THE DRILL SERGEANT: Castle Minerals (ASX: CDT) has claimed to have intersected a new zone of bedrock gold mineralisation while conducting RAB drilling four kilometres south of the company’s Bundi prospect in north‐west Ghana.

 

Castle’s Wa project in north‐west Ghana. Source: Company announcement

 

The company is conducting RAB drilling testing of an earlier reconnaissance drill intercept of 3 metres at 2 grams per tonne gold.

The latest drilling has returned the following gold results from this area:

–    10m at 1.19g/t gold from 5m;

–    10m at 1.8g/t gold from 16m;

–    2m at 1.9g/t gold from 4m; and

–    2m at 3.28g/t gold from 15m.

“These results highlight a strong new gold target,” Castle Minerals managing director Mike Ivey said in the company’s announcement to the Australian Securities Exchange.

“A contract RC rig has arrived on site to test the Bundi zone and the program will now be extended to test this exciting new area.”

Castle said it will also be using RC drilling to test the newly-defined Jango prospect, from which it recently reported rock chip results up to 61g/t gold within a 300m long zone of artisanal workings in the Julie West area.

Castle’s Wa project in north‐west Ghana. Source: Company announcement

ONE OFF THE WOOD: Walkabout Resources (ASX: WKT) managing director Allan Mulligan called into The Roadhouse to explain what the company has been up to.

 

Allan, Walkabout Resources reverse-listed into Nimrodel Resources on the ASX in 2011; Walkabout is a generic Australian term so can you explain how it fits the company’s African focus?

When working in Africa it is good to have an Australian connection. Australian companies operating in Africa are generally well-received so we felt it was important to establish an Australian identity moving into that space.

Is being an Australian company a good thing when working in Africa?

Yes, especially if, like us, you are an exploration junior company and you are operating in the areas we do, which is out in the regions where we work with local people and local companies.

Bringing Australian capital into the young mining regions of central and southern Africa is encouraged and welcomed warmly.

How does the new Walkabout Resources entity differ from its predecessor?

Nimrodel was a single-commodity company, focusing on coal in Botswana.

As Walkabout Resources we decided we to adopt a more diversified strategy and to have a broader portfolio, upon which we could create more value for our shareholders.

We have developed the Takatokwane coal project to be the largest Inferred coal Resource in Botswana at seven billion tonnes, with an Indicated Resource of 748 million tonnes.

That project is now going through a pre-feasibility study.

So, coal is one branch of you diversity tree, what are your other projects?

All together we have three, high-quality projects we are building the company on.

The first is, obviously the Takatokwane coal project and we also have an exciting copper project at Kigoma in Tanzania, which we secured earlier this year.

We also have a very interesting Platinum Group Element (PGE) project – the Makete platinum project – in Southern Tanzania, which has high PGE tenor grade and size.

Is that the order of priority you have placed on each of these projects?

Yes and no. That may sound strange, but the coal project is further developed, which gives it some seniority I suppose.

At this stage it doesn’t really require much of what we specialise in, which is greenfield and brownfield exploration.

We are a junior exploration company. That’s what we do best – acquiring projects and developing them.

Because the Takatokwane coal project is now in pre-feasibility our main focus is on the Kigoma copper project to move that up.

The thing with coal is its reliance on infrastructure development, which – along with other projects in the area – we are waiting on.

We have a very good deposit in a very good area and we don’t want to sit and wait too long.

We will look for solutions to commercialise that project – even in a moderate fashion – with a view to move it into the South African coal market.

How far have you managed to progress the Kigoma copper project?

We currently have a team on the ground at Kigoma and they are working at identifying what type of ore body we have there.

So far it appears we have two projects evolving – an oxide copper project with grades up to 25 per cent and there is also potential for a sulphide project.

 

At the moment we are looking at using a model similar to that being used by Tiger Resources where we can extract the oxide and create an early cash flow, which we can then use to develop the sulphide aspect of the project.

The scale we are seeing at this stage is quite large – similar to projects located in the copper belt of the Democratic Republic of Congo (DRC) and of Zambia – in that it demonstrates the geological elements required to have deposited, and concentrated the copper.

That leaves the Makete PGE project.

I have worked on PGE projects for 20 years and I consider the Makete project to be a very good project.

Having said that, to enter into PGE exploration – as a junior company of our size – you do need a Joint Venture partner, so we are going to be looking for mid-cap, or major, company which may be interested in helping us do that.

What have you learnt about the project to date?

Some exploration work was conducted there in the early 2000s, which recorded encouraging results, such as 17.6 metres at 4.9 grams per tonne PGE and gold, which included 1.7 metres at 26.8 grams per tonne.

