Thou Shalt Not COVID Thy Neighbour’s Economy

COMMODITY CAPERS: The world economy has endured COVID-19 like a pimply-faced teenager encounters puberty.

Both enjoyed an 11-year growth spurt that suddenly stopped, giving time for reflection on where they are now, and what clothing they are likely to wear until they have to contend with a middle-age spread.

When COVID-19 hit the headlines economists and predictors of fiscal fortunes recognised there was bound to be some reversal of prosperity, however after 11 years of growth, nobody was as prepared for what was to come as they thought.

True, we had been through the Global Financial Crisis (GFC) of 2008/9, but that was a man-made crisis, from the office-bound finger tips of greedy financial types, all of whom had a reasonable idea of what they may be getting us into, and had sound Plan Bs in place to ensure they would bounce back – again – as they had the time before and the time before that.

The ‘Global’ moniker attached to the GFC was also misleading as it was truly a first world affliction, while COVID-19 has truly hit on a global scale, having no discrimination of social standing nor Gross Domestic Product.

Australia weathered the stormy GFC seas thanks mainly to mainland China and its infrastructure drive, a policy that is still contributing to sustained high prices for the bellwether commodities of iron ore and gold.

COVID-19 may be influencing current iron ore pricing, but up until it struck, Australian producers were enjoying a buoyant run pre-pandemic that was fuelled by the misfortunes of global competitors, mainly Vale in Brazil and the collapse of the Brumadinho tailings dam, which made it difficult to re-rail operations.

It has been reported that Vale is back in the game, hitting export numbers of 5 million tonnes per week, however to keep the Brazilian government happy pressure is mounting to increase those figures to six million tonnes per week.

The Department of Industry, Science, Energy and Resources, Commonwealth of Australia Resources and Energy (DISER) had forecast Australian iron ore export earnings to top $100 billion in 2019-20, and in its recent March Quarterly Report suggested this, “appears to have been achieved”.

The iron ore price recently hit US$120 per tonne driven by demand, mainly from China, and tightness in the medium grade fines segment.

Gold has also been making the most of global pandemic-related panic, which was recently pointed out by good friend of The Resources Roadhouse, industry analyst Gavin Wendt.

Wendt opined that although mainstream media sought to correlate gold’s rise with the Covid-19 pandemic, just like iron ore, it too had its origins of ascent well before the outbreak reached the airwaves.

He dated the start of the latest gold run way back in 2015, when the gold price was sitting around US$1,050 per ounce.

Cries of industry joy were again heard in 2018 when gold hit around US$1200 per ounce.

Looking at gold’s recent peak of around US$2,050 per ounce, Wendt calculated gold to have almost doubled in price over the past five years, and is up by two-thirds over the past two years alone.

“Gold’s ascent began five years ago, with interest rates low and question marks beginning to be asked about the world economy,” Wendt explained.

“Interest rates were kept low during and subsequent to the GFC, as a means of accelerating and maintaining economic growth, but have never been allowed to return to ‘normalised’ levels.

“There are inherent dangers in keeping interest rates too low for too long, as they create asset bubbles and lead to artificially high equity markets, as investors chase returns.”

Gold has long been a safe haven, physical gold that is, which in times of strife, in the form of gold bars, or bullion, as it is known to its friends has been the way people have protected their wealth.

They buy it, store it, and every now and then take it out and look at it, then put it away again, if not in the shape of bars, perhaps as jewellery, either way the physical stuff traditionally been more favourable than paper, be that money or shares.

Until recently, that is, when the most renown of all investors, Canadian wunderkind Warren Buffet forked out US$564 million for a stake in Barrick Gold Corporation.

It’s not known for certain whether he was aware that Barrick had sold its stake in the Kalgoorlie Superpit, but Buffet was not setting a trend, but merely following one that had been kicked off by Australian fund manager, David Paradice, who was followed down the golden adit by London-based compatriot, Michael Hintze.

Have they all read the gold tarot cards correctly? Only time will tell, but safe to say such big investments from such big players can only encourage others to follow suite.

Nickel prices were already on the swing in 2019, way before COVID-19 had emerged from a Chinese wet market.

In the second half of 2019, the metal was shifting between US$10,400 and US$18,600 a tonne, averaging US$13,900 a tonne, thanks mainly to uncertainty from Indonesia’s planned nickel ore export ban.

