Southern Gold steps up to producer with first gold pour at Cannon

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THE BOURSE WHISPERER: Southern Gold (ASX: SAU) has joined the gold producer ranks, having completed the first gold pour from the company’s 100 per cent-owned Cannon gold mine, east of Kalgoorlie in Western Australia.

The Cannon open pit mine is being financed and operated by development partner Metals X (ASX: MLX) in a profit share arrangement, with both parties entitled to 50 per cent of the profits after repayment of costs which are charged on an at-cost open book basis by Metals X.

Cannon ore is being processed through Metals X’s Jubilee Mill, which is located a t that company’s South Kalgoorlie operations, approximately 35km from Cannon by haul road.

The key statistics of the first six days of the campaign leading up to the first pour were:

Tonnes of Ore Treated – 16,243 tonnes

Head Grade – 2.42 grams per tonne gold

Estimated Contained Ounces – 1,264 ounces of gold

Overall Average Plant Recovery – 89 per cent

Recovered Ounces – 1,125 ounces of gold

“After a challenging couple of years and much effort on the part of the Southern Gold team it is especially gratifying to see the first gold pour become a reality,” Southern Gold chairman Greg Boulton said in the company’s announcement to the Australian Securities Exchange.

“This is a significant milestone for the company and places it in an elite group managing to transition from explorer to producer.

“Now that Southern Gold has visibility to cash flow and many exciting opportunities to grow the production pipeline, the future looks very promising and encouraging for our investors.

“We look forward to taking the company to the next level.”

Email: info@southerngold.com.au

Website: www.southerngold.com.au

Metro Mining completes Bauxite Hills DFS

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THE BOURSE WHISPERER: Metro Mining (ASX: MMI) has had a Definitive Feasibility Study (DFS) completed for the company’s 100 per cent-owned Bauxite Hills project located in Cape York, Queensland.

The DFS looked at a 1.95 million tonne per annum (Mtpa) production scenario taking into consideration Metro’s strategy to develop Bauxite Hills under a streamlined environmental approval process by adopting a sub 2Mtpa production profile until the Queensland Department of Environment and Heritage Protections (DEHP) advised Metro that a full environmental process would be required for Bauxite Hills.

At the time of the DEHP’s formal advice in late September 2015 the key components of the DFS were largely complete.

As such, Metro decided to complete the DFS in order to assist current studies evaluating an optimised production profile of 4-5Mtpa.

The DFS considers a 25-plus year mining operation producing 1.95Mtpa of Direct Shipping Ore (DSO) quality bauxite in steady state.

This production is based on mining all of the DSO resources at Bauxite Hills that were considered feasible as part of the DFS findings.

A total of 53.6 million tonnes of resources exist across the BH1 and BH6 deposits.

The DFS confirmed that Bauxite Hills will have strong and robust project economics given modest CAPEX, low OPEX and an attractive LOM operating margin of $28.73 per tonne.

The DFS calculated a post-tax Net Present Value (NPV) of $235 million and Internal Rate of Return (IRR) of 148 per cent.

“The completion of the Definitive Feasibility Study within nine months of completing the Pre-Feasibility Study is an enormous achievement for the company and a testament to the project team and the quality of the asset,” Metro Mining CEO Simon Finnis said in the company’s announcement to the Australian Securities Exchange.

“The DFS confirms Bauxite Hills as an attractive project that should deliver strong financial returns.

“Metro will now work towards obtaining all relevant regulatory approvals in order to move to a final investment decision for project development whilst also undertaking feasibility studies with respect to a larger mining operation.”

Email: info@metromining.com.au

Website: www.metromining.com.au

Cassini Resources claims discovery of new Australian zinc province

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THE BOURSE WHISPERER: Cassini Resources (ASX: CZI) has claimed the discovery of a potential new zinc-lead province at the company’s West Arunta project (X17) in Western Australia.

