Fund Raising across the Boards

THE FUND RAISER: Some solid action across the Fund Raising front this week.

$6M Capital Raising for Cambodian gold project

Renaissance Minerals (ASX: RNS) has resolved to raise $6 million through a heavily oversubscribed equity placement, being made to new and existing institutional and sophisticated shareholders.

The funds raised from the Placement will enable the company to accelerate exploration activities at its 100 per cent-owned Cambodian gold project, which will include drill testing a number of new prospective targets in close proximity to the Okvau deposit.

“The raising was well supported by both new investors and long term supporters of the company,” Renaissance Minerals managing director Justin Tremain said.

“The support shown by some of the company’s largest shareholders demonstrates a high level of confidence in the company.

“Renaissance is now well funded to accelerate its activities in Cambodia, in particular around the 1.2 million ounce Okvau deposit.

“We look forward to a very active period of exploration and news flow over the coming months.”

Raising to fund exploration push

Alligator Energy (ASX: AGE) has entered into a share subscription agreement involving a group of sophisticated investors, which involves a commitment to take a $1.23 million share placement.

This commitment forms part of an approximately $4 million capital raising to drive the next phase of Alligator’s uranium exploration strategy in the Alligator Rivers Uranium Province in the Northern Territory.

The company said the capital raising will provide a solid foundation for it to pursue its exploration strategy to drill test existing priority targets on the Tin Camp Creek project area and assess additional targets generated by recent geophysical surveys.

Placement raises more exploration funds

Horseshoe Metals (ASX: HOR) has raised a further $120,000 by way of a placement of six million new shares to sophisticated and professional investors at 2 cents per share.

This placement brings the total amount raised in the company’s recent capital raising activities to over $1.34 million.

The funds will be used to fund ongoing exploration program at its copper/gold projects in the Gascoyne region of Western Australia.

Horseshoe Metals has also been granted up to $250,000 in co-funding support from the WA State Government for deep drilling at its Kumarina and Horseshoe Lights projects.

An additional $235,000 in drilling, paid for in Horseshoe Metals’ shares in lieu of cash (which have already been issued), is to be undertaken by Whitestone Minerals by March 2015.

This brings the combined total of cash raised and third party funded drilling to $1.8 million.

Avalon Minerals completes $1.95 million placement

Avalon Minerals (ASX: AVI) has arranged a placement to raise $1.95 million to new, professional investors in Australia, United Kingdom and Hong Kong as well as a major, existing Australian shareholder.

The funds will be applied to progress the company’s Viscaria copper-iron project in northern Sweden and for working capital.

“It is pleasing to complete this placement of $1.95 million to fund the ongoing operations of the company and to progress the Viscaria project,” Avalon Minerals managing director Malcolm Norris said.

“Although the resources sector is facing challenging times, this placement confirms the solid financial support Avalon continues to receive, particularly with the renewed focus on moving the Viscaria project forward.”

MacPhersons to raise up to $10.4 million

MacPhersons Resources (ASX: MRP) is undertaking a placement to raise up to approximately $9 million (but able to take over subscriptions to $10.4 million) via the issue of fully paid ordinary shares at 16 cents each to eligible investors.

Orion Mine Finance has committed to subscribe for up to $6.5 million worth of shares in the placement if it is fully subscribed, with Orion’s equity interest to be capped at 19.9 per cent of issued equity.

MacPhersons chairman Ashok Parekh has also agreed to subscribe for up to $1 million worth of shares in the placement, subject to shareholder approval.

The placement will utilise the ASX BookBuild facility.

“The continued participation of Orion Mine Finance is welcomed by the company and will assist our ongoing program of completing the Bankable Feasibility Study,” Parekh said.

“Continued in-fill and mine plan extensional drilling is delivering exciting results.

“As chairman I am very confident of the direction we are heading in.”

Share price movements during Diggers & Dealers

Share price movements during Diggers & Dealers

CONFERENCE CALLER: There is a lot of competition amongst companies attending Diggers & Dealers to land a ‘Presentation Spot’.

Each year the forecourt outside the Goldfields Art Centre is abuzz with conversation focused on the subject of who is presenting and who missed out.

Looking at the line-up it would seem each day is something of a mixed bag in regards to news and interest.

Day One presenters are usually guaranteed a good attendance with interest generally high in the Keynote Address, which this year is to be delivered by former Governor of the Bank of England, Lord Mervyn King.

