Canyon acquires new Burkina Faso project

THE BOURSE WHISPERER: Canyon Resources has entered into an agreement with a Burkina Faso vendor to purchase the Pinarello project, which comprises six granted exploration permits located in the southwest of the African nation.

The company said the new acquisition is consistent with its strategy to selectively grow its exploration portfolio in Burkina Faso whilst continuing to actively explore its existing projects.


Location of the Pinarello project. Source: Company announcement

“Since first entering Burkina Faso 12 months ago with the acquisition of our flagship Tao and Taparko North projects, Canyon has spent significant time in-country developing the key relationships required to grow a successful West African gold business,” Canyon Resources managing director Phillip Gallagher said in the company’s announcement to the Australian Securities Exchange.
“The addition of the Derosa project (April 2011), the Wilier project (August 2011) and now the Pinarello project, and consolidation of tenements around our existing projects has established a footprint of over 4,000 square kilometres in Burkina Faso on highly prospective tenements that the Company will continue to aggressively explore.

“We look forward to re-commencing drilling in the coming weeks to follow-up our highly successful maiden RC drilling program, which returned wide and high grade intercepts such as 20 metres at 11 grams per tonne gold at the Tao project, and also to undertake the first round of drill testing on these new project areas.”
The company has commenced logistical planning and plans to initiate a first pass exploration program on the Pinarello project in December.

The Pinarello project comprises six granted exploration permits, Sokorani, Noifera, Konkolikan, Baniera, Sokorani 2 and Soukoura 2 with a combined area of 1,104sqkm.

The addition of the Pinarello project, takes Canyon’s exploration permits to 4,114sqkm in five separate project areas; Taparko North, Tao, Derosa, Wilier and Pinarello projects.

The Pinarello permits are located approximately 260 kilometres to the southwest of the country’s capital city, Ouagadougou, and occur within the Hounde Greenstone Belt.

The Hounde Greenstone Belt hosts a number of significant gold deposits including the 3.3 million ounce Mana gold mine and the 400,000 ounce Bondi project.

Canyon is planning a comprehensive first pass exploration program to test the prospectivity of the Pinarello project.

Activities undertaken in this program will include extensive auger drilling, rotary air blast drilling, field reconnaissance mapping and rock chip sampling.

Kimberley estimates Mineral Hill Resource

THE BOURSE WHISPERER: Kimberley Metals has finalised a Resource Definition Program at the company’s Mineral Hill project.

The company has determined a first Resource estimate of approximately 2.0 million tonnes for the Southern Ore Zone (SOZ), lifting Mineral Hill’s overall current JORC-compliant Resources to 5.2 million tonnes containing 222,000 ounces of gold, 61,000 tonnes of copper and 6 million ounces of silver.

The latest estimate for SOZ follows on from the Resource estimate for the Eastern SOZ lodes (ESOZ) and Parkers Hill Resource upgrade the company had announced in September.

The company said that in terms of JORC-compliant estimate of contained metal, this resource upgrade represents:

–    A 96 per cent increase in estimated contained copper,  a 190 per cent increase in estimated contained gold and a 39 per cent increase in estimated contained silver over Kimberley’s resource estimate that it released in July; and

–    A 38 per cent uplift in estimated contained copper, a 77 per cent increase in estimated contained gold and a 21 per cent increase in estimated contained silver from the company’s most recent resource upgrade issued in September.


Summary increases in JORC-compliant Resources at Mineral Hill since July 2011. Source: Company release

“The Southern Ore Zone Resource adds significant upside to the Mineral Hill mining operations and importantly supports both an extension to the mine life and the ability to increase gold production,” Kimberley Metals executive chairman Jim Wall said in the company’s announcement to the Australian Securities Exchange.

According to Kimberley Metals the new 1.96 million tonne Resource Estimate for SOZ includes a high grade gold component of 400,000 tonnes at 4.4 grams per tonne gold and 0.8 per cent copper, a broader copper-gold resource and a separate lead-zinc resource.

Approximately 72 per cent of these Resources have been classified in the Measured and Indicated categories.

