RGN Vol 7 Iss 5

RESOURCE

Volume 7, Issue 5

GLOBAL NETWORK

Mining, renewable energy and oil & gas worldwide

LEADING THE GLOBAL MINING SECTOR INTO THE ONLINE CONFERENCING ERA RESOURCEGLOBALNETWORK.COM

EDITORIAL

Mines and Money leads the sector’s transition into digital conferencing

F

or the past 18 years, Mines and Money has run a packed annual schedule of events bringing together the global mining community in strategic locations such as London, Hong Kong, New York and Melbourne.

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 Daniel Linsker (Control Risks) 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.

These regular conferences provided the opportunity for the industry and investors to share information and strike deals in the settings of the world’s biggest commercial centres. However, the unprecedented developments of 2020 have radically altered the global business landscape – from office working to international events – perhaps on a permanent basis.

Restrictions on international travel and large-scale gatherings have emerged as a challenging consequence of the COVID-19 pandemic, particularly for companies like Mines and Money who have had to cancel and postpone their shows this calendar year and into 2021, while it remains unclear when it will be safe for the industry to reconvene again.

However, the Mines and Money team moved quickly to recalibrate its business offering this year, becoming one of the first event organisers in the mining sector to bring its services online. Two back-to-back ‘Online Connect’ events ran in June and July, providing a digital environment for mining executives to connect with investors and a packed schedule of live sessions.

Off the back of the success of these events, Mines and Money launched Online Connect Global at the start of September – an expanded event that offered a unique opportunity for the industry to connect over a rolling 24hour, three day period, plus the usual assortment of live content including informative presentations and lively debates between some of the sector’s leading lights.

Over the three days, Online Connect Global welcomed over 2,000 attendees from 98 different countries, with 120 mining companies participating in 2,198 meetings with 427 active investors.

RGN reported live from the show and this issue’s cover story provides a full review of the ground-breaking digital conference.

In true 2020 fashion, RGN has also slightly remodelled its content offering to align with the ‘work from home’ spirit of the COVID-19 era. Each of the six company features in this issue include a short video snippet taken from Zoompowered interviews I have conducted with mining executives in recent months.

Much like Mines and Money’s transition to digital events this year, technologies like Zoom have allowed RGN to feel closer to the companies we showcase in our magazine - without having to meet in person - while the video content is also appreciated by our readership.

Finally, in line with Mines and Money’s global online event, we bring you the latest developments from burgeoning exploration companies around the world in this issue, including projects in Western Australia, Senegal, Nigeria, Brazil and Mexico.

Jacob Ambrose Willson

Anderson Murray Media Fulham Green, 69-79 Fulham High Street, Main Reception,

jacob@resourceglobalnetwork.com

Bedford House, London SW6 3JW | Tel. +44 (0)207 148 5630

j a r

CONTENTS

MINES AND MONEY ONLINE CONNECT GLOBAL

NEWS

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

COLUMNS 12 Daniel Linsker (Control Risks) How will the COVID-19 pandemic impact the preexisting challenges faced by miners in Latin America?

COVER STORY

RUMBLE RESOURCES

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22 Mines and Money Online Connect Global RGN reports live from Mines and Money’s first global Online Connect event

MINING 36 Rumble Resources Multiple avenues to discovery in Western Australia 48 Chesser Resources Senegalese gold discovery in the company of giants

CHESSER RESOURCES

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KOGI IRON

60 Kogi Iron Pioneer iron ore and steel production to accelerate Nigeria’s industrial development

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74 Meridian Mining S.E Developing a dynamic coppergold portfolio inside mining frontier Brazil 86 Telson Mining Corp Closing in on first production at its second polymetallic project in Mexico 100 Hummingbird Resources More significant news flow from one of West Africa’s most exciting gold firms MERIDIAN MINING

EVENTS

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

TELSON MINING

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NEWS

FORTESCUE NAMED AS A WORLD LEADER FOR DEVELOPMENT OF FEMALE LEADERS Fortescue Metals Group has been ranked among the best companies internationally for supporting the development of female leaders by not-for-profit organisation parity.org.

The Pilbara-based iron ore miner was one of 34 companies included in parity.org’s 2020 Best Companies for Women to Advance List and was the only Australian company to be featured.

In 2019, Fortescue was one of the first companies in Australia to sign the ParityPledge to bring gender equality to the highest levels of business, making a public commitment to interview at least one qualified woman for every executive position.

“Fortescue has long advocated the benefits of

diversity and research continues to reinforce our view and experience that building a diverse workplace is not just the right thing to do, it’s the smart thing to do,” said CEO Elizabeth Gaines.

“In fact, I believe our inclusive, diverse culture has strongly influenced Fortescue’s industry leading performance, and has contributed to a 54% increase in our market capitalisation to A$42.6 billion over the 12 months to 30 June 2020.”

Gaines has overseen consistent growth in iron ore output since becoming Fortescue’s chief executive in 2018, and was ranked second in Fortune magazine’s 2019 global businessperson of the year, behind Microsoft chief executive Satya Nadella.

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NEWS

Mining, oil & gas and renewable energy news from around the world MINING M&A DEALS HIT $8.86 BILLION IN Q2, GLOBALDATA FINDS The total value of mining sector mergers and acquisitions (M&A) deals in the second quarter of 2020 increased by 29.1% on the previous quarter to US$8.86 billion, according to a recent GlobalData report.

However, this figure for the COVID-19-impacted quarter does represent a 14.4% decline when compared with the last four-quarter average, which stood at $10.35 billion.

The top five metals and mining M&A deals accounted for 59.2% of the overall value during Q2 2020, with a combined value of $5.24 billion.

The largest single deal was Vedanta Resources’ $2.15 billion acquisition of Vedanta Ltd.

The $1.78 billion merger of Alacer Gold and SSR Mining was the only other deal to exceed the one billion mark and was followed by Tibet Zijin Industrial’s $548 million acquisition of Tibet Julong Copper Industry.

Asia-Pacific held the top regional position around the world with total reported deals in the period worth $4.27 billion, while Canada topped the list at country level with $2.92 billion worth of M&A deals announced.

Canada also topped the list in terms of volumes with 151 deals signed in the country, followed

by Australia with 80 and the US, where 42 deals were struck.

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NEWS

BHP TO TERMINATE COAL-FIRED ENERGY SUPPLY DEALS FOR CHILEAN MINES BHP is set to pay a total of US$840 million for an early end to energy contracts at its Escondida and Spence copper mines in Northern Chile, which are currently supplied by a coal-fired thermoelectric plant.

Local power company AES Gener — a unit of AES Corp — said that the agreement BHP signed with its Angamos coal plant will end in August 2021. The contracts originally expired in 2026 at Spence and in 2029 at Escondida.

“As a result, AES Gener is accelerating all future payments from two of its long-term coal generation contracts, for a total of $720 million,” the company said.

AES noted that Escondida will have to disburse $730 million in nine instalments from August 2021 and Spence $109.6 million at the end of August this year.

The early termination follows BHP’s announcement last year of its plans to run Spence and Escondida (the world’s biggest copper mine) entirely on renewable power.

The world’s largest miner recently committed to invest $400 million over five years to reduce greenhouse gas emissions from its operations and commodities.

BHP is also aiming to eliminate the use of water from aquifers in drought-affected Chile by 2030. Instead the company plans to upgrade its desalination plants at Escondida and Spence.

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NEWS

Mining, oil & gas and renewable energy news from around the world ‘PEAK OIL’ REACHED, PREDICTS BP AS GREEN ENERGY TRANSITION ACCELERATES BP has declared that global oil demand may never exceed the level reached in 2019 following the impact of the COVID-19 pandemic and an acceleration in the green energy transition.

In its annual Energy Outlook report, BP said that ‘peak oil’ may have been reached last year and that demand may begin falling in absolute terms for the first time in modern history.

Two of the three 30-year energy scenarios included in the report found that oil demand had reached a peak in 2019, while the third – showing a world in which climate action does not accelerate – saw demand plateauing in the 2020s and declining from 2035.

BP CEO Bernard Looney said the Energy Outlook will help deliver its new green strategy and its net zero emissions ambition by 2050.

However, he stressed that the world remains ‘on an unsustainable path’.

“The scenarios show that achieving a rapid and sustained fall in carbon emissions is likely to require a series of policy measures, led by a significant increase in carbon prices,” he said.

“These policies may need to be further reinforced by shifts in societal behaviours and preferences. Delaying these policies measures and societal shifts may significantly increase the scale of the challenge and lead to significant additional economic costs and disruption.”

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How will the COVID-19 pandemic impact the pre-existing challenges faced 12

COMMENT | DANIEL LINSKER (CONTROL RISKS)

Latin America: Looking to e future by miners in Latin America? By Daniel Linsker (Control Risks)

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These days there are plenty of visions as to what the world will look and feel like once we manage to get the COVID-19 pandemic under control; and as hard as it is to divine the future, it is also becoming harder to remember in vivid detail what the world was like before the pandemic. However, to really understand what lasting impact the pandemic will have on mining in Latin America, we must look to the past and what was happening in the region’s key mining markets before this all started, as the trends that were unfolding are the ones that – combined with the social, economic and political consequences of the pandemic – will prove to be the most consequential for miners in decades to come.

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The pandemic will obviously have a very clear impact on miners, not only in Latin America. Mining companies and their key stakeholders are already experiencing considerable ‘shocks’ from price fluctuations, capital constraints and a fall in demand brought on by economic malaise everywhere (with the exception of gold) to new stringent health and safety requirements and accelerated changes towards process automation and digital transformation (as much as this is possible in mining operations).

Some of these impacts will surely be felt and seen for the foreseeable future in everything from new waves of bankruptcies and the sale of distressed assets to the consolidation of companies and the emergence of new players in the market.

Through historical boom and bust cycles, mining is well accustomed to managing these.

Harder to manage and usually more impactful for mining are the political and social challenges and swings that

have historically influenced, for better or for worse, the development of the sector in different countries in Latin America. These challenges and swings were evident throughout the region before the pandemic, as in 2019 most of the large economies in the region – with the notable exception of Brazil and Mexico (more on them below) – experienced episodes

COMMENT | DANIEL LINSKER (CONTROL RISKS)

Daniel Linsker Daniel Linsker is a senior partner at Control Risks and currently manages Control Risks’ Mexico City office, overseeing the delivery of solutions and services to clients in Mexico, Central America and the Caribbean. Before moving to Mexico, Daniel led the Security and Crisis Consulting practice for Control Risks in Latin America and also headed the Americas region extractives consulting practice.