The X17 project is located near Lake McKay, 20 kilometres from the community of Kiwirrkurra near the Western Australia – Northern Territory border.

Cassini originally acquired 75 per cent of the Project in 2013, increasing that to 100 per cent in July 2015.

The company said the discovery had been based on analysis of soil and lag geochemical data and the subsequent identification of gossan outcrops during field reconnaissance it carried out in late October 2015.

Cassini declared it believes it has made a significant zinc-lead discovery based on the outcomes of work it has completed so far, including:

The X17 project was generated as part of a continental-scale targeting study by the company, focused on frontier terranes in Western Australia;

Cassini defined X17 as a highly-prospective, large-scale conceptual target within the Centralian Superbasin, an area considered to be greatly under explored. It occurs at the intersection of several fundamental lithosphere-scale structures;

Confirmation of X17’s prospectivity was demonstrated by a soil sampling program identifying discrete zinc soil anomalism of up to 10 times background, with supporting anomalism in lead, Copper and Silver;

Coincident lag samples show highly anomalous zinc of up to 0.2 per cent;

Importantly, coincident Cadmium anomalism present in the lag is recognised as a signature of sphalerite, the primary source of zinc mineralisation;

Recent field reconnaissance identified several outcropping gossans as the likely source of each soil and lag anomaly;

Lag and gossan anomalism was verified in the field with portable XRF results of up to 0.6 per cent zinc, 0.2 per cent lead, 0.4 per cent nickel and 0.05 per cent copper.

“We are delighted with the results from X17,” Cassini Resources managing director Richard Bevan said in the company’s announcement to the Australian Securities Exchange.

“This project has been slowly progressing in the background for the past 12 months while we have focussed on our West Musgrave project.

“Now that we’ve made this breakthrough and potentially found a new zinc-lead province, we think we have a compelling project that we can progress through to discovery in a cost effective and timely manner without requiring additional funding.”

Email: admin@cassiniresources.com.au

Website: www.cassiniresources.com.au

Mithril Resources enters Meekatharra JV with Doray Minerals

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THE BOURSE WHISPERER: Mithril Resources (ASX: MTH) announced it has executed a Farm-in and Exploration Joint Venture Agreement with Western Australian gold miner Doray Minerals (ASX: DRM).

Under the new deal Doray will be entitled to earn up to an 85 per cent interest in Mithril’s recently-granted Duffy Well gold project by reimbursing the latter’s tenement acquisition costs and completing exploration expenditure of $500,000 over three years.

Duffy Well (EL51/1649) is in Doray’s neighbourhood, being located 30 kilometres east of Meekatharra in WA.

It covers the interpreted southern extension of the Gnaweeda Greenstone Belt where Doray intersected high-grade gold mineralisation in June from RC drilling at the Turnberry prospect, including:

3 metres at 10.1 grams per tonne gold from 149m;

5m at 17.4g/t gold from 71m; and

4m at 17.9g/t gold from 45m.

Mithril has completed a review of previous exploration at Duffy Well, comprising reconnaissance RAB and aircore drill traverses with little or no follow-up, from which it identified two gold-prospective areas for initial follow-up.

“Lying within the northern and central portions of the project, both areas are characterised by zones of structural complexity within favourable greenstone rocktypes,” Mithril said in its ASX announcement.

“The areas have also returned coincident bedrock gold (+50ppb) and arsenic (+100ppm) anomalism within widespaced drillholes.”

Doray Minerals has indicated it intends carrying out a field inspection of the two targets before the end of the December 2015 Quarter.

The terms of the Farm-in and Exploration Joint Venture Agreement are as follows:

Doray will reimburse Mithril its tenement acquisition costs – $22,634 (inclusive of GST).

Doray can earn an initial 51 per cent interest by completing expenditure of $300,000 within two years.

Doray can elect to earn an additional 34 per cent interest through further expenditure of $200,000 over a further year (in total 85 per cent by spending $500,000 over 3 years).

