August 2017
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S T E E L F D E T E C N E I N M T R A CON M S E H DT AN
SPECIAL REPORT
Hummingbird Resources MINING FOR OPTIMISM
IN A DATA-RICH INDUSTRY, IOT SENSORS ARE SET TO CHANGE MINING TRUCK FLEET MANAGEMENT
TOP 10
LARGEST LITHIUM producers
TECHNOLOGY
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FOREWORD WELCOME TO THE August issue of Mining Global! Our main feature this month is Hummingbird Resources. Our exclusive report looks at the company’s acquisition of the Yanfolila Gold project, and how it positions Hummingbird as a key player in the Malian gold market. We also take a look at Cupric Africa, and how the company’s copper project in Botswana will cement the company as a leader not only in Botswana but the wider African continent. Our other features include an insight into the financial trends across the mining industry with a leading mining analyst from SP Angel. We also detail the role of a data rich industry, with IoT sensors proving to be the next step in the mining truck fleet management of the future. And finally, with the global demand for lithium on the rise, we look at 10 of the biggest lithium producers in the world. As always, tweet your feedback @miningglobal
Enjoy the issue!
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F E AT U R E S
PROFILE
MINING FOR OPTIMISM WITH SP ANGEL TECHNOLOGY
14 CONNECTED
FLEETS AND THE SMART MINE
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6 LIST
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Top 10 lithium producers
C O M PA N Y PROFILES
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Hummingbird Resources AFRICA
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PT Merdeka Copper Gold TBK ASIA
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Cupric Africa AFRICA
PROFILE
MINING FOR OPTIMISM WITH SP ANGEL Mining Global talks to leading resources analyst John Meyer regarding how his work with emerging mining companies for investment bank SP Angel… Writ ten by: DAN BRIGHTMORE
PROFILE SP ANGEL IS a boutique independent investment bank and around half its business is in the resources space, with most of its staff experienced at working with companies within the mining industry. Leading resources analyst John Meyer at SP Angel introduces the organisation: “We are Nomads (Nominated Advisors) for companies on AIM (the Alternative Investment Market). We list resources companies and manage their corporate affairs while raising money for them in the market. Investors have a fairly short time horizon while companies are working on a longer-term basis to create value so we’re raising equity to help them get there. “Companies tend to come to us. They present themselves and we decide whether we want to invite them to work with us. It’s a bit of a meeting of minds really. They want to work with people who understand what they’re doing and can appreciate the long-term value of the geological and mining work they do.” The recruitment behind SP Angel is paramount and allows it to get the exact right people to better support those in industry. “Our Nomad 8
August 2017
team is the most experienced team of analysts in the city at working with resources companies,” Meyer explains. “We understand the language they speak, the issues they face and we don’t walk away from difficult situations. They’re going to get better advice from SP Angel than many other firms. You need to be a very big company to get the attention of JP Morgan and you’re not certain of getting the best advice from one of
MINING FOR OPTIMISM WITH SP ANGEL
“WHEN YOU LOOK AT THE LIST OF COMPANIES WE WORK WITH, SOME OF THEM HAVE DONE SPECTACULARLY WELL” JOHN MEYER, RESOURCE ANALYST, SP ANGEL
the mid-tier competitors. The integrity we’ve shown counts for a lot and that’s why we’ve got the longest list of any of the boutique banks in London. “We’re the largest integrated Nomad and broker for mining companies on AIM. A lot of bigger banks are very fussy about the size of a company they act for, but for us it’s all about creating growth and value combined with the integrity and ability of the management team to
deliver. We’re here to support that. “When you look at the list of companies we work with, some of them have done spectacularly well. Strategic Minerals is up 838 percent yoy and 165% year to date. Our AIM-listed mining house stocks were up 49% year to date (January 2017) and we were 22% year on year. But actually, as analysts, we don’t tend to focus on share prices as much as the fundamentals 9
PROFILE of what a company is doing and how its assets are performing.” CAUTIOUS OPTIMISM There’s a perception the industry that there has been in quite a downturn over the last few years, but Meyer is optimistic. “We’ve worked very hard with a range of companies to ensure they survived and had resources to advance their work through some dark periods when investors were not keen to get involved and other sectors were getting their attention. The markets have some cyclicality in their nature and most mining companies go through a rough patch before they head on the path to success. Two years ago, everybody was into biotech and technology. Mining almost became old economy again. “However, we’re in the early stages of a boom in battery-related commodities: lithium, cobalt, graphite… We’ve also had a strong resurgence in iron ore pricing and coal which is leading to huge profits for the bigger mining companies and giving rise to optimism for the smaller ones. We’ve been supporting companies looking to produce copper, because you 10
August 2017
