Altech Chemicals signs German project financing mandate

/in /by

THE BOURSE WHISPERER: Altech Chemicals (ASX: ATC) has executed an exclusive mandate with German KfW IPEX-Bank GmbH, a wholly-owned subsidiary of the promotional bank KfW.

Under the deal KfW IPEX-Bank will provide Altech advisory and structuring services in relation to the provision of senior debt project financing for the company’s proposed high purity alumina (HPA) project.

KfW IPEX-Bank is a leading German export and project finance specialist with significant experience in the debt financing of mining and chemical projects worldwide, including projects in the Asia-Pacific region and projects similar to Altech’s proposed HPA project.

Altech explained the mandate will consider senior debt project financing to maximise the use of Export Credit Agency (ECA) insurance cover under German government-backed project finance export guarantees.

ECA cover is an instrument for the promotion of German exports that provides a cover to bank lenders to insure against the risk of an export loan and is administered by Euler Hermes, the German Export Credit Agency.

The interest rate charged by lenders on the portion of total project debt that qualifies for ECA cover is available under attractive conditions with long tenor in accordance with OECD guidelines.

Interest charged on any senior debt and/or mezzanine debt over and above the ECA cover portion of debt is normally at standard commercial rates.

Altech’s initial estimate is that approximately US$40 million of HPA project debt should qualify for ECA cover.

The company said the ECA cover applies to the HPA project because the majority of the plant and equipment will be sourced from German and other European Union manufacturers, such as German company M+W Group, which has been appointed engineering, procurement and construction (EPC) contractor for the project.

Altech outlined its first step in the ECA cover approvals process is for it, KfW IPEX-Bank and M+W Group to make a presentation to Euler Hermes for its assessment of the project, from which an initial determination of eligibility for ECA funding will be made.

ECA cover and subsequent senior debt project financing is subject to a detailed due diligence process and Altech indicated there to be no guarantee ECA eligibility or final funding will eventuate, however, the company considers execution of this mandate with KfW IPEX-Bank is an important step in support of the project.

“The execution of this mandate with KfW IPEX-BANK for senior project debt financing, including its support in pursuing German Export Credit Agency (ECA) cover, is a significant step in the company’s project financing efforts,” Altech Chemicals managing director Iggy Tan said in the company’s announcement to the Australian Securities Exchange.

“The possibility of accessing low interest rate, long term project financing that may be available under German ECA cover is compelling and the detailed due diligence process associated with final grant of the cover will be a strong endorsement of the company’s HPA project.”

Email: info@altechchemicals.com.au

Website: www.altechchemicals.com.au

Sandfire Resources on track with DeGrussa Solar Power

/in /by

THE BOURSE WHISPERER: Sandfire Resources (ASX: SFR) has installation of the first solar photovoltaic (PV) panels underway as part of the construction of a 10.6 megawatt (MW) solar power station at the company’s 100 per cent-owned DeGrussa copper mine in Western Australia.

The $40 million project is to become the largest integrated off-grid solar and battery storage facility in Australia and will consist of 34,080 solar PV panels covering a total area of over 20 hectares at a site located immediately adjacent to the DeGrussa underground mine and processing plant.

Site electrical work is well advanced with the installation of underground electrical infrastructure including conduits ready for low-voltage and communication cabling to allow the interconnection of the panels, and to connect the facility to a 6MW lithium-ion battery storage facility and the existing 19MW diesel-fired power station at DeGrussa.

Sandfire expects to have installation of the solar PV modules completed early in the New Year with other items to be installed in the coming months, including a solar inverter to change electric current from DC to AC, transformers and other electrical accessories and control systems.

The company explained the system has been designed with the diesel-fired power station continuing to provide base-load power to the DeGrussa mine with sufficient minimum load to ensure it can respond quickly to meet the power requirements of the process plant and underground mine.