Kimberley has commenced dewatering the decline to access the SOZ drive.

A new production bore is being commissioned to increase pumping rates, which will allow the SOZ and ESOZ deposits to be reached by late 2012.

The company said it expects mining operations to commence during early 2013 following rehabilitation of the access.

Kimberley said it is confident drilling of its high priority exploration targets over the next year at Mineral Hill will further upgrade these Resources and extend the current production profile.

This would enable an expanded production profile of 400,000 tonnes of ore per annum for at least ten years.

Green Rock and New World join forces

THE BOURSE WHISPERER: New World Energy and Green Rock Energy have signed a binding Heads of Agreement to merge their Geothermal Exploration Permits in the Mid West region of Western Australia.

Under the terms of the agreement the two companies will formalise a joint venture under which each will acquire a 50 per cent interest in the other’s permits and will contribute equally to project funding.

The joint venture will initially seek to establish a grid‐connected geothermal demonstration project.

Green Rock will operate the joint venture.

“This mutually beneficial joint venture will create a single entity with access to the best geothermal areas in WA that are adjacent to transmission infrastructure and major baseload energy markets.” New World Energy managing director John Libby said in the announcement to the Australian Securities Exchange.

“The collaboration will allow both companies to pool their technical and financial resources to ensure the most timely and cost effective geothermal development.”

Libby’s optimisms was shared by Green Rock Limited managing director Richard Beresford who acknowledged the inroads his new partner had already achieved in the region.

“The Geothermal Power project is a strong contender for State and Commonwealth funding towards drilling the first two wells,” Beresford said.

“Working jointly with New World Energy further strengthens our prospects and we look forward to further progress on funding over the next few months.”

Advantages presented by the formation of the JV identified by New World Energy include:

–    the dominant position (with GRK) over the best geothermal areas adjacent to the main electricity grid in WA;

–    a lower risk and cost profile as the joint venture will focus on the best geothermal targets and share exploration costs;

–    increased potential to attract government funding;

–    ability to focus on progressing its Asian conventional geothermal projects and other new opportunities;

–    access to GRK’s geothermal expertise, including Director Dr Baumgätner, one of the World’s leading experts on the development and production of deep, non‐magmatic geothermal resources; and

–    ability to participate in GRK’s MoU with Pacific Hydro for the development of geothermal resources.

Orocobre notes new Argentine foreign currency rules

THE BOURSE WHISPERER: Orocobre Limited has informed its shareholders of some interesting developments regarding the exchange of foreign currency regulations in Argentina.

According to the company’s announcement to the Australian Securities Exchange the national Government of Argentina has announced via decree that export revenues from mining projects must be repatriated to Argentina and converted to Argentine currency prior to being distributed either locally or overseas.

This will result in the payment for goods and supplies from overseas and the distribution of dividends will require the Argentine currency involved in such transactions to be converted to the foreign currency of the transmittal.

“This overturns the previous benefits provided by Argentina to oil and mining companies, in 2002 and 2003-04 respectively, that exempted them from the currency repatriation laws that apply to all other primary producers in the country,” Orocobre said in its announcement.

The company has had a preliminary analysis of the decree carried out by its legal counsel in Argentina, which it said indicates that it does not change the current regulations that allow, subject to the Argentinean central bank rules, the unlimited purchase and transfer of foreign currency to offshore destinations in consideration the purchase of equipment or supplies, debt repayment or dividend payments.

Orocobre said it will continue to investigate, through its Argentine legal counsel and advisors, any other implications on the financial and operational aspects of the company that may arise from the new regulations.

In the meantime, the company will be continuing with work to advance its Olaroz lithium-potash project located in the Puna region of Argentina.

The company is also currently undertaking exploration programs at its Cauchari and Salinas Grandes projects.

Orocobre recently delivered the results of a Definitive Feasibility Study for the Olaroz project, which it said highlighted strong project fundamentals, low operating costs and a very large resource base to underpin a long project life.

