9

January

2019

Terramin Australia acquires Private Mine No 53 from Kitticooler

ASX-listed Terramin Australia has signed an agreement with Kitticooler to acquire 100% of Private Mine No 53 (PM 53), near Palmer, South Australia.

Private Mine No 53 consists of the historic Kitticoola copper-gold mine that was operated intermittently between 1846 and 1971.

Between 1846 and 1869, it operated as a copper mine, producing 7,000t of ore at an estimated average grade of 2.25% copper.

Gold potential at the mine was identified in 1890. The mine intermittently produced 30,000t of ore at an average recovered grade of 5.4g/t gold.

Kitticoola is situated 2.5km south of Palmer and around 62km from Terramin’s Angas Processing Facility (APF) at Strathalbyn.

Terramin Australia CEO Richard Taylor said: “Terramin is excited about the opportunity of adding potential production from Kitticoola to its Bird-in-Hand Project in the Adelaide Hills. PM53 is fairly unique in that it remains an approved mine (subject to the grant of updated environment approvals) that has not operated since 1971.”

Kitticoola, which has had ‘only limited modern exploration’ exposure, is expected to present significant synergies with Terramin’s other assets.

Taylor added: “If successful, exploration would provide additional feed to processing planned for the Angas facility at Strathalbyn. Operating the two projects would potentially increase local employment from the forecast 140 roles already earmarked for Woodside and Strathalbyn.”

The deal with KHP on PM 53 offers Terramin the opportunity to gain exploration rights and potential future mining rights over Kitticoola, provided it pays land access fees and a sliding scale royalty.

9

January

2019

Sedgman secures EPC contract from QCoal for Byerwen coal mine

Sedgman, a mining processing company of CIMIC Group, has secured an A$155m ($110m) engineering, procurement and construction (EPC) contract from QCoal for its Byerwen coal mine in Central Queensland, Australia.

This contract will deliver an expansion on the first phase of the project, which the mining processing firm was awarded in February 2018.

The latest contract includes the duplication of the existing coal handling and processing plant.

CIMIC Group CEO Michael Wright said: “The CIMIC Group has a long-standing and successful relationship with QCoal, which started in 2007, providing EPC services through Sedgman and mining services through Thiess.

“This latest contract demonstrates Sedgman’s ability to deliver positive and consistent outcomes for QCoal, and is a testament to the Sedgman team’s focus on delivering enduring value for our clients.”

Sedgman managing director Grant Fraser said: “We are pleased to continue our strong, long-term relationship with QCoal and look forward to assisting with the expansion of the Byerwen mine in a timeframe that optimises QCoal’s benefit.”

Sedgman has commenced work and expects to finish the project in early 2020.

The Byerwen mine site is located 20km west of Glenden in Queensland’s Bowen Basin.

In December 2018, CIMIC Group firms Sedgman and CPB Contractors secured a contract from Pembroke Resources for the Olive Downs Coking Coal Project in Central Queensland.

The scope of this contract involves design, procurement, construction and commissioning of the coal handling and preparation plant. It will generate revenues of A$184m ($131m) for the group.

8

January

2019

CMOC and Sumitomo approve block cave project at Northparkes Mine

China Molybdenum Company (CMOC) and Sumitomo have given final approval for the development of a new block cave mine at the Northparkes Mines joint venture in New South Wales, Australia.

An investment of more than $200m will be made over a period of three and a half years at the project, called E26 Lift 1 North (E26L1N).

Construction of the new block cave mine is scheduled to commence this month and full production is expected to begin in mid-2022.

Once online, this project will produce around 40 million tonnes of copper-gold ore over a ten-year period.

Northparkes is a joint venture between CMOC, which has 80% stake, and Sumitomo Group, which has 20% interest.

CMOC executive chairman and CEO Steele Li said: “We are really excited to see this project come to fruition and to watch Northparkes continue to develop and grow. Northparkes plays a pivotal role in our strong and long-term presence in Australia as an internationally renowned mining company.”

