Millennium raises $16.6 million and restructures debt

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THE BOURSE WHISPERER: Millennium Minerals has received firm commitments for a $16.6 million capital raising at an issue price of 1.9 cents per share.

The company has now restructured its debt facilities to enable it to assess a medium term production expansion.

This restructure will also provide the company with additional working capital reserves during the ramp up phase of its Nullagine gold project.

Nullagine Deposit Location Plan. Source: Company announcement

The capital raising was supported by institutions and high net worth individuals and is to be completed in two tranches.

The first tranche for $8.5 million settles under the company’s 15 per cent rule.

The second tranche of $8.1 million will settle after Millennium receives shareholder approval at the company’s Annual General Meeting scheduled for April 2012.

“We are delighted to be in a position to evaluate the potential to expand the project’s production capacity that is indicated by the recently announced Ore Reserve Estimate and our continuing exploration success,” Millennium Minerals chief executive officer Brian Rear said in the company’s announcement to the Australian Securities Exchange.

“This capital raising, together with our increased debt facilities, will also provide for increased capital construction reserves and for working capital during a conservative operational ramp up schedule.

“Following a 31 per cent increase in reserves late last year we have been evaluating a significant upsizing of our Nullagine gold project to best achieve our 100,000 ounce annual production base target whilst maintaining an eight year mine life or better.

“We are well advanced in the development of our project and are on time and on budget with a target date for practical completion in August this year.

“We are shifting our focus to commencing pit operations in June 2012 ahead of commercial production being scheduled for the fourth calendar quarter.”

The Nullagine gold project is a 1.33 million ounce gold resource contained within 7 deposits on granted mining leases.

The largest deposit within the project is Golden Eagle, which contains 62 per cent of the total Mineral Resource inventory.

Millennium said construction of the project’s gold processing plant and associated infrastructure remains on schedule and within the company’s approved $87.6 million capital cost budget.

Commissioning of the plant is scheduled to start in the third calendar quarter of 2012 with commercial production planned for the fourth calendar quarter.

Speewah upgrades titanium vanadium resource

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THE BOURSE WHISPERER: Speewah Metals has reported an increase in Mineral Resources of the combined Speewah titanium / vanadium deposit situated within the company’s 100 per cent-owned Speewah project in the East Kimberly region of Western Australia.
 

The Speewah deposit represents three large Resources (Central, Buckman and Red Hill) on the Speewah tenements.

 

Location of titanium / vanadium Mineral Resources at Speewah. Source: Company announcement

 

The latest upgrade represents:

A 32 per cent increase to the total combined Resource at Speewah; and

A 34 per cent increase to the Measured and Indicated Resources at Speewah.

The total combined Mineral Resource has been updated to include all three deposits at Central, Red Hill and Buckman.

The combined Measured, Indicated and Inferred Resource total is 4.7 Billion tonnes at 0.30 per cent vanadium oxide and 2 per cent titanium (at 0.23% V2O5 cut-off grade) in the three deposits, comprising:

Measured Resource of 322 million tonnes at 0.32 per cent vanadium oxide and 2 per cent titanium;

Indicated Resource of 1,054Mt at 0.33 per cent vanadium oxide and 2 per cent titanium; and

Inferred Resource of 3,335Mt at 0.29 per cent vanadium oxide and 2 per cent titanium.

“The Board is very pleased to be able to deliver another significant increase in the titanium / vanadium in magnetite Resource which is the largest of its kind in Australia,” Speewah Metals said in its ASX announcement.
 
“This Resource upgrade represents completion of one of the key objectives in respect of the titanium/ vanadium/ hematite project to be delivered.

“As well as the increase in size the drill results will provide the basis for analysis of the ore body to identify optimum pit location and design for the initial mine development and operation.

“The Board believe the resource is now globally strategic in size and provides excellent opportunity for long mine life and future expansion of production, both key value drivers for shareholders.”

Speewah said it intends following up these latest results with scoping level Operating and Capital cost estimates that will provide it with an indication of project economics and further work throughout 2012.

Overland increases Darcy deposit

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THE BOURSE WHISPERER: Overland Resources has finalised the re-estimation of the JORC Code compliant mineral resource for the company’s Yukon base metal project in Canada.

The company completed an exploration drilling program during 2011, which it said has extended the strike length of the known mineralisation at the Darcy and Andrew zinc deposits by 150 metres and 100 metres respectively.