Prices fell in early 2020 hitting a market low of US$11,055 per tonne, until July when a major boost in the shape of Tesla boss, Elon Musk appeared, who openly pleaded with nickel miners around the world to pull their collective fingers out.

“Any mining companies out there, please mine more nickel,” Musk pleaded.

“Tesla will give you a giant contract for a long period of time, if you mine nickel efficiently and in an environmentally sensitive way.”

The market reaction was similar to the rally Musk set off in 2017 for tin when he expounded on the virtues of that particular commodity in the production of modern gadgetry.

This time he spoke nickel and the spot nickel price reacted accordingly, rebounding to US$13,460 per tonne on the London Metals Exchange.

“Given its exposure to China’s stainless steel and electric vehicle (EV) production, there is wide consensus that nickel is one of the best placed base metals to rebound as the world, and particularly China, starts to recover economically from the COVID-19 pandemic,” DISER said.

Regardless of your analyst of choice, most predict a rise in the fortunes of nickel in coming years with some 1.1 million tonnes earmarked for use in the production of 30 million Electric Vehicles (EVs) by 2030.

That rise is anticipated to be shared by copper, of which around 4.1 million tonnes is expected to be used in making our roads cleaner and quieter.

A double-edged sword of COVID-19 and a general pessimistic world economic outlook conspired early in 2020 to bring copper prices down to their lowest levels since 2016 at US$4,620 per tonne, since then it has fought back to be knocking around the US$6,000 mark.

Australia’s recent fall in mined copper production, around 4.6 per cent, has not been directly due to any COVID-19 issues, but has been more in line with the closure of two Western Australian mines – the Nifty and Golden Grove mines.

Production from South Australia also fell with the closure of Hillgrove Resource’s Kanmantoo operation and the changing of ore bodies at Oz Minerals’ Prominent Hill mine.

Zinc prices have not had a fun time during the pandemic and have been predicted to remain so for the duration of 2020.

According to the boffins at DISER, zinc prices should enjoy a modest rise of around 3.1 per cent to US$2,055 a tonne over 2020 to 2022.

Australia’s zinc production is expected to gain traction increasing from an estimated 1.3 million tonnes (in metallic content terms) in 2019–20 to 1.6 million tonnes in 2021–22, however DISER forecasts Australia’s zinc export earnings to decline from $3.5 billion in 2019–20 to around $3.2 billion in both 2020–21 and 2021–22 based on an appreciating Australian dollar, despite increasing production and rising prices.

Lithium continues to be a conundrum wrapped up in onion clothing having suffered due to a COVID-19 induced slump in global automotive sales globally.

Whether it has been needed or just because they can, China upped its imports of lithium carbonate by a whopping 544 per cent year-on-year for April 2020 and up 284 per cent for the four months, January to April 2020, on a year-on-year basis as it cashed in on falling prices to place large lithium orders.

China also increased its imports of lithium hydroxide by 262 per cent, month-on-month for April as trade reopened after the COVID-19 outbreak.

Throw in an offtake agreement or two the country inked during COVID-19, and one would have to assume its appetite for lithium remains strong.

South Korea was not to be outdone and increased importation of lithium carbonate by 28 per cent month-on-month in April, again as trade resumed post the COVID-19 outbreak.

Although we in Australia are yet to see any substantial uptake in the electric vehicle market, at least not until prices come down to generate interest, sales elsewhere are healthy enough.

This resulted in DISER to predict, “global lithium demand to rise from 258,000 tonnes (lithium carbonate equivalent) in 2020 to around 414,000 tonnes by 2022 as car plants in Germany and China commence production and ramp up, after being slowed down by COVID-19”.

“Electric vehicles sales are forecast to drop by 18 per cent in 2020 due to the effects of COVID-19,” DISER said.

“Global electrical vehicle sales slumped by 44 per cent for the March quarter, but were offset by stronger European sales based on emissions restrictions due to come into force on 1 January 2021.”

If an unwinner were to be declared at this time it would be Australian LNG exporters with prices falling to record lows.

As countries have knuckled down to contain COVID-19 there has been a proportionate drop in gas and LNG demand across global power, industrial and transport sectors, which has increased the over-supply of LNG, thereby resulting in weakened prices.

How long we have to wait for these markets to rebound is anybody’s guess, however with vaccines rumoured to be closer to becoming an actual thing, countries will again be looking to kick-start their economies and spot and contract LNG prices will once again be on the rise.

