Mining Global - October 2017

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October 2017

KENYA CHAMBER OF MINES NORDGOLD

HOW

BIG DATA

is locating new minerals

Nuclear

REACTION Aura Energy’’s Peter Reeve explains how an uplift in nuclear activity is boosting the demand for uranium

10

TOP

LARGEST MINES

Specialising in high quality process engineering design and construction solutions to the minerals industry

Project Delivery Services Process Engineering Design Construction Refurbishment Studies & Consulting Asset Management

www.gres.com.au | gres@gres.com.au +61 8 6272 6000 | GNG.ASX 179 Great Eastern Highway Belmont Western Australia 6104

FOREWORD WELCOME TO THE October issue of Mining Global!

Uranium is bouncing back, with a greater demand coming from China’s nuclear power reactor. Peter Reece, Executive Chairman of Aura Energy, speaks about how the company is strategically placed to close the supply chain gap with two flagship projects in Africa and in Sweden.

The mining sector in Kenya is emerging as potentially one of the most attractive sectors for investment, but why? We speak exclusively

miningglobal.com

with the Kenya Chamber of Mines ahead of the upcoming Kenya Mining Forum, shining a spotlight on the incredible mineral potential of Kenya.

Our other features examine how data is proving key to locating new minerals, as well as a look at 10 of the largest mines in the world.

Finally, our special reports look at the Ministry of Mines, Kenya, as well as Base Titanium, Hummingbird Resources and Nordgold.

Enjoy the read!

bizclikmedia.com 3

CONTENTS CONTENTS

F E AT U R E S INSIGHT

06 Aura Energy interview with Peter Reeve, the Executive Chairman TECHNOLOGY

14

How big data is locating new minerals

40

The Ministry of Mines, Kenya

TOP 10 LIST

00 24 Top 10 largest mines

Headline for the article

48

Base Titanium

CONTENTS

C O M PA N Y P R O F I L ES

32 Kenya Chamber of Mines

AFRICA 32 Kenya Chamber of Mines 40 The Ministry of Mines, Kenya 48 Base Titanium 60 Hummingbird Resources

ASIA 70 Nordgold

60

70

Hummingbird Resources

Nordgold

INTERVIEW

Uranium

back BOUNCES

Aura Energy is poised to harness the growing demand for uranium from China’s nuclear reactors. Mining Global spoke with Executive Chairman Peter Reeve about closing the supply gap with the company’s two main projects: the low capital Tiris mine in Africa and the long-term Haggan facility in Sweden Writ ten by: DAN BRIGHTMORE

INTERVIEW

Aura Energy Tiris Project Drill

THE MARKET FOR uranium crashed hard six years ago following the nuclear disaster at Fukushima, Japan. Since then, uranium miners and processors sold down and have mostly stayed down.

However, uranium is critical to running the world and, according to the World Nuclear Association (WNA), we are now seeing increased demand due to energy security 8

October 2017

concerns, uncertainty surrounding future access to carbon-based fuel and greenhouse gas constraints on carbon burning, which have combined to put nuclear power back on the agenda for projected new capacity in many countries. That demand is set to ramp from resourcehungry nuclear reactors across China, and with the construction of nearly 500 more either planned or

AURA ENERGY - PETER REEVE

“The Tiris mine is quite a unique project because of

the way the uranium occurs” – Peter Reeve , Aura’s Executive Chairman

proposed worldwide, Aura Energy is well-placed to take advantage.

Aura’s Executive Chairman Peter Reeve believes there’s not a commodity reviewer in the world who isn’t predicting a big supply gap in uranium requirements two to three years out. “I believe that when chief executives at the utilities ask their inventory managers if they’ve got a good solid long-term inventory 9

INTERVIEW book of uranium and realise that’s not the case, they’ll go out into the market and purchase it very quickly, driving the price up,” he explains.

“I think the utilities have been playing a very cute game by utilising the stock spot price when they really need to fill their long-term contract books. It’s a dangerous game. Some will get caught out and some won’t.

The winners will be sitting there with an operation close to ready to go and needing to fill off-tack contracts.

Fortunately, we could be constructing our new plant in 2018, commissioning in 2019 and then in a situation where we’re taking in off-tack contracts where hopefully the utilities are starting to panic and wanting to pay up.”

$13.50

Per Pound – cost of production at Aura Energy’s Haggan project

Reeve has said that with the world’s population growing by the equivalent of one Germany every year, standing still with water, food, energy and resources is not enough. And with the number of nuclear reactors worldwide predicted to double between now and 2030, it’s a situation Aura Energy can capitalise on thanks to its two main projects in Africa and Sweden.

“The Tiris mine is quite a unique project because of the way the uranium occurs,” says Reeve of the company’s African project in Mauritania, which boasts a £50mn ($66mn) uranium deposit. “It will be quite a low capital project - just $45mn will produce a million pounds of Uranium per annum at a cash cost of around $30 per pound. We will ship out ‘yellowcake’ - there’s only uranium in that deposit.” Allied to tenements this, the company in Mauritania, has other not yet projects, which are set to yield gold and base metals and offer a perfect opportunity for Aura’s exploration team to get to work.

Superabundant Sweden Meanwhile, in Sweden, the company’s long-term Haggan 10

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AURA ENERGY - PETER REEVE

A nugget of uranium ore project excites Reeve with its ability to offer uranium and base metals, including nickel, zinc, cobalt and vanadium. “What we’re going to operate there is a bacterial heat bleach; it’s quite fascinating,” he enthuses. “There’s pyrite (known as ‘fool’s gold’) in the ore. It’s Fes2 and if you bleach it, you end up with sulphuric acid which you can use to bleach the uranium out of the ore.

“At Haggan, the bugs and bacteria are naturally resident in the ore and provide the biological agent we need to start the heat bleach. So, all we do is take the ore out of the ground, stack it up in heaps – as you do in a typical heat bleach – and then we cultivate the bacteria to increase its concentration before using it to leach the uranium and base metals from the ore and process it. The ultimate vision and

dream for a project like this is to end up with a good deal of base metals to fuel spin off fabrication businesses and downstream businesses in metals while making substantial uranium.”

Reeve also sees the potential for Haggan to provide stability for utilities in Sweden where over 40% of electricity is derived from nuclear power. “Euratom (European Atomic Energy Community) is quite concerned about the lack of available uranium ore and supply in Europe,” he explains.

“You’ve got Kazakhstan there… the Russians and Chinese are trying to get their hands on that. And you’ve still got to feed an awful lot of uranium reactors across Europe, despite the fact some countries are turning theirs off.”

Global optimism Kazakhstan is the world’s largest uranium producer, controlling around 40% of the global market.

The recent decision to scale back its output by 10% to tighten global supply has seen prices creep up, fuelling Reeve’s optimism for what Aura is placed to achieve. Another reason for Reeve to be cheerful is US President Donald Trump showing

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INTERVIEW

“Kazakhstan’s recent decision

10%

to scale back its output by to tighten global supply has seen prices creep up” – Peter Reeve , Aura’s Executive Chairman

more support for nuclear power than the Obama administration, which gave a higher priority to wind and solar power. While America may once more make moves to become self-sufficient in uranium, as of today, it still imports over 90% of the uranium it uses in its nuclear plants.

