Fertiliser firm Emmerson (LSE:EML) inched up 1.7pc to 4.5p on Monday morning after signing an initial agreement with Morocco’s leading gas distributor for its Khemisset potash project in the country.

The business has signed a memorandum of understanding with Afriquia Gaz to work towards a long-term supply agreement for gas to the project. As part of this, the firms have agreed to look at the best method of supplying gas to Khemisset and the most appropriate source of gas. This will involve looking at existing infrastructure, producing, and proposed gas fields in Morocco as well as pipeline or regular truck delivery.

Emmerson believes a deal with Afriquia, which currently delivers significant quantities of Liquified Petroleum gas to numerous major industrial consumers across Morocco, can help to enhance Khemisset’s economics. In particular, the organisation said it would look at whether it could act as a cornerstone Afriquia customer as the latter continues to expand its pipeline distribution business. Emmerson believes this could allow for a cheaper long-term gas price with an equally low-cost capital solution.

A recent scoping study for the project confirmed that it has the potential to be among the lowest capital cost, highest margin potash projects in the world.  Forecast economics include EBITDA margins of more than 60pc and a post-tax NPV10 of over US$1.1bn based on industry expert price forecasts.

Emmerson has recently been identifying numerous ways of improving project economics before the project enters the feasibility stage. This has seen it determine new mine-to-port logistics, complete an environmental baseline study, and begin metallurgical testing. Most recently, it signed heads of agreement with an as-yet-unnamed global fertiliser for the offtake of 100pc of the production from Khemisset. The initial deal, which exceeded even Emmerson’s expectations, prompted a spike in the company’s share price.

On Monday, the business’s chief executive Hayden Locke said energy is a ‘major operating cost’ for Khemisset, meaning that even a slight improvement can enhance project economics significantly.

‘We believe that our energy needs will be supplied via low capital cost solutions at competitive long-term operational prices, further supporting Emmerson's potential to become one of the World's lowest cost and highest margin potash producer,’ he added. ‘Strong in-country partners will be fundamental to underpinning the capital and operating costs of our upcoming Feasibility Study, and this MoU demonstrates the willingness of leading companies in Morocco to work with Emmerson. The comprehensive metallurgical test work programme is progressing well in addition to ongoing discussions with potential strategic partners.  I look forward to continuing to update shareholders with details of our progress as we advance towards the publication of the Feasibility Study.’

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

On Monday, MetalNRG (NEX:MNRG) and Mkango Resources (LSE:MKA) announced they have entered into a non-binding heads of terms agreement regarding the Thambani Exclusive Prospecting Licence in Malawi. The deal would give MetalNRG the chance to earn up to a 75pc interest in the Thambani uranium licence by spending up to $2m on exploration over a period of three years.

The exploration campaign would be split into three tranches or ‘workplans’, each 12 months long. During the initial workplan, MetalNRG must spend $500k on exploration at Thambani which will include 1.500 metres of drilling. On completion, MetalNRG will earn a 25% interest in the uranium assets and operations. During the second workplan, MetalNRG could advance its interest in the project to 49pc following an additional investment of $700k on further development of the exploration area.  Finally, the third workplan would entitle MetalNRG to a 75pc economic interest in the project subject to a further spend of $800k.

In the first half of 2017, Mkango carried out sampling at Thambani which is located in southern Malawi. Assay results returned high-grade uranium, tantalum and niobium values and new areas of mineralisation were identified. 

Commenting on the news, Rolf Gerritsen CEO of MetalNRG said:

"The Heads of Terms Agreement entered into with Mkango enables us to position the Company as a focused uranium play with an exciting exploration opportunity in Thambani. The combination of the Thambani project along with our, close to production, uranium project in the Kyrgyz Republic will put MetalNRG in a strong position in the London market."

Alexander Lemon, President of Mkango Resources, said: "This transaction is another milestone for Mkango and for Malawi, and is further endorsement of the Company's strategy and potential. With MetalNRG funding the Thambani uranium project and the previously announced transaction with Talaxis funding Mkango's Songwe Hill rare earths project, Mkango shareholders can look forward to an exciting year of news flow and progress in two of the market's most strategic commodities at present. We are pleased to be working with MetalNRG, and look forward to a new drilling program being carried out at Thambani."