Seven holes recorded intersections over one metre at plus 3.5 grams per tonne PGE and gold.

They were looking for a Bushveld complex-type deposit; however the current thinking on Makete is that it is not a Bushveld-complex deposit, rather it might be of ophiolite origin.

That means the geological model and the exploration techniques required will be different, so we are now going to have a look at it from that perspective.

We have all the data from the previous work – over 40 holes were drilled – once we have packaged that together we will start making enquiries to the PGE companies and see if anybody is interested in assisting us with its development.

Is it ready to present as such or will you need to conduct further work to bring it up to a level to create that interest?

We already have 10 intersections that are within an economically viable range, which were drilled across three separate areas within the project.

Our program will involve connecting those areas together and to gain an understanding of the project’s geological fluid dynamics.

When will you be commencing your drilling program at Kigoma?

We anticipate starting to drill at Kigoma by the end of May after conducting some trenching, which we are about to commence.

There are four types of mineralisation that have been identified at Kigoma and we will be trying to gain an understanding of the scale and tenor these in order to determine which ones we will be targeting.

The project compares favourably with the Michigan copper district near Lake Superior in North America.

 

It is quite an eclectic portfolio – what is the reasoning behind that?

That comes about from Walkabout Resources compiling a collection of quality projects and moving from a single-commodity focus into other commodities.

We felt that if, as a company, we were going to diversify then we needed to do it over a range of products that the market is quite keen on.

The coal project is too good to let go, the copper is very exciting – the early signs are that we may be able to grow something very substantial there, and PGE deposits are now moving back into exploration vogue.

The market can see there will be shortfalls, especially with copper and PGE, in the future.

It is a portfolio of commodities that, while they are not market-darlings, they are ones that are always in reasonable demand.

They are also not co-dependent on each other. So there is always the chance one will have some substance to it while the others may be experiencing a pause.

THE DRILL SERGEANT: Breakaway Resources (ASX: BRW) has identified multiple gold, nickel and base metal targets, including two priority drill-ready gold targets, at the company’s 100 per cent-owned Leinster gold project, located south of Leinster in Western Australia.

 

Leinster gold project location. Source: Company announcement

 

Breakaway identified the new exploration targets via a detailed structural analysis of the area combined with a comprehensive re-assessment of historic exploration data and recent surface geochemical sampling programs.

The company said the recent work has elevated the exploration potential of the owned Leinster gold project.

Breakaway is currently planning drilling programs for gold targets at Salute and Pond Well.

Planning is also underway for possible ground EM surveys over the nickel and base metal targets and in-fill sampling of the additional gold targets.

“The company is very pleased with the recent exploration results from the Leinster gold project, which represent the culmination of a significant in-house review of the gold potential of its tenements,” Breakaway Resources managing director Victor Rajasooriar said in the company’s announcement to the Australian Securities Exchange.

“A combination of good solid lateral thinking, structural geology and careful analysis of historic exploration data together with recent geochemical sampling has helped us to uncover significant new gold potential within our tenements, including at least two drill-ready targets which we plan to drill later this year.

“At the same time, recent surface sampling has uncovered some exciting nickel and base metals potential which requires follow-up.

“We are very excited by the potential of these targets and we are looking forward to progressing exploration activities to the next stage.”

The Leinster gold project is located in the Leinster gold, nickel and base metal province, which hosts BHP Billiton’s (ASX: BHP) Mt. Keith and Perseverance nickel mines to the north – where it has recently discovered the Venus nickel sulphide deposit – as well as the Thunderbox and Bannockburn gold mines, and the Jaguar / Bentley base metal mines.

WHAT THE BROKERS SAY: This week we take a look at a Triple research treat from Seismic Research.

Carrick Gold (ASX: CRK)

Carrick Gold is aiming to commence mining gold ore during January 2013 from its Kurnalpi project (100 per cent CRK), within the larger KalNorth Field, which consists of four main projects that are all located within 50 kilometres of the gold mining town of Kalgoorlie in Western Australia.

Carrick has established a JORC‐compliant Reserve base of 103,000 ounces of gold across two open pits, from a global JORC-compliant Resource Base of over one million ounces of gold.

Carrick’s strategy is to commence the toll treatment of shallow oxide and transition ore, through one or more of the three nearby mills, to generate the cash needed to finalise a Feasibility Study on a Carrick‐owned‐and‐operated plant.

This plant would be strategically located to optimise the economics of a regional operation that would process ore from a number of deposits within Carrick’s projects.

This regional approach would be similar to the nearby Mount Monger project, owned and operated by Silver Lake Resources (ASX: SLR).