Linc Energy submits demonstration plant permit

THE BOURSE WHISPERER: Linc Energy has submitted a permit application and commenced the approval process for Gasifier 6, which the company claims will be the first Underground Coal Gasification (UCG) demonstration plant in the United States for over twenty years.
Linc has submitted its application with the Wyoming Department of Environmental Quality (WDEQ) to build and operate the UCG demonstration plant in the Powder River Basin of Wyoming.

Linc Energy Chief Executive Officer, Peter Bond, said that the plant will allow the Australian company to prove to US stakeholders, investors and potential commercial partners, the viability of the UCG technology in the USA.

“What makes this so exciting is the opportunity to introduce the enormous potential of UCG to an American audience, and prove that it can be done in an environmentally sound and sustainable manner in the backyard of the largest energy market on the planet,” Linc Energy chief executive officer Peter Bond said in the company’s announcement to the Australian Securities Exchange.

“This is not just important for our USA customer base, but the success of Gasifier 6 in Wyoming will have a multiplier effect across whole regions and countries that will see this as just one more reason to adopt UCG into their energy platform.”

The Gasifier 6 permit application is based upon more than 16 months of continuous work and collection of baseline data carried out by the company.

As part of the permitting requirements and site feasibility, Linc Energy has conducted drilling and coring operations, hydrogeological studies with baseline groundwater sampling and wildlife and vegetation surveys on the UCG demonstration site located near Wright, Wyoming.

The application includes detailed hydrogeology models, UCG cavity growth models and subsidence control models prepared using Linc Energy’s proprietary UCG technology.

Linc Energy controls approximately 184,210 acres (745 square kilometres) of State owned coal leases within the Wyoming Powder River Basin.

In addition to its original GasTech lease acquisitions in 2009 and 2010, the company has acquired an additional 17,280 acres of coal leases from the State of Wyoming in 2011.

Following the submission of the UCG permit application, the WDEQ will perform a completeness review and then open a public comment period.

Linc Energy anticipates this to take approximately 180 days and once the permit is issued construction for the surface facilities will commence.

“Linc Energy anticipates igniting the Gasifier to complete the 90 day gasification demonstration at the Wyoming UCG demonstration site in the second quarter of 2012,” Bond said.

“After demonstrating to the WDEQ that Linc Energy has met the conditions outlined in the permit, the company intends to develop commercial UCG operations in the Powder River Basin.”

Enerji powers up another MOU

THE BOURSE WHISPERER: Emerging power utility, Enerji Limited has entered into a memorandum of understanding with Energy Developments.

With more than 275 Megawatts (MW) of installed capacity at 32 remote sites EDL is Australia’s largest independent remote energy business in the one to 100 MW field.

Under the terms of the MoU, Enerji will work with EDL to assess the viability of its waste heat recovery system, with the Opcon Powerbox, at existing viable EDL nominated sites and selected new sites for which EDL is submitting tenders or proposals.

If a site is found to be commercially viable for both parties then bona fide negotiations for a binding supply agreement will commence.

Enerji said its preliminary estimate demonstrates potential for in excess of 10 Opcon Powerboxes over the next two to three years, with some sites having capacity for multiple Opcon Powerboxes in the near term.

“We are very pleased to enter into this MoU with EDL providing a framework for entering into future binding supply agreements should further studies prove the viability of our waste heat recovery system using the Opcon Powerbox,” Enerji Limited chief executive officer Greg Pennefather said in the company’s announcement to the Australian Securities Exchange.

“This MoU represents a great opportunity for Enerji to work with an industry leader and specialist in remote energy.

“It presents the scope for the company to scale its business in its target market sector.

“This is the culmination of more than a year’s work and clearly demonstrates our ability to build the necessary relationships in this business.”

Enerji has ordered six Opcon Powerboxes.

The company said this MoU with EDL, which follows quickly on the heels of another recently announced MoU with Poseidon Nickel, together with the other sales prospects Enerji is pursuing, has the potential to use the ordered units.

Enerji is targeting to be operationally cash flow positive from when the fourth Opcon Powerbox is installed and commissioned.


