Latin American gold miner Minera IRL (LON:MIRL TSX:IRL) is set to begin drilling on January 2 of next year on the eastern extensions of the Ollachea ore bodies.
The company has awarded a diamond drilling contract for a minimum of 4,000 metres (m) of drilling to Ingetrol Peru, a company which is already providing surface drilling services to Minera IRL.
The 1,200m exploration drive at Ollachea is scheduled to reach 1,000m by early January, which should provide excellent positioning for exploration drilling of the eastern extension of the Minapampa ore body, where Minera IRL has just completed a feasibility study.
The company said good progress has been made with the exploration ground, thanks in part to ground conditions being a lot better than expected. Water in-flow has been low, the company added.
The rate of progress picked up considerably during October and November.
Mining has passed through the major regional lineament, the Ollachea thrust fault, and is now within the late rock package, which is where the gold mineralisation is.
"The tunnel, which is approximately 250 metres below the outcrop at Minapampa, will also place us in an ideal position to explore the down-dip extension of Minapampa as the tunnel advances," said Courtney Chamberlain, Executive Chairman of Minera IRL.
"The defined mineralisation remains open ended and untested along strike and down-dip," he added.
House broker finnCap thinks the underground drilling campaign could add considerable value to the project.
The broker currently ascribes no value in its valuation model to any resource that may be discovered in the current exploration drilling campaign, which is due to start in the near future.
“This is in spite of the fact that it is known that the mineralisation extends considerably to the east as it has been continuously mined at outcrop in the bottom of the valley,” notes finnCap analyst Martin Potts..
finnCap has a target price of 109.1p for the stock.
Proactiveinvestors is a leading multi-media news organisation, investor portal and events management business with offices in New York, Sydney, Toronto, Frankfurt and London.
Monday, 3 December 2012
Energizer Resources shares rise on NI 43-101 Molo resource - "significant accomplishment"
Shares in Toronto-based Energizer Resources (TSE:EGZ)(OTCBB:ENZR) advanced after it unveiled Monday an NI 43-101 resource estimate for its giant Molo graphite deposit in Madagascar, part of its aptly-named Green Giant project.
Graphite is a mineral form of the element Carbon (C), and forms in veins inside metamorphic rocks as a soft black material. It has many applications today, ranging from refractories, brake linings and steel-making uses, to lithium-ion batteries and fuel cells. Demand for the industrial mineral is projected to grow as lithium-ion battery adoption continues.
Indicated resources at the Molo deposit consist of 84.04 million tonnes, grading 6.36% carbon (C), above a 2% C cut-off grade, with inferred resources totalling 40.34 million tonnes grading 6.29% C.
The junior miner recently grabbed the attention of Euro Pacific Canada, with the Toronto-based brokerage adding Energizer to its watch list last month and rightly predicting between 80 to 100 million tonnes of graphite at Molo.
Energizer said Monday that mineralized zones in the resource estimate start from surface and continue to a maximum depth of 385 metres, with the zones remaining open along strike and at depth.
Two high grade zones occur on the western and eastern flanks of the Molo deposit, with a combined total indicated resource of 60.17 million tonnes grading 8.1% C, above a 4% C cut-off grade.
The company released final assay results from the remaining drill holes and trenches at its Molo graphite deposit in November, reporting intercepts including 246 metres at 8.19% carbon in hole MOLO-12-33.
Energizer said it now expects a preliminary economic assessment (PEA) by the first quarter of next year, which will be completed by DRA Mineral Projects. The release of the report has been delayed slightly from year-end 2012 due to the re-engineering of plant operating parameters.
"The calculation of our graphite resource is a significant accomplishment for the company, and impacts the next milestone for Energizer, which is the release of our PEA study," said president and COO, Craig Scherba.
"The original mine design parameters were based on an assumed head-grade of 6% C, and with the quantification by CCIC of significant tonnage at a much higher grade (9% vs 6% C), we believe a head-grade 40-60% higher than originally designed for is obtainable.
"Consequently, since less material will need to be processed to obtain the same volume of graphite flake, the capital and operating requirements for the mine should be significantly reduced in relation to the original design."
As a result, DRA has been authorized to begin redesigning the mine based on these new parameters. DRA, which has built more than 200 mines, took a 1.6 per cent equity investment in Energizer earlier this year through a strategic partnership. The African company has the right to acquire up to 5 per cent of Energizer.
The mineral resource estimate reported today, which was prepared by independent consultants together with Caracle Creek International Consulting (CCIC), is based on 48 drill holes, or a total of 9,551 metres, as well as 18 trenches drilled by Energizer. Three mineralized zones were modelled for the resource calculation.
The Molo deposit is part of the joint venture with Malagasy Minerals Limited in Madagascar. Energizer has a 75 per cent stake in the venture, and is the operator of the project.
