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Recent announcements regarding the South Australian mineral and energy resources sectors

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This update covers the July 2017 period and is compiled from information publicly released by companies and Ministerial news releases.

Readers should refer to the latest information available on company websites, particularly in regard to making any forward investment decisions.

Company news

Alliance Resources

www.allianceresources.com.au

The latest RC drilling program has been completed at the Wilcherry Project (ASX release 29 June 2017). Drilling was carried out at three prospects: Zealous tin (366 m; target depths not reached), Telephone Dam Zn–Pb–Ag (210 m) and Weednanna gold (4,051 m). Drill results from Telephone Dam and Weednanna are expected shortly. The Wilcherry Project, a joint venture between Alliance Resources (manager) and Tyranna Resources, is located within the southern Gawler Craton on the northern Eyre Peninsula and comprises six exploration licences covering 1,074 km2.

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Andromeda Metals

www.andromet.com.au

Excellent metallurgical gold recoveries have been reported for Baggy Green (averaging 98.7%, up to 99.3%) and Barns deposits (averaging 97.9%) using an identical gravity and cyanide leach flowsheet (ASX release 6 July 2017). The results confirm that Andromeda Metals will be able to effectively treat ore from both deposits using a conventional flowsheet in a single processing plant. The deposits contribute 95% of the Wudinna Gold Camp’s total mineral resource of 200,300 ounces (oz). Further metallurgical test work is proposed.

A potentially significant graphite discovery has been reported at the Thurlga Joint Venture by both Andromeda (ASX release 10 July 2017) and project manager Investigator Resources (ASX release 10 July 2017).

An innovative hydrometallurgical in situ recovery concept for copper production from Andromeda’s Wombat and Bruce deposits (part of the Moonta copper project) is being evaluated, following simple, preliminary leach tests on composite samples confirmed copper solubility of up to 65%. Further studies are required and discussions are underway with groups with in situ recovery expertise and the technical capacity to advance the project (ASX release 20 July 2017).


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Archer Exploration

www.archerexploration.com.au

Archer Exploration is expecting a decision shortly from the South Australian Government regarding the granting of a mining lease and miscellaneous purposes licences for its Campoona graphite project following the lodgement of its final response document (ASX release 4 July 2017).

Rock chip sampling at Archer’s Blue Hills copper project (40 km southeast of Peterborough) has extended the copper mineralisation footprint and assisted in identifying future drill targets (ASX release 10 July 2017). Best results along strike include:

  • 9.27% and 5.61% Cu
  • 2.4% Cu and 8.1 g/t Au.

Archer has entered into an agreement with the Australian Research Council Research Hub for Graphene Enabled Industry Transformation (ASX release 12 July 2017). The hub will provide leading knowledge, innovative research and development capabilities to assist with commercialisation of graphene research to create future carbon-based high-tech industries and technologies.

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Arrium Mining

www.arrium.com.au

A binding agreement had been signed by KordaMentha Restructuring (deed administrators for the Arrium Group Companies) for the sale of Arrium Manufacturing, Distribution and Recycling, Whyalla Steelworks and Mining divisions to GFG Alliance (ASX release 5 July 2017). The sale is subject to approval by the Arrium Committee of Creditors and the Foreign Investment Review Board, which are expected to decide soon. Completion of the sale is anticipated to occur in late August 2017.

Once the sale is finalised, KordaMentha will move to the next stages of the administration, including finalising returns to creditors, investigations into the affairs of the Arrium Group Companies and reporting to creditors on the outcome of the administration.

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Beach Energy – Senex Energy

www.beachenergy.com.au
www.senexenergy.com.au

Petroleum Exploration Licence 104 partners, Beach Energy (40%) and Senex Energy (60% and operator), announced a Birkhead oil discovery on the western flank of the Cooper Basin in an ASX release on 25 July 2017. Marauder 1 is located approximately 2 km north of the producing Growler and Spitfire oil fields. The prospect was identified from the Mollichuta 3D seismic survey and drilled as a vertical calibration well to appraise a potential northern extension of the western flank Birkhead oil play fairway. Marauder 1 encountered oil shows within the Birkhead Formation, with a flow rate of 655 barrels of oil per day, with no indication of formation water throughout the drillstem test. The well will be cased and suspended as a future producer and brought online in coming months.

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BHP

www.bhp.com

BHP’s Olympic Dam smelter operations will be enhanced through a $350 million smelter maintenance campaign, the largest planned shutdown by the company in South Australia (BHP News Release 19 July 2017). There will be 1,300 contractors at Olympic Dam during the peak of construction as teams work around the clock to dismantle, rebuild and upgrade integral components of the facility.

Starting in August, the maintenance campaign is expected to run for more than 100 days and involve combined investment in the following three key areas to ensure ongoing integrity of critical infrastructure and delivery of safe and reliable performance:

  • rebuilding key elements of the smelter flash furnace
  • demolishing and building a new electric slag furnace
  • removing and replacing the five-story high electro static precipitator.