can’t really do much with a battery without a copper cable and it’s vital for electric vehicles. There is less interest in gold, but that is also coming back. Even rare earth metals (such as neodymium used to make computer hard drives) are showing a resurgence.” More and more companies are turning to joint ventures to secure funding and there’s a growing trend towards streaming agreements between companies, something Meyer is cautious about. “Streaming becomes problematic if companies run into financial difficulties or want to restructure operations. Straight equity offers more flexibility and is preferable from a shareholder perspective. Royalty streams are fair enough because the royalty effectively shares in the success of the company. Streaming is similar but I recommend companies avoid it unless it’s the last thing they need to get a project fully financed and only when there’s a good contingency in place to cover any problems. “Joint ventures companies need to be careful of the partners they choose to share the cost of operation and
MINING FOR OPTIMISM WITH SP ANGEL
development with. You see it right the way through the industry: from the smallest operation companies to the largest producers. If you’re developing the world’s largest copper mine you wouldn’t have just one company doing it, you’d probably have two or three.” GOVERNANCE SP Angel uses its in-depth knowledge of the various regulatory environments mining companies operate in. But how do regulation and governmental pressures impact on mining operations? “Increased regulation around the world has become a burden for all companies,” Meyer explains. “Junior mining companies have to bear this as much as anyone. We’re here to help them with compliance and advise on the best course of action. The key is always to try and work with good people. Any company that takes investors’ money needs to be mindful of how they act. As Nomads, we are in the middle of all that and like to think we strive to give the best advice to the companies we work with.” Looking forward, there are many new trends taking shape 11
PROFILE across the industry, whether it’s acquisitions, joint ventures or other means of creating financial stability. Meyer is well-placed to offer the best advice to his clients. “There’s a growing trend to more cost-effective exploration and to look for value within mineral deposits rather than scale,” he explains. “Go back five or six years and companies were generally trying to show they
had large-scale mines with large scale production profiles. Now they are better focused on the creation of value through the more costeffective development of higher margin mining operations. Scale is often sacrificed in the quest for efficiency. That’s a good thing. “There’s a more careful approach towards the creation of value. It’s very important - we’ve been banging on
“THERE’S A GROWING TREND TO MORE COST-EFFECTIVE EXPLORATION AND TO LOOK FOR VALUE WITHIN MINERAL DEPOSITS RATHER THAN SCALE” JOHN MEYER, RESOURCE ANALYST, SP ANGEL
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MINING FOR OPTIMISM WITH SP ANGEL
about this for years. People ignored us and got starry-eyed. They hoped if they had the resources to produce a million ounces of gold someone would come along and buy them for it. Now they realise only half a million ounces of that gold could be economic. Across the whole spectrum of the industry companies are better targeting their exploration using remote sensors, geo-physical
methods and an increased use of drones for various surveys which can cut costs enormously. So, if they focus their efforts they can make very good money rather than risk a loss-making operation.” The mining industry is constantly evolving and Meyer has a few pointers as to where it’s headed. He concludes: “Mining has diversified to produce a broader range of materials which are more technology focused to support the industries of tomorrow and developments in material science. We’re working with many entrepreneurs in this area. I think there’ll be much more focus on rare earth metals going forwards. The strategic nature of certain metals is an area to watch as China is restricting the export of some materials – particularly in stress situations. “The EU developed a list of strategic metals as did the Americans. In fact, stockpiles of these metals are not what they used to be during the Cold War. A lot of that stock was sold down over 30 years and it’s quite possible governments might try to re-build strategic stocks of critical raw materials in future.” 13
TECHNOLOGY
CONNECTED
FLEETS AND
THE SMART MINE
IN A DATA-RICH INDUSTRY, IOT SENSORS ARE THE LOGICAL NEXT STEP FOR MINING TRUCK FLEET MANAGEMENT, SAYS JAMIE MILNE OF WORLD WIDE TECHNOLOGY W r i t t e n b y : J A M I E M I L N E , E N G A G E M E N T M A N A G E R , B I G D ATA & P R E D I C T I V E A N A LY T I C S , W O R L D W I D E T E C H N O L O GY
TECHNOLOGY BIG DATA PROJECTS take place at the intersection of business, science and technology. For miners, who have long weathered tough environments in both business and nature, staying abreast of the latest connected technology can often provide the key to greater efficiency and better margins. Miners have been collecting data and looking for an edge since the moment the sector became industrialised. However, identifying new opportunities can present a challenge, especially when trying to re-imagine facets of the mine operation that have not been overhauled in a long time. When trying to deploy new technologies, outcomes must be at the forefront of any Project Manager’s list of priorities. When implementing a Big Data project, the primary source of value comes from the distillation of vast quantities of data into previously unknowable intelligence, so it is extremely important to know how each element, from hardware deployment to data analysis to business outcome, forms part of a larger whole. 16
