THE BOURSE WHISPERER: It was a busy June quarter for Australian bauxite exploration play Bauxite Resources with the announcement of two maiden resources.

The two resources have increased the company’s total bauxite resource to 24.8 million tonne at 41.1% Total Alumina, 30.6% Available Alumina with 3.9% Reactive Silica.

All of these resources are within the company’s Joint Venture with Yankuang Resources, a wholly owned subsidiary of Yankuang Group.

Bauxite Resources retains 30% ownership of any bauxite resource and 100% of any other minerals.

The company has also had 13 new exploration licences granted in Western Australia, resulting in 40% of its Darling Range tenements being granted.

The company has completed exploration drilling and resource modelling on a number of new areas with maiden resources modelled in Juturna, Cardea and Minerva.

Bauxite Resources now has eight separately identified bauxite deposits in the northern portion of its southwest Western Australian project area: Aurora, Rusina, Juturna, Cardea, Minerva, Vallonia, Pomona and Concordia.

Four maiden resources have been announced from this inventory with a further two due for release in the September quarter.

The company said it expects to receive further updates to resources at Rusina, Cardea, Pomona and Minerva in the December quarter.

The Cardea deposit is the only one of these deposits that does not sit within the company’s Joint Venture with Yankuang.

Cardea is part of the Joint Venture the company shares with Shandong No1 Bureau of Geology & Mineral Exploration, which can earn up to 60% of bauxite rights by sole funding of exploration to bankable feasibility status.

Bauxite Resources also received a pleasant cash sum of $9 million as reimbursement in accordance with the Alumina Refinery and Bauxite Resource joint venture agreements signed with Yankuang.

The payment of this final reimbursement amount triggers the earning by Yankuang, of a 70% interest in the bauxite rights in the nominated joint venture tenements, both pending and granted, held by Bauxite Resources in the Darling Range.

Bauxite Resources is currently holding $53 million cash as well as substantial property, plant and equipment assets.

THE DRILL SERGEANT: Gold-focused exploration company Artemis Resources has announced a JORC-compliant resource estimate for the Mt Clement gold project located in Western Australia.

Artemis is the operator of the Mt Clement in a joint venture with Northern Star Resources (20%).

The new estimate indicates a total Inferred Resource of 1,131,600 tonnes at 1.77 grams per tonne gold and 17.0 grams per tonne silver containing 64,400 ounces of gold and 620,000 ounces of silver, for a total of 80,000 ounces gold equivalent.

Artemis said this represents a 58% increase in contained gold over the historical resource estimate for the project, and a doubling of the precious gold and silver metal content.

“The resource increase at Mt Clement is a major step forward and we anticipate further resource increases with additional drilling,” Artemis Resources chief operating officer Guy Robertson said in the company’s announcement to the Australian Securities Exchange.

The company has previously reported relatively high-grade mineralisation at depth associated with the Adit Fault from drilling programs that have been carried out this year.

As things currently stand around 125,000 tonnes at 2.71g/t gold, for 10,900 contained gold ounces, and 75.6g/t silver, for 304,000 contained silver ounces, of the total inferred resource are related to this structure.

Artemis said it has confirmed four targets remain within the immediate resource area, which it considers to have potential to increase the resource and warrant further exploration.

The company is planning a VTEM electromagnetic geophysical survey over the area surrounding mineralisation it has already defined.

The aim of the survey is to characterise the known high-grade sulphide zone and to identify immediate drill targets and potentially additional resources.

The survey is to be carried out over the whole of the Mt Clement project area.

“If this survey proves successful in delineating either extensions to the currently defined high grade sulphide-rich mineralised zone or potential repetitions of this mineralisation, then the company will consider conducting additional resource definition drilling at Mt Clement,” Artemis said.

 

THE BOURSE WHISPERER: Multi-commodity junior exploration company Havilah Resources is set to acquire from Glencore International, that company’s rights in the mining tenements and the Feasibility Study of the Kalkaroo project.

The Kalkaroo project is a medium-size copper-gold deposit containing over 320,000 tonnes of copper and almost 1 million ounces of gold in a measured resource of 62 million tonnes of 0.55% copper and 0.44 g/t gold

Havilah describes the deposit to be, “amenable to a bulk mining operation at the rate of 4.5 million tonnes per annum for a period of twelve years”.

Once the transaction has been finalised Havilah will take 100% control of what it considers an attractive copper gold deposit with a completed bankable feasibility study.

“Havilah will now pursue a measured strategy to maximise the value of this large copper‐gold asset and explore various development options,” Havilah Resources chairman Dr Bob Johnson said in the company’s announcement to the Australian Securities Exchange.

‘This will include further drilling to expand shallow gold and copper metal resources along strike and alternative metallurgical processing methods to improve recoveries particularly of gold and native copper.

“Kalkaroo contains almost 1 million ounces of contained gold, and is a large gold deposit in its own right, therefore optimising gold recoveries will be a high priority in future work.”

In accordance with the Heads of Agreement reached between the two companies, Havilah will issue $7million of ordinary shares to Glencore.

Havilah said the shares to be issued should be calculated on the volume weighted average price of the shares on the ASX in the 20 days previous to the date of the Heads of Agreement.

This is calculated to be $2.147 per share resulting in issue of 3.3 million shares representing approximately 3.95% of Havilah’s issued capital.

However, Glencore has taken the view the shares to be issued will be calculated on the volume weighted average price of the shares on the ASX in the 20 days previous to the date of expiry of Glencore’s option to participate.

This is calculated to be 68.94 cents per share resulting in issue of just over ten million shares representing approximately 12.3 % of Havilah’s issued capital.

