IronClad Mining scores SA Government approval for Lucky Bay amendments

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THE BOURSE WHISPERER: IronClad Mining (ASX: IFE) has received a nod of approval from the Government of South Australia for the company’s application for amendments to the existing Lucky Bay Port approval.

IronClad had asked the SA Government for a number of amendments to be made to existing approvals since the downturn in global iron ore prices last year.

The major changes sought by IronClad were for the introduction of a bulk ore, buffer stockpile to be situated within 1.5 kilometres of the planned loading facilities, within an area leased by the company, and a reduction in the trans-shipment distance from 10 nautical miles to 7 nautical miles.

The government approved the shorter trans-shipment distance amendment last month.

IronClad is required to transport all ore from its mine site at Wilcherry Hill – located 40 kilometres north of Kimba, on the Eyre Peninsula to the port at Lucky Bay (about 156kms away), about 120 kilometres south of Whyalla – in containers.

Due to the bulk density of iron ore and loading logistics, the containers need to be custom designed, built and delivered at a cost of over $7, 000 per container.

Logistics demanded that approximately 3,000 containers would have to be built and delivered.

Ironclad indicated the new amendments to the Lucky Bay approval will result in significant savings.

“We took the liberty of presenting government, in advance, with a full set of technical and environmental impact data relating to the buffer zone proposal so we believe that the approval time is likely to be shorter than the normal three months,” IronClad Mining managing director Robert Mencel said in the company’s announcement to the Australian Securities Exchange.

“With that approval in place we can lock in significant operating and capital cost reductions.

“With iron ore prices also rebounding recently, the SA Government approvals give us further strong impetus to commence production as soon as possible.”

Sherwin Iron locks in railway deal

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THE BOURSE WHISPERER: Sherwin Iron (ASX: SHD) has signed an MOU with Genesee & Wyoming Australia (GWA) for the purpose of defining a framework for a definitive long-term rail service agreement.

GWA is a provider of above rail freight services in South Australia and the Northern Territory and owner of the Tarcoola to Darwin railway.

Sherwin Iron said it had been working with GWA on this project for the last eight months.

“We welcome this milestone as this is just one more building block that Sherwin has put in place to enable us to get into production, which is tentatively set for the end of his year,” Sherwin Iron chairman Barry Coulter said in the company’s announcement to the Australian Securities Exchange.

“Due to the extensive amount of ground work that GWA have put into getting to this point we are hopeful that we will be in a position to enter into the Rail Haulage Agreement within the next two months.

“Upon satisfaction of certain conditions precedent in the Agreement, GWA and Sherwin can then commit to the necessary capital works and source the additional rolling stock required for the Sherwin Iron product.”

The key points of the MOU are:

Sherwin Iron and GWA are to negotiate a Rail Haulage Agreement whereby GWA will provide rail haulage and ancillary services for the transport of 3 million tonnes per annum of iron ore from Sherwin’s Roper River tenement;

Sherwin Iron will accept the service under the Agreement on a take or pay basis;

Sherwin Iron may be required to provide funding for construction of essential track infrastructure and

The term of the Agreement is a minimum of 10 years.

The MOU will terminate upon entering into the Agreement, by mutual consent, by either party giving five days’ notice to withdraw from the MOU or two years from the commencement date of the MOU, whichever is earlier.

Southern Hemisphere Mining farms in major mining partner

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THE BOURSE WHISPERER:  Southern Hemisphere Mining (ASX: SUH) has shored up a farm-in deal with global major Anglo American over three exploration projects in Chile.

The farm-in option agreement allows Anglo American to earn up to 75 per cent equity in the Chitigua, Carboneras and Meteoritica exploration projects by spending up to US$25 million on exploration over a maximum five-year period.

Southern Hemisphere appears to be on a bit of a roll at the moment having completed another farm-in option arrangement with Lundin Mining Corporation in November 2012 on the company’s Llahuin copper-gold project, also located in Chile.