Daniel specialises in developing, leading and implementing tailored and integral solutions for clients to manage complex issues across the Americas, with a special emphasis on risk management for large projects in the extractives, energy and infrastructure sector, and those that require in-depth regional expertise of Latin America.

of large-scale social and political unrest, including many countries, like Chile and Colombia, that were considered to be relatively politically stable.

By helping define and shape the future attractiveness and competitiveness of different countries – based on their political stability, respect for contracts and due process – the response of

each government and how it directly relates to these causes will determine the long-term impact of the pandemic on mining in the region.

Much has been said and written about the underlying causes of these waves of unrest, from persisting high levels of inequality, deficiencies in the provision of public services and a lack of progress in the fight

Daniel joined Control Risks in London in 2005 and worked as the head of the Americas Desk in the Global Risk Analysis department until 2009, when he took a sabbatical to work as the strategic director and policy coordinator of a presidential campaign in Colombia. Before joining Control Risks, Daniel taught Latin American politics at the London School of Economics while completing his doctoral thesis on the effectiveness of international institutions.

Daniel has a Master of Science degree in Comparative Politics from the London School of Economics, where he is also a PhD candidate in government. He is also a certified Governance, Risk and Compliance Professional (GRCP). Daniel was born in Colombia and has also lived in Israel. He speaks fluent Spanish and Hebrew.

ab j

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against regional ills such as corruption, unemployment and insecurity. Certainly, all of these are key issues – to different degrees – affecting the countries in the region, but none of these are new or experienced a significant change in the last few years

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to completely explain why such pent-up frustration was unleashed onto the streets.

In fact, some of these indicators had been improving in many of the countries in the region. Most of the region experienced economic

growth – and even decreases in inequality – over the last two decades. Looking at World Bank development indicators, in the last two decades every major economy in Latin America saw a reduction in its poverty rates and its GINI coefficient – which is used to measure inequality.

COMMENT | DANIEL LINSKER (CONTROL RISKS)

of representative democracy and growing frustration with the status quo. Large segments of the population across Latin America have felt that their institutions are no longer capable of delivering well-being and progress for them – a feeling that will be exacerbated starkly once the true socio-economic and political impact of the pandemic becomes clearer.

So, could it be that these were not the actual causes but rather the petrol that was used to help fuel the flames? What about other root causes? Mindful of the danger of generalising for all of Latin America, the one common thread across all jurisdictions is a general crisis

This crisis of representative democracy helps explain why different countries in the region, facing all sorts of different challenges and socio-economic backdrops, experienced waves of unrest at around the same time. It also allows us to understand why Mexico and Brazil did not experience similar unrest during 2019 – their frustrations with the status quo were channeled through their electoral cycles in 2018 and the election of populist candidates (AMLO and Bolsonaro) challenging the status quo.

What will all this mean for mining in Latin America after the pandemic? The first real impact will be on general political stability. If fixing democracy and negotiating

new social contracts was not going to be easy before the pandemic, now it will be much harder and discontent with the status quo will linger on, and so we can expect more and more constitutional crises and attempts at structural political reforms in years to come, be they through the redrafting of constitutions like in Chile, reform roundtables like in Colombia, or outright constitutional crises like in Peru and Bolivia.

This will represent a new challenge for mining companies, as politicians and decision-makers shift around constantly and reinvent themselves, making it ever more important to identify and understand the key stakeholders for any specific project, especially at the local level.

A second, more general impact on mining will be around policy predictability.

As countries try to balance all the previous competing demands for growth and development, and the aftermath of the pandemic puts increased strains on the economy and the resources of countries to deal with key

17

issues, leaders will have to make compromises on what is economically sensible and provides the best longterm outcome, in order to meet short-term tactical and political goals.

With growing demands for social benefits and basic income protection, in a context of a sharply deteriorated fiscal and debt position, leaders will find it increasingly hard to accept the high political costs of seemingly unpopular decisions, such as openly backing mining. The ability of companies and investors to cut through the political noise and predict public policy will therefore be eroded in years to come, making it ever more important to monitor policy developments appropriately.

This is not to say that mining will be targeted. Almost all of the protests have not been anti-mining or anti-extractives, and even in cases where some of the demands have included a redefinition of the role of the state vis-Ă -vis the economy and the use of natural resources, these did not figure prominently at the centre of the public debate.

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We thus expect that in most cases, especially in generally pro-business jurisdictions that have a tradition of respecting investors, economic pragmatism will prevail, even if taxation is adjusted and some environmental policies are adjusted to reflect new priorities - which might end up affecting some of the less profitable or less attractive projects but not seriously

undermining the economic fundamentals of most projects.

The third most relevant and direct impact on mining will come down to the day-to-day operations of miners, with ever increasing challenges at the local level for community engagement, economic development and growing care for social and environmental impacts. While the national agenda focuses on the post-

COMMENT | DANIEL LINSKER (CONTROL RISKS)

pandemic world and past grievances, miners are likely to experience some form of ‘hyper-localism’ for projects, in which the recurrent themes of the past which have revolved around balancing environmental and social impacts with economic growth and development will surely be re-contextualised within a new perception that some of these traditional local mining

issues reverberate far wider in society and that activism and unrest pay off.

Demands for change will increase throughout the region as the pandemic wanes – but these demands will be political. Miners will certainly encounter a much noisier and murkier environment post-pandemic, requiring companies to undertake a different sort of homework

with more planning and a deeper understanding of local issues; but amidst the turmoil most of these countries even if more unstable and unpredictable - will continue to be as attractive to miners as they were in 2019.

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reports live from Mines and Money’s first global Online Connect event

In recent decades, a multitude of largescale conferences and roadshows have provided regular opportunities for the global mining and resources industry to coalesce, informationshare and, most importantly, strike deals in the plush settings of the world’s biggest commercial centres.

However, 2020 has been far from a normal year.

Virtually every aspect of modern living has been impacted by the COVID-19 pandemic, with restrictions on international travel and large-scale gatherings drastically altering contemporary business practises, from office working to international conferences. Event organisers in the mining sector have had no choice but to cancel and postpone their shows this calendar year and into 2021 while it remains unclear when it will be safe for the industry to reconvene again.

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For the past 18 years, Mines and Money has run a packed annual schedule of events in locations such as London, Hong Kong, New York and Melbourne. But this year the team moved quickly to recalibrate its business offering and brought its services online with two back-to-back events in June and July. The Mines and Money APAC and EMEAmericas Online Connect events provided a digital environment for mining executives to connect with investors via a unique meeting portal function, while also having access to live presentations and panel discussions. Off the back of the success of these events, which attracted 79 mining companies, 302 investors and over 1,800 attendees, Mines and Money delivered an expanded 24-hour global event at the start of September, and RGN reported live from the ground-breaking show.

EVENTS | MINES AND MONEY ONLINE CONNECT

25

WELCOME ADDRESS FROM MINES AND MONEY HEAD OF CONTENT ANDREW THAKE

Day one – all that glitters is gold

Therefore, it seemed

Bristow was as forthright

particularly pertinent that

as ever throughout the

Against a global backdrop of

Mines and Money kicked off its

interview, which saw him

extreme economic uncertainty

Online Connect Global event

discuss topics ranging from

and unprecedented fiscal

with a deep dive on the gold

the gold price rise this year,

stimulus from governments

market throughout day one. A

the current political situation

and central banks in response

series of live sessions covering

in Mali, Barrick’s adoption of

to the financial impacts of

different components of the

renewables at its assets and

the COVID-19 pandemic, gold

gold sector were delivered,

future industry trends like

and other precious metals

starting with an exclusive

automation and digitisation.

like silver have enjoyed

interview between Kitco’s

incredible price runs this

Michael McCrae and Mark

Viewers then had the

year as investors turn to

Bristow, CEO of Barrick Gold –

opportunity to watch a seven-

these ‘safe haven’ assets while

one of the world’s largest gold

person panel of experts

other markets remain in the

miners.

discuss the development of a

doldrums.

26

EVENTS | MINES AND MONEY ONLINE CONNECT

FIRESIDE CHAT BETWEEN KITCO’S MICHAEL MCCRAE AND BARRICK GOLD CEO MARK BRISTOW

gold bull market over the last

equivalents in mining. That is

Yamana has five producing

two years, the return of the

the likes of Barrick, Newmont

gold and gold-silver mines in

generalist investor to the space

& Franco-Nevada.”

four jurisdictions: Canada,

and how mining companies will

Chile, Brazil and Argentina.

thrive in the elevated gold price

Mines and Money also secured

The company is listed on the

environment.

the services of another big

TSX and NYSE, and during

hitting executive in the gold

the presentation Marrone

Global Mining Capital Corp

space for day one, with

revealed Yamana’s plans to

president Keith Spence outlined

Yamana Gold executive

join the London market by the

his belief that the current boom

chairman Peter Marrone

end of September.

will be a boom of the senior

delivering an up-to-date

gold companies: “The seniors

presentation on the Americas-

“Our objective is to increase at

are going to overperform,” he

focused mining giant.

least one resource base to 1.5

said. “When generalists come

million ounces over the next

in, they are looking for FAANG

three years,” said Marrone.

27

MINING PITCH BATTLE, DAY TWO

“We can demonstrate short,

rooms to touch base with

Participants in the session

intermediate and long-term

other attendees and possible

included VanGold Mining CEO

growth opportunities with low

investors.

James Anderson and Nomad

capital requirements.”