In addition to Carrick’s substantial Resource base of over one million ounces of gold, there is significant exploration potential within and external to the identified deposits.

The previous management even went so far as to release a Carrick global Resource of over 4 million ounces of gold.

This was before the recent addition of the Mt Jewell tenements, which increased Carrick’s Resources by 186,000 ounces of gold and added a significant amount of prospective exploration tenure.

Carrick’s current target is to increase its Resource base by 0.5 million ounces of gold per annum and to triple its Reserves by the end of 2012.

John McKinstry, Carrick’s relatively new managing director, is a specialist in mine development; with over 25 years’ experience with major companies including Normandy and Newmont.

John has also brought smaller gold mines to production before. In his previous role, as managing director of North Queensland Metals (ASX: NQM), John successfully developed, commissioned and operated the Pajingo mine in North Queensland, until NQM was taken over by Conquest Mining (ASQ: CQT).

Pajingo now forms part of the suite of assets held by Evolution Mining (ASX: EVN).

Recommendation: Speculative Buy

Venturex Resources (ASX: VXR)

Venturex Resources is aiming to commence producing copper and zinc, in concentrates, at its flagship Pilbara copper-zinc project (100 per cent VXR), located close to Port Hedland in Western Australia during the 2H of 2014.

Venturex has established a substantial JORC‐compliant Resource base containing in excess of 550,000 tonnes of copper‐equivalent within a number of high‐grade Volcanogenic Massive Sulphide‐type copper-zinc deposits.

Preliminary results from Venturex’s Feasibility Study suggest a low (C1) cash cost of $1.15 per pound copper‐equivalent.

While Venturex already has a substantial Resource base, there is exploration potential within and external to the identified deposits, in particular at the 35km of prospective, near‐surface mineralisation at the Whim Creek, Salt Creek and Liberty Indee Joint Venture areas.

Venturex is currently developing a drilling program to test down‐plunge extensions of the Evelyn deposit at Liberty Indee, the Salt Creek deposit and the Balla Balla prospect.

Venturex is also planning to drill test more regional targets within the broader Mons Cupri area.

The company recently finalised a strategic 15 per cent share placement with an ASX 300 gold producer that is operating in the Ashburton‐Pilbara region of WA, Northern Star Resources (ASX: NST).

NST invested $6.5 million and underwrote Venturex’s recent $4.5 million capital raising.

The companies have also entered into a Memorandum of Understanding to explore potential options for the joint‐development of the Pilbara project, which could result in significant costs savings for Venturex.

In addition to the Pilbara project, the company is exploring for large gold deposits in Brazil through its wholly‐owned subsidiary CMG Mineracao Ltda.

Out of the recent capital raisings, Venturex has allocated $1 million to explore its Brazilian assets.

The most‐advanced project in Brazil is Serre Verde (100 per cent VXR), which is currently awaiting the grant of exploration licences.

Serre Verde hosts VXR’s highest priority exploration targets.

Recommendation: Strong Buy

Estrella Resources (ASX: ESR)

Estrella Resources is a junior copper‐gold explorer primarily focused on developing its flagship Agustina copper‐gold project (100 per cent ESR).

The project covers an area of 18.5 square kilometres that is located approx. 90km northeast of the mining town of La Serena, in the prolific copper producing belt of central northern Chile.

Agustina is an advanced exploration‐stage project with ‘drill‐ready’ exploration targets.

The company is aiming to release a maiden JORC‐compliant resource at Agustina by the first quarter of 2013.

By developing a portfolio of copper‐gold projects in northern Chile (close to La Serena), Estrella is looking to emulate the success of other ASX‐listed companies, like Hot Chilli (ASX: HCH), but on an accelerated time frame.

By the point at which HCH had defined a resource, its share price had more than trebled.

This took over 16 months for HCH, while Estrella plans to get there in less than 9 months.

Estrella boasts a strong management team and Board. Dr. Jason Berton, the company’s managing director, is a specialist structural geologist with over 12 years’ experience.

On the ground in Chile, Estrella will be managed by Juan Pablo Vargas de la Vega, a Chilean national with over 10 years’ experience with Santos (ASX: STO), Rio Tinto (ASX: RIO) and BHP (ASX: BHP).

Julian Bavin, on Estrella’s Board, is a Chilean resident with over 30 years’ experience in mining, including eight years as Rio Tinto’s former Exploration Director for South America.

Juan Pablo’s and the Board’s local networks afford a sound position for Estrella to expand its asset portfolio on favourable terms.

Second in the development pipeline is the Venus project (100 per cent ESR), where the company has secured 46 exploration concessions, covering an area of 85sqkm immediately to the south of Agustina.