The company has wasted no time in developing what it calls a “world class” graphite resource, having first identified graphite as a potential mineral of interest on the Green Giant property in December 2011.
Euro Pacific noted in its research that the Molo deposit is a massive, 2km long multi-folded graphite trend, which has the potential to be one of the world’s largest known sources of high-grade graphite.
Flake graphite - the most actively pursued type and associated with next-generation technologies - is made up of layers of graphene, which is the minerals' base structural element. The global supply of the mineral as of 2011 was 1.019 million tonnes, of which 565,000 tonnes was the flake variety. Metallurgical tests confirm that Energizer’s Molo deposit is 100% flake, including jumbo and large flake at an average grade of 93% C.
According to industry sources, over 65 per cent of the world’s graphite supply comes from China - the majority of which is of the amorphous variety - used for more traditional applications and for which consumption is falling.
But China has been experiencing declining production and increasing costs, recently imposing a variety of protective measures on graphite exports - including 20 per cent export duties, 17 per cent value added tax, and an export licensing system.
Companies like Energizer are taking advantage of what is perceived as a huge potential for graphite demand.
The Molo deposit is located strategically in the centre of the key graphite demand markets, which include China, India, South Korea and Japan.
The deposit, which boasts immediately serviceable infrastructure, is also in close proximity to specialty finishing battery producers in both Korea and Japan, where most producers send their spherical graphite for specialty coating.
Industrial mineral graphite has the highest natural strength and stiffness of any material, along with the lightest weight of all reinforcements. It is also an excellent conductor of electricity and heat, as well as strong lubricant.
The need for graphite in lithium-ion batteries is projected to grow dramatically, with these batteries found in several electronic devices, including the electric vehicle.
Shares in Energizer were lately up over 2.9 per cent, trading at around 35 cents late this morning. Its stock was halted earlier pending the news, and recently resumed trading after the release of the resource estimate.
The company's shares exceeded their 50-day average trading volume, with around 437,400 shares lately changing hands, compared to the 50-day average of 95,931.
Globex Mining starts prefeasibility drilling at Timmins talc-magnesite property
Globex Mining (TSE:GMX) (OTCQX:GLBXF) says it has started prefeasibility study drilling at its Timmins talc magnesite property in Timmins, Ontario.
The company said Monday that two drills are moving onto the site today, with the campaign to consist of around 46 drill holes, or 7,000 metres.
The majority of holes in the program will be infill, in order to elevate the first 20 years of potential resource to mineable reserve.
The preliminary economic assessment report, released in March of this year, was based on an initial 20-year period of mining 500,000 tonnes of ore per year, with total projected sales of $2.6 billion and an after-tax internal rate of return of 20%.
To advance the project to prefeasibility study stage, Globex is now completing infill and geotechnical drilling to upgrade the first 20-year resource to a 20-year reserve, which will be reported in a new NI 43-101 report.
The company has also undertaken a series of larger scale tests to further improve recovery costs and product purity, it said.
Globex is aiming to become a major supplier of "high quality" talc and magnesia to the North American market.
The Timmins project was acquired in 2000 by Globex, who now holds a 90% stake, with the remainder held by Drinkard Metalox. The property is situated in the south half of Deloro Township, Porcupine Mining District, 13 kilometres southeast of Timmins.
The PEA report was based on an initial mineral resource report on the project from March 2010, which included 12.73 million indicated tonnes at a grade of 52.1 percent magnesite and 35.4 percent talc in the A Zone Core, with 18.78 million inferred tonnes at a grade of 53.1 percent magnesite and 31.7 percent talc.
The optimized open pit shell contains a mineral resource sufficient to support a 60-year mine life, with the PEA only considering the first 20 years of this period. Total operating costs were estimated at $986.5 million for the 20-year mining period or an average of $98.65 per tonne processed.
Globex Mining has a portfolio of exploration properties in Quebec and Ontario.
Last week, the company said it received conditional approval from the TSX Venture Exchange to list its subsidiary Chibougamau Independent Mines (CIM) on the exchange as it completes the proposed spin-out.
With the approval now in hand, CIM will begin the $10 million private placement financing it announced in October. All the funds will be used for the ten, 100 per cent-owned, advanced properties in the Chibougamau area.
Clifton Star Resources announces more "encouraging" Duparquet drill results
Clifton Star Resources (CVE:CFO) announced Monday results from another 14 holes as part of the drilling campaign this year at its Duparquet project in Quebec, which continue to be "very encouraging."
The company said it continues to get "significant" assay results from both delineation holes within the limits of the current pit shell, and exploration holes outside of the pit shell.
Within the pit limits, the results show good grades and continuity, Clifton said, while the exploration holes show the potential to increase the limits of the current pit shell.
All of the holes reported Monday were completed after the closing date for the upcoming preliminary economic assessment, and will therefore not be included in the new resource estimate, the junior explorer said.