The day commenced with an

– each of whom delivered

edition of Mines and Money’s

strong company presentations

hugely popular 5@5 sessions

– plus renowned industry

hosted by the Melbourne

investors Matt Geiger of MJG

Much of the live discussions

Mining Club and its chairman

Capital and John Forwood

on day two centred around

Richard Morrow. 5@5 has

of Lowell Resources Funds

the world’s two largest mining

been running since the world

Management.

and mining financing hubs

went into lockdown and aims

– Canada and Australia. At

to help mining companies

The conversation meandered

the same time, attendees

put their message out to the

towards the current precious

continued to utilise the

investment sector during the

metals bull run and ways

event’s private meeting

current situation.

in which investors can gain

Day two – Canada and Australia flavoured

28

Royalty CEO Vincent Metcalfe

EVENTS | MINES AND MONEY ONLINE CONNECT

KEYNOTE PANEL DISCUSSION ON THE FUTURE OF M&A AND JVS IN MINING

leverage from the current

which has largely seen a

conditions in the market. In

continuation of the hot streak

a concluding remark, Geiger

of 2019.

said: “I truly believe the longer we stay disciplined as investors

The potential impact of the

and project operators, the

pandemic on M&A deals

more long lasting this bull

over the next 12 months was

market can be.”

discussed by an adept panel on the live steam during day

While the COVID-19 pandemic

two. The panel identified

has thrown up a significant

opportunities and potential

amount of disruption across

headwinds for those looking at

the global mining sector so far

consolidation through mergers

this year, it hasn’t seemed to

and joint ventures.

impinge on the volume of mergers and acquisitions

Denham Capital’s Bert Koth

(M&A) activity in the space,

pointed to the reduced

“We were very pleased with our recent Mines and Money Online Global event. The content sessions were lively and well attended, and the investors and miners were delighted with the meetings platform.” - Andrew Thake, Mines and Money head of content

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5@5 SESSION SPONSORED BY SPROTT SPROT

CHAD PETERS - MINING PITCH BATTLE WINNER, DAY TWO

30

opportunities to conduct

volume of M&A deals going

Kate Southwell. “There will

due diligence at mine sites

forward. “However, now is an

be opportunities as well as

due to COVID-19 restrictions

opportunistic time which will

challenges for development

as something that would

favour the bold,” added Pala

projects ahead.”

negatively impact the

Investment vice-president

EVENTS | MINES AND MONEY ONLINE CONNECT

WHAT IS NEXT FOR ESG IN MINING - KEYNOTE PANEL, DAY THREE

The final live offering of

like to thank the Mines and

the day was an entertaining

Money team for organising

Mining Pitch Battle which

such a fun event today,” Peters

saw five high quality mining

told RGN afterwards.

companies enter for the opportunity to secure a

“We may be a tad biased but

hypothetical $1 million

our team has always felt we

investment from the ‘Dragon’s

had a great story at Ridgeline

Den’ judges panel.

and it was incredible to see that the Pitch Battle judges felt

Nevada-focused gold explorer Ridgeline Minerals was

the same.”

of the fiercely fought battle,

Day three – The grand finale

to the delight of managing

The final day of Mines and

director Chad Peters. “We‘d

Money Online Connect

eventually chosen as winner

“In the current COVID-19 world, Mines and Money really stepped up to the challenge and delivered a well-organised and functional platform to meet with potential investors – Well done!” - Patrick Donnelly, Trilogy Metals VP corporate communications 31

Global afforded attendees the

three. The panel included

Emerald Resources and West

chance to absorb a wealth of

representatives from the

African Resources delivered

information from the packed

likes of Resolute Mining,

short presentations to the

schedule of live sessions and

OceanaGold, St. Barbara,

audience and the panel’s

one last opportunity to use

SilverCrest Metals and Pacific

expert investors - John Wong

the meeting room function to

Road Capital.

from Ruffer LLP and Sprott’s

network and do business with other delegates.

own CEO Peter Grosskopf.

“I’m so enthused that ESG has taken off in the way it has in

Grosskopf made a bold

The concept of environmental,

recent years,” said Resolute

prediction relating to future

social, governance (ESG) has

CEO John Welborn. “But we

mergers and acquisitions

become so ingrained across

must remember that we will

activity in the gold mining

the global mining sector that

never achieve our current ESG

space. “I think next year will

it would be considered a form

pathway as we habitually reset

be a record year for M&A in

of investment suicide for a

our standards.”

the gold space. The sector will

company to be blind of this

really light up following the

code of ethics. But what is next

In another interactive 5@5

COVID-19 distractions that

for ESG in mining investment?

session, sponsored by Sprott

have taken place this year.”

on this occasion, executives

32

This was the question posed

from mining companies

Bringing the final day (and

to a five-star panel on day

Saturn Metals, Mawson Gold,

week) to a close was another

EVENTS | MINES AND MONEY ONLINE CONNECT

exciting Mining Pitch Battle

welcomed over 2,000 attendees

delegates from attending

that was contested by four

from 98 different countries.

mining companies, including

strong mining companies

In addition, 120 mining

Patrick Donnelly, VP corporate

and won in the end by Kelly

companies participated in

communications and

Malcolm of Amex Exploration

2,198 meetings with 427

development at Trilogy Metals:

after the judges cast their

active investors – confirming

“In the current COVID-19

decisive votes in favour of the

Online Connect Global as the

world, Mines and Money really

Quebec-focused explorer.

world’s largest digital mining

stepped up to the challenge

conference yet.

and delivered a well-organised

Amex made a breakthrough

and functional platform to

discovery in 2017 at the Perron

“We were very pleased with

meet with potential investors –

gold property and hopes to

our recent Mines and Money

Well done!”

put out a maiden resource

Online Global event,” head of

covering four mineralised

content Andrew Thake told

Van Gold Mining Corp CEO

zones next year. “We have

RGN after the event. “The

James Anderson provided

$35 million in the bank to

content sessions were lively

another testimonial

pursue an aggressive drilling

and well attended, and the

commending the Mines and

programme in order to achieve

investors and miners were

Money team: “A fantastic, well

this,” Malcolm said.

delighted with the meetings

organised event that brings

platform.

mining professionals together

That’s a wrap

from all over the globe. It’s

Mines and Money’s first global

“Given the uncertainty

an excellent format to meet

Online Connect event served

surrounding COVID-19 and

people who you would not

up a perfect mix of 24-hour

physical events in 2021,

normally come into contact

networking and information

we recognise the need to

with.”

sharing via a range of

stay nimble as the situation

innovative online functions

constantly changes. However,

and live sessions that featured

I am confident that we can

a liberal smattering of the

evolve our online offering to

industry’s brightest minds.

meet our customers’ needs.”

Over the course of the three-

Thake’s sentiments were

day event, Mines and Money

echoed by several happy

Mines and Money’s next Online Connect Global event will take place in December 2020. Register to attend by visiting Mines and Money’s website today.

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

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

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Bushveld Minerals

RUMBLE RE

Multiple avenues to disco

36

MINING | RUMBLE RESOURCES

ESOURCES

overy in Western Australia

37

When founding member of Rumble Resources Shane Sikora took over as managing director of the Australian explorer in mid-2015, his first remit was to identify a technical leader with the necessary experience to propel the company towards a mineral discovery in Western Australia.

When he was introduced to revered WA-based exploration geologist Brett Keillor, he quickly realised that he had found the ideal candidate. Twice AMEC Prospector of the Year, first in 1998 for his central role in the Marymia discovery, and again in 2012 for his involvement in the discovery of the Tropicana Gold Deposit, Keillor was also an early stage founder in Resolute Mining and Independence Group (IGO).

Both companies saw their stocks soar due in large part to Keillor’s exploration success and the subsequent delivery of large-scale operating mines.

“What’s really impressive about Brett’s experience is that he is an early stage investigational explorationist who has made multiple major discoveries that have turned into mines. Equally as important, he has been with companies all the way through to mining, which provides a very unique and valuable skillset,” says Sikora. “He came on board at Rumble roughly the same time I did as MD. We formed a team and decided from there to build a unique strategy to utilise our skillsets. My role is to finance and bring in assets, manage public relations and compliance, while Brett focuses on his technical capabilities and making discoveries.”

38

MINING | RUMBLE RESOURCES

While this double act is a key component of the Rumble package, Sikora confirms he and Keillor are buttressed by a strong board and equally talented field team that believes in the company’s philosophy. He also believes that together they have cultivated an open and exciting culture that permeates all levels of the business.

Multiple avenues to discovery A quick glance at Rumble’s current portfolio reveals a distinct strategy, and that is to pursue multiple base and precious metals projects in WA. When asked why the company has favoured this route as opposed to developing a single asset, Sikora explains that making discoveries is difficult.

“From Brett’s experience and the work I’ve done in the industry, giving yourself multiple opportunities is the best way to make discoveries, so we’ve gone for that de-

39

risked approach. What we

“We call this ‘drill to kill’.

do is quite unique; low cost

We drill test the generated

The Western Queen

optionality up front, a small

targets in the first year and if

The Western Queen Gold

option fee over several years

it kills the project we move

Project is Rumble’s near-term

with a balloon payment at the

on with minimal spend. If

production asset located

back end.”

the drilling is successful, the

within the Yalgoo Mineral

projects progress along the

field, 110 km from Mt Magnet

Rather than buy a project

development pipeline. Fast

and within a 110 km radius

upfront, which is cost-dilutive

forward three and a half years

of three operating gold

and by no means a guarantee

and we have now advanced

processing mills.

of exploration success, Rumble

five assets which we believe

affords itself the opportunity

are near-term discovery.”

to generate targets and drill

historic high-grade gold

test them in that crucial first

deposits – the Western Queen

year.

40

The project contains two

MINING | RUMBLE RESOURCES

RGN editor Jacob Ambrose Willson interviews Rumble Resources managing director Shane Sikora, July 21, 2020

Central (WQC) mine and the

intercepting a pegmatite dike

resource extensions at depth

Western Queen South (WQS)

which was thought to close

and multiple repetitions of

mine – with a combined

off the high-grade gold shoot.

the WQC along strike, as these

historic production of 880,000

Similarly, WQS was kicked

deposit types typically form

tonnes at 7.6 g/t gold for

down the road after its former

multiple gold shoots.

215,000 oz.

owners completed two smaller open pit operations.

WQC was mined around 20

“Throughout the DD process we also identified a chance

years ago by a company called

“We picked up the project

of monetising the existing

Equigold, who extracted

as our initial assessment

open pittable resource, which

high-grade gold from an

indicated most of the historic

is 83,000 oz at 3.6 g/t at WQS.

open pit at 9 g/t followed by

drilling was focused on the

With the current gold price

an underground operation

pits. We completed some deep

and three hungry mills in the

at 10 g/t. The underground

due diligence and could clearly

area, there is an opportunity

operation was closed after

see the potential for WQC

to seek a joint venture to mine

41

BRETT KEILLOR, RUMBLE RESOURCES TECHNICAL DIRECTOR

RU M B L E RES O U R C ES

these resources while we focus

at depth at the WQC and,

on finding high-grade gold

of geological importance,

resources.”

identified that the high-grade

AT A G L A N C E

STOCK TICKER ASX: RTR

MARKET CAPITALISATION

US$60.7 million (as of August 05, 2020)

j a

42

gold is hosted in tremolite As part of its systematic

skarn shoots within the

exploration approach at the

mineralised shear zone. We

project, drilling was completed

now believe the WQ shear

over two stages to ascertain

zone could host a series of

the prospectivity and build a

high-grade gold deposits in

geological understanding of

tremolite skarn shoots similar

the mineralisation.

to WQC.”