Against the backdrop of this increasing market confidence in uranium, Aura listed on AIM (Alternative Investment Market) earlier this year and raised $3.93mn. “It’s lonely out here in Australia,” jokes Reeve. “That listing helps us a hell of a lot with our profile abroad and our investor base.” He believes it’s Aura’s low capital strategy to achieve initial production that will help them 12

October 2017

overcome the challenges of the development phase and continue to attract investment. “Investors can see we’re not just waiting for the uranium price to recover because we have other base metal strategies to provide good returns along the way and assist in funding our uranium developments.”

The Tiris mine was originally conceived to have up to $130mn in capital but Reeve re-cut the project in size and scope down to $45mn. “For a company of our development size people thought that was plausible,” he explains. “We got our cash cost down to $30 per pound - which on a stock

AURA ENERGY - PETER REEVE

basis might not make money at the moment but on a contract basis it will.

We’re able to present to the market that we’re quite viable. The Haggan project has extremely low cash costs at $13.50 per pound because of the base metal credits we can get. You’ve got to work your portfolio and not scare the market with capital that’s too large, particularly during the time it will take for uranium prices to recover over the next two years.”

Aura Energy listed in 2006, with Reeve originally coming on board as Chairman in early 2015 before moving into his Executive Chairman role when the CEO retired. With 35 years of experience in the mining industry he has worked for Rio Tinto, Shell, Billiton, and also spent time in corporate finance as a Fund Manager working with the likes of Newcrest Mining, before founding Ivanhoe Australia.

It was his former colleagues from Shell who attracted him to the Aura Energy project following their virgin discoveries in Africa and Sweden. With a feasibility study laying the groundwork for imminent government approval of the Tiris project and a 10-year plan in place

for community engagement and development at Haggan, Aura is making inroads to uptake with a strategy built on eastern promise.

“We will make U308 (a popular form of yellowcake) for processing into fuel rod stock,” maintains Reeve. “There’s a likelihood that some of that could go into Europe and the Middle East, but more likely China. We’ve signed an MOU (memorandum of understanding) with a Chinese engineering firm and we’re progressing on uptake arrangements with Chinese nuclear utilities who will need a good deal of this material going forward. You’ve really got to be in China if you want to make sure you’ve got those uptake contracts over a period of one to two decades.”

$66mn – value of uranium deposit at Aura Energy’s Tiris mine 13

TECHNOLOGY

DATA

MINING

WITH

Minerals are essential to the manufacture of many items you’re likely to buy or use, from smartphones to cans of drink, but also to roads, modes of transport and homes.

However, traditional methods of mining for minerals are being overtaken by disruptive technology‌ Wr i t t e n by : LE I L A H AW K I N S

TECHNOLOGY

BIG DATA ANALYSIS is an invaluable tool with many companies from finance, logistics and tech harnessing the power of the ’new oil’. Even construction is now finding a way of feeding its bottom line from big data analysis – the act of deciphering data to predict and forecast new items and trends.

Now, big data is being used by scientists to predict the location of new, so-far-unknown minerals and by doing so, is reshaping the entire mining landscape…

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October 2017

Big data in practice Along with a team of scientists, Dr Shaunna Morrison from the Carnegie Institution for Science in Washington D.C. is working with the US Geological Survey to unearth new mineral deposits. Using big data network analysis, they are assessing what minerals are already in existence and making predictions to discover what else might be out there, and their work has proven very successful - just a couple of weeks ago they found a new type of cobalt.

D ATA M I N I N G

Large organisations such as Amazon and Netflix apply big data to their market basket analysis to predict consumer habits and now mining companies could be doing the same.

“Looking at the spending profiles of customers is very similar to looking at the formational patterns of minerals,” Morrison says. “These practices are being implemented across the board by all these huge companies.

They’re very powerful statistics.”

A groundbreaking paper published in the American Mineralogist reports the first application to mineralogy of network theory, which is best known for analysis of e.g. the spread of disease, terrorist networks, or social media.

Many believe that the results could pioneer a way to reveal mineral diversity, evolution and distribution worldwide. “The quest for new mineral deposits is incessant, but until recently mineral discovery has been more a matter of luck than scientific prediction,” says Morrison. “All that may change thanks to big data.”

To reap the benefits of big data, organisations need to be cognizant of economic geology. “Without doing these statistics they’re relying on their knowledge and experience,” Morrison

“The quest for new mineral deposits is incessant, but until recently mineral discovery has been more a matter of luck than scientific prediction” – Dr Shaunna Morrison, Carnegie Institution for Science in Washington D.C.

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TECHNOLOGY explains. “They’re very familiar with how copper deposits form and the specific environments they form in.

They have to be aware of where that environment is, anywhere on the planet. Sometimes that’s not obvious if geological mapping hasn’t been done somewhere. If a huge copper deposit hasn’t been found, it’s very likely it’s because it hasn’t been mapped.”

Data challenge This tool generates a tremendous amount of data and creates an issue in terms of accessing quality information, according to Morrison. “There’s tonnes of information out there but how do you get that out? And how do you get that in a form that is machinereadable? It’s

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a huge undertaking. The mineral evolution database, which is what we use for most of our studies, has been assembled over a period of eight years by an army of undergraduates putting this together at the University of Arizona.

So, one of the biggest challenges is certainly acquiring that data.”

The network analysis technique enables scientists to represent data from multiple variables on thousands of minerals, sampled from a multitude of locations within a single graph.

These visualisations can reveal new and unique patterns of occurrence and distribution and patterns of mineral coexistence. Scientists can then see which geological, physical, chemical and

D ATA M I N I N G

biological characteristics are necessary for the mineral appearance.

It is then possible to predict what minerals might be missing, as well as where to go to find new sources.

Big data is also helping the physical processes of mining too. Jason Knuth, Product Manager of Analytics & JoySmart Solutions at construction and mining group Komatsu, explains: “Every machine is unique in terms of the challenges they face. This includes tough operating conditions and variety of materials. It’s why we collect so much data off of our machines.

“In order to accurately predict machine behaviour, you have to understand what normal looks like.

You have to build customised models that are unique to each machine and the conditions they’re in. Then as the conditions change, so do the models and predictions,” he says.

“We focus on looking at abnormalities in the data from typical operations and highlight abnormal behaviours. You can’t prevent what you haven’t seen. But the more data we have and the more data we process, the more we understand and the more we can help prevent issues for our customers.”

For Komatsu, this sheer quantity of data is a good thing. “For our engineers and data scientists, there’s never enough data,” Knuth says. “More data means more visibility, more clarity, increased modelling, and increased information. All of that leads to better response times for our customers and a better understanding of equipment needs for future development.

“Data storage is expensive and that can be a concern of course,” he adds, “but Komatsu has a data management strategy that allows us to archive the information at a lower cost, prioritising the most relevant and recent information while still allowing access to archived data.

“Because we are the original equipment manufacturer, we can do increasingly more computing and analytics on our own equipment, and less in the cloud. Getting that computing power closer to the machines helps with data storage and speeds up the flow of information and processing. Ultimately, that is our focus, turning the raw data into useful information and actionable items, and getting that into the right person’s hands in time to improve processes and prevent issues.”

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TECHNOLOGY

“Automation will continue to advance, allowing for the increased use of remote operation” – Dr Shaunna Morrison, Carnegie Institution for Science in Washington D.C.

