Bellevue Gold Scant on Details, but Conceptually Sound

THE CONFERENCE CALLER: Having substantially firmed up its namesake high grade brownfields gold project in Western Australia, Bellevue Gold (ASX: BGL) is now seeking to expand its resource base via greenfields exploration some 50 kilometres to the east. By Mark Fraser

The company is also preparing to look at some other prospective targets much closer to home.

During his appearance at the recent Diggers & Dealers Mining Forum in Kalgoorlie-Boulder, Bellevue’s upbeat managing director Steve Parsons said drilling was set to begin at Yandal South in WA’s north-east Goldfields.

Covering around 870 square km of under-explored real estate, this land hasn’t been properly looked at for the best part of 20 years.

While details regarding this field campaign were scant, Bellevue’s website says it holds a “dominant land position” between Bronzewing (which boasts an historical production of 5 million gold ounces) and Darlot (4.5 million oz), where “significant historical untested anomalous gold-in-soils and surface sampling await follow-up”.

From all indications the wholly-owned Yandal South has five main targets, with three being Yambo Strike, Popes Patch and Hartwell. Previous drilling in this district has returned gold intercepts like 9 metres at 8.5 grams/tonne (from 37.5m), 27m at 1.32 g/t (42m), 6m at 3.14 g/t (120m) and 19m at 1.4g/t (23m).

Aside from casting its eyes eastward, the company has been looking at an area immediately north of the historic Bellevue operation, which sits 430 km north of Kalgoorlie-Boulder and 40 km north of Leinster.

Covering around 20km of strike from the mine, the Kathleen Valley project has been subjected to very little systematic modern exploration, but nevertheless contains a number of advanced prospects.

During his Diggers & Dealers’ presentation, Parsons indicated the most exciting of these were Kathleen Valley, Government Well and Palmyra, which collectively had yielded numbers like 17m at 4.2g/t (from 19m), 2m at 18.7g/t (32m) and 2m at 22.8g/t (8m).

Then (running north to south) came the Bellevue Northern extension, where intersections of 11m at 6.5g/t (35m) and 2m at 5.6g/t (64m) were recorded, followed by Westralia pit (4m at 28.2g/t from 57m), Vanguard pit (8m at 11.2g/t from 27m), Henderson pit (3m at 53g/t from 13m) and Bellevue West (102g/t in rock chips).

All up, Bellevue is looking to spend a total of $35 million on exploration over the next 12-18 months. This will include the development of near-mine targets.

“We’ve had just such rapid success, and amazing success, at Bellevue (that) we’ve really have been focused on just around the brownfields, around the headframe, of where the mill and mine will be at Bellevue,” Parsons told the Diggers & Dealers crowd.

“(It’s) the first time ever that we are getting out on the ground now and exploring the 20 kilometres of strike of Bellevue and, of course, stepping out and looking at our second project (Yandal South) that sits only 50 kilometres away from where the processing plant will be at Bellevue.

“We’re super-excited by that – and you are going to see us starting on that drilling this weekend, with the first five targets being undertaken between now and Christmas – so hopefully some good news will flow on from that over the coming months.”

As it stands Bellevue has established a gold resource of 2.3 million ounces from ore grading 10g/t.

Within this is a 15.5g/t high-grade core containing 480,000 ounces.

This resource has grown at around 75,000 ounces per month at a discovery cost of $18 per ounce since December 2017.

Located within the Agnew-Wiluna Greenstone Belt in the Leinster region of WA’s Goldfields, the historic Bellevue mine produced around 800,000 ounces from 15g/t material in a predominantly underground gold operation that ran from 1987-1997.

Other projects situated within 100 km of Bellevue are the multi-million oz Lawlers/Agnew complex as well as the Wiluna, Bronzewing, Thunderbox and Darlot deposits.

 

 

 

Cazaly Resources Pumps Project Portfolio in Readiness of Exploration Barganza

THE CONFERENCE CALLER: It’s easy for an exploration play to get lost amongst the crowd at Diggers & Dealers, so it’s usually worth the effort to walk obligatory laps of the marquee to chat to some old acquaintances.

The Roadhouse sat down with Cazaly Resources joint managing director Clive Jones to find out what the company was up to.

Cazaly greeted Day One of the conference with an announcement that it had acquired the remaining 80 per cent of the Halls Creek project from its Joint Venture partner 3D Resources (ASX: DDD) taking its ownership of the project to 100 per cent.

The Halls Creek project comprises granted Mining Lease 80/247 situated near the township of Halls Creek covering part of the Halls Creek Mobile Zone which is considered highly prospective for a range of commodities including base metals, gold, diamonds and nickel.

The project hosts the Mount Angelo copper-zinc deposit, an extensive zone of near surface oxidised copper-zinc mineralisation overlying massive copper-zinc sulphide mineralisation.

“There are some undrilled conductors at depth below at the Mt Angelo copper-zinc deposit and also one kilometre along strike we have mapped the host mineralised sequence – so, there is a lot to find out about the project, which we are very keen to do,” Jones said.

