THE BOURSE WHISPERER: Solar Systems, a wholly-owned subsidiary of ASX-listed Silex Systems has commenced construction of a one (1) mega-watt (nominal) Concentrating Photovoltaic (CPV) solar power station at the Nofa International Equestrian Resort in the Kingdom of Saudi Arabia.

This is the first project to be undertaken by the company in the Middle East region.

The facility is to consist of 28 units of the commercial CS500 CPV Dish System product and will be used to offset existing diesel generator capacity at the Nofa resort.

Silex said the facility would also showcase the operational performance and suitability of Solar Systems’ proprietary Dense Array CPV power conversion system for the burgeoning solar market in the Middle East.

“Securing the Nofa project is a key step forward in the marketing of Solar Systems’ unique Dense Array CPV technology in the Middle East,” Silex Systems chief executive officer Dr Michael Goldsworthy said in the company’s announcement to the Australian Securities Exchange.

“The Nofa facility will allow potential customers in the region to observe and measure the performance of this unique technology first hand.

“With several governments in the region laying out plans for a massive expansion in solar power generating capacity, including the recent announcement by the government of Saudi Arabia regarding a US$109 billion plan to build 41 giga-watts of solar power capacity over the next two decades, we are very excited about the commercial potential of this technology in the Middle Eastern market.”

The Nofa resort is owned by His Highness Prince Sultan Bin Mohammed Bin Saud Al Kabeer.

It is located approximately 90 kilometres west of Riyadh along Highway 40, which is the country’s main highway linking Jeddah and Mecca in the west to Dammam in the east.

The funding of the facility will be shared by Solar Systems and Nofa.

The plant construction is expected to be completed around the end of CY2012, subject to finalisation of import customs arrangements and completion of project planning and design activities over the next few months.

THE BOURSE WHISPERER: Cassini Resources has commenced exploration activity on all three of the company’s projects, located in Nevada in the United States.

The company has kicked off its North American exploration activities ahead of the schedule, saying it expects to advance each of these projects significantly over the next six months.

Cassini considers its Nevada projects represent a near term opportunity for exploration success in one of the world’s pre-eminent mining jurisdictions.

Cassini project locations in Nevada. Source: Company announcement

Cassini has staked additional claims at the Goldstar project to cover structural targets on the eastern margin of the claim block.

“Negotiations with holders of patented claims covering historic workings within the Goldstar Area of Interest have commenced,” Cassini Resources said in its ASX announcement.

The company indicated it had just completed detailed structural mapping at Goldstar and is set to commence ground magnetic surveying.

“Target zones identified using the mapping and magnetics will be rock chip sampled in mid-July 2012,” the company said.

Cassini has also staked an additional 80 claims over prospective structure and stratigraphy at the Leonid project to extend the project by an additional 3.7 kilometres of strike length on the northwestern side of the claim block.

Detailed structural mapping is nearing completion with gravity surveying scheduled to be carried out in July 2012.

Prospective structures will be rock chip and/or soil sampled in July 2012.

At the Pasco Canyon project road and drill pad construction has commenced and will be completed by the end of June 2012.

The diamond drill rig is scheduled to arrive on site early next month.

The drill program will consist four holes and is expected to take approximately 30 days to drill.

THE BOURSE WHISPERER: Geothermal play Green Rock Energy has received notice from Western Australia Minister for Environment and Water Bill Marmion that its application for Low Emissions Energy Development (LEED) funding for its Mid West Geothermal Power Project has been successful.

Green Rock had applied for, and has received all of, $5.38 million.

The company said the success of the application will strengthen the case Green Rock has made to the Commonwealth’s Emerging Renewables Program which puts a strong emphasis on State support.

 “This announcement represents a substantial step towards commercialising the very large hot sedimentary aquifer geothermal resources in our Mid West exploration permits,” Green Rock Energy executive chairman Richard Beresford said in the company’s announcement to the Australian Securities Exchange.

“We look forward to working with the State Government so that geothermal power can make a significant contribution to the State’s electricity demand.