If Doray elects not to earn a further 34 per cent interest, then Mithril has the right to contribute on a pro rata basis or dilute as per an industry standard formula.

Once Doray has earnt its 85 per cent interest, Mithril has the right to contribute on a pro rata basis or dilute as per an industry standard formula. If Mithril’s interest dilutes below 10 per cent it will be deemed to have withdrawn and will be entitled to receive a 1.5 per cent Net Smelter Royalty on all Precious and Base Metals.

Doray is required to keep the tenements in good standing at all times and can only withdraw after it has spent a minimum of $100,000 in the first year.

The agreement is subject to both parties obtaining Ministerial Consent within 30 days of executing the Agreement (Condition Precedent).

Email: admin@mithrilresources.com.au

Website: www.mithrilresources.com.au

Superior Resources strikes deal with Canadian major Teck

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THE BOURSE WHISPERER: Superior Resources (ASX: SPQ) has entered into a Farm-in and Joint Venture Agreement with Teck Australia, a wholly-owned subsidiary of Canadian major resource company, Teck Resources.

The deal involves exploration over Superior’s Nicholson zinc-lead-copper project in north-west Queensland.

Previous drilling of the Walford South prospect by Superior has confirmed the presence of substantial amounts of pyritic shale and low grade zinc mineralisation, which are often associated with such styles of mineralisation.

The company has also completed an airborne VTEM survey over the Nicholson West prospect, which identified a moderately deep conductivity anomaly.

Superior considers these results, together with outcropping rocks containing vein-lead mineralisation, suggest the potential of the project to host stratiform zinc-lead mineralisation.

“We are delighted to have Teck as a partner, being one of the world’s largest zinc producers, to explore one of the company’s key zinc projects,” Superior Resources managing director Peter Hwang said in the company’s announcement to the Australian Securities Exchange.

“Teck, who are global leaders in zinc expertise and capability, are probably the most active of the large companies currently exploring for zinc in Australia.

“The finalisation of the agreement with Teck Australia is a significant milestone for the company and good timing as the company expedites the implementation of its zinc strategy.

“We have committed an extensive amount of our efforts to secure an appropriate major for our zinc projects and we consider Teck to be the perfect partner to complement our objectives of discovering the next Mount Isa deposit.”

Superior said the deal would provide it with room to now its resources on the larger Victor project, also located in north west Queensland as well as the Riesling zinc-lead-copper project in north east Queensland.

Email: manager@superiorresources.com.au

Website: www.superiorresources.com.au

Newmont to expand Tanami gold operations

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THE BOURSE WHISPERER: New York-listed global gold mining concern Newmont Mining Corporation (NYSE: NEM) has flagged its intentions to expand the company’s Tanami operations in Australia by building a second decline in the underground mine and additional plant capacity.

Tanami is located 950 kilometres southwest of Darwin and just over 560km northwest of Alice Springs in the Northern Territory.

Newmont said it expects the expansion project should add incremental gold production of approximately 80,000 ounces per year while bringing down Tanami’s all-in sustaining costs by five to ten percent in the first five years of production.

The second decline will open access to two million ounces of profitable production and extend mine life by three years.

Newmont will also use the project as a launching pad for new exploration drilling to support future growth.

The company has been buoyed by recent exploration results, which it says has demonstrated potential to double current Reserves and Resources by expanding existing Tanami deposits, and developing adjacent discoveries.

“Tanami is a Newmont success story,” Newmont Mining Corporation President and Chief Executive Officer Gary Goldberg said in the company’s New York Stock Exchange announcement.

“Since 2012, the team has more than doubled gold production while cutting costs by about two-thirds and significantly improving resource confidence.

“The expansion project continues this trajectory, offering robust returns of more than 35 percent at current gold prices.”

Newmont said that construction of a second decline at Tanami will step-up mining rates, which it anticipates ramping up to approximately 2.6 million tonnes per year.