Notable results from the latest holes were 36.0 metres grading 2.08 grams per tonne (g/t) gold in hole BD12-18, including 18.9 metres at 3.51 g/t gold, and 28.5 metres at 1.30 g/t gold in hole BD12-20 - also drilled on the western edge of the Donchester pit.
Hole D12-30 intersected the North zone approximately 60 metres outside the current limit of the pit shell, where it returned an assay of 1.52 g/t gold over 26.4 metres.
Meanwhile, hole D12-33, drilled toward the south, intersected high-grade gold mineralization within the central part of the syenite body, Clifton Star said, which assayed 11.53 g/t gold over 3.0 metres.
Hole D12-34, drilled in the east-central part of the Donchester pit shell, hit 36.6 metres at 2.59 g/t gold, including 14.1 metres at 4.77 g/t gold.
The company is working toward expanding the resources at the project at a steady pace, with two drill rigs on site. So far this year, it has drilled 84 holes for a total of over 30,000 metres, and has drilled 16 holes since late October.
Clifton Star's first integrated NI 43-101 report on the Duparquet property earlier this year outlined 3 general pit shells, which included the Beattie, Donchester and Central Duparquet properties.
The report noted 1,284 ounces of gold in the measured category, 1.71 million ounces of gold in the indicated category and 1.67 million ounces of gold in the inferred category.
Its recent exploration drilling program focused on the area between the Beattie and Donchester pits shells, as well as definition drilling within the central part of the Donchester pit shell.
The junior miner is now focused on putting out its preliminary economic report - which it hopes will secure a re-rating of its stock.
A new resource estimate - which will include 2012 drilling up to September - along with the PEA are expected to wrap up early in the new year.
The drills on the project are now focused on converting inferred resources to indicated resources within the limits of the pit shell, the company said. Clifton is also continuing an extensive resampling program and review of historical holes on the Dumico property, located around 1 km to the east of the Central Duparquet pit shell.
Earlier this month, the Quebec-based company closed a private placement financing with Industrial Alliance Securities, raising $3.45 million. It plans to use the new funds for exploration expenses at its Duparquet project.
Patriot Minefinders to become "major explorer" in central Mexico after preliminary option deal for Kilometer 66 property
Patriot Minefinders (OTCBB:PROF) says it has inked a letter of intent agreement with Bearing Resources (CVE:BRZ) to acquire up to a 75 per cent interest in the Kilometer 66 silver-gold-lead-zinc property in Durango, Mexico.
The project, which will be Patriot's second in central Mexico, has a deposit with NI 43-101 compliant resource of 22.3 million silver equivalent ounces.
Patriot said the deal will turn the company into a major explorer in the region.
“This new venture together with La Buena project located 5.6 miles to the north of Goldcorp’s Penasquito mine will allow our company to become a major explorer in the prolific silver-gold belt of Central Mexico," adds CEO, John H. Schweitzer.
"The company believes that the silver-gold-lead-zinc mineralization identified to date on the Km 66 property may well be indicative of a larger system under shallow cover while the newly discovered Victorinos target illustrates the excellent exploration potential in the region."
The Km 66 property is located 100 kilometres from the Peñoles smelter at Torreon, and is bisected by a paved highway and power lines.
It covers a five kilometre-long trend of mineralization that includes the La Gloria and Las Palmitas epithermal silver-gold-lead-zinc deposits. Great Panther Silver, which previously held an option to acquire Km 66, filed a technical report containing an NI 43-101 compliant mineral resource estimate for these two deposits in 2008.
The report calculated a total of 22.3 million silver equivalent ounces in the indicated category and a further 6.3 million silver equivalent ounces in the inferred category using a cut-off grade of 50 grams per tonne (g/t) silver equivalent.
Patriot said that it has not done sufficient work to classify this resource as current, and therefore is considering it a historical estimate.
Aside from the La Gloria and Las Palmitas zones, drilling by previous option holder Great Panther found quartz-molybdenite veins in the Bull's Eye zone, and carbonate replacement deposits in the North zone.
In addition, recent work by Bearing has outlined a new target at Victorinos, Patriot said, some 5 kilometres east of La Gloria, where soil sampling and prospecting have defined a 500 by 600 metre gold-silver-lead-zinc soil anomaly.
Under the terms of the preliminary option agreement, Patriot will have the right to earn a 75 per cent stake by assuming the remaining obligations of the underlying option agreement with the Mexican vendors, who retain a 3% net smelter royalty.
The terms include a US$150,000 payment on signing the definitive agreement and 1.2 million Patriot shares, along with a series of staged payments annually over a five year stretch. The company can choose to buy the property outright on the first anniversary for US$5.57 million, after the second year for US$5.87 million, or after the third year for US$6.87 million.
It also can purchase up to 1% of the net smelter royalty for US$650,000 per half per cent, and holds a right of first refusal to purchase the remaining 2%.
