06 November 2019

GR Engineering wins EPC contract to expand Saracen’s Carosue Dam plant

Saracen Gold Mines has awarded an A$24.5m (16.9m) engineering design, procurement and construction (EPC) contract to GR Engineering Services. The contract is for the expansion of a mineral processing plant at Carosue Dam, which is approximately 120km north-east of Kalgoorlie in the Goldfields region of Western Australia.

Work scope under the contract includes upgrades to the carbon-in-leach (CIL) circuit and associated infrastructure. It will also include the deployment of secondary grinding equipment to bring the existing processing plant capacity to a nominal production rate of 3.2 million tonnes per annum (Mtpa).

Commenting on the contract, GR Engineering managing director Geoff Jones said: “GR Engineering is pleased to again be working with Saracen to deliver improvements to its mineral processing facilities at Carosue Dam.

“Having been involved in the initial development of Carosue Dam in 2000, our team has maintained a strong relationship with Saracen and utilised its understanding of the project to deliver incremental benefits to the project.

“GR Engineering looks forward to achieving positive outcomes for Saracen through the safe and successful delivery of these expansion works.”

The contract is expected to start imminently upon completion of the upgrade, which is slated to finish in the first half of the financial year 2021. In June, Saracen Mineral signed a bid implementation deed to acquire all of the shares of Bligh Resources for A$38.2m ($26m). The company began gold mining activity at the Carosue Dam gold project in January 2010.

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4 November 2019

Albemarle completes $1.3bn lithium joint venture with MRL

US company Albemarle has concluded the transaction with Mineral Resources Limited (MRL) under the asset sale and share subscription agreement. The agreement was initially signed on 14 December 2018 and amended on 1 August 2019. The 60:40 joint venture (JV) between Albemarle and MRL is named as MARBL Lithium JV (MARBL). 

Under the terms of the agreement, Albemarle has purchased a 60% stake in MRL’s Wodgina spodumene mine in Western Australia (WA) for $1.3bn. It will pay $820m in cash and transfer a 40% interest in two 25ktpa lithium hydroxide conversion trains being built at Kemerton, WA, to MRL.

MARBL will manage Wodgina mine and the Kemerton lithium hydroxide conversion trains operations. This will allow Albemarle to market 100% of the output from the Wodgina and Kemerton conversion trains.

Albemarle CEO Luke Kissam said: “Over the past year, we have worked closely together and are even more confident that our investment will produce substantial, long-term value.

“In the short term, we have made the prudent decision to idle mine activity until market conditions improve. However, we are well-positioned for future growth given the high-quality Wodgina resource and the combined operating expertise of both companies.”

Albemarle noted that the 50ktpa lithium hydroxide conversion capacity at Kemerton is scheduled for commissioning in the first half of 2021.

The company mentioned Wodgina mine will idle production of spodumene based on current market trends.

Albemarle funded the transaction by borrowing over $900m under an unsecured credit facility.

The company started construction work on the Kemerton lithium hydroxide processing plant in March this year.

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1 November 2019

Australia’s Iluka considers demerger of BHP’s MAC asset

Australia’s mineral sands major Iluka Resources is considering structural separation of the Mining Area C royalty (MAC) through demerger.

MAC is a large iron ore mining area operated by BHP Billiton. It is located in the Pilbara region in the north of Western Australia. Iluka holds a royalty over iron ore produced from MAC.

Iluka chairman Greg Martin said: “The Iluka Board consistently reviews all of our operations and assets to determine what is in the best long-term interests of our company and shareholders.

“Given the substantial scale of the mineral sands business and the prospective scale of MAC, the time is right to formally review Iluka’s corporate and capital structure with the objective of fully capitalising on the respective features of both assets.”

The company said that the proposed demerger is part of a formal review of its two principal businesses, mineral sands operations and MAC. 

Iluka’s decision to conduct a formal review follows BHP’s development of South Flank. This development is expected to produce close to 145Mwmtpa, starting from 2023. The company noted that production from South Flank is expected to increase the annual iron ore production within the MAC royalty area from 55dmtpa to 135dmtpa or more from 2023.

Iluka managing director Tom O’Leary said: “Iluka’s mineral sands business continues to be a global market leader in the production of zircon and high grade titanium feedstock.

“The business is producing solid cash flows in the current market environment and is well positioned for the future, with a pipeline of attractive growth projects.”

Iluka anticipates an update on the review in February next year.

In July 2015, Iluka Resources amended MAC ore royalty agreements with BHP and its JV partners.

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30 October 2019

TerraCom to acquire substantial stake in Universal Coal

Australia-based coal miner TerraCom has signed a binding agreement to purchase a substantial stake in coal mining firm Universal Coal.