According to DISER, Australia exported some $47 billion of LNG in 2019–20, a figure way down on the previous year, in fact 4.6 per cent lower than 2018–19.

Australia’s LNG export earnings are forecast to fall back sharply again in 2020-21 by 26 per cent to $35 billion.

“Oil prices are a key sensitivity for Australian LNG export earnings, and there is substantial uncertainty underpinning the outlook for oil prices,” DISER said.

COVID-19 and the inability of OPEC+ countries to play nicely have resulted in wild fluctuations of oil prices throughout 2020, although this instability has abated since May 2020 that still suggests a high degree of uncertainty in the short-term.

“This uncertainty presents significant risks to the outlook for the Australian commodity sector,” DISER explained.

“Although Australia is not a major oil producer or exporter, almost three quarters of Australian LNG exports are sold under oil-linked long-term contracts.”

It has to be of little surprise that China is mentioned throughout – and in most economic analysis – as the country is an important trade partner to most others.

However, a significant factor to be included in any global economic equation has to be the probability of a Donald Trump re-election.

When elected in 2016, Trump had his sights on a trade war with China, and the upshot is that for the majority of 2019, Australian trade with China was negatively affected by tensions with the US.

This wasn’t helped by our own Prime Minister rattling the Chinese COVID-19 cage by calling for an investigation into the pandemic spread.

Since then there has been a Sino challenge to the import of Australian barley, beef, and most recently wine.

Although these commodities don’t lend much to the omnipotent Chinese infrastructure build as those we dig out of the ground, they do reflect how the country’s elite wish to enjoy the western things in life.

Trump, if you will pardon the pun, is the Joker in the pack and his possible re-election could extend the ongoing trade tensions that were in place before we all caught the nastiest of colds.

Great Southern Mining Intersects Cox’s Find Gold Mineralisation

THE DRILL SERGEANT: Great Southern Mining (ASX: GSN) reported gold intersections from Phase 2 RC drilling at the company’s 100 per cent-owned Cox’s Find project, in the Laverton Gold District of Western Australia.

Great Southern Mining explained this latest phase of drilling had focused on two key along-strike targets to the north of the Cox’s Find deposit, known as Targets 2 and 3.

Highlights included the intersection of gold mineralisation in first-pass RC drilling at two key along-strike targets located 400m (Target 2) and 1km (Target 3) north of Cox’s Find.

Best results include:

8 metres at 1.1 grams per tonne gold from 91m, including 2m at 3.2g/t gold;
6m at 1g/t gold from 114m, including 2m at 1.7g/t gold; and
13m at 0.7g/t gold from 34m, including 1m at 1.7g/t gold.

The newly identified mineralised zones appear open along strike and at depth with the recent results demonstrating structural prospectivity of the northern corridor.

Targets 2 and 3 represent only the first two of several along-strike targets the company has earmarked for drilling, which includes multiple areas further to the north of Target 3.

High-priority follow-up drilling of Targets 2 and 3, plus these other key structural targets is currently in the planning stage.

“These results represent a significant success for GSN,” Great Southern Mining chief executive officer Sean Gregory said in the company’s announcement to the Australian Securities Exchange.

“They demonstrate that gold mineralisation is not constrained to the Cox’s Find deposit and is evidenced for at least a further one kilometre along strike.

“They also show that historical RAB drilling in these northern areas by previous owners stopped short of genuine target depth in multiple zones.

“In short, the results substantially increase the overall prospectivity of the target corridor to the north of Cox’s Find.

“It is also important to note that Targets 2 and 3 are only the first two of several high-priority regional targets set to be drilled.

“GSN intends to aggressively follow-up this success, and the other high-priority structural target zones, with an intensive drilling program in the short term.

“Finally, the Cox’s Find project area is likely to again increase.

“GSN has an additional approximate 50 square kilometres under application, immediately adjacent to Cox’s Find.

“This ground is highly prospective with known mineralised corridors that host nearby million-ounce deposits interpreted to strike right through it.

“This application follows the granting earlier this month of E38/3476, which lies immediately to the north of the successful drilling at Target 3.”








RareX Identifies nickel-copper-PGE Targets

THE DRILL SERGEANT: RareX Limited (ASX: REE) informed of the identification of numerous nickel-copper-PGE targets on the company’s 100 per cent-owned Byro East project, located in the Western Gneiss Terrane north-west of Geraldton in Western Australia.

