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Tagged with: Reports

Jan 2010 - Gryphon Minerals

Gryphon Minerals Limited (GRY) –Moving its Banfora Gold Project in Burkina Faso towards a Scoping Study and BFS during 2010.

  • Gryphon Minerals’ (GRY’s) current main focus is on its Banfora Gold project in Burkina Faso. GRY has reviewed prospects in and adjacent to Burkina Faso with a view to keeping GRY as a West African gold company, while possibly undertaking an IPO of its WA gold and nickel projects
  • Burkina Faso is a stable West African country located north and adjacent to the Ivory Coast and Ghana. Its current government has enhanced its infrastructure, inflation is negligible, roads are good and radiate from the capital of Ougadougou, while traffic is significantly less congested than Dakar in Senegal. There is a main railway link to Abdijan in the Ivory Coast, and the main crops are cotton and rice.
  • GRY’s ~35km x 35km Banfora Gold Project is located in SW Burkina Faso on the Tongon/Senoufo greenstone belt (one of the many major greenstone belts that pass N/S through the country), above the river border with the Ivory Coast.
  • It is an area that contains a number of significant gold mines, such as Randgold’s 4 to 5 moz Tongon mine (in the Ivory Coast) on strike to the south, Resolute’s Syama (5moz mined, 6.5moz resource) to the NW (on strike from Perseus and Etruscan). Further NW is Anglogold/Randgold’s Morila (>5moz).
  • GRY have already established a >1moz resource to a depth of ~100m, mostly at Nogbele and are currently infilling/upgrading the resource targeting towards 2moz or higher with a view to completing a scoping study that leads into a BFS during 2010. Additional resource progress is being made at nearby Fourkoura, although there are historic artisanal gold workings in a number of areas of the property.
  • While there are a number of historic and new artisanal workings (following the drill rigs / exploration progress), the artisanal workers have moved on and the old workings bulldozed (partly due to reducing the spread of malaria). However, it could be seen that the artisans were mostly focusing solely on the near surface gold-in-quartz mineralisation, under the laterite cover down ~7m to 10m to the water table, and usually missing the halo alteration.

Feb 2010 - Catalpa Resources

Catalpa Resources Limited (CAH) –Cracow could achieve >100,000ozpa for ~10yrs as a Significant Asset for Catalpa

  • Catalpa’s merger with Lion has resulted in a far simpler share structure and a 30% holding in the Cracow gold mine in QLD. Cracow appears to have a market perception of only being a 3 to 5 year life mine at ~100,000ozpa. However, that vastly underestimates its potential with exploration alone having added at least the 100,000ozpa mined for the past 5 years, maintaining resources ~1moz at ~8g/t.
  • The Cracow plant has already gradually crept up to 42,000tpm (500,000tpa) following the replacement of the secondary crusher and some cyclones. With possible further modifications, production ~550,000tpa may be achievable.
  • The original NCM target at Cracow was a deep porphyry copper (and it is still a target), but the mine switched its focus to the historic higher grade veins following the successes at the nearby Pajingo mine, and since then has made a number of discoveries, including the recent apparently higher grade Phoenix ore shoot.
  • The size of the ore shoots at Cracow has been significant, typically ~300m to 400m long by 150m to 250m high as in Crown at 680,000oz, with Sovereign and Kilkenny both initially at 200,000oz. The intersection of Phoenix in the decline infers that it also could be ~300m to 350m long. Royal was high at ~350m for its ~500,000oz.
  • Construction of the plant at Edna May, appeared to be well ahead of schedule, and looks impressive considering it is the second hand Big Bell plant. Its only sign of age being some of the belt idlers. The pit was also taking shape, looking neat.
  • CAH has already had two unexpected “wins” at Edna May, being the ~30,000t soft backfill in the previous open-cut available to dry commission the plant at 0.8g/t to 1.0g/t, and the original hard rock bund wall (around the edge of the open-cut) available to wet commission the plant at >1g/t. The plan was to use lower grade (ideally <0.8g/t) to wet commission, but this ore is readily available at little cost.

