Condor Gold (LSE:CNR) bounced 7.2pc to 23.6p on Tuesday morning after revealing that it has started permitting for two feeder pits at its La India project in Nicaragua. The gold exploration and development business said America and Mestiza could increase open pit production at the asset by 50pc to 120,000oz of gold p.a. for seven years.

The pits have, in aggregate, 206,000ts containing 66,0000oz gold in the indicated category and 152,000oz contained gold in the inferred category. They are located between 2-4km from the location of the processing plant for the La India open pit. This has now been permitted with a processing capacity of 2,800ts a day.

In Tuesday’s update, the firm said it has received the terms of reference to produce an environmental impact assessment for the pit from the Ministry of Environment and Natural Resources (MARENA). This supports the granting of an environmental permit for the development and extraction of contained gold at both sites. The granting comes after MARENA, together with the Ministry of Energy and Mines and Ministry of Forestry, has conducted a site visit inspection of the proposed layout of the pits, waste dumps, and infrastructure.

Tuesday’s development comes after several weeks after Condor announced an updated mineral resource estimate for La India, where it owns a 100pc position. This gave the project a mineral resource estimate of 9.85Mts at 3.6g/t gold for 1.14MMoz gold in the indicated and 8.48Mts at 4.3 g/t gold for 1.179oz in the inferred category.

On Tuesday, Condor said that permitting additional high-grade open pit material at America and Mestiza would help to boost these figures and extend La India’s annual production or its life of mine.

Condor chairman and chief executive officer, Mark Child, added: ‘Permitting the high grade Mestiza and America satellite feeder pits has the potential to increase annual production from open pit material by 50% to 120,000 oz gold p.a. for a seven year life of mine. The feeder pits have in aggregate 206 thousand tonnes ("Kt") at a grade of 9.9 g/t (66,000 oz contained metal) in the Indicated category and 1,018Kt at 4.6 g/t (152,000 oz contained gold in the Inferred category).

‘The feeder pits complement the main, fully permitted La India open pit, which has a robust, economically viable Pre-Feasibility Study ("PFS") with Mineral Reserves of 6.9 million tonnes ("M tonnes" or "Mt") at 3.0 g/t for 675,000 oz gold, which demonstrates annual production of 79,300 oz gold and lower quartile all-in-sustaining cash costs ("AISC") of US$690 per oz gold. The higher grade feeder pits have the potential to materially enhance the Project economics.’

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

 

 

Emmerson (LSE:EML) soared 16.1pc to 3.6p on Monday morning after announcing that it could significantly cut the capex requirements of its Khemisset potash project by using a different port.

The business said it could save $7.5m on the capex costs previously announced in a scoping study for its Morocco-based asset by using storage and loading facilities at the Port of Casablanca. It has previously been looking at using the Port of Mohammedia for the export of potash created at Khemisset.

The change in port would result in a slight increase in transport distance for the product, given the potential use of rail rather than trucks for the majority of the journey. Transport can often be a particularly expensive stage in the creation and delivery of potash due to the produc’s bulk and heaviness.

However, in Monday’s update, Emmerson said indicative mine-to-port logistics cost quotes from the Moroccan National Rail Company show no change in operating costs from Khemisset’s scoping study.

The business added that using Casablanca, a significantly larger port with a more significant draft capacity, would allow the loading of a broader range of vessel sizes. This has the potential to reduce overall bulk shipping costs to target markets like Brazil, it added.

Elsewhere, the company said it remains in discussions with numerous Moroccan entities, included the port authorities. It is looking at further opportunities to improve Khemisset’s economics ahead of upcoming feasibility studies.

The scoping study for Khemisset 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’s chief executive Hayden Locke said it was ‘pleasing’ to see progress in the firm’s efforts to cut costs at Khemisset.

‘The Port of Casablanca is one of the largest and most modern in Africa and, consequently, it has outstanding infrastructure already in place. Discussions with the Port Authority suggest that we may be able to benefit from this; potentially reducing our capital costs further and having a net positive impact on our overall transport and logistics costs delivered to our target markets, including Brazil.