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October 2017

D ATA M I N I N G

Big data in the future Over the next couple of decades, Knuth envisages machines will become more intelligent, which will tie in with Komatsu’s growth. “Machines are going to continue getting smarter with more onboard computing,” he says. “At the same time, automation will continue to advance, allowing for the increased use of remote operation.

“As we continue to grow and improve our ability to turn raw data into information and results, that will be the glue that helps bring together various autonomous projects and capabilities on a mine site, enabling coordinated remote operation and monitoring. This will help keep more people from harm’s way while optimising machine performance and mine coordination, to enhance safety and production capabilities.”

Morrison believes the advancement of data analytics will enable mining companies to become more aware of where the earth’s resources are, and differentiate between the minerals they need vet against the worthless gangue minerals they don’t.

“This will save them a lot of time, and therefore a lot of money in trying to find them,” she says. “If they’re better able to characterise the minerals, that dramatically determines the economic value and viability of getting them out of the ground.”

“We’re on the cusp of a huge change in mineralogy and mineral resources, and in the understanding the mineralogical makeup of our planet,” Morrison adds. “In the next 10 years, we’re going to see an explosion in this type of work.”

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10 TOP 10

P O T

LARGEST GOLD

MINES IN THE

WORLD Written by: OLIVIA MINNOCK

This September, gold prices surged to the highest in a year at $1,340 – but where can the largest amounts of gold be found around the world?

We rate the top gold mines based on their deposits‌

TOP 10

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OBUASI IN THE ASHANTI REGION, GHANA CADIA EAST Located in southwest Ghana’s prolific IN NEW SOUTH gold producing Ashanti region, Obuasi WALES, contains an estimated 29.8mn ounces AUSTRALIA in gold deposits. This unique mine combines primarily underground mining with some open-pit operations.

Obuasi stands as the oldest working mine on this list, having opened in 1897 as the Ashanti Mine.

Despite its size, AngloGold Ashanti closed operations at the mine in 2014 based on profitability concerns with only a small security force remaining on site; the company is currently at work on a development plan for the future. The most recent available production figures date to 2009, when Obuasi produced approximately 381,000 ounces of gold.

Located around 250km to the west of Sydney, Cadia East is the largest and newest in a complex of three gold mines owned by Australian mining company Newcrest, boasting a projected 37.6 million ounces of gold deposits. Though discovered in 1994, production did not actually begin until January 2013.

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www.futureofobuasi.com

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October 2017

www.cadiavalley.com.au/site/about

LARGEST MINES

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MPONENG NEAR JOHANNESBURG, SOUTH AFRICA At a distance of 65km from Johannesburg, in the mining-heavy region of Witwatersrand, Mponeng is projected to contain gold deposits of 39.6mn ounces. This large mine is owned by major South African mining company AngloGold Ashanti and construction there began in 1981, with the main shaft reaching completion in 1986.

At 2.5 miles deep, Mponeng is also the world’s deepest mine with a 2016 output of 253,000 ounces of gold. Production at Mponeng has been in decline for over a decade, down from a previous high of 600,000 ounces per year. www.anglogoldashanti.com/southern-africa

PUEBLO VIEJO IN SÁNCHEZ RAMÍREZ PROVINCE, THE DOMINICAN REPUBLIC

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Located 100km from the Dominican Republic’s capital of Santo Domingo, Pueblo Viejo contains approximately 40.1 million ounces of gold deposits.

Owned jointly by Barrick Gold Corporation (60%) and Goldcorp Inc. (40%), Pueblo Viejo’s production began in 2012, with the mine reaching full production by 2014. www.barrick.com/operations/pueblo-viejo/default.aspx

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OYU TOLGOI IN THE SOUTH GOBI DESERT, MONGOLIA Jointly owned by Turquoise Hill (a Rio Tinto-owned subsidiary) and the Mongolian government, Oyu Tolgoi is projected to contain 46.3mn ounces of gold. Oyu Tolgoi is one of the most recently-developed gold mines on this list. The deposits were discovered in 2001, and construction on the mine began in 2010; the first shipment came in 2013.

While Oyu Tolgoi’s gold deposits are impressive, its copper deposits are significantly larger at 40bn pounds.

Gold production reached 300,000 ounces in 2016, with Turquoise Hill projecting a smaller output of between 100,000 and 140,000 ounces in 2017.

OLIMPIADA IN CENTRA SIBERIA, RUSSIA Nestled in Russia’s most productive gold mining region, Olimpiada is estimated to have 47.5mn ounces of gold. The gold deposits at Olimpiada were first discovered in 1970, with open-pit mining commencing 26 years later.

Olimpiada forms the largest operation of Polyus, Russia’s largest gold producer. In 2016, it produced more than 943,000 ounces of gold, up almost 18% over the previous year.

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ot.mn/about-us

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www.polyus.com/en/operations/operating_mines/olimpiada

LARGEST MINES

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MURUNTAU IN KYZYL KUM DESERT, UZBEKISTAN The fourth largest gold mine in the world by deposit size, with approximately 50mn ounces of gold, Muruntau is also the biggest open-pit gold mine in the world. This sizeable mine is owned by the government of Uzbekistan. After the gigantic gold deposit was discovered in 1958, systematic mining began in 1967 and has been ongoing since. With approximately 2.2mn ounces of gold produced last year, Muruntau ranks as the world’s largest gold producing mine, although these figures are clouded slightly by the Uzbek government’s reluctance to share information.

3 LIHIR ON NIOLAM ISLAND,

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PAPUA NEW GUINEA

Located inside an extinct volcano crater, Lihir is projected to contain 64.1mn ounces of gold and gold production at this expansive open pit mine started in 1997. The mine is currently owned by Newcrest, an Australian company that acquired it for US$22bn in 2010. www.newcrest.com.au/our-business/operations/lihir

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SOUTH DEEP NEAR JOHANNESBURG, SOUTH AFRICA Located near the eighth largest gold mine in the world, South Deep contains an estimated 81.4mn ounces of gold and mining began at South Deep in 1961; Gold Fields Limited acquired the mining operations in 2006.

At almost 3,000 meters below the surface, South Deep also ranks seventh on the list of deepest mines in the world and produced 290,000 ounces of gold in 2016; a 47% increase in production over the previous year. Gold Fields expects to increase gold production to 500,000 ounces per year by 2023. www.goldfields.co.za/south-africa-region.php

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LARGEST MINES

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TOP 10

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GRASBERG IN PAPUA, INDONESIA Owned by Freeport McMoRan with a large sharing arrangement with Rio Tinto, this gold mine contains a deposit of over 106.2mn ounces of gold.

In 2016, the mine produced more than one million ounces of gold, making it the fourth largest gold producer that year. The gold deposits on Mount Carstensz were first discovered by a Dutch geologist in 1936 following the implementation of foreign investment laws in 1967, with the Grasberg mine opened officially in 1973.

In February 2017, however, Freeport McMoRan announced that it was temporarily halting mining operations at Grasberg – which is also the third largest copper mine in the world – following a failure to reach an agreement with the Indonesian government on long-term investment plans. ptfi.co.id/en/about/our-operation-areas

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LARGEST MINES

GRASBERG CONTAINS 106.2 MILLION OUNCES OF GOLD.