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PREDICTING DISASTER Avoiding unscheduled downtime plays a major role in the smooth running of a mine truck fleet. A broken down truck on a wellused road can cause massive headaches, as operations are forced to a halt. Fortunately it has been possible to make progress in our ability to keep trucks on the road via the deployment of connected sensors and complementary Big Data analytics. Engines, transmission, torque converters and differentials are all examples of haul truck components that can be linked to a data logger via a sensor array. It is true that trucks have been running for decades without this kind of technology, without collecting all of these forms of data. However, in neglecting these potentially insightful data points, it is not possible to obtain the clearest picture of what is happening to crucial equipment. In order to enact change within a maintenance regime it is essential to gather a cache of data which can be projected into the future. A cache of recent data gathered from the quotidian activity of a
CONNECTED FLEETS AND THE SMART MINE
‘ENGINES, TRANSMISSION, TORQUE CONVERTERS AND DIFFERENTIALS ARE ALL EXAMPLES OF HAUL TRUCK COMPONENTS THAT CAN BE LINKED TO A DATA LOGGER VIA A SENSOR ARRAY’
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TECHNOLOGY mine truck can be used to forecast potential points of failure in the near-future. Oil changes, part changes and other maintenance actions can be carried out before a costly breakdown takes place. Broader insights, from the efficiency of specific truck models to how changes in operations effect model performance, are available through deeper analysis of gathered data.
TURNING OTHER DATA INTO ACTION AND ENSURING AN OUTCOME Beyond the maintenance of individual units, there is the potential to gain fleet-wide insights related to haul cycles as GPS data is captured. For example, problems with site roads, reported via sensors attached to the haul trucks, can be identified and swiftly dealt with before delays are caused. Truck operators too can benefit from insights related to the most efficient paths through a site and the correct gear choice in any given location. Readings from these sensors are fed back and interpreted by data scientists who can advise crews on more 18
August 2017
‘BEYOND THE MAINTENANCE OF INDIVIDUAL UNITS, THERE IS THE POTENTIAL TO GAIN FLEET-WIDE INSIGHTS RELATED TO HAUL CYCLES AS GPS DATA IS CAPTURED’
CONNECTED FLEETS AND THE SMART MINE
efficient operational practices. It really is a case of untapped opportunities at the moment in the mining world, as data is both plentiful and applicable to range of business critical processes. The problem that miners often face is that bringing projects from inception to business outcome is a path laden with obstacles. The infrastructure that is needed to process various disparate
data flows is rarely present in a conventional mining setting. Therefore, it is essential to understand what will be required to move each step of the project towards the goal of achieving quantifiable business outcomes. Technology partners who can offer testing and compute services alongside the large scale deployment of connected technologies greatly multiply the odds of success. 19
TOP 10
Top 10 lithium producers Dubbed ‘white petroleum’, the mining of lithium is booming. Here are the top 10 producers of an increasingly sought-after mineral Edited by: ANDREW WOODS
The global demand for lithium continues to incr ease at a significant rate and mining operations appear to be ramping up to meet it. The lightest and least alkali metal, lithium enjoys widespr ead commer cial use in gr ease, dryers, air conditioners, medicines and a fast-rising call fr om the battery and r enewable ener gy sectors. These top lithium operations ar e aggr essively working to meet that demand for the mineral branded ‘white petr oleum’ thr ough expansive mining and innovative technological advancements.
TOP 10
09 GALAXY RESOURCES LIMITED
10 WEALTH MINERALS Canadian-based Wealth Minerals has invested heavily in lithium mining in northern Chile. The outfit tapped into the lithium rich Salar de Atacama region where SQM and Albemarle have productive mines. Having acquired the Laguna Verde operation, this lithium junior outfit has access to a potential 512,960 tonnes of lithium carbonate. Stock value has taken a sharp uptick since January 2016 and continues trending as the outfit moves forward in developing its lithium operations in Chile. In many respects, Wealth Minerals might be an operation starting to come into its own, depending on the success or failure of the Laguna Verde project.
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Recognised as one of the hot lithium mining companies of 2017, Galaxy stock reportedly shot up more than 300%. Focused on key lithium regions such as the Sal de Vida project in northern Argentina, Mount Cattlin in Australia and James Bay in Quebec, Galaxy taps into major and manageable deposits. The James Bay operation has a potential yield of 11.75mtonnes with the Sal de Vida project residing in the “Lithium Triangle,” home to 60% of the world’s reserves. Mount Cattlin has an output of 137,000 tonnes per annum. The focus on tried-andtrue lithium reserves has this mining company on a two-year upswing. However, stocks have declined through the first half of 2017.