RareX pegged Byro East in February this year for rare earths exploration, after which it carried out a geological review subsequent to the Julimar discovery of Chalice Gold Mines (ASX: CHN).

The review highlighted the presence of ultramafic intrusions within the Narryer Gneiss Complex.

RareX completed a further review of publicly available data that showed its new landholding contains extensions of the Milly Milly Intrusion and multiple other ultramafic intrusions contained within the Byro East ultramafic corridor and the Brockman ultramafic corridor.

The company is of the opinion that the geological setting of the Milly Milly Intrusions is analogous to the Gonneville Intrusion that hosts the Chalice discovery.

“RareX has now begun collating all previous exploration data and reprocessing historical geophysical data ahead of the ground being granted in the coming months, with ground-based exploration expected to follow on from Cummins Range and Weld North later this year,” the company said in its ASX announcement.





Eagle Mountain Mining seeks geological wisdom for Oracle Ridge

THE CONFERENCE CALLER: ASX-listed Western Australian junior Eagle Mountain Mining (ASX: EM2) could well be on the way to making its mark on the American copper sector. By Mark Fraser

The Perth-based company has just started a 2,000 metres diamond drilling program at its 80 per cent-owned Oracle Ridge project just north of Tucson in the US state of Arizona, where it is initially looking to substantially grow an historic close-to-surface underground skarn-hosted polymetallic deposit which hasn’t received much attention since mining of the ore body ceased during the 1990s.

This field program has been funded via a $3 million capital raising conducted on the ASX earlier this year.

As it stands Oracle Ridge has an NI43-101-compliant measured, indicated and inferred resource estimate of 11.76 million tonnes of ore grading 1.57 per cent copper, 17.47 grams per tonne silver and 0.18g/t gold for a contained 409 million pounds of copper, 6.8 million pounds of silver and 68,000 gold ounces.

While one of the key aims of the current field program is to boost this resource two-to-three fold, past drilling in the area has also indicated there is further mineralisation outside of the resource’s footprint – with results like:

7.7 metres at 5.11 per cent copper, 0.72g/t gold and 55.8g/t silver, and
7.6m at 4.63 per cent copper, 0.74 per cent gold and 43.06g/t silver, catching the company’s eye.

In addition, the exploration house is trying to determine if there is a copper porphyry located beneath Oracle Ridge – a proposition not out of the question given the geological profile of the other major copper deposits found along the Arizonan section of the Laramide Arc.

Speaking before his presentation at the RIU Resurgence Conference, Eagle Mountain chief executive Tim Mason told Resources Roadhouse that many of the high-grade skarn-based mines found around Oracle Ridge had porphyries sitting beneath them.

“In our case the porphyry has never been found – and the reason for this is there is an intrusion just below the deposit, which would effectively have masked any geophysics conducted in the area,” Mason noted.

“This alone presents us with some really big exploration potential.”

Also working in Oracle Ridge’s favour is the fact the project already has underground mining infrastructure in place, it is located in an established and vibrant mining jurisdiction and its current ore reserve is actually close-to-surface, being located near the side of a hill.

“Because it is a stacked zone, it lends itself to being opened up to multiple production fronts … (which means) we can achieve higher production rates,” Mason later said during his RIU Resurgence Conference presentation.

“It is amenable to a lower cost mining operation compared to, say, a deeper ore body when you have to get the ore up from depth.

“So higher production rates and lower costs certainly bode well for our mining studies going forward.”

Eagle Mountain’s second Arizona project is the greenfields Silver Mountain, which sits north west of Phoenix and where previous drilling has identified highly anomalous assay values as well as the presence of porphyry indicator minerals – including molybdenum and bismuth.

Mason said while the company was focused on advancing Oracle Ridge over the next 12 months, it would not lose sight of Silver Mountain as this project obviously had plenty of potential.

“We’ve just finished off a geophysics program there,” he added.

“Eagle Mountain has also been doing a raft of mapping, it’s been following up on old targets and we’ve had crews out there in the last few weeks. But we have yet to start drilling it.”