Phoenix agrees to Red Dam purchase

THE BOURSE WHISPERER: Phoenix Gold has reached an agreement with Carbine Resources to purchase a 100 per cent interest in Carbine’s Red Dam gold project in Western Australia.

The Red Dam project is located immediately adjacent to Phoenix’s Broads Dam and Carbine projects and covers in excess of 270 hectares.

Carbine has quoted Red Dam as containing over 147,000 ounces of gold at 2.5 grams per tonne.

The most recent drilling program to be carried out on the project was conducted in 2007.

Results from this drilling contained significant intercepts from both infill drilling and drilling outside the existing mineralised envelope.

These results were published by Carbine in July 2007 and included:

–    5 metres at 44.07 grams per tonne gold from 32 metres;

–    14m at 8.27g/t gold from 97m;
–    18m at 4.88g/t gold from 76;
–    10 at 5.29g/t gold from 138;
–    9m at 5.73g/t gold from 49m; and
–    10m at 4.45g/t gold from 111m;

“The Red Dam resource sits near the convergence points of the region’s main shear zones and the potential to grow this Resource significantly has been demonstrated by the high grade intercepts outside the current resource envelope,” Phoenix Gold managing director Jon Price said in the company’s announcement to the Australian Securities Exchange.

“We are very excited about getting additional drilling going and growing the project along strike and at depth.”

Carbine has agreed to sell Red Dam to Phoenix for the following consideration:

–    $50,000 non-refundable cash deposit on signing formal agreement;

–    $50,000 cash payable at settlement;

–    eight million fully paid ordinary Phoenix Gold shares (at a deemed price of $0.23); and

–    $10 per ounce gross production royalty.

Phoenix said that the two companies expect to execute and complete a Formal Sale Agreement by December 2012 subject to any shareholder, government and regulatory approvals that may be required.

Phoenix has commenced planning and approvals work for a 5,000 metre drill program to test extensional targets as well as complete some validation drilling.

The company anticipates this will commence early in the March Quarter 2012.

“This acquisition continues Phoenix’s strategy of consolidating highly prospective tenure along these world class shear zones,” Price said.

“Red Dam has met all the selection criteria and will complement our adjacent projects at Broads Dam and Carbine.
“We welcome Carbine Resources as shareholders as they focus on their projects in Africa and look forward to creating further value from this exciting area for all our shareholders.”

Enerji Signs MoU with Poseidon Nickel

THE BOURSE WHISPERER: Enerji Limited has entered into a memorandum of understanding with Poseidon Nickel.

Enerji is an emerging green power utilty while Poseidon is the developer of the largest high grade nickel sulphide deposits of any exploration and development company in Australia.

Under the MoU Enerji will provide assistance to Poseidon on aspects of its feasibility study relating to power generation and specifically the implementation of a waste heat recovery system based around an Opcon Powerbox.

Following a successful feasibility study and subject to some site conditions being met, Enerji and Poseidon will enter into bona fide negotiations for a power purchase agreement.

Construction of the powerhouse and the associated waste heat recovery system would commence in the second half of 2012.

The addition of an Opcon Powerbox will provide up to 700 kilowatts of fuel and emissions free power to Poseidon’s Windarra powerhouse.

This power will assist in meeting the additional power requirements for its recently announced plans to double mine throughput as well as reducing fuel consumption and greenhouse gas emissions.

“Enerji is very pleased to be assisting Poseidon with the clean energy aspects of its substantial redevelopment of the Windarra mine,” Enerji chief executive officer Greg Pennefather said in the company’s announcement to the Australian Securities Exchange.

Poseidon is focussed on producing its first concentrate from the Mt Windarra mine in 2013.

The company is currently refurbishing the Mt Windarra mine and is completing the drilling and JORC resourcing of the Cerberus nickel deposit, which was discovered in 2008.

The Mt Windarra underground mine and the Cerberus deposit are contained in the same tenement package, located 260 kilometres from Kalgoorlie in the northern goldfields of WA.

The total lease package covers approximately 290 square kilometres.

“This is a text book application of our waste heat recovery system for a mine located in the Northern goldfields of Western Australia where diesel is the only option for power generation.” Poseidon Nickel chief executive officer David Singleton said.