Under the terms of the binding agreement, TerraCom intends to purchase approximately 19.9% of the issued capital of Universal from Coal Development Holding for a combination of cash and TerraCom shares.

The company will purchase 104,467,056 shares in Universal for A$34.6m ($26.4m), which includes around A$17.3m ($13.2m) in cash and 34.2 million fully paid ordinary TerraCom shares priced at A$0.5061($0.38) a share.

TerraCom’s acquisition of substantial shareholding aligns with the company’s strategy of entering into an emerging market, while reducing its sovereign risk profile with new South African investments.

The investment enables the company to access Universal’s thermal coal assets across South Africa’s major coalfields including Kangala, New Clydesdale, North Block Complex, Ubunto, the Eloff project, Arnot South and Berenice/Cygnus.

TerraCom chairman Wal King said: “This transaction is a significant achievement for TerraCom. Universal’s asset portfolio provides the company with greater geographic diversification and an expanded production footprint.

“The growth achieved under the guidance of CEO Tony Weber throughout the last few years has been exceptional.

“TerraCom is excited to become a substantial shareholder and looks forward to being associated with Universal’s long term profitable growth.”

Universal has a positive outlook for growth, increasing its sales to 8.4Mt by next June and 9.6Mt for the financial year 2021.

In February 2017, TerraCom subsidiary Orion Mining received formal indicative approval from Queensland’s Department of Natural Resources and Mines (DNRM) to transfer the mining lease of Blair Athol Coal Mine in Australia.

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29 October 2019

Newcrest Tanami JV completes RC drilling at Hutch’s Find in WA

Newcrest Mining joint venture (JV) partner Encounter Resources has completed the first phase of Reverse Circulation (RC) drilling at Hutch’s Find in the Tanami region of Western Australia (WA).

The JV has completed drilling a total of 17 RC drill holes for 4,930m at Hutch’s Find and assay results are expected to be received next month.

Funded by Newcrest, the drilling programme has now moved to the Afghan prospect, where the down dip extension of a broad, near surface gold anomaly is being targeted.

The Afghan prospect is a 12-hole RC drill programme comprising 300m deep RC holes. Assay results from this prospect are expected to be released in December this year.

Encounter Resources managing director Will Robinson said: “The Newcrest operated RC drill programme in the Tanami has started well with the first phase of drilling successfully completed at Hutch’s Find.

“The rig has now moved to the Afghan prospect to complete a planned 12-hole programme of 300m deep RC holes.

“The programme is targeting down dip and plunge extensions of known mineralisation within a broad anomalous gold halo defined in previous shallow drilling.”

Newcrest noted that it is the sole funder of exploration activities across multiple JVs with Encounter in the West Arunta regions of WA.

Three of the companies’ JVs, namely Watts, Selby and Lewis, cover more than 100km of strike along the Trans-Tanami Structure that extends through the Tanami region.

Encounter also has complete control on an extensive, underexplored project position covering the southern extension of the +40Moz Laverton Tectonic Zone.

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24 October 2019

World Gold Council releases report on gold’s emission profile

The World Gold Council (WGC) has launched its ‘Gold and Climate Change: Current and future impacts’ report to provide clarity to investors and industry stakeholders on gold’s emission profile.

Furthermore, the report highlights the role that can be played by gold as a climate risk mitigation asset in long-term investment strategies.

It also highlights the gold sector’s carbon footprint and the steps to be taken by the industry to transition towards a net-zero emissions path that aligns with the objectives of the Paris Agreement.

University of Oxford associate professor Dr Ben Caldecott said: “The global challenge of transitioning to a negative carbon footprint poses a massive challenge but also opportunity and will reshape the value of assets and companies across sectors of the global economy.

“This new report by the World Gold Council maps out the key questions the gold industry needs to address now in order to achieve net zero but it also looks at gold playing a part of the solution.”

Key findings of the report include revised estimates of the emissions associated with the production, as well as consumption of gold that represent an accurate understanding of greenhouse gas (GHG) intensity and carbon footprint of gold.

The World Gold Council also noted that there are sizeable options for gold mining to decarbonise.

World Gold Council chief financial officer Terry Heymann said: “We recognise that climate change imposes very substantial risks to the global economy.

“This new research demonstrates that gold has an important role to play in supporting the transition to a lower-carbon economy, both through decarbonisation efforts and as a compelling investment as investors look for resilient assets in their portfolios, which are less likely to be negatively impacted by the physical and transition risks associated with climate change.”

Last month, the WGC launched a set of principles for gold miners designed to address key environmental, social and governance (ESG) issues.

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