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

 

Canadian cobalt developer Global Energy Metals (TSX-V:GEMC) revealed that it has made a payment that will allow it to begin exploration work at its two projects near Tesla’s Gigafactory in Nevada on Thursday. The firm, which has announced plans to co-list in London, said it made a payment to the Bureau of Land Management for the required reclamation bond fee to begin drilling at the sites, which are called Lovelock and Treasure Box.

The properties are located in Churchill County, around 150km east of Tesla’s major battery factory in Sparks. Lovelock covers around 1,400 acres and is said to have produced 500ts of cobalt and nickel mineralisation between 1883 and 1890 when it was last in operation. Global Energy believes exploration work and modern drilling techniques could unlock a large amount of potential value at the site.

Treasure Box, meanwhile, is adjacent to Lovelock and hosts mine workings from limited copper production, which occurred until early into the 20th century. A historical diamond drill hole at the asset reportedly intersected 1.52pc copper over 85ft, with mineralisation beginning at surface.

Global Energy’s chief executive Mitchell Smith said completing the bond payment would enable the business to move forward with a staged exploration programme at Lovelock. He added that this will allow for further definition of the character, size, and potential of the nickel-cobalt-copper system at the asset.

‘We are excited about this initial phase of exploration and are very optimistic that this strategically located asset will significantly further the growth of our company,’ said Smith.

The company said its exploration program will be informed by ground induced polarisation surveys that defined areas of anomalous subsurface chargeability. This work has generated a number of drill-ready targets. The business is now reviewing work program options and anticipated announcing details of the first-phase exploration in the ‘near future’.

Earlier this month, Global Energy raised $813,500 in an oversubscribed placing at $0.05 a share to support the funding of the programme. Meanwhile, it announced in March that it had made its first option payment towards acquiring an 85pc stake in both sites. To do this, it issued 384,627 of its shares to the projects’ current owner Nevada Sunrise and paid $20,000 to the underlying vendor.

Global Energy focuses on offering security of supply of cobalt, which is a critical material in the rapidly growing rechargeable battery market. It is building a diversified global portfolio of assets in the sector, including project stakes, projects and other supply sources.

The business’s flagship asset is the Millennium Project in the world-renowned Mt. Isa region of Queensland, Australia. It executed the final agreements to take a 100pc interest in the project in November. Millennium is a multi-zone, near-surface cobalt-copper sulphide system with several kilometres of potential strike length. It is located near established mining, transport, and processing infrastructure and offers easy access to a very skilled workforce.

The growth-stage site contains a defined zone of cobalt-copper mineralisation.  Here, a 2016 JORC Resource estimate identified 3.1MMts of inferred resources containing 0.14pc cobalt and 0.34pc copper with gold credits. Global Energy is now looking at ways to increase the size of its deposit. Results from a first phase exploration campaign at two zones called Millennium North and Millennium South exceeded grade and thickness expectations. The firm will now carry out a second phase of drilling to examine both areas further.

Alongside Millennium, Global Energy has acquired two further discovery sites called Mt. Dorothy and Cobalt Ridge.  These are collectively known as the ‘Mt. Isa projects’. The areas expand Global Energy’s Australian land position by nearly twenty times but have yet to be exploited. Exploration to date has returned high-grade cobalt intercepts at both, allowing Global Energy to line up numerous targets for further investigation and test work to define a resource.

Finally, the business currently owns 70pc of the Werner Lake cobalt mine in Ontario Canada. It joint venture partner Marquee Resources is enjoying much success in its ongoing exploration campaign at the asset.

Author: Daniel Flynn

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

Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has 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

Sirius Minerals (LSE:SXX) bounced 4.2pc to 21.9p on Thursday morning after securing a major European distribution deal for its flagship fertiliser.

The company has signed a ten-year supply and distribution agreement with agribusiness BayWa Agri Supply & Trade (BAST) for the sale of its POLY4 polyhalite product into Europe. BAST is a subsidiary of listed German entity BayWa AG, which distributes more than 30MMts of agricultural goods across Europe every year. This includes the sale of approximately 2MMtpa worth of fertiliser.

The deal provides for the exclusive distribution of guaranteed minimum tonnes of POLY4 across most of Europe for a 10-year term. This will begin from the first production from Sirius’s Woodsmith Mine in North Yorkshire and includes two five-year extension options. According to Sirius, Woodsmith contains the world’s largest and highest-grade deposit of polyhalite, a unique multi-nutrient fertiliser that can be used to increase balanced fertilisation around the globe.