Personally I always like to hear what Diggers chairman Barry Eldridge has to say, especially when he gets fired up about mining and carbon taxes and such.

With everything being repealed instead of introduced this year, there’s every chance his blood pressure will be down, but there’s always hope something will raise his ire.

Companies sure to draw interest on Day One include Sheffield Resources, Sandfire Resources , and Northern Star Resources, which has been an outstanding performer this year and is The Roadhouse tip to pick up one the awards on offer at the Gala Dinner.

 

Session one presenters on Day Two will thank Sirius Resources for a full auditorium with Fraser Range nearologists in the crowd keen to claim that were able to sit within 20 metres of Mark Bennett.

 

For conference diehards Day Three promises good return for long-term investment of time with Gold Road Resources and Doray Minerals certain to add some sparkle to the opening session.

The pre-lunch session will be one to watch with Rox Resources, MacPhersons Resources, and Ram Resources – all promising stories in their own right – setting the stage for Blackham Resources managing director Bryan Dixon (if he’s still in the job by then) to spill the beans in regards to the company’s recent board room arm wrestle.

 

Throughout the week, we’ll be keeping an eye on how the market reacts to all the presentations and all the news that emanates from the conference, keeping a watch on how it all may, or may not, affect the share prices of the presenting companies.

We’re going to take a pretend portfolio encompassing a pretend $10,000 dollar investment in each just to see if there is indeed any movement, and if there is when it happens.

We’ll be watching to see whether there is movement before a company presents, or after – even during.

There is no scientific reasoning behind our study, we just need something to keep us occupied.

 

Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.

The views, opinions or recommendations of this article do not in any way reflect the views, opinions, recommendations, of The Resources Roadhouse.

The Roadhouse makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions.
 

Hi Ho, Hi Ho, it’s off to work we go

THE DRILL SERGEANT: Each week any number of junior exploration plays set out to drill their ground. Here’s a small selection of what’s been happening this week.

Commencement of multi-stage drilling program

Excelsior Gold (ASX: EXG) is about to kick off a multi-stage development and exploration drilling program at the company’s Kalgoorlie North gold project.

The company said the drilling program forms a critical part of its feasibility study to deliver high-grade open pit ore to the Paddington Mill under a recently-announced milling arrangement.

The drilling program is designed to:

Increase reserves within and around existing resources to help determine final open pit designs;

Extend known resources with a high probability of economic potential;

Explore for high grade plunge repetitions to the South of the known gold mineralisation at Zoroastrian;

Collect geotechnical information in order to optimise open pit designs; and

Undertake first pass drilling over a number of exploration targets generated from fluid flow and HyVista modelling.


Drilling to commence at Pencil Hill

Bisan Limited (ASX: BSN) has been advised a diamond drill rig is expected to commence drilling at the Pencil Hill prospecting licence in Botswana this week.

The program will entail drilling two diamond holes to a depth of 200 metres each to test for graphite and is expected to take at least two weeks and a further three weeks to prepare and send the samples to an independent laboratory for analysis.

Subject to the results of these two drill holes, Bisan can purchase a 30 per cent interest in the Pencil Hill PL.

If Bisan proceeds with the purchase, then it will also have a first right of refusal to increase its pre-IPO holding in Pencil Hill to 51 per cent.

Classic commences deep drilling

Classic Minerals (ASX: CLZ) has commenced a deep drilling program at the company’s Fraser Range tenement.

The drilling is to focus on four targets in the company’s hot zone’, centred on its A17 discovery, which is just 60kms from Sirius Resources’ Nova and Bollinger deposits.

The drilling program is based on the results from a high power Sub Audio Magnetics (SAM) Fixed Loop electromagnetic (FLeM) survey carried out in May, which identified a conductor 1km long, interpreted to extend from 40m to at least 500m depth below existing drilling at prospect A17, which intersected zinc and copper mineralisation.

A further three conductors were identified at depth, which extended the conductive target ‘hot zone’ in the area to over 8km in strike.

Two of the new deep targets are along strike from the Alpha copper deposit.

“We’re backing our own judgment, supported by the results of our geophysical survey work and shallow drilling to date, that we’re right in exploring to the north of the proven Sirius discoveries, although most other activity in the area is to the south and west of Sirius,” Classic Minerals managing director Justin Doutch said.

“We’ve made two potentially significant discoveries – Alpha copper deposit and Mammoth nickel-copper deposit– the only new discoveries in the Fraser Range region last year – which indicate we’re in the right spot.