The JORC Code compliant Indicated and Inferred Resource for the Darcy zinc deposit has been increased by 60 per cent to:

–    5.6 million tonnes at 4.7 per cent zinc.

The drilling conducted by Overland at the Andrew deposit extended the eastern end of the known mineralisation whilst closing off the western end of the deposit.

The updated Measured, Indicated and Inferred JORC Code compliant mineral resource for the Andrew zinc deposit has been increased by 7 per cent to:

–    7.8 Mt at 5.8 per cent zinc and 1.4 per cent lead.

The latest upgraded mineral resource estimates increase the total JORC Code compliant Measured, Indicated and Inferred mineral resource at the Yukon base metal project by 24.5 per cent to:

–    13.7 Mt at 5.3 per cent zinc and 0.8 per cent lead, or 13.7 Mt at 6.2 per cent zinc equivalent.

 

JORC Code compliant resource estimate for the Yukon base metal project (2% zinc cut off). Source: Company announcement

Overland said mineralisation at all three deposits at Yukon, including the Darin deposit, remains open at depth.

The company said it considers potential exists to expand the resource base further with deeper drilling.

It anticipates this drilling would be undertaken once the mining operation is in production and underground expansion was being considered.

“The extension of the shallow mineralisation at the Darcy zinc deposit along strike and the consequent 60 per cent increase in resource tonnes presents an opportunity to increase both the length and depth of the open pit development at this deposit,” Overland Resources said in its ASX announcement.

“The company has commenced a review of the open pit mine design and mining schedule for the Darcy deposit to optimise the production plan based upon the new resource re-estimation.

“Upon the completion of a new mine plan for the Darcy zinc deposit a production schedule will be developed for the combined mining operation of the Darcy and Andrew zinc deposits to optimise both production and capital utilisation.

“This new information will be factored into the economic parameters for the Project and mine permit submission.”

Silver Lake terminates Phillips River merger

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THE BOURSE WHISPERER: Silver Lake Resources has terminated the merger implementation agreement (MIA) with Phillips River Mining.

The two companies have now entered into an asset sale agreement that will result in Silver Lake acquiring Phillips River’s Munglinup project.

 

Project location. Source: Company announcement

 

The companies have drawn up an exclusivity agreement to restructure the funding for Phillips River and for Silver Lake to acquire other Phillips River assets.

Under the terms of the asset sale agreement Silver Lake will purchase Phillips River’s Munglinup project for $325,000.

The project consists of five exploration tenements.

Settlement under the asset sale agreement will occur later in the year and is subject to satisfaction of a number of conditions.

Silver Lake will immediately take responsibility for the maintenance and ongoing costs of, the tenements making up the Munglinup project.

Silver Lake terminated the MIA after running its due diligence slide rule over the deal was unable to deliver a result it found satisfactory.

Silver Lake’s main concern in electing not to proceed with the merger stemmed from the delivery schedule in a bulk concentrate offtake agreement entered into by Phillips River and LN Metals International.

The point of contention of the offtake agreement was that current market conditions and development delays meant the Phillips River project would not have been in a position to meet the delivery schedule, which is due to commence second half of 2013.

Phillips River was unable to secure changes to the offtake agreement to satisfy Silver Lake’s concerns in the timeframe required.

Phillips River said it intends to continue dialogue to resolve the delivery schedule issue and is confident it can reach a satisfactory outcome once it has more time to negotiate with LN Metals.

“A change to delivery schedules within offtake agreements is a common occurrence, especially with mines in pre-development, as it the case for Phillips River,” Phillips River chairman Hamish Bohannan said in the company’s announcement to the Australian Securities Exchange.

“However, commercial negotiations of this nature require significant time.

“Our team will continue negotiations on this front and believe a satisfactory outcome is achievable in the coming months.”

U308 signs joint venture with MH Argentina S.A.

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THE BOURSE WHISPERER: Perth-based ASX-listed company U3O8 has announced that its 100 per cent-owned subsidiary, Piche Resources has signed a Joint Venture Agreement with MH Argentina S.A. on the Cerro Chacon project in Argentina. By Mark Jones,

The Cerro Chacon Project consists of 11 tenements, covering an area of approximately 419 square kilometres, in the province of Chubut, in the Patagonia region of Argentina.