Green Rock Energy and New World Energy Mid West permit areas. Source: company announcement

“We consider the project to be a strong contender for the Commonwealth’s Emerging Renewables funding and our objective is to have the majority of at least the first well costs covered by LEED and Emerging Renewables Program funds.

“This would address the lack of private investor appetite in Australia for the drilling necessary to demonstrate commercial production of geothermal energy.

“However, once demonstrated in the Mid West, we are confident that industry and utility investors will recognise the value of the very large geothermal resource and its proximity to existing power infrastructure and a rapidly-growing energy market in the Mid West Region.”

THE BOURSE WHISPERER: During the week Rio Tinto announced it would be committing US$4.2 billion to develop its tier one iron ore business.

The investment covers US$3.7 billion for expansion of the mining giant’s Pilbara iron ore operations in Western Australia.

Also included in the announced spend-up is US$501 million earmarked for further infrastructure development at the Simandou iron ore project in the West-African nation of Guinea.

“We are directing investment to projects that will generate the most attractive returns for shareholders and are resilient under any probable macroeconomic scenario,” Rio Tinto chief executive Tom Albanese said in the company’s announcement to the Australian Securities Exchange.

“Our superior Pilbara iron ore business has one of the highest margins in the industry, low capital intensity of investment and a strong track record of completing projects on time and budget.”

The investment outlay in the Pilbara will result in the company completing associated port and rail elements in order to expand iron ore production capacity to 353 million tonnes per annum in the first half of 2015.

US$2.9 billion will be spent on adding two berths to the new Cape Lambert jetty and wharf, the replacement of the existing original Cape Lambert rail car dumper, and the Rail Capacity Enhancement project.

US$570 million will be spent on a new gas-fired power station at Cape Lambert, which Rio claims will be more energy-efficient and produce significantly lower carbon emissions than its predecessor.

Rio’s capital expenditure explosion will extend the life of the Yandicoogina mine in the Pilbara to 2021 and expand its nameplate capacity from 52 to 56 million tonnes per annum.

Rio said the expansion was in keeping with its strategy of investing in and operating long-life, low-cost, tier one assets, while maintaining consistency with the company’s economic outlook.

“We continue to see positive prospects for medium- to long-term iron ore demand driven by ongoing growth in Chinese consumption,” Rio Tinto Iron Ore chief executive Sam Walsh said in the announcement.

“We continue to forecast that annual Chinese steel production will grow from its current level of around 700 million tonnes to around one billion tonnes a year out towards 2030.

“This demand growth is coupled with an increasingly challenged supply response, as several high-profile competitor projects have recently been either delayed or postponed.

“Our Pilbara expansion is already well underway, positioning us to capture the opportunities of this market environment. And we have the natural advantages of a readily-expandable Rio Tinto-operated port and proximity to the Chinese market.

Africa has been an investment hub for Rio Tinto of late as it has for the world’s biggest customer for iron ore, China.

The reasons for this are pretty simple. The price of iron ore is coming down and once the nice shiny new African infrastructure is in place it will be a much cheaper place to be a producer.

According to Global Market Research body IBISWorld revenues from iron ore are set to decline.

“After two years of extraordinary growth in 2011 and 2010, the revenue generated by the Global Iron Ore Mining industry is expected to contract by about 4.3 per cent in 2012,” IBISWorld’s said in its Global Iron Ore Mining global market research report in March this year.

“Although output will continue to expand, prices are easing from the high levels recorded in the previous year.

“The gains made in 2011 and 2010 follow a period of gloom during global recession.

“Following the recession, most iron ore supply contracts shifted from annual pricing (which has been the norm since the 1960s) to more flexible quarterly or even monthly pricing.

“The industry’s share of total world GDP in 2012 is expected to be about 0.2 per cent.

“Higher iron ore output and prices over the five years through 2012 are expected to yield average annual growth in industry revenue amounting to 23.9 per cent.”

In other words if you can get out of the expensive areas and into the cheaper ones to allow you to continue digging out extraordinarily large amounts of iron ore at lower costs so as to maintain your profit margins do so as soon as you can.

This probably shines some light on Rio’s haste in bringing the Simandou iron ore project in Guinea closer to being in operation.

