Mkango Resources (LSE:MKA) was trading up 1.3pc to 9.5p on Monday afternoon after announcing a significant jump in the prospectivity of its flagship rare earths project.

The firm revealed that total measured and indicated resources at its Songwe Hill project in Malawi have increased by 60pc to 21MMt grading 1.41pc total rare earth oxide. The updated figure has seen the majority of the previously delineated near-surface inferred resource at the site be upgraded to either the measured or indicated categories.

Approximately 95pc of the measured and indicated mineral resource blocks are fewer than 160m below the surface of the hill at Songwe. According to Mkango, this suggests that the majority of the resource will be accessible through open-pit mining.

The new figure will underpin an ongoing feasibility study at Songwe. This, in turn, is aimed at helping Mkango towards its goal of becoming a long-term, sustainable producer of rare earth metals like neodymium, praseodymium, dysprosium and terbium.

Rare earths are used in permanent magnet motors for wind turbines and other clean technology. Most importantly, however, they are used in electric vehicle motors. As a result, they are expected to be a beneficiary of the forecast boom in EV usage in much the same way as battery metals like nickel, lithium, and copper.

The firm will now get to work on publishing a NI 43-101 technical report in relation to the resource update. This will trigger the next £7m milestone investment from Talaxis. Under the terms of an agreement, Talaxis will fully fund the Songwe feasibility study by investing £12m for a 49pc interest in the project. Talaxis will also have the option to acquire a further 26pc interest by arranging the funding of project development. If the business chooses to exercise this option, Mkango will retain a 25pc stake and will be free carried to production.

To-date, Talaxis has invested £5m, which has funded the initial phases of the Feasibility Study, for a 20pc interest in the project. Mkango holds the remaining 80pc.

William Dawes, chief executive of Mkango, said: ‘All the objectives for the 2018 drill programme have been achieved and we are very pleased to announce this increased resource at Songwe. This provides a solid platform for completion of a revised mine plan to be incorporated into the feasibility study. Based on the larger Measured and Indicated Resource, the feasibility study will evaluate opportunities to include more tonnes into the mine plan, expand operations, extend the mine life, reduce the strip ratio and therefore reduce mining costs.’

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Shares in Arc Minerals (LSE:ARCM) rose 5.4pc to 3.1p on Monday morning after the firm revealed two ‘potentially game-changing’ new targets in northwestern Zambia.

The business released the initial results of an airborne geophysical and soil sampling programme at the copper-cobalt licence owned by Zamsort. Arc holds a 66pc equity interest in Zamsort together with a convertible loan that converts into an additional c.5pc stake in the private business.

The work revealed seven new anomalies, the largest of which are Cheyeza West and Lumbeta. Cheyeza West contains a 3km-by-3km anomaly outlined by very high copper values in the soils enclosed by the wider 10km-by-8km Cheyeza anomaly. Furthermore, a co-incident electromagnetic anomaly over the core has indicated conductivity within the host rock.

Meanwhile, the Lumbeta target stretches for 11km and is associated with the crest of a fold. According to Arc, these formations can act as mineralisation traps and form high-grade deposits. Details of the six further identified targets are presented in the chart below.

Arc expects to release a more detailed update ‘shortly’ once it has assessed the results of the programme thoroughly with its external exploration consultants.

Executive chairman Nick von Schirnding said Cheyeza West and Lumbeta are close to ten times the size of Kalaba, currently Zamsort’s primary focus. Kalaba is a copper-cobalt licence covering nine of 30 high priority targets ranked by a previous JV operated by Anglo American. It is found near First Quantum’s Sentinel and Kansanshi and Barrick’s Lumwana mines.

The project has an existing near-surface estimated copper-cobalt oxide resource of 16.59Mt at 0.94pc copper and a historical exploration target of 150Mt. This makes it one of the most significant projects of its type in Zambia. With this in mind, von Schirnding added that Monday’s discoveries represent a ‘potential game changer’ for Arc.