“This is another significant event for Southern Hemisphere, and complements the important strategic joint venture we concluded recently with Lundin Mining Corporation at our Llahuin project,” Southern Hemisphere Mining managing director Trevor Tennant said in the company’s announcement to the Australian Securities Exchange.

“We were approached by two Tier 1 mining companies, which were interested in a farm-in arrangement for the Chitigua project area and we decided to enter into an option arrangement with Anglo American.”

Southern Hemisphere has already spent US$2.3 million on exploration and concession maintenance at Chitigua and completed some limited reconnaissance works at the Carboneras and Meteoritica projects.

 

Location of Chitigua, Carboneras and Meteoritica projects relative
to the Chuquicamata and El Abra mines. Source: Company announcement

 

The key terms of the Agreement with Anglo American include a US$50,000 payment to Southern Hemisphere upon signing the Agreement and payments of US$150,000 per year for three years, resulting in a total of US$500,000 to be paid on or before 31 January 2016.

If Anglo American continues thereafter with the arrangement to earn a 75 per cent interest in the projects, it is required to pay an additional US$150,000 per year for two years.

The First Exploration Period requires committed expenditure by Anglo American of US$1.5 million for in-ground exploration, including a minimum of 3,000 metres of drilling within 18 months of signing the Agreement.

Should Anglo American continue with the arrangement, it will then be required to spend a further US$8.5 million on in-ground exploration to earn 60 per cent equity in a locally incorporated company, Minera Chitigua that will hold the projects.

This aggregate spend of US$10 million has to be achieved within 36 months of signing the Agreement.

Anglo American then has the option for a Second Exploration Period to earn a further 15 per cent equity by spending an additional US$15 million on exploration works.

This expenditure has to be achieved within a further 24 months.

Southern Hemisphere has no obligation to spend any funds on exploration or concession maintenance costs until Anglo American has achieved a 75 per cent equity position in Minera Chitigua.

Mutiny Gold receives government stamp for Deflector project

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THE BOURSE WHISPERER: Mutiny Gold (ASX: MYG) has received Mining Proposal approval from the Western Australia Department of Mines and Petroleum (DMP) for the company’s Deflector gold-copper project in the Mid-West of Western Australia.

The project has been approved subject to the payment of security bonds.

The approval of the Mining Proposal by the DMP is the last of the key government approvals required for the Deflector project before the commencement of mining.

Mutiny Gold managing director John Greeve said in the company’s ASX announcement that with the completion of the approvals process, Mutiny’s project team can now focus on implementing the Deflector project plans leading into mining and production.

International Goldfields JV to merge exploration projects in Brazil

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THE BOURSE WHISPERER: International Goldfields (ASX: IGS) has entered into a Memorandum of Understanding to form an incorporated Joint Venture between the company’s 93 per cent-owned private entity Latin Gold and Brazil-based private entity group Biogold Investment Fund.

The deal will result in Latin Gold will transfer assets of its 100 per cent-owned subsidiary Amazongold Pesquisas Minerais to Biogold’s 100 per cent-owned subsidiary CIA Minerado Ouro Paz S.A. in exchange for 35 per cent ownership in Ouro Paz.

The JV entity will hold over 2,700 square kilometres land position in the Juruena Belt and an approved JV expenditure budget, which includes up to 6,000m of drilling for additional delineation and exploration drilling for 2013.

“For IGS, the JV provides a consolidated land position in the Ana prospect area, with the adjacent União project host to a larger proportion of the mineralised shear zone,” international Goldfields said in its ASX announcement.

“The JV also introduces additional highly qualified Brazilian national staff and management to the project and additional funding for exploration that will advance the project at an accelerated rate.”

Nimrodel Resources closes second Tanzanian copper deal

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THE BOURSE WHISPERER: Nimrodel Resources (ASX:NMR) has acquired a second copper deal in Tanzania, executing its second Heads of Agreement in as many weeks, this time for the right to acquire an 85 per cent interest in a contiguous grouping of 54 Primary Mining Licences (PML’s) in the copper mining area of Kigoma in western Tanzania.

