Carpentaria increases Hawsons NPV

THE BOURSE WHISPERER: Carpentaria Exploration has raised the estimated net present value (NPV) of its Hawsons iron project to $3.2 billion.

The increase has been based on lower projected operating costs used in a recent mining option study.

The Hawsons iron project is located 60 kilometres from Broken Hill and includes an Inferred magnetite Resource of 1.4 billion tonnes at a Davis Tube Recovery of 15.5 per cent (12 per cent cut off) and an Exploration Target of six billion tonnes to 11 billion tonnes at 14 per cent to 17 per cent DTR.

This includes up to 1.9 billion tonnes of high grade magnetite concentrate.

The increased NPV represents a rise of 14 per cent from the company’s pre-feasibility study and is based on modelling of in-pit crushing and conveying by GHD with significantly reduced mining cost estimates compared to conventional truck haulage.

According to Carpentaria Exploration executive chairman Nick Sheard the company views the new results as very pleasing as they boost the prospects of a new mine being established at Hawsons.

“This builds on an already robust financial model and development concept and shows the benefits of a very large and simple deposit,” Sheard said in the company’s announcement to the Australian Securities Exchange.

“In-pit crushing and conveying is an established mining method and well suited to the Hawsons deposit, importantly it has not yet been optimised and further cost reductions are possible.”

Carpentaria described the in-pit crushing and conveying technology it intends using as a preferred option for large openpit mines with high outputs.

The systems offer advantages over traditional truck haulage by reducing haulage distances.

It also reduces the costs involved with trucks due to lower maintenance costs, reduced road preparation, fewer movements during operations, less energy consumption and longer life span.

In addition to the in-pit crushing and conveying, Carpentaria said it is also working on processing cost savings, including capital costs, to maximise the benefits of the soft ore at Hansons and its amenable magnetite liberation.
“These ongoing improved project results show the potential of Hawsons to become a company-making project for Carpentaria and an ongoing source of wealth for shareholders,” Sheard continued.

“Carpentaria will continue to work to reduce costs and strive to produce magnetite at a comparable cost to West Australian hematite producers.”

Blackham signs up Williamsons gold mine

THE BOURSE WHISPERER: Blackham Resources has signed a Deed of Assignment with Apex Minerals that confirms the rights of Kimba Resources to all minerals covering Mining Lease M53/797, which includes the Williamson gold mine.

Blackham recently acquired 100 per cent of Kimba and its Matilda gold project as well as securing exploration and mining rights to gold, nickel and all non‐uranium minerals rights attached to a large tenure package in the Lakeway area.

The Matilda gold project area now includes gold and nickel rights to 40 kilometres of strike along the Wiluna mine sequence with a total land package of 600 square kilometres.

The project now includes the old Matilda gold mine, the Williamson gold mine and defined targets at Regents, Galaxy, Mt Poole, Monarch, Prior, Red Lady, Zenith, Island and Albion gold prospects in the Lakeway area.

The new deed also grants Blackham the right to Apex’s camp and facilities as far as it is not being fully utilised by Apex.

The deed also confirms Kimba’s rights to explore and mine nickel and uranium on Apex’s tenure and

Apex’s right to explore and mine calcrete on part of Kimba’s tenure.


Source: Company announcement

 Blackham will also receive all the mining information relating to the Williamson gold tenement currently held by Apex.

Discussions are currently underway between the parties concerning the possibility of Blackham processing ore through Apex’s gold plant.

“Processing ore from the Matilda gold project through Apex’s gold plant is likely to bring mutual benefits to both companies as the plant currently has excess capacity,” Blackham Resources said in its announcement to the ASX.

“Apex’s Wiluna plant has the flexibility through two separate mill streams to be able to treat both refractory and free milling ore.

“If Blackham is able to supply oxide ore to the plant the throughput capacity can be significantly increased.”

Blackham said it plans to focus initial drilling to be undertaken at the Matilda gold project on defining resources and exploration targets that are most likely to create near term mining opportunities.

The approvals process for the drilling program has begun with drilling expected to commence in December.