Apr 2010 - Vantage Goldfields

Vantage Goldfields Limited (VGO) –Increasing Production to ~50,000ozpa

  • In April/May 2010, Vantage Goldfields Ltd (VGO) expects to raise A$30m in an IPO (led by Shaw Corporate) for its wholly owned subsidiary, Eastern Goldfields SA, resulting in 224m shares on issue at a nominal price of A$0.40c for a market cap of A$89m.
  • VGO’s main assets are all in the Barberton region of Eastern South Africa, and comprise of the operating Lily underground gold mine (that is undergoing a mill expansion to ~400,000tpa), recommissioning the Barbrook mine and plant complex, and exploration over ~165sq km of the Barberton Greenstone belt (including the old Worcester gold mine).
  • The Barberton Greenstone Belt is comparable to the typical greenstone gold mine deposits of WA, yet it has not been subjected to standard Australian geological exploration techniques. For example, although it supported ~350 mines in its heyday and produced >10moz, no one has ever flown aeromag there, which is 101 basic geology in Australia. VGO intends to fly helicopter aeromag in JQ 2010.
  • VGO initially mined Lily as an open-cut at ~2.2g/t and ~10,000ozpa for ~5 years, before declining underground in June 2007 and switching to full underground production in January 2009. Recognising the need to upgrade the plant, Barbrook was acquired providing greater production potential to ~50,000ozpa.
  • VGO had intended to expand earlier, but were caught in the GFC limiting the ability to raise finance, until now. During that period VGO undertook studies and examined the capability of bringing Barbrook back into production, while exploration found depth extensions to the old Worcester gold mine (NW of Barberton, on a classic NW/SE structure).
  • There appears to be significant upside potential for VGO in the Barberton Greenstone Belt of South Africa.

May 2010 - Mundo Minerals

Mundo Minerals Limited (MUN) – Aiming to Increase Production to 100,000ozpa by 2012/13

  • Mundo Minerals Ltd (MUN) currently has two operating gold mines in South America, being Engenho near Belo Horizonte in SE Brazil and Torrecillas near Chala in Southern Peru. There are also two advanced exploration properties in Brazil being Jacqueira and Tocantins in northern and central Brazil respectively.
  • Engenho has settled down to produce ~25,000ozpa from its ~22,000tpm plant based on recovered underground grades ~ 3g/t from its namesake Engenho orebody, and has established 3 other orebodies which it intends to bring into production, being Crista, Olhos and Mazoca, stepping up to ~50,000ozpa.
  • The Engenho plant capacity is being almost doubled through adding a duplicate ball mill and two tanks, for treating the higher grade ~ 4g/t to 5g/t apparently simpler Crista mineralisation, initially as an open-cut in late 2010 and later underground. The current plan is to bring in Olhos as Crista goes underground.
  • Torrecillas has increased production to ~8,000oz to 9,000ozpa from toll treatment of its namesake Torrecillas underground mine’s vein being ~ 12,000tpa at ~20g/t. Two other veins (5th November and Torrechico) are under evaluation to establish their strike lengths and average grades, for completion of a BFS and possible plant construction near Chala, which may be delayed by cashflows to ~2012.
  • Depending on lode thicknesses, strike length continuity and better ground conditions than the Torrecillas orebody, Torrecillas’ production could gradually increase to 30,000ozpa and later 50,000ozpa with a conceptual eventual target of 100,000ozpa. When combined with Engenho, this takes MUN’s potential production up to >100,000ozpa by 2012/2013.
  • MUN is also progressing with exploration at Jacqueira to establish a minimum specified resource during 2010, while also making progress at Ampar in its Tocantins tenements.

Jun 2010 - Kingsgate Cons

Kingsgate Consolidated Limited (KCN) –Receiving renewed BOI incentives for the new Chatree North Plant, paves the way to a very profitable future Kingsgate

  • Kingsgate should score a double-premium for having no RSPT payments (because its operations are not in Australia) and receiving the BOI investment incentives (the same as before : 8 yrs’ tax-free, then 5 yrs at 15% tax, as Thailand moves ahead in encouraging mining investment). Receipt of the BOI, means that production from the second train of the Chatree plant could occur during SQ2011.
  • KCN’s Chatree gold mine in Thailand was a hive of activity in April 2010, initially aiming to increase gold production by ~50% to >200,000ozpa, and then using satellites and underground to reach ~300,000ozpa. Kingsgate is still exploring for possible stand-alone operations; following up epithermals that it has identified; and using its extensive database to find orebodies in other parts of Thailand.
  • Chatree was examining increasing the mine’s life by : deepening the pits using US$950/oz or US$1150/oz pit shells (compared to the existing US$750/oz pit shell of June 2009), extending Chatree on strike NNW or SSE, and delineating higher grade epithermal lodes that can be economically mined underground.
  • KCN intends to capitalise on its perception as an established, proven developing Asian gold producer while it leads the emerging mid-tier Australian listed gold producers into the A$1bn to A$2bn market cap category (following the takeover of Lihir by Newcrest).
  • The Thailand IPO float of 51% of Chatree under Akara Mining Ltd (the preference shares are redeemed for common stock in one movement) is expected to occur during DQ2010/MQ2011, and could raise ~A$400m to A$500m (being ~50% of Kingsgate’s current market cap, plus some capital for ~50% of the mill expansion plus ~50% of the exploration). (It should be noted that Akara may receive an Asian trading multiple and have a higher market cap than Kingsgate).
  • Kingsgate effectively retains mine management control with regional and near mine exploration under KCN’s Issara Mining (exploration) company. KCN/Akara’s Chatree controls an area of ~7kmN x 5kmE including the Chatree mine and MLs, while KCN’s Issara has the rest of the SPLs and SPLAs . Should Issara make a discovery, Akara Mining has first right of refusal in acquiring it for Chatree.