Jones indicated that Cazaly would be out on the ground and going over all previously assembled data asap to review of all previous exploration on the project.

“There is plenty of upside potential with mapping defining the untested northern extensions of the Mt Angelo deposit, including mapping out of the important Banded Iron Formation capping unit.

“On top of that, there a numerous, previously identified downhole EM conductors that we are keen to test with the drill bit.”

Drillhole plan outlining the Mount Angelo copper-zinc deposit

Cazaly has been busy of late adding to the company’s project portfolio, which included the recant addition of The Ashburton project in the Ashburton Basin in the Pilbara region of Western Australia.
“We just pegged a very large tract of land – about 2600 square kilometres in the Ashburton region of Western Australia,” Jones said.

“Geoscience Australia had previously completed a large seismic profile that showed there is a major structure that goes down to a mantle and that’s what you want for major ore bodies.

“We pegged 80 kilometres of that structure and it has never been explored before.

“It’s quite staggering to find a major-scale structure that Geoscience Australia is saying is a potential ore body mineralising system that hasn’t been explored.”

A survey carried out in 2011 via a collaborative effort between the Geological Survey of Western Australia, AuScope and Geoscience Australia determined a deep seismic survey transecting over some 450 kilometres covering the Capricorn Orogen.

The seismic survey identified three major terrane bounding sutures (deep seated, mantle tapping structures) across the 450km transect and included the Baring Downs Fault which lies centrally within the Ashburton Basin.

Known gold mineralisation in the Ashburton shows a close spatial relationship with the Nanjilgardy fault, which hosts the Paulsen’s, Belvedere and Mount Olympus orebodies and marks the northern basin margin.

The Roadhouse asked Jones why this greenfield area has not been as heavily explored as would be expected.

“Good question,” he responded.

“The Ashburton, unfortunately, has this reputation of being full of just alluvial, spotty gold.

“It’s just one of those things that people have formulated these ideas and really haven’t gone deep and taken a good look at the region and the science behind what’s going on there.

“There is a lot of gold in the system, there has also been some diamond occurrences, which confirms it is a mantle tapping structure.

“Back in the 1890s, way back in the day, there was a big gold rush – there were 8000 men working the field.

“There is a lot of gold out there, but for some reason, people just haven’t explored it with any great amount of sufficiency.”

The Ashburton project present Cazaly with a real, boots on the ground, classic grassroots exploration opportunity.

“It’s not dissimilar to the Telfer region,” Jones declared.

“Telfer had been sitting there for decades and people explored around it without any real conviction.

“It’s only just recently that Rio and Newcrest have found massive ore bodies there.

“They’ve always been there; people just haven’t looked for them.

“I see the Ashburton as being a similar sort of analogue.”

The company’s first steps on the new project will be to collate all the geophysics and it intends to fly its own major survey program over the project.

“We would like to get out on the ground fairly quickly to carry out some geochemistry, but the problem is the time of year and it is hard to get crews to venture out there when the temperature is hitting the mid to high 40 degree mark,” Jones said.

“So, in reality, we may have to postpone that until next year.”

The Ashburton is a new major play for the company, but Jones intimated it is not necessarily going to be its main game, rather it will become part of a substantive portfolio.

“Cazaly has always taken a portfolio approach to the business, so we have a range of projects at various levels of development and exploration,” Jones said.

Apart from Mt Angelo JV, Cazaly also owns 20 per cent of the Mt Venn gold project, located 30km from Gold Road Resources’ Gruyere gold deposit, in the Eastern Goldfields of WA.

JV partner Woomera Mining (ASX: WML) recently kicked off a Phase 2 drilling program at Mt Venn targeting underexplored, high-grade gold shows at Chapman’s Reward, Lang’s Find, and lower saprolite gold anomalies at the Three Bears prospect.

Acquiring projects is all well and good, but being able to make good money from the sale of projects is also an important skill in the junior exploration space.

Having sold its interests in the Parker Range project to Mineral Resources last year, Cazaly is well cashed up to the tune of $11 million in the bank to finance all its upcoming works.

 

Email: admin@cazalyresources.com.au

 

Web: www.cazalyresources.com.au

 

 

Western Areas’ WA Project Close to Completing Full Circle

THE CONFERENCE CALLER: Australia’s base metals sector is now just two years away from witnessing the rebirth of one of the country’s most idiosyncratic modern nickel operations. By Mark Fraser

If all goes to plan, Western Areas (ASX: WSA) is set to start mining its underground Odysseus ore body sometime in 2022 – a move which will effectively reboot the Cosmos project 50 kilometres north-west of Leinster in Western Australia.

Discovered back in 1997 by the now-gone Jubilee Mines, the original high-grade (about 8%) Cosmos open pit – which sits in a neighbourhood (the Leinster-Wiluna corridor) where nickel grades rarely go over 2.5 per cent – was commissioned in 2000 before production activities were quickly extended by the just-as-robust Cosmos Deeps.