The company must also spend a total of US$2.0 million on exploration work before April 23, 2015, and complete a bankable feasibility study after eight years.
Patriot's first project is La Buena, which is located only 5.6 miles north of Goldcorp's (TSE:G) Peñasquito Mine. The company also has an option to earn 50 per cent of the La Buena project through an option agreement with a Canadian mining exploration company.
Rambler -- commercial copper gold production in Atlantic Canada
George Ogilvie, President & CEO of Rambler Metals & Mining, talks about declaring commercial production, 2000-2500 wet metric tonnes of copper concentrate produced monthly, better than feasibility study, being able to process gold & base metals, aiming to be the leading mine operator & developer in Atlantic Canada (Nov 2012)
Aureus Mining "full steam ahead" towards production
David Reading, CEO and Director of Aureus Mining (LON:AUE TSX:AUX) tells Proactiveinvestors that the company is moving fast and the share price is only pricing in something like 40% of the value of the assets at New Liberty ONLY. No credit is being given to the remainder of the New Liberty asset or any of the other "exciting" exploration assets in Liberia such as Weaju (AUE also has assets in Cameroon). David says the strategy is to grow organically and, while there is always the chance of a bid, the intention is to move to being an independent mid-tier gold production company.
http://www.proactiveinvestors.com/companies/stocktube/352
Amara Mining reveals significant drill results from Yaoure gold project
West African gold firm Amara Mining (LON:AMA) revealed what it calls ‘significant’ results from the Yaoure project in Cote d'Ivoire.
Amara says the results have, so far, confirmed the potential for a large moderate grade sulphide deposit. This mineralisation lies beneath the previously mined oxide resources.
It revealed that 90 holes have been drilled and all of them have encountered mineralisation.
The highlight results had significant intercepts with lengths of between 8 and 28 metres with grades ranging from 3.24 to 9.47 grams per tonne gold.
Amara is on-target to complete an update for Yaoure’s inferred resource in the first quarter of next year. Also a new exploration campaign is planned to continue step-out drilling to get a better understanding of the area’s prospectivity.
"These latest drilling results from Yaoure continue to confirm our belief in the project's potential,” said chief executive Peter Spivey.
“We expect the remaining assays in the coming days and we intend to update our sulphide resources in Q1 2013.
“By using our cash flow from Kalsaka to fund our exploration at Yaoure and at the Baomahun project in Sierra Leone, Amara is differentiating itself from other junior mining companies and delivering on its strategy to become a mid-tier producer."
Amara says the results have, so far, confirmed the potential for a large moderate grade sulphide deposit. This mineralisation lies beneath the previously mined oxide resources.
It revealed that 90 holes have been drilled and all of them have encountered mineralisation.
The highlight results had significant intercepts with lengths of between 8 and 28 metres with grades ranging from 3.24 to 9.47 grams per tonne gold.
Amara is on-target to complete an update for Yaoure’s inferred resource in the first quarter of next year. Also a new exploration campaign is planned to continue step-out drilling to get a better understanding of the area’s prospectivity.
"These latest drilling results from Yaoure continue to confirm our belief in the project's potential,” said chief executive Peter Spivey.
“We expect the remaining assays in the coming days and we intend to update our sulphide resources in Q1 2013.
“By using our cash flow from Kalsaka to fund our exploration at Yaoure and at the Baomahun project in Sierra Leone, Amara is differentiating itself from other junior mining companies and delivering on its strategy to become a mid-tier producer."
Longreach Oil & Gas moves to further de-risk assets
Andrew Benitz, CEO Longreach Oil & Gas announces a new 2D seismic programme will help the company to further de-risk as it moves towards the drilling planned for early 2013. Andrew also says that it enables the company to turn other leads into new drill targets.
http://www.proactiveinvestors.com/companies/stocktube/351
Thor Mining finds nickel and copper indicators within Albany-Fraser
Thor Mining (ASX: THR, AIM: THR) has received some encouraging Nickel and copper indicators in early sampling work on Dundas gold project, which is located in one of Australia's hottest exploration post codes - the Albany-Fraser Province.
The results are from further analysis of surface geochemical sampling on just a small portion of the tenement holding.
Mick Billing, executive chairman, commented: “This is an encouraging start in assessing the Nickel prospectivity of the Dundas project.
"A number of the results are clearly anomalous, and the spacing between the sample collection points is extremely broad. We will be following up with an infill program to determine the potential for Nickel focussed drill targets.”
The Dundas tenements lie on the general strike-extension of the most prolific gold-bearing belt of the Yilgarn Province – the Wiluna–Kalgoorlie-Norseman greenstone belt, in an area where the trend of the Albany-Fraser belt is displaced south-eastwards by about 50 kilometres.