Image Resources has Growth Options in Place

THE CONFERENCE CALLER: Having quickly established itself as Australia’s premier mid-tier heavy minerals (HM) producer, Image Resources (ASX: IMA) is now facing another major challenge – to find further feed for its hungry processing plant. By Mark Fraser

Although the company’s high-grade flagship operation Boonanarring – located just 80 kilometres north of Perth in its home state of Western Australia – has only another two-to-three years’ mine life left in it, Image has enough expansion options up its sleeve to make sure the project remains an ongoing concern.

First cab off the rank is Atlas some 70km to the north, where an already-established resource of 18 million tonnes of ore grading 6 per cent heavy minerals (HM), including a combined 15.8 per cent zircon plus rutile (Z+R), looks set to add another three years of dry mining production.

Following this are the North Perth Basin dry deposits of Red Gully (6Mt at 7.7% HM; 15.5% Z+R), Regans Ford (9.9Mt at 9.6% HM; 14.3% Z+R), Helene/Hyperion (18.2Mt at 4.8% HM; 14% Z+R), Gingin South (8.1Mt at 6.1% HM; 13.5% Z+R) and Gingin North (2.4Mt at 5.5% HM; 9.1% Z+R).

All up this equates to an extra 93 million tonnes at 6.3 per cent HM; 17 per cent Z+R on top of Boonanarring’s current inventory of 30.3Mt at 6 per cent HM; 23.1 per cent Z+R.

Further exploration is expected to boost these figures.

In addition, Image has a number of dredge mining options – including Bidaminna (where the current resource sits at 45Mt at 3% HM and combined 6.5% Z+R), Titan-Telesto (140Mt at 1.9% HM; 12.8% Z+R) and Calypso (51Mt at 1.7% HM; 15.9% Z+R). Together, these add an additional 236Mt at 2.1 per cent HM and 11.5 per cent Z+R to the mining house’s inventory.

During the RIU Resurgence Conference, Image Resources chief financial officer John McEvoy indicated the company was initially looking to move its 3.7 million tonnes per annum Boonanarring wet concentration plant (WCP) to Atlas, where it had another three years of reserves, “with potential for further expansion”.

After that further relocation options included the neighbouring Hyperion and Helene deposits.

“At Boonanarring, as well as the potential to expand reserves to the north and west, there is also the potential to pump or truck ore from Gingin south and Gingin North,” McEvoy noted.

“For Atlas, there is the potential to increase mine life by pumping from the nearby deposits Hyperion and Helene.

“In addition, Red Gully and Regans Ford provide an option for a future WCP location.”

McEvoy added it was possible one of the dredging targets (particularly Bidaminna) could also be an option for a second operating centre.

Thus far this target has some fairly positive attributes – including a 90 per cent-plus HM grade, less than 5 per cent slimes, a 25-67 per cent leucoxene content as well as a 100Mt exploration target.

McIvoy told RIU delegates that while COVID had inflicted a, “limited impact on our operations”, the key issue for the first half of 2020 came from shipping, with China slow to ramp up production post its new year.

Image, he said, shipped 109,000 tonnes during that period.

However, since about May or June, Chinese demand has been increasing and the company remained on track to ship at its target rate of 90-100,000 tonnes in both the third and fourth quarters.

Moreover, this kept Image on track to meet its 2020 sales guidance of 300-330,000 tonnes, “despite the significant challenges thrown at us this year”.

One interesting development at Boonanarring, which looks set to moderately boost Image’s standing (or image) amongst the sustainability crowd, is the recent on-site construction of a 2.3 megawatt solar farm.

McEvoy told RIU delegates the resources house was now expecting to generate power within the next month.

“Whilst not providing a significant cost saving, renewable energy in terms of solar is expected to provide at least 25 per cent of our electricity requirements for the remainder of the mine life,” he said.



Kairos Minerals Identifies Kangan Project Gold Targets

THE DRILL SERGEANT: Kairos Minerals (ASX: KAI) timed its announcement of four new gold targets identified at the company’s 100 per cent-owned Kangan project in Western Australia with executive chairman Terry Topping’s presentation to the RIU Resurgence Conference.

The Kangan project is located 90km south of Port Hedland and 20km south-east of the new Hemi gold discovery of De Grey Mining (ASX: DEG).

Kairos Minerals identified the targets by way of results from a recently completed geochemical sampling program, together with interpretation of data from a recent aeromagnetic survey.

The new targets include a large gold target that sits in a favourable geological position for potential intrusive-hosted gold discoveries.