“I have no doubt that the DeGrussa solar power project will attract growing interest both internationally and within the industry as this impressive project commences operations,” Sandfire Resources managing director Karl Simich said in the company’s announcement to the Australian Securities Exchange.

“This is the first time that a major off-grid solar power facility with an integrated battery storage unit has been installed on a remote site in conjunction with an existing diesel-fired power station to service a highly critical operation such as an underground mine and processing plant, where safety and continuity of operations are paramount.

“We always said at the outset that the overriding consideration for this venture would be that, once installed and operating, it would not compromise copper production.

“This is a first for the mining industry, a first for the power generation industry and a first in the rapidly growing field of renewable energy.

“We are all looking forward to its completion and successful commissioning of this state-of-the-art project early next year, and to the positive impact that we believe it will have for all of our key stakeholders.”

Email: admin@sandfire.com.au

Website: www.sandfire.com.au

Altech Chemicals to locate beneficiation plant in Malaysia

/in /by

THE BOURSE WHISPERER: Altech Chemicals (ASX: ATC) has taken the decision to locate the beneficiation plant for the company’s proposed high purity alumina (HPA) project in Malaysia.

The company is currently undertaking detailed design for the project, located near Meckering in Western Australia, which includes consideration of optimisation opportunities for process flow design, plant layout, capital equipment and operating costs.

The company completed a Bankable Feasibility Study for the project in June that contemplated on-site beneficiation of mined kaolin material at Meckering.

However, as a result of the current detailed design and optimisation work, Altech will now locate the kaolin beneficiation plant at the company’s proposed HPA plant site in Johor, Malaysia.

According to Altech, moving the kaolin beneficiation plant to Malaysia will reduce plant capital costs as proposed dryer, bagging unit and supporting infrastructure will no longer be required.

Removing these items will also simplify the beneficiation process.

An added sweetener is that by locating the beneficiation plant in Malaysian means it will also be smaller in size as it will operate 24hrs/day – as opposed to 12 hrs/day in Australia – and construction costs in Malaysia will be much lower.

Operating costs for the Malaysian beneficiation plant will also be lower due to lower power and natural gas charges, lower labour costs and various maintenance and operating synergies.

The company said the revised Meckering operations (post mining) will now consist of loading raw kaolin material directly into sea containers for shipment to Malaysia.

“Identifying the benefits of locating the kaolin beneficiation plant in Malaysia is a credit to the detailed design and optimisation team,” Altech Chemicals managing director Iggy Tan said in the company’s announcement to the Australian Securities Exchange.

“The impacts on project NPV will be minimal, however the simplification of the beneficiation flow sheet and the synergies of having all of the major project infrastructure at one site and within one jurisdiction, Malaysia, will deliver both operating and project financing advantages.

“Detailed design and optimisation work is ongoing and will continue into the first quarter of 2016, in parallel with our project financing and associated activities”

Email: info@altechchemicals.com

Website: www.altechchemicals.com

Saracen on steady road to production at Thunderbox

/in /by

THE BOURSE WHISPERER: Saracen Mineral Holdings (ASX: SAR) informed the market of the progress being made to mining, plant refurbishment and infrastructure at the company’s 100 per cent-owned Thunderbox gold project in Western Australia.

Saracen said the project is on track for commissioning by the March quarter next year with first gold production in the June Quarter.

Mining activities to date at the Thunderbox open pit has advanced to a depth of 40 metres, with some 4.46 million billion cubic metres of dirt moved, well over the budgeted figure of 4.03 million BCM.

Saracen has completed a second grade control drilling program, which resulted in a Resource model update that confirmed a consistent and predictable ore body.

The first ore was mined at Thunderbox in October ahead of schedule, while plant refurbishment is also continuing ahead of schedule.

Saracen declared the Thunderbox project could potentially add around 20,000 ounces of gold to the company’s FY16 production guidance of 150,000 to 160,000 ounces, which is currently supplied solely from its Carosue Dam operation.