The company’s investment plan at Simandou will be used in detailed design studies, early works and long-lead items.

This is primarily for rail and port infrastructure with first commercial production planned for mid-2015.

Rio said its plan at Simandou entails staged funding approvals with its partners for a progressive ramp up of the operation.

The company envisages it becoming a long-life, low-cost operation producing one of the highest grade iron ores on the market.

It could also be described as an emerging product hub operating at much lower costs than its Australian counter-operation.

“The investment we and our partners are making in Simandou takes us a step further towards the phased development and ramp up of a new world-class iron ore resource,” Walsh continued.

“Further investment will be made as the Government of Guinea progresses its financing strategy and grants approvals for the next steps in developing rail and port infrastructure.

“The experience gained in expanding our Pilbara operations will be invaluable as we develop Simandou.”

The cynics out there may feel that it could be Rio could just want to deplete its Pilbara mines as quickly as possible in order to focus more attention to, and take more profits from, Africa.

THE BOURSE WHISPERER: Sundance Resources has increased the high‐grade hematite Resources at the company’s Mbalam project in Central Africa by 49 per cent to 775.4 million tonnes grading 57.2 per cent iron.

According to Sundance over 95 per cent of the updated Resource is in the Indicated category, which it claims further underpins the strength of the development of Stage One of the project.

Stage One has already established the project at 35 million dry tonnes per year (Mdtpa) for 10 years from a previously announced Ore Reserve of 352 million tonnes at 62.4 per cent iron with low impurities of five per cent silica, 2.6 per cent alumina and 0.09 per cent phosphorus.

The company revealed it has also defined a maiden resource of 1.4 billion tonnes of Itabirite mineralisation at 35 per cent iron at the Nabeba deposit in the Republic of Congo in addition to 2.3Bt of Itabirite it has previously announced at the Mbarga deposit in the Republic of Cameroon.

This brings the Mbalam project’s total high‐grade Hematite and Itabirite resources to 4.49Bt.

Location of Nabeba Northwest and Nabeba South deposits in relation to the Nabeba deposit. Source: Company announcement

“The size of the high‐grade hematite resource clearly demonstrates the potential of this project,” Sundance Resources CEO and managing director Giulio Casello said in the company’s announcement to the Australian Securities Exchange.

“Combined with our exploration target of a further 90 to 150 million tonnes of high-grade hematite and also considering the other areas within our tenements that are yet to be explored, we are confident of approaching one billion tonnes of high‐grade, which further demonstrates that Mbalam is a world‐class iron ore asset.

“The maiden Itabirite Resource at Nabeba is consistent with our previously announced exploration targets and confirms the long life potential of these deposits with total Resources of 4.5 billion tonnes.”

Sundance was able to increase the global JORC‐Code compliant Mineral Resources for the Mbalam iron ore project due to the following reasons:

–    Addition of the Nabeba Northwest deposit (50.3Mt at 52.8 per cent Indicated resources);

–    Addition of the Nabeba South deposit (9.9Mt at 57.3 per cent iron Indicated resources);

–    Re‐interpretation of the Main Nabeba and Mbarga deposits based on additional drilling information (accounts for an increase of approximately 80Mt of Resources); and

–    A relaxation of previous chemistry ‘cut‐off’ and ‘cut‐over’ restraints as a result of the Enhancement Study (accounts for an increase of approximately 115Mt of high-grade Resources).

Sundance identified the relaxation of previous chemistry constraints to be significant in that previous resource estimations have applied various iron cut‐offs inside defined mineralised domains and then had further restraints placed for silica and alumina to ensure a premium quality resource was provided to the Ore Reserve Estimation process.

The company indicated work carried out on its Enhancement Study has so far is demonstrated its Ore Reserve process can handle lower quality specifications and still produce a high-grade product by use of in‐pit scheduling and blending.

This has enabled Sundance to optimise the Resource to present maximum tonnes for the Ore Reserve Estimation process while also allowing use of the upgraded plant already within the company’s Definitive Feasibility Study to treat more resource tonnes.