Rico acquires Pilbara package

THE BOURSE WHISPERER: Rico Resources has acquired a tenement package prospective for iron ore within the Pilbara region of Western Australia.

The tenements were acquired from Cliffs Asia Pacific Iron Ore.

The acquisition of the Cliffs Pilbara tenements increases Rico’s landholding in the Pilbara provide the company with an additional 385.23 square kilometres of ground it said will complement current pre-feasibility study work and exploration drilling being carried out at the 100 per cent owned Wonmunna project.

The Cliffs Pilbara tenements consist of eight granted Exploration Licences and five Applications for Exploration Licence.

All of these Licences are either abutting, adjacent to or surround a number of current mining operations and development projects.

These projects include BHPB’s Mt Whaleback Mine, Rio Tinto & Hancock Prospecting’s JV Development at Hope Downs 4, BC Iron’s Nullagine operation and Atlas Iron’s Western Creek resource.

All of the tenements are well positioned close to existing infrastructure.

“The acquisition of the Cliffs Pilbara tenements is a significant achievement for Rico,” Rico Resources executive chairman Imants Kins said in the company’s announcement to the Australian Securities Exchange.

“This is a major expansion to Rico’s iron ore portfolio with tenements that are strategically located with respect to Rico’s Wonmunna Project and to other mines or development projects.

“The tenements are mostly located within trucking distance of Wonmunna and we consider the tenements to have the potential to substantially increase the Company’s iron ore inventory.

“The acquisition also provides additional optionality for development planning at the company’s Wonmunna project, where we are aggressively pursuing a pre-feasibility study.

“Rico will continue to work on securing additional tenements in the Pilbara with the aim of further increasing our resource base.”

The total purchase price of the transaction is $275,000 to be settled by way of:
$125,000 paid to Cliffs upon signing of sales and purchase agreement;

$75,000 paid to Cliffs 12 months after the first of the tenement titles is transferred to Rico; and

$75,000 paid to Cliffs 24 months after the first of the Applications for the Exploration Licences is granted.

Phillips River exploration tenements granted

THE BOURSE WHISPERER: Phillips River Mining has been granted two new exploration tenements.

The new tenements are located close to existing exploration tenement holdings and planned milling infrastructure of the Phillips River project.

The Phillips River project consists of four mines that contain gold, copper, silver, zinc and lead mineralisation as well as a processing facility that is capable of producing around one million tonnes per annum.

The company is targeting construction in 2012 and production in 2013.

Based on current studies, the company said it expects the Phillips River project to generate in the vicinity of one billion dollars in revenue through gold dore and copper and base metal concentrates sales.

Phillips River Mining is confident that the operating life of the mine will extend well beyond the initial 10 years.

The first of the two new exploration tenements measure 46 square kilometres and is located immediately west of the Trilogy deposit.

It has already been subjected to previous modern exploration which has returned intersections of:

–    9 metres at 0.22 per cent copper from 19 metres, and 7 metres at 0.24 per cent copper from 38 metres to end of hole in RAB drilling.

Neither of these intersections has been followed up with deeper drilling.

A total of 332 RAB holes for 14,384m have been drilled during the previous exploration efforts over the tenement area, which the company considers to be valuable data from which it can to re-launch exploration activities for Trilogy style mineralisation.

The second of the new tenements is 11 square kilometres and is located within the Albany-Fraser Belt, which is considered prospective for Tropicana style mineralisation.

This tenement adds to the company’s existing tenement package of 167,000 hectares of exploration tenements that was granted earlier this year.

“Acquiring these two tenements is part of the company’s strategy to explore for further resources to add to the Phillips River project mine life, “Phillips River Mining managing director Jason Stirbinskis said in the company’s announcement to the Australian Securities Exchange.

“Of particular immediate interest is E74/462 which is very close to the proposed Trilogy plant and we suspect the Trilogy multi element geochemical anomaly is likely to extend in the direction of the new tenement.”