Sep 2001 - Kingsgate Cons

Kingsgate Consolidated NL (KCN) - On Target for its First Gold Bar in November

  • Kingsgate’s Chatree mine in Thailand is well known and after some time attaining all the regulatory requirements, it is now expected to produce its first gold bar by the end of November 2001, following a construction period of almost one year.
  • KCN shows a very high sensitivity to Chatree’s gold grades. In our opinion, we believe that there are a number of reasons to suggest that gold grades should be at least 10% higher than expected. If such higher grades are achieved, then at current long-term gold prices of US$270/oz and an A$ exchange rate of US$0.50, the 5%real NPV of the project increases from A$0.87 to A$1.43.
  • KCN is in the very fortunate position that it does not pay tax for the first 8 years following its first gold pour, and then has a further 5 years after that at half-tax rates or 15%, under an agreement with the Royal Thai Board of Investment.

Dec 2001 - Elkedra Diamonds

Elkedra Diamonds NL (IPO Raising $3.5m) – Targeting Kimberlite Pipes in the NT using classic diamond formation models – SPECULATIVE BUY at 25c

  • Elkedra Diamonds NL is offering 14m shares at 25c by way of an underwritten IPO. Over-subscriptions of a further 6m shares could increase the total amount raised to $5m.
  • Due to Elkedra’s relationship with its current parent Metex (MEE), MEE shareholders are to receive a preferential offer of the minimum parcel of 10,000 shares each ($2,500). Up to 2m shares are accessible by MEE shareholders.
  • Funds raised through the IPO are to be spent drilling 31 high priority magnetic anomalies that have been identified on Elkedra’s tenements in the Altjawarra Craton in the Northern Territory. Drilling is expected to start by April 2002. These anomalies were identified from a 400m spacing aero-magnetic survey, completed by the NT Dept. of Mines and Energy, and released in March 2000.
  • The recent release of the detailed aero-mag data, (made available free), dramatically altered the economics of undertaking exploration in this potentially very prospective region. Previously, exploration was regarded as extremely difficult for explorers without GPS to know exactly where they were, due to few roads in apparently a virtually featureless landscape. As a result most of the areas have largely been un-tenemented since 1989.
  • Following the release of the aero-mag data and using theoretical models developed over several years by Elkedra’s management, the company pegged some 48,000 km2 of ground focusing on the nucleus of the Altjawarra Craton. Less than 24 hours before Elkedra submitted its applications, De Beers Australia had pegged 4 tenement blocks within the outer boundary of Elkedra’s target area.
  • This region has long been of interest to the diamond “majors,” with RIO and Stockdale (DeBeers) having held exploration licences over the area in the early 1970s to late 1980s. To date, some ten micro-diamonds and 1 macro-diamond have been reported on Elkedra’s leases, as well as numerous diamond indicators such as deep-sourced chromites and several picro-ilmenites. So far, most of the work focused on the fringes of the target area.
  • Recent work by Elkedra has indicated that at least five of the magnetic anomalies have coincident geomorphic crater-like appearances, with one hosting a micro-diamond and others hosting diamond indicator minerals.

