Mutiny upgrades Deflector to 552,000 gold equivalent ounces

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THE BOURSE WHISPERER: Mutiny Gold (ASX:MYG) has increased the JORC Code-compliant ore reserve and Life of Mine (LOM) production inventory for the company’s Deflector gold-copper deposit in Western Australia.

The company’s upgraded economic analysis has increased the Deflector maiden initial LOM production inventory to 552,000 ounces of gold equivalent.

This total includes 442,000 ounces of gold, 21,000 tonnes of copper and 491,000 ounces of silver.

 

Deflector ore Reserve statement. Source: Company announcement

 

The new LOM production inventory also includes a JORC reserve of 403,000 ounces of gold equivalent.

Mutiny Gold said the upgraded Deflector LOM production inventory and Ore Reserve supports the company’s vision of being a significant gold producer.

“This is another significant milestone along the path to the commercialisation of Deflector, which, in turn, is the first step in Mutiny Gold becoming a major new Australian gold and copper producer,” Mutiny Gold managing director John Greeve said in the company’s announcement to the Australian Securities Exchange.

“The new results have identified a 27 per cent increase in gold reserves, while mine inventory in gold equivalent ounces has jumped by 20 per cent.

“These reserves are the back-bone of an upsized mine plan, which we look forward to releasing to the market shortly.”

Mutiny Gold said it had produced these economic analyses using an updated resource model produced by Widenbar and Associates in August 2012.

 

Deflector deposit Mineral Resources: Source: Company announcement

 

The August 2012 Deflector analysis contains JORC-compliant Mineral Resources of 2.87 million tonnes at 6.41 grams per tonne gold, 6.82 grams per tonne silver and 0.95 per cent copper for 729,000 ounces of Equivalent gold; including 591,000oz gold, 628,000oz silver and 27,000t of copper using a 0.5g/t gold cut-off grade.

Southern Hemisphere welcomes Lundin US$35M farm-in

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THE BOURSE WHISPERER: Southern Hemisphere Mining (ASX:SUH, TSX-V:SH) has struck a strategic agreement with TSX-listed base metals miner Lundin Mining Corporation and executed a terms sheet.

The deal will result in Lundin Mining spending up to US$35 million on exploration at Southern Hemisphere’s Llahuin copper-gold project in central Chile to earn a direct stake of up to 75 per cent over a six-year period.

 

Location map showing the Llahuin project. Source: Company announcement

 

Lundin Mining will also take an 11.5 per cent stake in Southern Hemisphere via a US$5 million share placement of19.8 million fully paid Southern Hemisphere shares at C25c a share on the TSX-V.
US$3 million of the placement is to be spent by Southern Hemisphere on the Llahuin project.

“Lundin Mining’s extensive experience in exploration, mine development and mine operations, as well as its immense financial standing, means this deal is a game-changer for Southern Hemisphere and Llahuin,” Southern Hemisphere managing director Trevor Tennant said in the company’s announcement to the Australian Securities Exchange.

Lundin Mining is a diversified Canadian base metals miner with operations in Portugal, Sweden, Spain and Ireland, producing copper, zinc, lead and nickel.

It also holds a development project pipeline, which includes its Neves-Corvo mine in Portugal and an equity stake in the world class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo.

Southern Hemisphere last month announced a 36 per cent increase in resources at the Llahuin project, which now includes 436,000 tonnes of copper and 459,000 ounces of gold.

The resource upgrade contained a Measured and Indicated resource of 145 million tonnes grading 0.40 per cent copper equivalent with an additional 17 million tonnes grading 0.33 per cent copper equivalent in the Inferred Category.

Southern Hemisphere currently has a diamond core drilling campaign underway at the Llahuin project, which it said will be accelerated with the completion of the Lundin Mining share placement and farm in arrangements.

Under the terms sheet struck between the two companies, Lundin Mining will fund Llahuin project expenditures in stages with an initial US$3 million to be spent within three years.
 
