Consolidated Tin shareholder completes Kagara acquisition

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THE BOURSE WHISPERER: Consolidated Tin Mines (ASX: CSD) announce that Snow Peak Mining (SPM) has completed the acquisition of the Kagara Central Region project at Mt Garnet, near Cairns in northern Queensland.

Consolidated Tin’s excitement regarding the acquisitions stems from the fact it holds a holds a 10 per cent interest in the share capital of SPM on a ‘free carry’ basis.

The familiarity extends with SPM is a subsidiary of Hong Kong-based investment group Snow Peak International Investment, which is Consolidated Tin’s major shareholder.

Consolidated tin described the Kagara project as a highly prospective and proven package of copper and base metal assets.

The project also contains an existing operational concentrator with a one million tonne per annum-capacity.

The concentrator currently has both copper and poly metallic circuits, with each circuit having the capacity to process about 500,000 tonnes per annum.

 

Breakdown of CSD JORC resources. Source: Company announcement

 

Adding to Consolidtaed tin’s excitement is the Kagara project’s proximity to its Mt Garnet tin project.

Needless to say the company views the acquisition of the Kagara project by its major shareholder as being of significant strategic value and importance.

The operating concentrator acquired by SPM is located just nine kilometres by sealed road, on the Kennedy Highway from Consolidated Tin’s Gillian tin deposit, which has a near-surface open pit mineable JORC Resource of three million tonnes at 0.78 per cent tin.

“This deal is a major step forward for Consolidated Tin,” Consolidated Tin Mines managing director Ralph De Lacey said in the company’s announcement to the Australian Securities Exchange.

“The acquisition of an operating processing plant by our major shareholder provides us with the opportunity for a clear path to production for our Mt Garnet tin project.”

It is proposed that CSD will manage and operate the Kagara project on a reimbursable basis on behalf of SPM.

Royal Resources receives Razorback PFS results

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THE BOURSE WHISPERER: Royal Resources (ASX: ROY) has received the results of a Pre-feasibility Study conducted on the company’s Razorback premium iron ore project (RPIP) in South Australia.

The company put a number of scenarios through the calculator during the PFS, finally choosingto go with the lowest risk, OPEX and CAPEX option as its preferred configuration.

 

Key metrics from the PFS. Source: Company announcement

 

This base case will see an annual mining rate of 40 Million tonnes per annum (Mtpa) from which ultimately 8.2Mtpa of premium concentrate production is targeted.

The RPIP contains a Mineral Resource of 1.8 billion tonnes at 21 per cent iron, including an Indicated Resource of 1.2 billion tonnes at 21.5 per cent iron.

The Indicated Resource is currently being converted into a Probable Ore Reserve.

The company explained mining operations at the RPIP will consist of a conventional large scale open-cut mining operation using standard drill and blast, shovel, and truck haulage processes.

An initial pit is to be developed on the Razorback Ridge / Razorback West resource, while the Iron Peak resource will be developed as a second pit in the future.

“The quality and quantity of Royal’s mineral resources will underpin the long term success of the Razorback project,” Royal Resources chairman Phil Crabb said in the company’s announcement to the Australian Securities Exchange.

“The PFS detail provides a broad perspective on the progress of the project and the Board’s vision of bringing into existence a major new source of premium quality iron concentrate.”

Cyclone Oswald causes trouble for Queensland miners

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THE BOURSE WHISPERER: The recent heavy rainfall generated by ex-tropical cyclone Oswald has caused a great deal of damage across Queensland, which has led some miners to provide updates on its effect on their operations.

Evolution Mining (ASX: EVN) has advised the market the heavy rain and flooding in Southern Queensland has not had a great impact on its operations.

The company closed down mining and processing operations at its Mt Rawdon gold mine, located 75 kilometres south west of Bundaberg, on Saturday 26 January mainly as an exercise in ensuring the safety of its personnel.

The company said its site management team were well drilled for the onset of the wet season.

Evolution anticipates processing to restart later this week depending on access to ongoing supplies of diesel and other major consumables.

Processing will be limited to low-grade stockpiles while dewatering of the open pit is progressed.

It was business as usual at the company’s Cracow gold mine, located 215 kilometres west of Bundaberg.

“Although the extreme weather event will have some impact on production from the Mt Rawdon mine in the current quarter, Evolution Mining remains confident of meeting its FY13 Group production and cash cost guidance of 370,000 to 410,000 ounces gold equivalent at $730 to $790 per ounce,” Evolution Mining said in its ASX announcement.

Yancoal (ASX: YAL), unfortunately, has not been as lucky with both the company’s Yarrabee and Middlemount open cut mines impacted by Oswald.

Yarrabee recorded over 360mm and Middlemount 420mm of rain from the event.