The belt hosts the plus 6.4 million ounce AngloGold Ashanti (ASX: AGG) and Independence Group's (ASX: IGO) Tropicana gold deposit, and other closer discoveries.
Nickel Exploration
Further analysis of 195 wide spaced calcrete samples has now been completed across a 25 square kilometre area of exploration tenement, E63/1102 (THR 60%).
The geology of the area comprises Fraser Complex mafics and ultramafics which host significant recent Nickel discoveries including Sirius Resources' (ASX: SIR) Nova discovery which about 80 kilometres north-northeast of Dundas, and historical Nickelintercepts nearby at the Gnama South and Talbot prospects.
The selected area also includes a buffer zone to allow for irregularities in the interpreted formation contact which exists largely under several metres of sediment cover.
Results of the additional analyses indicate three areas of elevated Nickel, one area of elevated copper and one area of coincident copper and Nickel.
Analysis
Thor currently holds 60% equity in the Dundas project along with rights to increase that equity to 100% - with the project located in one of the hottest belts in Australia.
Any success from the infill sampling in early 2013 will provide a catalyst for a positive price re-rating for Thor, which not only has exposure to the Albany-Fraser - but also another two projects.
This includes the Spring Hill (Thor 51%) which hosts 450,000 gold ounces, and the company's Molyhill tungsten and molybdenum project in the Northern Territory, where following the completion of a Definitive Feasibility Study earlier this year - Thor has been focused on negotiations to secure agreements for offtake and project finance.
With this highly prospective portfolio - Proactive Investors consider that Thor offers upside to $0.02 - $0.03.
The results are from further analysis of surface geochemical sampling on just a small portion of the tenement holding.
Mick Billing, executive chairman, commented: “This is an encouraging start in assessing the Nickel prospectivity of the Dundas project.
"A number of the results are clearly anomalous, and the spacing between the sample collection points is extremely broad. We will be following up with an infill program to determine the potential for Nickel focussed drill targets.”
The Dundas tenements lie on the general strike-extension of the most prolific gold-bearing belt of the Yilgarn Province – the Wiluna–Kalgoorlie-Norseman greenstone belt, in an area where the trend of the Albany-Fraser belt is displaced south-eastwards by about 50 kilometres.
The belt hosts the plus 6.4 million ounce AngloGold Ashanti (ASX: AGG) and Independence Group's (ASX: IGO) Tropicana gold deposit, and other closer discoveries.
Nickel Exploration
Further analysis of 195 wide spaced calcrete samples has now been completed across a 25 square kilometre area of exploration tenement, E63/1102 (THR 60%).
The geology of the area comprises Fraser Complex mafics and ultramafics which host significant recent Nickel discoveries including Sirius Resources' (ASX: SIR) Nova discovery which about 80 kilometres north-northeast of Dundas, and historical Nickelintercepts nearby at the Gnama South and Talbot prospects.
The selected area also includes a buffer zone to allow for irregularities in the interpreted formation contact which exists largely under several metres of sediment cover.
Results of the additional analyses indicate three areas of elevated Nickel, one area of elevated copper and one area of coincident copper and Nickel.
Analysis
Thor currently holds 60% equity in the Dundas project along with rights to increase that equity to 100% - with the project located in one of the hottest belts in Australia.
Any success from the infill sampling in early 2013 will provide a catalyst for a positive price re-rating for Thor, which not only has exposure to the Albany-Fraser - but also another two projects.
This includes the Spring Hill (Thor 51%) which hosts 450,000 gold ounces, and the company's Molyhill tungsten and molybdenum project in the Northern Territory, where following the completion of a Definitive Feasibility Study earlier this year - Thor has been focused on negotiations to secure agreements for offtake and project finance.
With this highly prospective portfolio - Proactive Investors consider that Thor offers upside to $0.02 - $0.03.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.
Peak Resources' Scoping Study delivers high returns for Ngualla rare earths project
Peak Resources' (ASX: PEK, OTCQX: PKRLY) has delivered a very impressive Scoping Study for the Ngualla Rare Earth Project in Tanzania, confirming that the project is a stand-out in the rare earth industry.
Highlights include a base case pre-tax net present value of US$1.571 billion and an internal rate of return of 53%, with a low capital cost requirement of US$400 million (excluding contingency) with a payback period within the first 3 years of production.
Peak is rightly 'extremely encouraged' by the confirmation of high returns, low cash costs, and the low capital cost required to bring the project into production.
Richard Beazley, managing director, commented: “The outcome of the scoping study confirms that Ngualla is indeed a leading and stand out project in the rare earth industry with excellent efficiencies in capex and opex driven by the deposit’s dominant natural advantages.
"This study clearly delineates the strong value proposition of Ngualla and catapults its development ahead of other projects.”
Ngualla hosts a resource of 170 million tonnes at 2.24% REO - ranking it as the fifth largest rare earth deposit in the world outside of China.