“The first two stages of drilling

Armed with this new

identified six compelling

geological understanding

high-grade gold shoot targets,

and high-grade gold drill

extended the high-grade gold

results to date, the company is

MINING | RUMBLE RESOURCES

SHANE SIKORA , RUMBLE RESOURCES MANAGING DIRECTOR

confident it is now zeroing in

been properly tested before,

North and South mineralised

on the high-grade gold shoot

based on Rumble’s new

WQ shear zone extensions

discoveries. In June, Rumble

interpretation of the location

of the main project area,

commenced a 12,000 metres

of WQ Shear Zone. This

expanding the strike to 35 km.

drill programme, the largest

informed Rumble’s decision

No previous drilling has tested

in the company’s history, with

to significantly increase its

the newly inferred position

the aim to start defining high-

landholding by 500%, which

of WQ shear zone North and

grade resource extensions

was confirmed in July.

South, providing an expansive

at depth by stepping down

new area for targeting high-

the shoot beneath the WQC

“The original Western Queen

grade gold discoveries.”

deposit and targeting multiple

main project area had a 5.5

high-grade shoot discoveries

km North-South trending

Sharing the load

along strike.

mineralised shear zone which

Forming JVs is something the

hosts the WQC and WQS

company has successfully

In addition, the company

deposits. We secured the

executed at other assets in

felt that the ground to the

highly prospective contiguous

the portfolio, not least at

North and South had not 43

its projects in the highly

and basement

prospective Fraser Range

gold, which is also

region of WA. Rumble has

subject to this round

partnered with Keillor’s

of drilling in the

former employer IGO, who

September quarter.

have earned a 70% interest in Rumble’s Fraser Range

Rumble’s other JV

tenements, with Rumble free

project in WA is

carried to completion of a pre-

hugely exciting, so

feasibility study.

much so that Sikora admits it keeps him

“We’ve got two projects

up at night due to the

with IGO – one called the

potential scale and

Thunderdome, where IGO has

the ultimate prize.

already generated 12 km of

It is called the Lamil

discoveries, and our Lamil

copper-zinc anomalies with

project in Paterson Province,

project is located between the

multiple conductors beneath

an area which is long thought

Nifty and Telfer mines. With

them. There are also multiple

to be rife for new discoveries.

Brett’s exploration nous, he

magnetic gravity feature

identified that there was a

targets which have similar

The province is a globally

chance to have shallow Tier 1

features to that shown in the

recognised mineralised belt

targets on our project.

pre-discovery at the nearby

hosting the 32 Moz Telfer

Mawson deposit by Legend

copper-gold deposit and the 2

“To scope the potential of

Mining. IGO are scheduled in

Mt Nifty copper mine. More

the project, we completed

the September quarter to drill

recently, Rio Tinto made the

an airborne magnetics

test those Tier 1 targets.”

Winu discovery and Greatland

programme which identified

Gold discovered Haveiron,

what we think is the best

Further South at Fraser Range

which was recently acquired

undrilled target in the

is the Thunderstorm project,

by Newcrest.

Paterson Province called the

which has also received early

44

Lamil Dome, which has similar

stage drilling from IGO. In

“In the Paterson Province

dome size, trend and host

their first stage of drilling, IGO

you’ve got four Tier 1 projects,

rocks to the Telfer deposit.”

found 13 km of paleochannel

two of which are new

MINING | RUMBLE RESOURCES

they’ve gone ahead

discoveries, advancing a series

and assembled

of projects which are now near

a formidable

term to discovery.

exploration team.

“We have near-term leverage to

Experienced Australian

“They’ve completed

exploration success with three

passive seismic,

major drilling programmes

gravity and micro

commenced or planned,

soils and reworked

targeting high grade gold at

the regional seismic

the Western Queen, Tier 1

data and airborne

nickel-copper and gold targets

magnetics. Every

in the Fraser Range and Tier 1

single test along

gold and copper targets at the

the way has been a

Lamil Project in the Paterson

tick to suggest there

Province,” Sikora summarises.

explorer AIC Mines soon

is an intrusion at that Lamil

signed a JV deal which will see

dome, all while generating

The company’s de-risked

them spend $6 million to earn

a multitude of new targets

exploration strategy is

50% in the Lamil project, at

with the potential for Tier 1

paving the way for multiple

which point Rumble has the

discoveries.”

avenues to discovery in WA

ability to co-contribute and

– a jurisdiction with world-

retain 50% of the project– a

AIC recently announced they

class resources, facilities and

rare outcome in the industry

are scheduled to complete

service providers, with major

according to Sikora.

the exciting maiden drill

discoveries continuing to be

programme at the Lamil

made. Following a $6 million

Project in September.

capital raise in June, Rumble

“Our JV partner AIC indicated they would put together a

is well cashed up to continue

of discovery specialists with

Discovery ready in WA

a wide range of technical

Over the last three and a half

heavy lifting at the Fraser

expertise to give us the

years, Rumble has executed its

Range and Lamil projects.

best chance of making a

strategy of generating a packed

significant discovery and

pipeline capable of world class

highly credentialled team

drilling at Western Queen, while its JV partners do the

45

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At Capital Drilling, we know how important this information is to our clients. We have our own Q&A teams on all production crews and ensure our drillers and offsiders are trained to follow our sampling systems and processes to deliver quality samples.

After all, what’s the drill hole really for?

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CHESSE

Senegalese gold discovery in the com

48

MINING | CHESSER RESOURCES

ER RESOURCES

mpany of giants

49

ASX-listed Chesser Resources has been focused on gold exploration in Senegal since 2017, when the company was offered three projects in the highly prospective Kédougou-Kéniéba Inlier (KKI) - a Northwest extension of the world-class Birimian greenstone belt - which runs along the border with Mali on the Eastern side of the West African country.

Until recently, multi-million ounce gold discoveries have been confined to the Mali side of the KKI, but the Senegalese segment is now emerging as an equally rewarding stretch of terrain with the same favourable underlying geology, following a series of breakthrough discoveries.

Chesser’s flagship 100%-owned Diamba Sud project is located to the West of the regionally significant Senegal-Mali Shear Zone (SMSZ) and is in close proximity to numerous mines, including Barrick Gold’s Loulo and Gounkoto operations, plus B2Gold’s Fekola mine. The project is also directly West of the Bambadji JV, where Barrick has announced a very early stage discovery in partnership with IAMGOLD. Since acquiring the project three years ago, Chesser has conducted 25,000 metres of auger drilling and 15,000 metres of RC drilling, while also committing to a refresh at board level in order to meet the challenges of exploration in this prolific gold region. Earlier this year, experienced investment banking professional Robert Greenslade was appointed nonexecutive director and more recently Mark Connelly was brought in as the company’s new chairperson.

50

“Mark is probably one of

running of the company, even

the most successful mining

at its current early stage of the

executives in West Africa,” says

exploration cycle.

Chesser’s managing director and CEO Mike Brown. “He

“If we can do the right things

was chairman of West African

early on to de-risk the project

Resources, who have just put

as we move into development

their plant into operation

cycle, Mark is the perfect

under budget and under time

person to have steering the

schedule. He was also chairman

ship,” says Brown.

of Toro Gold, which was sold last year to Resolute Mining.

Exploring for gold elephants

“He has a wealth of experience

Prior to Chesser taking over

on-ground in Senegal from

the Diamba Sud project, there

his time with Toro Gold. Mark

had been minimal exploration

was also the CEO of Papillon

work carried out by the former

Resources, who discovered the

owners. In fact, only a small

Fekola mine which was then

amount of soil sampling and

sold to B2Gold. Fekola has gone

10 RC drill holes had been

on to become the mainstay

completed, and none of those

producer of B2Gold, it’s an

had been followed up as the

incredible deposit.”

thinking at the time favoured the Eastern side of the SMSZ,

The importance of having a

where all the major deposits

chairperson with Connelly’s

were located.

elite level of experience in the West African gold space is not

However, Chesser’s board

lost on Brown, who describes

made a calculated decision to

how the appointment has

focus on the opposing Western

helped Chesser on many levels,

side of the trend and the risk

not just through his reputation

paid off as a succession of drill

and industry connections, but

programmes identified multiple

also down to the day-to-day

large high-grade gold anomalies

MINING | CHESSER RESOURCES

51

over significant extents, with a significant discovery made last year.

“The alteration styles and the rock style that we have discovered in the drilling are very similar to Guonkoto which is 7 km due East.

Also, the drilling has shown the same type of alteration assemblages present at Fekola and also some of the same rock types.

“Every phase of drilling is a new chapter for us as the project is largely undercover, so we are really drilling blind,”

using auger drilling have even

“We discovered a new

Brown stresses. “We have

changed the approaches of

mineralised structural

a bit of geophysics on the

other companies in the region, orientation in the main area

surface and we have auger

with Barrick also adopting

of our discovery, which we

geochemistry over the whole

auger at nearby Bambadji.

call Area A. Having two sets

property, which has been really key in the discovery.”

52

of structural orientations is Chesser also commenced its

normally quite favourable

fourth phase of drilling - a

to deposit formation, and

Auger drilling has been

4,000 metres RC drill campaign it’s what is seen at Loulo and

a critical weapon in the

- in May. The programme was

company’s exploration arsenal

completed prior to the onset

at Diamba Sud, where the

of the wet season in late July,

Several of the 30 remaining

terrain is more amenable to

with results from 12 of the 42

holes to report are from

auger than soil sampling. The

holes reported at the time of

areas that Chesser hasn’t

anomalies detected by Chesser

writing.

drilled before, so Brown is

Gounkoto.”

