Apollo gains access to Woomera Defence Area

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THE BOURSE WHISPERER: Apollo Minerals has entered into a Deed of Access (“DoA”) with the Australian Department of Defence that allows the company to explore the full extents of its Commonwealth Hill property located within the Woomera Defence Area in South Australia.

Apollo is one of the first exploration companies to be granted access for mineral exploration since the Commonwealth Government announced plans to adopt the recommendations of the Hawke Review which were published in May 2011.

The key recommendation of the Hawke Review was that a co-working arrangement be implemented between Defence and the natural resources industry in which both industries can operate within the Woomera Defence Area.

 “This is a very important milestone for Apollo and allows us to begin field activities in what is rapidly shaping up as Australia’s new iron ore mining frontier,” Apollo Minerals chief operating officer Dominic Tisdell said in the company’s announcement to the Australian Securities Exchange.

“Apollo has been very pleased with the co-operative approach of all parties involved in the implementation of the new access framework and looks forward to contributing to the successful development of this important defence and mineral province.

“These recent changes to the Woomera Defence Area access regime give Apollo, and many other mining and exploration companies, the surety they need to invest in these high potential projects for the good of their shareholders and ultimately, the good of the State.”

The DoA allows Apollo to enter and work within the WDA, subject to the company providing notification of timing for access, people entering and of equipment to be used within the area.

Apollo said it expects the agreed DoA will convert into a new deed within six months, after the new WDA access framework has been agreed between the key stakeholders and fully implemented.

The company has already begun work on developing its iron ore, base and precious metals projects on the property with the first aboriginal heritage clearance survey now also complete.

Apollo said the results from the survey were another positive step for exploration and development and it anticipates building a strong relationship with the Antakarinja Matu-Yankunytjatjara, Traditional Owners of the land.

Apollo expects to soon begin preparations for its maiden JORC drilling program at Sequoia as well as the next phase of geophysics, including evaluation of the St Andrews Direct Shipping Ore style mineralisation prospect where previously drilling encountered 24 metres at 57 per cent iron, including very high grade iron of 70 per cent iron over four metres.

Mine permitting related environmental baseline studies are also expected to commence during the December quarter.

Finders secures funding for Wetar copper project

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THE BOURSE WHISPERER: Two major shareholders of Finders Resources, Taurus Funds Management and Resource Capital Funds have agreed to provide a loan of up to $8 million to Finders, providing capital for the Wetar copper project in Indonesia.

Finders will put the funds towards deposits and progress payments on Marine Fuel Oil (MFO) generators, the transportation and import of the Whim Creek SX/EW plant from Australia and for general working capital purposes.

Finders has signed a contract for the purchase of six second‐hand refurbished generators from Royce Power Engineering representing a total generating capacity of 19.7MW.

Use of MFO generators was a key component of the Bankable Feasibility Study, which established they offer a significant operating cost saving (around 15 per cent to 20 per cent) compared to high speed diesel due to lower fuel price and greater efficiency.

The Whim Creek SX/EW plant was formerly used at the Whim Creek mine in Western Australia and Girilambone in New South Wales.

The plant has a nameplate capacity of 18,000 tonnes per annum copper cathode and was purchased by Finders from Straits Resources in 2009.

Finders said it also currently arranging a an additional project finance funding package of US$138 million with Credit Suisse, Standard Bank and Barclays.

The banks have received all external consultant reports necessary for their due diligence and are expected to seek credit committee approval in November.

Finders Managing Director Chris Farmer said the financing is a vote of confidence in Finders:

“The MFO generators and the Whim Creek SX‐EW plant are both important parts of our development plan for the Wetar copper project,” Finders Resources managing director Chris Farmer said in the company’s announcement to the Australian Securities Exchange.

“Shipping Whim Creek and securing long lead time equipment such as the MFO generators represent important development milestones.

“Taurus and RCF have been supportive, long term shareholders who recognise the value of the Wetar copper project.

“Their support means we can sustain project development momentum, ahead of the main project funding.”

The principle terms of the loan from Taurus and RCF are as follows:

–    facility amount of up to $8 million;

–    the facility is unsecured;

–    interest rate of eight per cent per annum payable quarterly in arrears and may, subject to agreement between the individual lender and Finders, be paid by way of issue of ordinary shares in Finders at the 5 day VWAP for ordinary shares of Finders on the ASX;

–    the facility is repayable on the earlier of either the project equity raising or 24 October 2012;

–    if Finders is issuing ordinary shares, the lenders may elect to convert their loan into ordinary shares of Finders at the same issue price per share as the equity raising;

–    the lenders are entitled to a facility fee of 1.5per cent of the total facility amount and will be issued warrants over a total of 16 million shares, exercisable at 50c per share at any time in the next three years; and

–    Finders is required to use funds raised on the exercise of the warrants to repay any outstanding amounts under the facility.