‘This is a positive development and it will form a key part of our analysis for the Feasibility Study. We are rapidly progressing Khemisset and look forward to keeping shareholders updated as we identify further areas of improvement for the Project during 2019."

Towards the end of last month, the firm hired Don Larmour of Global Potash Solutions to advise on metallurgy and processing at the asset as well as acting as a consultant for the feasibility study. Larmour has already conducted a detailed review of the Khemisset scoping study as part of his hiring process. Through this, he identified opportunities for the simplification and optimisation of the project’s design. Emmerson believes these have the potential to reduce capital and operating costs. He also suggested potential changes to Khemisset’s brine management strategy and identified several areas of focus for the next, more detailed design phase to further de-risk 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

In an announcement Thursday, Oriole Resources (LSE:ORR) disclosed that IAMGOLD is about to restart exploration at the Dalafin gold project in Senegal. IAMGOLD is progressing into the second year of its earn-in to the project with a budget of $1m.

Oriole currently owns an 85pc interest in Dalafin and the firm has provided IAMGOLD with an option to earn-in to an initial 51pc interest with a $4m spend over four years progressing the project. IAMGOLD can further extend its interest to 70pc with an additional $4m spend over the following two years. 

The exploration programme will continue to focus on Madina Bafé and will include 5,000m of regional aircore (AC) drilling, to extend the previous 2018 campaign and 4,000m reverse circulation (RC) drilling to follow-up on the best results from last years drilling. Then focus will turn to the Saroudia prospect situated 2km away with 2,500m regional AC drilling and RC drilling will follow at the best locations. Oriole expects results will be available towards the end of the second quarter or early in Q3 this year.

The Dalafin Licence

 

The Dalafin licence is located in the Birimian-age Kédougou-Kenieba gold belt that extends from eastern Senegal into western Mali and has already seen multiple major gold discoveries including Randgold Resources’ Massawa deposit which is estimated to  contain 3.4 million ounces of gold. four main geochemical targets, Faré, Baytilaye, Saroudia, and Madina Bafé, have been identified to date.

Oriole Resources CEO, Tim Livesey, said: "We are delighted to announce that IAMGOLD has committed to its year two earn-in on the Dalafin licence following an initial successful drilling programme last year.

The exploration programme outlined will continue to build on the exciting results already delivered at the Madina Bafé prospect with additional drilling planned for the Saroudia prospect to the North-West. 

Our partnership with IAMGOLD at Dalafin has already contributed significantly to the increasing value of Oriole's wider portfolio, and we look forward to updating the market on this stage of the drilling programme later on in the year."

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

Cora Gold (LSE:CORA) released drilling results from its Sanankoro gold discovery on Tuesday. The company said drill results from the Zone A prospect showed ‘good correlation to historical drilling’. Sanankoro is Cora’s flagship project and is situated in the Yanfolila Gold Belt in Southern Mali. The firm believes the project has the potential for a standalone mine development and is in the process of determining the location of higher grade areas with the current drilling campaign. Cora reports that this first set of drilling results suggests a continuation of broad zones of shallow high-grade mineralisation across the Zone A prospect. All holes ended in oxidised material to depths of around 90 metres. The drill results (shown below) include a number of higher-grade areas with top examples of 8m at 3.17g/t Au from 69m and 26m at 2.60 g/t Au from 71m.

Drill Results recorded across Zone A Prospect, including results from Cora’s 2018 drill campaign

Dr Jonathan Forster, Cora's CEO commented:

"These initial results from our latest drill programme are particularly encouraging. The results reported from the Zone A prospect vindicate our strategy of focusing on oxide deposit areas that have the potential to become higher grade starter pits for a future development opportunity.  The continuity of the widths, grades and near surface location of the gold mineralisation is potentially indicative of a zone that is in the 'sweet spot' with potential for future economic extraction; in particular given the very deep weathering that has resulted in oxidation to depths of 90m or more." 