The project will include 11km of underground development, an underground primary crusher, conveying systems and associated infrastructure.

During the peak construction period, the project will hire up to 180 people.

Currently, an upgrade of the ventilation system is underway to provide the mine with sufficient air flow.

The E26L1N mine also embraces an increased level of automation and digitisation.

Northparkes acting managing director Hubert Lehman said: “This is a major investment in the future of our business and a very exciting time for Northparkes. We look forward to continuing to contribute to the local community in which we live and work for years to come.”

Northparkes, which has secured the requisite approvals, licences and permits, is claimed to be the first mine in Australia to use the block cave mining method.

Northparkes is also claimed to have become the most automated underground mine in the world in 2015, with automated loaders responsible for 100% of ore production. The mine’s owners have permission to mine at the site until 2032.

As of the end of 2017, Northparkes had reserves of 125 million tonnes of ore alongside resources of 471 million tonnes.

Lehman added: “We know the exploration potential of Northparkes and we believe we will discover more copper and gold deposits to take us even further into the future. Northparkes is the world’s most automated underground block-cave mine and we are proud of our history and achievements. The mine has been operating for 24 years and we have a vision of a century of mining together, here in NSW’s Central West.”

3

January

2019

Rio Tinto successfully deploys autonomous trains in Western Australia

Rio Tinto has successfully deployed autonomous trains across its iron ore operations in Western Australia (WA), with over one million kilometres of railway now travelled autonomously.

The AutoHaul trains were first tested in July last year, transporting around 28,000t of ore over 280km on their first journey. The company has continued to expand its autonomous fleet over the second half of 2018.

Rio Tinto has invested $940m into the programme, which is the world’s first and largest heavy-haul long distance autonomous train service, based in in WA’s Pilbara region.

“The safe and successful deployment of AutoHaul across our network is a strong reflection of the pioneering spirit inside Rio Tinto,” said Ivan Vella, managing director of rail, port and core services at iron ore operations. “It’s been a challenging journey to automate a rail network of this size and scale in a remote location like the Pilbara, but early results indicate significant potential to improve productivity, providing increased system flexibility and reducing bottlenecks.”

Rio Tinto operates a vast rail network in the Pilbara, with 1,700km of track connecting 16 mines to four ports, and deploying human workers to monitor the network to ensure safe operations has been a logistical challenge.

The AutoHaul trains are fitted with on-board cameras, which human operators use to monitor the trains’ behaviour from remote locations, enabling workers to inspect multiple trains at once.

Removing humans from trains and points along the railways also lowers the risk of an individual being involved in a crash or other accident. In November 2018, rival miner BHP suspended its rail operations in the Pilbara region following mechanical and operational failures that caused a train to travel 92km without a driver. Rio Tinto hopes that improving its autonomous trains will prevent similar accidents happening at its operations.

The trains are Rio Tinto’s latest involvement in automated technology as the company looks to ensure safety at its operations. Rio Tinto planned to deploy 130 autonomous trucks at its operations by the start of this year, and has deployed its autonomous drill system at its operations, enabling a single human worker to operate up to four drill rigs at once, improving efficiency and removing workers from potentially dangerous mine sites.

3

January

2019

Barrick-Randgold merged entity begins trading

Barrick Gold has begun officially trading as a merged entity with Randgold Resources, following last month’s approval of an $18.3bn merger deal that combined the two companies.

In September 2018, Barrick agreed to acquire Randgold in an all-stock transaction.

This was considered to be the biggest deal in years in the gold mining industry and came at a time when the industry has been facing pressure to cut costs.

Henceforth, Barrick’s symbol on the New York Stock Exchange will be GOLD, a ticker that was earlier held by Randgold on NASDAQ. However, its ticker in the Toronto stock exchange will continue to be ABX.