Geologists support JORC Code “principles” over “prescription”

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THE BOURSE WHISPERER: The Australian Securities Exchange has flagged changes to the way mining companies report Resources to the market.

The national body of Australia’s geologists, The Australian Institute of Geoscientists, has said it would prefer to see the ASX adopt a “principles” approach rather than a “prescriptive” approach if there is to be any structural changes to the country’s world-famous reporting standard for minerals resources, the JORC Code.

The Australian Securities Exchange is currently reviewing the way the country’s listed miners and explorers report their updates on Exploration Results, Mineral Resources and Ore Reserves under what is known as the JORC Code.

“JORC, as a principles-based system can deal with the complexity of mineral deposits and, backed by qualified geologists, meet clear standards able to properly inform the public,” Australian Institute of Geoscientists president Andrew Waltho said.

Waltho’s comments and the Institute’s concerns stem from industry apprehension that the ASX appears to favour a “checklist” or “prescriptive” approach in its recently released ASX Listing Rules discussion paper.

The Australian Institute of Geoscientists – one of the parent bodies of the JORC Code – said that the JORC Code had for more than three decades, well served regulators, the public and the industry alike in ensuring that all relevant minerals information was objectively disclosed.

The Institute suggests a “checklist approach” may not deliver additional market transparency or the materiality of reporting by resources companies, compared to the current JORC approach.

“We note that every other resources reporting code in the world except Canada follows the JORC model,” Waltho said.

“No overseas minerals jurisdiction has adopted the prescriptive Canadian model now being considered by the ASX – so that is a performance yardstick that needs to be given some weight if there are major changes eventually proposed by the ASX”.

“We would not want to see changes in reporting guidelines that either reduced the quality of reporting or damaged investor confidence in a sector now very much driving jobs and project growth in this country.
 
“It may more be a case that the JORC code itself does not need changing but that because of the mining booms underway at state and national levels in Australia, that the ASX’s regulatory staff may need additional resources to achieve timely administration and policing of minerals reporting.”

Waltho said JORC had become internationally recognised and respected as a balanced and proven process for minimising market manipulation through deliberate misinformation.

Since the introduction of the JORC Code in 1989, there had been no serious problems with the regime of self-regulated public reporting of resource company information it established in Australia.

“This has largely been due to the strength of the system created in Australia by JORC and the ASX working closely together,” Waltho continued.

“The Institute knows that the JORC Committee would welcome ongoing consultation with the ASX on its proposed new regulatory regime.

“The overseas experience with a prescriptive approach has not prevented serious problems such as deliberate fraud.

“The JORC Code review presents an opportunity for the ASX, the Institute and other key stakeholder groups to continuously improve the transparency and materiality of information disclosed to investors.

“This in turn would further maintain Australia’s leadership and reputation in geoscience reporting integrity and investor confidence.”

Waltho said the Institute formally supported a measured and evolutionary refinement of securities exchange reporting of Exploration Results, Mineral Resources and Ore Reserves as any changes to the JORC Code would also have international impacts in the equities and resources sectors.

“The ultimate effectiveness of a principles-based approach to public reporting must be the ability of regulators to competently assess technical information presented in public announcements of exploration results, resources and reserves, as these constitute price sensitive information,” he said.

“Investor confidence in the resources sector is paramount to the continued strength of Australia’s exploration and mining industries.”

ActivEX forms new JV with Coppermoly

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THE BOURSE WHISPERER: ActivEX has entered into a new Joint Venture in the Esk Trough area having signed a letter agreement with Coppermoly Limited for it to farm-in to ActivEX’s Esk Trough project.

The Esk Trough project is a group of five EPMs located 80 kilometres west of Gympie in South East Queensland.

The project consists of 356 square kilometres across five exploration permitted areas: Booubyjan, Dadmarine, Balirmore Ban Ban and Stockhaven.

ActivEX did have a JV in place with Minotaur Exploration over part of this area.

This was terminated in late 2010, returning 100 per cent ownership of the area to ActivEX.

Terms of the new agreement are for Coppermoly to farm-in to the joint venture area by sole funding exploration spending of $3 million over three years to earn a 51 per cent interest.