‘The initial results from the airborne survey and soil sampling programme are extremely exciting and have exceeded all our expectations. It is clear that our licences lie in a very prospective mineral belt adjacent to Zambia's largest copper mines and we believe they have the potential to host not one but multiple large new copper deposits,’ he said. ‘We have been approached by some very large industry players and are in discussions. We continue to assess the data as it becomes available and look forward to reporting further on this shortly.’

Monday’s news comes just one week after Arc announced the imminent completion of a plant at Kalaba. In the update, the organisation said the back end of a commercial scale demonstration plant being constructed by Zamsort was ready for imminent commissioning. Initial production is scheduled shortly afterwards.

The business said the announcement followed a period of ‘excellent progress’ at Kalaba. In November, the company’s technical team completed the front end of the plant. This is made up of two crusher units, screen, a ball mill, and conveyors. This section was then commissioned in December, with an initial capacity to process 10,000ts of ore a month.

In last week’s update, Arc said the plant has a fully permitted, renewable mining licence through to 2025 and is funded through to initial production. It added that it is also in discussions with several off-takers regarding future sales.

Arc also owns a 100pc interest in Casa Mining, a private company that has a 71.25pc stake in the Akyanga gold deposit in the DRC. At the end of July last year, the business rose 12.5pc after reporting that a JORC mineral resource for Akyanga had almost doubled to 3m ounces of gold averaging 2.16 grams per tonne.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Chesterfield Resources (LSE:CHF) sat at 4.4p on Monday morning after widening its metal exploration programme in Cyprus significantly in response to strong initial drilling results.

The business is in the process of submitting applications to more than double its mineral exploration land package in the volcanic belt surrounding Cyrpus’s Troodos mountain range. The region was actively mined before the Turkish invasion in 1974. However, many brownfield sites and unexplored greenfield targets exist that Chesterfield expects to make attractive exploration targets.

The firm’s decision to expand follows an initial 3,097m drilling programme carried out on its 100pc-owned licences in the Troodos West region. These are located near the large historical Limni open pit mine.

Using archival data, reinterpreted magnetic surveys and geological mapping, Chesterfield tested numerous structures on a series of features around the mine. The work identified additional gold potential alongside the primary target of copper. It also found evidence of epithermal mineralised structures, providing the potential for deposits in two separate styles of mineralisation.

Chesterfield said most of its holes intercepted mineralisation. Highlights including 18.9m at 1.29 g/t gold, 13.18g/t silver, 0.62pc copper, and 0.49pc zinc from 45.1m and 27.93m at 0.96g/t gold from 13.2m. The business added that some prospective mineralised structures on the licences still remain largely untested by modern exploration techniques.

The expansion is also the latest stage in Chesterfield’s recent efforts to bolster its exploration capacity significantly. This began last month with the appointment of Michael Parker as chief operating officer. Parker was taken on to lead an enlarged exploration team in Cyprus. He is a geologist with over 30 years of experience in both exploration and project development and joins from First Quantum Minerals.

In Monday’s update, Chesterfield’s executive chairman Martin French highlighted that the business expects to take on several additional UK and Cypriot geologists over the coming weeks. He added that the company has also commissioned a remote sensing survey and is appraising further ground facilities in Troodos. Finally, he said the firm has been granted three new prospecting permits in Troodos North and has identified a sizeable new target south of its drill area in Troodos West.

‘We anticipate more permits to be granted in the vicinity in the near future. The Company has been prudent in its expenditure, and so remains well funded for the continuation of our drill campaign which will be focussed on making a commercial discovery this year,’ said French.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Oriole Resources (LSE:ORR) advanced 1.9pc on Thursday morning after announcing a significant rebate from HM Revenue & Customs (HMRC). The Africa-focused exploration company expects to receive around £500,000 from the UK tax office following the positive resolution of a VAT dispute last year.

In 2017, HMRC ruled that Oriole could not class the support of its overseas exploration operations as an economic activity for VAT purposes. As a result, it demanded that the business pay back all of the VAT it had reclaimed in the UK since 2011. This led to a provision of £557,000 in Oriole’s 2017 financial statements and a £593,000 payment to HMRC last June.