LITHIUM PRODUCERS
07 MGX MINERALS
08 NEMASKA LITHIUM One of the few operations geared toward culling direct lithium hydroxide, Nemaska has been working the Whabouchi mine in Quebec, Canada. Some claim this could prove to be the second wealthiest mine and potentially the biggest lithium deposit on the planet, at an estimated 28m tonnes. The open-pit operation yields 2,740 tonnes of ore daily and has a life expectancy of 26 years. Despite a promising portfolio, Nemaska lithium stock has declined in 2017 and stands below its $1.20 rate five years ago.
MGX is active in numerous large-scale mining operations in Canada with others located in the United States. The outfit employs a specialised practice to cull lithium carbonate and other minerals from salt water. The water, which moves to the surface with pumped petroleum, is treated as a waste by-product. As an innovator in lithium and mineral mining in general, MGX has acquired more than 1.7m acres of brine resources for its oilfield extraction process. Currently, waste water disposal runs approximately $13 per barrel and MGX is engaged in developing a treatment process that would purify the water after extracting the lithium. MGX is a next generation lithium producer.
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05 JIANGXI GANFENG LITHIUM
06 LITHIUM AMERICAS Formerly knowns as Western Lithium, this outfit has been working Chile’s Cauchari-Olaroz resource in conjunction with SQM. Earlier this year, Americas also entered into a development agreement with Ganfeng Lithium that will invest $174m into Cauchari-Olaroz. Although Lithium Americas gave up 19% of its portfolio in the deal, the arrangement is likely to propel the mining company into the big time. The deposit has been said to potentially hold the majority of the world’s known lithium and the outfit expects to pull 50,000 tonnes per annum. Lithium Americas also has interests in Nevada, USA. The operation’s stock has trended upward from $.20 in 2012 to $.87 in 2017. However, Lithium Americas has suffered a modest slide since February.
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China’s number two lithium producer is headquartered in Xinyu and has been on a global move to acquire stakes in growing operations such as International Lithium and Australia’s Reed Industrial Minerals. An international dealmaker, Jiangxi threw in with Albemarle and SQM to expand and identify Argentinian resources. Jiangxi has enjoyed marked success in recent years. For instance, as a 43.1% stake holder in Australia’s Mt. Marion lithium mine, the operation ramped up production by 160 percent in 2016, topping out at 60.5m tonnes of lithium. Its fiveyear stock ascension continues to look strong for long-term investors.
LITHIUM PRODUCERS
04 SICHUAN TIANQI LITHIUM Based out of Chengdu, China, this company is considered the global leader in hard rock-based lithium production. Tianqi and Albemarle have been collaborative bedfellows in recent years. After Tianqi out manoeuvred Rockwood Holdings for control of Australia’s Greenbushes mines, it sold 49 percent back after Albemarle acquired Rockwood. The joint venture has been lucrative with Albemarle making significant investment into the mines. The leading Chinese operation has been on the Shenzhen Stock Exchange since 2010 and its portfolio includes mining operations in Australia, the Chinese provinces of Yajiang County, Ganzi Prefecture and Sichuan, as well as the Zhabuye Salt Lake Lithium Project in Shigatse, Tibet. Over the last five years, stock values have risen from 7.86 to over 54 in a highly stable fashion. Its Asia operations claim to have access to more than 200,000 metric tonnes of lithium reserves and Greenbushes’ output nears 40% of the global market.
03 FMC With global offices in six countries, FMC has been aggressive in Argentina’s Salar del Hombre Muerto and has reported revenues in excess of $230 million. The corporation placed emphasis on its lithium hydroxide operation in China last year and that investment is expected to yield a significant capacity boost. A jump from 2016’s 10,000 metric tonnes to 18,000 in 2017, and an upward trend that may hit 30,000 by 2019, keeps FMC poised as an industry leader. Along those lines, FMC fostered an agreement with Nemaska Lithium for a supply of 8,000 metric tonnes of lithium carbonate annually. The agreement goes into effect in 2018. FMC Corp stocks have been upwardly
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02 SQM
allegations and sustained friction with Sociedad Química y Minera de Chile Chile’s Corfo over lease agreements (SQM), an open traded stock company, in Salar de Atacama. After banding has shown steady gains since January with Lithium Americas to undertake 2016 and appears to be a lithiumthe Argentinian Cauchari-Olaroz producing riser. The outfit enjoyed lithium project in 2016, SQM’s portfolio stock value highs in the fall of 2012, but began trending upward. Planning bottomed out in July 2015. During this to drop $100m into the project this low point, the company came under year, an uptick from 6,000 to 13,500 scrutiny for bribery and tax evasion metric tonnes annually is expected.