A further US$3 million from the proceeds of the placement to Lundin Mining is to be spent on the Llahuin project, providing a US$6 million total initial committed expenditure.

After the total initial commitment is expended, Lundin Mining has the option to sole-fund a further US$10 million towards Llahuin project expenditures to earn a cumulative undivided 51 per cent interest in the project.

After completing this earn-in, Lundin Mining has the option to sole-fund an additional US$10 million within one year to earn a further 14 per cent interest for a total undivided 65 per cent interest in the Llahuin project.

Following this earn-in, Lundin Mining has the option to sole fund the last additional earn-in by spending a further US$12 million, within three years of obtaining a 51 per cent interest, to earn an additional 10 per cent interest in the project for a total undivided 75 per cent interest in the Llahuin project.

Panoramic upgrades total Resources at Gidgee

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THE BOURSE WHISPERER: Panoramic Resources (ASX:PAN) has announced a combined 74 per cent increase in the Resources at Howards and Heron South, part of the company’s 100 per cent-owned Gidgee gold project, located near Wiluna in Western Australia.

The total Resources at Gidgee now measure 11.8 million tonnes at 3.07 grams per tonne gold for 1,160,000 ounces of gold.

“The Resource upgrade at Howards and Heron South demonstrate the potential for further Resource upgrades and exploration success at Gidgee,” Panoramic Resources said in its ASX announcement.

“These resources will now be included in the updated Gidgee gold project Scoping Study, which is currently underway and due for completion before the end of 2012.”

 

Drilling results from Howards. Source: Company announcement

 

The updated Resource at Howards is now 3.5 million tonnes at 1.61g/t gold for 182,500 ounces of gold.

This represents a 100 per cent increase over the deposit’s previous estimate.

The gold grade has also increased by approximately five per cent from 1.54g/t to 1.61g/t.

“The recently completed drilling program at Howards demonstrates a mineralised system that remains open at depth and along strike,” Panoramic said.

“The Howards Resource has not previously been mined and has the potential to be an early source of ore in any redevelopment at Gidgee.”

The upgraded Resource at Heron South is now 1.1 million tonnes at 2.20g/t gold for 80,300 ounces of gold.

This is a 34 per cent increase over the previous estimate.

“Resource definition drilling has confirmed a continuous, well defined mineralised zone beneath the existing open pit,” Panoramic said.

Panoramic indicated a recently-announced Scoping Study for the Gidgee project will now be expanded to include the Resource upgrades at Howards and Heron South.

The company said it considered the upgraded resources add to the prospects of the redevelopment and commencement of operations at Gidgee.

“Assuming that the updated Gidgee Scoping Study is completed before the end of 2012, Panoramic plans to commence a detailed Feasibility Study in early 2013,” the company said.

“Subject to positive economic results, financing and necessary statutory approvals, the target is to be in gold production at Gidgee in mid-2014.”

Hot Chili set to raise $35.5 million

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THE BOURSE WHISPERER: Hot Chili Limited (ASX:HCH) has arranged a two tranche placement to raise $32.5 million at 50 cents per share as part of a proposed capital raising of up to $35.5 million.

Hot Chili said funds raised will largely be directed towards a resource growth drilling program and continuation of development studies at the company’s Productora copper project in Chile.

Productora is being fast-tracked towards a decision to mine on a large-scale open pit project in cooperation with Hot Chili’s project partner and substantial shareholder Compañía Minera del Pacífico S.A. (CMP- Chile’s largest iron ore miner).

Hot Chili claim the project to be one of the fastest emerging mid-tier copper projects being developed in Chile, with significant infrastructure advantages in the low-altitude coastal range.