“The extension of our copper holdings in the Kigoma region and the option to explore and acquire these PML’s, which are already held under mining licence and are ready for consolidation into a Mining Licence (ML) establishes the platform upon which we can build a significant regional presence.” Nimrodel Resources managing director Allan Mulligan said in the company’s announcement to the Australian Securities Exchange.

“Our legal entry, right into the heart of the artisanal mining area, will fast track the exploration program providing ready-to-go drill targets.”

 

General location of 54 adjoining PMLs. Source: Company announcement

 

Nimrodel explained that, according to Tanzanian mining law, a Primary Mining Licence may not exceed more than 10 hectares (0.1sqkm) in area but holders may accumulate them into larger groupings which can then be converted into Mining Licences (ML’s) by application and with the submission of a suitable environmental impact report.

“Our strategy is one of consolidating these small holdings and it is our intention to accumulate contiguous PML’s until there are enough to sustain reasonable sized mining operations,” Mulligan said.

The company said under the terms of this Heads of Agreement it has free right to terminate the deal at any time.

Nimrodel is to pay $43,200 for a one year option to explore the entire group of PML’s and $50,000 to explore in year two.

Nimrodel has the option to purchase 85 per cent of the mineral rights within the PML’s at any time for a once off $350,000 payment.

The free-carry arrangement expires after two years of exploration.

“Our model for working with PML holders is constructive and collaborative,” Mulligan said.

“PML’s will be accumulated in suitable target areas under special arrangement with the holders.

“As soon as prospectivity has been established, we will move to consolidate and convert the PML’s to Mining Licences, at which time the in-country partner will have the option of retaining the minor equity and contributing further or commercialising the asset through a sale of the minority equity to the company.”

Latin Resources boosts Guadalupito project in Peru

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THE BOURSE WHISPERER: Latin Resources (LRS: ASX) has boosted the total JORC-compliant Inferred Resources at the company’s Guadalupito iron and heavy mineral sands project in Peru.

The total Inferred Resources for the project have increased 371 per cent from 392 million tonnes with 17.6 million tonnes of contained heavy mineral to 1,465 million tonnes with 82.9 million tonnes of contained heavy mineral.

The updated figures have been achieved by the addition of a new JORC-compliant Inferred Resource Estimate for the Los Conchales area, which is two kilometres to the east of the previously released JORC-compliant inferred resource estimate for the Heldmaier area.

 

Map of the Los Conchales, Heldmaier and Tres Chosas Resource areas

 

Armed with a substantial resource base at Guadalupito and a scoping study completed in September 2012, Latin Resources is now evaluating a number of pathways towards production.

These include a dry mining operation to take advantage of high HM content sand fraction resources and gold present above the water table at the Heldmaier area.

The company indicated the relatively low gravel content, shallow saline water table, and consistently-mineralised sediment pile at Los Conchales favours a large scale, low cost dredging operation.

“We are extremely pleased to post our third and most significant JORC resource at Guadalupito that is a real game changer for Latin,” Latin Resources managing director Chris Gale said in the company’s announcement to the Australian Securities Exchange.

“To have achieved almost 1.5 billion tonnes of inferred resources after only two years of exploration is a significant feat and we look forward to further evaluating development alternatives for what has undoubtedly become a World Class Iron and Heavy Mineral Sands deposit, still with significant upside potential.

“With such a massive resource base, and promising product potential for magnetite, andalusite, zircon, monazite, titanium and other minerals, Latin has laid the foundations for evaluating a significant multi-commodity operation and will continue to work towards realising the value of this considerable asset by expediting plans to move into production.”

Genesis Minerals welcomes Canadian major back to Argentina

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THE BOURSE WHISPERER: Genesis Minerals (ASX: GMD) has received notice from Canadian miner Teck Resources, through its subsidiary Teck Argentina, that it has elected to earn back a 60 per cent stake in the Australian junior company’s Las Opeñas project in San Juan, Argentina.

The decision is a return of serve in a tennis match, in which Genesis had notified Teck in December 2012 it had earned a 100 per cent interest to Teck’s rights and interest in the project.