Coppermoly has committed to a minimum expenditure of $0.5 million in the first year.

Once the first stage earn-in has been completed Coppermoly can elect to continue sole funding the exploration program and by spending an additional $3 million it can earn a cumulative 70 per cent interest in the area.

If and when Coppermoly earns the 70 per cent, ActivEX can elect to claw back a 10 per cent interest (to 40 per cent) by sole funding $6 million of exploration expenditure.

The JV then will contribute on a pro-rata basis if either company discontinues sole funding.

“We have always believed in this area because of its porphyry indications, so it is a credit to us to bring in another company to continue exploration in the area,” ActivEX managing director Doug Young said in the company’s announcement to the Australian Securities Exchange.

“Our work in the past has intersected some wide zones of copper-gold mineralisation including 290 metres of 0.13 per cent copper and the prospects have a high gold content as shown by drilling at the Kakapo prospect where ore grade intersections of 88 metres at 0.47 per cent copper and 0.49 grams per tonne gold have been made.

“As a company we have been largely focussed on our Cloncurry copper-gold project and the Barambah gold-silver project in the last year, so to bring a new source of funding for Esk Trough is a great result, particularly involving a company like Coppermoly, which has a lot of experience in this style of deposit in Papua New Guinea.

“They will bring new ideas and techniques to help define targets and we will assist them by managing the project on the ground, as we have done in the past.”

The two companies are developing a forward exploration program at the moment and anticipate activities to commence soon.

Terranova begins field work

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THE BOURSE WHISPERER: Terranova Minerals has kicked off field based exploration at its Peninsula gold project, located in Norseman, Western Australia.

The company said the initial focus for the campaign is to help it gain an understanding of the controls and extent of the gold mineralisation at Peninsula.

The company will be utilising Mobile Metal Ion (MMI) Geochemistry, which it described to be a robust, highly sensitive geochemical exploration method.

Mobile Metal Ions are adsorbed onto the surface of screened soil particles and then dissolved using patented chemical leaches and analysed at parts per billion levels.

Terranova said it hopes to identify areas that are geochemically anomalous in the target commodities, being gold, and base metals.

The company expects the sampling activities to highlight a number of priority targets and geochemical trends which it will explore further through such means as geological mapping, prior to any geophysical or drilling assessment.

It will also be conducting a rock chip sampling and geological mapping program at and around the historical Peninsula gold project workings.

“The aim of rock chipping is to further define the grade distribution across the workings and potentially identify extensions to known mineralised areas,” Terranova Minerals said in its announcement to the ASX.

“Rock chip sampling and mapping will assist with interpreting results in the returned MMI geochemistry.”

The MMI survey will involve the collection of 32 soil samples on a 50 metre by 50 metre grid spacing.
 
The samples will then be submitted to SGS Laboratories in Perth, where they will be analysed for a multiple commodity exploration package comprising 45 elements.

“Gold mineralisation at Peninsula is associated with north-south trending quartz veins which dip at angles of 60 degrees to 80 degrees to the east,” Terranova said.

Terranova said that the quartz reef at Peninsula extends for the length of the tenement and has been subjected to historic work in the late 1800’s and intermittently throughout the 1900’s.

Along the strike within the project area a total of five shafts have been sunk and a small scale open cut and underground mining activities have been undertaken at the project.

The company said that a trial open pit mining operation yielding a total of 424 tonnes of ore that was treated at a grade of 2.14 grams per tonne gold.

A decline was developed by Central Norseman Gold Corporation Limited (CNGC) at the southern end of the project, from which a total of 495 tonnes averaging 1.62 grams per tonne was mined.

Minbos tables Cacata scoping study

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THE BOURSE WHISPERER: Africa-focused phosphate developer Minbos Resources has received the results of a scoping study recently conducted by CRU Strategies on the Cacata project, located within the company’s Cabinda project area in the Republic of Angola.

Cacata contains an indicated resource of 33.9 million tonnes with average phosphate content of 15.75% including 22.5 million tonnes resource at 21.4% phosphorus pentoxide.

“The completion of the Scoping Study on Cacata is an important milestone in the ongoing development of the project,” Minibos Resources executive chairman Peter Richards said in the company’s announcement to the Australian Securities Exchange.

“The scoping study highlights that the required capital expenditure and operating costs remain at the low end of the industry range for comparable scale projects and has the potential to produce a premium product which all make for potentially very robust economics.