Dec 2001 - Independence Gold

Independence Gold NL (IPO Raising $3.5m) – Has significant upside potential from the rights to WMC’s Southstar database – SPECULATIVE BUY at 20c

  • Independence Gold NL (IGO) is offering 17.5m shares at 20c by way of an IPO. Over-subscriptions of a further 2.5m shares could increase the total amount raised to $4m. Within 3 months of successful listing, all shareholders receive 1 option (details to be announced post listing) – for - every 2 shares held.
  • IGO has an associated relationship with Ranger Minerals (RGS) who provided the initial seed capital of just over A$1m for which it received 15m ordinary shares in IGO (which with the 1m contribs is expected to be 28.8% of the total shares issued of 55.6m).
  • IGO has 5 joint ventures covering a suite of metals namely gold, PGE’s and base metals, of which the most advanced are the gold projects. The JVs are Chesterfield, Goldsearch, Randles Find, Southstar, and Dolphin.

Feb 2002 - Aquarius Platinum

Aquarius Platinum Ltd (AQP) – A Buying Opportunity based on potentially significant profit growth

  • The share price of AQP has drifted sideways up to about 900c for most of the past year since January 2001, despite a number of very positive fundamental improvements amidst ongoing uncertainty over Russian deliveries impacting on the pge prices, especially platinum.
  • During 2001, AQP increased the holding in its main operation (Kroondal) from 45% to 95%, and In mid-2001 upgraded the Kroondal mill by 50% by installing a regrind circuit, with production attaining that higher level before December 2001. The regrind circuit also expected recoveries to improve by about 10%. •
  • The increased holding in Kroondal was made using a placement and some Rand-denominated loans (about R629m) which with the 50% fall in the Rand against the A$ and US$ during 2001 reduced the loan by approximately one-third, from US$79m to US$52m. Operational costs have similarly fallen with the rand’s value, enhancing profitability too.
  • Marikana has started construction, and could be in production by very late 2002, while the more profitable Everest South is still in feasibility study.

Apr 2002 - Gympie Gold

Gympie Gold Ltd (GYM) – Undergoing a Dramatic Transformation

  • Gympie Gold Limited is a gold and coal company that is undergoing a dramatic transformation, resulting in increased gold and coal production, higher profitability and growth in earnings for its shareholders.
  • The old-timers failed to recognise the significance of the ore shoots in the Inglewood structure and their relationship to the Gympie Veins which are all recent breakthroughs in understanding GYM’s gold mineralisation. This is already reaping benefits resulting in a sudden spate of discoveries of stockworks, ore shoots and Gympie Veins, which with the new 1mtpa decline and move towards rubber-tyred mechanisation all point to production growth at its QLD operation
  • One of the first conclusions that we made on completing a valuation of Gympie is “where is the mistake”, because the valuation using a 7% NPV or constant money cashflow (the norm for gold is 5% and for coal is possibly 7%) was more than double its share price of A$1.07, so we “hacked” the model, and yet the valuation was still more than double its share price of A$1.07 (since risen to A$1.18).

May 2002 - Golden Cross Res

Golden Cross Resources Ltd (GCR) – Gaining a Step on the Production Ladder

  • Golden Cross is in the process of making the transition from a pure exploration company to a gold producer through re-opening the Adelong goldfield in NSW, with initial production targeted at up to 35,000ozpa.
  • GCR has a number of prospects all in NSW, and has moved to farm-out a number of them in the past 4 months as it focuses on Adelong, such as with MIM in February over Copper Hill, Triako in April over Yellow Mountain and Sipa in May over its Broken Hill properties. In most cases the farm-out is for up to 70% of the prospect.
  • GCR is currently in the process of negotiating its financial arrangements to enable it to move into construction and development of the Adelong goldfield. Although there are 3 styles of gold-in-quartz mineralisation that we observed, based on the different wallrocks and strikes of the lodes, the old Challenger mine is the first that is planned to be re-opened.
  • The recently completed feasibility study showed that payback of the $3m to $3.5m required to re-open the mine and commence plant throughput could be achieved within 1 year depending on the treatment rate through the plant.

Jun 2002 - Pan Aust Resources

Pan Australian Resources NL (PNA) – Advancing its Laotian Gold Project Towards Feasibility and Production

  • On 14 June 2002, PNA shareholders are to vote on a number of steps that have the capability to materially enhance their company resulting in gold production possibly by December 2004, by approving the acquisition of the Phu Bia coppergold project in Laos from Newmont.
  • The results of initial scoping studies suggest that Phu Bia could be capable of producing 70,000ozpa of gold from a 3mtpa heap leach operation advancing into 25,000ozpa of gold and 25,000tpa of copper from a concentrate in a 3mtpa conventional plant, that could later be expanded to 5mtpa.
  • Further infill drilling is currently required to complete the pre-feasibility study on Phu Bia and assess the initial processing route as heap leach and/or CIL, with a combined CIL/heap leach route potentially capable of materially higher gold production. The treatment alternatives depend mainly on drilling higher grade targets of 4 to 5g/t at Ban Houayxai and 8g/t at Long Chieng Track, plus the 3 to 12g/t gossans, and deeper copper-gold mineralisation at Phu Kham.
  • PNA also still has its Puthep copper project in Thailand on which it is waiting for Cabinet approval in order to advance it to the next stage having completed a viable pre-feasibility study.