Expansion to the processing plant will involve adding a ball mill, thickener and gravity circuit to improve recoveries that will subsequently expand mill capacity from 2.3 to 2.6 million tonnes per year.

When the expansion is complete, Tanami will be capable of producing between 425,000 and 475,000 ounces of gold per year at all-in sustaining costs of between US$700 and US$750 per ounce in the first five years of production.

Newmont will fund the capital investment of between US$100 million and US$120 million through free cash flow and available cash balances.

Of this amount, a quarter will be spent in 2015, half will be spent in 2016, and the remainder will be spent in 2017.

First commercial gold production from Tanami decline two is anticipated in the second half of 2017.

In 2014 Tanami produced approximately 345,000 ounces of gold at all-in sustaining costs of US$1,038 per ounce.

Newmont boasted that it has one of the strongest project pipelines in the gold sector, adding the company remains on track to deliver profitable new production from Leeville in Nevada where the Turf Vent Shaft is due for completion in late 2015; from Cripple Creek & Victor’s expansion projects during 2016; from Merian in Suriname in late 2016; and from Long Canyon Phase 1 in Nevada beginning in 2017. 

Website: www.newmont.com

MZI Resources commences HMC production at Keysbrook

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THE BOURSE WHISPERER: MZI Resources (ASX: MZI) announced the commencement of heavy mineral concentrate (HMC) production at the company’s Keysbrook mine site in Western Australia.

MZI explained it had recently begun 24 hour mining operations and mechanical completion of the Mining Feed Unit (MFU) and the Wet Concentration Plant (WCP) at Keysbrook.

Now the first ore has been fed into the MFU and WCP with HMC resulting in the start-up of production.

The company was eager to impress that the Keysbrook project has achieved HMC production three weeks ahead of its original schedule and is currently on budget.

“First HMC production is a great milestone for our shareholders and the team at MZI,” MZI Resources managing director Trevor Matthews said in the company’s announcement to the Australian Securities Exchange.

“To complete the WCP well ahead of schedule and on budget reflects the quality of the team and project.

“The Keysbrook project is performing exceedingly well and we now look forward to commencing product sales later this year.”

MZI intends to progress the commissioning of Keysbrook operations progressively to full capacity during the current quarter.

Heavy mineral concentrate will be stockpiled on the Keysbrook site ahead of planned commissioning of an upgraded and expanded mineral separation plant in November 2015, with first sales targeted for late December 2015.

Keysbrook is currently scheduled to produce over 95,000 tonnes of leucoxene and zircon products annually, at EBITDA margins greater than 50 per cent.

Testwork to further increase WCP heavy mineral recoveries is currently underway as the MZI continues with early stage expansion studies.

Email: admin@mzi.com.au

Website: www.mzi.com.au

Sirius stockpile boosts Independence stocktake

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THE BOURSE WHISPERER: Independence Group (ASX: IGO) displayed the value of its takeover of Sirius Resources with an update on the company’s consolidated Mineral Resource and Ore Reserve estimates, as at 30 June 2015.

Independence has estimated its total Measured, Indicated and Inferred Mineral Resources to contain 391 thousand tonnes of nickel, 494 thousand tonnes of copper, 888 thousand tonnes of zinc, 2.5 million ounces of gold and 32.4 million ounces of silver.

The numbers represents an increase of 433 per cent and 36 per cent in both Sirius products nickel and copper contained metal, while its gold metal numbers dropped off with a six per cent decrease compared with the group’s estimates as at June 2014, net of depletion.

Both zinc and silver contained metal remained similar to June 2014.

IGO’s total Proven and Probable Ore Reserves estimate contains 295,000 tonnes of nickel, 320,000 tonnes of copper, 496,000 tonnes of zinc, 1.2 million ounces of gold and 16 million ounces of silver.

Again the big increases are in nickel and cooper with an 887 per cent increase in nickel metal, 48 per cent increase in copper metal, a one per cent increase in zinc metal and 11 per cent decrease in contained gold, compared with the company’s estimate as at June 2014, net of depletion.

