Gold Road locks in 100koz forward Sales facility

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THE BOURSE WHISPERER: Gold Road Resources (ASX: GOR) has moved to take advantage of the current historically high gold prices by entering into a margin gold Forward Sales facility with Commonwealth Bank of Australia.

The facility is worth up to 100,000 ounces of Australian dollar denominated forward sales, with Gold Road having the option to increase the facility size to 150,000 ounces on the satisfactory completion of the Feasibility Study for the company’s Gruyere gold project.

Gold Road explained that under the terms of the margin facility it is required to lodge $1 million as cash security for every $1 million the mark to market difference exceeds $15 million, otherwise the facility is unsecured with a negative pledge condition.

This takes Gold Road’s locked in forward sales contracts to date to 50,000 ounces at an average price of $1,791 per ounce.

“Should project financing be selected as the preferred funding solution for the development of the Gruyere gold project, the forward sales executed with CBA, at close to record high Australian dollar prices, are expected to be rolled into a longer dated hedging program, enhancing the debt carrying capacity for the project,” Gold Road Resources said in its ASX announcement.

“If a Joint Venture is the selected development route for the project, then the forward sales will support a strong operating margin on Gold Road’s share in the gold produced from the Gruyere gold project.”

Email: perth@goldroad.com.au

Website: www.goldroad.com.au

Doray Minerals announces record cash flow from Andy Well

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THE BOURSE WHISPERER: Doray Minerals (ASX: DRM) banged the drum to let everybody know of its earnings and record cash flow for the 2016 financial year.

The company went further to point out this has been achieved whilst it is funding and building its second high‐grade gold mine at Deflector.

Dory said unaudited financial results for the full year ending 30 June 2016 showed Revenue of $131.1 million and net profit before tax of $17.5 million, after one‐off non‐cash exploration write‐offs totalling approximately $5.8 million.

Cash flow from the company’s operations increased by 8.7 per cent to $60.9 million, this was despite lower production when compared with the previous year.

“Andy Well has delivered within production and cost guidance for the third consecutive year and the company looks forward to reaping the benefits of having a second high‐grade gold operation for the first time with the ongoing ramp‐up of production from Deflector,” Doray Minerals managing director Allan Kelly said in the company’s announcement to the Australian Securities Exchange.

“Over the last 12 months, we achieved EBITDA of $62.7 million from revenue of $131.1 million, resulting in an outstanding EBITDA margin of 47.8 per cent, amongst the highest of any ASX gold producer.

“Our cash and debt position was also better than expected at the end of the financial year, as a combined result of higher gold prices being received for production at Andy Well and the new Deflector project coming on line on schedule and within budget.”

Website: www.dorayminerals.com.au

Lithium Australia awarded second Federal Government grant

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THE BOURSE WHISPERER: Lithium Australia (ASX: LIT) claimed strengthened support from the Federal Government just as the company moves to commercialise its Sileach process for recovering metals, lithium in particular, from silicate minerals.

LIT informed the market that the Government has granted the Perth-based company a second Innovations Connections Grant under the Entrepreneur’s Program run by the Federal Department of Industry and Science.

This follows a grant the company was awarded in March 2016 and complements the MRIWA grant awarded to LIT in August, for commercialisation of impurity removal and by-product generation during production of battery-grade lithium.

Under the terms of the latest grant, Lithium Australia said the additional funding of $50,000 will assist with laboratory scale optimisation carried out by LIT’s partner ANSTO Minerals (a division of the Australian Nuclear Science and Technology Organisation), focusing on the application of the Sileach process to aid the recovery of lithium.

The Sileach process is designed to recover lithium from silicates without the expensive roasting step that has long been the mainstay of the lithium recovery process.

“Lithium Australia’s Sileach process has the potential to catapult Australia into the forefront of the lithium battery boom by supplying optimal grade and purity material from low-energy production of lithium chemicals,” Lithium Australia managing director Adrian Griffin said Iin the company’s announcement to the Australian Securities Exchange.

“These chemicals can be produced from a range of minerals, including spodumene.

“We welcome the Federal and WA Government’s continuing support to be innovative, and this ‘ideas boom’ ideally suits our project development goals.”