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Inside the Kenya Chamber of Mines Edited by Tom Wadlow Produced by Richard Deane

An exclusive interview with Moses Njiru Njeru, Chief Executive Officer, Kenya Chamber of Mines. The Chamber is an industry partner of the upcoming Kenya Mining Forum and Mr Njeru will deliver a guest keynote in the session on “Perspective of the mining sector.

Is the sector for the young population?�.

Give us a brief introduction to the Kenya Chamber of Mines The Kenya Chamber of Mines, a business member organisation, was formed in the year 2000 to represent the interests of players in the development of the mineral sector of Kenya. The players may include: miners; explorers; prospectors; mineral processors; manufacturers of mineral based products; mineral traders; mineral transporters; equipment and machinery suppliers; legal service and financial service providers and professional service Providers within the mineral development value chain.

The Kenya Chamber of Mines seeks to associate the interests of its members with national and local

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community interests, and to engage other stakeholders in order to promote business within the mineral sector while ensuring safeguards to the environment and human beings are factored in all business models.

Why, despite having a diversity of mineral wealth, has Kenya’s mining sector remained largely underexploited?

Kenya is blessed with good arable land and suitable climate for agriculture. It also has a diversity of wildlife and well managed national parks and other interesting sites for tourism. Therefore, these being the low hanging fruits, the country embarked on developing these opportunities for its economic support. Other ventures of economic

AFRICA

value have also been developed in the sector of ICT and Technology.

However, the ever-increasing population, joined with the changing climatic conditions, threaten the country’s economic survival on agricultural economy. Again, the global insecurity challenge affects the tourism sector.

This necessitates a shift from agriculture based economy to other sectors of economic importance; a mineral-based economy. The country is now shifting to development of its mineral wealth for economic support.

The Kenyan geology is very lucrative and is encouraging investors to invest in mineral exploration.

This is why, in the year 2016, Kenya put in place a Mining Act through a very consultative process. Through the Ministry of Mining and in co-operation with Kenya Chamber of Mines and other stakeholders, several mining

regulations have also been developed and published. The second Kenya Mining Forum, planned for November 2017, is meant to market Kenya’s mineral sector to investors and other stakeholders so that the sector could increase its contribution to the economy of this beloved country.

What is your relationship with the Ministry of Mining?

I have worked for the Ministry of Mining since August 1998 when I joined the public sector from the private sector, as an Assistant Inspector of Mines. I worked up the ladder to an

“The country is now shifting to development of its mineral wealth for economic support.

The Kenyan geology is very lucrative and is encouraging investors to invest in mineral exploration” MOSES NJIRU NJERU, CEO

w w w. m i n i n g g l o b a l . c o m

35

K E N YA C H A M B E R O F M I N E S

Acting Commissioner of Mines and Geology, after which I exited the public sector back to private sector, Kenya Chamber of Mines in April 2016.

Within this period I worked in the Department of Mines and Geology, in the Ministry of Mining, we identified various issues in the then Mining Act Cap. 306 of the Laws of Kenya, put in place in the 1940s. These did not offer clear guidance on various aspects of mineral development value chain. Key among them was discretionary powers to Commissioner

of Mines and Geology in matters of granting mineral rights, the duration of an exploration project, aspects of reporting on findings and announcements, granting of mineral rights to artisanal miners, and mineral processing. The discretionary powers provided for then through the Mining Act were subject to abuse and did not offer any sustainable stability to investment in the mineral sector.

This was the realisation that informed the repealing of the Mining Law. Currently the country

BENEFITS ENJOYED BY KENYA CHAMBER MEMBERS • Access to KCM database of members for member’s business projection and/ or benchmarking • Participation in networking forums and seminars attended by likeminded participants, a boost to member’s venture; • Listing on KCM website, which help to market member to a wider range of clientele; • Being a member of KCM, a business member organization, helps to offer members

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the industry good will; • Participation in meetings and opportunities to make presentations and therefore catch wider attention; • Participation at discounted rate in any minerals and mining forums organised by KCM; • Participation in forums and activities, organised by other business member organisations, providing greater networking support opportunity for members business.

AFRICA

has a Mining Act, 2016 in place and fourteen Mining Regulations have been finalised and published.

Seven more are under way.

How does the Chamber work with communities at the same time as protecting the interests of members?

It is now in the law that before a mining license is granted, a proof on environmental protection and conservation has to be provided to the regulator by the investor. In Kenya, there is an established National

Environmental and Management Authority which looks at, among other issues, the environmental and human safeguards, through the requirement that social and environmental impact assessment has to be undertaken and reports prepared and submitted to the Authority before mining ventures could be allowed within a particular area. As an industry, we welcome this requirement.

Our members have been guided to always ensure that they operate in accordance to the law and where the law is found not to be supportive and

w w w. m i n i n g g l o b a l . c o m

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K E N YA C H A M B E R O F M I N E S

“The mining sector’s potential to drive the national economic growth, create employment and improve living standards for the people of Kenya, is huge�

MOSES NJIRU NJERU CEO encouraging to the investment, then we take up the matter for engagement to ensure that the environment for business continues to improve.

On CSR, the mining laws in Kenya require a Community Development Agreement before a mining license is granted. There is sufficient guidance on how engagement in the process of formulating the Community Agreement should be done.

Our members, noting that the community is an important

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stakeholder in their investments, are keen to ensure that relationships between the communities around the investment sites are strengthened and maintained. This way, sustained social license to operate is achieved.

What are your personal views on the industry generally?

Kenya has a good geology, which favors presence of minerals.

Looking at the mining activities being carried out by the six main

AFRICA

producing mining companies and the exploration activities going on, one gets to understand the potential the sector holds.

The mining sector’s potential to drive the national economic growth, create employment and improve living standards for the people of Kenya, is huge.

The main challenge to realising this is having a well-managed sector, aided by favorable regulatory framework, accommodating the need-based incentives, realistic to the characteristics specific to a mineral deposit as discovered and investigated during exploration.

A well-managed and sustainable mineral sector would deliver significant multiplier benefits to other sectors through the supply of goods and services, especially in areas of logistics, energy, and a variety of other services. This, if sustained, could lead to the mining sector becoming another economic frontier.

denotes potential for mineable mineral deposits. This potential has to be investigated through exploration to reveal the probable opportunities within the mineral sector. The opportunities, when exploited will then provide the needed economic benefits for the country.

The mineral sector will only be of benefit to the community, government, investor and any other stakeholder only if we focus and encourage the following activities; • Studying, analysing and understanding the GEOLOGY of our country; • Understanding and identifying the OPPORTUNITIES presented by the GEOLOGY • Securing and sustaining a stable and favorable environment for exploiting the OPPORTUNITIES to realise the envisaged ECONOMIC BENEFIT for the country.

What is your key message going to be at the Kenya Mining Forum?

The geological setting in Kenya

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AN INTRODUCTION FROM THE KENYA MINISTRY OF MINES Written by: Dale Benton Produced by: Richard Deane

M I N I S T RY O F M I N E R A L R E S O U R C E S

Dan Kazungu, Cabinet Secretary, Ministry of Mining, Republic of Kenya, introduces our special focus on the growing mining sector in Kenya CAN YOU GIVE US A BRIEF

WHAT IS THE HISTORY OF THE

HISTORY OF THE MINISTRY

MINING SECTOR IN KENYA?

OF MINES IN KENYA?

