Australian Bauxite confirms 3.5M tonne Resource

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THE BOURSE WHISPERER: Bauxite development company, Australian Bauxite Limited (ASX: ABZ) has completed investigative drilling as part of the due diligence process in respect to the acquisition of Mining Lease ML80126.

The mining lease is located 25 kilometres south of Mundubbera and 155 kilometres southwest of Bundaberg Port in central Queensland.

 

Australian Bauxite tenements in Central Queensland, including ML80126 and the Binjour project. Source: Company announcement

 

Australian Bauxite said the drilling has enabled it to confirm the Inferred Resource of bauxite identified is 3.5 million tonnes.

The company said establishing the resource size provides it with the consideration for concluding final agreements to purchase the mining lease.

This will also allow the company to commence early mine production to supply, what it described to be “the currently-buoyant bauxite market”, which it considers to be currently seriously short of this type of gibbsite bauxite.

Australian Bauxite indicated the granted, long-term mining lease ML80126 may be a fast-track route to the commencement of the company’s Binjour bauxite project located 115km southwest of Bundaberg Export Port.

“The discovery of a good bauxite deposit on this granted long-term Mining Lease is one of the final jigsaw pieces in establishing the first modern bauxite business in Australia since the 1960s,” Australian Bauxite chief executive officer Ian Levy said in the copany’s announcement to the Australian Securities Exchange.

“Production from this mining lease may commence early and kick-start the large Binjour project several years earlier than we previously thought.”

Gindalbie raises $62M to strengthen balance sheet

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THE BOURSE WHISPERER: Gindalbie Metals (ASX: GBG) has announced an approximate $62 million equity raising.

The raising comprises a $40 million fully underwritten placement to institutional and sophisticated investors and a proposed additional conditional placement of approximately $22 million to the company’s major shareholder Ansteel, maintaining its approximate 36 per cent equity interest in Gindalbie.

Gindalbie said the proceeds will strengthen its balance sheet, and may be used to fund contributions to the Karara Mining joint venture if required during commissioning of its Karara project in the Midwest region of Western Australia.

“While Karara has been delivered broadly within the revised construction budget and very close to schedule – which is a major achievement in itself – we have seen that, in recent months, unexpected volatility in Australian Dollar iron ore prices can put significant short-term pressure on Australian iron ore operations,” Gindalbie Metals managing director Tim Netscher said in the company’s announcement to the Australian Securities Exchange.

“We want to make sure that the company and the project remain in the strongest possible position during the commissioning process, with sufficient liquidity to address any unexpected events and the ability to weather any adverse developments in global markets.

“This is a large and complex plant and the commissioning process will take several months and involve a number of challenges along the way.

“I am highly confident in the team we have put together, their focus on this job, and the timeframe we have allowed ourselves, however we must be prepared for unexpected issues, and be able to move quickly and seamlessly to address these.

“We are very pleased with Ansteel’s participation in this transaction which highlights their continued and ongoing support for Gindalbie and the Karara project.”

The first magnetite concentrate has been produced at Karara and the project is now going through its commissioning and ramp-up phase with nameplate capacity of 8 million tonnes per annum expected to be achieved during June Quarter 2013.

Gindalbie indicated the proceeds will provide an additional cash buffer to address any possible increase in working capital requirements during the 6-month commissioning phase for the magnetite concentrator.

To date the Karara project has been delivered broadly in line with the revised construction budget and schedule.

Gindalbie also advised that following a review the Stage 1 production cost forecast has increased to $72 to $76 per tonne (FoB Geraldton, not including royalties) from the previous forecast of $65 to $68 per tonne.

Revised product cost guidance reflects general inflation and the impact of the Carbon Tax since the previous forecast in June 2011.

Gindalbie commenced shipments of DSO hematite from Karara in October, with production and shipments currently ramping up to a targeted annualized rate of 2Mtpa by the end of 2012.

Wasabi Energy subsidiary signs water deal with AngloGold AShanti

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THE BOURSE WHISPERER: Aqua Guardian Group (AGG), a 79.2 per cent-owned subsidiary of emerging power producer Wasabi Energy (ASX: WAS) has completed its first mine site sale and deployment in Western Australia with AngloGold Ashanti Australia (ASX: AGG).