In October, Cora announced that SRK Consulting had determined an initial Exploration Target of between 30 and 50 million tonnes of gold ore at a grade of between 1.0 and 1.3 g/t Au at Sanankoro. The company believe there is the potential to delineate 1-2 million ounces of gold to a depth of 100m. Last month the firm appointed Wardell Armstrong International (WAI) as independent consultants to undertake a preliminary metallurgical test work programme at Sanankoro in order to assess the amenability for cyanide leach extraction of gold from oxide mineralization at the discovery. A core hole has now been drilled to provide a composite oxide metallurgical sample for the metallurgical test work programme.

Cora is expected to announce drilling results from its nearby Selin prospect over the coming weeks

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

 

Prairie Mining (LSE:PDZ) declined 7.1pc to 19.5p on Tuesday morning after announcing a six-month extension to discussions around a potential deal on its Polish coal projects. Prairie and major coal miner Jastrzębska Spółka Węglowa (JSW) have signed an agreement to extend the terms of a non-disclosure agreement (NDA) related to a potential co-operation arrangement until 28 September 2019.

The possible link-up was first announced last March and saw Prairie give JSW access to information on its hard coking coal project under the Debiensko-1 concession and its Jan Karski project in the Lublin Coal Basin. JSW has since been conducting an assessment of the feasibility and economics offered by both projects.

This has now completed and has confirmed that Jan Karski’s Lublin deposit contains semi-soft coking coal that it can potentially utilise. JSW’s work has also shown the technical feasibility and potential synergies of accessing initial seams at the Dębieńsko deposit.  This would employ existing infrastructure at JSW's adjacent Knurów-Szczygłowice mine and potentially enable the production of hard coking coal within 18 months of permits being granted.

In Tuesday’s update, Prairie said the NDA has been extended for the ‘purposes of continuing discussions’. It added that the firms would discuss a potential deal structure and commercial terms for any co-operation or transaction. They will also look at developing the existing mine plans for both projects to fit in with JSW’s plans.

Jan Karski is a large scale semi-soft coking coal project located in the Lublin Coal Basin in south-east Poland. It is situated adjacent to the Bogdanka coal mine, which has been in commercial production since 1982 and is the lowest cost hard coal producer in Europe. According to Prairie, Jan Karski has the potential to produce a high-value ultra-low ash semi-soft coking coal with a coking coal product split of up to 75pc. Meanwhile, the Debiensko nine is a hard-coking coal project located in the Upper Silesian Coal Basin in the south west of Poland.

Prairie shot up to more than 30p last August after Polish media reported that JSW’s president had told a press conference that Dębieńsko and Jan Karski mines had met its coal quality expectations. Prairie attempted to downplay the speculation, stating:

‘Commercial discussions continue to be at a preliminary stage and that even if they move onto discussions of specific transactions terms there can be no certainty as to whether any transaction(s) will be agreed or the potential form of such transaction(s). The Company expects further exchange of information will continue with JSW.’

The firm added that any transaction will be subject to conditions like obtaining positive evaluations and expert opinions, necessary corporate approvals, consents and approvals related to funding. It also said it may also have to get consent from Poland’s competition authority and meet any other requirements that may relate to the strategy, objectives and regulatory regimes applicable to the respective issuers. These terms were once again referred to in Tuesday’s update.

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

Kavango Resources (LSE:KAV) was trading down slightly at 3.2p on Monday morning after launching a £500,000 placing to accelerate its exploration work in Botswana. The firm placed c.17.9m shares at 2.8p each, a premium to the 2.5p it raised at when it entered the London market last July.

Kavango holds 15 prospecting licences covering 9,231km2 of ground in Botswana, including most of the 450km long Kalahari Suture Zone (KSZ) magnetic anomaly in the southwest of the country. Here, the business is exploring for copper, nickel, and platinum group element-rich sulphide orebodies. The area is yet to be examined using modern drilling techniques. However, Kavango argues that it has a similar geological setting to the giant Norilsk copper/nickel deposits in Siberia.

