Positive Development News

Good news for equipment companies and service suppliers to the mining industry during the past week included mine developments at Fort Cady and Prieska, and positive feasibility studies at Ixtaca, Tampia, Platina and Araguaia.

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American Pacific Borate & Lithium Ltd plans to commence construction of the Fort Cady borate mine in California during the fourth quarter of 2019. This follows a positive definitive feasibility study that returned a net present value, discounted at 10%, of US$1.25 billion. Under the study, the phase-one operation is slated at 82,000 t/y of boric acid and 36,000 t/y of sulphate of potash at a capital expenditure of US$138.2 million.

In South Africa, Orion Minerals Ltd expects its flagship Prieska zinc-copper mine to start production by 2021. The company is expected to release the results of a bankable feasibility study on the historic mine (which ceased operating in 1989) by the second quarter of 2019. Approval for mining rights is expected by mid-2019, with construction starting in the second half of 2019.

Positive feasibility studies announced last week included one by Almaden Minerals Ltd for its Ixtaca gold-silver project in Mexico's Puebla state. The project has a net present value, discounted at 5%, of US$310 million. The study was based on a proven and probable reserve containing 1.39 Moz of gold and 85.2 Moz in 73.1 Mt grading 0.59 g/t gold and 36.3 g/t silver. Initial capex for the open-pit operation is estimated at US$174 million.

Explaurum Ltd has issued an updated feasibility study for its Tampia gold project in Western Australia. The new net present value, discounted at 8%, is given as A$103 million. The improved study for the open pit incorporated further metallurgical test work, mine design and scheduling together with refined capital and operating cost estimates, as well as incorporation of the Mace supergene deposit.

Also in Australia, a definitive feasibility study for the Platina scandium project in New South Wales, owned by Platina Resources Ltd, concluded a net present value, at an 8% discount, of US$166 million.

Horizonte Minerals Plc's study for its Araguaia nickel project in Brazil indicated a net present value, discounted at 8%, of US$401 million over an initial 28-year mine life in the operation's first phase. In the second-phase expansion, NPV, discounted at 8%, was calculated at US$741 million. Capital expenditure is expected to be over US$400 million for each of the two phases. Horizonte CEO Jeremy Martin said the company is looking to move Araguaia to the construction stage and start to advance its Vermelho nickel-cobalt project.

A feasibility study for Battery Minerals Ltd's Balama Central graphite project in Mozambique indicated an internal rate of return of 55%, with a 2.3-year payback period.

Plans announced last week for higher production included operations in Canada and Australia.

Pretium Resources Inc. plans to increase production at its Brucejack mine in British Columbia to 3,800 t/day. This decision follows the receipt of amended permits from the Ministry of Energy, Mines and Petroleum Resources and the Ministry of Environment and Climate Change Strategy. Minor mill upgrades, which are projected to cost less than C$25 million, are needed to support the production rate increase. Annual production will rise from 990,000 t to 1.4 Mt/y, with a timeline for the ramp-up, and an updated mine plan, expected in the first quarter of 2019.

MACA Ltd has been awarded a A$28 million construction project for Adaman Resources Ltd's Kirkalocka gold project in Western Australia. The contract's scope of work includes the installation of a new semi-autogenous grinding mill and the refurbishment of an existing mineral processing plant at the project. The contract starts in February 2019 and is expected to continue for eight months.

Cape Lambert Resources Ltd has appointed Kobu Capital to source finance and an engineering, procurement and construction provider for the Kipushi Tailings cobalt-copper tailings project in the Democratic Republic of the Congo.

Financing announced during the past week that is dedicated to development work included C$20.0 million for Sabina Gold & Silver Corp. The funds came from an underwritten bought-deal financing, and will be used to develop the Back River gold project in Nunavut, Canada.

The government of Ecuador has received a third, and final, instalment of US$20 million. This is part of the US$65 million advanced royalties payment agreed with Lundin Gold Inc. for development of the Fruta del Norte gold project.

There was the usual spate of early-stage assessments announced last week. These included a pre-feasibility study for Kidman Resources Ltd's Mount Holland 45,000 t/y lithium hydroxide project in Western Australia (a joint venture with Sociedad Quimica y Minera de Chile SA). The study outlined a net present value, discounted at 10%, of US$2.2 billion. Capital expenditure is given as US$737 million

Universal Coal Plc's 49%-owned Eloff Mining Co. has received the mining right and environmental approval for its Eloff coal project in South Africa. The company will start development work on the 8,168-hectare property that hosts a coal resource of 424 Mt. 

Source: All material is taken 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.