However, Oriole has since disputed the ruling, successfully leading HMRC to reverse its decision. It now expects a final agreement to result in repayment in the current quarter.

Chief financial officer Bob Smeeton called the outcome ‘excellent news’, adding: ‘It removes a significant area of uncertainty around our operations, and brings a substantial amount of cash back to us. It has been a long process to reach this agreement and a significant and costly distraction that we can now put behind us.’

Cameroon push

The company will put some of the additional funds towards progressing its activities in Cameroon.

Oriole entered a conditional option agreement with established Cameroonian outfit BEIG3 in June last year for its two early-stage gold exploration projects, Bibemi and Wapouzé. The assets cover the highly prospective Neoproterozoic Pan-African greenstone belts in the north-east of the country.

The two-part agreement gives Oriole the right to earn up to a 90pc interest in the projects and take over their management. For an initial 51pc stake, the firm must fund $1.56m of exploration over two years, with a minimum commitment of $560,000 in the first year. It can then earn up to a further 39pc in exchange for another $1.56m exploration payment.

The business quickly got to work at the fields following the deal, and in November results from its rock-chip sampling programme demonstrated bonanza gold grades at Bibemi. The work confirmed a significant gold anomalism extending over a c.4km strike, predominantly from quartz and quartz-tourmaline veins hosted within granodiorite. All-in-all, 16 samples returned more than 10g/t gold, and four returned more than 100g/t gold.

Meanwhile, a field team has been dispatched to Wapouzé to carry out a soil sampling programme. Following its strong initial results at the field, Oriole plans to carry out a drilling programme in Cameroon this year.

Broader portfolio

In Thursday’s update, Oriole said some of the funds would also be used to pursue other opportunities in Africa and Europe. The company has a broad portfolio of interests across both regions.

Its most advanced asset is its 85pc-owned Dalafin project in the Kédougou-Kéniéba inlier of eastern Senegal. Here, Canadian miner called IAMGOLD has the option to acquire a 51pc stake by spending $4m over four years, diluting Oriole to 41.65pc.  It can increase this by a further 19pc to 70pc through the investment of another $4m.

In October last year, IAMGOLD completed a 2,428m air core (AC) drilling programme carried out at a prospect on the Dalafin licence called Madina Bafé. This is located just 12km away from IAMGOLD’s Boto gold development project, where it recently delivered the results of a feasibility study.

The results confirmed the presence of a 1.5km gold mineralised trend in the southeast and a 400m gold anomaly in the northwest, both greater than 20 ppb. The drilling also produced higher-grade gold samples, with best results including 2.48g/t gold and 0.66g/t gold. According to Oriole, these grades could indicate the presence of a feeder zone at depth on the prospect.

IAMGOLD is now completing a 3,000m RC campaign at Madina Bafé in November, testing identified anomalies as well as strike extensions at some previous mineralised holes.  Following this, the company will carry out a 500m diamond drilling campaign to validate some of the best intersections offered by Oriole through previous drilling.

Elsewhere, Oriole owns positions in an extensive portfolio of early-stage exploration interests. It holds a 30pc stake in Thani Stratex Resources for its projects in Egypt and Djibouti and an 11.6pc holding in Tembo Gold for its project located next to Acacia Mining’s 20Moz Au Bulyanhulu mine. It also has a 7.8pc position in private Australian company Aforo Resources for projects in Burkina Faso. Finally, it owns stakes in several licences in Turkey including 14.9pc in copper-gold project Muratdere that is expected to default to a 1.2pc royalty position shortly.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for the article’s content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Thor Mining (LSE:THR) rose 8.7pc to 1.3p on Wednesday after revealing strong progress at all of its projects, an improved cash position, and a bullish outlook for tungsten price.

In an update for Q4 2018, the firm revealed that its forecast activity is entirely financed until late 2019 following the exercise of £581,000 worth of warrants last year. It also updated investors on recent activity and plans for the current quarter at its portfolio of tungsten, molybdenum, and copper projects around the world.

The end of last year saw the business appoint Argent Partners to provide corporate advice aimed at securing financing for its flagship Molyhil project.