Email: info@lithium-au.com

Website: www.lithium-au.com

Sheffield raises $17M to progress Thunderbird

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THE BOURSE WHISPERER: Sheffield Resources (ASX:SFX) has received commitments to raise up to a total of $17.1 million, which will be put towards the completion of a Bankable Feasibility Study (BFS) at the company’s Thunderbird mineral sands project near Derby in Western Australia.

The total of $17.1 million (before costs) is being raised through a placement of 32.9 million fully paid ordinary shares at an issue price of 52 cents per share.

Sheffield said the placement welcomes a number of new domestic and international institutional and cornerstone investors to the company register in addition to other professional and sophisticated investors.

As well as enabling the completion the BFS, the funds will also be put towards continued exploration in the region surrounding the Thunderbird project while a small portion of the funds will be reserved for general working capital purposes.

“We are very pleased with the strong support received for the Placement, which will allow Sheffield to continue the momentum at its world class Thunderbird mineral sands project,” Sheffield Resources managing director Bruce McFadzean said in the company’s announcement to the Australian Securities Exchange.

“The company welcomes the addition of some of the world’s most respected investment funds as shareholders.

“This support further underlines the quality of Thunderbird, which is a long life asset of strategic importance to the global mineral sands industry.

“Thunderbird’s strategic significance is further supported by the ‘Lead Agency’ status award by the Western Australian Government for the project.

“Whilst always recognising the wonderful support from our current shareholder base, it is important that we now have greater institutional investor representation, enabling Sheffield to go to the next level and assist in unlocking further value for all shareholders.

“The company is now fully funded beyond the conclusion of the Thunderbird BFS, which is expected to occur at the end of 2016 and to continue offtake and financing negotiations as a part of the development of this tier 1 mineral sands asset.”

Email: info@sheffieldresources.com.au

Website: www.sheffieldresources.com.au

Orinoco Gold close to commissioning Cascavel gold mine

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THE BOURSE WHISPERER: Orinoco Gold (ASX: OGX) provided the market with an update on operations at the company’s 70 per cent-owned Cascavel gold mine in central Brazil.

Orinoco said plant commissioning at Cascavel is nearing completion as the ramp-up of commercial gold production moves closer.

The company declared the commissioning of the Cascavel processing circuit to be progressing on schedule with completion expected by the end of August, at which point it anticipates moving into the production ramp-up phase.

The comminution circuit and the gravity circuit have reportedly been operating well and are now consistently performing above the targeted 85 per cent availability level.

The tailings circuit has been the subject of most adjustments during the commissioning process and, following the latest alterations performed over the last few days, is now also expected to consistently meet or exceed targeted availability.

Orinoco’s current focus is on mine development of, and production from, the higher grade Central and Southern portions of the mine.

Stopes in the South are currently being mined to provide production ore to the plant.

A previously announced mine definition drilling program is also underway, which Orinoco expects will provide information to assist with mine planning and development.

“The Cascavel site is currently a hive of activity with our development, mining and operations teams now in the full swing of operations,” Orinoco Gold managing director Mark Papendieck said in the company’s announcement to the Australian Securities Exchange.

“Our focus over the last two months has been on getting the Cascavel processing circuit through commissioning and ready to start processing production material – and by the end of this month we will be in exactly that position.

“Our mining and plant teams have done a great job to get to this point so quickly, and the next important milestone will be to process the first batch of production ore, which should occur next week.

“That will provide invaluable grade reconciliation information which will assist our mine planning team.

“We look forward to providing further updates as this occurs and as we begin the main production ramp-up from early September onwards.

“All going well with the ramp-up, we anticipate being in a position to declare commercial gold production during the December quarter.”

Email: info@orinocogold.com

Website: www.orinocogold.com

Rox Resources says ‘YES!’ to Marindi Metals 21M Reward offer

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THE BOURSE WHISPERER: Rox Resources (ASX: RXL) has accepted a revised offer from Marindi Metals (ASX: MZN) for the company’s interest in the Reward zinc-lead project.

Having fielded a number of competing offers, Rox ultimately accepted Marindi’s revised $21 million offer for Reward.