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LITHIUM PRODUCERS
01 ALBEMARLE This global outfit is based out of Charlotte, North Carolina, and emerged as the world’s top lithium superpower after its acquisition of Rockwood Holdings and Rockwood Lithium in 2015. In January, the corporation concluded at deal with the government of Chile’s Development Agency that allows it to increase lithium mining at the Salar de Atacama operation in the Antofagasta region and has touted an investment uptick of $400-$600m. The move is expected
to increase battery-grade lithium carbonate output from 24,000 to 80,000 tonnes. Albemarle has also been aggressive in augmenting other global lithium operations. With a 40% stake in Australia’s Greenbushes mine, Albemarle has pushed for significant upgrades to the facility and expects to double production to 1.34m tonnes of lithium concentrate by 2019. Considered the world leader in lithium mining, Albemarle shows no sign of falling behind the pack.
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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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AFRICA
“
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 lowcost high-grade operation played a key role on this front.
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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
CIS: your remote site solutions provider Present in Africa for over 20 years, and 5 years in Mali. Serving more than 6 million meals per year, including half a million meals in Mali. CIS is specialised in the management of remote sites in extreme environments for mining and Oil & Gas operators. In addition to its core business of catering and living accommodation services, the Group has developed a comprehensive service offering in facilities and utilities management and in support services to provide its customers with turnkey solutions. 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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AFRICA
“The biggest initial challenge was definitely the 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
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HUMMINGBIRD RESOURCES
such a low-cost producer,” he adds. 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.”
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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 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
AFRICA
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.
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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
“We exist within a community and want to be a part of that community. 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,
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as Hummingbird works to provide opportunities for Malian people 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.”
AFRICA
Throughout the construction of the Yanfolila Project, Hummingbird 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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CUPRIC AFRICA:
BOTSWANAN COPPER, AFRICAN AMBITION Written by: Dale Benton
Produced by: Vince Kielty
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Cupric Africa looks set to become a major player in the Botswanan and African copper market with its Khoemacau Project
C
upric Canyon Capital, through its mining arm of Cupric Africa, owns one of the most significant high-copper discovery zones in recent years. With sulphide resources of around 100.3 million tonnes, Cupric has set its sights on becoming a major player in the Botswanan mining market. The area, known as Zone Five, was acquired through the acquisition of Hana Mining back in 2013 and falls within the Khoemacau project. This has since become the company’s flagship operation. The Zone Five starter project is the first phase of a major expansion and exploration development of the zone. This initial phase will look to average around 50,000 tonnes per annum of copper and in excess of 1.4 million tonnes per annum of silver. Cupric will look to mine around 10,000 tonnes per day through an underground mine that can be accessed via three
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interconnected underground mines. Following the completion of the starter project, Cupric will move onto a major expansion project, one that will see the annual mining output rise to 80,000 tonnes per annum of copper and 2.4 million tonnes per annum of silver. Such a significant expansion will no doubt cement Cupric as not only a major player, but potentially the major player. Having a significant mining operation, with a significant capacity for production, is one thing but a mining operation is nothing if it is not worth it with regards to costs and revenue. Well, Cupric has that covered. With production earmarked for a 2019 start date, Cupric has estimated capital costs at around $350 million for the Starter Project. Looking beyond that, Zone Five has a mine life of 27 years and cash costs over those 27 years are estimated at around $1.00 per pound of copper.
MINING
With production earmarked for a 2019 start date, Cupric has estimated capital costs at around $350 million for the Starter Project
80k
2.4m
Predicted copper output in tonnes per annum
Predicted silver output in tonnes per annum
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MINING
Zone Five falls under the company’s Kalahari strategy and Khoemacau Boseto exploration work. The strategy centres around the Kalahari Copper Belt, a 1,000-kilometerlong belt which extends from Northern Botswana in Namibia. Cupric has an “extensive package” containing a number of licences along this belt, with in-place mining infrastructure, JORC compliant resources and numerous additional high-grad copper exploration targets. This package presents Cupric with a “near-term” opportunity to create and operate a lowcost copper production from a
long-lived operation with substantial exploration and production upside. With Botswana being ranked as number one in in the “investment attractiveness” index for Africa, and the country being a pro-mining jurisdiction, Curpic is well placed to capitalise on this and continue to operate as a key player not only in Botswana, but also wider Africa. Cupric continues to grow. In February of 2017, the company announces that it had secured a $50 million term loan facility agreement to provide funding for the Khoemacau coppersilver project. The loan will specifically fund development costs as well as
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front end engineering in advance of the construction phase, which will begin in the second half of 2017. “Proceeds from the term loan will enable us to continue development work at Khoemacau as we prepare to begin full scale construction of the Starter Project in the second half of 2017,” says Dennis Bartlett, Cupric’s Chief Executive Officer. “All design, engineering and permitting work is progressing well and on schedule, bolstering our confidence that production will commence in 2019.” The project, upon completion, could stand as the most attractive new copper project, not just in Africa.