“Now we’re looking for good results in the new conductors at depth to confirm our interpretation of our work to date.”

Joint Venture announcements

THE BOURSE WHISPERER: As they say in the classics; it’s better to have 50 per cent of a project than 100 per cent of no project.

Thunder Bay North Earn-in and Option to Joint Venture

Panoramic Resources’ (ASX: PAN) wholly-owned subsidiary, Panoramic PGMs (Canada) has signed an Earn-in with Option to Joint Venture Agreement with Rio Tinto Exploration Canada (RTEC), a wholly-owned subsidiary of Rio Tinto (ASX: RIO).

The deal will result in the two entities consolidating their respective Platinum Group Metal (PGM) projects in Ontario, Canada.

The consolidation includes Panoramic’s Thunder Bay North project and RTEC’s Escape Lake project.

Escape Lake is surrounded on all sides by Panoramic’s project.

RTEC has an option to spend up to CAD$20.25 million over the next five and a half years to earn a 70 per cent interest in Thunder Bay North.

If RTEC do so, Panoramic will acquire a 30 per cent interest in Escape Lake.

Panoramic has been granted certain rights to acquire 100 per cent of Escape Lake in the event RTEC does not proceed with the Earn-in/JV.

“Panoramic believes RTEC’s interest in the Thunder Bay North project and the terms of the proposed Earn-in/Joint Venture demonstrate the potential of the consolidated property,” Panoramic Resources said.

“Panoramic believes the consolidation of the Thunder Bay North and Escape Lake projects potentially gives the consolidated project significant critical mass.”

Farming into German potash

Potash West (ASX: PWN) is earning an interest in a potash project in Germany.

PWN has the right to earn up to 55 per cent of the JV by funding early exploration.

The licence applications are located in the South Harz potash district, a region where potash has been mined since 1896 and is still being produced.

Over 500 million tonnes of potash ore was extracted from the South Harz region, producing over 100 million tonnes of potash fertiliser.

The JV has applied for two exploration licence areas, both of which have historical drilling that intersected potash mineralisation over large areas.


Silver Lake buys out Newcrest Mount Monger stake

Silver Lake Resources (ASX: SLR) has struck a deal with Newcrest Operations Limited to acquire Newcrest’s (ASX: NCM) 15 per cent satke in the Mount Monger Joint Venture, which includes the Majestic and Imperial projects located 35 kilometres south east of Kalgoorlie in Western Australia.

The acquisition will take Silver Lake’s ownership in the project to 100 per cent.

Consideration for the JVI is $1.527 million cash payable in 2 tranches: Tranche 1: $1.027 million (paid); and Tranche 2: $500,000 payable on completion, which is expected to be 5 December 2014.

“A plan is in place to drill test to the west of the Imperial deposit,” Silver Lake said.

“Re-interpretation of previous geophysical work suggests that there is possibly another mineralised structure in the hangingwall of the Imperial deposit.

“Silver Lake is performing mining method and optimisation studies for both the Majestic and Imperial deposits.”


Stonehenge signs MoU with Korean resources development company

Stonehenge Metals (ASX: SHE) has signed a non-binding memorandum of understanding (MoU) with a KOSDAQ listed resource development company, Korea Resources Investment & Development Inc (KORID).

The company explained the MoU provides a framework for it to negotiate a binding term sheet agreement, which would set out the key terms of a Joint Venture (JV) between KORID and Stonehenge.

The purpose of the JV is to accelerate the development of the mineral exploration rights and properties held by the wholly-owned Korean subsidiary of Stonehenge, Stonehenge Korea, with a particular focus on the vanadium and uranium potential of the company’s Daejon project.

“The MoU with KORID is a pivotal event for Stonehenge in Korea,” Stonehenge Metals chairman Richard Henning said.

“This document outlines the broad terms and principles upon which Stonehenge and KORID can confidently negotiate a binding agreement.

“A JV with KORID would materially enhance our efforts to extract value from the significant vanadium and uranium potential at Daejon.”

Graphite: The market’s new favourite

THE BOURSE WHISPERER: Graphite, it seems, is the ‘new market darling’ of the resources sector.

During a recent day of trading in the boards of the Australian Securities Exchange (ASX) graphite was the key word on a number of company releases.

Lamboo Resources (ASX: LMB) proclaimed: “Significant Thick Flake Graphite Intersections From Phase 2 Drilling Program at Geumam Graphite Project.”