“Going forward Minbos now has this high grade project in the development stage, supported by additional significant tonnages within its Cabinda licences, the potential of a similarly robust project at its 100 per cent-owned Kanzi prospect in the Democratic Republic of Congo, and now complemented by our potential potash project located immediately adjacent and under our Cabinda licence.

“Minbos is very well positioned to capitalise on the increasing demand for fertilisers as it aims to be a supplier to the world fertiliser market.”

Minbos indicated potential existed to supplement the Cataca resource from the nearby Chivovo deposit which contains relatively high grades of between 28 per cent to 34 per cent phosphorus pentoxide.

The company expects to mine Cacata using open pit mining methods and a conventional beneficiated process including size classification and attrition scrubbing, wet screening and desliming at 106 microns.

The company said the scoping study assumed a target production rate of 1.5 million tonnes per annum of marketable phosphate rock, which provides for an operation life in excess of 10 years.

In its study CRU said, as a general rule, a phosphate rock project generally requires a US$100 to US$250 capital expenditure per tonne of annual capacity.

This equates to US$100 million to US$250 million for one million tonne s per annum capacity of rock concentrate.

“The Cacata project is expected to be at the lower end or in fact below this range due to the fact that it is foregoing the purchase of mining and haulage equipment by using contractors, the deposit is relatively high grade, it will not require a complex beneficiation process and is close to infrastructure,” Minbos said.

“A cash operating cost midpoint estimate of US$46/t has been projected (with a low and high range of US$35 to US$58 per tonne).”

Coalspur increases Vista outlook

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THE BOURSE WHISPERER: Dual-listed (ASX and TSX) Coalspur Mines has increased the forecast marketable coal production from its Vista coal project in Canada.

The forecast production for Vista has been increased to 11.2 million tonnes of coal per annum as part of the ongoing Bankable Feasibility Study.

This represents a 24 per cent increase over the 9Mtpa that was forecast in the company’s in the Pre-Feasibility Study.

Coalspur said the increased production rate came as a result of enhanced mine planning, increased clean coal yield and the optimization of mine infrastructure design.

The BFS is progressing on schedule and is expected to be ready for publication in early 2012 following completion at the end of 2011.

“The expanded annual production further confirms Vista’s status as a world-class, Tier one mining project,” Coalspur Mines managing director and CEO Gene Wusaty said in the company’s announcement to the Australian Securities Exchange.

“We expect that the increased production volumes in conjunction with the accessible rail and port infrastructure will render Vista an important first-world alternative supplier of export thermal coal to the rapidly expanding Asian Pacific economies.”

Coalspur said the revised production plan will process approximately 20.1Mtpa of run of mine coal and produce 11.2Mtpa of marketable coal.

The updated mine will accelerate dragline mining to the first year of production as compared to the fifth year, which was outlined in the earlier PFS, resulting in lower comparable mining costs.

The development of the Vista mine is planned to be completed in two phases an approach that Coalspur said will enable it to utilize a mine permit that was granted to the company in May this year.

It will also allow the company to reduce its upfront capital costs required before achieving significant operating cashflows.

In addition to the refined mine plan and processing plant design Coalspur indicated several other infrastructure components have also been optimized to accommodate the increased yearly tonnages.

These include the raw coal storage, coal sizing facilities, overland conveyor, and rail car load out facility.

Northwest Millennium strike gold JV

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THE BOURSE WHISPERER: Nullagine goldfields neighbours Northwest Resources and Millennium Minerals have signed a non-binding heads of agreement for a 50:50 joint venture.

The new JV will result in ore from Northwest’s Camel Creek Trend gold deposits being mined and processed by Millennium.

Northwest and Millennium are both developing gold projects in the Nullagine goldfield located in the eastern Pilbara of Western Australia.

Millennium will manage the joint venture, which will not require any up front capital contribution by Northwest.

All ore mined as part of the joint venture will be processed through Millennium’s Golden Eagle treatment plant, which is currently under construction.

The key commercial terms of the Joint Venture are as follows:

–    Gold produced from the joint venture will be shared equally on a 50:50 basis.

–    All costs associated with mining, processing and administration of joint venture ore will be shared equally on a 50:50 basis.

–    As consideration, on signing of the formal joint venture agreement Millennium will pay to Northwest, $1.25 million comprising $250,000 in cash and $1M in Millennium shares. The shares will be issued at a price equal to the 30 day VWAP of Millennium shares prior to the date of issue of the shares to Northwest.

According to the companies’ joint ASX announcement the joint venture will transform Northwest from its current advanced explorer status to that enjoyed by an emerging gold producer.