Centius acquires gold mine

THE BOURSE WHISPERER: Centius Gold has acquired 100 per cent ownership of the high-grade Dittmer gold mine located near Proserpine in Queensland.

The acquisition is subject to Due Diligence for an acquisition price of $600,000, which will be funded by Centius from existing resources.

The agreement provides for the acquisition of 100% of two Dittmer Mining Leases with Loch Neigh Pty Ltd, as well as a surrounding Exploration Permit.

Centius said it plans to commence gold production at Dittmer next year, which basically adds a near term production asset to the company’s portfolio, which consists of gold and base metals interests located elsewhere in Queensland and in New South Wales.

The company said it already has knowledge of sufficient ore to cater for a 10 year to 16 year mine life.

The immediate term program following the completion of due diligence and the acquisition will see Centius complete testing of key data and work required to enable it to carry out the calculation of a JORC indicated reserve.

This in turn will allow it to determine the prioritisation of project development options, with a focus on near-term production.

Centius will fund the initial mine development from existing cash reserves, and is confident that it will not need to go to the market and rattle the tin for funding for this development.

The company proposes to commence with a small operation that will generate an immediate cash flow from the recoverable free gold.

“The acquisition is an extremely compelling one for Centius shareholders as it is attractively priced and will allow the company to fast track its plans for gold production,” Centius Gold managing director John Slade said in the company’s announcement to the Australian Securities Exchange.

“Our other projects will continue to be developed.

“We are confident that there is sufficient gold at our Croydon gold project to allow production and will continue to work towards this objective.”

Castlemaine pours first Ballarat gold

THE BOURSE WHISPERER: Castlemaine Goldfields has achieved its first gold pour during the re-commissioning of the Ballarat gold project in Victoria.

The golden baby resulting from the pour weighed in at 8,517 grams (260 ounces of gold) and was a composite of gold recovered from the gravity circuit.

Castlemaine is currently re-commissioning the sulphide leach circuit at the Ballarat project and is scheduled to commence treating sulphide concentrate in October.

The company said that it anticipates the first gold production from this part of the circuit later that month.

The re-commissioning of the gold processing plant has continued to plan so far with the company enduring no significant issues to impede its progress.

At this stage of the start-up process Castlemaine is utilizing low-grade ore of around two to three grams per tonne.

The company expects that between 5,000 ounces and 8,000 ounces of gold will be produced from the project for the 2011 calendar year.

Gold bullion production will increase as the underground mine development and gold ore mining continues to ramp-up over the next six to nine months.

The company said it also remains on track to meet its target to produce approximately 50,000 ounces annually once this ramp-up period has been completed.
“Another milestone has been achieved, on time, as we progress through re-commissioning,” Castlemaine Goldfields managing director Matthew Gill said in the company’s announcement to the Australian Securities Exchange.

“This event is significant for the company, our employees and shareholders, as we make the company defining transition from explorer to producer.

“We are pleased with the progress to date, and that these activities have been done professionally and safely, and are a credit to our work teams on site.
“We remain on track to produce approximately 50,000 ounces of gold next year.”

ActivEx granted Selwyn EPM

THE BOURSE WHISPERER: Brisbane-based exploration play ActivEX has been granted a new exploration permit by the Queensland Government.

The new permit, EPM 18073, is an area of 211 square kilometres located in the Selwyn district, 75 kilometres south of Cloncurry and 15 kilometres south-east of the company’s Florence copper-gold-cobalt project area.

“This EPM has taken an age to be granted but we are really keen to get on the ground because it is such a hot area,” ActivEX managing director Doug Young said in the company’s announcement to the Australian Securities Exchange.

“Just adjacent to our new EPM there are two big new developments by Ivanhoe Australia, which has just announced that it has moved to pre-feasibility at the Mt Dore cathode copper project.

“That’s in addition to its decline into the high grade molybdenum deposit at Merlin, which has progressed about half way to the ore zone.

