What the Brokers Say
Interesting news and views from across the Resource Analyst universe.
Wolf Minerals (ASX: WLF, AIM: WLFE)
Wolf Minerals has secured finance and development of the Hemerdon Ball tungsten-tin mine is now underway.
GR Engineering Services has been awarded the fixed term, fixed price contract which should see the 3Mtpa processing plant ‘production ready’ within 24 months.
Wolf Minerals continues to make steady progress towards the redevelopment of the world class Hemerdon Ball tungsten and tin project.
The company has now secured a $212 million funding package and has engaged GR Engineering Services to commence development of a 3 million tonnes per annum processing plant, plus associated infrastructure.
The plant will be delivered as a fixed term (24 months), fixed price (£75 million) contract with first production scheduled for mid-2015.
The $139 million (£85 million) mining contract was also recently awarded to CA Blackwell who are expected to commence pre-strip and mine development by March 2014.
Hemerdon hosts a JORC resource of 401 million tonnes at 0.13 per cent tungsten and 0.02 per cent tin, placing it as the fourth largest (known) tungsten deposit in the world.
A Definitive Feasibility Study (DFS), completed in May 2011, indicated robust economics based on a 3 million tonnes per annum operation over a 9.25 year life of mine.
Production is estimated at approx. 350,000 metric tonne units (mtu) per annum of a 65 per cent tungsten concentrate and a further approx. 450tpa of tin in concentrate at C1 costs of US$105/mtu (after tin credits) versus the current APT price of US$417/mtu.
The current mining Reserves of 26.7 million tonnes at 0.19 per cent tungsten and 0.03 per cent tin are bound only by the constraints of the open pit limits as per the parameters of the granted ‘Planning Permission’.
Significant opportunity exists to extend the mine life should approval for a larger open pit be sought in due course.
Papillon Mining (ASX: PIR)
A world class asset where the gold mid-tiers play
The Fekola project’s 4.21 million ounce resource at 2.38 grams per tonne meets the American Geosciences Institute’s definition of a world class gold deposit (i.e. greater than 3.2 million ounces).
Fekola has a 10 to 12 kilometre strike length in a 25km corridor with thick mineralisation open along strike and at depth.
Papillon has 1,460 square kilometres of tenements within the Birimian gold belt in SW Mali bordering Senegal.
Whilst gold grade of around 2 to 3g/t has been discovered to date recent drill results have shown potential of 4g/t at 75 metres.
The project has ready access to water and is within proximity to established infrastructure (i.e. 50km south of the Millenium Highway with Dakar 700km to the west and Mali’s capital, Bamako, 400km to the east).
Conventional mining and processing
The Fekola project purports to be delivered cost effectively via an open pit mining and conventional gravity gold-CIL processing method.
The PFS supports production of over 300,000 ounces per annum at low C1 cash costs of US$580 per ounce (all-in sustaining costs of US$725/oz) and an initial mine life of 9 years.
Leading with relevant West African experience
Mark Connolly (CEO) has experience in building and operating an initial 100,000 ounce mine in Ghana for Adamus Resources as its CEO, and later as group COO after its sale to Endeavour Mining in November 2011.
We value Connolly’s prior West African experience given Fekola is a start-up in a relatively high risk country.
Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.