Molyhil, which is located in the Northern Territory of Australia, is now substantially permitted and ready for construction as a result of Thor’s significant drilling and metallurgical testing work. As it stands, the site contains a probable reserve of 3.5MMts at 0.29pc tungsten (10,200ts) and 0.12pc molybdenum (4,300ts).

Last August, an updated definitive feasibility study for the site gave it an NPV(5) of A$101m, an internal rate of return of 59pc, an EBITDA of A$239m and a payback period of around 18 months. In Wednesday’s update, the firm said these enhanced figures had attracted the interest of various potential partners. It hopes to finalise an acceptable arrangement over the near term.

Over the coming quarter, Thor also plans to carry out marketing activities to lock in off-take agreements for both tungsten and molybdenum concentrates at Molyhil. It also expects to get drilling approval for the project’s nearby Bonya deposits.

A maiden resource estimate in Q4 last year gave Bonya a deposit of 230,000 tonnes containing 4,600 tonnes of copper. It is also expected to include tungsten deposits that could add to Molyhils life and scale. The company hopes to launch a drilling programme to assess this in the current quarter.

Elsewhere, Thor plans to carry out the second stage of metallurgical test work and environmental and infrastructure studies at its 100pc-owned Pilot Mountain tungsten project in Nevada. Last year saw the firm release an update to the resource estimate for the project’s Desert Scheelite deposit. This increase contained tungsten by 6.5pc and included attractive zinc levels for the first time.

Finally, the business said it plans to prepare the Kapunda copper project in Australia for field pump testing in the current quarter. This comes after it demonstrated proof of concept for in situ recovery at the site last year.

Mick Billing, executive chairman of Thor Mining, said: ‘A positive quarter with progress on all core projects, and a strengthened cash position. The appointment of corporate advisors to support and guide our efforts towards off-take & financing for Molyhil is a strategy we believe will improve our prospects of securing the best arrangement possible for our shareholders. A number of potential scenarios are possible with various interested parties, and we hope to be in a position to advise progress shortly. Additionally, the potential of nearby Bonya tenements, hosting tungsten, copper, and vanadium, provides potential upside for Molyhil, and also for other stand-alone development opportunities.’

The improvement in the Pilot Mountain resource estimate is an additional welcome boost as we advance our technical studies. Proof of Concept for ISR recovery for the Kapunda copper project is a significant critical step in this very exciting project. We will continue to provide investors with regular updates in respect of activities and progress.’

Elsewhere, the company gave a bullish outlook for price trends in its important tungsten and molybdenum markets. As at the time of the report’s release, tungsten price per mtu of Ammonium Para Tungstate were $262.50/mtu. Speaking to MiningMaven, Billing said industry dynamics indicate that prices could rise from this level:

‘China, the dominant global supplier, has withdrawn production licences from a number of producers for environmental reasons, and reports suggest that they have issued no new production licences for a couple of years. While a number of projects elsewhere are in development and hopeful producers, like Thor, are poised to commence development, it is unlikely that these new developments will meet the expected growth in demand.’

Meanwhile, molybdenum prices sat at $11.25/lb. Billing said the industry is expecting several years of supply constraints. This has led numerous potential molybdenum off-take partners to indicate a willingness to discuss fixed price purchasing agreements with Thor.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

The Hummingbird Resources (LSE:HUM) share price remained flat today as it disclosed it had hit the top end of its revised production guidance with 91,620 ounces (oz) of gold poured in 2018. Guidance had been reduced from between 105k and 115k oz to between 87k and 92k oz after the company endured a number of setbacks at its Yanfolila gold mine in the last quarter of 2018.

In October, the company announced that stability issues at the western wall of Yanfolila’s Komana East pit had required work to be suspended in several areas. Compounding the disruption, the firm also said an unusually heavy wet season had damaged a bridge on the only access road to the mining, leading to the introduction of a weight limit that restricted much of its equipment – in particular, heavy equipment that would be aid the repair of the pit wall could not pass. 