In light of the new discoveries, Kairos has decided to prioritise an initial aircore drilling program to test the targets next quarter.

Target 1 is defined by a major north-south structural zone which is coincident to a 3km long geochemical anomaly.

Target 2 is a gold-in-soil anomaly coincident with some magnetic features. Sulphur and Strontium are also elevated within this target area.

Target 3 is defined by a 3.5km long geochemical anomaly coincident with magnetic features and lithological boundaries.

Target 4 is a low-level gold anomaly coincident with a magnetic feature.

“Our systematic approach to exploration across the Pilbara Gold Project is continuing to generate results across a number of fronts,” Kairos Minerals executive chairman Terry Topping said in the company’s announcement to the Australian Securities Exchange.

“Results have been received from the recent Ultrafine soil geochemistry program at Kangan and together with newly interpreted aeromagnetic data, have generated four gold targets.

“The largest of these is a coincident geochemical and geophysical feature that sits on the margin of an intrusion in a geologically favourable position just 20 kilometres from De Grey Mining’s exciting Hemi discovery.

“We plan to commence heritage surveys with a view to testing these new targets as soon as possible, clearing the way for initial aircore drilling in October/November this year.”

Elsewhere Kairos has completed a ground-based geophysical program for the Fuego prospect, part of the company’s Croydon project, located 120km south of Port Hedland.

The survey also covered the Iron Stirrup and Old Faithful prospects at the Mt York project.

Approximately 190 line kilometres of survey has been completed to date and data processing and interpretation is now underway.

The survey is currently in progress over the Tierra prospect at the Croydon project, with 70 line kilometres planned to cover over 5km strike of the geochemical anomaly.

“RC drilling is continuing at the Fuego prospect with eight holes completed to date,” Topping said.

“We are encouraged by the initial indications from this drilling, with broad zones of sulphides intersected in conglomerates, sandstones and black shale.

“Assays are awaited and drilling is progressing to allow us to complete the initial program at Fuego.

“Drill pad preparation at the Mt York Project has now been completed and the rig will relocate from Fuego to Mt York as soon as the current program is completed, to drill extensions of the Mt York, Iron Stirrup and Old Faithful deposits.

“In total, we expect to drill approximately 5,000 metres across the two project areas.”







Venture Minerals Poised to Cross Production Threshold

THE CONFERENCE CALLER: Diversified junior Venture Minerals (ASX: VMS) looks set to become Australia’s next iron ore miner – possibly by late October – at its Riley hematite operation in north west Tasmania. By Mark Fraser

The company currently boasts a diverse exploration portfolio covering a slew of mineral commodities and recently consolidated its position in Western Australia’s premier volcanic massive sulphide country following its acquisition of some new gold/zinc-copper-gold tenure at its Golden Grove North project in WA’s mid-west.

During late August, Venture announced it had started dry screening and associated mining activities at Riley, which sits around 85 kilometres south west of the port city of Burnie.

A direct shipping ore project sourcing a deposit that sits at surface, Riley has current reserves of 1.6 million tonnes grading 57 per cent iron and an expected strip ration of zero.

While activities started at the site in 2013, they were subsequently suspended due to a softening of the iron ore price.

So far Venture has secured an off-take agreement with a tier-one global iron ore trader (Prosperity Steel) for the (current) two year mine life, assembled a highly experienced project team to advance the completion of the decision-to-mine study and reboot of operations, as well as signed road and port access agreements.

During the RIU Resurgence Conference, the company’s managing director Andrew Radonjic said dry screening and associated mining operations had already begun, while the project economics were currently well above the 2019 feasibility study numbers, which were based on a US$90/t-62 per cent iron case.

He also noted the resources house currently had $17 million in the bank, meaning it was in a good position to get Riley up and running.

“The feasibility study done back in August 2019 …. gave us a $13 million profit, and today obviously the price is US$125 per tonne, so (the profit margin) is significantly higher than that,” Radonjic said.

“So certainly, in terms of the project only having a two year mine life, we are certainly well positioned (with) these higher prices over the next couple of years.

“In the meantime, while we are doing our dry screening operations, we’re looking to lock down our funding for the wet screening plant – we’re looking at around about circa $5.5 to $6 million to get that done.

“So, we are probably targeting late next month, and obviously the company has a great opportunity to … move from explorer to producer, so a fantastic outcome for the company.”

