THE BOURSE WHISPERER: Tasmania-focused Australian mineral exploration company Venture Minerals has inked a Memorandum of Understanding (MOU) with Grange Resources.

Under the MOU, the two companies will investigate the potential for Grange to act as a downstream partner for Venture in value-adding to the proposed magnetite production from the Mount Lindsay Project.

Magnetite will be a by-product of mining from Venture’s Mount Lindsay tin-tungsten deposit in northwest Tasmania.

According to a recently completed Pre-Feasibility Study by Venture, Mount Lindsay will produce more than 200,000 tonnes of magnetite concentrate per annum.

The company has identified an opportunity for this magnetite concentrate to be converted to iron ore pellets and distributed directly to end users by utilising Grange’s existing pellet plant and ship-loading facilities at Port Latta, located on the north coast of Tasmania.

Grange currently exports approximately two million tonnes per annum of iron ore pellets from its wholly owned Savage River mine situated some 25 kilometres from Mount Lindsay.

Venture is currently completing a Bankable Feasibility Study on Mt Lindsay, which in addition to tin and tungsten production includes detailed information on the production of magnetite fines.

Following completion of this study, Venture will submit the report to Grange along with a proposal for joint development activities between the parties.

“A joint development with Grange would provide synergistic benefits to both parties and allow Venture access to Grange’s long-established infrastructure,” Venture Minerals managing director Hamish Halliday said in the company’s announcement to the Australian Securities Exchange.

“We are excited to have the opportunity to explore a range of development options with Grange, who have been successfully mining, manufacturing and exporting iron ore pellets from Tasmania for several decades.”

As well as signing the MOU with Grange, Venture has also progressed off-take discussions on its Livingstone Direct Shipping Ore hematite deposit, following interest from a number of parties.

THE DRILL SERGEANT: Reconnaissance drilling carried out by Western Australian mineral exploration company Resource & Investment on the south eastern section of its Doolgunna project has identified a new zone of gold mineralisation, with preliminary grades of up to 14.46 grams per tonne.

The area, now called the Ross’s Reef prospect, remains open in all directions.

The nearology for Resource and Investment’s Doolgunna project is impressive being located just three kilometres from the DeGrussa copper-gold discoveries of ASX-listed Sandfire Resources.

Sandfire has reported combined resources at DeGrussa of 14.33 million tonnes grading 4.6% copper and 1.6 g/t gold.

Resource and Investment began a 950-hole drilling program at Doolgunna in May to test 24 priority Volcanogenic Massive Sulphide (VMS) copper-gold and vein-style gold targets.

By the end of August, 185 holes had been drilled for a total of 15,500 metres.

“The gold mineralisation discovered at Ross’s Reef appears to occur in east-west trending quartz/ironstone reefs that transect the basaltic lithologies,” Resources and Investment said in its ASX announcement.

To date three drill holes on two drill lines, 200 metres apart have intersected significant gold mineralisation.

“At this stage, both the extent and orientation of the gold mineralisation within the Ross’s Reef prospect are unknown,” The company said.

“To determine the orientation of the gold bearing structure, RNI has recently completed follow-up drilling on the two lines where high values were recovered.”

Ross’s Reef prospect also lies 3km east of the Tony’s Find gold prospect within the Doolgunna Project.

Resource and Investment said its geologists believe the two prospects occur on the same east-west trending structural feature.

The company has recently completed preliminary drilling of the Tony’s Find prospect with samples currently at the laboratory awaiting assay analysis.

The two prospects have a shared history of having been worked intensively by prospectors using metal detectors, although Resource and Investment said no details of these operations are available.

The drilling program at the Doolgunna project has now moved to the Marty’s Patch gold target, with drilling of a VMS target located close to DeGrussa expected to follow.

JETT RINK: Oil and Gas exploration and development company, Beach Energy has secured two rigs, an Ensign#65 and Ensign#16, for its unconventional shale gas appraisal program in the Nappamerri Trough of the Cooper Basin for 2012.

The drilling program that will utilise the two rigs will consist of both horizontal and vertical wells across the Beach permits.

Recent drilling results have demonstrated the target zone in PEL 218 (Beach 90%) goes beyond shale and incorporates other lithologies that are also gas saturated.

Beach said that it is convinced, that in addition to the substantial shale gas potential, it is now dealing with an unconventional basin centred gas play.

The 2012 program is designed to test the potential of the basin centred play in what Beach now considers to be a thick, continuous, multi lithology gas accumulation across the PEL 218 permit and potentially ATP 855P.

The Ensign#65 (ADR1500) rig is a new build 1,500 horsepower rig out of Canada and the United States which is expected to arrive around April 2012.
 
The rig uses the latest proven technology being used for drilling horizontal wells in the Haynesville shale province in the US.

It will be built to meet Australian standards and conditions and has the capability to drill 1,500 metre laterals from a depth of 4,000 metres and will drill the first horizontal well in ATP 855P to target shale and other lithology target zones.

Upon completion of this well, the rig will commence the horizontal pilot well program in PEL218, with two pilot horizontal wells planned adjacent to Holdfast-1 and Encounter-1.

The Ensign#16 is a 1,200 horsepower rig used to drill Holdfast-1 and Encounter-1. It is currently in the Officer Basin and expected to be available around January 2012.

The Ensign#16 will drill a series of vertical wells in PEL 218 to continue the evaluation of the continuous basin centred gas play in the permit.

