Mining Breaks

Australian producer Regis Resources’ underground growth strategy at its Duketon gold project in the WA Goldfields is advancing with the award of a $A113M, 3-year development and production contract to Barminco.
The underground development, directly below the current Rosemont openpit, is targeting a maiden resource of 1.4Mt @ 5.1g/t for 230,000oz.
MD Jim Beyer says Rosemont’s initial underground development provides an excellent platform for growth through exploration from an established underground footprint.
The Rosemont experience supports its aim to follow up with similar developments at Garden Well followed by other Duketon satellite deposits.

CM1 has begun mining second stage, higher-grade oxide mineralisation at its Geko gold mine 25km NW of Coolgardie in Western Australia.
Under a 3-stage mine plan adopted after low grades disrupted its original ore sales deal with Northern Star, CM1 aims to mine 260,000t @ 2.23g/t for 18,640oz in the current phase.
It hopes NST will acquire about 50,000t @ 2.75g/t or higher to NST, with the rest stockpiled pending decisions on ore sales or toll milling.
Geko stage 3 comprising 1.3Mt of remnant ore @ 1.7g/t for 71,000oz will finally be mined if CM1 can secure a toll milling deal.

LPI has exceeded the requirements of a 20-year mine life with the declaration of a maiden reserve of 742,000t lithium carbonate equivalent for its 50%-owned Maricunga project in N Chile. The reserve is compliant with JORC and NI 43-101 standards.
The reserves figure, and an updated resources estimate of 2.07Mt LCE in measured and indicated classifications, come days ahead of the expected release of a DFS on the lithium brine project.
LPI says there is considerable scope for more resources, and probably reserves, below the current 200m resource drilling depth.

Toro Gold has exceeded expectations, pouring 156,926oz of gold in the Dec 2018 year (FY/CY18), the 1st full year of output from its 90%-owned Mako Gold Mine in E Senegal, topping forecasts by 17%, but with FY/CY19 guidance easing to 135,000oz-145,000oz.
1st gold was poured Jan 26 2018 with output up due to better than forecast head grades/metallurgical recoveries from 1.8Mt of ore processed at 2.94g/t Au from a forecast 1.7Mt at 2.77g/t, metallurgical recoveries up to 95.5% from 92% and AISC below $US700oz from a budgeted $798oz. FY/CY19 AISC is put at $820oz-$860oz.

A scoping study has backed the commercial potential of developing a battery materials refinery in Townsville, Australia that would produce about 25,400tpa nickel sulphate and 3,000tpa cobalt sulphate from third party nickel-cobalt ore imported from New Caledonia.
The study by privateer Queensland Pacific Metals estimates construction capital costs of $US297M for a 600,000wtpa plant to produce 5,760tpa contained nickel, 6390tpa contained cobalt plus 221,000tpa hematite, 8,700tpa alumina and 4,600tpa magnesium oxide.
QPM will proceed with further feasibility studies, metallurgical test-work and approvals.
Battery metals explorer Pure Minerals holds an option to acquire QPM.

Russian miner Highland Gold Mining is expecting a big jump in Dec 2019 year (FY/CY19) gold equiv output to 290,000-300,000oz from FY/CY18’s 269,500oz, a 1% drop from its 3 producing mines in 2017, albeit within guidance of 265,000oz-275,000oz.
The FY/CY19 rise will be carried by the addition of over 30,000oz from the acquisition of the Valunisty mine at the end of Q4 18. FY/CY18 gold equiv production from Mnogovershinnoye jumped 9.9% to 112,607oz, due to higher grades/recoveries, with a new ore reserve audit pushing LoM out to 2029 from 2022. Belaya Gora output rose to 44,085oz from 43,166 on ore mined up 94% to 2.09Mt, but Novoshirokinskoye (100%) eased to 112,808oz from 126,606oz due to lower mined ore grades.

Copper miner Sandfire Resources’ shares have been temporarily suspended from the ASX after the company confirmed it has written to MOD Resources about a $A88M ($US63M) takeover of the copper-gold explorer, which is expecting a final FS on its 590,000t copper- 27Moz silver T3 Copper Project in Botswana by end-Mar 2019.
Sandfire, which owns the producing DeGrussa copper-gold mine in Western Australia, says the takeover approach was on the basis of $0.38 per MOD share and subject to due diligence, among many other things.
MOD’s T3 FS is based on process plant throughput of 3Mtpa, up from the Jan 2018 PFS’s 2.5Mtpa and mineral resources of 69Mt at 0.98% Cu for 590,000t copper and 14g/t Ag for 27Moz silver.
Sandfire’s DeGrussa is expecting FY19 copper output up to 63,000t-67,000t from FY18’s 64,918t and gold steady at 37,000oz-40,000oz from 39,273oz, with C1 cash costs up to $1.00/lb-1.05lb Cu from $0.93lb.