In terms of Venture’s expansion of its Golden Gove North project, Radonjic said the acquisition of the strategic landholding in the Yalgoo Goldfield complemented the company’s emerging VMS discovery strategy.

The additional real estate contained a “fantastic intersection” of 22m at 0.76 grams per tonne gold, 0.64 per cent copper and 1.3 per cent zinc from 38m – including 10m at 1g/t old, 0.74 per cent copper and 2.1 per cent zinc from 50m – and sat on a trend between two recently delineated VMS targets (Vulcan North and Vulcan West).

As a result of the purchase, the company’s Golden Grove North project now covers 288 square kilometres of prospective land and sits just 10km from the Golden Grove polymetallic mine.

“So, the first thing we’ll be doing is heading up there to get an EM survey done,” Radonjic told RIU delegates.



Panoramic Resources Expects to Make Triumphant Return

THE CONFERENCE CALLER: After what has effectively been a four-year hiatus, Panoramic Resources (ASX: PAN) is on the verge of once again becoming a formidable Australian mid-tier base metals producer as it prepares to fully relaunch its wholly-owned Savannah nickel project in Western Australia’s East Kimberley. By Mark Fraser

The refurbished operation, which originally started life in 2004 sourcing open cut ore, had initially been put on care and maintenance during 2016, but was recommissioned in 2018 following the discovery of the Savannah North ore body. It was temporarily suspended earlier this year due in part to the COVID virus.

In July, Panoramic announced a new mine plan for the project based on a healthy reserve inventory of 8.3 million tonnes grading 1.23 per cent nickel, 0.59 per cent copper and 0.08 per cent cobalt for 102,000 tonnes of nickel, 48,500 tonnes of copper and 7,000 tonnes of cobalt.

With the addition of some further inferred resources (located near the above-mentioned reserves), this inventory increases to 10.4 million tonnes at 1.22 per cent nickel, 0.54 per cent copper and 0.08 per cent cobalt for 127,000 tonnes of nickel, 56 million of copper and 8,500 tonnes of cobalt in contained metal.

Panoramic is now confident the project will enjoy a life of around 13 years, with the majority of ore expected to be sourced from Savannah North. It is currently anticipated that the average annual production for years one to 12 will be 8,810 tonnes nickel, 4,579 tonnes of copper and 659 tonnes of cobalt in concentrate.

Over the mine plan, recoveries should average 83 per cent nickel, 98 per cent copper and 92 per cent cobalt based on the historical plant performance for Savannah ore as well as the metallurgical test work conducted on the Savannah North material during 2017.

Meanwhile, the average site all-in costs for years one to 12 of are $7.54/pound payable nickel (US$5.27/lb) net of copper and cobalt by-product credits.

In addition, there are some attractive base case financials involved – namely a pre-tax cash flow of $468 million and a net present value of $262 million.

Located 240 kilometres south of Kununurra, the Savannah project boasts two nickel sulphide ore bodies (Savannah and Savannah North), the underground mine, a 1 million tonne per annum processing plant, a tailings storage facility as well as a 14-megawatt power station.

All up, this represents a $100 million investment which should, according to Panoramic Resources managing director and chief executive Victor Rajasooriar, enable the operation to be brought into production straight away.

Speaking at the RIU Resurgence Conference, Rajasooriar described Savanah as a high-quality asset, with Savannah North being, “the prize that we were going into”.

“When you look at Australian nickel sulphide projects, they are like hen’s teeth – they are very hard to find (and) the nickel sulphide operations that are currently operating are producing grades of less than 1 per cent – I think that the average grade is about 0.6 per cent – and most of those mines are coming to their natural end as well,” he explained.

“And (in terms of) Australian nickel sulphide projects, we are quite well placed when you look at the nickel equivalent grades.”

Rajasooriar also said the updated mine plan was conservative.

Mine dilution at Savanah, for instance, was 12 per cent – it’s now 22 per cent.

Ditto for plant recoveries, which in the old days was 114 per cent as opposed to the current 90 per cent.

Meanwhile the plant, which can churn through one million tonnes per annum, was now set to process 900,000 tonnes a year.

“We’ve been very transparent – we have put all of the costs into the project so that it is very clear,” Rajasooriar said.

“On a base case we are running on about $7.54/lb, and at the consensus case it’s about $7.14.

“Today’s nickel price is about $9.14/lb, so there is a good margin to be made on this project.”