In today’s update, Hummingbird reassured investors that remedial work is progressing well at the Komana East pit wall and completion is expecting in the coming weeks. The company reports it has “resumed full capacity production in Q1 2019”. To overcome the weight limit issue regarding the public bridge, Hummingbird mobilised a military barge to transport heavy equipment and other large loads across the river. A new bridge is currently being built a Government contractor and is due to be completed at the end of Q2 2019.  

The combination of these problems and the significantly reduced guidance caused the share price to capitulate, hitting a low of 15p.  As the time of writing the stock has recovered to 24.6p, a decent move from the lows, which perhaps explains the lack of movement this morning.  maybe much of today’s positive news on rectifying the issues has been assumed already in the price, or the stock could be taking a breather after a surging 75% increase from lows. Either way, with Hummingbird upping guidance for 2019 to between 110k and 125k oz and a rising gold price, the company could well continue its flight to recovery.

After all, the stock is still substantially lower than the 40p highs it struck in late 2017 when gold was similarly priced at around $1300 per oz. With all-in sustaining costs (AISC) forecast to be $800-$850 per oz in 2019 - which include the remaining costs of the remediation work – Hummingbird already has a significant margin to the current spot price. Should the gold price go on to conquer the resistance around $1360 that held it back for much of 2018, gold stocks are going to be very rewarding indeed.

In support of its 2019 guidance range, the firm states it is on track to produce 10k oz of gold in the month of January, a great start to the New Year.

Dan Betts, CEO of Hummingbird, commented: "The Group has been through an operationally challenging quarter, but I am pleased to report that we have made significant headway on the ground in resolving the issues we faced.  January's production figures are in line with 2019's production guidance and mine plan and we are making positive progress with the construction of a second ball mill, which is due for completion in Q3 2019.  This will increase throughput and, along with our exploration campaign, the long-term value of Yanfolila. 

Over the course of Q1 we look forward to receiving the remaining drilling results from the 2018 exploration campaign and working with the team to understand how to release the expected potential of these results in our Life of Mine planning."

Author: Stuart Langelaan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Bushveld Minerals (LSE:BMN) dipped 5.3pc to 38.6p on Wednesday morning after revealing that its vanadium production fell short of expectations last year.

The firm, which has rocketed from 8.6p over the past year, produced 2.560mtV of the metal from its South Africa-based Vametco project. The metal was produced in the form of Nitrovan, Bushveld’s trademark product sold in major steel markets across the world. This figure falls short of the 2,649mtV produced by the company in 2017 as well as its previously-announced guidance range of 2,600 to 2,650.

Bushveld said production was hit by unplanned maintenance and a repairs programme at Vametco in the final quarter of the year. The lower volumes that resulted from this work also led production costs to come in 3pc higher than guidance at ZAR260.6/KgV.

Wednesday’s disappointment comes after Bushveld was forced to reduce its 2018 production guidance from a range of 2,850mtV to 3,000mtV in Q3 2018. This came after production was hit by a two-week-long period of local, unprotected industrial action and a seven day kiln shutdown due to unplanned maintenance. The resolution of these issues led the business to enjoy a 22.4pc jump in production between the third and fourth quarters of 2018. 

Despite the disappointing production figures, Bushveld investors can take some solace in the fact that the firm’s sales revenue soared 142.7pc to $192.2m in 2018. Likewise, its EBITDA rose by 349.2pc to $107.5m. These increases were underpinned by higher ferrovanadium prices, which increased by 148.9pc year-on-year to an average of $81.2/KgV in 2018. Since the beginning of 2019, however, prices of the metal have dropped to an average of $76/KgV.

To address its ongoing performance issues, Bushveld launched a detailed diagnostic review of the Vametco plant in October. This was followed by the launch of an ‘operational transformational programme’ in December that aims to enhance the site’s performance. In Wednesday’s update, the business said it expects these efforts to result in higher production over the next 12 months. Guidance for 2019 will be provided in Bushveld’s Q1 operational update, once all aspects of the transformational programme have been scheduled.