The guaranteed minimum volumes of POLY4 for sale under the agreement increases to 2.5Mtpa in year five. This takes Sirius’s aggregate peak contracted sales volume to 10.7Mtpa. The deal also allows Sirius to elect for BAST to purchase and distribute additional quantities above the guaranteed amounts, allowing the organisation to shift uncontracted capacity if needed. However, BAST would receive a more significant share of obtained pricing if this option was exercised.

The pricing mechanism in the agreement is linked to the downstream pricing received by BAST on the sale of POLY4 in Europe. Indeed, the price received by Sirius under the deal is determined by the amount received by BAST with reference to benchmark prices and the nature of BAST’s customer.

According to Sirius, this approach incentivises BAST to sell POLY4 further down the value chain and optimise the best FOB netback price. The firm said the deal also gives it greater exposure to pricing in the downstream market and expects to deliver it the highest rates across its current supply agreement portfolio.

Finally, Wednesday’s agreement provides for the establishment of a joint venture vehicle for the management of sales and marketing of POLY4 into Europe.

Chris Fraser, managing director and chief executive of Sirius, said: ‘The European fertiliser market is highly advanced and the second largest in the world behind China. We are delighted to be partnering with a leading agribusiness to distribute our POLY4 product into this key market. Our exclusive partnership with BAST will enable us to reach downstream customers through the groups' well-established and extensive logistics network and long-term, trusted relationships with farmers. Our exclusive partnership is structured to enable us to achieve maximum value for our POLY4 product.’

Meanwhile, BAST chief executive Daan Vriens added: ‘We are excited to be partnering with Sirius to bring a high performing, multi-nutrient fertiliser like POLY4 to customers across Europe through Cefetra. We believe in long term partnerships and we feel confident that this will be a successful new endeavour. POLY4 fits with our sustainability and farmer services strategies across our markets. This will provide farmers, via our extensive networks, a fertiliser product that promotes sustainable agricultural practice in our home market, Europe.’

Author: Daniel Flynn

Valuethemarkets.com and Dynamic Investor Relations Ltd are not responsible for the content or accuracy of this article.  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.

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

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

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Metals Exploration (LSE:MTL) sank by more than a fifth to 0.84p on Wednesday morning after revealing that funding constraints have prevented progress at its flagship gold project in the Philippines. In its update for Q1 2019, the business said that although it has been unable to begin key maintenance programmes at the Runruno project, it has placed orders to undertake mobile equipment rebuilds in Q2 2019.

The organisation revealed that it has also encountered problems on the processing side at Runruno, with both overall plant availability and gold recoveries coming in well below original feasibility studies. Indeed, gold recoveries averaged 66pc over the three months against the feasibility forecast of 90pc. As a result, total poured gold was below budget at 14,892ozs. Meanwhile, average mine gold grades came in at 1.54g/t against a budget of 1.70g/t. Metals Exploration said it expects this deficit to continue and – as such - has accounted for it in its internal forecasts to ensure plant feed grades and forward production can be budgeted more accurately moving forward.

Runruno is found 200 miles north of Manila in a mineral-rich province called Nueva Viscaya. In 2010, a feasibility study confirmed the project’s viability, projecting average production of 96,700oz gold p.a over a mine life of 10.4 years at an average forecast operating cost $477/oz gold before molybdenum credits.  Work to date has defined a resource of 1.42Moz gold, and 25.6Mlb of molybdenum with 900,000oz gold in the measured and indicated categories and 780,000oz in the proven & probable reserve category.

On Wednesday, Metals Exploration added that maintenance issues were also a key detractor on production throughputs. The company said more than two weeks were lost at the hands of ruptures in Runruno’s tailings pipeline and low water availability. It has now identified critical areas in its pipeline for immediate repair or rotation and has arranged for access to alternative suitable process water sources.

Elsewhere, the business revealed that it sold 15,293oz of gold over the quarter at an average realised gold price of $1,309/oz. This left it with cash in the bank of $3.34m as of 31 March. The group added that discussions with its lenders are ongoing to restructure its overall debt position, with a standstill from making principal and interest payments remaining in place until 2 May.