This area, where copper is currently being mined and processed on‐site by small‐scale artisanal (informal) miners, is seen by Estrella as a regional extension of the known mineralisation at Agustina.

The company is planning to start a field program at Venus in Q3 2012.

Recommendation: Strong Speculative Buy

Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.

Kevin Rudd is an expert and Julia Gillard has just demonstrated doing it properly can pay off in spades. Chinese Language and Cultural Advice managing director Leonie McKeon tells us how to conduct successful negotiations in China.

 

Spend time developing and maintaining ‘guanxi’

The closest English meanings for ‘guanxi’ are relationships, connections and one’s social ties. Relationship in Chinese culture means a business relationship, and carries the same importance as a strong friendship, marriage or partnership. Solid ‘guanxi’ can be with you for the rest of your life, and like any relationship, it takes some effort to maintain. Developing and maintaining ‘guanxi’ is a vital part of the negotiation process. The Chinese often say ‘no relationship no business.’

Understand Chinese hierarchy

Chinese culture is a hierarchical culture; therefore you need to understand the hierarchy of the Chinese people with whom you are negotiating. This hierarchy will determine how you address people, where you sit in the meeting room, and how you introduce your group.
 

Understand ‘face’

‘Face’ is different to the notion of ‘self-esteem’. Self-esteem is about “how I feel about myself”, but ‘face’ is more about “how others feel about me”. ‘In Chinese society it is important to be respected by the group in which you belong, as the focus is on the individual’s position within his/her own social group.  ‘Face’ is always gained, lost, or given in front of others. A Chinese person’s reputation rests on how much ‘face’ he/she gains. It defines a person’s place in their social network. Sources of face can be wealth, intelligence, skills, position and solid social connections.

Asking very direct questions can cause loss of ‘face’. A strategy to avoid asking questions in such a direct manner is to change the structure of your questions. Instead of asking yes/no questions it is better to ask more open-ended questions.

You can give ‘face’ by pronouncing a Chinese person’s name correctly, and also knowing where the family name is situated in the name.

A ‘no’ can look like a ‘yes’

In communication, Chinese people often use a circular style to express rejection or refusal. Looking at this example, ‘Under the current circumstance, we would like to discuss this matter when the opportunity arises’, this sentence uses very positive words to send a ‘no’ message. This kind of answer can leave you with an optimistic view that things are moving forward, however it is a gentle rejection.
 

Translate your materials

Before meeting with your Chinese counterparts, you will need to have all of relevant materials translated. This paves the way for smooth communication. Make sure you use a reputable company to do the translation job, as an unclear translation has the potential to destroy a business deal.

Engage a professional interpreter

Always have your own interpreter rather than relying on the interpreter from the Chinese side. You need to engage a professional interpreter, as just because someone is Chinese doesn’t necessarily mean they can interpret. The more you prepare the interpreter for the interpretation assignment the smoother things will be. Good preparation means providing the interpreter with your presentations and meeting agendas so that they can research any unfamiliar terms and ask you questions prior to meetings.

Understand the Chinese negotiating culture

The physical surroundings that Chinese people are born into play a big part in how they feel about negotiation. It is common in China to see open air markets and people bargaining striving to get the best deal possible. Most Chinese people feel quite comfortable about the process of negotiation as this is a normal part of their everyday life. A well-known saying in China is “Everything is negotiable

Negotiating strategies from the Art of War

Chinese culture encapsulates the practice of negotiation in The 36 Chinese Strategies, which comes from “The Art of War”. Most Chinese people know and unconsciously use these strategies to negotiate.

They are widely known and applied in the contemporary business world.  A way of thinking about the 36 Strategies is that they are like idioms such as ‘don’t cry over spilt milk.’  Just like these idioms, the 36 Chinese strategies are learnt through families, friends, and to a lesser degree, at school. Knowing the 36 Strategies is a crucial part of knowing how to understand and conduct business with Chinese people.

An example of one of the 36 Strategies: Strategy 3: ‘Murder with a Borrowed Knife’. This means: To preserve your own strength by getting others to help you achieve your goals. For example: In a business negotiation the head person will not be the one who raises questions such as ‘Can you reduce the price?’ The person who asks this will be someone with much less status. The head person is therefore preserving his/her own strength.

 By: Leonie McKeon, Managing Director, Chinese Language and Cultural Advice

Contact us at Chinese Language and Cultural Advice
www.clca.com.au
info@clca.com.au
Phone: 08 8352 6128

Chinese Language and Cultural Advice in conjunction with Chamber of Commerce and Industry of Western Australia are conducting a full-day workshop on Wednesday 8 May in Perth.

For details of the event click here.