“Our ground is less than three kilometres east of these developments and parts of it lie on the southern contact of the fertile granite.”

Data compilation carried out by ActivEX of previous exploration in the Selwyn East area shows that little detailed work has been carried out in the past and that no drilling has been attempted in the newly-granted EPM area.

The company has also processed available aeromagnetic and radiometric data over the area.

This has enabled it to identify what it describes as, “a strongly developed structure, passing through the central part of the EPM”.

The company has interpreted the structure to splay off the Mt Dore-Mt Elliott structure and by doing so controls the shape of the Mt Dore Granite.

This structure will be the subject of initial field activities to be carried out by ActivEX.

ActivEX said it proposes to carry out an initial inspection of the ground in the next few weeks in order to formulate a suitable exploration program for the area.

“The new Selwyn East ground complements our Florence project area where we have discovered brand new copper-gold-cobalt deposits in the last year and have been actively drilling over the last few months to define resources,” Young said.

IOH dances with Rio

THE BOURSE WHISPERER: Iron Ore Holdings Limited has sold off its Koodaideri South tenement located in the Pilbara region of Western Australia.

The buyer was none other than Rio Tinto 100% owned subsidiary Hamersley Iron.

The price paid by Red Dog’s parents was $32 million cash plus a two per cent Free On Board royalty on ore mined from the tenements.

The transaction came after IOH held a 12-week strategic review of its Central Satellite deposits where the company considered its optimum value creation options, including self-development, joint venture structures or divestment.

IOH said that the Rio Tinto offer for Koodaideri South was selected from a number of proposals, and was accepted on the basis of it providing the best strategic value for IOH in terms of both the cash component and the future exposure to a production royalty.

Koodaideri South is one of five tenement groups comprising the company’s Central Satellite deposits and has three currently identified resources named Kurrajura, Fingers and Bight, which jointly contain 106 million tonnes of JORC Resource at an average 58.6% iron.

The company was forthcoming in its praise of Rio saying it was happy to be involved in such a transaction with a company that was an industry leader that continues to recognise and realise the growth potential of their Pilbara operations.

Iron Ore Holdings managing director Alwyn Vorster said the transaction had disproven the theories of some people outside the company who considered the Central Satellite deposits to be infrastructure stranded and too small to contribute much value.

“The cash plus royalty value achieved for the Koodaideri tenement provides a benchmark for the Iron Valley and Bungaroo South deposits, which are both more valuable in terms of resource size and strategic location,” he said in the company’s announcement to the Australian Securities Exchange.

IOH is carrying on discussions with other interested parties in regard to the commercialisation of the remaining Central Satellite tenements.

The company said that funds generated from the process will be applied to further exploration and project studies, potential new business opportunities and to potential capital management initiatives.

Magnum to acquire Brazilian project

THE BOURSE WHISPERER: Perth-based Magnum Mining and Exploration has entered into an option and exclusivity agreement to acquire an iron ore project in Minais Gerais, Brazil.

OCRA Trustees (Seychelles) Limited as trustee of Global Trust has granted Magnum an irrevocable exclusive option to acquire all of the fully paid issued shares in Irongates (Aust) (IAPL).

IAPL holds 100 per cent of the issued capital in Gates Minerals (GMPL) as well as 99% of Irongates Brasil Recursos Minerais (IBRML), a company registered in Sao Paulo.

GMPL also holds the remaining one per cent in IBRML.

IBRML holds contractual rights to acquire Emicon Mineracao Terraplenagem Ltda’s (Emicon) Brazilian iron ore project, the focus of Magnum’s acquisition.

The Brazilian iron ore project is located in the south western portion of the renowned “Iron Quadrangle” in Serra Azul in the state of Minas Gerais, Brazil.

“The Iron Quadrangle is an important iron mining region and one of the most important metallogenic provinces in the world and has been mined for iron ore since the nineteenth century,” Magnum Mining said in its announcement to the ASX.

The Brazilian iron ore project consists of an in-situ exploration project and a sinter feed project containing alluvial tailings.