One of the levee banks surrounding the Middlemount Mine was breached and water flowed into the open cut.

Yancoal said the mine operators and management had responded by installing pumping equipment to remove water from the mine.

Production from the mine is likely to be impacted for at least three weeks however the timing on the commencement of coal mining remains uncertain.

At Middlemount the company said it would seek to continue to undertake certain works in areas which are unaffected by the flooding.

Production was suspended at the Yarrabee Mine for a period over the weekend and following an inspection of the mine normal operations are expected to commence this week.

Yancoal does not expect any impact on production for the quarter from Yarrabee.

Sheffield Resources has grounds for Pilbara consolidation

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THE BOURSE WHISPERER: Sheffield Resources (ASX:SFX) announced to the Pilbara iron ore mining community it is prepared to participate in resource consolidation to get its ore to market.

“The junior iron ore players in the Eastern Pilbara recognise the need to consolidate resources to achieve infrastructure solutions,” Sheffield Resources managing director Bruce McQuitty said in the company’s announcement to the Australian Securities Exchange.

“Our team has a proven track record in iron ore exploration in the region, and with a growing portfolio of prospective tenements, Sheffield is well placed to participate in the consolidation process.”

McQuitty’s statement follows recent mapping and sampling undertaken by Sheffield’s geologists, which has outlined five new zones of high-grade iron mineralisation and increased the mineralised area at three previously identified prospects.

The discoveries follow the company recently being granted three exploration licences in the North Pilbara and a ballot outcome for exploration licence application E47/2594 in, what the company described to be – the highly prospective and competitive iron ore district to the north of Newman.

 

Sheffield’s Pilbara iron projects. Source: Company announcement

 

Four of the new mineralised zones are on Sheffield’s Three Pools and Eagle Pool projects where the company has previously outlined an Exploration Target of 20 to 60 million tonnes at 56 to 60 per cent iron.

These projects are adjacent to Brockman Mining’s (ASX: BCK) Pallas and Castor deposits.

In the North Pilbara, Sheffield has identified zones of iron enrichment at the Panorama and Dead Bullock projects, which are located close to Atlas Iron’s (ASX: AGO) Abydos and Mt Webber mine camps and within potential trucking distance to Port Hedland.

Polymetals completes Mt Boppy Feasibility Study

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THE BOURSE WHISPERER: Polymetals Mining (ASX: PLY) has completed a feasibility study of the company’s Mt Boppy gold project in Central New South Wales.

According to the company the study has demonstrated Mt Boppy to have potential as a development opportunity, which could generate healthy shareholder returns.

“This project has near-term production potential, low execution risk and robust economics, as well as high strategic value,” Polymetals chief executive officer Frank Terranova said in the company’s announcement to the Australian Securities Exchange.

“Owning processing infrastructure in a region surrounded by many active exploration companies places a strategic premium on this project.

“Mt Boppy is one of a number of exciting growth opportunities for Polymetals; we continue to enhance the value of the company through creating a suite of exciting projects.

“Completion of the feasibility study with all major approvals to hand enables us to assess fully the strategic optionality of this project.”

The feasibility was completed based on the following development concept and assumptions:

–    Mining of a cut back on the existing open cut mine to extract 587 thousand tonnes of ore mined at 4.32 grams per tonne gold over a 10-month period;

 

Mt Boppy pit 2012. Source: Company announcement

 

–    Waste material is to be used for a new tails storage facility (wall and base construction), a noise bund and capping of existing tails dam with the remaining waste to be delivered to a dedicated waste dump;

–    The mined ore is processed over 24 months at Mt Boppy using the existing plant, which would be upgraded to treat 300 thousand tonnes per annum;

–    The existing CIL process plant is to be refurbished with the addition of flotation and concentrate fine grinding circuits to maximise gold recovery from sulphide ores;

–    Gold on carbon is to be recovered utilising existing facilities at White Dam, which is serviced by a fully sealed road from the Barrier Highway;

–    Grid power to be supplied via reticulated overhead power lines; and

–    The existing mining camp in Canbelego is to be expanded.

Polymetals indicated it schedule for the Mt Boppy gold project shows gold production could be achieved in approximately seven months once the project go-ahead is given based on mining equipment mobilisation within two months and a 5-month construction period.

The company said it is now assessing funding options as part of its investment decision process.

Gold Road opts for smaller processing plant at Central Bore

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THE BOURSE WHISPERER: Gold Road Resources (ASX: GOR) has conducted further ore processing studies on the company’s Central Bore project, located in Western Australia.

Gold Road said the latest studies confirm the viability of a smaller stand-alone high-grade underground mining operation at Central Bore than what had previously been identified in the Scoping Study the company completed in September last year.