With this deal, the merged entity claims to “own five of the industry’s Top 10 Tier One gold assets”, including 100% stakes in Cortez and Goldstrike in Nevada, US; an 80% stake in Loulo-Gounkoto in Mali; a 60% interest in Pueblo Viejo in Dominican Republic; and a 45% stake in Kibali in DRC.

According to the company, two assets, both of which are in the US, have the potential to become Tier One gold assets – its 100% stake in Goldrush/Fourmile and its 75% stake in Turquoise Ridge project.

With these assets, Barrick claims to be “well placed to be the world’s most valued gold mining business”.

In a joint letter to stakeholders, executive chairman John L. Thornton and president and CEO Mark Bristow said: “We will do so by optimising our existing operations, pursuing new opportunities that meet strict investment criteria, and developing them with disciplined efficiency. In all that we do, we will be guided by a long-term strategy and clear implementation plans designed to deliver sustainable returns to our owners, and real benefits to our partners, host countries, and communities.”

Meanwhile, media reports stated the new Barrick Gold Corp is exploring options for its stake in Acacia Mining including possible divestment, as the firm plans to end a tax dispute in Tanzania, which has dragged on for close to two years, and led to closure of its operations in the African country.

Bristow, who earlier headed Randgold, expressed hope that the dispute, which began when the national government imposed a $190bn tax bill on Acacia in March 2017, would be resolved soon.

Bristow was quoted by Reuters as saying: “This has been a very complex and challenging situation where no-one has won. It’s untenable and will be resolved.”

According to a framework agreement signed in October 2017, which is yet to be carried out, Barrick executive chairman John Thornton and Tanzanian President John Magufuli agreed that Acacia would pay $300m to the government and divide the economic benefits of its mines.

Owning 64% in Acacia, Barrick has not been able to export gold during the dispute. Barrick could either acquire the rest of Acacia or split the firm.

3

January

2019

Pilbara taps two Chinese customers for lithium project funding

Pilbara Minerals has tapped its two Chinese customers alongside existing lenders to provide a funding package worth $156.4m to expand its Pilgangoora lithium-tantalum project in Pilbara region, Western Australia.

The remaining amount for the $231m expansion project will come from the company’s existing reserves and future cashflow from its two million tonnes per annum (mtpa) project.

The expansion will increase Pilgangoora’s throughput to 5mtpa.

It has received funding support from its Chinese customers Jiangxi Ganfeng Lithium and Great Wall Motor.

Pilbara Minerals expects to commission the second stage of the project in 2020.

It will also explore potential for a stage three expansion based on customer demand, which, if it materialises, could take the project’s total output to 7.5mtpa.

The funding package consists of a A$35.5m offtake pre-payment from Great Wall, a $50m placement from Gangfeng priced at A$0.6438 per share, and A$70.9m tap issue to the company’s existing bondholders.

The reports on funding package to Pilgangoora project come three months after the company shipped its first lithium concentrate from the stage one project.

Meanwhile, Pilbara Minerals signed a non-binding memorandum of understanding (MoU) with steel maker POSCO, another of its offtake partners, to evaluate a larger joint venture downstream chemical conversion facility in South Korea with capacity of up to 40ktpa LCE, from the earlier 30ktpa LCE.

This MoU recognises an increase in the existing spodumene concentrate offtake agreement from Pilgangoora project from 240,000tpa to 315,000tpa to support the enlarged chemical facility.

Major players in the lithium industry such as SQM and POSCO have made heavy investments in boosting their capacity, as the coming years would see a global surge in production of lithium-ion batteries. Western Australia currently serves as a hub for the lithium boom.

2

January

2019

Cobalt 27 Capital to acquire Highlands Pacific

Cobalt 27 Capital has signed a scheme implementation agreement (SIA) to acquire all of the issued ordinary shares in Highlands Pacific which it does not already own through a scheme of arrangement (SoA).

With an interest of around 13%, Cobalt 27 is the largest holder of shares in Highlands.