In Monday’s update, chief executive Michael Foster said the proceeds from the placing will allow Kavango to accelerate its exploration programme on the KSZ.

At the end of January, the business announced that it plans to begin an initial 1,000m drill programme at its Ditau project on the anomaly this month. This is designed to intersect two ‘very compelling’ coincident geophysical and geochemical base metal conductor/anomalies.

Elsewhere, the firm has mobilised the second phase of an airborne electromagnetic survey over its 15 prospecting licences in the KSZ. The airborne EM survey is the first stage in the company’s efforts to identify 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 take between four to six weeks to complete and will cover up to 2,062 line-kilometres in the Hukunstsi area of Botswana.

On Monday, Foster said: ‘Our current exploration programme in Botswana is on track, with both the airborne electromagnetic (AEM) survey (see RNS dated 21 January 2019) and the drilling at Ditau, which forms part of the KSZ project (see RNS dated 28 January 2019) progressing according to plan. Further information is expected to be available shortly on both these programmes which the Company will of course relay to the market at that time’.

Finally, he added that the placing funds will also allow Kavango to review other ‘highly selective but potentially very interesting natural resource opportunities in Botswana.’

It is also worth noting that each placed share also has a warrant attached. This is exercisable at 12p from the earlier of the date falling one year after the time of admission or the date of the publication of a prospectus until 31 July 2020.

What’s more, if exercised, the warrant gives the holder the right to an additional half-warrant exercisable at 24p before 31 July 2022. This ambitious target will likely send out a positive message to investors regarding management’s belief in where Kavango could be heading over the medium term.

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

Horizonte Minerals (LSE:HZM) said ‘multiple value drivers’ will provide an exciting year ahead for shareholders in an update on Thursday. The nickel-focused firm is currently developing two projects in Brazil, the Araguaia Ferronickel Project and a nickel-cobalt project called Vermelho.

Horizonte released a feasibility study for the Araguaia Project back in October last year. Based on an average nickel price of $14k per tonne, the company forecasts Araguaia could generate free cash flow of up to $1.6bn over an initial 28-year mine life.  Last month, Horizonte received the construction license permitting it to construct a rotary kiln electric furnace processing plant and all associated infrastructure.

Meanwhile, a pre-feasibility study is underway at the Vermelho nickel-cobalt project which the company acquired in 2018. The previous owner, Vale previously completed a feasibility study on the project which was originally scheduled for construction in 2006. What made Vermelho so attractive to Horizonte is its proximity to Araguaia. The two projects are 100pc owned by the company and combined offer a potential nickel production of 40-50k tonnes annually.  Operations are underway to demonstrate the economic viability of the project which will then feed into the pre-feasibility study.

Jeremy Martin, Chief Executive of Horizonte said: “In January 2019, following completion of the FS, the Company was awarded the Construction Licence for the project, which subject to funding, allows development to commence on the RKEF process plant and associated infrastructure.”

In the wake of the recent tragedy in Brazil Martin added:

“It is important to note that Araguaia does not produce tailings and does not have a tailings dam so is not affected by the recent ban on new upstream tailings dams in Brazil.”

The company is very bullish on the nickel market highlighting that inventories on the London Metal Exchange are at their lowest level for five years. Horizonte cites increasing demand from the stainless-steel market as well as the electric vehicle battery sector for the buoyant demand. At the time of writing the nickel spot price is around $12,800 per tonne. Many of the larger banks, including UBS and Morgan Stanley are predicting a price hike for nickel over the next few years, forecasting prices in the region of $16,500-$17,600 per tonne in 2021.

Martin commented: "Work recently commenced on the PFS for our Vermelho nickel cobalt project. Snowden Mining Industry Consultants have been contracted to produce the mining schedules and act as overall study manager, in addition the Simulus Group based in Perth will provide detailed design information and costings for the Vermelho process flow sheet and together with our local Brazilian engineering partners, will deliver associated infrastructure to the project. In parallel we have our teams working on the environmental and social permitting, and new terms of reference have been submitted to SEMAS, the Brazilian Pará State Environmental Agency to advance Vermelho's Environmental Impact Assessment.