Following that, the company prolonged its corporate life by finding lower strength deposits (including Alec Mairs, Tapinos and Prospero) just to the south.

Aside from establishing a mining operation in double quick time, Jubilee also found itself taking full advantage of the 2000s’ nickel (and mining) boom, becoming one of the ASX’s top performing mid-tier mineral houses during this period.

So successful was the company that, in early 2008, it was bought out by the (then) publicly-listed Xstrata for a whopping $3.2 billion – no mean feat given its stock had hit a 4 cent low between the time it listed on the Australian bourse in 1987 and when the deal with the international miner was eventually struck.

Making this achievement even more impressive for the WA-based outfit was the fact the purchase price ended up being $23 per Jubilee share.

Western Areas acquired Cosmos from Glencore (LSE: GLEN and JSE: GLN) in October 2015, just two months after it had become debt free, for $24.5 million – a sum significantly less than the massive $500 million Jubilee’s colourful founder-boss Kerry Harmanis pocketed from the sale.

Then, earlier this month, the WA-based resources house gave the Odysseus definitive feasibility study the green light and approved the decision to mine.

Assuming this all goes ahead as envisaged, production is expected to begin at the site during late 2022, while the average nickel-in-concentrate output should reach 14,500 tonnes in 2024.

With Odysseus, Western Areas is confident it is sitting on a long life (10 year-plus), low cost project.

The ore body’s current reserves are 8.1 million tonnes grading 2 per cent nickel for 164,000 tonnes, with all-in sustainable costs pencilled in at $3.50 per pound.

Since approving the mine plan the company has also added to the project’s inventory with the announcement of a further reserve at AM6, just to the south, of 2.1 million tonnes at 2.2 per cent nickel for 47,000 tonnes.

During last week’s Diggers & Dealers Mining Forum in Kalgoorlie-Boulder, Western Area’s managing director Dan Lougher said pre-production activities had already started on Odysseus’ underground infrastructure, with the resources house expecting to spend $252 million on the development between 2021-23.

Current work includes the drilling of a pilot hole for a proposed hoisting shaft, as well as the completion of optimisation studies for the expanded 900,000t per annum concentrator (which has a present capacity of 550,000t pa).

In terms of the 1.27 million tonnes per annum (ore and waste) shaft – which was being brought in second hand from South Africa – Lougher said its installation would see the mitigation of 85 per cent of carbon dioxide emissions, a drop in the burning of diesel fuel (1.5 million litres pa) as well as the removal of 5 megawatts of heat generated from diesel engines.

Another take-home message regarding Odysseus was the fact it had significant upside, with trace drilling at depth revealing 3.4 metres at a breath-taking 22 per cent nickel in massive sulphides and a further 37m at 2 per cent in disseminated ones.

Lougher suggested the 22 per cent intersection possibly represented the highest mineable nickel intercept in the world, although he welcomed any opinions to the contrary.

A further interesting point raised during Western Areas’ Diggers & Dealers’ presentation was the fact the company is currently celebrating its 20th anniversary, having listed on the ASX in July 2000 on the back of a $5 million IPO with an issue price of 20 cents per share.

While not dwelling too long on this, Lougher did manage to show a group photo of some of the key people who helped turn this junior into the outstanding mining story that it is today.

Missing from this picture, he noted, was the late Terry Grammer, the geologist who – along with Azure Minerals (ASX: AZS) boss Tony Rovira – discovered Cosmos.

A coincidence perhaps, but given this it’s fair to say that while the fortunes of the resources industry may generally be cyclical, the arrival of Odysseus in 2022 will well and truly mark the completion of a full circle in the history of WA’s modern nickel sector.

 

 

Project on Course to Achieve Legendary Status

THE CONFERENCE CALLER: Rather than bombard his audience with endless drill results from his company’s exciting Rockford polymetallic play in remote Western Australia, Legend Mining (ASX: LED) boss Mark Wilson instead told this year’s Diggers & Dealers Mining Forum in Kalgoorlie-Boulder why the resources house was such a solid investment opportunity. By Mark Fraser

Speaking towards the end of the conference’s second day, Wilson was quick to point out that one of the junior’s main aims was to become a producer within five years of discovery.

If this wish becomes a reality, Legend looks set to join Australia’s mining fraternity sometime towards the end of 2022.

“That’s what nickel is all about,” Wilson noted.

The WA-based company, he said, also knew what direction it was heading vis-à-vis its potential customer base, with nickel technologies now being key in the production of electric vehicles.

“Despite the fact that 70 per cent of the use for nickel is in the stainless steel market, I really think the future of these nickel sulphides that we are looking for is in the battery market,” Wilson explained.

Located in the emerging Fraser Range district some 300 kilometres east of Kalgoorlie-Boulder, Rockford contains three possible mineralisation types – Nova-style nickel/copper, volcanogenic massive sulphide-hosted copper/zinc/silver and Tropicana-lookalike gold.