Being debt-free and with net cash and bullion of $44.9 million sitting in the bank, Saracen boasted it is set to double its gold production to around 300,000 ounces of gold per annum at an all-in-sustained-cost of less than $1075 per ounce within two years, funded from internal cash flows.

“First gold from Thunderbox will see Saracen produce gold from multiple operations for the first time, doubling our production base,” Saracen Mineral Holdings managing director Raleigh Finlayson said in the company’s announcement to the Australian Securities Exchange.

“Importantly this growth is both low cost / high margin, and internally funded.”

Email: info@saracen.com.au

Website: www.saracen.com.au

Metals X to acquire Comet Gold Project from Silver Lake Resources

/in /by

THE BOURSE WHISPERER: Metals X (Metals X) has continued its gold project procurement endeavours having reached a binding agreement with Silver Lake Resources (ASX: SLR) to acquire the Comet gold project, located near Cue in the Murchison Goldfield region of Western Australia.

The acquisition is to cost Metals X $3 million in cash.

Metals X said the deal is subject to Ministerial consent for the transfer of tenements and Foreign Investment Review Board approval, although it anticipates this should be completed before the end of the year.

The Comet gold project covers an area of 50 square kilometres and includes the Comet, Comet North and Pinnacles Mines which includes the Lunar/Solar prospects.

Silver Lake has previously reported a total mineral resource estimate of 3.8 million tonnes at 2.9 grams per tonne gold containing 353,000 ounces of gold.

Metals X declared its initial focus will be on the Comet mine, which the company plans to develop as an underground operation consisting of a current total mineral resource estimate of 1.46 million tonnes at 4.8g/t gold containing over 225,000 ounces.

“This is another great value acquisition for Metals X which presents an immediate addition to our recently commissioned Central Murchison gold project,” Metals X CEO Peter Cook said in the company’s announcement to the Australian Securities Exchange.

“It has very good underground mining metrics and excellent potential to be a strong and steady contributor to our aggregate gold production in the near term.”

Email: reception@metalsx.com.au

Website: www.metalsx.com.au

Hannans Reward Pahtohavare JV partner commits to Stage 2

/in /by

THE BOURSE WHISPERER: Hannans Reward (ASX: HNR) has been informed by Swedish mining company, Lovisagruvan AB of its decision to proceed to Stage 2 of the Pahtohavare Joint Venture.

The Pahtohavare copper-gold project is located approximately 8km south-west of Kiruna, a full service mining town in northern Sweden and comprises three deposits – Central, Southern and South Eastern.

The Central deposit contains a current JORC Compliant Inferred Mineral Resource Estimate of 1.4 million tonnes at 1.8 per cent copper and 0.6 grams per tonne gold (2.4 per cent copper equivalent [CuEq]).

“Lovisagruvan AB is funding the costs of exploration pursuant to the Joint Venture announced to ASX on 27 March 2015 with Hannans to retain a 25 per cent free carried interest through to a Decision to Mine,” Hannans Reward explained in its ASX announcement.

“Hannans and Lovisagruvan will now incorporate a corporation (a Swedish aktiebolag) through which the joint venture will be administered.”

Under the terms of the JV, Lovisagruvan Stage 2 commitment will consist of:

Preparation and lodgement of an exploitation concession application (i.e. a mining lease application) for the Central deposit within approximately 12 months; and

Provide Hannans’ wholly-owned subsidiary Kiruna Iron AB with a $0.475 million interest free working capital facility.

As part of its Stage 1 commitment Lovisagruvan has already spent $0.7 million and completed the following:

Eight new diamond holes and one diamond tail for a total of 760.3 metres. The drilling program confirmed the wide, high-grade nature of the copper-gold-silver mineralisation at Central but also showed that the mineralisation is complex, likely due to the insitu weathering and subsequent supergene overprinting of the deposit;

Copper speciation testwork that showed the majority of the copper mineralisation is associated with cuperiferous clays. Copper speciation testwork, undertaken using an aggressive acid (H2SO4) concentration of 50g/L over 1 hour, indicated the percentage of acid soluble copper for each of the three composites ranged from 83.10 to 87.85 per cent; and

A preliminary environmental review that showed the waste rock is most likely not acid producing and no major environmental problems are expected from the existing waste dumps.