On the exploration side, Bushveld said it has completed 13 drill holes at Vametco. These are part of an initiative to increase geological confidence and grade control of the ore mined at the project. The results have provided evidence of additional resources and reserves and an updated mineral resource estimate is due in the current quarter.

Finally, the firm has now received all of the assay results for the first phase of an exploration programme at its neighbouring Brits project. These have either been above or in line with management’s expectations. The results of a second phase of drill holes are expected in the current quarter and will be followed by a maiden mineral resource estimate in Q2 2019.

Fortune Mojapelo, chief executive at Bushveld, said that while Bushveld is benefitting from high vanadium price, it recognises the importance of driving Vametco towards ‘operational excellence’ and its ‘true potential’.

‘The transformation programme we have initiated at Vametco is designed to do just that and we are confident to see an improved production performance during 2019,’ added Fortune. ‘The deposit hosts exciting potential and our drilling programmes at Vametco and Brits have been carefully designed to ensure that we extract the wealth of the minerals in our portfolio and extract them in the most cost efficient, sustainable way.

‘At the Brits deposit, the recent exploration results continue to prove the deposit as a future source of additional production tonnages. As it is an election year for South Africa, we expect continued stability and positive sentiment to allow us to focus on our operations and make long term investment decisions for the benefit of all our stakeholders, including employees, local communities and shareholders.’

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Yesterday, Jangada Mines (LSE:JAN) announced a 117% increase in the size of the company’s JORC resource at Pedra Branca. The shares have rallied, trading at 2.25p-2.4p last seen, but there is a sense the market hasn’t quite yet woken up to the significance of this news. Since last summer’s placing, the fully funded Jangada has taken substantial strides forward in advancing South America’s “largest and most advanced platinum group metals (PGM) and nickel project”. We caught up with COO Heinrich Muller to understand more about what the JORC increase means.

Starting first with the numbers and Jangada reported a 117% increase in the JORC classified ore at Pedra Branca to 78.84million tonnes (Mt). This includes 29.34Mt in the indicated category and 45.5Mt in the inferred category.

In turn, this led Minxcon Projects, the company Jangada has employed to create its Bankable Feasibility Study (BFS) for Pedra Branca, to conclude that the deposit contains 3.05 million ounces (Moz) of palladium equivalent, a 103% increase. Of this 1.24Moz is in the indicated category at a grade of 1.36grams per tonne (g/t) and 1.81Moz in the inferred category at 1.28g/t.

This all sounds great, but what does any of this mean in real terms?

Broadly speaking there are three particular areas to focus on in Jangada’s announcement. These are;

  1. The size of the estimated resource in the indicated category and what that suggests
  2. What the “palladium equivalent ounces” reveal about the quality of the project
  3. The reported grades in the context of the plan for an open pit mine at Pedra Branca

Starting first with the categorisation and this matters because it will later feed into Pedra Branca’s economic model. The crucial numbers to focus on in the short term are those in the indicated group. When it comes to calculating Pedra Branca’s bankable reserves it will be the indicated ounces that are used, so it is encouraging to see Jangada already report such strong figures. As Muller put it to us,

“The 3.05Moz figure is the piece of dough from which the cookie will eventually be cut. Not all of it will go into the final reserve model, but it is great to begin with such a large resource to work with.

The important thing is that our indicated category is almost as large as what our previous resource was. This means that the amount of material we eventually end up with in reserves will be significantly higher than what was initially anticipated based on the previous resource.

This is important because at the BFS stage, to be able to declare reserves, you need sufficient resource at sufficient confidence levels (measured and indicated categories) to prove the economic viability of the project. In our case our estimated economic modelling already looks extremely robust, so to report the gains we have is very good news.”

Moving next to the reported palladium equivalent ounces Muller explained how these were calculated and what they can tell us about Pedra Branca.

“To calculate the palladium equivalent ounces is fairly straightforward and is defined in the JORC code. We used palladium because it is the main economic driver of Pedra Branca (contributing the most ounces), and then multiplied the other elements by the pre-set modifying factor, taking into account expected recoveries.