Further refinery asset maintenance will also occur during the downtime.

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Carpentaria Exploration

www.carpentariaex.com.au

Carpentaria Exploration has released a revised resource estimate for its Hawsons Iron Project, located in New South Wales close to the South Australia border, based on a lower cutoff grade of 9.5% Davis tube recovery (DTR). The new resource estimate stands at 2.50 billion tonnes (Bt) at 13.9% DTR magnetite recovery for 348 million tonnes (Mt) of concentrate at 69.7% Fe and 2.81% silica, representing an increase of 120 Mt and an increase in contained concentrate of 12 Mt (ASX release 3 July 2017). The earlier resource estimate, announced in an ASX release on 27 February 2017, used a 10% DTR cutoff grade.

The recently completed prefeasibility study (PFS) identifies it as one of the world’s leading undeveloped high-quality iron ore concentrate and pellet feed projects (ASX release 28 July 2017). Results show robust project economics for the production of 10 million tonnes per annum (Mtpa) of the world-leading Hawsons Supergrade® product for steelmakers. The PFS is a major step forward for what could become a decades-long operation for Broken Hill. Blue-chip steel makers from Asia and the Middle East have already oversubscribed for initial planned production, and Hawsons is now extremely well positioned to attract the necessary investment to advance towards mining.

The PFS announcement also included the release of a maiden probable reserve statement of 755 Mt at 14.7% DTR for 111 Mt of 69.9% Fe concentrate.

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Havilah Resources

www.havilah-resources.com.au

Portia gold production increased by 86% in June at 849 oz on the back of record plant throughput of 42,000 t, a 35% increase on the previous month (ASX release 20 July 2017). Havilah Resources also reported that the final stage of plant improvements, the installation and commissioning of cyclones which will lead to higher throughput at improved recoveries, will be completed in July.

Further drilling has been carried out at the northern end of the open pit in search for high-grade extensions to the Portia mineralisation with results to be reported when available.

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Investigator Resources – Andromeda Metals

www.investres.com.au
www.andromet.com.au

Investigator Resources has earned 75% equity in its Thurlga Joint Venture Project with Andromeda Metals after spending $750,000 on a scout drilling program targeting a number of potential silver targets across the tenement (ASX release 10 July 2017). Silver and base metal anomalies were intersected at two prospects – Wide and Ironstone South – with anomalous silver up to 6.6 grams per tonne (g/t). Best results at Wide include:

  • TH17AC006, 28 m at 0.14% Pb from 24 m
  • TH17AC007, 1 m at 2.8 g/t Ag from 63 m (end of hole)
  • TH17AC011, 3 m at 456 parts per million (ppm) Cu from 36 m
  • TH17AC012, 21 m at 0.16% Zn and 1.05 g/t Ag from 36 m.

Significant graphite potential was discovered in the Ironstone area with broad intersections of up to 30 m at 10% total graphitic carbon (TGC).

The program was supported by the South Australian Government’s PACE Discovery Drilling program.

Andromeda Metals also reported on results of the drilling program (ASX release 10 July 2017).

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Iron Road

www.ironroadlimited.com.au

The estimated capital cost of Iron Road’s Central Eyre Iron Project (CEIP) has been reduced by nearly US$300 million to US$3.7 billion, a significant reduction to that delivered in the 2015 optimisation study estimate of US$4.0 billion. CEIP partner, China Railway Group Limited, delivered the estimated capital savings as part of the Joint Project Commercialisation Programme (ASX release 3 July 2017).

Thiess-RWE has been appointed to conduct a final, short mine plan review (approximately 2 months) which is expected to deliver additional mine establishment efficiencies and further maximise project value. Review findings, anticipated in August 2017, will be integral to the independent technical expert report that Iron Road will provide to Chinese banks and other financial institutions during respective due diligence processes.

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Lincoln Minerals

www.lincolnminerals.com.au

Lincoln Minerals continues to move closer to development of the Kookaburra Gully graphite project with the announcement that it proposes to lodge the program for environment protection and rehabilitation (PEPR) with the South Australian Government in September 2017 (ASX release 31 July 2017). The current Kookaburra Gully resource, which includes measured, indicated and inferred mineral resources, stands at 2.03 Mt at 15.2% TGC using 5% TGC cutoff (ASX release 17 May 2017).

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Magnetite Mines

www.magnetitemines.com

In an ASX release on 17 July 2017, Magnetite Mines announced the signing of a non-binding letter of intent between the companies of the South Australian Magnetite Consortium and United Steel Industrial Co., Kuwait, for the sale and purchase of up to 4 Mtpa of ultra-high grade pellet feed. The letter sets out the intent to negotiate an agreement for the sale and purchase of magnetite concentrate from the Olary Project. This agreement will become effective (and binding) when construction financing is secured for the development of the Olary production facilities.