The principal commercial terms of the offer include:

Cash of $8 million;

$4 million worth of ordinary shares in Marindi, to be issued at the same price at which Marindi intends to undertake a capital raising to facilitate the proposed transaction;

210 million three year convertible notes with a total face value of $5.25 million (2.5 cents per note), convertible into Marindi ordinary shares or redeemable by Marindi for face value plus accrued interest at 10 per cent per annum (see Appendix for more details); and

A deferred payment of $3.75 million, payable on completion of a bankable feasibility study, or the expiry of six years, whichever comes first.

“Monetising the Reward project has been a long process, however I’m delighted with this outcome,” Rox Resources managing director Ian Mulholland said in the company’s announcement to the Australian Securities Exchange.

“If either the Marindi offer successfully completes or Teck pre-empts, Rox will be well funded for the foreseeable future and under the Marindi offer will have a substantial investment in a company with a first class Board and management team, together with a high quality zinc project portfolio.”

Rox explained that completion of the transaction with Marindi is conditional upon a number of matters, including:

Rox having first offered its interest in the Reward project to Teck Australia Pty Ltd, which is a requirement under the terms of the partner’s current Earn-in and Joint Venture Agreement, and Teck not accepting the offer; and

Marindi completing a capital raising to fund the offer. Marindi has provided Rox with a letter of support from Argonaut Securities to underwrite the proposed capital raising; and

Marindi and Rox receiving requisite approvals from their shareholders to complete the transaction.

Marindi has recommended its shareholders vote in favour of the transaction and capital raising while Rox will also be required to obtain approval from its shareholders.

Rox has also recommended its shareholders vote in favour of the transaction – in the absence of a superior proposal.

Rox said the initial $8 million in cash payment will provide funding for the company to progress its other projects, including the Fisher East nickel sulphide project, and new opportunities, without undue dilution of shareholders for the foreseeable future.

Email: admin@roxresources.com.au

Website: www.roxresources.com.au

Evolution Mining agrees to sale of Pajingo gold mine

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THE BOURSE WHISPERER: Evolution Mining (ASX:EVN) has entered into a binding agreement with Chinese company Minjar Gold Pty Limited to sell the company’s Pajingo gold mine and surrounding exploration tenements in North Queensland.

The total proceeds from the deal will be up to $52 million, consisting of a $42 million upfront cash payment and a 1 per cent NSR (net smelter return) royalty of up to $10 million for gold production above 130,000 ounces 

Minjar Gold has met all the requirements in relation to Chinese approvals and FIRB approval for the transaction.

Evolution explained it has consistently stated a key objective of its corporate strategy is to improve the quality of its asset portfolio over time adding the sale of Pajingo is consistent with this strategy.

“Pajingo has made a very important contribution to our business over the last six years,” Evolution Mining executive chairman, Jake Klein said in the company’s announcement to the Australian Securities Exchange.

“Evolution has grown significantly in the past 18 months and it now makes strategic sense for the asset to be operated by an emerging gold producer that can provide the right level of focus on further extending the mine’s operating life.

“We thank all of our team at Pajingo for their contribution to Evolution.

“Their level of focus and commitment has ensured Pajingo continues to be a profitable gold mine 30 years after commencing production.”

As noted in an earlier the ASX release, Evolution will book a loss on the sale of $77.3 million based on the carrying value of the asset, which is expected to close on 1 September 2016.

Evolution said it was committed to assisting Minjar Gold to ensure an orderly transition of ownership at the Pajingo operations.

As a result of the sale, Evolution has revised its FY17 gold production guidance to 745,000 to 800,000 ounces (from 800,000 to 860,000 ounces) at an AISC5 of $970 to $1,030 per ounce (from $985 to $1,045 per ounce).

Website: www.evolutionmining.com.au

Lithium Australia’s Sileach process wins WA government grant

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THE BOURSE WHISPERER: Lithium Australia (ASX-LIT) announced that the Western Australian Government, under the guidance of the Minerals Research Institute of Western Australia (MRIWA), has approved a grant of $195,632.

The grant is in regards to MRIWA Application M479: Solution purification and valuable by-products formation during the production of battery-grade lithium and relates to Lithium Australia’s determination to work with science partners to commercialise the company’s low-energy, low-cost and exclusive trademarked Sileach processing technology to produce lithium extractions from lithium bearing silicates.

Corporate sponsorship of MRIWA’s project module will be provided by Lithium Australia and Venus Metals Corporation (ASX: VMC) – the two companies having executed a Memorandum of Understanding to initially test the commercial lithium potential of VMC’s holdings in the Pilbara region of Western Australia.