MINING | CHESSER RESOURCES

anticipating some exciting

are of the remaining holes,”

results to come, and the

says Brown.

company is well cashed up to resume drilling once the

“The first of those is start

wet season breaks in October,

infilling, gain some higher

following a $6 million capital

geological knowledge and do

raise in July.

some diamond core [drilling]

Cash in the bank

CHESSER RESOURCES AT A G L A N C E

in the main Area A footprint.

The second part is to look at

“The raise was critical for us

this new structural trend and

because it sets us up for the

start extending that within the

next round, which we see as

main area we’ve drilled to date

having two main objectives,

and also looking for extensions

regardless of what the results

to the Southwest.”

STOCK TICKER ASX:CHZ

MARKET CAPITALISATION

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j a

53

“We discovered a new structural orientation in the main area of our discovery which we call Area A. Having two sets of structural orientations is normally quite favourable to deposit formation, and it’s what is seen at Loulo and Gounkoto” Mike Brown, Chesser Resources managing director and CEO 54

In addition, the company

“There’s a lot of work in front

will also look to follow up on

of us for highly prospective

any attractive results from

exploration on these parallel

its recent drill campaign and

structures that we are only just

various hits at other trends

starting to get a handle on as

that are parallel to the Western

we slowly extend the drilling.”

Splay system previously identified in geophysics.

Throughout its exploration programmes so far, Chesser

“We’ve got a splay structure

has used two of the three

running through the property

established in-country

that appears to be a controlling

drilling companies - FTE

feature. Those splays are

and IDC – although the open

what host Fekola, Loulo and

door policy with Mali and

Gounkoto. We’ve got one and

the broader region should

have a number of parallel structures to it.

MINING | CHESSER RESOURCES

MIKE BROWN, CHESSER RESOURCES MANAGING DIRECTOR AND CEO

allow for the possibility of

enough programme to possibly

than neighbouring Mali’s,

bringing in equipment from

bring new players into the area

recent modifications to the

other jurisdictions should it be

and create a more competitive

2003 Mining Code in 2016

required.

environment for the drilling.”

have assisted in the sector’s

“The good thing about the

Live by the code

next programme coming up in

Although Senegal’s mining

dry season is it will be a large

industry is less developed

development and helped the country foster a reputation as a strong mining jurisdiction,

55

RGN editor Jacob Ambrose Willson interviews Chesser Resources managing director and CEO Mike Brown, July 16, 2020

supported by a stable

“We’re coming up to five years

will be developed, only that the

democratic system.

into that tenure, so we’ve

board’s number one priority is

still got quite a bit of runway

to advance it in a way that will

“It’s a very workable code for

to push this forward. These

maximise shareholder value.

the exploration. We haven’t

projects take time as wet

got to the exploitation side of

seasons can get in the way,

“Whether that is taking it into

it yet but we essentially have

and you need to raise money,

production, selling to a major

11 years on the area (subject

so you need those longer time

or getting a major involved

to work commitments) and

frames,” explains Brown.

through an earn-in/JV, we’ll

then we can approve renewals

56

essentially be trying to develop

along the way to advance that

When quizzed about Chesser’s

it far enough so we can

property. Equally important is

long-term ambitions at the

maximise the potential value

the relative low jurisdictional

Diamba Sud project, Brown

at the given market at a given

risk that Senegal enjoys

reveals that the firm has no

time.

relative to West Africa.

pre-set as to how the project

MINING | CHESSER RESOURCES

“Having an early stage

compiling of a resource

during a tumultuous 2020,

discovery within a strategic

estimate for Diamba Sud,

subsequently making more

operational belt for Barrick,

which Brown believes can be

capital available for juniors to

who may have a discovery on

achieved by 2021, barring any

advance exploration.

their neighbouring property, is

major hiccoughs. At present,

potentially helpful in creation

the company has located

“The operations in this part

of value. At this stage it’s fair

shallow high-grade gold in flat

of the world are generally

to say that our current market

terrain – favourable conditions

relatively cheap on an AISC

value is severely lagging

for quickly advancing a

basis, which sets up West

what we see as the potential

resource.

Africa as the perfect place

endowment value - although most CEOs will claim this!”

for developing large scale Finally, Chesser’s boss

deposits. Hopefully, the stars

highlights how now is a great

stay aligned and we can push

The next major company

time to be invested in gold as

through a resource,” concludes

milestone will be the

the price continues to climb

Brown.

57

KOG IRO

Pioneer iron ore and steel p

to accelerate Nigeria’s industria

60

MINING | KOGI IRON

GI ON

production

al development

61

The wheels of full-scale industrialisation in Nigeria have been in motion for several decades following independence in 1960 and the establishment of a large-scale oil sector in the 1970s. However, achieving economic development through rapid industrialisation has remained a major challenge in Africa’s most populous nation and largest economy, which was still reliant on oil and gas for 65% of government revenues in 2018. Industrial development in Nigeria is generally constrained by high cost of supply and this is glaringly apparent in the raw materials market. Nigeria does not produce any domestic steel, which means its existing fabrication facilities are dependent on the import of all steel raw materials - most of which is scrap metal - to produce low quality items such as rebar and hot/cold rolled steel and wire coils.

The high cost of importing scrap to produce low quality steel is an equation that has stunted industrial growth in Nigeria for too long and changing this requires a trailblazer. Step forward ASX-listed Kogi Iron. The company plans to deliver the country’s first fully integrated cast steel project on the Agbaja iron ore plateau in Kogi State, central Nigeria.

62

MINING | KOGI IRON

“Ours is a pioneer project,”

pivoted towards the idea of

Kogi’s managing director David developing a fully integrated Turvey proclaims. “There isn’t

steel production facility, a

any other steel production in

move that Turvey describes as

Nigeria so we have first mover

‘a real paradigm shift’.

advantage, but that comes with good and bad sides to it.

“The Nigerian domestic steel

There isn’t much policy with it

market has both current

because nobody else produces,

demand and significant

so we’re pioneering policy as

latent demand. If you can

well as producing steel.”

produce domestically than you are likely to benefit from

Kogi spent the best part of a

that latent demand. At the

decade exploring, discovering

moment, they are importing

and defining an iron ore

scrap steel at a very high price.

resource at the Agbaja Project, located approximately 200 km

“If we can match that price

South of capital city Abuja.

and over time lower it, then

The JORC-compliant mineral

we’re supporting the growth

resource on the plateau

of the local industry. I see it

has been estimated at 586

as a unique opportunity to be

million tonnes (Mt) with an

the first, but also to work with

in-situ grade of 41.3% Fe. The

the country in developing the

project is Nigeria’s only JORC-

policy for their first successful

classified iron ore resource.

integrated steel plant.”

The company’s original plan

In order to build a low-cost

for the project was to develop

steel producing facility, you

the mine and become an

need a few fundamental

iron ore export play, but

components, firstly a source of

after evaluating the difficult

suitable quality and quantity

logistics and escalating costs

iron ore. Tick. Reliable power

of exporting the ore, Kogi

supply is also a necessity.

63

64

MINING | KOGI IRON

Fortunately for Kogi, running quite nearby the iron ore deposit is a large gas pipeline, ideally suited to supply a gasfired power plant. Tick.

“These are two very significant fundamental competitive advantages that are very rare in the rest of the world,” Turvey explains. Coal and limestone are the other ingredients required for steel making, and the company has noted that both can be drawn from local sources. Tick.

Feasibility study work The company completed a substantial amount of prefeasibility level work for the fully integrated project between 2014 and 2018, including the manufacturing of a sample steel product using iron ore mined from the Agbaja plateau and local coal.

“We took bulk samples of our iron ore and local coal down to South Africa and Mintek produced internationally

65

marketable steel billet. Steel billet is a traded intermediate product, and that’s what we’re aiming at. We’re not looking at being a fabricator of rebar or the finished steel products, we’re looking at selling to the pre-existing steel fabricators.”

In 2018 Kogi hired Fast Markets to conduct a market feasibility survey, taking in all aspects of the contemporary steel industry in Nigeria and West Africa. The survey concluded that Kogi would be able to sell 1.5 million tonnes

KO G I I RO N

AT A G L A N C E

STOCK TICKER ASX:KFE

MARKET CAPITALISATION

US$22.32 million (as of August 29, 2020)

j

66

per year of billet steel in

from existing Nigerian

Nigeria and into neighbouring

steel fabricators which will

countries.

be progressed into offtake discussions, although Turvey

Following the publication

stresses this will take time and

of the survey, Kogi received

the company must arrange a

several expressions of interest

strategy with the government

MINING | KOGI IRON

for the eventual replacement

production and it’s a mutual

Many of these components

of imports.

process. There has been quite

will not take long to update

a bit of time and effort spent

to a bankable level, such as

“As a pioneer, we have an

on pre-feasibility studies

the upgrading of the iron

obligation to listen to what the

on the steel side, including

ore resource to reserve

government wants because

environmental work. We’re

classification (at a cost of

there is no current steel

currently converting these to

approximately US$1 million)

bankable feasibility level.”

67

“Ours is a pioneer project. There isn’t any other steel production in Nigeria so we have first mover advantage” – David Turvey, Kogi Iron managing director

68

and the Fast Markets study,

off on the process guarantee

which should be a relatively

from a world expert.

straightforward task according to Turvey.

Critical path value drivers

Process flowsheet refining

These elements, along

tests are another important

with confirmation of a gas

aspect of the bankable

supply contract, comprise

feasibility work, particularly

the company’s ‘critical path

the chosen steel refining

six-month value drivers’ – a

technique to remove

plan formulated by the board

phosphorous – a well-known

to essentially de-risk and

contaminant. This refining

expedite key parts of the study

stage is not a big capital item,

following the onset of the

but it’s crucial to receive sign

COVID-19 pandemic.

MINING | KOGI IRON

RGN editor Jacob Ambrose Willson interviews Kogi Iron managing director David Turvey, August 17, 2020

“The bankable feasibility

supply contract, if not slightly

“We’ve received positive

will take up to 18 months to

afterwards.”

feedback and progressed

complete and we will need

relationships with the UK ECA

to raise US$8 million to fund

The design engineering will

and with other banks on the

it. But we will probably only

be the longest lead item on

debt side of project financing.

need $1-2 million for our key

the BFS because it is reliant

It relates to the unique

value drivers over the next six

on the refining process and

advantages of the Agbaja steel

months.

power supply being in place.

project and the quality of

Once design engineering is

the investment opportunity

“The steel test work in Sweden

complete, a six-month timeline

destined in the bankable

is expected to cost less than

is expected before equity and

feasibility study,” says Turvey.