A recent recapitalisation conducted by Panorama, Rajasooriar said, had erased debt and hedging arrangements as well as provided the company with a sufficient runway to progress development to both enable the operation’s reboot as well as fund near term exploration.

It was therefore not surprising that, on the day of Rajasoorier’s RIU presentation, the resources house announced it had launched an exploration program for both Savanah and Savanah North.

At Savannah, surface activities would complete preliminary nickel prospectivity assessments and look at the previous untested oxide and Stoney Creek intrusions.

Meanwhile, the underground drilling at Savanah North would complete an initial test of a series of strong downhole electromagnetic anomalies that were previously identified in several holes.

Earlier this month the company announced that over half of its planned 468 metre ventilation access drive – which has been designed to establish a platform well above the previous zone of instability at its Savannah North underground mine – had been developed, with the remainder to be finished by the end of September.

Upon completion of this ventilation raise and certain other underground works, the project would be significantly de-risked and capable of being fully rebooted by the end of 2021.


Prodigy Gold Completes Northern Territory Drilling Campaign

THE DRILL SERGEANT: Prodigy Gold (ASX: PRX) has just completed a drilling campaign on the company’s 100 per cent-owned gold portfolio in the North Arunta and Tanami regions of the Northern Territory.

Prodigy Gold drilled 195 aircore holes that were designed to test seven targets across three prospects – the Tulsa target in the North Arunta project, and the Bonanza West and Blue Hart prospects within the Tanami.

The company explained its drilling of these high priority targets forms part of a broader exploration strategy aimed at systematically exploring the company’s project portfolio to screen for new large-scale gold deposits in the Northern Territory.

“We are pleased to have completed this drilling program across several highly prospective targets within the North Arunta and Tanami regions and we look forward to reporting our findings from this program soon,” Prodigy Gold managing director Matt Briggs said in the company’s announcement to the Australian Securities Exchange.

“Data from this initial campaign will be used to define a series of targets for follow-up RC drilling later this year.

“We are drilling targets located in a highly prospective gold region which hosts several multi-kilometre structural targets, so the potential for discovery is very clear.”








Genesis Minerals Confirms Admiral Mineralisation Continuity

THE DRILL SERGEANT: Genesis Minerals (ASX: GMD) has been encouraged by initial results from a maiden Reverse Circulation (RC) drilling program at the company’s 100 per cent-owned Ulysses gold project in Western Australia.

Genesis Minerals carried out drilling on the Admiral deposit, which was part of the recent acquisition of the Kookynie tenements the company announced in June 2020.

Admiral is one of a number of deposits that will be systematically drilled out over the coming months within the Ulysses project.

Genesis said the drilling confirmed shallow and continuous mineralisation, from results including:

7 metres at 1.8 grams per tonne gold from 23m;

7m at 2.12g/t gold from 46m;

10m at 3.6g/t gold from 25m; and

3m at 5.45g/t Au from 35m.

Genesis has now completed approximately 95 holes of Resource confirmation drilling at the Admiral, Clark and Butterfly deposits, which have a combined Mineral Resource of 4.6 million tonnes at 1.7g/t gold for 246,000 ounces.

“Our maiden drilling program across the newly-acquired Kookynie tenements is off to a great start,” Genesis Minerals managing director Michael Fowler said in the company’s announcement to the Australian Securities Exchange.

“The initial phase of RC drilling has validated the historic drilling data on which the current Admiral resource is based – which is a huge tick for the project, confirming the presence of consistent and continuous gold mineralisation within the Mineral Resource envelope.

“Importantly, the currently defined Mineral Resource at Admiral is open down-dip on the Admiral shear and along the north-dipping shear running along the northern limit of the current Admiral deposit.

“We believe there is significant potential to grow the Resource and, with resource confirmation drilling already nearly completed, the next phase of drilling will focus on this exciting potential over the next couple of months.

“Drilling is progressing smoothly, which is a real credit to the exploration team in the field, with well over 120 holes completed over the past two months.

“With so many samples going into the laboratory, the only brake on news-flow will be assaying of samples and processing of results.
“That said, we expect to receive a steady stream of results from both in-fill and extensional drilling across the deposits which should ensure regular news-flow through to the end of the year.

“Drilling is continuing at Ulysses with two RC rigs and a diamond rig operating and an air-core rig scheduled to commence drilling this week.”