13.2 g Au/t over 6.7
ultimately be incorporated into
would make the area between
metres.
a longer-term plan. Crucially
the Indian and Baltic zones an
for the company, it has access
area of significant interest, as
Following the announcement,
to a second mill within the
it is a zone which has received
Bradbrook described these
Plutonic premises, which
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MINING | SUPERIOR GOLD
will allow it to easily ramp
company, Bradbrook appears
up should extra resources be
enthusiastic about Superior’s
discovered.
future.
The second mill has a capacity
“We are in a tier one
of 1.2 million tonnes per
jurisdiction and we have got
annum and is currently on
one of the biggest gold systems
care and maintenance but
in WA, which is Australia’s
can be brought back online
biggest gold producing district.
with minimal capex spend,
We also have infrastructure
according to the company.
that allows us the expand
Bradbrook believes the
rapidly and at low capital. I
possession of an additional
think we are extremely well
mill is a key differential for
placed in the current gold
Superior in the gold space.
market.”
“The gold price is very impressive right now. If we are in a prolonged period of high gold prices, you want to be able to deliver the maximum amount of gold into that. Most other companies don’t
SUPE RIOR G OLD AT A G L A N C E
have the capacity to do that, whereas we do. We can add more ounces into a strong gold market very quickly and with minimal capex.” STOCK TICKER Considering the strong fundamentals – such as a high gold price and operating in a strong mining jurisdiction
TSXV:SGI
MARKET CAPITALISATION US$30 million (as of March 24, 2020)
j
– underpinning the
105
EVENTS International Mining and Resources Conference (IMARC) + EXPO Where global mining leaders connect with technology, finance and the future October 27-29, 2020, Melbourne, Australia IMARC is set to return to Melbourne at the end of October for its seventh year, having quickly grown to become the largest international annual mining event in Australia. Powered
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including a central networking hub, OFS technology showcase and a revamped PetroAfricanus gala dinner. In addition, Total chairman of the board and CEO Patrick PouyannĂŠ has been confirmed as a speaker, with further speaker announcements to follow over the coming months.
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Mines and Money London The number one global event portfolio for mining investment returns to London December 01-03, London, UK Mines and Money London is one of the most popular events in the mining calendar, and the 2020 event is likely to be even more eagerly anticipated as other international conferences in the Mines and Money series face cancellation due to the COVID-19 outbreak. As it stands, Mines and Money will return to the UK capital for its 18th year and aims to
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RE-Source 2020 European platform for corporate renewable energy sourcing December 09-11, Amsterdam, Netherlands RE-Source claims to be the world’s largest gathering of renewable energy buyers and suppliers – and it will return to Amsterdam at the end of the year. In 2019, there were over 900 registered participants, many of which took part in peer-to-peer workshops and business-to-business matchmaking meetings. The event also provided speakers
and support from the highest political levels in the EU. This year, RE-Source has pledged further B2B matchmaking activities, deep dive breakout sessions and extended meetings to include more diverse buyer and supplier groups. The last two RE-Source events sold out in advance, so be sure to have it in your calendar.
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