The total resource includes a higher grade, near surface zone of 40 million tonnes at 4.07% REO for 1.6 million tonnes of contained REO.
Scoping Study highlights
The full breakdown of the scoping study highlights include:
- Strong economics with a base case pre-tax net present value of US$1.571 billion and an internal rate of return of 53%;
- Low capital cost requirement of US$400 million (excluding contingency) with a payback period within the first 3 years of production;
- Low operating cash costs of US$10.09 per kg Free on Board "FOB" for the first 5 years of production with an average cost of $US11.05 per kg over 25 years;
- Annual average revenues of US$361 million at 10,000 tonne equivalent rare earth oxide production;
- Scoping study mine plans based solely on the Indicated and Measured portions of the Mineral Resource;
- Significant opportunity and available resource to upscale production to 40,000 tonnes per annum and extend the mine life, as the base case scoping study mine plan exploits less than 10% of the total Mineral Resource;
- The highest grade large scale rare earth deposit in Africa and the fifth largest deposit outside of China;
- Mineralisation is not radioactive and has the lowest levels of uranium (18ppm) and thorium (43ppm) of any major rare earth deposit;
- Beneficiation and metallurgical process proven in laboratory test work with pilot plant work underway;
- Relatively simple metallurgical process utilising sulphuric acid leaching with no inherently troublesome acid cracking or baking requirements; and
- On target to begin production in Q1 2016.
Physical and Financial Summary
The key physical and financial parameters that define the Ngualla Rare Earth Project value proposition, and support the project as a low cost, long term producer of rare earth
products for the world market, are:
- Average Annual Mine Production (after ramp up) 325,000 tonnes
- Life of Mine (LoM) 25 years
- Average Grade (LoM) 4.35% REO
- Average Grade for first 5 years 4.64% REO
- Average Stripping Ratio (LoM) 3.34
- Average Stripping Ratio for first 5 Years 0.73
- Total REO Recovery 71%
- Average Annual Equivalent REO Product (after Ramp-up): Separated REO = 6,347 tonnes
CeO2 Concentrate = 3,633 tonnes, Total REO Production = 9,980 tonnes
- Capital Costs (Excluding Contingency) US$ 400M
- Average (LoM) Cash Cost (FOB), Excluding Amortisation, Depreciation, and Royalties. (C1 Cost) US$ 11.05 / kg
- Average (C1 Cost) for first 5 years of full production US$ 10.09 / kg
- Revenue (FOB) Separated Products “Basket Price” (US$ 52.34 / kg) CeO2 (concentrate) (US$ 8 / kg)
- Discount Rate Applied 10%
- IRR (Pre-tax and Royalties) 53 %
- NPV (Pre-tax and Royalties) US$ 1.571 billion
- Payback from production start-up In 3rd Year
Analysis
In August 2012 Proactive Investors highlighted the price dis-connect with Peak, and said: "The pullback in the share price to $0.16 therefore provides investors with a potential low re-entry price before the news flow ramps up for the company in the second half of 2012."
Now with Peak continuing to deliver some impressive news from Ngualla, the company's share price is currently trading 19% higher than when Proactive Investors made this statement.
Even with the share price rise, the market cap. of $50 million is still very light, considering an IRR (Pre-tax and Royalties) of 53% and an NPV (Pre-tax and Royalties) US$1.571 billion.
Further highlighting the meagre valuation, Ngualla ranks as the fifth largest rare earth deposit in the world outside of China.
With $8.3 million in cash at the end of September 2012, the Peak enterprise value is a mere $42 million.
Due to the very impressive Scoping Study metrics, Proactive Investors considers that the positive re-rating in the Peak share price has only just begun.
Highlights include a base case pre-tax net present value of US$1.571 billion and an internal rate of return of 53%, with a low capital cost requirement of US$400 million (excluding contingency) with a payback period within the first 3 years of production.
Peak is rightly 'extremely encouraged' by the confirmation of high returns, low cash costs, and the low capital cost required to bring the project into production.
Richard Beazley, managing director, commented: “The outcome of the scoping study confirms that Ngualla is indeed a leading and stand out project in the rare earth industry with excellent efficiencies in capex and opex driven by the deposit’s dominant natural advantages.
"This study clearly delineates the strong value proposition of Ngualla and catapults its development ahead of other projects.”
Ngualla hosts a resource of 170 million tonnes at 2.24% REO - ranking it as the fifth largest rare earth deposit in the world outside of China.
The total resource includes a higher grade, near surface zone of 40 million tonnes at 4.07% REO for 1.6 million tonnes of contained REO.