 

Chubut Province, Argentina. 
Source: Company announcement

The project area is prospective for low sulphidation epithermal gold-silver mineralization.

Several very significant anomalies have previously been identified; however, no drilling has been undertaken on the project to date.

The Cerro Charcon project is one of a number of operations and projects in Patagonia located in similar geological settings.

MH Argentina S.A. is the Argentinean branch of Hochschild Mining, a leading underground precious metal producer in the Americas with a primary focus on gold and silver.

  

Location of Cerro Charcon Project JV, Chubut. Source: Company announcement

 

Crusader identifies new Borborema targets

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THE BOURSE WHISPERER: Crusader Resources has identified a number of new exploration targets situated within the mineralised system hosting the company’s multi-million ounce Borborema gold project in Brazil.

The targets were identified through a review Crusader conducted of all existing data of the Seridó Belt, which is the regional host of the Borborema project.

 

Regional geology map after re-interpretation of geophysical data. Source: Company announcement

Crusader said the new targets are located within the same rock units and structural settings as Borborema and appear to be part of the same mineralised system.

The Borborema gold project currently boasts an Indicated and Inferred Mineral Resource estimate of 2.31 million ounces of gold.

One of our highest priorites is expanding our gold resource inventory in the region – our growing tenement portfolio gives us a commanding position within the highly prospective Seridó Belt,” Crusader Resources managing director Rob Smakman said in the company’s announcement to the Australian Securities Exchange.

“The belt could host multiple Borborema-style deposits and our recently completed review of the regional geology has identified some very high quality targets.

“Regional exploration is now underway.”

Strategic strikes eponymous tungsten deal

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THE BOURSE WHISPERER: Strategic Materials, the 100 per cent-owned subsidiary of ASX-listed Strategic Elements, has secured the exploration rights to the Wicklow Tungsten Block, located approximately 60 kilometres southwest of Dublin, Ireland.

The Wicklow Tungsten Block contains an extensive tungsten system Strategic Elements claims to be potentially up to 10km in strike length.

Two previous owners of Wicklow have conducted exploration work that has taken the project to the drill testing stage.

The company is confident it can benefit from the exploration work and expenditure already invested into the project.

This includes various positive feasibility studies, off-take agreements and successful debt financing arrangements, which have all recently been achieved.

“This asset fits in extremely well within our existing portfolio,” Strategic Elements managing director Charles Murphy said in the company’s announcement to the Australian Securities Exchange.

“As in New Zealand, Ireland provides a very secure mining system, has low levels of corruption and is a low cost country in which to operate.

“Some of the geological aspects of the Wicklow Tungsten Block are also very familiar.

“Also as in New Zealand, we have identified an excellent exploration team to work with that has deep knowledge of the local geology combined with significant global experience.”

Strategic Elements said it now intends forming a separate subsidiary to specifically expedite progress of its projects with exposure to tungsten and gold.

The 100 per cent-owned new entity will focus on generating tungsten/gold prospects with proven mineralisation.

The company intends moving the Wicklow Tungsten Block to this new entity.
The subsidiary company, Strategic Materials will continue to remain tightly focused on its Australian and New Zealand rare earths projects.

Strategic Elements said this company structure will enable it to continue generating prospects, market its rare earths and tungsten/gold activities to specific sets of investors/partners and prepare for any future corporate activity.

TNG signs JV agreement with Rio Tinto

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THE BOURSE WHISPERER: Australian resources company TNG Limited has reached an agreement of in-principle terms for a farm-in and Joint Venture agreement with Rio Tinto Exploration (RTX).

The Joint Venture agreement is in regard to TNG’s 100 per cent-owned Melville Island licence in the Northern Territory.

Melville Island location map. Source: Company announcement

Under the in-principle terms of the agreement, TNG will receive an initial cash payment of $50,000, and RTX will progress negotiations for the granting of the licence application for the exploration of bauxite on the licence.

Once the licence has been granted RTX will be required to spend $5 million within four years to earn 80 per cent equity in the project with TNG retaining 20 per cent equity.

At this point TNG may elect to contribute, sell or convert its equity to a two per cent Net Smelting Royalty (NSR).

Covering an area of approximately 1400 square kilometres the Melville Island exploration licence application has been a strategic licence for TNG as it is located in an area the company considers to be prospective for bauxite and other minerals.

