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
48
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. 6
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. 8
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.” 9
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Mining post COVID-19 in L the past to understand the
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
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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.
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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.
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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
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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
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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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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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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
US$24.56 million (as of July 22, 2020)
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
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MINING | HUMMINGBIRD RESOURCES
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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.”
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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
115
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