Finally, the business highlighted the numerous changes made to its board over the period. Notably, this saw it appoint Darren Bowden as chief executive and executive director on 3 January. The outfit also appointed Guy Walker as interim chairman and Mike Langoulant as interim chief financial officer, as well as adding new managers in its processing plant division.

Author: Daniel Flynn

The Author does not hold a 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.

 

Since listing in London last July, Kavango Resources (LSE:KV) has been making progress in its quest to locate magmatic, massive sulphide orebodies in Botswana. In particular, the company is focused on a 450km-long magnetic anomaly called the Kalahari Suture Zone (KSZ), where it hopes to discover deposits of copper, nickel, and platinum group elements. In this piece, Kavango co-founder and seasoned geologist Mike Moles explains how the magmatic sulphide orebodies Kavango is searching for are formed, what they could contain, and how they can be developed into a marketable product.

Until Kavango started work on the KSZ, the mineral potential of the area had not been investigated using modern exploration techniques. Kavango believes that the KSZ represents a similar geological setting to the giant Norilsk copper/nickel/PGE deposits in Siberia. The firm has now begun an initial 1,000m drill program at its nearby Ditau prospect.  Meanwhile, the company is continuing to line up further drilling targets through the combination of an extensive airborne EM survey and a pioneering, high-resolution soil sampling technique that detects ultra-fine metal particles.

What are magmatic sulphide orebodies?

Magmatic ore deposits are formed in association with the intrusion of mafic/ultra-mafic magma into (or sometimes on top of) the rocks forming the earth’s crust. This magma contains more dark minerals like olivine and pyroxene than light-coloured minerals like silica-rich feldspars and quartz.

Examples of mafic/ultra-mafic rock include gabbro, peridotite and dunite. Most of the minerals making up these rocks are still silicates but they tend to contain relatively higher proportions of base and precious metals in their crystal lattices than felsic minerals. The diagram below shows this dynamic in action. When these metals are concentrated at high enough grades and in large enough quantities to be economically mined, they are called ‘magmatic ore deposits’.

 

This diagram shows examples of both mafic and felsic rocks (Credit: W.W. Norton & Company)

It is worth noting that magmatic ore deposits are not the same as volcanogenic massive sulphide (VMS) deposits. These are formed from the interaction of seawater with submarine volcanism. The extrusive volcanism represents a ‘heat engine’ that drives the hydrothermal alteration of both the lavas and the country rock. The metals that are ‘dissolved’ by the alteration then combine with sulphur in the seawater. This leads to the deposition of metal sulfide deposits on the seafloor or within the country rocks.

How are they formed?

Mafic/ultra-mafic magma is the product of the partial melting of ultra-mafic rock and sub-ducted crust. The magmas rise into the solid crust partly due to thermal convection (hot spots), partly due to the melting of sediments containing water, and partly due to density, temperature & pressure differentials.

In some cases, the magmas intrude into areas of structural weakness like deep-seated faults or ancient craton edges or suture zones. Here, the magma can reside for varying periods in what are known as ‘magma chambers’ where it interacts with the enclosing rock.

During this period, the magma may partly crystalize and alter the chemical composition of the residual magma. Further pressure from below may then force this ‘evolved’ magma into shallower depths.  In some cases, it may eventually reach the surface, where rapid decompression may result in the extrusion of lava (e.g. basalt). Extrusive lavas cool rapidly, but the magma in the magma chambers may take several million years to cool and crystalize to form solid rock. 

Following this, the concentration of the critical ‘ore’ minerals occurs through a number of different primary and secondary processes.

Primary concentrations

The mafic/ultra-mafic magmas vary in chemical composition depending upon their source rocks and the degree of partial melting that occurred during their formation. The molten magma may end up containing quantities of sulphur and water.

As the magma in the magma chamber begins to cool it starts to crystalise, with some minerals crystalising before others. This changes the chemical composition of the residual magma, leading it to be enriched in certain elements through a process known as ‘fractional crystallisation’.