Not to be outdone Uranex (ASX: UNX) released an announcement titled: “LARGE GRAPHITE INTERCEPTS AT NACHU,” in regards to its graphite project in Tanzania

Closer to home Buxton Resources (ASX: BUX) added a healthy 25 per cent to its share price by announcing:  “27 METRES at 13.4 per cent TGC (total graphitic carbon) – YALBRA GRAPHITE DRILLING,” for its project located east of Gascoyne Junction in Western Australia.

Gold and base metals-focused company Montezuma Mining (ASX: MZM) was determined to join the fun by bouncing out the Buxton release to ensure market followers knew it holds a large chunk of Buxton shares (15 per cent).

A smart move as it turned out with Montezuma shares also enjoying a healthy eight per cent jump for the day’s trade.

A couple of days later Kibaran Resources (ASX: KNL) reported RC drilling at its Epanko deposit in Tanzania had surpassed its expectations.

Then up jumped Castle Minerals (ASX: CDT) to claim a new graphite discovery while drilling its Wa gold project in Ghana.

Roadhouse Regular Correspondent and market analyst, Gavin Wendt recently identified opportunities in the graphite space to be quite considerable.

“The European Commission has included graphite amongst 14 materials that it considered high in both economic importance and supply risk,” Wendt wrote in a recent article.

“The British Geological Survey has also listed graphite as one of the materials to most likely be in short supply globally.

“China, India and Canada are currently responsible for most of the world’s graphite mining and processing, with China producing the lion’s share of between 70 to 80 per cent; however China’s production comprises 70 per cent amorphous and lower-value, smaller flake graphite.”

Wendt indicated the future demand for graphite is most likely to be driven by new technologies, in particular Lithium-ion batteries, fuel cells, vanadium redox batteries – and further into the future, pebble-bed nuclear reactors.

“Graphite demand from li-ion batteries has grown from virtually zero five years ago to almost 100,000 tonnes per annum and now represents 20 per cent of the flake market and continues to grow at 20 per cent annually,” he said.

“The fuel cell market is now a billion-dollar-a-year industry and many products are now going mainstream.”

A recent Industry Report from Patersons Securities, suggested investors should consider some important factors before taking the graphite plunge.

Patersons has come up with six key factors it considers to be important in evaluating investment opportunities in the graphite sector.

“While size of deposit and grade are key metrics in evaluating mining projects, the evaluation of graphite projects is more complex,” Patersons said.

“Out of the myriad of considerations, key attributes (in addition to size of deposit and grade) are flake size distribution, purity of the graphite and the extent to which the company has signed binding sales agreements.”

Factor 1 – Deposit size and quality

Evaluating the first factor, Patersons scored companies out of a total of 10 as it takes into consideration the size (20 per cent) and grade (30 per cent) of the deposit as well as the Enterprise Value per tonne (EV/t) of contained graphite (50 per cent).

The company explained its reasoning encompasses the traditional size and grade metrics of a normal mineral deposit (where bigger and higher is better) and adds an element of valuation to the mix with the (EV/t) metric.

Factor 2 – Location

Patersons’ second factor scored the risk of project location using the Fraser Institute Annual Survey of Mining Companies 2013 (Policy Perception Index), which it supplemented with a subjective score for non-ranked countries.

“Country risk is often underestimated until the risk is realised, often with significant consequences for investors,” Patersons explained.

Coming out on top in the location stakes was Talga Resources (10/10) with its deposit in the Fraser Institute Survey’s number one ranked country, Sweden.

Lamboo Resources also did well (9/10), however this was in relation to its deposit in Western Australia rather than the company’s Geumam graphite project, which is located in South Korea.

The lower scores on this scale were given to companies with African and Sri Lankan projects.

Factor 3 – Flake size distribution

Patersons’ third factor scored the flake distribution, or suitability, of the graphite produced to be used in higher value applications.

If there is one aspect of graphite projects to remain a mystery to most investors, flake size and distribution of a graphite deposit would be it and probably requires more explanation than others.

Patersons said this particular aspect was one of the hotly-debated graphite project factors.

It put the argument down to some companies emphasising its importance while others play it down.

According to Patersons the companies falling into the latter camp are usually the companies that don’t have elevated quantities of larger flakes in their deposit.

“However, a number of facts about flake size are true, firstly, the larger the flake the higher the purity of the graphite and secondly, the larger the flake size the higher the price (all else equal),” Patersons explained.