"Horizonte holds two Tier 1 assets in terms of size and grade; the development-ready Araguaia ferronickel project and the Vermelho nickel-cobalt project. Our portfolio is therefore well placed at a time when demand in stainless steel and electric vehicle markets is increasing and outstripping new nickel supply coming online.

"2019 is set to be an exciting year for the Company with multiple value drivers for shareholders all set against a positive back drop of the broader nickel market and growing Brazilian economy." 

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

 

 

Thursday saw Arc Minerals (LSE:ARCM) announce the sale of one of its non-core assets to help support the accelerated development of its Zamsort copper-cobalt project. The resources firm sat at 3.1p after offloading its 18.5pc position in Andiamo Exploration for $250,000. The sale to a private business called Emerald will close next Monday.

Executive chairman Nick von Schirnding said the proceeds would go towards the company’s current exploration programme at Zamsort. Arc owns a 66pc equity interest in Zamsort, together with a convertible loan that converts into an additional 5pc position.

The firm is planning to accelerate its drilling of Cheyeza West and Lumbeta- two large new targets identified at Zamsort earlier this month. Lumbeta stretches for 11km and is associated with the crest of a fold. Arc has previously said that these hinge points in a folded environment could act as mineralisation traps and form high-grade deposits.

Cheyeza West, meanwhile, is a core 3km by 3km anomaly outlined by very high copper values in the soils enclosed by the wider 10km x 8km anomaly. The prospect is roughly ten times the size of Kalaba, currently Arc’s most developed prospect at Zamsort. With this in mind, Arc has previously described the candidate as a potential game-changer that has exceeded all of its expectations.

Alongside the proceeds from the sale of its stake in Andiamo, Arc carried out a private £2.2m placement over the weekend at 3p a share to support the accelerated drilling at the two prospects. This was supported heavily by the organisation’s board and two large family offices. Elsewhere, Arc is continuing to complete an 11,000m diamond and reverse circulation drilling programme at Kalaba as well as completing a commercial-scale demonstration plant.

In Thursday’s update, von Schirnding said the sale of Andiamo represents a ‘step forward’ in Arc’s plans to sell off its non-core assets. ‘We are also progressing discussions with a number of interested third parties in respect of our other non-core assets,’ he added. These assets include the business’s wholly-owned Šturec project in Slovakia, which hosts the 1.3Moz AuEq  PFS stage Ṧturec Gold Project.

Elsewhere on Thursday, Arc announced that Zaco Investments has now acquired a 464.69km2 area of Zamsort Mining that it is not being prioritised or developed in the near-term. The sale, first announced in Arc’s December results, has arisen to allow the business to comply with Zambian mining regulations.

Arc is Zaco’s largest shareholder with a 42.5pc interest, and von Schirnding has been appointed the vehicle’s chairman. Arc said the company is now evaluating a range of options including bringing in a joint venture partner to develop the license area.

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

 

MiningMaven recently caught up with Eurasia Mining’s (LSE:EUA) chairman Christian Schaffalitzky to discuss the Russia-focused exploration firm’s plans following a busy news period.

Last month saw the business announce that preparatory work, including tree felling, had begun ahead of this year’s production at its West Kytlim mine in Russia’s Urals region. This is expected in April once the seasonal thaw sets in.

Meanwhile, the company is also continuing to make progress at its 80pc-owned Monchetundra project in the Kola Peninsula, where first palladium, platinum, and gold production is targeted in 2021. The business received a mining licence for the project in December 2018, and can now look to advance the project through construction.

Read on for more details on Schaffalitzky’s plans at its principal assets over the coming year as well as his views on the platinum market and Russia as an operational jurisdiction:

MiningMaven: Can you give us an overview of your plans at West Kytlim now that operations have re-started?