Anglo Ashanti Australia (AGAA) has taken the lead on environmental excellence in water management by signing an agreement with AGG to implement its modular evaporation and algal control system, AquaArmour™, at the Tropicana Gold Mine in Western Australia.

“The deployment of AquaArmour™ in the mining industry is a significant step forward in the ongoing evolution of AGG,” Wasabi Energy executive chairman John Byrne said in the company’s announcement to the Australian Securities Exchange.

“The mining sector has been a key target market due to the large number of mine sites in arid, water stressed areas and the importance of water to the mining process and to the local communities.”

Wasabi noted there are 364 operating mines in Australia, approximately half of which are located in Western Australia, South Australia or the Northern Territory.

The majority of mines use open water storage facilities and are located in arid areas where water availability is relatively low and access to water is expensive.

In 2011 over $8.3 billion was spent by the mining industry on water with the Australian mining industry incurring a total water expenditure of $1.5 billion, which was more than any other country and almost double the next biggest spenders being Chile and China.

“With their rigorous health, safety and risk management assessments, this sale and deployment to a global mining company, demonstrates the compliance of the AquaArmour™ product and we expect an increase in mining sales,” Byrne said.

“The product has already been tested and successfully deployed in a number of environments, ranging from residential water, storm water harvesting and now mine site uses, for the effective mitigation of evaporation, algal control and maintenance of water quality.

“We have received interest from a wide range of potential customers in both the mining sector and water authorities and we continue to see an acceleration of the pipeline from initial contact through to sale and deployment of the modules.”

The Tropicana mine is 70 per cent-owned and managed by AGAA with Independence Group (ASX: IGO) holding the balance, is located 330 kilometres east‐northeast of Kalgoorlie‐Boulder on the western edge of the Great Victoria Desert.

The mine site covers 13,000 square kilometres of remote terrain in an arid climate, which experiences temperatures of up to 45 degrees Celsius and between 150mm and 250mm of rainfall per year.

The mine is currently under construction and is scheduled to pour first gold in the December 2013 quarter.

“The deployment of AquaArmour™ provides an economically viable, simple solution to securing the site’s water security and water quality,” Byrne said.

“The AquaArmour™ modular evaporation and algal control system will be utilised in a water storage at the reverse osmosis water plant at Tropicana, the main supply of water to the site.”

Peak makes beneficiation breakthrough at Ngualla

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THE BOURSE WHISPERER: Peak Resources (ASX: PEK) has reported the development of a process to physically upgrade rare earth mineralisation at the company’s Ngualla rare earths project in Tanzania.

The company has used a combination of Wet High Gradient Magnetic Separation (WHGMS) and a specialised flotation regime, which it claims has demonstrated 38 per cent of the plant feed can be rejected prior to acid leaching for just a 5 per cent loss in rare earth content.

Peak said the new process will result in reduced capital and operating costs for the Ngualla project . 

 

Mass and rare earth recovery summary for beneficiation test work on weathered SREZ mineralisation. Source: Company announcement

 

Peak considers the beneficiation process, combined with a simple sulphuric acid leach using acid produced on site supports its vision for the 100 per cent-owned project to be a low-cost, long term rare earth producer.

The physical upgrade process will be included in a Scoping Study that is due for completion by mid-December.

“This achievement is a very important breakthrough by Peak’s Technical Team,” Peak Resources managing director Richard Beazley said in the company’s announcement to the Australian Securities Exchange.

“We have always said we intend to be a low cost producer and the physical upgrade will contribute significantly to achieving this.

“We have a high grade deposit, the mineralisation is shallow, has excellent metallurgical characteristics, and with this physical upgrade and the forthcoming Scoping Study we believe Peak is very well placed to continue hitting its milestones.”

Peak completed a maiden Mineral Resource estimate at Ngualla in February 2012 of 170 million tonnes grading 2.24 per cent of rare earth oxides (REO) for 3.8 million tonnes of contained REO.

Within this resource there is a highly weathered and near surface zone estimated at 40 million tonnes at 4.07 per cent REO for 1.6 million tonnes of contained REO.

Ngualla is a bulk deposit which is largely outcropping and has the lowest uranium and thorium levels of any major rare earth deposit in the world.

Peak has proved a simple sulphuric acid leach processing route to produce a high-grade, high-purity rare earth concentrate.