“We continue to believe that Zone 5, combined with the expansion potential offered by the other deposits within our license areas, represents perhaps the most attractive new copper project in the world today, with the potential to ultimately achieve copper production in excess of 120,000 tonnes per annum,” he says. As a firm commitment to focusing on bringing about the project and realising that low cost high-grade operation, Cupric has brought in a Head of African Operations. Johan Ferreira, Head of African Operations and Managing Director of Khoemacau Copper Mining, has
He brings the underground mining expertise necessary to transition the project from studies to mine development and operations Dennis Bartlett, Cupric’s Chief Executive Officer, on the appointment of Johan Ferreira
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been brought in specifically to lead the development of the project. He comes with over 20 years’ experience in the global mining industry, working with Anglo American on two African mines and was the president of the Ghana Chamber of Mines. “We’re excited to welcome Johan to the Cupric team,” says Dennis Bartlett, Cupric’s Chief Executive Officer. Bartlett stresses that a key element of Ferreira’s appointment is his experience within underground mining. “He brings the underground mining expertise necessary to transition the project from studies to mine
development and operations,” he says. With a targeted construction date aiming for the latter part of 2017, Cupric seemingly has all the right pieces in place for the project to truly become a major operation in Botswana and Africa. The company has committed to its Khoemacau copper/silver project, with plans for further expansion that will increase annual production to well over 100,000 tonnes of copper and in advance of 3 million ounces of silver. Cupric is saying and doing all the right things that will get the company through its 27-year mine life and be hugely successful along the way.
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INDONESIAN MINING
ON THE WORLD STAGE Written by: Nye Longman
Produced by: Richard Deane 47
PT Merdeka Copper Gold Tbk: Financially and environmentally sound, the Tujuh Bukit Project in East Java is set to be one of Indonesia’s finest mines
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ith production already underway at Indonesia’s Tujuh Bukit Project in East Java, the company in charge, PT Merdeka Copper Gold Tbk, is already proving its worthiness for such an important undertaking. An Indonesian-owned operation, the company is set to oversee a profitable, safe, and sustainable mine that will pay dividends for shareholders as well as the local community. We speak to Merdeka’s CEO Colin Moorhead to discover how one of the country’s most promising mines in recent years will make the grade. With an estimated Mineral Resource of some
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99mn tonnes of ore at an average grade of 0.8 grams per tonne of gold, and 25 grams per tonne of silver, the near-surface ore deposits contain approximately 2.45mn ounces of gold and 79mn ounces of silver. The underlying porphyry deposit has an Inferred Mineral Resource of some 1.9bn tonnes at estimated grades of 0.45% copper and 0.44 grams per tonne gold making it one of the largest projects of its kind in
the world. All told, the porphyry is estimated to contain 28mn ounces of gold and 19bn pounds of copper. “I come from 30 years mining experience working on some of the largest mines in Australia and PNG,” he explains. “I’ve been asked to build a technical team capable of taking Tujuh Bukit to those standards. I’m proud to say we could take anyone from Australia and they would be impressed with our
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ATTITUDE. RELIABILITY. KINDNESS. AWARENESS. TEAM WORK. ORGANIZED We are a Heavy Equipments Rental company with more than 300 Units of Equipments. We also experienced in Earth Work Construction services, Toll Road, Dam and Mining Services.