“The material change to both the Total Mineral Resource and Total Ore Reserves compared to 30 June 2014, is the addition of the Nova project into the IGO portfolio as at 22 September 2015,” Independence Group explained in its ASX announcement.

The Mineral Resource for the Nova project is:

14.3 million tonnes at 2.3 per cent nickel, 0.9 per cent copper, 0.08 per cent cobalt for contained metal of 325,000 tonnes of nickel, 134,000 tonnes of copper and 11,000 tonnes of cobalt.

The Nova Ore Reserve estimate stands at 13.1 million tonnes at 2.1 per cent nickel, 0.9 per cent copper and 0.07 per cent cobalt for a contained metal of 273,000 tonnes of nickel, 112,000 tonnes of copper and 9,000 tonnes of cobalt.

Website: www.igo.com.au

PepinNini and OZ Minerals strike JV for nickel exploration

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THE BOURSE WHISPERER: PepinNini Minerals (PNN) and OZ Minerals Ltd (ASX:OZL) have struck up a farm-in Joint Venture agreement over the Mt Woods Inlier, located in the vicinity of the OZ Minerals’ Prominent Hill copper-gold mine, within the Gawler Craton northwest of Adelaide.

The deal is subject to a confidentiality agreement, under which PepinNini have been granted access to the $70 million worth of geological data collected by OZ Minerals and its predecessor companies in the area.

From this data, PepinNini has deemed the Mt Woods Inlier can be considered fertile for the formation of magmatic polymetallic nickel-PGE sulphide deposits.

“The PGE content in particular is encouraging as not all nickel-sulphide terranes have PGE fertility to form polymetallic nickel-PGE deposits,” PepinNini said in the company’s ASX announcement.

“PepinNini have considerable expertise in Ni-PGE sulphide exploration with the company’s Musgrave project in both South Australia and Western Australia and believe there are analogies within the Mt Woods inlier to many world class nickel-PGE sulphide deposits globally.”

The terms of the agreement require PepinNini to undertake at least 8,000 metres of drilling using its own drilling equipment, which is to be included in an exploration expenditure commitment of $4.4 million to earn an initial 40 per cent interest.

Should OZ Minerals elect not to contribute to expenditure during Stages 3 to 5, PepinNini can earn an additional 40 per cent interest by undertaking a further 30,000m of drilling, again using its own drilling equipment.

This will be part of a further exploration expenditure commitment of $12 million for Stages 3 and 4.

PepinNini will also need to spend $15 million on a prefeasibility study and declare a JORC 2012 reserve in Stage 5.

The agreement is subject to PepinNini raising Stage 1 exploration funding of $1.2 million before 1 December 2015.

Email: admin@pnn-adelaide.com.au

Website: www.pepinnini.com.au

Excelsior Gold completes raising to be fully-funded through to production

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THE BOURSE WHISPERER: Excelsior Gold (ASX: EXG) announced the completion of a placement to sophisticated and institutional investors, which resulted in the company raising $4.55 million.

The raising involved the issue of 75.8 million shares at a price of six cent per share and was supported by existing Excelsior shareholders as well as welcoming new investors to the register.

The placement was lead managed by Patersons Securities Limited. 

Once the money is in the bank and the company can start to drawdown the project funding package it negotiated with Macquarie Bank in July, the Kalgoorlie North gold project will be fully-funded and production ready.

Excelsior said the funds will be applied to working capital and development requirements at the project.

“The successful completion of the placement is another positive step towards production at our flagship Kalgoorlie North gold project,” Excelsior Gold managing director David Hamlyn said in the company’s announcement to the Australian Securities Exchange.

“The significant demand received from new and existing shareholders represents a strong endorsement of the direction of Excelsior and the development strategy undertaken.

“The project is now fully funded and gold production is imminent.”

Website: www.excelsiorgold.com.au