As it stands, Legend is one of four players now firmly established in the highly prospective Fraser Zone. Furthermore, with its 3,088 square kilometres of holdings, it is the largest land holder within this group, controlling some 19 per cent of the area.

Amongst the many points raised by the upbeat Wilson during his presentation was the fact that one of these companies – Sirius Resources (ASX: SIR) – had seen its market capitalisation jump from $10 million to $1.8 billion in just three years following its discovery of the Nova nickel/copper/cobalt deposit, which sits 120km north-east of Rockford within a 46sqkm land package.

“I think I rest my case,” he said.

Another interesting piece of information Wilson put to his Diggers & Dealers’ audience was the observation that the Thompson Nickel Belt of northern Manitoba in Canada was the same size as Legend’s Fraser Zone holdings.

“It’s got 2.7 million tonnes of nickel endowment – there’s 300,000 tonnes here – and I’m reliably informed by a Kiwi accountant, which is bit of a tricky statement, that 1.6 million tonnes has come out of Kambalda, just to give you a bit of an idea of the potential of this project,” Wilson said.

“And if you look at Legend’s orange landholding, you’ll see that we control the entire part of that central gravity anomaly, which to our mind is no doubt the best ground in the Fraser Range.”

The junior has so far identified seven prospects – Magnus, Octagonal, Worsley, Hurley, Crean, Shackleton and Mawson – with the latter generating quite a bit of excitement since its discovery in December 2019.

“Legend is not a one trick pony at Mawson – I think Hurley is the next one (based on recent electromagnetic geophysics) … and that’s where I would expect our second ranking project to come,” Wilson said.

At the end of the day, the exploration house enjoyed a current market capitalisation of $400 million, “a series of options that are all in the money (and) that over the next couple of years will deliver another $13 odd million to our treasury” as well as cash and receivables worth $31.5 million.

In addition, the company was unique in the ASX-listed junior space insofar as it was concentrating on just the one project.

“The story I hope you have heard from me … is (Legend has) a highly prospective project, committed people, we’re well-funded, we’re systematic, we’ll go the distance and we’re absolutely committed to growing shareholder value,” Wilson added.

 

High Margins the Goal for Musgrave Minerals

THE CONFERENCE CALLER: It’s seems one of the mantras underpinning Musgrave Mineral’s (ASX: MGV) gold exploration strategy in Western Australia is an old, but simple, one – grade is king. By Mark Fraser

From all indications this chant is quietly being repeated by the company as it goes about sizing up high margin gold ounces at its Cue project in WA’s Mid West.

Located 40 kilometres north of Mt Magnet just off the road to the historic mining town of Cue, the undertaking – via the advanced Break of Day ore body – already has an indicated and inferred resource of 686,000 tonnes grading 7.2 grams/t gold for 199,000 oz along 28 km of strike.

At the moment, though, Musgrave Minerals is focusing on the establishment of new resources at its recent Starlight and White Light discoveries, a task it hopes to complete by the end of this month.

These targets – which effectively revealed Cue’s robust upside to the market – have provided “a significant change for Musgrave” by exposing some high angle, close-to-surface mineralisation in previously undiscovered north-east lodes to the south.

During his presentation at the Diggers & Dealers Mining Forum in Kalgoorlie-Boulder, the company’s managing director Rob Waugh pointed out that in the past around 3-4 metres of hardpan cover over had more or less disguised potential mineralisation.

“And as far as surface geochemistry goes, we are in an area where there has been a fair bit of historical activity around small, little pits and historical operations back from 1885, so a long way back,” he noted.

“But that has led to a significant geochemical halo in this region, which has meant that people haven’t been able to focus on individual lode orientations very well through geochemistry.

“So, there is definitely opportunity here going forward (for) making new discoveries.

“It’s important to note that when we turned the rig around here, about six months ago, this is the first time anyone has drilled in this whole belt in this orientation – effectively forever.

“First drilling here was in the 1970s, but no one has turned the rig around.”

Some of the high-grade gold intersections at Starlight so far:

22m at 21 g rams per tonne gold (from 2m);

14m at 190g/t (4m);

77m at 13.3g/t (7m);

68m at 5.9g/t (21m);

31m at 44.8g/t (37m);

12m at 109g/t (40m);

42m at 6.8g/t (70m), and;

60m at 13.1g/t (77m).

Meanwhile, new mouth-watering gold intercepts under 2-3m of hardpan cover where there had been no previous drilling included 5m at 13.4g/t (28m) and 4m at 15.4g/t (41m).

In addition, Waugh said, gold recoveries achieved from metallurgical test work at Break of Day and Lena (to the north-west) totalled 96-97 per cent from conventional gravity and carbon-in-leach processing.

Furthermore, high gravity recoveries (over 73%) were also made in the fresh rock.

This, he noted, was good when compared to typical Yilgarn Craton gold ores and suggested low reagent use and reduced processing costs. Importantly, there were no deleterious elements present.