The company said the transaction with Rio Tinto is consistent with its focus on the continued evaluation and development of its Mount Peake project.

The deal has been structured so that TNG will retain either a 20% interest or 2% NSR giving it continued exposure to the potential exploration upside of the project.

In the company’s announcement to the Australian Securities Exchange TNG managing director Paul Burton said the transaction would enable it to remain focussed on the continued exploration and development of its flagship Mount Peake iron-vanadium-titanium project as the basis for a potentially world-scale ferrous metals business.

It will also allow the company to continue development of its co-owned new hydrometallurgical process, and its expanding copper exploration portfolio.

Ivanhoe commences production at Osborne

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THE BOURSE WHISPERER: Ivanhoe Australia has achieved the first production of copper and gold concentrate at the company’s Osborne processing facilities south of Cloncurry, in northwestern Queensland.

“The commencement of copper-gold production at the Osborne facilities is an important first step in what we envisage will be the creation of a strong cashflow stream for 15 to 20 years”, Ivanhoe Australia chief executive officer Peter Reeve said in the company’s announcement to the Australian Securities Exchange.

“With our inexpensive acquisition of Osborne, the start of road construction to the Starra copper and gold mines, and our recent exploration successes around Osborne and Starra, we believe a long mine life is assured.

“Ivanhoe Australia is well on the way to achieving its vision of becoming a significant, Australian base-metals producer.”

Ivanhoe Australia acquired the Osborne complex less than 18 months ago and has since developed the Kulthor underground resource and restarted the Osborne underground mine within the company’s scheduled time frame.

 

Osborne and Kulthor cross section. Source: Company announcement

 

The company said its exploration and resource definition efforts conducted near mine at Osborne and also to the north along the Starra Line has continued to build its understanding and definition of the field, and reinforced its confidence in the projected mine life of 15 to 20 years.

Ivanhoe commissioned the plant in late January and has progressed to initial production of concentrate, ahead of schedule, on February 28.

Production officially began at Osborne on March 7, with the achievement of steady-state production of concentrate and the haulage of first concentrate to the Townsville port.

Throughput at the processing plant has ramped up to 220 tonnes of ore per hour (an annualised rate of 1.65 million tonnes, assuming a 95 per cent utilisation rate), which is in line with the original ramp-up schedule.

Ivanhoe said it expects production throughput at the Osborne plant for 2012 to be approximately 700,000 to 900,000 tonnes of ore and 1.8 to 2 million tonnes in 2013.

Approximately 80,000 tonnes of ore are stockpiled on the run-of-mine (ROM) pad, providing a buffer of around 20 days of mill production.

Blackthorn focuses scoping study on Mumbwa

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THE BOURSE WHISPERER: Blackthorn Resources has commenced a scoping study for the company’s 100 per cent-owned Mumbwa project in central Zambia.

The company is undertaking the study to assess potential for an economic mining operation of the Kitumba inferred mineral resource.

Blackthorn is exploring the Mumbwa district for iron oxide copper-gold (IOCG) style of mineralisation as follow-up to the maiden inferred mineral resource, which was estimated at Kitumba copper deposit in October 2009.

The company kicked-off a follow-up Phase 5 drilling program in August 2011, which has produced some positive results so far.

 

Source: Company announcement

These results are to be integrated into the existing data-set to potentially upgrade the existing inferred mineral resource category, tonnes and grade.

The scoping study will focus on the key aspects of developing a successful project, including:

–    Validation of the mineral resource and geological model;

–    Review of the deposit characteristics and implications for mining;

–    Pit limit optimisation to define economic mining limits;

–    Identification of pit development strategy and mining method; and

–    Life of mine production schedule.

Blackthorn said it also intends carrying out metallurgical testing of representative core samples from the Kitumba mineral resource as part of the scoping study.

It anticipates results of the scoping study will become available early in the second half of 2012.

“Following the excellent results achieved from our Phase 5 drilling program at Mumbwa, we are excited about the prospect of upgrading the inferred mineral resource at Kitumba and assessing the economics of the project by conducting this scoping study,” Blackthorn Resources managing director Scott Lowe said in the company’s announcement to the Australian Securities Exchange.

“We welcome the opportunity to work with MMC on the Mumbwa project, which the company believes has the potential to deliver an economic copper deposit at Kitumba, along with the potential for new discoveries elsewhere on the lease.”