Traditionally, mining was not the primary focus for Environment and natural resources management - mining was largely ignored. Its therefore no wonder that Kenya never realized the full potential of mining until 2013 after President Uhuru Kenyatta’s administration whose transformation agenda included bringing mining to the forefront.

With that, Kenya’s mining journey began in earnest and the country

The ministry of mining was established in 2013 through a decision by president Uhuru Kenyatta to create a new ministry mandated solely to grow the mining sector after having been given prominence by vision 2030 pillar seven, which identified mining or the extractives sector as a key contributor to a diversified economy with the potential for jobs and wealth creation for Kenya.

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kicked off on a reform agenda to transform mining to be more inclusive, modern, ensure the sector attracts responsible investors and to legitimize artisanal and small-scale miners while having community (Kenyans) benefits taken care of.

WHAT IS THE ROLE AND THE VISION OF THE MINISTRY IN TODAY’S INDUSTRY?

The goal of the ministry is to transform mining to become a key contributor to the economic growth and transformation of the country. The aim is to see growth and GDP in the mining sector hit double digits. We see Kenya as a hub for mineral trading and value addition for east and central Africa, leading in technical expertise, logistics, funding for mineral projects and services. We have plans to consolidate leadership through the set-up of a regional mineral and metals exchange.

To achieve this, the ministry is tasked to promote Kenya as a minerals hub for players across the board by carrying out the right reforms and creating an environment that ensures that mining

investments thrive based on a win-win formula, i.e. for the investor, national government, county government and the communities. The ministry is making deliberate efforts in the spirit of inclusivity to Kenyans who have been excluded from the mining eco-system to now be a part of it. In addition, efforts are being made to attract large-scale mining in the country to bring in investment, technology transfer, technical expertise and highly specialised jobs and opportunities.

CAN YOU TELL US ABOUT THE CHANGING FACE OF KENYA’S MINING INDUSTRY?

As a country Kenya is proud to state that in the first year of its reform, efforts to create a robust mining climate have started to bear fruit. According to the global mining investment attractiveness index by the Fraser institute, Kenya has jumped 16 places up to position 86 in 2016 from position 102 in 2015 in a global mining attractiveness survey.

Today, Kenyans are more aware of the opportunities in the mining sector (especially artisanal miners) that are

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M I N I S T RY O F M I N E R A L R E S O U R C E S

now claiming their space encouraged by the progressive mining law in place.

Small and Medium Scale miners are showing increased interest too.

Exploration and mining companies are in Kenya carrying out exploration leading to the announcement of what is considered the biggest gold discovery on the continent - 1.3mn ounces of inferred gold along the Liranda corridor in Ikolomani in Western Kenya.

Large-scale mining investments are coming to Kenya for example Base Resources (Base Titanium) that is the single largest mining company in the country, Acacia Mining, Gold Plat, Tata (Magadi soda), Lafarge limestone project.

WHY HAS IT TAKEN SO LONG, IN YOUR OPINION, FOR KENYA TO REALISE THE ENORMOUS ECONOMIC POTENTIAL OF ITS NATURAL RESOURCES?

It all comes down to leadership and vision. Over the years industry players have been talking about mining opportunities. It takes leadership to transform this, to real worth. This

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is what formed the vision to grow Kenya’s into a medium sized economy.

The other reason is socio-economic socialisation as over the years, Kenya was presumed to be an agricultural economy and so little attention was paid to mineral exploitation.

YOUR MINISTRY’S WORK, LEGISLATION AND COLLABORATIVE APPROACH HAS BEEN PRAISED

BY SOME OF THE MAJOR MINING OPERATIONS IN THE COUNTRY. HOW IMPORTANT IS TO MAINTAIN GOOD RELATIONSHIPS?

As a country, we believe strongly that to create a robust investment environment, relationships are extremely key and not about shortterm gains. Mining projects are by nature long-term and therefore the relationships built should be longterm. This is the natural habit to adopt, not just to please investors but also to create a “win-win-win-win” in the sector. This is the only sustainable way; – win for the investor who takes the risk (sometimes massive risks) and creates jobs, win for the

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“As a country, we believe strongly that to create a robust investment environment, relationships are extremely key and not about short-term gains” DAN KAZUNGU Cabinet Secretary Ministry of Mining, Republic of Kenya

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national government that creates the enabling environment for investments to flourish and prosper, win county governments as that is where all mining projects are established and last win for the local community as Kenyans are the core beneficiaries of the mining activities in the country.

WHAT OTHER WORK IS THE MINISTRY DOING TO SEEK OUT NEW POTENTIAL AREAS

is encouraged practice. The country has put in effort to do a comprehensive nationwide airborne geophysical mapping survey in order to identify new potential areas for mineral discovery.

Both investors and government have been keen to have the latest data on minerals in the country. The finalisation of this survey will be a key milestone for Kenya’s mineral development, as it will drive key interest and attractiveness to Kenya as a modern mining jurisdiction.

FOR EXPLORATION?

Private companies such as Base Titanium carry out geological surveys that share data with the ministry, which

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YOU HAVE CREATED AN AMBITIOUS 20-YEAR STRATEGY FOR THE SECTOR WITHIN THE 2030

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VISION. TELL US ABOUT IT AND WHETHER YOU FEEL YOU ARE ON COURSE? WITH ELECTIONS

Kenya has also learned lessons from her peers in mining that if the basics are not in place, things can go wrong.

APPROACHING, HAVE YOU LAID A FIRM FOUNDATION?

CAN YOU DETAIL THE IMPORTANCE

Kenya’s 20-year strategy is part of what we call the 6-pack initiative that was a realization that in order to promote an attractive and robust proper mining environment, six key components have to be achieved; the strategy itself that outlines how Kenya will leapfrog this mining journey to become a key player in the region and in the world, mining policy that aims at creating the right environment for reform, repealing old laws and building institutions while looking at issues of inclusivity and environmental concerns, Mining Act 2016, the most progressive mining law in Africa, the mining regulations to enable the implementation of the mining law, a fiscal Policy framework to ensure Kenya has both an attractive and competitive tax and royalty regime and finally availability of the latest data.

The idea here has been that for the country to get its basic right by laying the foundation for a successful sector.

OF EVENTS SUCH AS THE KENYA MINING FORUM TO HELP PROMOTE THE SECTOR NATIONALLY AND INTERNATIONALLY?

The Kenya Mining Forum and other such like events are designed to bring investors into the country and the entire region for them to experience first-hand Kenya’s mining sector. The first edition of the KMF in 2016, attracted close to 400 investors from 15 nationalities.

The second edition is expected to be even bigger than the first.

TELL US HOW IMPORTANT YOU THINK THE UPCOMING MINING FORUM IS IN NOVEMBER.

I welcome you all to Nairobi for the second edition of the Kenya Mining Forum in November. We are ready to network, share thoughts and experiences and above all we want to do business because Kenya is open for Mining Business.

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KENYAN MINING ON THE RISE Written by: Dale Benton Produced by: Richard Deane

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BASE TITANIUM, A CRUCIAL PLAYER IN KENYA’S EMERGING MINING MARKET, HAS BEEN FORMALLY ACCREDITED BY KENYA VISION 2030 AS ITS FLAGSHIP MINING PROJECT

T

he Kenyan mining industry is on the rise. Historically, the country focused on agriculture, tourism, services and manufacturing as its main economic pillars, but in recent years, that focus has begun to shift towards extractives – both oil and mining.