The two companies are now in discussions regarding the amount of shares to be issued.

If discussions fail to resolve the dispute then the parties are likely to engage in a formal dispute resolution process in due course.

THE BOURSE WHISPERER: Geothermal energy generation company, Hot Rock Limited has announced a maiden estimated resource at its 100%-owned Calerias geothermal project located 100 kilometres south-east of Santiago, Chile.

Having completed geological, geochemical and geophysical studies Hot Rock has estimated an inferred geothermal resource of 7400 petajoules has been estimated for the project.

Hot Rock said the estimated resource is equivalent to 185 megawatt electrical of electrical power generation over a period of 30 years, which it claims is sufficient to meet the needs of more than 250,000 Chilean households.

“This is a very significant milestone, positioning the Calerias project as our most advanced in the burgeoning, Chilean geothermal sector,” Hot Rock Limited executive chairman Dr Mark Elliott said in the company’s announcement to the Australian Securities Exchange.

“Chile is one of the best regions in which to advance geothermal projects today. The country has some of the best volcanic geology suited for geothermal energy in the world, yet the sector is still in its infancy.

“Chile also has a very stable, pro-development government providing excellent incentives to new geothermal companies.”

Hot Rock said that, as the world’s largest copper producer, Chile also has the highest power costs in South America.

This has led the country to have suffered power shortages for several years, due to increasing energy demand, which has created both the impetus and potential to establish geothermal power.

“We have had an on-the-ground presence in Chile since 2009,” Elliott continued.

“Our early mover advantage has allowed HRL to cherry pick several prime tenements, well before the recent pegging rush by the other major geothermal companies. HRL now holds the largest geothermal land package in Chile.”

Elliott labelled the Calerias project as being very prospective due to its location close to a heat providing volcanic centre.

He also pointed out the strategic location of the project, which is close to existing transmission grid inter-connection points with direct access to the large urban electricity market in Santiago.

It is also close to private customers such as the nearby El Teniente mine, the largest underground copper mine in the world.

“The El Teniente mine has a large future requirement for electricity, including power generated from renewable sources, required to meet obligations under recently revised government energy regulations,” Elliott said.

“With a maiden resource now defined, we will expedite activities at Calerias with a view to start drilling by early 2012, upgrading the reservoir to a Measured Geothermal Resource suitable to commence a bankable feasibility study.”

The Calerias resource area remains open with strong indications for a significant extension to the north-northeast.

Hot Rock is planning to undertake a further detailed geophysical survey by year-end, which it is confident, should substantially expand the currently declared resource assessment ahead of drilling.

 

In its Gold Sector Review for July, international financial house Ambrian Partners couldn’t get past the first letter of the alphabet for its top gold companies for the year.

“Adamus, Ampella and Avocet are our top picks this year,” Ambiran Partners said.

“We think that all three companies offer value at their current prices.

“All have presented clear and defined plans as to how they will achieve their goals this year and we expect that further development of their respective assets throughout the second half of 2011 will drive their market valuations higher.”

Ambrian provided a small snapshot of each company.

First cab off the rank in the report was Adamus Resources.

Adamus has commenced production at its Nzema gold project in Ghana to become the newest gold producer in the world-class Ashanti Gold Belt.

Ambrian said an expected consolidation of the West African gold sector will result in Adamus having a central role as it is producing and holds a substantial and prospective gold package in the region.

Still in West Africa Ampella Mining is, according to Ambrian, “One of the most exciting West African gold exploration stories on the ASX”.

The company has a resource of 2.2 million ounces gold, which Ambrian said it expects to see upgraded before the end of this year.

Ambrian’s third top tip is Avocet Mining as it considers the company to continue delivering on a number of fronts.

“It has continued to meet its production targets, while also keeping the drill rigs running ‘hot’ on its properties in Burkina Faso and Guinea,” Ambrian said.

“During the first half of the year Avocet has sold its high cost South East Asian assets and is now fully focused on growing West African production.

“We maintain our belief that Avocet is on the way to becoming a 500,000 ounce gold producer.”

Ambrian has based its assessments on the first half of 2011 where the market has been subjected to record high US dollar gold prices on the back of a ‘perfect storm’ of a weakening US dollar.

Other contributing factors include the weakness in the Eurozone and inflationary pressures from China.

“Despite record high US dollar gold prices, gold-focused mining equities were flat over the first half of 2011,” Ambrian said.

The firm identified three main areas it believes to be the main reasons for the underperformance of gold equities:

– The weakness of the US dollar, which has contributed to the offset of profits producers operating outside of a US dollar-denominated currency would have made.

“Investors are aware of this and have not followed gold spot prices up when companies are not fully exposed to the US dollar,” Ambrian said.

– Political instability in gold exploring/producing countries, which actually has a limited effect on the companies operating/exploring in those countries, has driven share prices lower.

“This instability (or perceived instability) is not only limited to companies that have projects in countries that have experienced revolutions or wars, but is also present in countries where the government has signaled a review of taxation policies or royalty rates,” Ambrian said.

– General risk aversion in equity markets that has resulted in investors preferring to put money away in what they perceive to be more stable investments; for example, investing in gold Exchange Traded Funds rather than equities that are historically perceived to hold risks from market fluctuations and individual company risk.

“In an assessment of those gold equities that we feel will perform best in 2H11, we maintain our belief that those stocks that continue to grow their profile whilst keeping the market updated with a positive newsflow will continue to prosper,” Ambrian said.

The report also looked beyond the top three companies mentioned providing a comprehensive view of 15 other companies stretching way into the rest of the alphabet.

Click here to view the entire report