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PT Arkadiya Fourhaka Indonesia www.arkadiya.co.id info@arkadiya.co.id
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construction and operating standards”. Operations Merdeka is listed on the Indonesia Stock Exchange following a successful IPO in 2015 and controls the companies that hold the Tujuh Bukit mining leases. These consist of PT Bumi Sukesindo (BSI), which is permitted for mining production, and PT Damai Sukesindo (DSI), which holds the adjacent exploration permit. The company is fully engaged in Indonesia’s mining industry and, working to international standards, is focussed on developing the country’s gold, silver, copper and other mineral deposits. The company has three major Indonesian shareholders, one of which is PT Saratoga Investama Sedaya, Tbk – the country’s premier investmentholding company, PT Provident Capital Indonesia, a leading investor in Southeast Asia, and Pak Garibaldi Thohir. This winning combination ensures that the mine will remain liquid throughout its life. “The technical mining potential in Indonesia is huge,” Moorhead comments. “It has some of the
“What we aim to do is create an internationally respected, high standard and high integrity mining company” – Colin Moorhead, CEO
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biggest gold and copper deposits This could set us up as a 30 plus in the world. What we aim to do is year copper-gold producer.� create an internationally respected, The oxide gold silver development high standard and high integrity commenced operations in December mining company. Tujuh Bukit has a and produced its first gold in March typical epithermal gold oxide cap 2017, just 18 months after construction that has been developed as an open work started. This mine offers low pit mine, overlying a two billion tonne costs and high margins. Using sulphide porphyry copper conventional open pit mining, deposit that could be the ore is crushed and The number of developed in stages agglomerated before staff at PT Merdeka as a series of mass being stacked on a underground mines. heap leach pad where Copper Gold Tbk
1,500
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the gold is dissolved in a weak cyanide solution. The pregnant solution is then pumped to an ADR (absorption, desorption, recovery) plant where gold and silver is recovered and produced as dorÊ. Initially the operation will process four million tonnes of ore annually and will produce on average 100,000 ounces of gold and up to 300,000 ounces of silver per year over the next decade. Looking further ahead, Merdeka is also conducting a study on expanding the mine’s heap leach capacity to 50mn tonnes and its production
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PEOPLE ACHIEVEMENT DEDICATION
Madhani provides clients with a complete pit to port mining solution. Our modern fleet of mining equipment includes hydraulic excavators ranging up to 350 tonne & haul trucks up to 150 tonne capacity. Madhani construction services cover all commodity types and include mine site infrastructure and ore processing/handling facilities. Construction capabilities include airstrips, containment dams, equipment maintenance workshops, site camps, fuel storage tank-farms, explosive magazine facilities and site office complexes. We can supply, install and operate crushing plants, conveyor systems and port loading facilities. We are always ready to meet the needs of our clients no matter where they are located.
Office Address: PT Madhani Talatah Nusantara, Alamanda Tower 12th Floor, Jl. TB Simatupang Kav. 23-24, Jakarta 12430, Indonesia Web: www.madhani.co.id | Email: info@madhani.co.id
CONSTRUCTION AND MINING CONTRACTORS
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rate from four million tonnes to six million tonnes per annum. The second opportunity at Tujuh Bukit is to develop a series of underground mines to exploit the massive porphyry copper gold deposit that underlies the oxide mine. “We are currently doing the pre-engineering to put an exploration decline into the porphyry which sits below the oxide mine we are operating,” Moorhead adds. “That upper high grade zone (UHGZ) of that deposit is estimated to contain about 300mn tonnes at 0.8% copper and 0.8 grams
of gold.” The decline will help Merdeka acquire the data needed to support a prefeasibility study for the first mass underground mine. Sustainable mining The journey to developing one of Indonesia’s best deposits, and with that, one of its most reputable mining companies, has not been easy. Issues over ownership and permitting slowed progress before a single brick was laid. And once that had been taken care of, the company had the weather to contend
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of PT Bumi Sukesindo (BSI), which is permitted for mining production, and PT Damai Sukesindo (DSI), which holds the adjacent exploration permit. The company is fully engaged in Indonesia’s mining industry and, working to international standards, is focussed on developing the country’s gold, silver, copper and other mineral deposits. The company has three major Indonesian shareholders, one of which is PT Saratoga Investama Sedaya, Tbk – the country’s premier investmentholding company, PT Provident Capital Indonesia, a leading investor in Southeast Asia, and Pak Garibaldi Thohir. This winning combination ensures that the mine will remain liquid throughout its life. “The technical mining potential in Indonesia is huge,” Moorhead comments. “It has some of the biggest gold and copper deposits in the world. What we aim to do is create an internationally respected, high standard and high integrity mining company. Tujuh Bukit has a typical epithermal gold oxide cap that has been developed as an open pit
“We have a commitment to spend 1.5% of our return revenue capital on local projects” – Colin Moorhead, CEO
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TOTAL EXPLOSIVES SOLUTION! WHY DAHANA? DAHANA’s line of business covers Explosives Manufacturing, Drilling & Blasting Services and Related Services for customers throughout Indonesia and ASEAN Region. Dahana’s explosives users comprise of Mining Industry, both metal and non metal; Quarry & Construction such as cement, asphalt and andesite quarries and construction projects such as dams, roads, tunneling, irrigation, harbor and building demolition; Oil & Gas Sectors such as oil well perforating, seismic prospecting and also defense related. Owing to its 25-year experience, DAHANA enjoys extensive customer’s trust for its proven exemplary integrated explosives services for various purposes and conditions, including bench blasting, trench blasting and underwater blasting, which are quite complex. Dahana has been able to handle the whole blasting process, starting from the designing, calculation, drill hole preparations, explosive configuration, explosives supply, blasting, up to the operational security. DAHANA has been in operation for drilling and blasting work in more than 20 sites scattered in Indonesia under the support of its On Site Plant (OSP) and Mobile Manufacturing Truck (MMT), among others, is the one in operation at Mine Site of PT Bumi Suksesindo (BSI) in Banyuwangi, East Java.