The chemistry of the residual magma may also be changed by the incorporation of volumes of ‘country’ rock from the walls of the chamber. It is particularly advantageous for the magma to incorporate volumes of coal or coal shale that contains both sulphur and carbon. This appears to be the case with the gabbros on Kavango’s KSZ project. If the residual magma becomes enriched with sulphur, most of the metals will prefer to bond with the sulphur rather than form oxides or take up sites within the silicate lattices. The metal sulphide liquid is late to crystallize and forms an ‘immiscible’ liquid, which is heavy relative to the recently formed silicate minerals. This metal-rich sulphide liquid tends to crystallize on the cool walls of the intrusion or gravitates to the floor where it forms a concentrate - the massive sulphide. 

Concentration and crystallization of this immiscible liquid can also occur at other localities due to a sudden drop in pressure or introduction of new magma into the chamber. This type of mineral concentration is usually dependent upon large quantities of magma passing through the magma chamber, constantly enriching the residual magma in metal sulphide liquid.

A variation of this model occurs in very large mafic/ultra-mafic (layered) intrusive bodies such as Bushveldt, Duluth, and Stillwater. These are closed or partly-closed systems where magma replenishment is less important. In these bodies, sulphur is also less important. After the first phase of crystallization, the residual liquid becomes enriched in certain elements. This may lead to the crystallization of another mineral species until the residual liquid becomes depleted in the elements needed for that phase. This leads to cyclical fractionation producing alternation layers of mineral species. At some point in this very slow process, bands of chromite might form as the concentration of chrome in the residual melt combines with oxygen in the system. As the silicate crystals form, gaps occur between them. These gaps may be filled with the immiscible sulphide liquid, which is rich in copper, nickel and PGEs. In some cases, these sulphide-rich layers are rich enough to be economic.

Another variation are Komatiites, which seem to be restricted to very ancient ‘Archean’ terrains formed at a time when there was no free oxygen in the air. They are essentially ultra-mafic lavas that once flowed over the surface of the earth and were enriched in sulphur.  As the lavas cooled, the metals combined with the sulphur and the resulting immiscible liquid sank to the paleo-surface, where it accumulated in depressions and hollows forming sulphide concentrations. An example of this is Kambalda.

A magnetic image of the Kalahari Suture Zone, where Kavango is searching for massive sulphide orebodies 

Secondary concentrations

Secondary concentrations occur at some point in time after the intrusive has solidified (crystallised). The majority of these deposits are formed by hydrothermal alteration. Essentially, this is the activity of very hot water (or brines) circulating through the intrusive and concentrating the metals further, either within the intrusive itself or transported some distance away, where the precipitation of the minerals is favourable.  These secondary deposits come in the form of re-crystallised sulphides or as oxides/carbonates and can be very high grade.

What do they look like?

On the surface, weathered massive or disseminated sulphide orebodies will form ‘gossan’. These are generally rusty coloured rocks with a rough, crinkly texture. Gossans can be very high grade, although metallurgically these metal oxide ores can be difficult to process. Massive sulphide ore is generally very heavy, formed of a mass of shiny suphide crystals, and will smell of suphur when hit with a hammer. Disseminated sulphide ore will have large numbers of shiny sulphide crystals within a matrix of the host rock (usually gabbro or altered mafic rock).

An example of the various layers of a sulphide mineral vein, with gossan at the top (Credit: Bastian Asmus, Archaeometallurgy) 

How are they found?

The metal particles within the sulphide crystals are too small to find with the naked eye in streams or soils.

Most of the oldest mines are sited where outcrops of gossan were discovered. Typically, the gossans were assayed for metal values. When these proved to be positive, drilling was conducted beneath the gossans to identify sulphide mineralisation below the level of oxidation. Usually, the oxides were not mined, due to the difficulty of extracting the metal.

Although there have been some discoveries in very remote areas in recent times by finding the gossans, most exploration for magmatic sulphide ore bodies is now conducted by remote sensing for hidden orebodies.

Before starting the search, geologists will select areas where a discovery is likely. These will be in areas where mafic/ultra-mafic intrusives are known to occur. Preferably this will be in association with a major structural fault along which intrusives from below the crust can migrate. 

Soil sampling can identify metals coming to surface, whilst geophysical techniques can identify massive sulphide bodies at depth by testing the electro-magnetic signals of the ground being explored. This can be done by airborne EM surveys, which can cover hundreds of kms of survey per day and will typically identify conductors to 200 - 300m depth.

EM conductors identified from the airborne surveys are then followed up by ground-based geophysical techniques to identify drilling targets. Depths to targets can be calculated and drilling can be conducted to investigate the anomalies. 