Magnum said that it considers the alluvial nature of the sinter feed fines of the Sinter Feed Project present an early production opportunity for the company.

The Brazilian iron ore and Sinter Feed projects are both located in close proximity to Brazil’s MRS railway network, providing excellent infrastructure logistics to major ports located off the coast of Rio de Janeiro and São Paulo.

Magnum has already commenced comprehensive due diligence investigations in respect of the Brazilian iron ore and Sinter Feed projects.

Magnum has until January 2012 to exercise the option, subject to it being satisfied with its due diligence investigations on the two projects.

In consideration for the grant of the option, Magnum has paid OCRA an option fee of US$200,000.

Carnegie Wave rolls onto Reunion Island

THE BOURSE WHISPERER: Wave energy developer Carnegie Wave Energy has delivered its next generation commercial scale CETO unit (CETO 4) to its deployment location on Reunion Island with the help of French marine defence contractor DCNS.

The unit will now be subjected to pre-deployment testing similar to the CETO 3 pre-deployment testing undertaken by Carnegie at its Fremantle test facility in Western Australia earlier this year.

Once pre-deployment testing is completed, offshore installation of the unit is currently scheduled to take place during the Southern Hemisphere summer, subject to completion of some final installation aids.

The CETO 4 unit will be deployed and tested offshore at the Reunion Island project site.

Successful testing and operation of CETO 4 is planned to be followed by a grid-connected two mega-watt CETO project at the same site with subsequent further expansion to 15MW.

Activities to date have been two-thirds funded by French Government grants and the grid connected project will receive a marine energy feed-in tariff.

The work being carried out by Carnegie associated with Reunion Island and CETO 4 follow on from the company’s signing of a CETO technology licence and Joint Venture agreement with Electricité de France (EDF EN) in 2009 and a Memorandum of Understanding with EDF EN and DCNS in 2010.

The MoU outlined the intention of the parties to work together to test a single CETO unit ahead of a two mega-watt CETO project which would be expanded to a 15MW project at the same site at Reunion Island.

DCNS performs engineering, procurement, and construction management (EPC) activities for the project.

The CETO 4 unit involves some design modifications from the recently tested and independently verified CETO 3 unit deployed off Western Australia.

“The CETO 4 project represents the first joint project activities of Carnegie, EDF EN and DCNS,” Carnegie Wave Energy managing director and CEO Michael Ottaviano said in the company’s announcement to the Australian Securities Exchange.

“As well as testing the CETO system in a different wave climate, we’ve taken the opportunity to test some new design ideas.

“We’re grateful to the support of the French Government and the local Reunion region.”

Carnegie said the recent activities are consistent with the Carnegie and EDF EN technology licence and joint venture agreement, which established the framework for the company and EDF EN to work together to jointly deliver projects in the Northern Hemisphere and on Reunion Island.

All commercial stages beyond the initial CETO 4 unit deployment will result in Carnegie being paid a fee for licensing the CETO technology to the projects.

Anglo American farms-in to Earaheedy JV

THE BOURSE WHISPERER: The Earaheedy Joint Venture between Cazaly Resources and Vector Resources has signed a farm-in agreement with global diversified mining house Anglo American.

The farm-in agreement will cover part of Joint Venture’s Earaheedy iron project located in the Wiluna region of Western Australia.

“The dimensional extents and quality of the Earaheedy project will be further refined and enhanced as a consequence of this timely involvement by world leading miner, Anglo American,” Vector resources chairman Damien O’Reilly said in an announcement to the Australian Securities Exchange.

O’Reilly’s sentiments were supported by Cazaly managing director Clive Jones, who said the agreement with Anglo American recognised the substantial potential of the Earaheedy project and the need to have a major international mining house as part of its development.

“Earaheedy is a potentially major iron ore province and it needs the resources and expertise of a major player to develop it,” Jones said in the ASX announcement.