Atlantic commissions Windimurra facility

THE BOURSE WHISPERER: Vanadium near-producer Atlantic Ltd has successfully completed the hot commissioning of a rotary kiln at its wholly-owned Windimurra vanadium facility in Western Australia.

The company said it considers the firing of the kiln marks the achievement of a key milestone as it prepares to commence production at Windimurra.

The rotary kiln is an important facet of the production chain at Windimurra as its function will be the roasting the magnetite ore, which allows vanadium to be extracted through the process of leaching.

Over recent months Atlantic has mined around 240,000 tonnes of vanadium bearing ore, which it has stockpiled for processing through the new plant.


 Stockpiled magnetite concentrate ready for roasting in the kiln. Source: Company announcement

Already the company has been able to process 58,000 tonnes of mined ore through the crushing, milling and beneficiation (CMB) plant to produce magnetite concentrate.

Stockpiled magnetite concentrate has been fed into the kiln, marking the commencement of hot commissioning.

Atlantic managing director Michael Minosora said process commissioning of the remaining facility will commence as soon as vanadium solution concentrations reach target levels.

“The operations team continues to improve rates of availability and levels of production of the CMB plant and a specialist engineering company has been appointed to assist in the resolution of the remaining commissioning work at the CMB plant,” Minosora said in the company’s announcement to the Australian Securities Exchange.

Atlantic said it expects to commence first production of ferrovanadium in the December calendar quarter of 2011.

It is currently screening existing fines material at Windimurra in preparation for transportation to storage sheds in Geraldton.

Calcined iron fines shipments are expected to take place in December of 2011.

Hillgrove begins production at Kanmantoo

THE BOURSE WHISPERER: Hillgrove Resources has delivered the first ore to the process plant at the company’s Kanmantoo copper mine project.

Processing through the plant has now commenced.

The first ore to be throughput is to be sourced from stockpiled, crushed, relatively low grade ore, to test the plant and to optimise performance.

The Kanmantoo copper mines project is located less than 55 kilometres from Adelaide in South Australia and currently hosts a Mineral Resource of:


Source: Company announcement

The company said that it expects the first concentrate production soon as the concentrate thickener fills.

Once the plant has been optimised, ore feed will move to higher grade material (0.7 per cent to 0.9 per cent copper), of which about 300,000 tonnes is now stock-piled on the Run-of-Mine pad, situated immediately adjacent to the crushing facility.

Hillgrove anticipates the transition to higher grade feed will occur within days rather than weeks.

“Last evening we commenced production through the mill at the Kanmantoo project, after 12 months and two weeks of a scheduled 12 month construction project,” Hillgrove Resources managing director Drew Simonsen said in the company’s announcement to the Australian Securities Exchange.

“By any measure, this is an outstanding result, and the Kanmantoo and broader Hillgrove team are to be congratulated on this accomplishment.

“The achievement of this milestone changes the company from ‘developer’ to ‘producer’ status.”

The company outlined its next milestone to be the formal hand-over of the plant from the construction contractor, subject to meeting contractual performance criteria.

First revenue is expected in December from the company’s contracted off-take party with the first shipment of concentrate out of Port Adelaide scheduled for early next year.

“I am excited by the number of revenue enhancing and cost reduction initiatives already identified by the very experienced process plant team, and these have the potential to benefit the operation in the next year or so,” Simonsen added.

“In addition, initial results from tonnage and grade reconciliations between mining production and the resource model are very encouraging, with grade in line with expectations, but substantially increased tonnages over those predicted by the block models – hence the size of the stockpile on the ROM pad.

“While much too early to extrapolate this experience to the whole resource, the results to date are very encouraging, with implications for strip ratio as well as providing the operation with added grade control flexibility.”

FairStar given keys to fun SHIP

THE BOURSE WHISPERER: FairStar Resources has been granted a Mining Lease by the government of Western Australia its 100 per cent-owned Steeple Hill tenements.

The news follows the company’s successful negotiation of a Native Title Agreement covering the Steeple Hill Iron Project (SHIP), which was announced earlier this week.

The granting of the Mining Lease moves the company closer to securing a $300 million debt funding facility, on which it can commence to draw down on and move towards production.