As part of its ongoing exploration strategy, Waugh explained, Musgrave Minerals would continuing step out drilling in a north-east orientation.

“Some of these grades we are seeing are the highest intersected in Australia and the world in the last 12 months, and the fact we are getting them within three to four metres of surface is phenomenal,” he told the Diggers & Dealers crowd.

“People have been talking about not being able to find high grade surface mineralisation in Australia, and obviously we are an exception to that.”

Ultimately, Waugh said, Musgrave Minerals was looking for high margin oz.

“The focus is for us is not on tonnes, it’s not on oz, but on margins,” he noted.

“For us really it is about grade.”

 

 

Producer “Forged in Fire” as Market Turnaround Looms

THE CONFERENCE CALLER: Just before speaking on the opening day of the Diggers & Dealers Mining Forum in Kalgoorlie-Boulder, Ken Brinsden’s company – Pilbara Minerals (ASX: PLS) – gave delegates a taste of what to expect via a release sent to the ASX earlier in the day. By Mark Fraser

The release was in the form of an operational update for the mid-tier miner’s wholly-owned Pilgangoora lithium-tantalum project in Western Australia’s north west, the document was reasonably upbeat, but nevertheless somewhat cautious, as it tried to impress upon investors Pilbara Minerals’ preparedness to fully embrace the market, “as demand conditions improve”.

Recent operational tweaks in its production of spodumene and tantalite concentrate, the WA-based producer indicated, positioned it, “well” to take advantage of the expected turnaround in the lithium market, “when that occurs”.

Despite a rise in sales during the September quarter, the company said, spodumene concentrate pricing remained weak, reflecting the sustained lower pricing and demand being experienced across the entire lithium raw materials and chemicals supply chain.

The news, however, was not all bad: “Production levels in the September quarter exceeded quarterly sales in preparation for delivering into contracted customer sales from early October 2020,” the announcement espoused.

During his Diggers & Dealers presentation, managing director and CEO Brinsden infused his narrative with a similar combination of optimism and caution, although there seemed to be a little more of the former in his telling of the story as he described how Pilbara Minerals was now at the back end of something of a horror run.

Over past 18 months, he explained, the “amazing tail wind in the lithium world” came to a sudden stop – primarily because of China.

Plus, there was the “combination” of cyclones, material changes in the industry’s dynamics, having to raise the right amount of money to see the project come to fruition and – “last, but not least” – a homicide (in the coastal mining town of Port Hedland earlier this year).

“I can assure you that was not something I expected to experience in my mining career,” Brinsden told his Kalgoorlie-Boulder audience.

“So, we’ve seen the lot.”

However, in a funny kind of way, it had been a genuine case of “being forged in the fire” for Pilbara Minerals.

Despite this turmoil, Brinsden noted, the company still managed to establish the next largest lithium raw materials operation outside of Greenbushes in WA’s south west – a project that was started 25 years ago and is now “universally recognised as the gold standard”.

“We’ve got that to design recovery, which I can assure you is no mean feat,” he said.

“We’ve got to the point now that when the plant is operating, we are really, really confident of its reliability and what it is going to deliver, which translates to a very low-cost base.”

As part of its operational update, Pilbara Minerals told the market there had been an increase in plant run-time and utilisation, which represented around 70-75 per cent utilisation across the September quarter (compared with just 40% during the previous three months).

Meanwhile, higher plant utilisation and continued high product recovery contributed to a lower average unit cash operating cost of US$355 per dry metric tonne (Cost, Insurance and Freight – China) for the quarter.

Lower mining costs during the moderated production period were now expected to be partly offset by the combination of strong product recoveries and increased plant run-time (through higher product demand), supporting unit cash operating costs trending towards the company’s targeted unit cost of US$320-350 per dry metric tonne (CIF China).

Overall, Brinsden said, this was a “pretty amazing outcome”.

Located around 100 kilometres due south of Port Hedland, Pilgangoora enjoys a current mine life of over 40 years.

Stage one of the operation, which kicked off commercial production during April 2009, has a nameplate capacity of around 330,000 tonnes per annum of combined concentrate, with this output set to increase to about 800-850,000tpa during stage two (which is currently the subject of a soon-to-completed phased expansion study).

Brinsden indicated Pilbara Minerals would not pursue the mooted nameplate production boost until phase one had been concluded.

“Out of all of that we are absolutely the horse to back in the lithium materials sphere because we have an amazing asset base, very low cost of production and the expectation that the demand conditions have already started to improve,” he added.

 

 

Web: www.pilbaraminerals.com.au

 

 

 

Gold Road Resources Focus now firmly on WA expansion

THE CONFERENCE CALLER: Having helped establish a Tier 1 gold operation in its home state of Western Australia, Gold Road Resources (ASX: GOR) is seeking more ounces through increased production and the discovery of enough new ore bodies to establish another mine. By Mark Fraser

Following the first pour at the company’s 50 per cent-owned Gruyere project in June last year, Gold Road and its Joint Venture partner (and operator) Gold Fields (JSE and NYSE: GFI) produced 230,590 gold ounces during the mine’s first 12 months at an all-in sustainable cost of $1,155 per ounce.