Core Lithium’s push to become the first Australian lithium producer outside WA has reached a milestone with the award of a 20-year mineral lease for the Grants deposit at its 100%-owned Finniss project near Darwin.
MD Stephen Biggins says the first lithium lease in the NT has been received 3 months earlier than anticipated, providing strong momentum leading into expected resource updates and the project DFS in the March qtr.
Core remains on-track for first production at Finniss at the end of 2019.

NCZ is now aiming to reach full nameplate plant recoveries in the June 2019 qtr after producing 25,500t of zinc concentrate at 47.0% Zn, 7.5% Pb, 6.5% SiO2 & 150g/t Ag in the Dec qtr (Q2FY19) from the hydraulic mining of tailings at its Century mine in N Qld, Australia.
After making its first shipment in Nov 2018, the restarted mine is regularly achieving 40-45% total zinc recovery. Average monthly zinc metal production has risen 55%.
NCZ is introducing its third mining cannon and an additional pump train with the aim of reaching at least 8Mtpa by end-March and 15Mtpa by end-2019.

Financially strained mineral sands miner MZI Resources has put its prime Keysbrook Mineral Sands Project, 70km S of Perth, Western Australia, on the market.
The company says a new owner of the project, that went into production in 2015 and is the world’s biggest high value leucoxene producer, “may be better placed to build on existing operations within a more conducive capital structure and place greater strategic value on MZI’s product streams.”
In the meantime, the company has reached an in-principle agreement with major shareholder/sub-ordinated debt provider Resource Capital Fund (RCF) on a short-term funding package, including an additional $US1.5M cash to be provided shortly and an additional up to $5.7M in Mar 2019 subject to RCF being satisfied with the sale progress. MZI also has some minerals sands assets on Tiwi Island off Australia’s N Territory coast.

Mining services company Ausdrill’s late-2018 acquisition of underground contractor Barminco has delivered early results with the award of a $A113M, 3-year contract at Regis Resources' Rosemont gold project in the WA Goldfields.
Barminco will undertake development and production work on the new underground mine beneath the Rosemont openpit. Onsite work will begin in the March qtr.
The contractor has also gained a new 14-month contract with Western Areas for decline rehabilitation and development at its new Odysseus nickel mine. It’s additional to Barminco's continuous 14 years of mining services work at WSA’s Forrestania operations.
Separately, Ausdrill has won new exploration drilling contracts with Consolidated Minerals at Woodie Woodie and Bellevue Gold at its Bellevue project.

BHP Iron Ore has challenged a West Australian state government claim that it has underpaid between $A200M and $300M in royalties due on its Pilbara operations.
State treasurer Ben Wyatt says a routine WA Mines Department audit highlighted a “difference of opinion” about the world No 3 iron ore miner’s cost deductions from royalty payments relating to its Singapore marketing hub from the early 2000s until 2016.
BHP rejected the government claim, saying the department had questioned what had been a “long standing and historically accepted” model for calculating deductions, ABC Radio reports.
Both the government and company say they'll work together to resolve the dispute.

West Australian miner Saracen has boosted its gold production guidance by 6% to 345,000-365,000oz after posting record Dec half output of 177,774oz. AISC guidance remains $A1,050-1,100/oz.
Of its 2 WA mines, Carosue Dam contributed 104,861oz at $996/oz and Thunderbox delivered 72,912oz at $1,072/oz.
MD Raleigh Finlayson says Saracen continues to grow in the key target areas of inventory, production and cashflow.
Saracen ended the period with cash and equivalents of $142.6M, up from $131M at end-Sept, supporting an increase in its FY19 capital development budget to $35M.

West Australian engineer GR has been awarded a $A50M EPC contract by unlisted public company Tellus Holdings for its proposed innovative mining-plus-waste storage development of the Sandy Ridge project, 75km NE pf Koolyanobbing in the Coolgardie shire.
The guaranteed maximum price contract covers establishing a 23m deep openpit to yield up to 40,000tpa kaolin and adapting the mined voids for long-term separation and storage of hazardous and intractable waste.
Subject to project approvals, GR expects to begin on-site work that will also include road and water supply infrastructure mid-2019.
MD Geoff Jones says the Tellus contract follows its FS and preliminary design work at Sandy Ridge.

Lower copper and zinc prices in the second half have left international base metals miner MMG facing a likely 55% plunge in net profit for the year to end-Dec 2018.
While FY2018 financial results are being finalised, the Hong Kong-based company expects attributable NPAT to be $US65-70M compared to $147.1M in FY2017. It’s likely to record a $55-60M loss for the second half.
MMG notes copper prices fell 11% and zinc prices 21% at a time when it was also hit with higher interest rates, depreciation and amortisation costs at Las Bambas in Peru and effective tax rates.

