Opportunities Feature Australian Assets

Weekly summary of mining industry announcements that have implications for equipment suppliers, the service sector and the global financial community. It will include new resource announcements, feasibility studies, mine openings and expansion projects.

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Last week saw a number of business opportunities announced by companies with assets in Australia. ASX-listed Yancoal Australia Ltd is in the final stages of a rights issue and initial public offering of 59.4 million shares in Hong Kong to raise some US$800 million. The company's major shareholders are Yanzhou Coal Mining Co (which owns 65.5%), China Shandong Investment Ltd and Cinda International HGB Investment Ltd. Yancoal is Australia's largest pure-coal producer, with five mines (plus another five it manages) across New South Wales, Queensland and Western Australia. The company also has a half share in the Middlemount joint venture.

PVW Resources NL is planning an ASX listing as it seeks to bring its small-scale Mount Clifford underground gold mine in Western Australia into commercial production. PVW is raising up to A$7 million in the IPO and will start drilling in February 2019 to validate existing data.

Genesis Minerals Ltd is undertaking a feasibility study on its Ulysses gold project in Western Australia after the viability was confirmed by a scoping study. The company anticipates an 800,000 t/y operation to produce a total of 357,000 oz over a four-year underground mine life at all-in sustaining costs of under A$1,100/oz.

Evolution Mining Ltd is expanding the Cowal processing plant in New South Wales, Australia, from 7.5 Mt/y to 8.7 Mt/y at a cost of A$25-30 million, which will be spent over the next two years. The expansion will result in additional gold production of up to 20,000 oz/y, with unit processing costs reduced by A$1.25/t to A$1.75/t. Work will begin in the March 2019 quarter, with commissioning expected to take place about 12 months later.

Elsewhere, IronRidge Resources Ltd is raising about £5.4 million to fund development of its gold and lithium projects in Ghana, Chad and the Ivory Coast.

National Aluminium Co. has earmarked 380 billion Indian rupees for brownfield expansion of 500,000 t/y and greenfield production of 600,000 t/y in the next few years. The greenfield investments would be spent at Angul, Dhenkanal and Kamakshyanagar in Odisha.

NGEx Resources Inc. announced last week that a pre-feasibility study for the Josemaria copper-gold project in Argentina's San Juan province has suggested a net present value, discounted at 8%, of US$2.0 billion, an 18.6% internal rate of return and a 3.4-year payback period from the start of processing. The study assumed prices of US$3/lb copper, US$1,300/oz gold and US$20/oz silver. Proven and probable reserves are given as 6,500 Mlb copper, 6.5 Moz gold and 28.8 Moz silver contained in 1,010 Mt of ore grading 0.41% Cu equivalent. Total capital expenditure for the open pit project's 20-year life was assessed at US$3.73 billion.

Adriatic Metals Plc has raised A$10.8 million through an issuance of 19.7 million depository certificates to institutional investors and existing shareholder Sandfire Resources NL. The placement will be used to accelerated exploration at the Rupice project in Bosnia and Herzegovina, make additional land acquisitions and progress technical studies.

Galantas Gold Corp. is raising funds through a private placement to achieve full production at its Omagh gold mine in Northern Ireland. Shareholder Melquart Ltd is expected to increase its interest to 25% by subscribing for shares worth up to £1.4 million. The Omagh mine recently started limited production, with the delivery of the first concentrate shipment in early November to Glencore's Brunswick smelter.

Global Atomic Corp. recently raised C$9.2 million from a non-brokered private placement of 33.3 million shares. Proceeds from the placement will be used to fund technical studies and permitting related to commercial production at the DASA uranium project in Niger. A preliminary economic assessment for DASA generated a net present value, discounted at 8%, of US$299 million and a 25% internal rate of return, based on a uranium price of US$50/lb. 

Source: Material based on alerts from S&P Global Market Intelligence's Metals & Mining database.

Chris Hinde

Chief Commentator, Mining Beacon

Previously editorial director of Mining Journal, and more recently head of S&P Global Market Intelligence's metals and mining team, Chris is now Mining Beacon's editor-in-chief and lead commentator. He posts two blogs every week, one on Monday reviewing market conditions over the prior week, and a second on Thursday looking at issues on the global mining scene. There is also a quarterly blog on business opportunities in the sector.