The new operation will run on a one hundred thousand tonnes per annum (100ktpa) processing plant, as opposed to the 400ktpa in a conventional CIL plant with blended feed material from both the Central Bore underground mining operation and the lower-grade Attila and Alaric open pit mining operations originally suggested by the scoping study.

Gold Road conducted a review of the outcomes of the study, which highlighted the different operating costs of the underground mine versus the open pit mines, and the increased project and funding risk from including the relatively lower grade/higher cost open pit mining operations.

It then commissioned investigations into a smaller sized processing plant options fed only from the Central Bore underground mining operation for both the capital expenditure and operating expenditure requirements for the smaller 100ktpa modular processing plant.

The newly-crunched numbers ranged as:

–    Capital expenditure (process plant only): $18 to $20 million; and

–    Plant operating expenditure per tonne: $80 per tonne to $100 per tonne.

“The lower capital expenditure of the smaller stand-alone plant option compared to the original Scoping Study is very positive, and will result in a shorter payback period while maintaining the high return on investment,” Gold Road Resources chairman Ian Murray said in the company’s announcement to the Australian Securities Exchange.

“This option would allow us to expedite production with a much lower financing requirement, which is critical in the current capital market environment, and provides a solid platform for the finalisation of the Pre-feasibility study.”

 

Process Flowsheet. Source: Company announcement

 

The company indicated other potential benefits associated with the smaller modular plant to be:

–    Reduced plant construction lead times;

–    Smaller mining camp; and

–    Reduced environmental footprint.

Gold Road said it would use the new numbers in its Pre-feasibility Study, along with the revised Central Bore resource model, which will incorporate recent diamond drilling results.

The Pre-Feasibiliy Study is due for completion in the 2nd Quarter 2013.

Krucible Minerals receives $12m offer for phosphate tenements

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THE BOURSE WHISPERER: Krucible Minerals (ASX: KRB) has accepted a non-binding offer from Daton Group Australia (ASX: DTG), a fertilizer manufacturer with activities in Queensland and a new plant being built in Brisbane, to buy Krucible’s phosphate bearing tenements for $12 million.

The proposal relates to all 13 of Krucible’s phosphate bearing tenements, including the Korella deposit and mining lease.

 

The effect of the deal on Krucible‘s tenement portfolio with those
the subject of the Proposal shaded and in red. Source: Company
announcement

 

Krucible owns more than 20 tenements consisting of exploration applications, exploration permits and a mining lease holding a JORC-inferred rock phosphate resource at Korella, which is adjacent to the existing Phosphate Hill mine owned and operated by Incitec Pivot (ASX: IPL).

Krucible explained Daton’s actions to be influenced by its interest in manufacturing advance value-added fertilisers raising the need for it to shore up a long-term stable supply of preferably locally-mined phosphate of appropriate grade.

Daton considers Krucible’s Korella phosphate deposit suitable as it is the only high grade Direct Shipping Ore phosphate resource in Australia adjacent to existing infrastructure, near to surface and ready to mine.

Krucible said it is excited about the deal, saying it introduces the much anticipated value of its phosphate activities to the company’s balance sheet.

Altona Mining accelerates progress of Outokumpu project

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THE BOURSE WHISPERER: Altona Mining (ASX: AOH) is making solid progress in regard to operations on the company’s Outokumpu project in South East Finland.

The Outokumpu project comprises the new Kylylahti underground mine and the refurbished Luikonlahti processing plant.

The operation involves ore being trucked 42 kilometres from the mine to the mill.

“I am delighted to report that recent performance at the Outokumpu project is ahead of market guidance in terms of production, design throughput and copper grades,” Altona Mining managing director Dr Alistair Cowden said in the company’s announcement to the Australian Securities Exchange.

“As a result, we are raising our production guidance for the 2012/2013 year.”

Altona commenced ore production at Outokumpu in January 2012 from ore in development drives.

Stoping commenced in late May and during the December 2012 quarter, mine production reached 140,000 tonnes with average grades for copper at 1.62 per cent and gold at 0.68 grams per tonne.

Altona claimed the production volumes it is achieving at Outokumpu are currently exceeding design rates of 550,000 tonnes per annum (46,000 tonnes per month) while copper grades are surpassing 2012/2013 forecasts (1.33 per cent copper) and life of mine average (1.57 per cent copper).

 

Source: Company announcement

 

The company also indicated it is achieving a satisfactory mill performance with metal recoveries, utilisation rates and throughput achieving or exceeding design.

Copper metal production for the quarter was better than what the company had forecast and when annualised, reached the design rate of 8,000 tonnes per annum.