$500,000 and will probably

debt financing is secured, in

take three months. Then the

Q2 2022 at the earliest.

market entry is likely to be

As a result of the impact of the COVID-19 pandemic on equity

hand in glove with the gas

69

markets, and the subsequent

front end of the project can

aspects, and it has been

economic challenges that

be fast-tracked and de-risked,

no different for Kogi, who

have emerged in Nigeria this

while easing the short-term

finalised an early CDA back in

year, Kogi has decided to take

funding conundrum the

2016.

a phased approach to the

company would have faced

development of the project,

under the original plan.

which involves construction of a lower risk, smaller-scale steel billet plant.

70

Community support

The CDA details Kogi’s support for the local communities across four key areas: Education, health,

In Nigeria, mining companies

infrastructure (power

The plant’s design will allow

are obliged to draft community

and water supply) and

for expansion to larger scale

development agreements

employment. Recently, the

production capacity relative

(CDAs) for their projects

company has overseen the

to market demand, but the

far in advance of work on

installation of a water bore

phased approach means the

all technical and financial

and storage tank at one of

MINING | KOGI IRON

the remotest villages near

sustainability practices for all

the project, it has provided

water and wastes, and are in

education bursaries and

addition to the project itself

contributed to maintenance

supporting Nigeria’s ongoing

work on a key access road

path to industrialisation by

leading to the plateau.

providing a maiden source of domestic billet steel, after

“This has been rewarding for

years of reliance on expensive

me to watch and report. The

imported scrap for steel

sooner we can raise money

production.

to fund the feasibility study, the sooner we can plough

As the country’s first domestic

more into our community

steel producer, Kogi is also

development commitments.

working closely with the

I’m an explorer, I drive from

government to formulate an

the bottom up and unless I

appropriate policy framework,

have that community support,

thus opening the door for

it is not worthwhile.”

others to follow in Kogi’s

““We’ve received positive feedback and progressed relationships with the UK ECA and with other banks on the debt side of project financing. It relates to the unique advantages of the Agbaja steel project and the quality of the investment opportunity destined in the bankable feasibility study”

footsteps.

When the fully integrated

“Nigeria has a lot of the

Agbaja project is operational,

Clearly, Nigeria has a lot to

ingredients that can make

Kogi expects to directly

gain from Kogi’s pioneer

this thing work – the iron ore

employ over 2,000 people and

project, but Turvey is keen

resource, potential low-cost

substantially more indirectly

to stress the mutually

gas and power supply, British

in related local businesses,

advantageous nature of the

law, improved sovereign risk

and the creation of a modern

relationship. “Now is the right

- and that is what attracted

mining and steel-making

time in a macro sense, because

me.” Now it is full steam

hub will bring innumerable

Nigeria is a big economy

ahead towards the trailblazer

benefits to the local

in Africa and it has highly

company’s six-month and two-

communities.

intelligent, highly skilled

year timelines to bankable

people with a drive to succeed.

feasibility and beyond.

These local ‘spin-off’ businesses will be based on

71

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MER M

Developing a dynamic

74

MINING | MERIDIAN MINING

RIDIAN MINING

c copper-gold (and polymetallic) portfolio inside mining frontier Brazil

75

Meridian Mining S.E. is a Toronto-listed exploration, development and mining company in Brazil that originally focused on a manganese project in a joint venture with fellow Canadian junior Cancana Resources Corp. The companies merged in 2016 and continued to run the Espigão manganese project, located in the state of Rondônia in Northwestern Brazil, which produced a high quality and highly sought-after product. “But along the way, we recognised the project had a bit more to offer,” says Meridian’s CEO and President Dr Adrian McArthur. “We commenced a programme of stream sediment sampling, mapping and soil surveys, and that gradually uncovered two very substantial gold soil anomalies.” The company also realised that the manganese mineralisation was associated with a much broader set of metals, particularly rich in copper, with some of the concentrates running up to 1% copper. Additional styles of hydrothermal mineralisation were also detected, including iron oxide breccia systems.

“We’ve recently reinvented the project with a focus on a higher value-adding proposition. We believe there is a polymetallic exploration opportunity.”

In line with its new focus on discovering a high-grade copper-gold system, Meridian has placed the manganese operation on care and maintenance, while refocusing on copper-gold exploration and project development opportunities.

76

environment. It has a good

Corporate evolution

mining history and good

McArthur has been with

mining laws, but some of

Meridian for around five years

these areas have only recently

and is based in Brisbane,

been opened up for economic

although he commutes to

activities. Mapping is at a very

Brazil to work on-site for two

early stage and we recognised

to three months at a time. The

that there are several satellite

experienced geologist started

projects around.

as the company’s exploration

“Brazil is an underexplored

manager but has recently seen “One of those is Mirante

his role transition from chief

da Serra, where we have a

geologist to CEO.

number of our own licences and an option agreement over

McArthur’s appointment was

an undeveloped manganese

announced in July along with

deposit. We also have licences

other corporate changes,

in the Ariquemes district,

including the retention of

which is a very large tin mining

former CEO Gilbert Clarke as

centre, but still underexplored,”

a company director and the

Meridian’s CEO says.

retirement of Peter Weidmann, who represented the Private

Meridian has also recently

Equity fund Sentient Global

signed an option agreement

Resource Fund IV L.P. on the

on the Cabaçal Copper‐Gold

Meridian board. The company’s

Project in the neighbouring

chairman, Charles Riopel, is an

state of Mato Grosso, which

accomplished senior executive

hosts a historical copper-

with a strong business

gold mine with undeveloped

background and over 25 years

extensions and is undertaking

of international investment

due diligence on this project.

experience in mining.

MINING | MERIDIAN MINING

77

78

MINING | MERIDIAN MINING

The company had previously received strong financial backing from the Fund’s managers Sentient Equity Partners, but the decision was made this year to reduce its shareholding to below 10% to provide opportunities for new investors.

“We have a new set of investors behind us, we have more liquidity and a broader shareholder base, and we’ve just started to initiate our programmes, carefully monitoring the COVID-19 situation,” McArthur proclaims.

Copper-gold focus Following a successful C$3.5 million capital raise in July, Meridian is initiating a geochemistry programme at the Espigão Copper-Gold Project, which is located within the Amazon Craton – a hotspot for copper and gold mineralisation in Brazil.

79

ESPIGÃO PRIORITY TARGET AREAS (2020 SOIL PROGRAMME)

“We’ve accumulated a large

vectors for targeting a zoned

“For the remaining months

dataset in previous years

hydrothermal copper-gold

of this year the focus is going

which contains a lot of

system, with the ultimate goal

to be on the geochemical

geophysical information, not

of identifying and prioritising

programme, getting a

all of which has been fully

targets for drilling.

good sweep on pathfinding

processed. The plan is to start

80

elements and understanding

with the basics and go back

While McArthur is cognisant

more about the gold anomalies

to some promising areas that

of the market’s desire to see

and the extension of those into

haven’t yet had the first pass

drill results, he highlights the

adjoining licences, processing

soil and stream geochemistry.”

vast nature of this prospective

the geophysics and optimising

project’s area – 55 km East-

that.

As many areas are yet to have

West and 30 km North-South –

preliminary geochemical

and underlines the importance

“We expect to learn a lot in

coverage, Meridian will

of building a good targeting

the coming months and going

start with a reconnaissance

criteria to accurately define

into next year we will be

programme and develop ore

targets for drilling.

ready with a set of prioritised

MINING | MERIDIAN MINING

CABAÇAL PROJECT MAP

targets identifying where the

disseminated copper-gold

style. Globally, such deposits

best bang for the buck will

sulphide mineralisation was

have been major global hosts

be on what is a very large

never exploited. Meridian

of base metals, gold and

hydrothermal system.”

is currently commencing a

silver. Deposits tend to form

due diligence process at the

as clusters within districts

project.

of about 40 km in diameter,

Moving into Mato Grosso

that may once have contained

The Cabaçal deposit was

The Cabaçal project presents

dozens of periodically spaced

discovered in 1983 by BP

an opportunity to leverage

mineral centres.

Minerals and was later

off a historical database

acquired by Rio Tinto. It

with over 70,000 metres

Validation drilling was

operated as a selective high‐

of historical drilling. The

previously conducted in

grade underground mine

deposit is considered to

2015 on the undeveloped

in the late 1980s to early

be deformed copper-gold

mineralised halo with

1990s, but the main envelope

rich of the volcanic-hosted

impressive results. Subject to

of stockwork, stringer and

massive sulphide deposit

a positive due diligence, the

81

RGN editor Jacob Ambrose Willson interviews Meridian Mining CEO and president Adrian McArthur, August 13, 2020

next steps would be to conduct

discovery. The company has a

presented to them. Approval

a systematic programme of

regional exploration package

of the report will then be the

validation drilling and support

and an option agreement

trigger for initiating a resource

a NI 43-101 resource update

covering an extensive system

delineation programme

and feasibility study in an

of sediment-hosted manganese on the Mirante da Serra

open-pit operation.

mineralisation.

mineralisation.”

Manganese at Mirante da Serra

“At the core option agreement

The first step for Meridian,

area, we are just waiting

subject to AMM approvals, is

Meridian is balancing its

for the national mining

to initiate a pitting programme

upcoming workload between

agency (AMM) to complete

at Mirante da Serra. At the

Espigão and the nearby

an assessment of a technical

project there exists significant

Mirante da Serra project - an

report that was recently

colluvial mineralisation at

undeveloped manganese

82

surface, which means that

MINING | MERIDIAN MINING

the surficial material can

Mirante da Serra project as

are and when we get to the

be evaluated by pitting and

those approvals come through

stage of extraction, we will run

trenching, with shallow

in the coming year.”

through very carefully what

drilling on the underlying

the programme will entail and

Instead, the company

Thinking globally, acting locally

plans to screen the soil

Meridian is also working hard

lawyer who deals with

and put it through a gravity

to build local environmental,

contractual arrangements with

concentration circuit

social and corporate

landholders and there is also

(if needed), to produce

governance (ESG) programmes

a dedicated environmental

a concentrate with no

throughout the rural areas

specialist that studies

chemicals. This examination

surrounding the projects in

environmental impacts and

of the colluvial layer

Rondônia. The company views

manages recuperation of the

represents the easiest pathway

ESG as an essential part of its

land.

to production for Mirante da

licence to operate, especially

Serra, according to McArthur.

in Brazil.