Local Content
Customization
Go Green
As a domestic company, DAHANA uses local materials in the country for the products and services it produces. It is a form of approbation and support for the independence of the domestic industry.
With the support of Energetic Materials Center (EMC) as a center for production and research and development of energetic materials, DAHANA is able to answer the challenge for explosive material tailored to a variety of terrains and purposes.
DAHANA constantly grows along with the environment in their business activities The Green Concept applied to both of the management of buildings and products has resulted in numerous awards both nationally and internationally.
Menara MTH 17th floor, Jl. MT Haryono Kav. 23 Jakarta, Indonesia
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Total Service Solution The integrated Services of DAHANA range from production of explosives, drilling and blasting services to related services such as demolition,warehousing, consulting and licensing as well as the mobilization of explosives, also the explosives services for defense as propellants for large munition and small munition, rocket, PETN and warplanes bomb.
PT MERDEKA COPPER GOLD TBK
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OUR CLIENTS LIKE OUR VALUES • Openness • Trust and Integrity • Passion for Quality • Teamwork • Responsibility for our Actions • Can-do: Safely PT Prasmanindo Boga Utama, established in 1985, is one of Indonesia’s preferred Catering and Camp Services partners in the Mining and Oil & Gas industries. We strive to be a best-in-class provider of contract foodservice and support services; renowned for our professionalism. Better known in the market as PBU we predominantly operate in remote locations across the archipelago with leading Indonesian, Multinational and International clients. Our vast experience can be applied to the most demanding of challenges and we are committed to consistently deliver superior service in the most efficient way, for the benefit of all our stakeholders.
PT. Prasmanindo Boga Utama,Wijaya Graha Puri Block F 33 - 34 Jl Wijaya II , Kebayoran Baru, Jakarta 12160, Indonesia +62-21-7206621 | www.ptpbu.com | pbujkt@ptpbu.com
Email: info@psi-ind.com Website: www.psi-ind.com
PSI Drilling Services & Support Consistently providing successful, cost effective drilling solutions throughout the South East Asian mining & energy sectors. Currently operating in Indonesia, Malaysia, Thailand, Laos & Myanmar
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with. Having centuries of experience locked into its workforce, Merdeka has been able to shrug off these risks, and ensure that the project has a positive impact on local businesses, the community, and the surrounding environment. No small order. “We had the wettest year on record which hampered our earth works considerably,” Moorhead says. “We were able to handle those impacts and
delays by using our status as an owner-executor. I think if we were using an EPCM arrangement we could have had a large cost blowout.” Unlike many players operating in the country’s mining space, Merdeka is fully owned by locals, with expats making up less than one percent of its workforce. But the company’s commitment to Indonesia doesn’t end there, as Moorhead explains: “On
2012
The year that PT Merdeka Copper Gold Tbk was founded
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SODIUM CYANIDE SUPPLY AND SERVICES • Dedicated production and supply to the gold mining industry • Secure, certified and robust supply chains • Unmatched safety and environmental performance • Sodium Cyanide handling and awareness training • Facility advice and technical support 24/7
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the community side we have a commitment to invest 1.5% of our revenue on community social responsibility (CSR) projects. “We are tailoring those projects to the needs of the people, which include capacity building, scholarships for kids, and helping businesses. We are in the early days of that.� The company initially also granted 10% of its shares to the government of The Regency of Banyuwangi, which has effectively granted rights for local people to participate in these mining projects. The further intention of the share grant is to provide the community of Banyuwangi Regency with sustainable economic benefits from the gold mining project.
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Protecting local water supplies is essential, and no fewer than six dams have been constructed with this specific purpose in mind. Moorhead adds: “We have two process water dams which take water from the catchment, one storm water pond which is a clay and plastic lined, and three environmental control dams that collects all the runoff. These can also handle the extreme rainfall events up to three times over. “We
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also have a detox system to manage cyanide and arsenic levels in excess process water, backed up by mercury scrubbers if required. Merdeka has also spent over 15,000 man-hours on safety training and continues to build skills and awareness in this regard. With the Tujuh Bukit Project now in production, Merdeka has its sights confidently set on the future dividends that a mine of this size and quality is certain to bring. Its shareholders
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own and control a number of other Indonesian mining companies with assets and are looking for where it makes sense to consolidate those under Merdeka. “In three to five years’ time we will have that copper project to pre-feasibility level and ready to construct and potentially multiple operating mines producing a significant amount of gold per annum. If we are successful at that we could be a $3bn company.�
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