How are they extracted? 

Once a metal sulphide deposit has been identified, drilled out and a resource calculated; a feasibility study will be carried out to determine whether it can be mined economically. It will be decided how the deposit is to be mined; open cast or underground mining.

During the mining operation, only the ore of a certain grade will be processed. The ore will then be crushed and milled to liberate the sulphides from the host rock (gangue). The resulting product will then undergo floatation which will separate the sulphides from the guague. The sulphides are then smelted to burn off the sulphur (usually captured), leaving a metal matte, which is then sent to a refinery where the economic metals are separated and extracted. The product is either sold at the matte stage or as a metallic product after refining.

Author: Mike Moles

Mike is the co-founder of Kavango Resources (LSE:KAV), where he is currently a non-executive director and responsible for exploration strategy in Botswana. He has 30 years of experience in mineral exploration in southern Africa and has formerly held senior roles at Delta Gold, Reunion Mining, and Lonmin.

The share price of Hummingbird Resources (LSE:HUM) fell 17pc to 16.75p on Tuesday after the company released production figures for the first quarter of 2019.  Gold poured from the Yanfolila mine in the quarter totaled, 23,807 ounces, an increase on the previous two quarters, while ore mined was slightly under the quarterly average over the past 12 months. What appears to have upset the market is the large increase in costs.  Problems in both the Komana East and West pits required remediation work and restricted access. The additional expenditure required ramped up the All-In Sustaining Costs (AISC) to $1,297 per ounce of gold extracted. This is the second successive quarter whereby the AISC has been higher than the average price received for gold sold. However, the costs were markedly lower in Q1 2019 than the previous quarter when the AISC peaked at $1,677 per ounce.

Another factor weighing on the share price is that the artisanal mining depletion in the Komana West pit is deeper and more extensive than Hummingbird previously estimated in the reserve model. However, in Tuesday’s update, the firm stated that as they progress deeper into the pits ‘the impact of this is expected to reduce significantly in the near term’.

Despite these issues, Hummingbird says it maintains its production guidance of 110,000 to 125,000 ounces of gold for 2019.  The company goes on to warn that the AISC for the year may exceed the previous estimates of $800 to $850 per ounce.

On a more positive front, the construction of a second ball mill at Yanfolila is progressing to plan, with the installation team due to arrive on site during April. Once operational, the second ball mill will increase throughput capacity from 1Mtpa to 1.24Mtpa.

Dan Betts, CEO of Hummingbird, commented: 

"The period under review has seen the Company resume mining to plan, following a period of remediation work on the pit wall, with a quarter on quarter increase in production of 33%.  In the period, production was impacted by ore depletion from the Komana West pit from historical artisanal workings, which was greater than forecast in the reserve model.  We are taking immediate steps to reverse the impact of this dilution through working closely with the mine contractor and as we progress deeper in the pits the impact of this is expected to reduce significantly in the near term as we access areas of expected higher-grade ore." 

"We look forward to receiving the updated reserve/resources report in Q2, which will allow us to publish a new Life of Mine plan for Yanfolila.  It is also pleasing to note the strong progress we have made on the second ball mill project and we look forward to the positive impact that will bring to our process plant capacity once completed."

Author: Stuart Langelaan

The Author holds a 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.

On Tuesday, Thor Mining (LSE:THR) announced it has started drilling at the Bonya tungsten deposits near Molyhil in Australia. Thor holds a 40pc interest in the deposit via a joint venture with ASX-listed Arafura Resources (ASX:ARU).

The programme will consist of 2,500 metres of Reverse Circulation (RC) drilling of a number of targets including Samarkand, Jericho, White Violet, and Tashkent deposits. Drilling is expected to take around two weeks and Thor expects to update on progress shortly, as well as updating on preliminary on-site XRF analysis. Each of the deposits has outcropping tungsten at surface, and the The Jericho deposit, in particular, has been mined historically, with a surface stockpile estimated at several hundred tonnes of scheelite ore at surface adjacent the deposit. In addition to Tungsten, there are also deposits of copper and vanadium at Bonya.

30km west of Bonya is the 100pc owned Molyhil tungsten project which Thor is developing towards commercial production. The firm completed an updated Definitive Feasibility Study for the project back in August and is now focused on securing project finance to bring Molyhil into production.