“Beach has started to unlock a significant basin centred unconventional gas play in the Cooper Basin,” Beach Energy managing director Reg Nelson said in the company’s announcement to the Australian Securities Exchange.

“These two rigs will take us a step closer to understanding the extent of the gas resource that resides within our permits.

“The horizontal pilot wells to be drilled by Ensign#65 will be production style wells designed to flow gas at commercial rates.

“Should these wells be successful we will seek to commence a pilot development program as soon as possible.”

JETT RINK: Australian oil & gas exploration play Jupiter Energy has announced that it the acquisition of 3D seismic has commenced for the recent extension to its Block 31 acreage, located in the Mangistau Basin in Kazakhstan.

The Block 31 permit has a 10 year exploration licence (initial 6 years + two possible extensions of 2 years each) as well as a 25 year production licence.

The company announced in July that the Kazakh Ministry of Oil & Gas had given its approval to its application to extend the existing Block 31 acreage of 63.39 square kilometres by an additional 59.29sqkm to a new total of 122.68sqkm.

As part of its application, Jupiter was obliged to shoot 3D seismic over the new area on or before 31 December 2012.

According to the company, current interpretations using the existing wide-spaced 2D data suggests the fault trend that traps oil in the Mid Triassic at J-50 and J-52 continues to the south east setting up similar traps in this new extension area.

A number of existing wells drilled within the new area during the 1960’s and 1970’s are thought to have encountered hydrocarbons.

All this has led Jupiter Energy to now be in the planning stages to include a well location in the extension area as part of its 2012 drilling program.

“Our early focus on the Block 31 extension area demonstrates our interest in the prospectivity of this new acreage and we look forward to determining whether there are suitable drilling targets in the area over the coming months,” Jupiter Energy chairman and chief executive officer Geoff Gander said in the company’s ASX announcement.

The company said it expects the acquisition of the 3D seismic to take four weeks and the data will then require six months for processing and interpretation.

The results of this work will enable Jupiter to determine whether a suitable well location for an exploration well can be established on its newly extended acreage.

OUT AND ABOUT: The clean energy sector has come to prominence through the Federal Government’s Clean Energy Initiative.

It may seem as if it is a new sector but the reality is that it has been around a lot longer than what many of us may realise.

Mention the clean energy sector to most people and their initial reaction would most probably be that they are waiting to see how this fledgling industry comes on.

In world terms the sector has been coming on for some time.

New investment globally in Clean Energy grew from US$52 billion in 2004 to US$186 billion in 2009.

Last year the total spend hit US$243 billion world-wide.

What is probably more surprising to learn is that China is one of the major drivers behind the clean energy space.

In 2009 the Asia / Oceania region overtook the United States in clean energy spending.

That feat was replicated in 2010 when it surpassed the clean energy spending of Europe.

In 2010 China was the number one country when it came to total clean energy investment.

This includes all aspects of the sector ranging from large wind farms to small scale solar cells.

Second was Germany with bronze going to the United States.

“Clean energy is an important part of China’s energy matrix,” Bloomberg New Energy Finance head of research Australia Seb Henbest told The Roadhouse at the Clean Energy Symposium in Sydney.

“They see it as a growth industry, globally in the components that make up that industry in the wind turbines and the solar panels.

“They have been very aggressive in what is, for them, an industrial policy at that level.

“We have tracked US$20 billion of investment, so far this year, in China and US$8 billion in the United States.

“This growth is not just a one-off; it has been going for a few years.”

China is ramping up on the manufacturing side of the industry but it is struggling to establish a foothold in the world market for its wind technology.

The majority of the wind industry happens outside of China ad it wants to sell its technology to the United States and to Europe and to Australia.

Right now though, its technology is not considered to bankable by those countries.

China is trying to demonstrate to the market that its wind technology does work so it is investing in the construction of a great deal of domestic capacity.

The idea behind this is to establish demonstration facilities in places like Australia and South America in order to leverage into the US and European markets.

“Wind turbines are big engineering projects and the Chinese industry has grown very quickly,” Henbest said.

“It is just a confidence in the technology. They are no different, in many ways to any number of wind manufacturers from Europe but they do have a bit of a patchy track record in terms of reliability, which has raised some doubt.

“We don’t think that doubt is going to last forever and once they have been able to prove their technology is as good as anyone else’s, in a global sense then that will also drive prices down.”

Like most things it manufactures, the cost of a Chinese wind turbine is significantly less than the cost of a European wind turbine.

However, world investment banks are requiring project developers to use, what they perceive to be, the more reliable technology to ensure they get their returns and that the project doesn’t fall over from a technology perspective.

As a result, China is working on demonstrating it does have reliable technology that is as good as that from Europe.

The Chinese push into the wind turbine industry is just one aspect that is providing momentum for the clean energy sector.

The benefits to the economy growth of countries around the world and security for the provision of power are also contributing factors.

Energy security is not a great issue for Australia, at this stage, but it is increasingly concerning for Europe and the US.

In Europe it is particularly acute because there are a lot of people using a lot of energy, a great deal of which is currently being generated in the Middle East and Russia causing ructions of instability.

This is a situation Europe is very keen to wean itself off that as much as possible so it can maintain control.

Another obvious factor is greenhouse gas emissions.

Henbest said there is, despite rhetoric to the contrary, global recognition by world leaders accepting scientific data that this is a major issue that needs to be acted upon.