“In the past mining was not seen as a significant sector of the economy – that is until Base Titanium’s Kwale Mine entered into production in early 2014,” says Joe Schwarz, General Manager – External Affairs and Development, Base Titanium. “The industry is now contributing around 1% to the GDP, but with increased interest in extractives and a friendly investment climate that will increase.”

FLYING THE FLAG FOR KENYA In 2013 the Government of Kenya created, for the first time, the stand-alone Ministry of Mining in recognition of the emergence of mining, led

by Base Titanium, as an increasingly important sector of the economy with real growth potential.

“Establishing the Ministry of Mining has really given the mining industry in Kenya a new focus and impetus,” Schwarz says. “With the Ministry and Base Titanium working collaboratively to promote further

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An aerial view of dozer mining in the Central Dune at Base Titanium’s Kwale Mine.

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B A S E T I TA N I U M

“It’s absolutely vital that we play our part, we are guests in the community and must obtain a social license to ensure a harmonious and mutually beneficial operating environment” – Joe Schwarz, General Manager – External Affairs and Development

Magaoni Secondary school built by Base Titanium.

The company is investing heavily in local education.

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Sorghum – one of the crops supported under the livelihood programme.

investor interest in the sector, we stand as a benchmark for others to emulate.”

This relationship with the Ministry of Mining is important, not only for Base Titanium, but for any future mining projects in Kenya that will contribute to the achievement of country’s Vision 2030 objectives of establishing Kenya as a middle-income country by 2030.

For Schwarz, that relationship with the Ministry is crucial in jointly driving the mining agenda by attracting serious investment into exploration and development in

a mutually beneficial manner.

Collaboration is key and this has also allowed Base Titanium, through the Kenya Chamber of Mines, to work closely with the Ministry of Mining on formulating the Mining Regulations after the Mining Act 2016 took effect in May last year.

“We provided significant input to the public review process.

With this positive relationship we are able to exchange views in a constructive manner to achieve a balanced outcome,” Schwarz says.

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B A S E T I TA N I U M

“As Kenya’s leading mining company, working with the Ministry, we have also had opportunities to jointly promote Kenya as an investment destination.” “Being the preeminent mining company in the country, we shall again be playing a leading role in supporting the November 2017 edition of the Kenya Mining Forum as its main sponsor,” Schwarz adds.

“We fully support Mining Cabinet Secretary Dan Kazungu’s philosophy

Building skills in mineral processing.

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of making Kenya a predictable, stable and attractive investment destination and work with the government to showcase the country at events such as this.” This forum is the premium annual mining investment event, showcasing Kenya’s potential and ‘open for business’ stance.

LEADING FROM THE FRONT Construction of the Kwale Mine was completed in 2013 and the first shipment of ilmenite left its port facility in February 2014. Since then a number of process optimisations have been successfully completed to improve efficiencies and debottleneck the plant. Hydraulic mining has been successfully introduced and will ultimately replace dozer mining and the wet concentrator will soon be uprated to fully utilise the minerals separation plant capacity as mining moves to lower grade areas.

In the fourth year of its 11-year mine life, 2017 proved to be a highly successful year for the project. Over 10mn tonnes of ore were mined leading to a combined 671,000 tonnes of ilmenite, rutile and zircon

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being exported as the market for all three products showed signs of significant improvement.

The importance of Kwale to the Kenyan mining industry is amply illustrated by the fact that it now contributes close to 60% of the total value of Kenya’s minerals output.

Regional exploration to extend the life of the mine is one of the company’s key future growth strategies. The initial phase has been successfully completed and plans are in hand for further exploration in the coming year.

But for Schwarz, the success of the Kwale Mine and Base Titanium extends well beyond its core mining operations. He also measures the success of the company through its role in building the mining economy and giving back to its host communities by improving their livelihoods in a sustainable manner.

“The cornerstone of our philosophy is the flow of mutual benefits,” he says.

“It has to be win-win for everyone, all the stakeholders must share in the benefits – Government, investors and the local communities.”

During the construction phase of

Spirals in the wet concentrator.

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the project Base Titanium spent one third of the $320mn capital cost with Kenyan suppliers and contractors.

THE COMMITMENT TO MAXIMISING LOCAL CONTENT DIDN’T END THERE In operation, the company continually aims to maximise local procurement, spending $37mn annually (or 84% of the total) on spares, consumables and services purchased from local suppliers. In all, Base Titanium expects to contribute close to $1bn to Kenya’s 56

October 2017

GDP through the period of 2015-2025.

“Viewing direct revenues from a mining operation of this scale in isolation is to see only a quarter of the picture” he says. “The indirect and induced economic stimulus generated beyond this through wider employment creation, the supply chain, consumer spending and taxation is enormous in comparison.”

ENHANCING A COMMUNITY For any mining operation, the role of the local community can never be

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Ship loading at the dedicated port facility. In 2016 the Kwale Mine accounted for close to 60% of Kenya’s mineral output.

underestimated. Base Titanium has proven that it is a key contributor to the Kenyan economy, but how is the local community benefitting?

To date, the company has invested $10mn in four pillars of community development; social infrastructure, livelihood enhancement, health programmes and education.

“It’s absolutely vital that we play our part, we are guests in the community and must obtain a social license to ensure a harmonious and mutually beneficial operating environment,”

Schwarz says. “Such benefits need to be tangible and sustainable.”

Base Titanium has built a number of schools and health facilities, sunk community boreholes and supports various medical campaigns such as immunisations and training community health workers. Provision of secondary and tertiary scholarships has so far benefitted close to 1,000 students from needy families.

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opportunities for sustainable livelihood enhancement,” Schwarz says.

This has seen the company work on multiple agricultural programmes, taking farmers, groups and communities from just subsistence towards sustainable commercial agriculture in cotton, potato and sorghum production. Base Titanium is working with governmental and non-governmental organisations, including international partners, to enhance these programmes and to connect the farmers with markets for their products.

programmes to address competency gaps and enhance skill levels of our existing employees; also, a range of external programmes are run, including apprenticeships, student attachments, a graduate training scheme and imparting artisan skills to neighbouring community members.”

Currently 970 people, including outsourced service contractors, are employed at the Kwale Mine.

Reflecting the company’s commitment to prioritise job opportunities for

THESE, SCHWARZ SAYS, ARE EXAMPLES OF THOSE REAL AND TANGIBLE BENEFITS Earlier this year, a report from the Zambia Chamber of Mines revealed that the global mining industry is facing its most significant skills shortage in decades, and Base Titanium is all too aware of the importance of providing employment and training opportunities.

“One of our key programmes is training and skills development,” he says. “This includes internal training

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Cotton harvesting in full swing

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locals, 65% of these employees are drawn from Kwale County. A clear barometer as to the effectiveness of its training programmes is the reduction by 50% of its expatriate complement over the last three and a half years.

“All this feeds into our succession planning. By empowering people with the right skills and experience, Kenyans are progressively taking over most technical and management roles from expats,” Schwarz says.

“It’s a clear illustration of the success

of our investment in training to empower the local community and Kenyans in general.”

Mining needs to be at the forefront of economic growth if Kenya is to achieve its Vision 2030 goal of becoming a middle-income country in the next 13 years. Schwarz says. “We fully support the endeavours of the government to transform the mining sector into an increasingly significant contributor to employment, exports and the socioeconomic growth of the country.”