Rare earth leach extraction rates of up to 96.5 per cent and averaging 80 per cent were returned from across the central portion of the Southern Rare Earth Zone (SREZ), the Bastnaesite Zone that is targeted for first production by early 2016.

Hastings Rare Metals expands East Kimberley tenements

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THE BOURSE WHISPERER: Hastings Rare Metals (ASX: HAS) has acquired additional tenements to the company’s 100 per cent-owned Hastings heavy rare earths project near Halls Creek in Western Australia.

The tenements are contiguous with the company’s existing tenements and are to the north west and south west.

 

Project location. Source: Company announcement

 

Hastings considers the additional tenements provide exploration potential for rare earths and increased flexibility for building infrastructure for the Hastings heavy rare earths project.

The terms of the acquisition include an up-front payment of $50,000, a minimum expenditure commitment of $150,000 over 5 years on the tenements and a royalty of 1 per cent on any rare earths extracted.

The tenements include gold workings believed to date back to the gold rush of 1885 to 1896.

Hastings indicated that apart from the historic workings, only a limited amount of exploration work has been undertaken, the most recent of which occurred in the late 1990s and included rock chip and soil sampling.

This returned values for gold, silver, lead, tungsten and noted higher than average rare earth values.

Hastings is not aware of any other exploration activity targeting rare earths in the area.

The acquisition of the tenements gives Hastings the rights to all minerals other than precious and base metals that are retained by the vendor.

“This is another step towards the development of the project,” Hastings Rare Metals chief executive officer Alastair Metcalf Hastings said in the company’s announcement to the Australian Securities Exchange.

“The resource has been delineated, the metallurgy determined and now we are starting to put in place the components needed to advance the project towards development.”

The Hastings deposit contains JORC Indicated and Inferred Resources totalling 36.2 million tonnes at 0.21 per cent Total Rare Earth Oxides, including 0.18 per cent Heavy Rare Earth Oxides, plus 0.89 per cent zircon and 0.35 per cent niobium.

Kimberley Rare Earths acquires U.S. gold project

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THE BOURSE WHISPERER: Kimberley Rare Earths (ASX: KRE) has entered into a convoluted transaction that will result in the company acquire 100 per cent of the Big Springs gold project located in Nevada, in the United States of America.

Stay with us on this – it is circuitous.

Kimberley Rare Earths has signed a binding agreement to acquire 100 per cent of Big Springs Project Pty Ltd (BSP) from its shareholders.

A US subsidiary company of BSP, MRG Copper (MRG), currently has a conditional right to acquire 100 per cent of the Big Springs gold project from Victoria Gold Corp.

Completion of the acquisition by KRE of BSP is conditional on the simultaneous completion of MRG’s acquisition of the Big Springs project.

Simple.

KRE indicated it had spent the past nine months on the look-out for projects it considered to be suitable for acquisition.

The company said it reviewed more than 40 projects, of which only a handful met its investment criteria.

These included: the potential for early development into a sustainable and profitable project; fit with the distinctive capability and strategic intent of KRE; and provision of a platform for further stepwise growth.

Subject to completion of due diligence, Kimberley Rare Earths claims the Big Springs gold project meets all of these criteria.

“The acquisition of the Big Springs project marks a new beginning for our company and follows an extensive search for suitable projects both in Australia and overseas,” Kimberley Rare Earths managing director Tim Dobson said in the company’s announcement to the Australian Securities Exchange.

“The combination of this new flagship project, together with KRE’s strategy and distinctive capability, is intended to position the company to achieve its goal of rapid growth into gold producer and acquirer of other metals projects.”

The project is located in an established gold mining region, 80 kilometres north of Elko in the north east of the state of Nevada.

 

Project location in north eastern Nevada, USA. Source: Company announcement

 

The project’s previous owners, Gateway Gold Corp reported an NI 43‐101 inferred gold resource estimate in 2006.

KRE said its due diligence has been unable to validate the basis of the assumptions and estimates used in that NI 43‐ 101 report and, accordingly, KRE does not intend to rely on it.

The company intends defining a JORC‐compliant resource on the project following completion of the acquisition, however, it also indicated it is uncertain if, following evaluation and/or further exploration, that the existing resources will ever be reported in accordance with the JORC code.

The company warned that should it be able to report a JORC‐compliant mineral resource, there is a risk it may be lower than that reported by Gateway.