Christian Schaffalitzky: We are waiting for the ice to melt so we can start the washing process. If things go well, we could begin to produce in April. It depends on when the thaw kicks in because we need running water to wash the gravel.

The preparatory work required ahead of mining is relatively straightforward. First of all, the site contains ‘pay gravels’ that contain ore. We can start working on clearing forest and non-ore from above these gravels because we have identified where the platinum-bearing gravels are. Forest is removed, overburden is stripped back, and this is work that can be undertaken in winter and early spring. So that’s the immediate work plan.

We are actually mining sediments that are in an active river system. So, once the river is flowing, we redirect it for the section on which we are working and also the terraces on the side of the river, from earlier river systems. Those terraces are also platinum bearing, giving us several generations of sand and gravel that are potentially platinum-bearing. That is what we are looking for when we are exploring.

MM: Did the company deliver its production targets last year?

CS: We did, yes. We had an informal target of around 100kgs of platinum, and we produced 165kgs. So, we were delighted with our performance in spite of difficult conditions in the platinum market, where prices remained very weak as gold and palladium roared ahead.

MM: On that note, do you think platinum prices are basing and are ready to move up shortly?

CS: There seems to be a perception in the market that there is an excess of platinum globally, which is pushing prices down. This is because the metal is used primarily in catalytic converters in diesel engines, which are expected to suffer declining demand over the coming years.

Personally, I don’t buy into the idea that this dynamic is this simple. At current prices, around 80pc of the platinum mines in the world – or at least in South Africa – are operating below breakeven. They cannot keep working on negative income. You also have to remember that many of the underground mines in South Africa are old and, as such, are not mechanised. This could ultimately cause them to close, which would also throw up serious geopolitical concerns as they employ thousands of people who cannot be fired overnight. New mines are coming, of course, but as these older mines close, it will be a big problem for supply.

MM: So, with South Africa’s potential issues in mind, is the area of Russia you are based in prolific for mineralisation?

CS: Yes. If we focus on the Urals, it is famous for platinum. In fact, it was the first place in the world where platinum was discovered and then worked commercially. The Russians discovered significant platinum nuggets at the beginning of the 19th Century, and work has been going on since. Over this period, 16Mozs of the metal has been worked, so it really is prolific.

There are both small-scale and large-scale platinum mining operations in the river system. What you do not find in the Urals are hard rock platinum mines, which are present in South Africa. In other words, in the current environment, the only economic platinum that we see in the Urals is as alluvial deposits like our West Kytlim Project, which are also very low cost operations, relative to the South African mines.

At Monchetundra the focus is on Palladium as our identified ore bodies are at least 2:1 Pd:Pt. There are several other licences adjacent to our current permit and further afield, which we are reviewing. We believe Kola can be a really hot area on the global PGM map in years to come.

MM: Moving away from the Urals, what can you tell us about developments at the Monchetundra project?

There are a lot of elements in place at Monchetundra and a lot of things that we are currently doing. It is a complicated, big project, that very well may be a company maker for us. To recap, we have now completed a Russian style feasibility study to apply for a mining licence. This has now been granted and covers c.2Moz of palladium-rich mineralisation with platinum and gold as well as copper and nickel.

We now have to have the mine development approved by the government, and also by ourselves. In other words, we need to get the engineers at work now, to put together the actual construction of the mine, and to make the planned detailed engineering for the mine.

As part of this, we signed a contract back in 2016 with Sinosteel, a large Chinese engineering group to do an Engineering, Procurement, and Construction contract. They did an estimate at the time that said it would cost about $178m to construct the mine in roughly two years. They estimated that it could produce 130,000oz of palladium mineralisation per annum.

To do the project, they would finance 85pc of the $178 million, and they would carry that loan on their books until the plant was fully operational, or commissioned and handed over. And then it goes on to Eurasia's books. The remaining 15pc, which is roughly $24 million, is our bill- our equity contribution to the development of the mine.