The 2020 annual guidance is currently 250-270,000 ounces at an AISC of $1,250-1,350 per ounce.

Located in WA’s north east Goldfields on the under-explored Yamarna Greenstone Belt, Gruyere has a 12-year life based essentially on what was a six million ounces discovery by Gold Road back in 2013.

As it stands the deposit has a total mineral resource of 154 million tonnes grading 1.34 grams per tonne gold for 6.62 million ounces, as well as an ore reserve of 93 million tonnes at 1.24g/t gold for 3.72 million ounces.

Gold Road is now confident it can find more ore to feed the Gruyere mill, and has subsequently put aside $26 million to explore the 4,500 square kilometres it holds in the Yamarna belt.

The company is also looking at increasing plant throughput and deepening the current pit.

Speaking during the Diggers & Dealers Mining Forum in Kalgoorlie-Boulder, Gold Road managing director and chief executive Duncan Gibbs suggested a rise in output could involve expanding plant operating times, mining at a higher rate and reducing unit operating costs.

“We believe if we put those elements together, along with some steepening of the pit walls, we can drive the pit to a deeper level than the one which came out of the bankable feasibility study,” Gibbs said.

“Conceptually we think we can get the pit down to somewhere like 400-450 metres below surface – that becomes one of the deepest pits in Western Australia.

“Of course, to get that right we need to understand the geotechnical parameters as well; we’ve done some geotechnical and metallurgical drilling under the pit, so we have that information.

“We really want to get an understanding of the fresh rock exposure in the mine before we start to lock in the commitment and the understanding of what the life of mine reserve looks like for Gruyere.”

In terms of exploration, Gibbs said around 75 per cent of the $26 million put aside for the Yamarna belt would be channelled towards the 800sqkm southern project area, where the high priority targets were Kingston (with its diamond hole of 1m at 10.4 g/t), Hirono, Savoie and Beefwood as well as Gilmour and Gilmour South.

The other project area is at Yandina in WA’s south west Yilgarn, which sits within an under-explored greenstone belt near the farming community of Lake Grace.

Here, Gold Road and Cygnus Gold control 3,400sqkm of land covering two joint venture areas, with the former planning to take over the role of operator.

Some 20,000m of aircore drilling targeting crustal scale shear zones have already been completed, while a field program consisting of another 8,500m of aircore, 750m of RC and 500m of diamond drilling is now underway.

“What we see is the opportunity here for a large scale, regional geochem corridor stretch over about 15 km, and the opportunity really is to follow up the aircore results that we have,” Gibbs said.

“And hopefully we can make a discovery in this part of the Australia.”

Gold Road became debt free in July, while it also has $65 million of franking credits as a consequence of its 50 per cent sale of Gruyere to Gold Fields.

Given this, Gibbs added, the resources house was now, “in a position to pay fully franked dividends.”

 

 

Email: perth@goldroad.com.au

 

Web: www.goldroad.com.au

 

Bardoc Gold Ready to Take Advantage of the Upside

THE CONFERENCE CALLER: Cashed-up punters seeking something in the small-end-of-town gold space should get advice from their financial advisers re Bardoc Gold (ASX: BDC), which could well be on the verge of a substantial share price hike over the next 12 months. By Mark Fraser

During the coming year the West Australian company is expected to make a final investment decision regarding its $140 million namesake yellow metal project located just 40 kilometres north of Kalgoorlie-Boulder, where it has already established a 3.03 million gold ounce resource and 790,000 ounces of reserves within a prospective land holding covering 250 square km.

As it stands, Bardoc is hoping to set up a 135,000 ounces per annum operation via the annual processing of 1.8 million tonnes of ore with an average life-of-mine grade of 2.6 grams per tonne.

All-in sustaining costs are expected to be around $1,220 per ounce, while the initial mine life has been pencilled in at 7-8 years.

According to Bardoc chief executive Robert Ryan, the explorer is sitting on, “one of Australia’s best undeveloped gold deposits”.

Furthermore, the project is now only one of a handful of new plus-100,000 ounces per annum yellow metal operations expected to come on stream Down Under over the next two years.

Speaking during the opening day of the 2020 Diggers & Dealers Mining Forum in Kalgoorlie-Boulder, Ryan said the company currently had the funding in place to complete Bardoc’s definitive feasibility study, with this phase of due diligence now expected to be wrapped up by the end of March next year.

If all goes to plan, he suggested, construction should be underway by this time next year.

These facts should be a wake-up call for investors given: (1) most juniors with economically attractive projects are significantly revalued around the time their DFS findings are released; (2) Bardoc’s current share price is only 7.8 cents, which on face value is quite a bargain for a gold stock with undeniable upside, and; (3) recent interest from the financial sector has been strong, with “a number of institutions” joining the junior’s register in its last capital raising.