With that in mind KRE has negotiated for the final consideration for the project to be dependent on the extent of any JORC‐compliant resource it may delineate.

Carnegie Wave Energy completes $5.8M funding initiative

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THE BOURSE WHISPERER: Wave energy developer, Carnegie Wave Energy (ASX: CWE) has completed a $5.8 million funding initiative for the company’s Perth Wave Energy project (PWEP), from a combination of Government and private funding.

Carnegie has secured agreement from the Government of Western Australia for a redistribution of the Low Emissions Energy Development (LEED) grant funding for the Perth Wave Energy project.

The net effect on Carnegie’s Perth project is an increase of $2.26 million in total State and Federal government grant funding to a total of $17.7 million.

Carnegie has already received $2.83 million from the LEED fund for development of its 100 per cent-owned CETO Wave Energy Technology intellectual property.

 

Source: Company announcement

 

In addition to the grant funding, the company has also raised $3.53 million of private capital through a combination of institutional and sophisticated investors, the majority from its existing shareholder registry.

88 Green Ventures, which led the capital raise, has now increased its ownership stake in Carnegie from 6.1 per cent to 9.7 per cent.

As a result, that company’s founder, Mike Fitzpatrick will join Carnegie’s Board of Director’s as a non-executive director.

“Carnegie presents an exciting opportunity to be a major player in the delivery of sustainable clean power and water projects for decades to come around the globe,” Fitzpatrick said in Carnegie’s announcement to the Australian Securities Exchange.

“The scalability of the CETO Wave Energy Conversion system to utility projects presents an exciting opportunity for 88 Green Ventures.

“I am looking forward to a greater involvement in Carnegie as a director as it continues its path through commercialisation to renewable utility scale generation.”

Carnegie said the increased $2.26 million in Government funding into the Perth project will result in a decrease of the same amount in capital the company will need to invest in the project.

Total Government funding into the Perth project is now $17.7 million.

Carnegie indicated the project is on track for completion of detailed design and securing of environmental and Government approvals by the end of 2012 and is scheduled to deliver first power at the end of 2013 with the Australian Department of Defence as the recipient.

“We greatly appreciate the continued support of the State Government of Western Australia,” Carnegie Wave Energy chairman Grant Mooney said.

“I am also delighted to welcome Mike Fitzpatrick onto Carnegie’s Board of Directors.

“Mike has an exceptional background in finance, infrastructure and renewable energy and I look forward to his contribution to Carnegie’s future success.”

Reed finalises debt facility for Meekatharra gold project

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THE BOURSE WHISPERER: Reed Resources (ASX: RDR) has finalised documentation for a $19 million syndicated finance facility with Credit Suisse.

The funds from the finance facility will be available to Reed for immediate use.

Reed indicated the funds will be used to meet working capital requirements for the company’s 100 per cent-owned Meekatharra gold project (MGP), located in the Murchison region of Western Australia.

The key features of the facility are summarised as follows:

–    $19 million Senior Secured Term Loan Facility;

–    Repayment in twelve months from first utilisation, with an option for Reed to extend by a further six months; and

–    A hedging facility which includes 70,000 ounces in forward delivery contracts and 40,000 ounces in bought puts.

The deal involves Reed opting to participate in a Participating Forward Gold Hedging Structure to manage gold price risk.

This will involve selling 70,000 ounces of production as forward delivery contracts and purchasing put options over 40,000 ounces, with put-only protection in the first four months before forward deliveries commence in month five.

Reed said this agreed hedging structure will enable it to mitigate its risk should an unexpected gold price downturn occur, at the same time retaining some upside participation should the gold price increase.

Reed will achieve a gold floor price of approximately $1641 per ounce over 110,000 hedged ounces.

“While gold hedging is required under the facility, the combination of puts and forwards establishes a gold price floor which protects the MGP’s revenue base, effectively mitigating risk should the gold price deteriorate, whilst retaining some exposure to gold price upside,”  Reed Resources managing director Luke Tonkin said in the company’s announcement to the Australian Securities Exchange.

Commissioning of the Meekatharra gold project is on schedule to start next month.

Refurbishment of the Bluebird mill is nearing completion following the commissioning of a new primary crusher in November.

“Installation of the new diesel-fired power station has commenced and is expected to be completed by early December whilst electrical terminations between the processing facility and the new power station remain on schedule for completion by mid-December,” Tonkin said.