 

Drilling intersections in relation to landholding and development lay-out at Productora. Source: Company announcement

 

In addition to its current cash balance of approximately $10.8 million, Hot Chili said the funds will be directed toward the following activities at Productora during 2012 and 2013:

–    Completion of a major resource drilling program comprising a further 80,000m of reverse circulation (RC) and 15,000m diamond drilling (DD);

–    Completion of two major resource up-grades – the first in the December quarter of 2012, and the second expected in the June quarter of 2013;

–    Completion of a pre-feasibility study at Productora in the second half of 2013;

–    Completion of further key land acquisitions during 2012/2013 to bolster the company’s copper project centre in the third and fourth regions of Chile’s coastal range;

–    Completion of joint infrastructure and iron exploitation agreement for the Productora project with Hot Chili’s major project partner CMP; and
 
–    Submission of an Environmental Impact Assessment in the first half of 2013 to facilitate environmental and regulatory approval for mining.

The company indicated it also intends to direct some funds towards continued exploration assessment of other projects within its Chilean copper project portfolio.

“The Board of Hot Chili is very pleased with the interest shown in the placement by a number of highly regarded institutions and fund groups both in Australia and overseas,” Hot Chili said in its ASX announcement.

“The successful capital raising is a strong vote of confidence in the company’s growth and development strategy by some of Hot Chili’s largest shareholders and pedigree names in the copper industry.

“The capital raising will allow participation by new investors, institutions and fund groups as well as existing shareholders in a stand-out growth opportunity in the Chilean copper industry.”

Avalon to acquire Hannan’s Swedish copper-iron prospects

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THE BOURSE WHISPERER: Avalon Minerals (ASX:AVI) has signed a binding Heads of Agreement (HOA) with Hannans Reward (ASX:HNR).

Avalon has agreed to buy Hannans’ Discovery Zone and Tributary Zone prospects as well as the exploration area surrounding the Discovery Zone located in the Kiruna district of Sweden for $4 million.

The Discovery Zone has a current JORC Inferred Mineral Resource of 10.9 million tonnes at 0.31 per cent copper, 38.7 per cent iron and 0.08 grams per tonne gold, reported above a 20 per cent iron cut-off.

The prospects are currently 100 per cent-owned by Hannans subsidiary, Kiruna Iron.

 

Source: Company announcement

 

The acquisition is conditional upon the completion of legal and technical due diligence by Avalon on the Discovery Zone prospect, to be conducted by 23 November 2012.

If the company is not satisfied (Condition Precenden), the HOA will terminate and the acquisition will not proceed.

“The acquisition of the Discovery Zone prospect provides an exciting opportunity to expand the company’s exploration portfolio and complements Avalon’s strategy to deliver significant long term growth opportunities to its shareholders,” Avalon Minerals managing director Jeremy Read said in the company’s announcement to the Australian Securities Exchange.

“The location of the Discovery Zone prospect, approximately 10 kilometres from the Viscaria copper project, offers the potential to add up to $100 million in value to Viscaria, bringing the total project Net Present Value to potentially US$300 million, by trucking mineralisation from Discovery over to the planned processing plant at Viscaria, extending the life of the overall project to 9.5 years and allowing an increase in the mining rate.

“The copper-iron mineralisation at the Discovery Zone is very similar in nature to the copper-iron mineralisation at Avalon’s existing D Zone Mineral Resource.

“Therefore, we believe that the Discovery Zone mineralisation will be processed through the processing plant planned for Viscaria and this is the main reason that this acquisition is such a value adding opportunity for Avalon.”

Under the HOA, Avalon will be required to make the following payments to Hannans:

–    A non-refundable cash deposit of $100,000 when the Condition Precedent is satisfied;

–    A non-refundable cash payment of $300,000 when a formal sale and purchase agreement for the acquisition is executed by Avalon and Hannans. This formal agreement is required to be signed within 30 days of the First Payment unless otherwise agreed by the parties and will be consistent with the terms set out in the HOA and will contain customary terms and conditions for a transaction of this nature;

–    $1.6 million when written notification from the Mining Inspectorate of Sweden is received, noting that the Mining Inspectorate of Sweden formally approves the complete transfer or assignment of the Discovery Zone prospect to Avalon on conditions (if any) acceptable to Avalon; and

–    $2 million when Avalon receives full, unencumbered title to the Discovery prospect. Up to $1 million of this final payment may, at Avalon’s sole and absolute discretion, be paid by Avalon issuing Hannans or its nominee up to $1 million worth of Avalon shares.