However, at the same time, there is a cashback element to the project whereby Sinosteel sub-contract to us to do specific preparatory work. All that part of the work is subcontracted back to Eurasia.  So, what this means is that we have to come up with $24m now, but we get $50m back, we believe less than what it costs to do the work. We've pretty much estimated that this will actually generate positive cashflow for our development.

MM: Excellent, so can you give shareholders any indication of when more information will be available?

CS: Right now, we are preparing the plans for all of this work and are making sure we have the licensing schedule organised with the government, and so on. There is a lot of paperwork involved in all of the aspects of the deal, and it does take time. We have to do it right, and we are a small company, relatively speaking, and this is a massive project, so we have to get it right. We will be providing further information to the shareholders in stages over the coming months with an update due soon.

Interview by Stuart Langelaan

The interviewer 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.

On Wednesday, Harvest Minerals (LSE:HMI) said Brazilian Energy company CEMIG had connected its natural fertiliser project to the electricity grid. Approval from CEMIG was received on 18th February following final testing at the project.

The low-cost mine, called Arapua is located in the heart of the Brazilian agriculture belt and has an indicated and inferred resource of 13.07Mt at 3.1pc potassium oxide and 2.49pc phosphorus pentoxide. At forecast levels of output for the company’s KPFértil product, the resource already provides 29 years of production based on drilling a mere 6.7pc of known mineralization to date. 

Last year in preparation for connection to the grid, Harvest installed a 600KW power substation and two transformers. Up until now the plant and other onsite facilities were powered by Diesel generators.  Replacing these generators with power from the national grid will reduce costs at the project. The project is already considered low cost with an 80% margin and a market for the product on its doorstep, reducing transportation costs. As an example, the local coffee industry alone represents a potential market for KPFértil of over 3Mtpa within 300km of the project.

Harvest advises that the current installed capacity for electricity supply exceeds the maximum current demand by 15% and can easily be upgraded to 2,500kW, allowing for future demand.

Harvest's Executive Chairman, Brian McMaster, said, "The plant upgrade and expansion we installed last year is working well and by switching from diesel to grid power we will be able to continue to control costs and maintain our position as one of the lowest cost producers in the world."

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

 

  1. Arc Minerals to accelerate activities at Zamsort with cash injection (ARCM)
  2. African Battery Metals returns to trading as investors approve restructure plans (ABM)
  3. Strategic Minerals reveals promising copper assays at Leigh Creek (SML)
  4. Centamin enjoys boost after revealing expanded Côte d'Ivoire resource base (CEY)
  5. Strategic Minerals rises as resource upgrade puts Cornwall tin-tungsten project on the map (SML)
  6. Kodal Minerals releases strong lithium assays as it gears up for Bougouni resource update (KOD)
  7. Alba Mineral Resources gears up for further drilling in Ireland and Greenland (ALBA)
  8. SolGold ‘surprised and disappointed’ by Cornerstone’s bid rejection (SOLG)
  9. Oriole Resources reports ‘positive drilling results’ from Dalafin gold project (ORR)
  10. Mkango announces 60pc jump in Songwe resources (MKA)
  11. Arc Minerals jumps as Zamsort surveys reveal two ‘game-changing’ targets (ARCM)
  12. Chesterfield to scale up Cyprus exploration ground by more than double, as drilling results shine (CHF)
  13. Oriole Resources says tax rebate will boost Cameroon exploration activity (ORR)
  14. Thor Mining rises as cash position improves and tungsten projects advance (THR)
  15. Hummingbird Resources ramps up production again after difficult last quarter (HUM)
  16. Revenues soar but disappointing vanadium output sees Bushveld Minerals fall (BMN)
  17. “Pedra Branca is truly a palladium and nickel play”; Jangada Mines’ COO Heinrich Muller on the 117pc JORC upgrade (JAN)
  18. Kavango soars as it reveals Ditau drilling date (KAV)
  19. Asiamet reports steady progress at BKM as it prepares bankable feasibility study (ARS)
  20. MetalNRG unveils mining licence at uranium option project in Kyrgyzstan (MNRG)