“In addition, as certain end use applications require certain minimum specifications of graphite, the demand profile for different flake sizes (among other factors) is a key driver in project decisions.

“For that reason, projects with particularly large proportions of ultrafine flake graphite may not proceed into development as this is the segment of the market most at risk of over-supply.”

 

Flake size distribution. Source: Patersons Securities

Factor 4 – Product purity

Patersons fourth factor to keep in mind when considering graphite projects is the purity of the graphite after simple processing – before it is subjected to acid or thermal upgrading.

“The purity of the graphite is particularly important for the higher value end uses like lithium-ion batteries and is a key determinant in saleability of the product,” Patersons said.

“It is also a key factor in the cost of production, as if further processing is required to make the product saleable this could dramatically increase the operating cost.”

Factor 5 – Product off take

Obviously there is little point producing any commodity if there is no market, or customer, ready to receive it.

This has been highlighted recently with the state of the uranium market, which is in limbo as it waits for anticipated Chinese demand to kick in.

It is for reasons like this Patersons declared signing binding off take agreements and Memoranda of Understanding (MoU) for intended production is important for intending graphite producers.

“The graphite market is largely one of contracted sales agreements between buyers and sellers for product meeting the buyer’s specific requirements,” Patersons observed.

“For this reason a formal sales agreement with buyers for a substantial portion of the intended production is of particular importance (there have been cases of companies being forced to close because they could not sell a large enough portion of product produced).”

Factor 6 – Timeframe to production

As with all commodities, proving up a Resource or Reserve is one thing, but as gold producers such as Doray Minerals (ASX: DRY) have proved, getting it out of the ground and shipping it out is more conducive to keeping shareholders happy.

“The interest in securing ex-China sources of supply coupled with Chinese closures and the growth in higher specification product demand has resulted in a window of opportunity to introduce new supply to the market,” Patersons said.

“The race to bring the right product to the market and secure those sought after offtake agreements means that those companies further advanced in their timeline to first commercial production have an advantage over those further behind (on the assumption that they have the required product specifications).”

Gold Road receives final Gruyere drill out numbers

THE DRILL SERGEANT: It will be interesting to see what Gold Road Resources (ASX: GOR) has to say in its presentation slot at Diggers & Dealers next week.

The company has received the remaining gold assays from resource definition drilling on the Gruyere deposit.

Gold Road said it is compiling the final assay information in ongoing resource estimation activities, which are aimed to produce a Maiden Mineral Resource for the Gruyere deposit within the September 2014 Quarter.

The new gold assays have been derived from three separate drilling programs.

The first of these comprised 20 Reverse Circulation (RC) drill holes, which in‐filled on a 50 metre section spacing to an approximate depth of 150m.

Gold intercepts from the 50m section infill program included:

14GYRC0124
85 metres at 1.38 grams per tonne gold from 35m, including 56m at 1.65g/t gold from 35 metres; and 39m at 3.66g/t gold from 123m, including 17m at 1.73g/t gold from 128m, and 14m at 7.71g/t gold from 148m, including 6m at 15.55g/t gold from 153m or 3m at 25g/t gold from 156m;

14GYRC0120
49m at 2.53g/t gold from 125m, including 39m at 3.02g/t gold from 134m; and

14GYRC0135

5m at 2.94g/t gold from 64m, 21m at 1.61g/t gold from 73m, and 35m at 2.1g/t gold from 97m.

 

Gruyere plan projection illustrating interpreted geology and location of
recent drilling on 50 metre infill sections. Source: Company
announcement

 

The second program was 26 close-spaced RC holes the company designed to test short scale continuity of geology and grade.

Intercepts from the Detailed Drilling Program included:

14GYRC0114
14m at 5.05g/t gold from 22m, including 12m at 5.79g/t gold from 22m;

14GYRC0090
59m at 1.23g/t gold from 43m, including 22m at 1.45g/t gold from 43m, and 8m at 1.64g/t gold from 70m; and 17m at 3.33g/t gold from 113m; and

14GYRC0093
14m at 1.59g/t gold from 17m, including 7m at 2.67g/t gold from 24 metres; 52m at 1.64g/t gold from 35m, including 10m at 2.42g/t gold from 36m, and 10m at 2.45g/t gold from 77m; 5m at 1.83g/t gold from 90m, including 3m at 2.48g/t gold from 92m; and 21m at 1.29g/t gold from 99m, including 7m at 1.9g/t gold from 99m and 6m at 1.59g/t gold from 110m.