The HOA also allows Avalon to take over responsibility for an existing Net Smelter Royalty of 1.5 per cent for the Discovery Zone prospect.

Metallica completes SCONI pilot testwork

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THE BOURSE WHISPERER: Metallica Minerals (ASX:MLM) has successfully completed the second phase of the company’s pilot metallurgical test program on representative SCONI (scandium-cobalt-nickel) oretypes.

Metallica completed the first phase of the metallurgical testwork earlier this year in two separate steps.

The first step involved the leaching of metals into a pregnant leach solution (PLS) through a High Pressure Acid Leach (HPAL) pilot plant at SGS Lakefield Oretest (SGSLO) in Perth, Western Australia.

The second step used a purpose built, solvent extraction plant at HRL Testing in Brisbane, Queensland to recover scandium from the PLS and subsequently refine the scandium into high-purity (greater than 99.9 per cent) scandium oxide.

The company announced the success of this phase in July.

The recent phase of testwork required Metallica to transport the solvent extraction pilot plant to Perth to be integrated with the HPAL pilot plant.

The fully integrated closed circuit pilot plant operated continuously for eight days, during which time Metallica said it was successful in demonstrating the efficacy of the process.

The company identified this as being crucial in proving the flowsheet it had selected for the SCONI project and for obtaining detailed data it will used in the design of the processing plant in a Definitive Feasibility Study.

A blended bulk sample of representative moderate grade nickel/cobalt/scandium oretypes from the SCONI Greenvale, Lucknow and Kokomo nickel-copper and scandium deposits was processed through the pressure leach autoclave at 265ºC for a continuous eight-day period.

Approximately 2,800 kilograms of typical SCONI ore blend at an average feed grade of 1.2 per cent nickel, 0.08 per cent cobalt, and 103 grams per tonne scandia was leached during the campaign and high average metal extractions were achieved: of greater than 95 per cent nickel and cobalt; and greater than 85 per cent scandium.

 

Sc-Co-Ni metal extraction (LHS) and acid consumption (RHS). Source: Company announcement

 

The average iron, magnesium and aluminium content of the samples were 25 per cent, 4.3 per cent, 3.9 per cent respectively and presented no significant issues in the continuous pilot testwork.

The acid consumption was also modest, averaging around 400 kg/tonne.

The high pressure acid leach (HPAL) was integrated with a purpose built solvent extraction circuit to recover scandium from the pregnant leach solution (PLS).

In excess of 96 per cent of the dissolved scandium was recovered into a crude hydroxide intermediate, which will be further refined to pure scandium oxide in Brisbane.

“These results, in conjunction with those previously reported from our earlier pilot program, demonstrate the robustness of the selected process to achieve high scandium, nickel and cobalt extraction and recovery from a range of SCONI oretypes,” Metallica Metals chief executive officer Gavin Becker said in the company’s announcement to the Australian Securities Exchange.

“This testwork has provided the SCONI project process design criteria and is a crucial foundation for the Definitive Feasibility Study of the proposed full scale operation at Greenvale.

“Having the majority of the metallurgical testwork successfully completed with consistently positive results is a major step towards our aim of becoming a significant producer of nickel and the world’s first long-term reliable scandium producer.”

Strategic Energy gains access to Cultana Military ground

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THE BOURSE WHISPERER: Strategic Energy Resources (ASX:SER) has been granted federal access to Commonwealth land known as Cultana Military Training Area in South Australia.