Scoping Study highlights
The full breakdown of the scoping study highlights include:
- Strong economics with a base case pre-tax net present value of US$1.571 billion and an internal rate of return of 53%;
- Low capital cost requirement of US$400 million (excluding contingency) with a payback period within the first 3 years of production;
- Low operating cash costs of US$10.09 per kg Free on Board "FOB" for the first 5 years of production with an average cost of $US11.05 per kg over 25 years;
- Annual average revenues of US$361 million at 10,000 tonne equivalent rare earth oxide production;
- Scoping study mine plans based solely on the Indicated and Measured portions of the Mineral Resource;
- Significant opportunity and available resource to upscale production to 40,000 tonnes per annum and extend the mine life, as the base case scoping study mine plan exploits less than 10% of the total Mineral Resource;
- The highest grade large scale rare earth deposit in Africa and the fifth largest deposit outside of China;
- Mineralisation is not radioactive and has the lowest levels of uranium (18ppm) and thorium (43ppm) of any major rare earth deposit;
- Beneficiation and metallurgical process proven in laboratory test work with pilot plant work underway;
- Relatively simple metallurgical process utilising sulphuric acid leaching with no inherently troublesome acid cracking or baking requirements; and
- On target to begin production in Q1 2016.
Physical and Financial Summary
The key physical and financial parameters that define the Ngualla Rare Earth Project value proposition, and support the project as a low cost, long term producer of rare earth
products for the world market, are:
- Average Annual Mine Production (after ramp up) 325,000 tonnes
- Life of Mine (LoM) 25 years
- Average Grade (LoM) 4.35% REO
- Average Grade for first 5 years 4.64% REO
- Average Stripping Ratio (LoM) 3.34
- Average Stripping Ratio for first 5 Years 0.73
- Total REO Recovery 71%
- Average Annual Equivalent REO Product (after Ramp-up): Separated REO = 6,347 tonnes
CeO2 Concentrate = 3,633 tonnes, Total REO Production = 9,980 tonnes
- Capital Costs (Excluding Contingency) US$ 400M
- Average (LoM) Cash Cost (FOB), Excluding Amortisation, Depreciation, and Royalties. (C1 Cost) US$ 11.05 / kg
- Average (C1 Cost) for first 5 years of full production US$ 10.09 / kg
- Revenue (FOB) Separated Products “Basket Price” (US$ 52.34 / kg) CeO2 (concentrate) (US$ 8 / kg)
- Discount Rate Applied 10%
- IRR (Pre-tax and Royalties) 53 %
- NPV (Pre-tax and Royalties) US$ 1.571 billion
- Payback from production start-up In 3rd Year
Analysis
In August 2012 Proactive Investors highlighted the price dis-connect with Peak, and said: "The pullback in the share price to $0.16 therefore provides investors with a potential low re-entry price before the news flow ramps up for the company in the second half of 2012."
Now with Peak continuing to deliver some impressive news from Ngualla, the company's share price is currently trading 19% higher than when Proactive Investors made this statement.
Even with the share price rise, the market cap. of $50 million is still very light, considering an IRR (Pre-tax and Royalties) of 53% and an NPV (Pre-tax and Royalties) US$1.571 billion.
Further highlighting the meagre valuation, Ngualla ranks as the fifth largest rare earth deposit in the world outside of China.
With $8.3 million in cash at the end of September 2012, the Peak enterprise value is a mere $42 million.
Due to the very impressive Scoping Study metrics, Proactive Investors considers that the positive re-rating in the Peak share price has only just begun.
Mining Group digs up 57.3g/t gold in Philippines
Mining Group (ASX: MNE) has confirmed the high grade and continuous nature of its newly discovered Taub Prospect at the Comval Copper-Gold Project in the Philippines with new trench sample results.
Trenching at the prospect has delivered a best interval of 14 metres at 11.38 grams per tonne (g/t) gold and 18.06g/t silver, and an individual rock chip result from the same trench (CCPCH00003) of 57.3g/t gold and 122.9g/t silver.
High grade gold mineralisation has now been identified in multiple east-northeast striking quartz veins ranging in thickness from 10 centimetres to over 1 metre and striking over a 300 metre length, and is open in both directions.
Taub is a newly discovered gold prospect about 7.5 kilometres north of the Tagpura copper deposit.
Zeff Reeves, managing director, commented: “Taub is clearly a high quality drill target with the latest results from trench CCPCH00003 demonstrating the continuity of the mineralised system over a 300 metre strike length with exceptional surface gold and silver grades.
“These results not only show the zone is continuous but highlight the high grade nature of Taub. We are aiming to commence RC drilling within the next few months to follow up these exciting results.”
Results remain outstanding for trench CCPCH00004 and an additional trench is currently being installed 25 metres west of CCPCH00001 to further extend and delineate the high grade vein set.
To date systematic trenching, mapping and sampling has identified a 200 metre wide structural corridor at Taub that has identified gold mineralisation over 300 metres of strike, which remains open in all directions.
Ongoing trenching and sampling work will continue to further extend the zone and provide information for drill targeting.