Jul 2002 - Elkedra Diamonds NL

Elkedra Diamonds NL (EDN) – Encouraging Signs in the First Drilling programme

  • Elkedra is already seeing encouraging signs (or potential indications of diamond bearing formations) from the geochem analysis of its first drilling programme at Mt Ultim.
  • The initial success consists of individual drillholes containing a darker red sandy unit, a micaceous chip, and a thick clay zone, which are all regarded by EDN as possibly anomalous, and could potentially indicate highly weathered kimberlite. These units or zones and others are to be subjected to second-stage heavy mineral analysis to identify possible diamond indicator minerals (results possibly by end July 2002).
  • While the initial geochem results continue to be assessed from both Mt Ultim’s 7 drillholes and Central Craton samples, the second drilling program commenced in the last week of June 2002 in the Central Craton focusing on at least 15 high priority anomalies, consisting of aeromag and photo-feature anomalies.
  • Manganese was also found in two grab samples in the Central Craton prospect. Although it has to be acknowledged that they were grab samples, one of the manganese values was relatively high at 42%Mn along with lower percentages than usual of deleterious elements such as iron (Fe) at 0.16% and silica at 5.8% SiO2.

Jul 2002 - Abelle Limited

Abelle Ltd (ABX) – A Neat, Very Profitable 75,000ozpa or so Gold Mine

  • Abelle is operating the old Gidgee mine (that used to belong to Australian Resources (ARS) before that company went into receivership in early 1999), and is currently producing about 75,000ozpa at a cash cost of US$215/oz and total cost of US$260/oz (at an A$ exchange rate of US57c).
  • Our initial impression on visiting the mine in mid-November 2001 was that it was capable of generating annual after-tax profit of A$2m to A$10m per year, depending on how well the visible gold in quartz underground was “running”.
  • Gold production has the capability to increase materially since about one-third of current production is coming from extremely low 0.8gpt stockpiles which could be replaced by oxide ore (when found) or from increased underground production.
  • In our opinion there is in fact significant upside potential for both gold production and life. However, it is more a case of where to start, and which order to take the targets in, and consequently we have used scenario analysis in pages 6 & 7. For example, the current underground life is conservatively 6 years, excluding reopening either Kingfisher or Omega, and a decline is being sunk in Butcherbird.
  • Currently the exploration direction is being made towards the potentially more prospective Gidgee anticline, by focusing on already delineated oxide targets and a number of classic exploration “gaps”, before the mill runs out of “soft” ore in about 2 years’ time. An alternative could be to spend possibly $10m more capex and increase underground production so as to replace both the surface sources.
  • We have provided profit and cashflow estimates for the scenario range (pages 6 & 7), with ABX’s share price (on a 5% NPV) capable of being between 40c and 105c.

Jul 2002 - Tanami Gold

Tanami Gold NL (TAM) – Bringing Prospects into Fruition in Elephant Country

  • Tanami Gold are first and foremost a gold company, focusing on gold with the view that should base metal prospects emerge within their tenements, then TAM may consider possible joint ventures or other options to fund or divest such assets. TAM does not intend to use their gold assets to finance diversification into base metal assets.
  • Over the past 8 years, Tanami Gold has built up a tenement package of 64,000sq km focused in 4 regions of the Tanami-Arunta Province (essentially all within the Northern Territory), which has become the envy of virtually all the world’s major resource companies as they have gradually realised that the NT is “elephant country”.
  • The NT has become elephant country partly because it was classified as too hard to explore in and its restrictions on mining and royalties were regarded as archaic and insurmountable. Whereas, TAM has shown that they are not insurmountable, and more importantly there are structures on a mega scale that cause geologists to salivate, and yet have still not had one drillhole into them.
  • TAM has established farm-in jvs with some of the gold majors such as Newmont and Barrick, and appear to be centred within a “land grab” with Anglogold even pegging “postage stamp” blocks probably because Callie’s (>10moz resource) surface footprint was only about 40m by 20m.

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