FairStar now needs to conclude Off-Take Agreements for a substantial part of the ore to be derived from the SHIP Tenements to complete its obligations to earn the funding.


Source: Company announcement

“Shareholders can be encouraged that the Board and the company have achieved what we said we would when we made the conditional funding announcement just three weeks ago,” FairStar Resources managing director Kevin Robertson said in the company’s announcement to the Australian Securities Exchange.

“SHIP is a company transforming project that will rapidly take FairStar from an explorer to a producer of iron ore in a short time frame and we are looking to the investors to complete their due diligence and upgrade the funding status for our $300 million facility from “conditional” to “unconditional.

“We have always said that FairStar would move SHIP to production for the benefit of our loyal shareholders and I am pleased to say that today we stand on the threshold of accomplishing this very thing.”

FairStar said the $300 million facility will be used to commence construction and commission the SHIP plant in Western Australia’s Yilgarn region, fund infrastructure, provide further working capital and retire debt.

The facility will be repayable over ten years from first drawdown with iron ore.

Key features of the Innovative Debt Instrument include:

–    Initial cash drawdown upon the facility becoming unconditional with further drawdowns over the following 15 months based on agreed budget and milestones;

–    Debt repayable by the delivery of iron ore over a 10 year term; and

–    Security is a mortgage over the SHIP mining tenements only.

FairStar plans to execute a three phase strategy at SHIP; the first phase will recover the project’s deposits of alluvial iron ore in a low cost mining operation, while the second phase will be a drill and blast operation for hard rock hematite, the third phase will be the recovery of magnetite.

Red Gum to list on Sth America portfolio

THE BOURSE WHISPERER: The Initial Public Offering (IPO) of fledgling South America-focused exploration play Red Gum Resources to raise a maximum of $6 million is expected to close on 21 November.

A listing for the company on the Australian Securities Exchange is hoped to occur during December.

The Offer is for a maximum of 30 million shares at an offer price of 20 cents per share.

An Oversubscription of up to a further 5 million shares, to raise a further $1 million, may be accepted.

Red Gum has full ownership, or the right to earn full ownership, in a prospective portfolio of base metal exploration projects, located in Chile and Peru.

In Chile the company has the option to acquire 100 per cent of the La Negra project, which hosts an exploration target of a 10 million tonnes to 70 million tonnes of polymetallic deposit containing zinc, lead, copper and silver.

Red Gum claims previous underground workings at the project to a depth of 30 metres indicate high grade resource potential up to 20 per cent contained metals.

There has already been geochemistry and 3D induced polarisation geophysical surveys completed, which have revealed large, coherent anomalies.

The company has engaged a drill rig for late November to undertake a 3,600 metre diamond drilling program.

In Peru Red Gum owns 100 per cent of the Chongos and Cerra Huancash zinc, lead and silver projects.

Chongos is located in the centre of the Peruvian polymetallic belt, which Red Gum pointed out contains world class deposits including Antamina, Iscaycruz, San Gregorio and Toromocho / Morococha.

Early stage exploration and geochemical sampling carried out at Chongos have already identified an anomaly 5 kilometres long demonstrating significant zinc anomalies up to 10 per cent.
“Our portfolio of projects is highly prospective for polymetallic discoveries and we look to immediately commence with a drill program at our flagship Chilean project, La Negra, post listing,” Red Gum managing director Dr paul Pearson said in a company announcement.

“Our Board’s unparalleled experience within the publicly listed resources space, combined with our on the ground knowledge of South America, will prove key in transforming Red Gum into a successful exploration and development company.”

Riedel to secure Burkina Faso tenements

THE BOURSE WHISPERER: Riedel Resources has entered into a binding agreement with Golden Rim Resources for the right to acquire 100 per cent interests in a package of five granted exploration permits.

The permits are known individually as Galgouli South, Gonsin, Keri, Moaga and Tagou, and cover a total area of 1,076 square kilometres in African gold-bearing nation Burkina Faso.