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Marmota

www.marmota.com.au

Drilling at Marmota’s Aurora Tank has been completed on schedule. The 87 aircore holes, totalling 4,189 m, included infill drilling at the Goshawk prospect and new target testing at the Kingfisher prospect (ASX release 10 July 2017).

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Minotaur Exploration – OZ Minerals

www.minotaurexploration.com.au
www.ozminerals.com

Minotaur Exploration and OZ Minerals are collaborating in exploration around the Prominent Hill mine, through the Mount Woods exploration alliance. Access and clearance preparations for a ground electromagnetic survey over the Skylark Shear Zone have been finalised. Scheduled to start in August, the survey will test around 15 km of strike of the shear zone, mostly northwest of the Bellatrix target, searching for iron sulfide – copper–gold style mineralisation under conductive cover (Quarterly report period ended 30 June 2017, ASX release 28 July 2017).

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OZ Minerals

www.ozminerals.com

At OZ Minerals’ Prominent Hill Mine, strong production and lower costs for the June quarter saw copper production up 12% to 28,163 t and gold up 23% to 32,136 t on the previous quarter (ASX release 25 July 2017). The mine plan has production ramping up in the latter half of the year, supported by completion of the second permanent decline expected in late August.

At Carrapateena the boxcut for the second parallel decline is nearing completion with the decline scheduled to break through in late August. Underground development is advancing both declines, which is improving overall development rates. A further update on Carrapateena mine development is expected in the third quarter.

The concentrate treatment plant project is now being managed separately and to a different timeline to Carrapateena.

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Renascor Resources

www.renascor.com.au

An airborne electromagnetic survey has been completed over Renascor Resources’ extensive Siviour graphite deposit on the eastern Eyre Peninsula, confirming the shallow, horizontal nature of the mineralisation as well as the presence of significant near-surface, flat-lying extensions along strike (ASX release 11 July 2017). Results will be used in advanced mine planning studies and are expected to further contribute to establishing a globally competitive, low-cost mining operation.

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Tyranna Resources

www.tyrannaresources.com

Tyranna Resources, as manager of the Western Gawler Craton Joint Venture with WPG Resources, has released final assay results from recent drilling at the Jumbuck gold project in the northern Gawler Craton ( ASX release 6 July 2017).

At the Monsoon gold prospect, 54 RC drillholes were completed for 4,250 m (average depth 78 m). Best results include:

  • 17MNRC019, 12 m at 1.60 g/t Ag from 33 m
  • 17MNRC023, 11 m at 1.21 g/t Ag from 48 m
  • 17MNRC004, 7 m at 1.12 g/t Ag from 30 m
  • 17MNRC037, 3 m at 1.94 g/t Ag from 49 m
  • 17MNRC041, 1 m at 3.58 g/t Ag from 62 m.

At the Typhoon gold prospect, results exceeded expectations and planning is underway for additional drilling to commence in early August 2017. Best results include:

  • 17TYRC004, 1 m at 50.7 g/t Ag from 71 m
  • 17TYRC012, 13 m at 3.88 g/t Ag from 47 m, including 4 m at 10.18 g/t
  • 17TYRC013, 5 m at 2.55 g/t Ag from 70 m, including 1 m at 7.5 g/t
  • 17TYRC004, 14 m at 1.24 g/t Ag from 32 m
  • 17TYRC001, 3 m at 2.95 g/t Ag from 45 m.

The second phase of Typhoon drilling will be followed by a 3,000 m RC drill program at the Greenewood prospect, located in the northern Jumbuck area.

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WPG Resources

wpgresources.com.au

At WPG Resources’ Challenger Mine, rehabilitation works at the bottom of the Jumbuck Decline have been completed and on 5 July 2017 development towards the next production level recommenced, marking the first step in the development of Challenger Deeps as a new production area (ASX release 7 July 2017). Development activities, including the next phase of drilling activities due to commence in August, will continue in anticipation of first stoping later this year.

Byrnecut Australia will be assuming responsibility for all underground mining at Challenger, including the Challenger Deeps area, as of 8 August 2017.

Production figures for the June quarter include (ASX release 20 July 2017):

  • 13,909 oz of gold, taking year-to-date production to 50,882 oz
  • record gold production of 6,230 oz for the month of June from Challenger and Tarcoola.

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Ministerial news releases

Certainty for Whyalla as Arrium sale agreement signed

Premier Jay Weatherill
05 July 2017


Treasurer Tom Koutsantonis has welcomed the signing of a binding agreement to sell the Arrium companies, including the Whyalla operations, to London-based GFG Alliance (Liberty House). The sale is still subject to approval by the Arrium Committee of Creditors and the Foreign Investment Review Board, however the process is anticipated to be complete by August this year. GFG Alliance, led by Gupta Family Group Executive Chairman Sanjeev Gupta, submitted a modified offer last night after the exclusivity period granted to the South Korean consortium Newlake expired on Friday with no deal reached. Premier Jay Weatherill said the signing signalled the beginning of the end of the 15 months of uncertainty for Whyalla and heralded a new future for the state’s steel city.

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