The area of focus will be Venus’ Pilgangoora project, southeast of Port Hedland.

The MRIWA project module will test processing solutions generated from pilot testing at ANSTO Minerals (a division of the Australian Nuclear Science and Technology Organisation).

Lithium Australia explained these tests will aim to establish the most effective commercial outcome for recovering products produced by the company’s halogen-based Sileach process.

The MRIWA grant will fund test work being undertaken at Murdoch University, Perth (WA) on solutions generated from batch testing the Sileach process and will extend to solutions then produced from continuous pilot testing.

“It is anticipated the latter will be available in September 2016,” Lithium Australia said in its ASX announcement.

“If the laboratory and pilot plant testing is successful, Lithium Australia plans to establish a number of processing hubs with locations targeted around growing lithium resource bases in Australia, North America and Europe.”

Email: info@lithium-au.com

Website: www.lithium-au.com

St George Mining completes $6M raising

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THE BOURSE WHISPERER: St George Mining (ASX: SGQ) completed a private placement of shares, which raise $6.47 million.

According to St George the placement was heavily oversubscribed, which it claimed to be a reflection of the strong investor interest that has been created by the recent results the company has achieved from its ongoing exploration being carried out at the Mt Alexander high-grade nickel‐copper sulphide project.

Approximately 43.165 million shares will be issued at 15 cents per share with one free attaching option exercisable at 20 cents on or before 30 June 2017 for every five shares applied for.

St George indicated the new funds will allow it to aggressively continue exploration activities at the Mt Alexander project, where nickel‐copper sulphides have been discovered over a broad area, which the company considers to demonstrate potential for a new nickel sulphide camp.

The funds will also be put to use exploring at the company’s other Western Australian projects and for working capital.

“The placement provides St George with a strong balance sheet that allows us to vigorously progress the tremendous exploration opportunity at the Mt Alexander project,” St George Mining executive director John Prineas said in the company’s announcement to the Australian Securities Exchange.

“Since commencing drilling at the project earlier this year, we have intersected massive nickel‐copper sulphides at three prospects and expanded the Cathedrals nickel‐copper sulphide belt to 3.5 kilometres of recurrent mineralisation.

“We are committed to continuing to create substantial shareholder value through exploration success, and thank new and existing shareholders for recognising the strong upside of our projects.”

Website: www.stgm.com.au

Alt Resources to Farm-in to Ironbark Zinc gold venture

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THE BOURSE WHISPERER: Alt Resources (ASX: ARS) has entered an agreement with Ironbark Zinc (ASX: IBG) to farm in to the Fiery Creek gold project in New South Wales.

In its announcement to the ASX, Alt Resources described the project as, “a highly prospective gold exploration opportunity in a well-endowed historic goldfield”.

Under the agreement, Alt can earn up to an 80 per cent interest in the Fiery Creek project in stages by funding drilling activities and making a payment in cash or shares at its election.

The Fiery Creek project contains the historic Fiery Creek and Macanally gold and copper workings, which extend over a strike length of more than 8.5km.

The project is located within EL 6925 which contains both the Fiery Creek project and the Peakview base metal prospect.

Alt and Ironbark have agreed to divide the tenement to reflect their interests in the respective projects, with Ironbark to continue focusing on the base metal potential at Peakview.

The broad terms of the agreement include:

Ironbark will grant a 51 per cent interest in the Fiery Creek project to Alt subject to Alt completing 1,500m of RC or diamond drilling within 24 months;

After earning this initial farm-in interest, the parties will cooperate to effect the separation of the tenement into two distinct exploration licences to allow Alt to focus on the Fiery Creek prospect and Ironbark to focus on the Peakview prospect;

Ironbark will grant a further 29 per cent interest in the Fiery Creek project to Alt, increasing its interest to 80 per cent, subject to Alt completing 2,500m of drilling and paying the sum of $150,000 in cash or fully-paid Alt shares at its election; and

In the event that Alt acquires an 80 per cent interest, it will continue to sole fund all expenditure commitments at the Fiery Creek project until the parties make a decision to mine a deposit within the area.

In the event of a decision to mine, the joint venture will proceed on a contributing basis.