Altona’s production guidance for the 2012/2013 financial year was originally forecast in July 2012 to be between 5,000 and 6,000 tonnes of copper and 5,000 to 6,000 ounces of gold in concentrate.

The company has now confirmed it is on track to exceed the upper level of the guidance highlighted in July 2012.

This has been increased to between 6,500 and 7,000 tonnes of copper metal and 6,500 to 7,000 ounces of gold in concentrate.

Altona commenced copper-gold concentrate shipments in February 2012, which are transported 400km by road to New Boliden’s smelter at Harjavalta in western Finland.

The company said its concentrate sales continue to increase with approximately 9,800 tonnes of copper-gold concentrate delivered in the December 2012 quarter.

Altona shares were sitting at 25c in afternoon trade

MacMahon Holdings lands major Fortescue deal

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THE BOURSE WHISPERER: To paraphrase Mark Twain, it would seem the reports concerning the possible demise of Fortescue Metals Group (ASX: FMG) have been grossly overstated.

The company has signed up Western Australia-based mining contractor Macmahon Holdings (ASX: MAH) to deliver open cut mining services as part of FMG’s Christmas Creek mine expansion.

Mcmahon trumpeted the signing of the contract describing it as the largest single mining contract it has ever landed.

The company has secured a $1.8 billion contract to deliver open cut mining services as part of the Christmas Creek expansion.

According to Macmahon Holdings chief executive officer Ross Carroll the five year contract was significant for the company as it enables it to focus its future on the mining sector.

The contract award brings Macmahon’s mining order book to $3.6 billion, the highest level in the company’s history.

“This is an exciting project that builds on the existing success of our surface mining operations, securing a stronger foundation for the company’s mining focused business over the next five years,” Carroll said in the company’s announcement to the Australian Securities Exchange.

“Macmahon has a long history of successfully delivering mining projects in the Pilbara and this project further expands the company’s presence in the region.”

The project will involve MacMahon in all aspects of mine operations including drill and blast, overburden removal, ore harvesting, maintenance of equipment and associated services.

It will result in the movement of approximately 300 million bank cubic metres of iron ore and associated overburden material.

Since commencing mobilisation to site under a limited notice to proceed, Macmahon has recruited about 600 people for the project, with more than 500 employees already mobilised to site.

Mining activities have commenced, with the development of on-site infrastructure underway and the mining of overburden, harvesting and drilling also in progress.

“Macmahon’s business has been built on developing productive and long term associations with our clients and this contract continues our strong relationship with Fortescue Metals Group,” Carroll said.

“This is a key project for Fortescue and Macmahon is pleased to be supporting their expansion.”

Emergent Resources to adjust focus on Columbia

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THE BOURSE WHISPERER: Emergent Resources (ASX:EMG) has entered into a conditional agreement to acquire West Rock Resources, a move the company claims will reposition it as a Colombian-focused base and precious metals explorer.

A privately-owned Australian entity, West Rock has an established exploration team in Colombia, and, through its wholly-owned subsidiaries, has the rights to an exploration and exploitation licence located in the Southern Antioquia region of Colombia.

The licence consists of one fully granted tenement covering a total land area of 1,998 hectares (approximately 20sqkm) and is located near the town of Tarso, in close proximity to the world-class deposits of Marmato and Titiribi.

 

Project location details, including the major copper/gold belts in Colombia. Source: Company announcement

 

Emergent was eager to tell about West Rock’s Tarso project area being located in, what it identified to be, one of the world’s most prospective new gold belts with over 50 million ounces of gold resources reported discovered in the last five years by major mining houses.

Adding further icing on the cake, West Rock also has a Strategic Alliance with major, New York-listed international mining company Cliffs Natural Resources (NYSE: CLF) whereby Cliffs will provide funding to West Rock to identify and explore projects in Australia and the Asia-Pacific region.

“We are very excited about exploring in Colombia, unlocking the tremendous potential of the West Rock assets and building the project portfolio in such a prolifically mineralised and underexplored jurisdiction,” Emergent Resources chairman Wolfgang Fischer said in the company’s announcement to the Australian Securities Exchange.

“The proposed transaction is further enhanced by the alliance between Cliffs Natural Resources and West Rock which offers Emergent remarkable growth possibilities by partnering with a proven minerals giant like Cliffs.

“The West Rock-Cliffs alliance speaks volumes about the confidence and respect Cliffs has for the professionalism and expertise of the West Rock team members.

“This ‘company making’ transaction is a unique opportunity combining projects with exceptional potential and a very strong, professional team with extensive exploration and commercial experience.”

Following the completion of the acquisition, Emergent indicated it intends to commence an aggressive exploration campaign in Colombia initially focusing on the Tarso project area.

Emergent shares were up 31.58 per cent to 2.5 cents on the back of the news.