The final program consisted of extensions drilled by re‐entry of 13 previously drilled holes, which had ended in mineralisation.

Intercepts from the Extensions to Existing Drilling included:

13GYRC0033
46m at 1.13g/t gold from 102m, 22m at 2.44g/t gold from 163m, and 11.9m at 1.71g/t gold from 192m;

13GYRC0050
35.8m at 1.24g/t gold from 170.5m, and 44.5m at 1.34g/t gold from 220m; and

13GYRC0058
70m at 1.46g/t gold from 103m, including 19m at 1.91g/t gold from 111m, 8m at 1.95g/t gold from 133m, 8m at 1.67g/t gold from 152m, and 2.4m at 3.95g/t gold from 164.4m.

“The 50 metre sections infill program returned intersections comparable to previous drilling on 100m spaced sections to depths of approximately 150 metres,” Gold Road Resources said in its ASX announcement.

“This provides excellent confirmation of the geology and grade of mineralisation between sections along the main 1,800m long zone of the Gruyere deposit.”

Email: perth@goldroad.com.au

Website: www.goldroad.com.au

Rox encounters more high-grades at Musket

THE DRILL SERGEANT: It’s probably fair to say representatives of Rox Resources (ASX: RXL) will have a spring in their collective step at Diggers & Dealers next week.

The company has announced an encounter with further massive high-grade nickel sulphide intersections from recent Reverse Circulation (RC) drilling carried out at the Musket prospect.

Musket forms part of the company’s 100 per cent-owned Fisher East nickel project, located 500 kilometres north of Kalgoorlie in Western Australia.

Rox is conducting the RC drilling at Musket to define and delineate additional near-surface nickel sulphide mineralisation as part of a resource estimation it currently has underway.

“These new RC results back up the results we released from Musket a few days ago,” Rox Resources managing director Ian Mulholland said in the company’s announcement to the Australian Securities Exchange.

“It looks like we have identified a near-surface, thicker high-grade zone, which is consistently running above eight per cent nickel.

“The grades being recorded in this zone at Musket are similar to those intersected at Cosmos during the early exploration stage of that deposit, and those grades made the mine.”

The latest high-grade massive nickel sulphide intersections achieved include:

MFEC071
4 metres at 8.4 per cent nickel from 1 78m, including 2m at 14.7 per cent nickel; and

MFEC072

5m at 8.4 per cent nickel from 205m, including 3m at 12.1 per cent nickel, including 1m at 20.7 per cent nickel from 206m.

 

MFEC072 RC sample piles. Source: Company announcement

 

A further RC hole, MFEC074, drilled at the top of the main mineralised zone returned 1m at 3.6 per cent nickel from 142m, while hole MFEC073, drilled to the south of the mineralised zone did not return any significant result.

Rox said it is waiting on results from additional RC drilling at Musket, Cannonball and Corktree, which it expects to receive over the next two weeks.

The company has also completed an Aircore/RotaryAir Blast (RAB) drilling program, from which results are also expected within the next few weeks.

Email: admin@roxresources.com.au

Website: www.roxresources.com.au

Musgrave wins Fraser Range tenement ballot

THE BOURSE WHISPERER: Musgrave Minerals (ASX: MGV) will be another company keen to deliver its presentation at Diggers & Dealers next week.

The company has won first prize in a ballot for Fraser Range tenement EL 28/2405 in Western Australia, now named the Mamba project.

 

Location of Musgrave’s new Mamba project in the Fraser Range. Source: Company announcement

 

Musgrave was victorious over 10 other applicants in the ballot, which went before the WA Department of Mines and Petroleum’s Wardens Court recently.

The company has taken control of 61 blocks covering approximately 180 square kilometres.

Like all good Fraser Range tenements EL28/2405 is in the same belt as the Nova-Bollinger nickel-copper sulphide discoveries of Sirius Resources (ASX: SIR).

Musgrave indicated the tenement is along strike from Sirius’ Nova deposit and only 5km from the Trans Australian rail line.

Musgrave’s technical team has commenced reviewing previous exploration conducted on the tenement and has already identified targets within the regional aero magnetics it considers warrant follow-up exploration.

“We are very pleased with the positive ballot outcome for the tenement in a very competitive process,” Musgrave Minerals managing director Rob Waugh said in the company’s announcement to the Australian Securities Exchange.