“Poseidon is committed to applying innovative practices to developing the Windarra project.

“We believe that the Enerji solution to waste heat recovery will deliver real benefits to our shareholders and help to minimise our environmental footprint.”

ASX suffers a technical hitch

THE BOURSE WHISPERER: The Australian Securities Exchange had one of its more interesting days of trading today.

The Exchange halted trading after a number of traders said they were unable to complete their transaction.

The halt lasted four hours, during which time investors were frustrated in their attempts to take advantage of earnings news and developments in Europe.

Eurozone leaders emerged from their meetings to declare they had made some ‘‘extremely important decisions’’ to try and fix the European debt crisis.

In the glare of daylight and television cameras European Central Bank chief Jean-Claude Trichet provided some insight to proceedings.

‘‘We have taken extremely important decisions in several aspects,’’ Trichet told the gathered media contingent.

‘‘All of this now requires a lot of work and a lot of quick work.’’

The reason for the glitch suffered by the ASX was still a mystery at the time this was being written, but needless to say there will probably some fat-fingered accountant somewhere with a lot going through his mind.

“The markets were halted at 10.05am when ASX detected a connectivity issue,” The Australian Securities Exchange said on its web site home page.

“ASX has worked with its technology vendor to resolve the issue.”

You would think that the mood at a conference with over 140 mining industry related companies would be sombre due to the glitch.

At the Mining 2011 conference in Brisbane the mood was, surprisingly, buoyant.

For many companies dotted around the exhibition room it was a chance to celebrate a day that their share price didn’t actually fall, which is more than many of them have been able to do recently.

Others weren’t so fortunate, however, with the reality of the situation being particularly stressful for companies such as Blackthorn Resources and MacPhersons Reward who both released extremely positive announcements to a stagnated trading floor.

Once order was restored the market took off like a lead pencil being shot from a third-graders tautened elastic band.

Blackthorn eventually closed the day up 22.5 per cent to close at 49c, while MacPhersons rose 5.17 per cent to 30.5c.

Bass turns Fossey mine

THE BOURSE WHISPERER: Bass Metals has reported progress with the turnaround in the performance of its 100 per cent-owned Fossey mine in Tasmania.

The company’s September 2011 quarterly report indicated a strong recovery from recent mine issues and an excellent outlook for further exploration success underpinned by robust production.

Bass Metals said that although the quarter has been one of the most difficult and challenging in the company’s history, it has been able to re-establish the mining operation as one that is both safe and financially.

The company has also made some progress in regard to exploration while also advancing a major $25 million fundraising, which is now in its final stages.

Production from the Fossey underground resulted in 97,879 tonnes of ore produced during the quarter, 11 per cent less than the previous quarter’s production, but at higher grades.

Operating costs for mine met budgeted forecasts at $90 per tonne during the quarter, while the mill operating costs were below budget at $48 per tonne.

The company claimed several outstanding exploration results were achieved during the quarter including a high-grade intercept at Mackay of seven metres at 22.3 per cent zinc, 9.9 per cent lead, 0.7 per cent copper, 181 grams per tonne silver and 3.4 grams per tonne gold.

Bass said the results may have identified a new mineralised zone.

“Importantly this validates a new exploration model and opens up large tracts of ground not previously interpreted as prospective,” Bass Metals managing director Mike Rosenstreich said in the company’s announcement to the Australian Securities Exchange.

“At Fossey East, further high-grade intercepts were made as part of the 25 metre spaced infill drilling program and the outlook for a high-grade extension to the Fossey mine is promising.

Bass is in the final stages of a 1 for 3 non-renounceable entitlements offer to raise up to $10.7 million.

“The Board and management of Bass Metals consider that the company has strong, realistic production plans in place to support a number of very exciting growth opportunities,” Rosenstreich said.

“The recent McKay discovery, following within 12 months of the Fossey East discovery, is a clear validation of the company’s new exploration models and strategy and emphasises the under explored nature of the Hellyer-Que River area and significant exploration upside.”