Geology and Aeromagnetic Image – Galgouli South project. Source: Company announcement


Acccording to Riedel the permits exhibit appealing geological attributes, including:

–    Major regional structures;

–    Favourable host rocks within Birimian Greenstone Belts;

–    Areas of artisanal mining;

–    Numerous significant ‘gold-in-soil’ anomalies and rock chip samples up to 65.5 grams per tonne gold; and

–    The company considers the permits to be highly prospective for the discovery of large gold deposits with several permits being located along strike from major gold deposits including Ampella Mining’s 2.2 million ounce Konkera gold deposit and operating gold mines such as thw 1.1 million ounce Youga mine and the 0.6 million ounce Kalska mine.

Some limited exploration programs have already been carried out by Golden Rim, which Riedel indicated have already identified multiple drilling targets within each of the permit areas.

“This permit package offers Riedel a compelling opportunity to establish a significant position in the fastest growing gold producing region in the world,” Riedel Resources managing director Jeffrey Moore said in the company’s announcement to the Australian Securities Exchange.

“When coupled with our Marymia project located in the Doolgunna – Thaduna region of Western Australia, Riedel has significant tenement holdings in two of the most prospective precious- and base-metals minerals provinces in Western Australia and West Africa.

“These opportunities represent an outstanding business case for prospective investors with significant exploration upside from a modest market capitalisation base.

“We also consider it a major advantage to be able to commence a partnership with Golden Rim who have a substantial exploration footprint together with demonstrable exploration success and a highly developed knowledge base in West Africa and specifically, in Burkina Faso.”

Riedel commenced due diligence on the tenements with site visits in late September 2011 and many aspects of the legal reviews underway.

The company said it identified and selected in-country exploration management and preferred contractors for commencement of field operations for the current field season.

Riedel anticipates the due diligence period for the transaction will be completed by mid-December 2011, with initial field operations including geochemical sampling and auger drilling planned for immediate commencement after that.

Sundance upgrades Mbalam

THE BOURSE WHISPERER: Sundance Resources has upgraded the High-Grade Ore Reserve for Stage One of its Mbalam iron ore project in the Republic of Cameroon and the Republic of Congo.

The JORC-Code compliant Reserve now stands at 352 million tonnes at 62.4 per cent iron.

Sundance said it considers this estimate to be significant as it confirms Mbalam now has sufficient Reserves to deliver Stage One of the project.


Global Summary of all High Grade Ore Reserves for the Mbalam project. Source: Company announcement

 Stage One proposes the production of 35 Mt per year of High-Grade Direct Shipping Ore (DSO) for at least 10 years.

The Ore Reserves increase is based on the company’s previously reported current inventory of 521.7 Mt of High Grade Hematite Resources at 60.7 per cent iron and represents a conversion of some 72 per cent of Sundance’s total Indicated Mineral Resources.

Sundance chief executive officer and managing director Giulio Casello said this Ore Reserve upgrade demonstrated the capacity of the Mbalam project.

“This outstanding result emphasises Mbarga/Nabeba’s status as having some of the best quality, high grade iron ore in Africa,” Casello said in the company’s announcement to the Australian Securities Exchange.

“The quality of the high grade reserves which would be mined during Stage One is competitive in the international seaborne iron ore market.

“When combined with the over two billion tonnes of Itabirite resource we have at Mbarga, and the potential to grow our total resources of Itabirite and high-grade hematite to beyond five billion tonnes, it is clear that the Mbalam project is poised to play a significant role in the global iron ore market for decades to come.”

Sundance focussed the recent drilling programs and subsequent Ore Reserve estimate on its two principal deposits at Mbarga (in the Republic of Cameroon) and Nabeba (in the Republic of Congo).

The company said it considers it has potential to be able to grow its resources even further having already identified numerous exploration targets for drilling.

Broken Hill updates Pyrite Hill Resource

THE BOURSE WHISPERER: Broken Hill Prospecting has updated the mineral resource for its Pyrite Hill cobalt deposit at Broken Hill in New South Wales.

The update has increased the deposit’s size from 10.6 million tonnes of 2.2 pounds per tonne of cobalt to an Inferred Resource of 16.4 million tonnes of 1.83 pounds per tonne cobalt.

This represents a 55 per cent increase in contained cobalt.

Source: Company announcement

According to Broken Hill Prospecting the study also defined additional potential for between 14 million and 24 million tonnes of cobalt mineralisation of similar grade on the fringe of this resource at Pyrite Hill.