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Singing to the tune of success Written by: Dale Benton Produced by: Richard Deane

HUMMINGBIRD RESOURCES

With the acquisition of the high grade, low cost Yanfolila Gold project, Hummingbird has set its sights on becoming a major player in the Malian gold market

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“

Mali has had a gold mining industry for hundreds of years, but in terms of commercial gold mining, the country has really come along way predominantly through the development of Randgold Resources over the last two decades,” says Robert Monro, Head of Business Development, Hummingbird Resources.

Hummingbird Resources is another West African gold explorer that was founded in late 2005, listed on the London Stock Exchange (AIM) in 2010, and entered the Malian gold exploration space in 2014 through the acquisition of the Yanfolila Gold Project.

The Yanfolila Gold Project, a high grade open pit gold operation, predates Hummingbird Resources and was brought to a significantly advanced stage through the investment and previous ownership of Gold Fields, one of the largest gold producers on the global stage.

It was this advanced development, coupled with the geographical significance of Mali as the third largest

gold producing country in Africa, that attracted Hummingbird to Yanfolila and the company acquired the project for $20m of stock back in 2014.

“What attracted us to it was the ability to finance and get into production, a very high margined low-risk gold project in a proven gold jurisdiction,” says Monro.

Hummingbird will continue the development and construction of Yanfolila and bring forward a 1.2 MTPA gold project, which upon completion will produce an average of 110,000 ounces a year.

Advanced project For any exploration company, a significant hurdle that must often be overcome very early on in the process of developing an operation like this is financing the project and raising the necessary equity.

For Monro, Yanfolila’s reputation as a significant low-cost high-grade operation played a key role on this front.

“The biggest initial challenge was definitely the

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HUMMINGBIRD RESOURCES

“What attracted us to it was the ability to finance and get into production a very high-margined, low-risk gold project in a proven gold jurisdiction” – Robert Monro, Head of Business Development

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Our philosophy at CIS is to be fully involved in the local economy through local content projects.

From day one, CIS has provided a full range of services to Hummingbird and its 500 employees on the Komana mine. On top of core services, CIS has been providing catering equipment over a long-term leasing contract, as well as full camp maintenance.

Visit www.cis-catering.com – Ph: +33.(0)4.91.16.53.00

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financing and fundraising,” he says.

But the company overcame this challenge, raising around $75 million in 2016, the largest fundraising on AIM in the last four years in the mining space.

“We acquired a very well run project and the fundraising is a testament to the quality of it,” Monro adds. “We have a world class asset and are extremely proud to have come through and make some real inroads with the construction.”

Hummingbird has earmarked a Q4 2017 production date, with the pre-production mining of the ore commencing in Q3 and stockpiling until the official production date.

Hummingbird did not acquire the project to simply sit on it and rely on the work already done to get to where it is today. Through two feasibility studies, Hummingbird has optimised the project and has set the all-in cost at $700 per ounce. In the current market, this will generate a significant amount of profit and be further proof as to that low-cost high-grade reputation.

“We are due to make around $75 million of free cashflow in the first full year of production,” says Monro. With commodity prices continuously fluctuating, Hummingbird has accounted for any sudden price drop and will remain resilient.

“If the gold price was to retreat we’d still have security and the ability to operate because we are such a low-cost producer,” he adds.

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BRINGING MORE TO MINING

African expansion For Hummingbird, Yanfolila is not the company’s first foray into Africa. The company also has exploration and development projects in Liberia and Ghana.

“We are an acquisitive company,” says Monro. “We bought Yanfolila, we have a huge asset in Liberia [4.2 million oz. of Gold] and we have the ability for organic growth as well as looking for any further acquisitions.”

With an eye on the future of the company, Monro stresses that right now 100 percent of the company’s focus is centred on bringing Yanfolila to production over a mine life of seven and a half years. That life of mine, however, is subject to

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change, and with further exploration and investment Hummingbird will look to move the goalposts beyond those initial seven years. “We have well over a million ounces of resources at Yanfolila not in the mine plan and we are looking to convert those resources to reserves and increase that life of mine well into the teens,� says Monro.

Licence to drill For any mining company, a key goal is to earn a social licence and the right to mine. This is a barrier

that can play a significant role in the path to achieving success: lose the social licence and the mine may never see the light of day.

Hummingbird has community engagement engraved right into the core nature of the company.

Inheriting a mine from Gold Fields, which had made some major community investments over the years, Monro was keen to ensure that Hummingbird built upon such a strong foundation of social responsibility. “We exist within a community and want to be a part of that community.

HUMMINGBIRD RESOURCES

“We bought Yanfolila, we have a huge asset in Liberia [4.2 million oz. of Gold] and we have the ability for organic growth as well as looking for any further acquisitions” – Robert Monro, Head of Business Development

There are no big barriers where we operate,” he says. “We run our own clinic as well as help other clinics in the local community, and we’ve just completed a major malnourishment programme across the local area.”

But the company’s social licence does not stop at providing infrastructure and healthcare support for the local community, as Hummingbird works to provide opportunities for Malian people

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to obtain work and develop their skills and career paths.

“It’s a Malian mine, so we work as a Malian company,” says Monro. “There are certain skills that you have to bring in from the outside, but the hope is that you are training a Malian employee as their number two, providing them with the skills in order to one day replace that outsourced expertise.”

Throughout the construction of the Yanfolila Project, Hummingbird

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can stand tall against other mining operations throughout Africa and the world due to a company-wide commitment to the health, safety and wellbeing of its employees.

A commitment that has seen the company reach a very significant milestone.

“We are well over 50 percent complete on the construction of Yanfolila and we have had zero Lost Time Injury (LTI),” Monro reveals.

“We remain on time and on budget and that speaks volumes to our approach – we are running Yanfolila extremely well and we are not pressuring people to work overtime or create a difficult environment that could put their lives at risk.”

A premier producer Looking beyond Yanfolila, Monro believes the company can become a much bigger player in the global gold industry and Yanfolila will be the very foundation on which this reputation can be built on.

“The vision and strategy is to become a multi mine producer with a suite of assets from production development and exploration and that will be largely driven by the gold prices,” he says.

“The goal is to become a significant gold company with multiple mines. 100 percent of our effort is on delivering Yanfolila on time and on budget, without delivering that, it’s all irrelevant.”

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Russia’s gold standard Written by: Fran Roberts Produced by: Mariana Lee

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NORDGOLD

Currently celebrating its 10th anniversary, Nordgold has come a long way over the past decade.

Created as a division within the vertically integrated steel and steel-related mining company, Serverstal Group, it is renowned as an internationally diversified gold producer today

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O

ne of Nordgold’s key strengths have been its top management, which has been instrumental in the company’s expansion, both domestically and outside of Russia. Today Nordgold boasts over 8,000 employees, spread across six countries on four continents.

“I think we’ve had a pretty dynamic management team, with a particularly high appetite for development and they’ve never been afraid of taking on projects that are outside of their comfort zone,” explains Matthew

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Wilcox, Project Director of the Gross mine project. “They started in 2007 through investment in the first mines in Russia and Kazakhstan and moved with the acquisition of High River Gold into the African market along with the expansion in Russia. It was a unique situation when a gold company with Russian roots obtained assets in Africa and continued to develop them, doing quite well out of them.”