It will also allow Northwest to focus on developing its core Blue Spec Shear high-grade gold-antimony deposits into an underground gold mine.
 
The gain from Millennium’s perspective is that the joint venture with Northwest will bolster its Ore Reserve inventory through the addition of shallow, moderate grade oxide feed.

“This is an exciting time for Millennium with construction of the Nullagine gold project on budget and on schedule,” Millennium Minerals chief executive officer Brian Rear said in the ASX announcement.

“This milestone is the first in a series of deals contemplated as part of our medium term regional consolidation strategy.”

Northwest Resources managing director John Merity was also effusive in welcoming the new JV.

 “This joint venture provides substantial benefits for both companies,” Merity said.

“Northwest was attracted by the strong track record of Millennium’s management team and we are confident that they will make a success of their project and the joint venture.

“For Northwest, joint venture revenue will underwrite the company’s future and allow us to focus on bringing our high-grade Blue Spec Shear gold-antimony deposits into production as soon as possible in an environment of historically high gold and antimony prices.”

Phoenix Gold inks second mill deal

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THE BOURSE WHISPERER: Phoenix Gold has executed a Toll Treatment Campaign Agreement with FMR Investments for the treatment of a parcel of Phoenix ore.

The ore will be processed through the latter’s one million tonne per annum Greenfields processing facility located near Coolgardie in Western Australia.

The Greenfields mill is a private toll treatment facility located 25 kilometres south of Phoenix’s southern tenements.

Phoenix said the facility is well serviced by haul roads in all directions.

Under the terms of the agreement, Phoenix will deliver an ore parcel to the mill and will pay a cost plus toll treatment charge on a $A per tonne basis.

The processing circuit will be configured with site personnel under the direction of Phoenix management, which the company said will enable optimal conditions to maximise recoveries and minimise costs.

Phoenix also said that the treatment of the batch of ore will also provide it with valuable metallurgical information and will also allow it to confirm gold recovery values used in project evaluation.

“This agreement allows Phoenix to realise early cash flow from our surface stockpiles that are now economic in the current high gold price environment with minimal haulage required,” Phoenix Gold managing director Jon Price said in the company’s announcement to the Australian Securities Exchange.
 
The agreement with FMR follows the execution by Phoenix of a Memorandum of Understanding with Kalgoorlie Mining Company for the treatment of up to 300,000 tonnes per annum of its ore through the Bullant processing facility.

The MOU was signed earlier this month and contemplates the preparation and execution of a binding agreement within 12 months.

“We are now in a position where we have flexibility and options for the treatment of our ore in the short to medium term as we continue to grow our resource base” Price said.

Phoenix has drafted a long-term agreement with FMR for the treatment of 150,000 tonnes per annum and anticipates this will be executed during the December Quarter.

Midas has gold tenement granted

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THE BOURSE WHISPERER: Midas Resources has had its E40/295 tenement, located in the Leonora area of Western Australia’s northern goldfields gazetted as granted.

Midas said the tenement comprises 48 graticular blocks and is a key tenement in the formation of the company’s Leonora gold project situated between Leonora and Kookynie, approximately 200 kilometres north of Kalgoorlie.

“E40/295 contains a number of historic gold mines and prospects that are generally associated with northwest trending shear zones and faults,” Midas Resources said in its ASX announcement.

“These prospects form part of a corridor of gold mineralisation that extends over 50 kilometres from Kookynie to Leonora.

“Recent sampling by the company has also identified strongly anomalous gold values from old mine dumps at Bluebell in the southern part of the tenement.”
 
Midas said the Bluebell target, like a number of its other targets in the tenement, requires further mapping and sampling prior to being subjected to a drilling program.

The company’s objective is to complete this work and obtain the necessary permits for drilling within the current quarter.

Midas’ Leonora project tenements now exceed 200 square kilometres in area.

They include a Mining Lease application at Sunset Well where the company has previously announced an Inferred Mineral Resource of 1.1 million tonnes at a grade of 1.40 grams per tonne gold for 50,100 ounces of contained gold.

The company is currently undertaking exploration that is focused on targets in tenements E40/294 and E40/295.

This includes prospects at George Bore, Hawke, and Bluebell.

The company has also submitted applications for tenements E40/312 and P40/1282, from where it announced strong gold sampling results from in the Kookynie area.
 

Midas has recently completed a Renounceable Rights Issue and has budgeted 2600 metres of Reverse Circulation drilling for testing of various targets in the Leonora project tenements.