Both the Pyrite Hill JORC Code-compliant Inferred Resource and potential mineralisation occur from near surface to 300 metres depth and are open at depth and along trend to the northwest of the Pyrite Hill deposit.

Including mineralisation at the Big Hill Cobalt deposit (Inferred Resource of 4.4 million tonnes of 2.00 pounds per tonne cobalt) the combined Inferred Resources for the overall project now totals 20.8 million tonnes of 1.87 pound per tonne cobalt for 39 million pounds of contained cobalt metal.

BPL has recently completed an extensive IP geophysical survey across Pyrite Hill and the north east extension of the Big Hill mineralised trend.

The company said the results of this survey will be interpreted and that it anticipates it will define high-priority drill targets for new cobalt deposits as well as zinc and lead targets.

Work plans for the company over the coming months include further drilling to upgrade and increase the mineralisation at both Pyrite Hill and Big Hill and to drill test new anomalies generated by the geophysical survey.

“The new resource work has increased the project’s cobalt resources by seven million pounds of contained cobalt,” Broken Hill Prospecting managing director Dr Ian Pringle said in the company’s announcement to the Australian Securities Exchange.

“It has also shown the potential to double the size of the Pyrite Hill deposit with further infill drilling.

“This is a terrific step forward for our company as we progress towards growing a sizeable deposit to base a world-class mining operation.

“The mineralisation occurs close to surface and is an excellent kick start for feasibility studies for a future open cut mine capable of initial production throughput of four million to five million tonnes per year.”

Manas redraws mining pit at Shambesai

THE BOURSE WHISPERER: Manas Resources has reported the updated results of a mining evaluation and pit optimisation review that was recently completed on its 100 per cent‐owned Shambesai gold project in the Kyrgyz Republic.

The Shambesai project was upgraded in September to an Indicated and Inferred Mineral Resource of 11.6 million tonnes at 2.1 grams per tonne gold for 766,000 ounces of gold (0.5 grams per tonne gold cut‐off).

Manas said the revised pit optimisation studies at Shambesai demonstrate potential for net cash flows of up to US$190 million over the initial five years of the proposed mine by producing more than 200,000 ounces of gold (EBITDA at US$1,500 gold price).


Shambesai mineral inventory in preliminary pit shell. Source: Company announcement

The company provided highlights of the revised mining evaluation and pit optimisation study that include:

–    Estimated net cash flows attributable to Indicated oxide Mineral Resource material only totals more than US$137 million over five years (EBITDA at US$1,500 gold price), with a further possible US$53M from Inferred oxide Mineral Resource;

–    The current Probable Reserve of oxide material is estimated to be 180,000 ounces over the five‐year mine‐life with a potential of a further 40,000 ounces from currently Inferred oxide material that is contained within the pit shell;

–    Production at the Shambesai gold project is projected to peak at 50,000 ounces of gold per annum in year three and average 40,000 ounces per annum for the five years of the projected mine life from the Indicated and Inferred oxides;

–    More than 75,000 ounces of gold contained within sulphide material stockpiled during oxide mining is not included in the cash flow estimates;

–    Cash costs are estimated at US$370 per ounce for the first four years, US$465 per ounce for life‐of‐mine;

–    The Feasibility Study including final pit optimisation on high‐value near surface oxides to be completed in December 2011; and

–    High potential remains for increased throughput, increased cash flows and increased mine life by further oxide ore discoveries and future sulphide ore treatment.

“We are extremely pleased with the updated cash flow numbers from the pit optimisation study which, when compared to the November 2010 Scoping Study, demonstrate that we can expect a much improved production rate and subsequent improved cash flows for the Shambesai shallow oxides alone,” Manas Resources managing director Stephen Ross said in the company’s announcement to the Australian Securities Exchange.

“Despite this conservative approach to the mining plan focusing on the near‐surface oxide material only, project cash flows from the updated pit optimisation work have almost doubled, plus we can expect very high initial returns at a medium‐term gold price of US$1,500 per ounce of gold.

“We look forward to the granting of our mining licence and an early move into the implementation phase of the Shambesai gold project.”