As per the terms of the SoA, shareholders of Highlands will receive A10.5 cents of cash for every share, provided all applicable conditions are being met or waived and the scheme is being implemented.

This consideration, which represents a premium of 43.8% over the closing price of Highlands shares of A7.3 cents on 24 December 2018, takes the equity value of Highlands to around A$115m ($80.9m).

The consideration will increase by A1.0 cents of cash for every share to A11.5 cents, provided before the end of this year, the closing spot price of nickel touches more than $13,220 per tonne over a period of five consecutive trading days.

This SoA will need the approval of 75% of shareholders of Highlands who are entitled to vote. Voting will take place at a shareholder meeting, which is expected to be held in mid to late April.

Additionally, the scheme will have to be approved by the Papua New Guinea’s (PNG) National Court.

The major asset of Highlands is its 8.56% interest in the Ramu nickel-cobalt mine (Ramu), located near Madang in PNG. After repayment of Highlands’ attributable construction and development loans for the Ramu project, its ownership will increase to 11.3%.

Cobalt 27 chairman and CEO Anthony Milewski said: “The acquisition of Highlands will allow Cobalt 27 to gain a direct interest in the Ramu nickel-cobalt mine and materially increase its attributable exposure to the mine’s nickel production from 27.5% to 100% and cobalt production from 55% to 100%, relative to the previously announced Ramu Cobalt Nickel Stream.

“It does so at nearly half the cost of the previously announced Ramu Cobalt Nickel Stream, provides increased balance sheet flexibility, and enhances value for Cobalt 27 shareholders. It also brings cash flow to our business, something we have told our shareholders was important from the beginning.”

Cobalt 27 expects to have the opportunity to take part in any potential expansion and boost its attributable production through its purchase of Highlands following the SoA.

Highlands has interests in the Star Mountains Copper Gold exploration project in PNG and is reviewing the Sewa Bay laterite nickel project in PNG along with Sojitz Group, a Japanese trading firm.

Cobalt 27 plans to review strategic alternatives with regard to these non-core assets.

21

December

2018

Pembroke awards $131.96m EPC contract for Olive Downs project

Pembroke Resources has awarded a A$184m ($131.96m) engineering, procurement and construction (EPC) contract to CIMIC Group subsidiaries Sedgman and CPB Contractors for a coal handling and preparation plant (CHPP) at the greenfield Olive Downs coking coal project in Central Queensland, Australia.

Located 40km south-east of Moranbah, Olive Downs is a greenfield metallurgical coal mine with a production capacity of up to 15 million tonnes of metallurgical coal per annum for almost 80 years.

The contract involves the design, procurement, construction and commissioning of the CHPP plant.

Sedgman is specialised in providing mineral processing and associated infrastructure solutions, while CPB Contractors is CIMIC Group’s construction company.

The companies will jointly work on the project to deliver the end-to-end contract, with design and early procurement work set to begin immediately. The contract work is scheduled for completion in 2020.

CIMIC Group CEO Michael Wright said: “The unique combination of Sedgman’s mineral processing experience and CPB Contractors’ construction expertise provides CIMIC Group clients with the certainty of a proven track record in developing coal mines and an integrated solution from design to commissioning.”

The proposed CHPP is expected to have sufficient capacity to process the first phase of annual production of up to six million tonnes of run-of-mine coal from the Olive Downs project.

Olive Downs also includes centralised coal handling and processing facilities, infrastructure links for rail, water and electricity, including an 18km rail spur and on-site rail loop.

Sedgman managing director Grant Fraser said: “The Olive Downs coking coal project is an exciting, long-term development in the Queensland Bowen Basin and we are pleased to be working closely with Pembroke Resources to deliver value for the project.”

During the construction phase, the Olive Downs project is expected to generate more than 500 jobs. Once the project becomes operational, around 1,000 staff will be employed.

The project is estimated to have JORC resources totalling 813 million tonnes (Mt), including 514Mt of reserves.