Nordgold’s entrance into the African mining market also marked the beginning of Wilcox’s journey with

the firm. “I was hired by Nordgold in November 2010 as the EPCM manager of the Bissa Gold project in Burkina Faso. About a year later I took over as the director of the project and another year after we poured first gold on that project. So that was a major milestone both for myself and for Nordgold – commissioning their first greenfield construction work.”

Following stints in Guinea at the Lefa mine, and a return to Burkina Faso for the Bouly mine project, Wilcox now works in Russia as Project Director

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Matthew Wilcox joined Nordgold in November 2010. He was responsible for the engineering design, construction and subsequent launch of Nordgold’s Bissa mine in Burkina Faso, which was delivered on time and on budget and is already exceeding production forecasts.

Wilcox holds a Bachelor of Science Degree in applied Chemistry and a Bachelor of Engineering in Chemical Engineering, both from Curtin University in Western Australia.

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Matthew Wilcox Project Director – Gross Project

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for the Gross mine. “Nordgold’s big milestones from my perspective were the commissioning of Bissa and Bouly, and obviously now we’re looking forward in the next year to the commissioning of Gross,” he explains.

Golden opportunities

The construction of Gross will be Nordgold’s third greenfield project developed from exploration to production, following the successful launch of the Bissa and Bouly mines. “It’s a greenfield with aspects of a brownfield. There is existing infrastructure there but we’re basically rebuilding it all as a separate mine. It’s clean and easy in the fact that we haven’t had to pioneer there,” advises Wilcox.

Located in Yakutia, Gross is not Nordgold’s first foray into Russia’s Far Eastern region. “Gross is very close to the neighboring Neryungri mine, which was acquired by Nordgold in 2007. It was one of the initial acquisitions and Gross is a neighboring ore body to the Neryungri mine,” Wilcox adds.

New infrastructure

As part of the new infrastructure

system, much construction work has taken place at the Gross mine.

“We are constructing a 1,000-man camp, 10-bay truck workshop and a gold processing plant. Our output will be on average 230,000 ounces per year over the 17-year life of mine.

The gold mine itself is a 12mn ton per annum heap leach,” says Wilcox.

“It’s a primary gyratory Metso crusher 50/65 leading up to two GP 500 Metso cone crushers. Primary and secondary crushing are then followed by approximately 3.5km of overland conveyors to our leach pad.

The leach pad itself is retreat stacking

A huge Nordgold mining truck

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using TNT stackers and portable conveyors. The ore is then leached with cyanide solution that is heated with waste heat from our power station.

“Cyanide solution is collected using a system of under heap drainage and the solution is then sent through carbon adsorption columns.

The solution is adsorbed onto the carbon, which is then what we call the pregnant carbon. This is then put through a desorption column where it’s stripped of its gold. The gold is again converted to a solution, which is then electrowon to the point where it’s a high gold content sludge and then it’s put through a final refining step and it comes out as a gold bar.”

A great gold producer

Nordgold has conducted an extensive exploration programme to identify the Gross deposit and its reserves.

“It has a 17-year mine life, relatively soft ore, and it should be a strong, low-cost, great gold producer,” Wilcox reveals. “It’s highly recoverable through heap leach so that’s one of the great advantages of it.”

Once commissioned – Nordgold

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NORDGOLD

CLIENT SATISFACTION IS OUR SUCCESS Established in 1986, Como Engineers’ provide engineering services and specialist products to the Mining and Resource sector. We are committed to working collaboratively with our clients to deliver mineral processing and engineering projects on time and on budget.

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Nordgold’s Bissa CIL plant at dawn

anticipates this will happen in mid2018 – the Gross mine will make a significant impact on the business.

“We’re predicting about 25% increase in overall gold production from our current level” Wilcox observes. “It will take us well past the 1mn ounce produced goal, which is a remarkable level in the industry.”

Naturally, the Gross mine has resulted in substantial expenditure

by Nordgold. “The investment to date is about US$150mn but the final investment number including the mining equipment will be around US$250mn. Obviously,

that depends on the exchange rate between currencies. We’re financing it almost entirely from the cashflow from our other mines, so we’re not going into debt to build this project,” remarks Wilcox.

Climate challenges

Despite the advantages of the Gross mine, the site has also presented some challenges for Nordgold. “We’ve had to be fairly innovative to build and operate this plant in the weather conditions that we’re experiencing in the Yakutia region,” Wilcox explains. “We get temperatures down to -50 Celsius, so recovering gold, leaching and producing power are all challenging things in that kind of climate.”

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NORDGOLD

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“Nordgold tries hard to bring zero harm and is supportive of the local community” Matthew Wilcox, Project Director – Gross Project

NORDGOLD In mining, every minute of production is important, downtime and interruptions to power are costly resulting in lost revenue and lost reputation. Reliable standby power is a must and who else would Nordgold look to for the provision of such power but Caterpillar. In the coming months, Vostochnaya Technica, Caterpillar’s Dealer in CIS, will install and commission two, 3516 generating sets which will maintain leaching

operations in the event of power failure.

The Cat 3500 engine platform is the industry standard for heavy duty diesel and gas engines worldwide. Cat’s 3516 generating sets offer the field-tested power capabilities and reliability that make them, and Caterpillar Electric Power, the go-to power source for work in some of the world’s most extreme environments. The first of their kind to be installed in Yakutia, these generating sets will be supported by Vostochnaya

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8,000+ Number of employees at Nordgold

Technica through the provision of a stock of consumable parts and the assignment of two support engineers who will provide routine and emergency service and maintenance.

Indeed, extreme temperatures is what Yakutia is famous for. Only Antarctica has recorded lower temperatures than some parts of this region in the extreme north of Asia. “We generally work down to around

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NORDGOLD -40 Celsius, at least outdoors, and then it becomes very hard on the equipment. Our plant will be allweather when it’s enclosed and will be capable of operating in Arctic climate conditions,” says Wilcox. “The plant should be operable even in the most extreme climate. It’s not exactly in an easy position – it’s got challenging topography, alongside access to the site itself but there’s enough gold and we have to work around these things.”

The Gross mine is certainly remote – it is located 100km from the nearest community. Despite this, Nordgold is keen to give back to the indigenous people of Yakutia. “Nordgold tries hard to bring zero harm and is supportive of the local community in all regions we operate,” acknowledges Wilcox.

In Yakutia, Nordgold supports communities that live on the territory where the Neryungri mine operates.

Indigenous people called Ewenki represent a part of this community. This ethnic group has been living in Yakutia for centuries and reindeer breeding has always been their traditional

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occupation. Apart from providing jobs for these people, building schools and houses for young professionals, the Neryungri mine helps the Ewenki to maintain their traditional lifestyle tightly related to the reindeer breeding – Nordgold provides herders with gasoline, goods and transport.

“Our approach certainly depends on the project and where it is.

Obviously, the community’s not as big a thing at Gross where it’s a very remote project, but certainly during my work on the Bouly project, we completed a resettlement project for 3,000 people,” Wilcox reveals.

Advanced explorations

In addition to Gross, Nordgold has several other projects it intends to develop. “There is our French Guiana project – Montagne d’Or – and then there’s exploration project Pistol Bay in Canada, and some other Russian projects. I think Nordgold is one the bolder companies and it’s already got a very well-advanced development pipeline,” Wilcox concludes.

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Reindeers live in the vicinity

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