The following step at the

“We are very conscientious

project will involve a decision

about the importance of

relating to a small-scale trial

good relationships with the

plant before getting into full

landholders in our local

production. “We’re looking at

regions. All the work we

all those options, but at the

execute is done with the

moment the copper and gold

agreement and blessing of

market is doing very well.

those landholders,” explains

primary.

McArthur.

“Manganese has softened a bit, so our priority is to focus on

“All the work is done very

Espigão, where there is a high

carefully through a process

value-add proposition. Then

of consultation. We inform

we can gradually build up the

them what the programmes

how it will impact them.”

Meridian has an in-house

“We have a new set of investors behind us, we have more liquidity and a broader shareholder base, and we’ve just started to initiate our programmes, carefully monitoring the COVID-19 situation” Adrian McArthur, Meridian Mining CEO and president

83

“We are quite proud of this as it’s critical for having good relations with landholders.

We are active in formalising the mediation programmes from all phases of mining that are being executed and returning it to a productive state, whether it was an area of vegetation or pasture.”

Strong team, strong jurisdiction McArthur summarises by highlighting the skilled and capable team that will drive

M E R I DI AN M IN I N G

AT A G L A N C E

STOCK TICKER TSXV:MNO

the project’s forward from

the market that we have the

MARKET CAPITALISATION

grassroots concepts through to

necessary skills in-house. The

feasibility and permitting.

management team has a track

US$37.3 million (as of August 20, 2020)

j

84

record of project execution “We try to set ourselves

and I do believe Brazil is a

apart by demonstrating to

great frontier compared to

MINING | MERIDIAN MINING

many other areas I’ve worked

geophysics or drilling before

believe in the potential of the

over the years.

and so there are opportunities

country and the people that

here that don’t exist in other

are part of this team.”

“I find it amazing that some

economies. This is one of

of these areas simply haven’t

the reasons I’ve sat with this

had any form of geochemistry,

project for some time. I really

85

TEL MIN

Closing in on first production at its se

86

MINING | TELSON MINING

SON NING

econd polymetallic project in Mexico

87

Telson Mining Corp is a Mexico-focused public company listed on the TSX Venture Exchange (TSXV) that was formed by current CEO Ralph Shearing and a colleague and close friend in the late 1990s. Not long after its founding, the nascent firm discovered the polymetallic Tahuehueto Project in the prolific Sierra Madre Mineral Belt within the state of Durango. Telson has gone on to retain the project to this day, advancing it through several cycles in the commodities sector.

The company started to substantially explore the Tahuehueto concessions during the mining boom of 2004-08 before pulling back during the decline of 2015-16. Despite the difficult market conditions at that time, Telson managed to attract vital funding from a Mexican mining group in 2015, which allowed the company to complete bulk sampling work and economic studies that firmed up the project’s viability and convinced Trafigura Mexico to provide a loan facility for the construction of the mine.

During this period, Telson also came across the Campo Morado Mine in Guerrero state – a base metals asset that Nyrstar had spent $500 million on but were looking to divest. Telson subsequently acquired the mine for a fee of $20 million in 2017.

“Campo Morado was a very

to put the mine into care and

good buy as we were able

maintenance in 2019, which

to quickly get the mine

stalled the construction of

back into production,” says

Tahuehueto. But, after further

Shearing. “At the same time,

COVID-19 related disruption

we were building our project

earlier this year, the company is

in Tahuehueto and the funding

now producing again at Campo

plan there required cash from

Morado and moving full steam

Campo Morado to slide over for

ahead to secure final funding

its construction.”

to complete construction at Tahuehueto.

Telson soon encountered some difficulties with the

“We have a very good

Campo Morado asset and had

operations team in Mexico, that group came in and funded us

88

MINING | TELSON MINING

five years ago, and we have a

Sierra Madre - which hosts

“It’s recognised as a

good blend of professionals in

a series of historic and

mineralised district. If you

mining and capital markets.

producing mines and most of

were to compare it to any

Together, we are working very

Mexico’s active exploration

other mineralised region in

effectively to move things

and development projects.

Mexico, the one that comes to

forward.”

mind is the San Dimas Mining The project is a ‘fantastic, rich

District,” he says before

deposit’ and of ‘district scale’

pointing out that San Dimas

according to Shearing, who

is about a third larger and has

tells RGN that Telson owns

been producing for 150 years,

Tahuehueto consists of 28

around 80% of the prospective

while the Tahuehueto district

mining concessions spread

ground in the region.

remains underexplored.

A fantastic polymetallic deposit across a large expanse of prospective ground in the

89

90

MINING | TELSON MINING

Down the years, the region has received less attention than San Dimas due to a perception of its remoteness in Mexico.

However, based on Canadian standards, Shearing believes this not to be the case. “If I can drive to my project in one day, I don’t consider that remote,” he remarks.

Telson’s exploration campaigns have identified gold-silver and base metals reserves at Tahuehueto, including copper, lead and zinc in the single structural zone the company has focused its efforts on thus far.

Inside this structural zone, Telson has defined total probable reserves of 3.26 million tonnes (Mt) with average grades of 3.4 g/t gold, 41.8 g/t silver, 0.35% copper, 1.19% lead and 2.24% zinc.

At present, gold resembles around 75% of the value of the project and the current grade estimations will make Telson one of the four highest grade producers in Mexico.

91

“We’ve really only explored along this one major structure and haven’t yet completed the exploration and development there. It remains open to mineralisation at depth and along strike in both directions.

“In the structural corridor we are working on right now, we think there is likely to be around 7 km of strike length potential and we’ve explored about 2.4 km on that major structure,” says the CEO. “There are also seven or eight more mineralised structures exposed on surface within this corridor. We have to follow up with exploration on all of those as time carries on.”

Telson is also developing an underground extension at Tahuehueto and has completed around 90% of the development work for the first three to four years of the operation. That development work has extended one tunnel at least 250 metres past known drill holes intercepts, where continuous mineralisation is already adding new

92

MINING | TELSON MINING

93

resources to the project, not

about by the COVID-19

some of the debt accumulated

yet quantified in a new NI 43-

pandemic this year, although

at Tahuehueto. At this stage,

101 technical report.

the company still managed to

the bank and bank associates

negotiate a US$12 million loan

have invested over $1 million

“We’re already growing the

facility with Accendo Banco

to propel the project through

asset with the underground

at the height of the global

to the final funding stage.

development, and as soon as

outbreak in June. The deal is

the company is in a healthier

expected to close very soon.

state we’ll be able to get drills

94

Once the deal reaches full closure, Telson will have the

turning again and bring in

Accendo Banco has even

funds available to resume

new resources and reserves,”

advanced $500,000 of the

construction and finish

assures Shearing.

loan figure to help bring in

building the mining operation,

additional funding and has

which should be completed

Here he alludes to the difficult

also helped clean up Telson’s

early next year according to

market conditions brought

balance sheet and paid off

Shearing.

MINING | TELSON MINING

RGN editor Jacob Ambrose Willson interviews Telson Mining Corp CEO Ralph Shearing, August 18, 2020

a plant with an intended

Back on track at Campo Morado

capacity of 1,000 tonnes

Campo Morado is an

per day (tpd) and targeting

underground polymetallic

to initiate production with

mine with a large resource

one ball mill in the 500 tpd

of 17.6 Mt (including high

range within eight months of

grade gold, silver, zinc, copper

securing final funding, and

and lead mineralisation) and

thereafter ramping up to 1,000

infrastructure, installations

tpd once the second ball mill

and equipment capable of

is installed later in 2021. “With

processing 2,300 tpd of ore.

The company is building

over 60% of construction already completed that is an

Although Shearing regards

achievable timeline once we

the 2017 acquisition as a

have the funding in place.”

good one for Telson, he notes

“Tahuehueto is an advanced in construction, highgrade gold mining project with silver and base metals byproducts, recoveries are great and the metallurgy could not be better. Our cash flow models predict very good profitability and excellent free cash flows at Tahuehueto,” - Ralph Shearing, Telson Mining CEO 95

T ELS O N M IN I N G

AT A G L A N C E

that it has previously been

improving its recovery rates at

regarded as a difficult asset

the mine.

to operate, predominantly for two reasons: Falling zinc

“A group out of the UK

prices and low metallurgical

conducted Leachox testing

recoveries.

which achieved up to 60% gold recoveries and 80% silver

STOCK TICKER TSXV:TSN

MARKET CAPITALISATION

US$33.08 million (as of September 21, 2020)

ja

On the latter point, metal

recoveries. This was first

grades are relatively high

phase testing and I have since

at Campo Morado - with

spoken to the group and they

average gold at 1.5 g/t and

think they can do better on the

silver grades of 90-100 g/t - but

second phase.

recoveries are languishing at around 15% gold and 30-

“If that is successful then we

40% silver. However, Telson is

have a path to significantly

currently investigating ways of

96

MINING | TELSON MINING

RALPH SHEARING, TELSON MINING CEO

improving the recoveries

“At 3,000 tpd, the economies

of the precious metals and

of scale will work to our

Growth potential at both projects

therefore improving the

advantage and certainly

In a similar vein at Tahehueto,

profitability of that project,”

improve profitability. At the

the company is planning for

says Shearing.

moment, we are running

a long-term expansion of

at 2,100 tpd and making

the plant towards 3,000 tpd,

In addition, Telson is looking

money. But with metal prices

based on adding resources and

at improving productivity at

[including zinc] improving,

reserves through exploration,

the mine by increasing the

we’ll be able to continually

to depth and along strike

plant capacity to 3,000 tpd, an

operate the project after some

on the current zones where

expansion which had already

interruptions in the last 12

resources and reserves

been started by Nyrstar and is

months. With some hard work

are already defined in the

currently 80% complete.

and ingenuity we will increase

company’s current mine plan,

the profitability of the mine.”

as well as exploring already identified vein structures

97

outside the current mine plan

stronger cash position and can

In conclusion, Telson is

area and finally initiating

subsequently get drills turning

nearing completion of its long-

greenfields exploration

again.

held Tahuehueto high grade

within the overall Tahuehueto mineralised district.