Ryan said the project effectively brought together a series of smaller ore bodies in a location that had remained largely under-explored due to previous fragmented ownership.

They included Aphrodite, which has a current resource of 22.9 million tonnes at 2.3g/t gold for 1.99 million ounces and was acquired via a corporate merger in 2017, as well as Excelsior and Zoroastrian, where the respective resource numbers are 8.4 million tonnes at 1.2g/t for 320,000 ounces and 7.28 million tonnes at 2.2g/t for 526,000 ounces.

Aside from owning a project with compelling high margin/low cost/high-grade credentials, Ryan said Bardoc had also attracted the right talent to make the undertaking a reality.

“Over the last 12 months we have significantly built out our management team to contain a lot of Kalgoorlie-centric mining expertise, as well as environmental expertise, to get this project into production,” he noted.

“We raised $24 million (at the company’s last capital raising); primarily aimed at building the support from the investment community that are going to be there for a larger equity raise when it comes to construction build.

“The people who we have on the register now have made commitments to be there for 2-3 times their current investment – to be there to build the project.

“And that’s a fantastic position to be in because it has given us the ability to be able to push the project at 100 miles an hour.”

 

Web: www.bardocgold.com

Mark McGowan Declares WA the Best Place on the Planet to do Business

THE CONFERENCE CALLER: Western Australia Premier, Mark McGowan broke new ground at the opening of the 2020 Diggers & Dealers Forum in Kalgoorlie.

He faced the what would normally be, for a WA Labor Premier a fairly daunting task – to open what is often touted as the biggest gathering of the Australian – particularly the Western Australian – mining industry.

Pic: Courtesy – Billy Stokes

Fortunately for him, or most likely thanks to him, the state is currently in fine fettle.

During these times of COVID-19, Western Australia currently represents one of the best opportunities going around – on the planet.

Western Australia is currently the only state in the Commonwealth not in recession and its real estate, car sales and internal travel industries are going nuts.

McGowan became the first sitting premier, in the history of the Diggers & Dealers event, to deliver the keynote address, something he acknowledged by joking that the only way he scored the gig was to make sure he kept any other prospective candidates out of the state.

“What a year it has been,” McGowan declared.

“We have been fighting tooth and nail against a dangerous, health risk to our state.

“For the last eight months, we’ve been successful in keeping this invading threat out of Western Australia.

“This has benefitted the health of our citizens and subsequently the health of our finances.

“But now that we have successfully dealt with Clive Palmer, we can now turn our attention to COVID-19.”

The premier’s comedic banter was warmly welcomed by a room chock to the gills with an audience that would traditionally be considered rusted-on Liberal Party voters.

They most probably still are; however, it is difficult to deny that the stance McGowan has taken in regards to the state’s borders has allowed sandgropers to continue with life as they know it, and events such as the annual Kalgoorlie mining industry talkfest can be held with confidence.

Hitting a serious note, McGowan thanked the resources industry for how it had handled itself throughout the COVID-19 pandemic.

“2020 has been a volatile, challenging, and exhausting year,” he said.

“There has been no shortage of threats to projects and worksites. Let alone the imposition from restrictions put in place to keep us safe and COVID free.

“But all through this crisis the industry has handled itself well, understood what is at stake and worked with the government to ensure the industry can continue to operate safely, and virtually, uninterrupted.

“To keep the economic and financial lifeline it represents to Australia intact.

“As premier of Western Australia, I’d like to thank you all personally for your cooperation and understanding.”

McGowan’s eyes raised above the WA border as he began to wind up and take aim at the eastern states, commenting on how this difficult time had made sure the rest of the country could acknowledge the part WA plays in the prosperity of the entire nation, in particular the state’s mining and energy sectors.

“Western Australia carries the country,” he pronounced.

“Whilst the other premiers don’t like to hear that, it is true. This state, carries the nation.”

“Our net contribution to federal finances is many times – per person – the next highest contributor, which is New South Wales.

“We lead the country in economic recovery from COVID.

“When the crisis began earlier this year, we established a national cabinet as a means to quickly respond to what was, a very rapidly developing crisis.”

McGowan explained that one of the first points on the national cabinet agenda was the closure of certain industries, which at the time included the resources space.

This, he said, was something he railed against at the time.

“As we meet here today, over six moths later, I think we can all agree the hard work in Western Australia – and the sacrifice – were well, literally, worth it,” he said.

“We kept industry safe…we avoided the damage that happened where COVID has been allowed to run rampant.”

“The risk of shutdown is ever-present around the world. It means (commodity) prices are highly volatile.

“There is also a global recession that is going on around the world, meaning that the volatility from unpredictable growing levels of demand continues due to an ongoing economic contraction.

“Despite all the uncertainty and unpredictability…Western Australia, for my money, represents one of the best places in the world to mine, to set up, to hire, and to invest.

“Unlike so many other jurisdictions, we are virus free, with the strongest fundamentals in the world.