Mick Billing, Executive Chairman, commented: "We are very hopeful of positive results from our first drilling and costeaning program on the Bonya tungsten deposits."

"The 13 outcropping tungsten deposits at Bonya, several of which have historical mine workings, have the potential to add considerably to the life, scale, and economic outcomes of the Company's flagship Molyhil project nearby."

"We hope to be able to provide regular updates of progress, including provisional XRF analysis, during the program."

"Despite the licence area being part of a known tungsten "province", it has had no tungsten drilling since the 1970's, and we are very excited at the commencement of this program, and the potential it brings.

Earlier this month, Mick Billing spoke with MiningMaven to discuss Bonya and Thor Mining’s other assets including Kapunda and the more recently acquired Pilbara Goldfields and Hammersley Metals. You can listen to the interview below.

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, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

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. 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 share price of Atalaya Mining (LSE: ATYM) was flat on Monday after the firm released an update regarding its operations in the first quarter of this year. In the announcement, Atalaya reiterated its copper production guidance at 45,000-46,500 tonnes for 2019, with production up 8pc compared with the same period last year. However, copper output decreased 9pc quarter-on-quarter, although it’s worth noting Q4 2018 was a record quarter and production for Q1 2019 is still in line with expectations.

The company is looking to ramp up production up to 55,000 tonnes of copper in 2020 as it expands its plant at Proyecto Riotinto to process 15 Million tonnes per annum (Mtpa). The company reports the expansion project has ‘progressed materially’ in the first quarter and expects mechanical completion by the end of Q2 2019. The firm has two ongoing drilling programmes at Proyecto Riotinto underway. The first is targeting massive sulphides and stockwork mineralisation under the Atalaya pit, while lateral extenstions of massive sulphides and stockwork are being drilled at Filon Sur.

Meanwhile, at Proyecto Touro - a copper project in Spain – feedback regarding environmental impact studies has been received from the relevant authorities. Atalaya has an earn-in agreement to own up to 80pc of the Proyecto Touro project.

Alberto Lavandeira, CEO commented: "During the first quarter of 2019 our operations at the Riotinto mine continued to deliver strong operating results. Simultaneously the construction activities for the modernisation and expansion of the plant are expected to meet our self-imposed tight schedule of mechanical completion by the end of the second quarter. Based on the excellent expertise of the teams on site we are confident that the project will be concluded on time and on budget and that we will achieve our full year production guidance."

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.

Emmerson (LSE:EML) jumped 11.3pc to 4.3p on Monday after announcing an offtake agreement for 100pc of the potash produced at its flagship Khemisset project. The firm revealed that it has signed a heads of agreement for up to 800,000 metric tonnes of K60 muriate of potash a year over an initial five years.

Although it has not named the party with whom the deal has been made, Emmerson said the business is a leading global fertiliser trading, distribution and marketing company. In particular, it noted the partner has a significant footprint in the Brazilian market, as well as a presence in Africa and North Western Europe. These are areas where Khemisset has a strong transport and logistics advantage thanks to being based in Morocco.

The two organisations have agreed a binding exclusivity period until 30 September to negotiate commercial terms for a binding supply and off-take agreement.

Emmerson added that the deal underpins Khemisset’s ‘forecast industry-leading operating margins’ and reinforced its ‘status as a world-class potash project’ ahead of talks with potential debt-financing partners. A scoping study at Khemisset forecast EBITDA margins of more than 60pc and a post-tax NPV10 of over US$1.1bn, based on industry expert price forecasts.

Emmerson’s chief executive Hayden Locke added that Monday’s announcement represented an ‘important step’ for the business:

‘We believe potash produced in Morocco will be in significant demand for a number of important consuming markets, and this Heads of Agreement reinforces that belief. Our partner's footprint in the fast growing Brazilian and more mature North West European markets makes them an ideal partner for Emmerson as we focus on those markets where we would have a strong transport and logistics advantage.

‘The benefit of location has been clearly demonstrated in our Scoping Study and we continue to expect Khemisset to be among the highest margin potash projects in the world, generating outstanding returns for our shareholders.  Strong sales and marketing partners will be fundamental to supporting our eventual discussions with financing partners and we believe our sales partner will provide significant confidence to all potential lending syndicates for the Project.’

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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