Strategic Energy described the Cultana area as one of the best remaining blocks to explore for iron-oxide-copper-gold (IOCG) type mineralisation in South Australia.

It forms part of the Olympic Dam province which includes Prominent Hill, Olympic Dam and Carrapateena.

“We are thrilled to have ministerial approval to explore this area,” Strategic Energy managing director Mark Muzzin said in the company’s announcement to the Australian Securities Exchange.

“It has been a very long process, one that I personally have pursued for more than six years and can now say that we have been rewarded.

“We believe this property to be one the best relatively unexplored areas in South Australia.

“We have a number of targets lined up and are keen to get started, hopefully in December.”

 

Cultana Lease 5010 South Australia. Source: Company announcement

 

The Cultana Lease covers an area of 792 square kilometres within the Cultana Army Training Area south of Port Augusta in South Australia.

Strategic Energy holds a 75 per cent interest in the licence in a joint venture with U Energy and its parent company, Fleurieu Mines, holds the remaining 25 per cent.

The first activity planned is two holes for test-drilling in the Cultana Inlier.

The Joint Venture is considering flying a 90 kilometre squared HeliTEM geophysical survey over all seven defined IOCG gravity targets to confirm exact drill locations.

Deed of Access needs to be signed with the Department of Defence outlining the parameters of site access.

Strategic Energy has already reviewed an earlier draft document and said it foresees no issue with obtaining the deed.

The project also requires standard regulatory approvals from DMITRE (Department for Manufacturing, Innovation, Trade, Resources and Energy, South Australia).

The Joint Venture is aiming to drill the key targets by December this year or early January 2013.

This will be dependent on the availability of drill rigs and all usual permissions being granted.

“This is a major milestone for the company and we are excited that we have unlocked what we believe is our biggest asset,” Muzzin said.

Placement gives Renaissance $10M boost

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THE BOURSE WHISPERER: Renaissance Minerals (ASX:RNS) has received firm commitments from sophisticated and institutional investors to raise gross proceeds of $10 million through a share placement.

The company said the Placement was strongly supported by new and existing institutional and sophisticated investors within Australia and overseas.

Renaissance indicated it intends using the funds raised by the Placement to accelerate exploration activities within the company’s Cambodian gold project.

The company is targeting increases in the existing resources from the Okvau gold deposit and from surrounding drill ready targets.

Renaissance has already defined a JORC-compliant indicated and inferred resource estimate at the Okvau gold deposit of 12.6 million tonnes at 1.8 grams per tonne for 729,000 ounces of gold.

 

Okvau gold deposit Resource estimate. Source: Company announcement

 

The Placement consists of 55.55 million new shares to be issued at a price of 18 cents per share to raise total funds of $10 million.

The shares will be issued in two tranches:

–    Tranche 1 – comprising 39.40 million shares at 18 cents to raise $7.1 million, to be issued immediately, in accordance with ASX Listing Rules; and

–    Tranche 2 – comprising 16.15 million shares at 18 cents to raise a further $2.9 million, to be issued subject to shareholder approval at a meeting of shareholders to be held in mid-November 2012.

“This $10 million raising places the company in the strongest financial position it has been in and allows for the acceleration of an aggressive exploration program at the company’s Cambodian gold project in the forthcoming dry season – approximately from mid-November onwards,” Renaissance Minerals managing director Justin Tremain said in the company’s announcement to the Australian Securities Exchange.

“The Directors of Renaissance Minerals Limited recognise the ongoing support that we continue to receive from our existing shareholders, including OZ Minerals, and welcome the new shareholders to the register.”

Renaissance pointed out OZ Minerals(ASX:OZL), the company’s major shareholder, has agreed to participate in the Placement to the amount of $1.5 million.

The company said its participation will be deducted from the $5 million deferred consideration payable to OZ Minerals under the Sale and Purchase Agreement for the Cambodian gold project.

The remaining $3.5 million obligation will be paid in January 2013.