“The tenement is in an exceptional location within the very prospective Fraser Range and we look forward to commencing exploration when the tenement is granted.”

Musgrave explained the area covered by EL28/2405 was previously held by Ponton Minerals and was subject to a five year compulsory partial surrender in late 2013 prompting widespread interest amongst explorers.

Musgrave is in a strong financial position with $6.1 million in the bank, meaning it is well cashed up as far as junior exploration plays go.

The company is eager to conduct an aggressive exploration campaign over the new Mamba project tenement once it is granted.

Upon grant Musgrave indicated it will undertake detailed surface geochemical and ground electromagnetic surveys prior to drilling.

Email: info@musgraveminerals.com.au

Website: www.musgraveminerals.com.au

Northern Star increases Jundee Estimate by 68 per cent

THE BOURSE WHISPERER: Northern Star Resources (ASX: NST) is gearing up for a big time at the annual Diggers & Dealers conference next week after declaring it anticipates increasing the mine life at its Jundee gold mine in Western Australia.

The rise in the company’s expectations stem from an increase to the project’s total JORC Resource estimate by 68 per cent, taking it to 851,000 ounces.

Northern Star said the outlook for Jundee, which recovered 75,319 ounces in the June Quarter, has been strengthened by its Reserve component remaining almost steady at 383,000 ounces.

This is despite 138,000 ounces of gold being produced in the six months following the previous Reserve estimate in December 2013.

The new Resource estimate for Jundee comprises 4.2 million tonnes at 6.4 grams per tonne gold for 851,000 ounces of gold, including Reserves of 2.5 million tonnes at 4.8g/t for 383,000 ounces.

 

Jundee Resources. Source: Company announcement

 

Northern Star also indicated an in mine Exploration Target in addition to the above stated Mineral Resource in the range of one to 1.5 million tonnes at eight to 12g/t gold.

The company said further drilling will be required over the coming twelve months to test and validate the Exploration Target that sits within the same geological setting hosting the Jundee deposit.

“The increased Resource estimate demonstrates the potential for substantial additions to Jundee’s mine life,” Northern Star Resources managing director Bill Beament said in the company’s announcement to the Australian Securities Exchange.

“We have identified numerous target areas around existing resources as part of our strategy to grow the mining inventory at Jundee.

“We also have many new areas which we believe are highly prospective, providing further scope to grow the resource base and mine life.

“The scale of production, its high grade, low costs and strong exploration upside will allow Jundee to make a substantial contribution to Northern Star for many years.”

The Jundee resource upgrade follows the substantial increase of the resource at the company’s othe recently-acquired Pegasus deposit at the Kundana mine, also in WA, to 763,000 ounces at 11.4g/t gold.

Email: info@nsrltd.com

Website: www.nsrltd.com

West African pleased with Mankarga 5 Scoping Study

THE BOURSE WHISPERER: West African Resources (ASX: WAF) has received the results of a Scoping Study of a heap leach starter project on the company’s Mankarga 5 project, located in Burkina Faso.

The scoping study was based on annual throughput of 1.6 million tonnes per annum, which the company explained was in line with the capacity of a second-hand plant it purchased earlier this year.

The base case was stated assuming 100 per cent project basis and a gold price of US$1,300 per ounce.

All amounts are in US dollars unless otherwise stated.

Highlights include:

IRR of 57 per cent with a 16 month payback on capital costs;

Free cash flow of $103 million after capital costs NPV (5%) of $84 million;

Pre-production capital of $35 million plus working capital and contingency of $9 million;

Estimated average annual gold production of 59,400 ounces for first three years;

Estimated average annual gold production of 44,100 ounces for life of mine;

Current study mine life of 5.4 years;

Life of mine strip ratio 1:1;

Cash costs of $614 per ounce; and

All-in sustaining cash costs of $685 per ounce (including cash costs, royalties, refining & sustaining capital).

 

Simplified process flow sheet. Source: Company announcement

 

“The study has shown that Stage 1 of the development of Mankarga 5 has a very short payback, high internal rate of return and NPV two and a half times capital costs,” West African Resources Managing Director Richard Hyde said in the company’s announcement to the Australian Securities Exchange.

“The study marks an important milestone for us as we can now transition from explorer to a low capital cost developer, which is an excellent achievement only six months after acquiring the Mankarga 5 project.”

Email: info@westafricanresources.com

Website: www.westafricanresources.com