“If I were a betting man, I’d be betting big on WA.”

 

 

WA Government Supports Nickel Downstreaming and Streamlining Industry Approvals

THE CONFERENCE CALLER: Western Australia Minister for Mines, Energy, and Petroleum, Bill Johnston began in predictable fashion when opening the 2020 Paydirt Nickel Conference by highlighting the 2019 Indonesian nickel ban and its effect on the global nickel price.

He then demonstrated his grasp of the situation, briefly commenting on the metal’s rebound this year thanks to China’s pandemic-related recovery and the recent comments of Elon Musk.

Johnston moved onto what nickel holds for Western Australia by acknowledging the part to be played by the battery industry.

“it’s very good news for Western Australia,” he said.

“With the second largest nickel reserves in the world and some of the highest-grade deposits.

“These deposits are clearly ideal for production of nickel sulphate, one of the mineral components that’s used for a lithium-ion battery.”

Johnston declared that the state government is a supporter of a downstream nickel processing industry in WA and he welcomed BHP Nickel West’s continuing efforts on its nickel sulphate plant in Kwinana.

“We expect that plant, when it is completed, to be producing 100,000 tonnes of nickel sulphate, and we expect to see that in production next year,” he said.

 

Johnston hardly reinvented the wheel in his address and stuck to some safe ground.

So, it was no surprise when he touched on electric vehicles (EVs) and energy storage devices as creating a great opportunity for the emerging Western Australia nickel industry.

“Many people outside this room don’t realise there is more nickel in a lithium-ion battery than there is lithium,” he declared knowledgably.

“So, we have a rapidly emerging battery metals processing sector here in Western Australia, and we have got very strong relationships with the principal battery industry countries, like China, Japan, and South Korea.

“We have got a strong, proven and clear industry regulation framework that aligns with social expectations for environmental sustainability around the world.”

All this, according to the minister, is why the government he represents is supporting an incentive package to get a plant active in WA.

Johnston made mention of an incentive package the McGowan government has in place, regarding which he displayed some umbrage that it hadn’t received much media coverage.

This probably had something to do with it being buried in an announcement for a $92.4 million suite of initiatives to activate new industries and create a jobs pipeline by the Premier and the Minister for Transport and Planning, Rita Saffioti.

As part of the $92.4 million package, $13.2 million has been earmarked as project funding to attract a global cathode active materials manufacturer to establish a production facility in WA.

“The cathode active manufacturing initiative includes incentives to offset project costs, such as land lease rates on industrial land to help businesses establish and keep local jobs in WA,” the announcement declared.

“This will strengthen WA’s position as a world leader in future battery minerals, materials, technology and expertise in global battery supply chains – and supports the implementation of the Western Australian Future Battery Industry Strategy.”

Johnston also touched on the role played by the Future Battery Industry’s (FBI) Property Research Centre.

The FBI has three main programs in train supporting industry development; one of these being a $10M pilot plant near Curtin University with the view of producing battery cathode material.

“This is a very important step forward in our Future Battery Industry Strategy and aligns with our vision to have Western Australia as an established supplier of battery materials; creating jobs, diversifying the economy; and benefitting regional communities,” Johnston said.

“Our strategy has four themes: investment attraction; project facilitation; research and development; and battery technology uptake.”

Johnston gave an example of the government’s support of the battery uptake theme with the connection of a large-scale battery in Kwinana.

“That’s on top of the range of other battery projects that we have for our energy system here in the southwest of the state,” he said.

Johnston wound up by reiterating the government’s support of the exploration sector, mentioning its recent announcement of an increase to its Exploration Incentive Scheme (EIS) funding.

An extra $5 million in funding for the EIS will increase funding for the EIS to $15 million in 2020-21.

The EIS supports five high-level programs, including the successful co-funded drilling program, which offers up to a 50 per cent refund for innovative drilling in under-explored areas in WA.

“The additional $5 million funding will invigorate the industry and allow more exploration companies to participate in the co-funded drilling program, creating jobs for Western Australians,” Premier Mark McGowan said in the announcement.

“The flow-on effect from this additional investment in exploration and technology will result in drilling companies deploying more rigs and workers, and lead to new resource discoveries.”

Johnston went on to inform Paydirt Nickel Conference delegates that the government was also reforming the current regulatory framework to reduce timelines for approvals process.

“I’m pleased to say that the department is reaching its reduced program of works timeline to just 15 business days and 99 per cent of applications since we changed the target date,” He went on.

“we are also continuing to examine how we can reduce mining approvals…we are moving to a single approval instrument to approve mining activities across multiple tenements.

“We’re aligning reporting frameworks around projects, rather than individual tenements.

“There will be a viewing process for low-impact exploration and prospecting activities, which will allow automated approvals, subject to standard conditions.

“We’re removing duplications in environmental reporting, with one annual environmental report across all tenements and all agencies

“And, also we are seeking to move to biannual reporting after three years fro projects satisfactorily complying with environmental obligations.”