Email: admin@hannansreward.com

Website: www.hannansreward.com

Azure raises $5.22M to bankroll Mesa de Plata exploration

/in /by

THE BOURSE WHISPERER: Azure Minerals (ASX: AZS) has secured funding of $5.22 million just as it is about to embark on a program of resource estimate drilling and development studies at the Mesa de Plata silver discovery, on the company’s Alacrán project in northern Mexico.

The funding will come from a placement of 145 million shares, which will be issued at a price of 36 cents.

The biggest chunk of the placement is to be taken up by a large Canadian-based institutional investor, which has subscribed for 75 million shares to raise $2.7 million, to emerge as a substantial shareholder with a six per cent stake in Azure.

Next up, Exploration Capital Partners 2008 Limited Partnership, an entity affiliated with Sprott Inc., has subscribed for 40 million shares at a cost of $1.44 million.

Sprott is a leading natural resources investment management firm based in Toronto and is listed on the Toronto Stock Exchange.

Rounding the placement off is existing Azure shareholder Mark Creasy, who has subscribed, through his private company Yandal Investments Pty Ltd, for 30 million shares to raise $1.08 million.

The placement will increase Creasy’s shareholding in Azure to 9.8 per cent.

“The placement significantly strengthens the company’s financial position for the intensive work program planned for Mesa de Plata in the next 12 months, which included a maiden resource estimate, metallurgical work and further development studies,” Azure Minerals managing director Tony Rovira said in the company’s announcement to the Australian Securities Exchange.

“The three participants in this placement are top class investors which shows the very strong interest in the Alacrán project and the Mesa de Plata silver discovery.

“Our improved balance sheet will allow us to progress development as quickly as possible.

“As a junior exploration company, it’s very pleasing to get such significant support from major international institutions, and we are equally pleased that Mr Creasy continues to back our work.”

Website: www.azureminerals.com.au

Latin Resources strikes Chilean copper JV

/in /by

THE BOURSE WHISPERER: Latin Resources (ASX: LRS) has signed a binding terms sheet with Chilean company, Minera Activa to enter into a Joint Venture agreement on Minera Activa’s Filipina copper project in Chile, South America.

The JV allows Latin to earn into the project by payments over a four year period to potentially earn up to 100 per cent of the project.

“We are extremely pleased that we have secured a project that has a reported and current NI 43-101 resource that has the potential to take Latin Resources into copper production,” Latin Resources managing director Chris Gale said in the company’s announcement to the Australian Securities Exchange.

“The Filipina project also shows great exploration upside and also located in the northern part of Chile which has exceptional infrastructure including copper toll processing plants, power, smelters and refineries with a well-developed mining community.

“Chile is the world’s largest copper producer which therefore has well defined mining jurisdiction and laws Australia has a Free Trade Agreement with Chile along with a double tax treaty agreement.

“The Filipina project represents a tremendous value creating opportunity for Latin Resources with a potential near term production and cash flow generator for the company”.

The key terms of the Joint Venture are:

Latin Resources to make an investment into the project of US$2 million over an 18 month period to earn 25 per cent;

The company has an option to invest a further US$5 million to Bankable Feasibility Stage (BFS) to earn a further 24 per cent for a total of 49 per cent in the following 18 months (36 months). Latin must exercise this option to maintain its 25% interest;

Latin will have an option to acquire the remaining 51 per cent by paying US$2 million to Minera Activa by month 36 (to earn a further 6 per cent share to take Latin to 55 per cent) and a further payment of US$10 million to Minera Activa by month 48 for the remaining 45 per cent to take Latin to 100 per cent ownership;

On signing the JVA, Latin may appoint up to four nominees to a Joint Venture management committee and will have control of operations on the projects; and

Latin may, at its election, bring in a third party to assist with funding investment in the projects.