98

gold project in Durango state, The company currently

with the final funding solution

has its hands full with

the last piece of the jigsaw

Shearing states that both

development work schedules

ahead of its construction.

projects contain excellent

at Tahuehueto and Campo

Meanwhile, Campo Morado

organic growth potential

Morado, but is also monitoring

in Guerrero state is back into

which will be unlocked

additional opportunities for

production and primed for an

when Telson finds itself in a

external growth via potential

expansion which will boost

acquisitions in Mexico.

productivity and profitability.

MINING | TELSON MINING

TELSON MINING EXECUTIVES AT TAHUEHUETO

“Tahuehueto is an advanced

“Campo Morado has its

growth potential, building

in construction, high-grade

difficulties but if we are

towards becoming a mid-tier

gold mining project with silver

efficient and tackle it properly,

mining company in Mexico.”

and base metals, recoveries

we will be able to increase

are great and the metallurgy

recoveries and throughput

could not be better. Our cash

production to markedly

flow models predict very good

increase profitability in the

profitability and excellent free

future. And there is great

cash flows at Tahuehueto,”

exploration potential on both

Shearing asserts

projects, so Telson Mining Corporation has excellent

99

HUM R

More s

100

MINING | HUMMINGBIRD RESOURCES

MMINGBIRD RESOURCES

significant news flow from one of West Africa’s most exciting gold firms

101

Regular readers of RGN will be very familiar with AIM-listed gold explorer and producer Hummingbird Resources by now. This publication has been following the company’s West African story since 2016, when it had only then completed a definitive feasibility study (DFS) for the Yanfolila gold project in Mali, having pivoted away from its original exploration asset in Liberia.

Over the last four years, Hummingbird has delivered the Yanfolila mine on-time and on-budget, transforming itself from an explorer to a producer in the process. After reaching nameplate capacity in early 2018, the highly flexible team skilfully navigated operational challenges at the mine in 2019 and boosted throughput through the addition of a second ball mill, all while maintaining a prominent position in the local Sikasso region through a series of generous community development programmes.

2020 has been another year of significant news flow for Hummingbird, despite the worrying emergence of a global pandemic that has posed a challenge not just to the company’s finances but more importantly to its stakeholders.

“There’s no doubt it’s been very challenging,” says managing director Dan Betts. “We operate a remote mine in a remote jurisdiction and Mali’s borders have been closed for some time, which has given us a lot of supply chain and logistics issues.

“We’ve had to increase our inventory of spares, fuel and supplies so we can sustain unforeseen events, but when things do go wrong it’s hard to get parts to site and this has a cost implication for the company.”

However, Betts believes that by far the biggest challenge posed by COVID-19 has been maintaining morale and managing fatigue on-site at Yanfolila. The pandemic has dictated a stricter focus on employee health and safety, which has meant changing shift patterns from normal with time off to an intense 15-week spell on-site for many staff.

10 2

MINING | HUMMINGBIRD RESOURCES

103

of the Kouroussa Gold Project

going so well, but it’s been

Going into Guinea

a tough ask for our team.

Despite these significant

Cassidy Gold Corp in June,

Another challenge has been

impediments to

moving into a third West

not knowing. You can’t really

Hummingbird’s regular

African jurisdiction in the

plan in this time, so it’s been

operational and corporate

process.

a case of reactive planning

rhythms, the company has

depending on what rules

remained active in the market

governments have thrown at

and announced the acquisition development asset in Guinea’s

“It’s amazing they’ve kept

us.”

1 04

in Guinea from junior explorer

The deal for this near-term prolific Siguiri Basin perfectly

MINING | HUMMINGBIRD RESOURCES

aligns with Hummingbird’s

per year. This bracket sounds

little gem in that respect.”

strategy of building a high

great on a spreadsheet but it’s

grade, high margin gold

actually very hard to find this

Kouroussa has a mineral

producer in West Africa and

type of project which is slightly

resource of 1.18 million oz of

it complements the Yanfolila

sub-scale for the majors and

gold, which Hummingbird has

mine in more ways than one.

the mid-tiers, but big enough

applied significant dilution

to be a substantial employer

to, but is still returning head

“We were aiming for a project

and revenue generator for us.

grades at over 3 g/t gold

with a production profile of

The Kouroussa project was a

according to Betts. “There

around 100-150,000 ounces (oz)

105

HUMMINGBIRD

were some absolutely knock

flowsheets and process plant

RESOURCES

out drill holes there and I

design and even service

think the exploration potential

providers as they are in the

is huge as well,” he says. First

same broad geographic region

gold is expected in under two

in West Africa.

AT A G L A N C E

years, when the mine will

STOCK TICKER AIM:HUM

MARKET CAPITALISATION

£101.5 million (as of June 24, 2020)

aj

produce around 100,000 oz per

“We can take a lot of synergy

annum.

from everything we have done at Yanfolila and transport it

In addition, there exist

across to Kouroussa, which

several similarities between

should help us build the mine

Kouroussa and Yanfolila, in

very effectively. We have kept

terms of the scale of both

the same project team together

projects, the metallurgical

from Yanfolila and after the second ball mill, this is the

1 06

MINING | HUMMINGBIRD RESOURCES

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10 8

MINING | HUMMINGBIRD RESOURCES

third build that project team

it hosts plenty of major mining

there is no need to cross land

will work on.”

companies as a result.

borders to get on-site.

A mature mining sector

For Hummingbird, Guinea

“In terms of physical security,

represents a new political

Guinea is slightly more stable

While not as mature as Mali’s

environment – which always

than Burkina and Mali at the

gold sector, Guinea is by no

takes time to acclimatise

moment. I think it’s a good

means a fledgling mining

to. However, Betts believes

time to enter, certainly in

jurisdiction. Thanks to its

this adaption comes with

terms of gold exploration

world class bauxite and bulk

no significant risk. In fact,

around the Siguiri gold

commodities industries,

working in Guinea may

belt. There have been some

the country has established

actually be smoother as the

amazing drill holes come out

infrastructure, a strong

country has its own port and

recently from the Australian

understanding of mining and

juniors and I think there is

109

DAN BETTS, HUMMINGBIRD RESOURCES MANAGING DIRECTOR

110

MINING | HUMMINGBIRD RESOURCES

going to be a lot of activity in this part of Guinea over the next 10 years.”

Hummingbird is already busying itself at the Kouroussa project crossing Ts and dotting Is in terms of permitting and government approval for the change of hands. The company is in dialogue with the government and is pleased to have received early support from the authorities.

“They [the government] seem very supportive of Hummingbird’s involvement and I don’t foresee any problems, so the team is now working on refining the detail and the scope of the plant.”

Throughout the remainder of the year, the company plans to refine the Kouroussa feasibility study and enlarge the scope of the plant, making it more comparable to the Yanfolila operation.

“We’re imagining a circa 1-1.2 million tonnes per year plant,

111

Dan Betts, Hummingbird Resources managing director

two-stage crushing, CIL gravity

presented problems due to its

while funding all other costs

circuit producing in the region

vast scale.

during the two-year period,

of 100,000 oz per year,” Betts

earning a 49% interest in the

envisions. “Hopefully we will

“It’s going to be a huge

be ready to start construction

project. Remember the first

at the beginning of next year.”

164 drill holes we did all hit

The agreement should also

mineralisation. There is so

unlock a huge amount of value

much gold there to be found,

for Hummingbird’s investors,

but we felt it needed someone

according to Betts. “When

with a longer-term mindset

ARX lists in Canada it will

Also in June, Hummingbird

to do more exploration and

be a separate entity with a

sealed an earn-in agreement

expand the project. That’s what direct look-through value for

with ARX Resources for the

ARX is doing.”

Sharing the workload in Liberia

Dugbe project (its original

project.

Hummingbird’s shareholders.

And then at the end of it all,

West African asset). Liberia

Under the terms of the deal,

Hummingbird converts its

has been a tough nut to crack

ARX will spend US$10 million

51% in the project into 51% of

for the company over the past

on further exploration and

the company and maintains

five years and the project itself

commit to completing a DFS

control of the asset. I think it’s a fantastic deal.”

11 2

MINING | HUMMINGBIRD RESOURCES

113

In a third major piece of news

to find ways to promote the

community and healthcare. “I

flow in June, Hummingbird

industry and all the good work

think that is something to be

confirmed its membership

it does. That’s the bit of the

immensely proud of and I’m

with the World Gold Council

relationship I am most looking

looking forward to being a part

– a point of real pride for

forward to; looking at how we

of that with the World Gold

the company’s managing

can promote and be proud of

Council.”

director. “I see the Council as

the gold mining industry.”

Betts is quick to highlight the

Assisting the COVID-19 effort

admirable work that the gold

In a particularly fraught

“It has many capable and

sector does around the world

time for all of its people,

respected people looking

in terms of R&D, environment,

Hummingbird has gone

the highest body in the gold industry.

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MINING | HUMMINGBIRD RESOURCES

health education, including

resource expansion at

bringing in an additional

Yanfolila as one of its key

site doctor who has provided

annual targets. This has

valuable assistance to our

not changed even after the

medical team in supporting

outbreak of COVID-19 and

Hummingbird’s COVID-19

all of its implications on the

response.

ground.

“In addition, we have made

In early June, the company

donations to the Malian

announced some encouraging

government and local

drill holes from underground

health authorities, offering

drilling at Komana East, and

direct support to our local

there are hopes this could

communities with initiatives

prove up the underground

such as soap manufacturing.

mining concept at Yanfolila

We have been buying

and add long-term oz to the

soap from the community

base load feed for the mine.

soap factories previously

above and beyond in its commitments to the local

established by Hummingbird

“We’re hitting mineralisation

and supplying the local

where we were expecting and

communities to help combat

are also targeting some new

COVID-19 with greater

deposits. Nobody has done any

handwashing and hygiene.

communities in Mali, bringing

greenfields exploration here for seven or eight years, and

in additional public health

“We also continue to supply

we’ve had a couple of good hits

education initiatives while

medical equipment and are

in the early drill holes. It’s a bit

continuing to support existing

in the process of buying some

early to say but I’m optimistic

programmes, including the

testing equipment with the

we will come up with more

hugely successful market

support of the government of

good results,” Betts concludes.

garden and water projects.

Mali.”

“We have put a huge amount of

At the start of the year,

effort into driving community

Hummingbird earmarked

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