OZ Minerals’ participation will fall under Tranche 2 of the Placement.

Exco delivers maiden Salebury copper-gold Resource

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THE BOURSE WHISPERER: Take-over target Exco Resources (ASX:EXS) continues to demonstrate its value with the completion of a maiden JORC-compliant (combined Indicated and Inferred) resource for the Salebury copper-gold deposit.

The maiden mineral resource for the Salebury deposit has come in at 1.3 million tonnes at 0.90 per cent copper and 0.54 grams per tonne gold containing 12,000 tonnes of copper and 23,500 ounces of gold.

The total resource includes an Indicated mineral resource of 1.1 million tonnes at 0.93 per cent copper and 0.56g/t gold.

The resource still remains open at depth within the prospective region.

The Salebury deposit is located approximately 15km east of Cloncurry in Northwest Queensland and forms part of the company’s Cloncurry project.

 

Salebury geological interpretation. Source: Company announcement

 

“The deposit occurs on the southern limb of the Pumpkin Gully syncline,” Exco Resources explained in its ASX announcement.

“Geologically, the area consists of intercalated black shales and meta-basalts/dolerites of the Toole Creek Formation.

“Mineralisation is predominantly hosted within black shale and forms a number of sub-parallel East-West trending lodes.

“Geophysics, surface mapping and anomalous results in drill holes indicate a strong structural control to mineralisation.

“The deposit occurs over a combined strike length of approximately 900 metres.”

Exco said recent geophysics, surface geochemical surveys and drilling it has carried out has effectively mapped the mineralising structures and host lithological units, providing a strong geological model.

Recent drilling has confirmed the continuity of the mineralisation between sections and shown the mineralisation to be extensive and relatively continuous; however there appears to be numerous lodes, some of which will require further infill drilling.

The company indicated this new resource, together with other recent updates and ongoing work in the region is in line with management expectations and does not change the Exco Director’s recommendation in respect of the Revised Offer tabled by predator Washington H. Soul Pattinson & Company Limited (WHSP).
 
Exco Directors continue to unanimously recommend that Exco shareholders accept WHSP’s Revised Offer.

International Goldfields and US-based, Santa Fe Gold Corporation to merge

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THE BOURSE WHISPERER: International Goldfields (ASX:IGS) and United States-based, Santa Fe Gold Corporation (OTCBB:SFEG) have entered into a conditional Binding Heads of Agreement (HoA) to merge.
 
In an announcement to the ASX the merged entity was described as a diversified, well-funded and low cost gold-silver explorer, developer and miner.

It will have the advantage of being listed on the ASX and also traded on a major United States exchange or on the OTC Bulletin Board.

Company projects will scattered across emerging mining districts including West Africa, Brazil and the south-west US.

The combined entity will have an initial market capitalisation of approximately $70 million, cash reserves of at least $10 million, low cost gold and silver production of 28,000 ounces per annum (gold equivalent), an operating mill, near term development assets and a portfolio of advanced exploration assets.

“The combination of International Goldfields’ exploration assets in emerging global mining districts with Santa Fe’s portfolio of low-cost mining and exploration assets in New Mexico, together with the combined skills of the two experienced management teams, will create a new merged company capable of adding significant value for its shareholders during a time of robust gold price,” International Goldfields chief executive officer Travis Schwertfeger said in the copany’s announcement to the Australian Securities Exchange.

Schwertfeger was joined by Santa Fe chief executive Pierce Carson to sing the praises of the merger.

“Santa Fe’s projects have had significant exploration and development, plus we successfully achieved commercial production at our Summit mine in early 2012,” Carson said.

“Our focus is on increasing production at Summit and bringing the Mogollon and Ortiz projects on stream.
 
“The merger with IGS provides Santa Fe the working capital to achieve those goals, plus rounds out the exploration pipeline for continued growth of the company’s resource base.

“At full production, we anticipate low production costs at our mines that will rival major producers worldwide.”