Prominent Southern African leaders are supporting Felix Tshisekedi as winner of DR Congo’s presidential election after the Constitutional Court declared him the victor by a simple majority and refused calls for a recount.
The constitutional court said a challenge by runner-up Martin Fayulu to provisional results showing Tshisekedi with 38.57% to his 34.8% was “unfounded”.
South African president Cyril Ramaphosa and Kenya’s Uhuru Kenyatta congratulated Tshisekedi. Ramaphosa called on all parties to respect court decision and “continue with a journey of consolidating peace", BBC reports.
The dispute threatens hopes of a peaceful transition from the 18-year reign of Joseph Kabila in mineral-rich DRC The general voting count confirms Kabila’s party will retain a majority in the national parliament.

START THE WEEK: WHAT YOU NEED TO KNOW
Germany closed its last two hard coal mines in the west of the country at the end of December, ending two centuries of mining history in the industrial Ruhr Valley.
The closure of the Prosper-Haniel and Ibbenbüren mines has been claimed as a victory by climate change campaigners demanding the phasing out of coal-fired power generation, but the closures are attributed more to the mines' inability to compete with lower cost imports from countries including Russia, USA, Australia and Columbia.
Supporting that, German coal importers association VDKI is now predicting total coal imports of 45Mt in 2019, a 1.4% increase from 2018 and a turnaround from a 13% decline in the previous 12 months.
VDKI data shows the imports will comprise 30Mt for power generation and 15Mt for steelmaking, Reuters reports.
Germany also has many openpit mines producing softer and cheaper lignite. The two types of coal accounted for 38% of German power production last year, nearly equal with renewable energy resources amid political pressure to replace fossil fuels.
It's widely feared that Germany's announced plans to shut down its nuclear plants by 2022 will leave it with insufficient renewable energy sources to meet power needs.

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COMMODITIES
LME ($US), Jan 18 –
Aluminium 1,851.00
Copper 6,022.00
Zinc 2,577.00
Nickel 11,610.00
Lead 1,972.00
Tin 20,900.00
Cobalt 38,000.00
Gold 1,283.10

COMEX ($US), Jan 18 -
Gold 1,281.10
Copper 2.712
Silver 15.36

NYMEX ($US) 62% Fe CFR China, Jan 18 -
Iron ore 75.15 

LBMA price data ($US), pm Jan 18 –
Platinum 801.00
Palladium 1,375.00

CALENDAR
Public holidays –
Jan 20: Epiphany (Ethiopia)
Jan 20: Heroes Day (Guinea-Bissau)
Jan 20: Duruthu Full Moon Poya Day (Sri Lanka)
Jan 21: Martin Luther King Jr Day (USA)
Jan 21: Thaipusam (Malaysia regions, Mauritius)
Jan 21: Princess Ingrid Alexandra Day (Norway)
Jan 21: Our Lady of Altagracia (Dominican Republic)
Jan 22: Plurinational State Foundation Day (Bolivia)
Jan 24: Unification Day (Romania)
Jan 25: Revolution Day (Egypt)
Jan 26: Australia Day (Australia)
Jan 26: Republic Day (India)
Jan 26: Duarte´s Day (Dominican Republic)
Jan 26: Liberation Day (Uganda)

Conferences –
Jan 20-21: Resource Investment Conference 2019, Vancouver (Canada)

Companies -
Jan 21: Saracen Mineral Holdings Q2, Perth (Australia)
Jan 22: BHP HY operational review, Melbourne (Australia)
Jan 23: Northern Star Q24, Perth (Australia)
Jan 24: Galaxy Resources Q4, Perth (Australia)
Jan 25: NOVAGOLD Q4, Vancouver (Canada)

Regional specialist Patagonia Gold is reviewing production forecasts for its Cap Oeste gold-silver mine in southern Argentina after below-forecast grades, labour disruptions and crushing circuit downtime in the Dec qtr pulled it up short of its revised guidance for the year to end-Dec.
Total FY2018 production was 42,906oz gold equivalent, up from 20,088oz in FY2017 but 5% below the 45,000oz target.
Patagonia resumed re-handling and crushing of stockpiled ore at the mothballed Lomada de Leiva mine at end-Nov.

Continued strong performance from its Tier 1 NSW mines have seen dominant Australian coal producer Yancoal lift attributable FY2018 production to 32.9Mt, up from 31.45Mt in the previous year.
The Moolarben (85%-owned), Mount Thorley Warkworth (82.9%) and Hunter Valley Operations (51% JV with Glencore) contributed 84% of the total.
CEO Reinhold Schmidt says the result benefits from record production at Moolarben and maximising production from its underground and opencut mines to meet growing demand for higher-quality thermal coal.
Yancoal predicts more growth, with guidance for attributable production of 35Mt in FY2019.