For example, as reported in our RNS, this led us to calculate that every 1ounce of palladium was worth the equivalent of 1.834 in situ tonnes of Nickel.”

Nickel has become particularly significant for Pedra Branca, since Jangada announced the project’s maiden nickel JORC resource in December. We asked Muller to expand on this and to put into context what this means for the project:

“First look at the top table in the RNS (reproduced below) and compare the 3.05Moz palladium equivalent ounces to the 2.17Moz of PGM plus gold (AU). This shows you, from a revenue perspective, the likely future contribution of the various elements.

In broad terms, we expect PGM + AU production to account for just over two-thirds of Pedra Branca’s future revenue, with the remaining one third coming from the base metals. Since our Nickel resource dominates these we expect that this metal will account for about 30% of total project revenue, after recoveries are taken into account.

We don’t feel the market has recognised this yet, but Pedra Branca is truly a palladium and nickel play”.

Pedra Branca

Tonnes

Grade

Metal Content

Resource Classification

 

Pd Eq

Pd Eq

PGM+Au

   

Mt

g/t

Moz

Moz

Indicated

 

29.34

1.36

1.240

     0.875 

Inferred

 

45.50

1.28

1.809

     1.293 

Indicated and Inferred

74.84

1.31

3.050

     2.168

SOURCE: JANGADA MINES ANNOUNCEMENT 28 JANUARY 2019

This brings us to the reported grades at Pedra Branca. As the table above shows the palladium equivalent ounces in the indicated category are based on 1.36g/t and the inferred ounces at 1.28g/t. MiningMaven explained a little more about understanding grades in this article recently, but for Jangada the Pedra Branca grades are significant because of the company’s plans to develop an open pit mine here.

Open pit mines are generally technically less challenging than underground operations and are therefore much less expensive to develop. In November 2018 Jangada announced a 32% reduction in the cap-ex requirement for Pedra Branca $43.9m. The payback period is estimated to be within 1.6years. Now factor in the relatively good grades of the updated JORC resource (in the all-important indicated category in particular) and a very clear picture is emerging.

At 2.4p to buy, Jangada is currently valued at £5.48m. With the company having previously reported an NPV10 of $192m and IRR of 67% for Pedra Branca, a great deal of upside seems left on the table. Jangada is fully funded for its BFS and the verification phase of this is due for delivery by the end of March. Exciting times lay ahead.

Author: Ben Turney

The Author currently holds a position or positions in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

 

Kavango Resources (LSE:KAV) rose by nearly a third to 2.3p on Monday morning after announcing the imminent drilling of one of its major prospects in Botswana. The firm plans to begin work at its Ditau prospect, which forms part of the Kalahari Suture Zone (KSZ), early next month.

The KSZ is a 450km-long magnetic anomaly along which Kavango is exploring for copper, nickel, and PGE-rich sulphide orebodies at depth. The area is yet to be examined using modern drilling techniques. Mining consultant MSA Group has backed the potential presence of these deposits on the KSZ, first explored in the 1980s and 1990s. Meanwhile, Kavango has suggested that the area has a similar geological setting to the giant Norilsk copper/nickel deposits in Siberia.

Kavango’s initial 1,000m drill program is designed to intersect two coincident geophysical and geochemical base metal conductor/anomalies at the site. These are based at depths of 100m and 200m. The work will involve a combination of reverse circulation and core drilling, with conductors extending to depths of more than 600m. Kavango has signed a drilling contract with Maquana Explorations, an experienced Botswana company based at Selebi-Phikwe.

In today’s update, the firm said target anomalies extend north-south for at least 4km at Ditau. It added that they represent ‘very compelling’ geophysical anomalies that are coincident with zinc in soil anomalies at the surface. Zinc acts a pathfinder for potential base metal mineralisation at depth because it is the most mobile of the base metal elements.

Chief executive Michael Foster added: ‘We are pleased to be able to announce the start of drilling at the first of several exciting coincident geophysical and geochemical base metal anomalies that have been identified at the Ditau Prospect, which forms part of the KSZ Project. The drilling is scheduled to commence shortly and results will be announced as they become available.’