“Given associated industry cost pressures it has been pleasing to deliver the MGP’s capital works program within budget.

“Dry commissioning of the plant will commence in mid-December with wet commissioning shortly thereafter.

“Circuit gold inventory will be established during commissioning whilst plant throughput is scheduled to increase throughout the fiscal third quarter as ore generated from the Bluebird open pit is mined.”

Emmerson and Ivanhoe tighten Northern Territory Joint Venture

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THE BOURSE WHISPERER: Emmerson Resources (ASX: ERM) has reaffirmed the terms of its Tennant Creek exploration Joint Venture in the Northern Territory with JV partner Ivanhoe Australia (ASX: IVA).

Emmerson said the JV remains committed to the advancement of regional greenfields exploration within its extensive package of tenements.

Ivanhoe has spent $18 million in the past 3 years, which has resulted in that company earning its 51 per cent interest on certain tenements in the Tennant Creek Mineral Field.

Ivanhoe has agreed to sole-fund a further $10 million the Joint Venture will put towards accelerating testing of a portfolio of new projects.

The JV has indicated two parallel exploration programs will commence in the 2013 field season.

These include:

–    The continuation of drilling at Emmerson’s 100 per cent-owned and sole-funded areas including the Goanna, Monitor discoveries and the Gecko and Orlando deposits, which contain current JORC resources of 50,800 tonnes of copper and 70,000 ounces of gold. These deposits are in close proximity to the 100 per cent-owned Warrego mill which is currently on care and maintenance; and

–    Exploration on regional greenfields areas funded by Ivanhoe but managed by Emmerson.

“We are very pleased that Ivanhoe Australia continues to strongly support the Tennant Creek exploration program and maintain the faith that the region can produce globally significant mineral discoveries,” Emmerson Resources managing director Rob Bills said in the company’s announcement to the Australian Securities Exchange.

“We believe the recent discoveries of Monitor and Goanna by Emmerson within our sole fund blocks is an indicator of the potential within the wider Joint Venture area.”

 

Source: Company announcement

 

Emmerson and Ivanhoe Australia will continue to share technical capabilities.

The JV partners have scheduled a joint ‘targeting workshop’ to be held early in 2013, during which they hope to identify a portfolio of ‘Tier 1’ projects as priority drill targets for future exploration within the jointly owned areas.

A minimum $500,000 (funded by Ivanhoe) will be spent in 2013 on drilling and geophysics to test these targets.

The remainder of Ivanhoe’s $10 million will be spent on identifying and drill testing a portfolio of Tier 1 targets during the following years.

Emmerson Resources will retain all rights to take out further sole-fund blocks from the Joint Venture areas and will continue to act as agent for the JV.

AusAmericn increases Bluebell De Soto projects in Arizona

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THE BOURSE WHISPERER: Australian-American Mining Corporation (ASX: AIW) has significantly increased its ground position at the company’s Bluebell and De Soto copper-gold-silver projects in Arizona, in the United States of America.

The company has staked 156 unpatented mining claims, which it said has considerably strengthened its ground position at the Bluebell and De Soto projects.

AusAmerican is of the opinion that the newly-staked unpatented claims contain extensions of known mineralisation at both the Bluebell and De Soto projects.

A recently-conducted field program identified prospective stratigraphy in an area located between the projects, which has been labelled ‘the Gap’.

 

Ground holding at Bluebell and De Soto projects. Source: Company announcement

 

This is the area in which and the company has staked its new claims.

“The staking of new ground at Bluebell and De Soto greatly enhances the prospectivity of the combined projects, as we believe the stratigraphic horizon that host the VMS mineralisation extends beyond the boundaries of the original projects,” AusAmerican managing director Richard Holmes said in the company’s announcement to the Australian Securities Exchange.

“In securing ‘the Gap’ between the two projects, the combined project area is a contiguous five kilometre band and this area also contains favourable stratigraphy for hosting VMS mineralisation.

“Staking this additional land is an exciting development for the company as it increases the size of the project area to over 14 square kilometres of similar geology to the historic mining areas.”

AusAmerican indicated it now intends drilling the Bluebell open pit target in Q1 2013 and will look to conduct geophysical appraisal of the newly staked ground in Q2 and Q3 in 2013.