“Anglo American has the resources to invest in the development of this project and we, and our JV partner, are very happy to have their support.”

The Earaheedy project covers an area in excess of 1,700 square kilometres and includes a substantial strike extent of the iron ore prospective Frere Formation.

A recent drilling program carried out on a number of targets at the Earaheedy project returned encouraging results from the Cecil Rhodes prospect.

Results from the prospect included:

–    34 metres at 54.4 per cent iron, including 22 metres at 58.1 per cent iron; and

–    22m at 57.8% iron and 26m at 55.1% iron, all with low levels of contaminants.

The farm-in agreement relates to a specific area of approximately 890sqkm and allows for Anglo American to complete an initial “proof of concept” program.

This will consist of a minimum of 7,500 metres of reverse circulation (RC) or diamond drilling to be completed as due diligence within 18 months.

Once this has been completed, Anglo American may earn an initial 51 per cent interest in the project by payment of an initial one million dollars in cash to the Joint Venture and the additional spending of $20 million within four years.

After this, Anglo American can qualify to earn a total 75% interest in the project by completing a Bankable Feasibility Study and a further payment of $5 million.

Delivery of a positive BFS would then require Anglo American to make a success payment of $45 million, after which the Joint Venture may then elect to contribute to project expenditure or dilute to a royalty of 1.25% Fee On Board.

The Eeraheedy JV retains sole rights to the southern portion of the Earaheedy project area, which it considers to be prospective for manganese mineralisation.

Northern Star to boost production

THE BOURSE WHISPERER: West Australian-focused gold producer Northern Star Resources is set to increase annual production from 75,000 ounces per annum to 200,000 ounces per annum.

The increase will take place over two stages and comes as a result of a decision by the company to upgrade the plant at its Paulsens gold mine and develop its Ashburton project.

Stage One will see Northern Star increase plant capacity at the Paulsens mine from 350,000 tonne per annum to 450,000 tonne per annum.

The initial result of this will be a rise in production from the current level of 75,000ozpa to 80,000ozpa to 100,000ozpa.

Northern Star said the additional ore to cater for the increase will come from a combination of open pit development and high-grade underground zones, currently classed as either unmined resource blocks or remnant ore.

The company expects this combination of material to provide three years’ ore feed to the expanded mill.

During this time, Northern Star will undertake further reserve drilling and modelling at its neighbouring Ashburton project, which will be split into two projects.

The Ashburton free-milling project, where oxide/transitional resources stand at 92,000oz, will form part of the Stage One expansion.

The Ashburton sulphide project, where sulphide resources stand at 576,000oz will be Stage Two.

Northern Star said the Ashburton free-milling project, where it currently has a $20 million exploration program underway, has potential to expand the free-milling resources.

It will ultimately supply ore to the Paulsens plant once the initial three-year supply of feed from the Paulsens open pit and upper level resources have been exhausted.

Based on the current free-milling resources at the Ashburton project, Northern Star is confident it could add a further three to four years to the Paulsen’s 100,000ozpa production profile.

At this time Northern Star will also begin work on Stage Two of the growth strategy by undertaking studies on the Ashburton sulphide project, where it said, preliminary indications point to a stand-alone operation producing 100,000ozpa.

Northern Star intends to fund the expansion from its cashflow, which is supported by a bank balance of around $30 million.

The increase in production comes on the back of a productive 12 months for the company since it acquired Paulsens for $40 million with it about to become one of Australia’s prominent gold miners.

“Paulsens has provided Northern Star with an outstanding foundation of strong production, low costs and high cashflow,” Northern Star managing director Bill Beament said in the company’s announcement to the Australian Securities Exchange.

“And there is still a lot of gold to be mined and we believe a lot of gold to be discovered at Paulsens.

“This two-staged strategy will enable the company to take even greater advantage of record gold prices in a very short timeframe and for a relatively small capital outlay.

“At the same time, it allows Northern Star to start work on its next substantial growth phase, which will catapult the company into the next league of gold producers.”