The news comes just a week after Kavango announced that it has now mobilised the second phase of an airborne electromagnetic survey over its 15 prospecting licences in the KSZ area. The airborne EM survey is the first stage in the company’s efforts to identify these sulphide orebodies. It detects and prioritises potential locations for these deposits, which Kavango can then follow up with more detailed groundwork and drilling.

Flying for the second phase of the survey is expected to begin later this month. It will take between four to six weeks to complete and will cover up to 2,062 line-kilometres in the Hukunstsi area of Botswana. On this, Foster said in Monday’s update:

‘With the success of our exploration techniques, we expect many more anomalous areas to be identified following completion of Phase 2 of the airborne electro-magnetic (AEM) survey (see announcement of 21 January 2019). These will be followed up on the ground and prioritized for drilling.’

As revealed earlier this month, Kavango has contracted the services of a leading airborne geophysical survey player called SkyTEM for its latest phase of AEM work. SkyTEM offers a ground-breaking, high-power surveying system that has been optimised to reach a depth of up to 300m below the earth’s crust.

It reaches these depths by using a high current and low base frequency of 12.5hz. According to Kavango, the technology has not been used in Africa before and is more effective than the older systems currently on the market.

Speaking to Mining Maven, Kavango’s exploration director Mike Moles said the technology will let Kavango investigate for orebodies at a deeper level and with higher resolution than it could in the first phase of its survey.

The company identified 26 conductive anomalies over 2,000 line-km of the KSZ project during this stage of work. However, the technology used did not penetrate deep enough beneath the surface. As such, Kavango was unable to tell which anomalies were low priority near-surface conductors like clays and shales and which went much deeper.

He believes the new technology will make it much easier for Kavango to differentiate between the two types of anomalies.

‘We will immediately be able to see which conductors have a depth component to them and represent high priority targets. Likewise, it will be much easier for the business to identify and ignore those surficial conductors that are very often just clays and other conductive materials that lie within the first 50-60m below the surface,’ he told us.

‘The technology we contracted in Phase One used a much higher frequency and was not getting deep enough to differentiate between the shallow and deep targets. If we had SkyTEM’s technology back in September when we launched the campaign, we could have reduced the number of conductors worth following up from 26 to about six or seven straight away. Using our new approach, we should be to turn over these conductors much more quickly in Phase Two.’

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Shares in Asiamet Resources (LSE:ARS) sat flat at 4.3p on Friday after the firm said work at its Beruang Kanan Main (BKM) copper deposit is going to plan.

The business is carrying out additional resource evaluation drilling as part of a bankable feasibility study (BFS) at the site. As it stands, 22 holes for nearly 3,000m of diamond core drilling have completed. Drilling is ongoing, with a further 1,825m planned. This is expected to be completed by five drill rigs by the end of the current quarter.

In an update, the firm said results from the first four holes confirm the continuity of mineralisation in the southern part of the BKM deposit. Moderate to strong chalcocite-covellite mineralisation was intersected just below the zone of oxidation. Some samples returned grades of up to 5.52pc copper.

A preliminary economic assessment has given BKM an NPV10 of $204m, and an internal rate of return of 39pc based on a 431.9kt contained copper resource. Asiamet plans to develop an open pit mine that will produce 25kt of copper cathode a year over eight years, with immediate expansion potential.

However, it hopes its current programme of drilling can upgrade and capture additional inferred resources at the site. If successful, it expects this to enhance BKM’s project economics and the robustness of its BFS significantly ahead of project financing. The firm plans to begin production later this year, with financing discussions underway.

In today’s update, Asiamet’s chief executive Peter Bird said initial drilling were positive and in line with expectations.

He added: ‘With operational work continuing apace we expect to be consistently reporting further results as they come to hand over the coming weeks leading into completion of the BFS. In addition to the ongoing technical programme, various work streams relating to the Environmental Impact Assessment ("AMDAL") for BKM and forestry use permits are also being progressed along with due diligence investigations and commercial discussions with potential partners on both our main projects. We look forward to providing further updates as they become available.’

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

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