Teck volleyed at the net by recently notifying Genesis of its decision to exercise its pre-emptive Back-in Right to earn a 60 per cent interest in the project by spending $1.2 million.

Teck plans to advance exploration at Las Opeñas in the coming months by targeting a large mineralised system encompassing wide zones of gold mineralisation with associated silver, lead and zinc Genesis had identified during its first drilling program at Las Opeñas during November 2012.

 

Las Opeñas drill hole locations and results. Source: Company announcement

 

Genesis explained the results it achieved from last year’s drilling had given support to its belief Las Opeñas has the potential to host a multi-million-ounce gold deposit in a large epithermal system.

The company said Teck’s decision to earn back into the Las Opeñas project was a positive one, which validated its belief in the project and its geological potential.

“The fact that Canada’s largest diversified mining company has elected to become operator and invest in further exploration at Las Opeñas is a huge vote of confidence in the Project,” Genesis Minerals managing director Michael Fowler said in the company’s announcement to the Australian Securities Exchange.

 “The results generated by Genesis support our view that Las Opeñas has the potential to host a multi-million-ounce orebody.

“This belief can be further tested with the help of Teck’s immense knowledge and experience.

“Teck has a track record of exploration and development success at both 100 per cent-owned and joint venture projects in South America.

“We are delighted that Genesis’ shareholders stand to benefit from its involvement at Las Opeñas.”

Galaxy ready to restart Jiangsu lithium carbonate plant

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THE BOURSE WHISPERER: Galaxy Resources (ASX: GXY) has received clearance from the Zhangjiagang Safety Bureau allowing the company to recommence operations at its Jiangsu lithium carbonate plant in China.

The Safety Bureau has inspected and approved Galaxy’s repairs to a u-bend section of pipe in the sodium sulphate crystallisation area of the plant that ruptured in November 2012.

Galaxy said it expects the plant to be fully operational and producing lithium carbonate within the week.

In addition, a complete Hazard and Operability review has been conducted across the Jiangsu operation to ensure complete and ongoing safety of the plant.

The main calcination kiln is in the final stage of the dry out process and will soon be heated to full temperature to coincide with the start-up of the plant allowing for a return to full operations.

“We are pleased to have obtained the Zhangjiagang Safety Bureau’s clearance and to have recommenced operations at Jiangsu,” Galaxy Resources managing director Iggy Tan said in the company’s announcement to the Australian Securities Exchange.

TNG Limited recalculates PFS numbers

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THE BOURSE WHISPERER: TNG Limited (ASX: TNG) has completed an internal technical review of the July 2012 Pre-Feasibility Study (PFS) for the company’s Mount Peake vanadium-titanium-iron project in the Northern Territory.

TNG claimed the review has led to an enhancement of the project’s economics following the identification of a miscalculation of the value of the iron component of the resource.

The technical review of the July 2012 PFS was conducted ahead of the planned commencement of a Definitive Feasibility Study (DFS) for the Mount Peake development later this year.

According to the company, the review identified the price for the hematite product at Mount Peake had incorrectly been applied to contained iron as opposed to contained iron oxide.

As a result of this finding, the original financial model for the Mount Peake PFS has been verified and updated by Snowden Mining Industry Consultants leading to:

–    An increase in life-of-mine (LOM) revenues from $11.8 billion to $13.6 billion;

–    An increase in Net Present Value (NPV8 per cent) from $1.884 billion to $2.646 billion; and

–    An increase in pre-tax IRR from 31.8 per cent to 38.7 per cent.

Needless to say TNG is pretty happy with the results saying they have dramatically enhanced the financial strength of the proposed Mount Peake mining operation and provide strong momentum for the upcoming DFS.

The company is aiming to commence construction of the project in 2014, with production and exports proposed to commence in 2015.

“Based on the revised economic model, the Mount Peake development is even more robust than initially thought and is shaping up as an outstanding growth asset for TNG shareholders,” TNG Limited managing director Paul Burton said in the company’s announcement to the Australian Securities Exchange.

The company expects to announce the award of the contract to complete the Mount Peake DFS later this month.