Latin Resources explained the mineral resource estimates are regarded as a foreign estimate and are not reported in accordance with the Australian 2012 JORC Code.

Email: info@latinresources.com.au

Website: www.latinresources.com.au

Arafura Resources slices $244M off Nolans CAPEX

/in /by

THE BOURSE WHISPERER: Arafura Resources (ASX: ARU) has reduced the estimated capital expenditure (CAPEX) for the company’s 100 per cent-owned Nolans rare earths (RE) project in the Northern Territory.

The total initial CAPEX for the Nolans project is now estimated at $1.193 billion (or US$835 million at A$1 = US$0.7) inclusive of 20 per cent contingency but excluding deferred capital.

It comprises direct costs of $764 million at the Nolans Site in Australia and $95 million at the offshore RE separation plant.

Arafura said that since it commenced initiatives in April 2013 to improve the viability and fundability of the Nolans project, the CAPEX estimate has been reduced by $719 million, or 38 per cent.

“The initial CAPEX investment for the establishment of the Nolans project may be further reduced through ongoing value engineering including modularisation, review of plant layout to reduce construction costs associated with concrete, piping and electrical, and financial packaging, including build own and operate (BOO) of the more conventional plant infrastructure requirements such as contract crushing,” Arafura Resources said in its ASX announcement.

“CAPEX savings from these initiatives are estimated to be $30 million, potentially further reducing the initial project CAPEX to $1.163 billion.”

Email: arafura@arultd.com.au

Website: www.arafuraresources.com.au

Vimy Resources PFS confirms Mulga Rock status

/in /by

THE BOURSE WHISPERER: Vimy Resources (ASX: VMY) has had a Pre-feasibility Study completed on the company’s Mulga Rock project (MRP).

The PFS was undertaken by Amec Foster Wheeler Australia and AMC Consultants and included an economic evaluation the company said supported its view of the MRP to be one of the best undeveloped uranium projects in Australia with substantial annual production and mine life.

Key highlights to emerge from the Study include:

MRP is an attractive deposit with long mine life and long term source of uranium;

MRP is the third largest undeveloped uranium deposit in Australia;

A total resource estimate of 65.6 million tonnes at 520ppm uranium for a contained 75 million pounds of uranium;

A Life of Mine (LoM) of 17 years with an estimated total production of 50.4 million pounds of uranium; and

77 per cent of the uranium mining inventory for first five years is from Indicated Resources.

The study also determined the project to have a low cash cost and robust financials, including:

C1 operating cost for LoM of US$31 per pound of uranium, including by-product credits;

Robust pre-tax NPV10 of $431 million, 25 per cent IRR and a 3.9 year payback at US$65 per pound uranium; and

A breakeven price of US$50 pr pound uranium (capital payback at 10% discount rate).

Mulga Rock also came out from the study as a low risk project with a low cost mining process utilising a simple open-pit mining operation up to a maximum depth of 74m, and a process plant to use low-cost acid leaching and resin-in-pulp.

The company said the project environmental approvals and permitting are well advanced, while the study also highlighted additional opportunities to further reduce operating and capital costs, which will be incorporated into the definitive Feasibility Study (DFS), which is already underway.

“The team has once again delivered a great result for Vimy,” Vimy Resources managing director Mike Young said in the company’s announcement to the Australian Securities Exchange.

“Mulga Rock is a robust and large uranium deposit with simple geology, mining and metallurgy.

“We are well positioned to ride the wave of demand for uranium as the world turns towards cleaner energy sources.

“We are proud that Mulga Rock will deliver enough uranium fuel to offset the equivalent of 50 million tonnes of CO2 emissions per year or nine per cent of Australia’s total CO2 emissions.”

Website: www.vimyresources.com.au