New gold mineralised zone
Mining Group has also discovered a new gold bearing structural zone at the Ugpo Prospect over 400 metres of strike, with rock chip sample results up to 9.1g/t gold.
Work has so far delineated a gold bearing shear zone within altered andesitic volcanic over a 400 metre strike length which is open both to the north and south.
To date assays have been received for three of the four trenches installed at Ugpo, with the best results being from trench CCPCH00006 which returned 2.3 metres at 2.28g/t gold and 5.18g/t silver from 54.7 metres.
Results from trench CCPCH00007 remain outstanding.
Reeves said: “We've also been carrying out similar work at Ugpo 1.5 kilometres to the west where four trenches have been installed with results indicating the presence of another strike extensive gold bearing zone.
“We need to carry out further work at Ugpo to better understand the controls on mineralisation prior to committing to drilling testing.”
Analysis
The potential of Mining Group and its Comval Project has not been lost on some investors with the company’s shares rallying over 200% since late October.
Today’s news confirms the high grade and continuous nature of the newly discovered Taub Prospect, which lies 7.5 kilometres north of the Tagpura copper deposit and was discovered just last month.
With the identification of the Ugpo and Taub gold targets to the north, an extensive high grade gold system has been identified.
Mining Group has defined four deposits with Inferred resources at Comval, which have the potential to expand given the ongoing discoveries being made at the project.
Importantly, high grade gold is present at surface in the northern lease, which hosts the Ugpo and Panag/Taub prospects that have proven high grade gold potential, all of which increases the economic potential of Comval.
While the project is still in its early stages, the potential is evident with multiple targets identified and extensive surface mineralisation.
Mining Group’s market valuation of A$18 million, against a share price of $0.185, will appear light as the company further firms up the high grade gold potential in drilling, which has already begun at the Tagpura North Prospect.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.
Trenching at the prospect has delivered a best interval of 14 metres at 11.38 grams per tonne (g/t) gold and 18.06g/t silver, and an individual rock chip result from the same trench (CCPCH00003) of 57.3g/t gold and 122.9g/t silver.
High grade gold mineralisation has now been identified in multiple east-northeast striking quartz veins ranging in thickness from 10 centimetres to over 1 metre and striking over a 300 metre length, and is open in both directions.
Taub is a newly discovered gold prospect about 7.5 kilometres north of the Tagpura copper deposit.
Zeff Reeves, managing director, commented: “Taub is clearly a high quality drill target with the latest results from trench CCPCH00003 demonstrating the continuity of the mineralised system over a 300 metre strike length with exceptional surface gold and silver grades.
“These results not only show the zone is continuous but highlight the high grade nature of Taub. We are aiming to commence RC drilling within the next few months to follow up these exciting results.”
Results remain outstanding for trench CCPCH00004 and an additional trench is currently being installed 25 metres west of CCPCH00001 to further extend and delineate the high grade vein set.
To date systematic trenching, mapping and sampling has identified a 200 metre wide structural corridor at Taub that has identified gold mineralisation over 300 metres of strike, which remains open in all directions.
Ongoing trenching and sampling work will continue to further extend the zone and provide information for drill targeting.
New gold mineralised zone
Mining Group has also discovered a new gold bearing structural zone at the Ugpo Prospect over 400 metres of strike, with rock chip sample results up to 9.1g/t gold.
Work has so far delineated a gold bearing shear zone within altered andesitic volcanic over a 400 metre strike length which is open both to the north and south.
To date assays have been received for three of the four trenches installed at Ugpo, with the best results being from trench CCPCH00006 which returned 2.3 metres at 2.28g/t gold and 5.18g/t silver from 54.7 metres.
Results from trench CCPCH00007 remain outstanding.
Reeves said: “We've also been carrying out similar work at Ugpo 1.5 kilometres to the west where four trenches have been installed with results indicating the presence of another strike extensive gold bearing zone.
“We need to carry out further work at Ugpo to better understand the controls on mineralisation prior to committing to drilling testing.”
Analysis
The potential of Mining Group and its Comval Project has not been lost on some investors with the company’s shares rallying over 200% since late October.
Today’s news confirms the high grade and continuous nature of the newly discovered Taub Prospect, which lies 7.5 kilometres north of the Tagpura copper deposit and was discovered just last month.
With the identification of the Ugpo and Taub gold targets to the north, an extensive high grade gold system has been identified.
Mining Group has defined four deposits with Inferred resources at Comval, which have the potential to expand given the ongoing discoveries being made at the project.
Importantly, high grade gold is present at surface in the northern lease, which hosts the Ugpo and Panag/Taub prospects that have proven high grade gold potential, all of which increases the economic potential of Comval.
While the project is still in its early stages, the potential is evident with multiple targets identified and extensive surface mineralisation.
Mining Group’s market valuation of A$18 million, against a share price of $0.185, will appear light as the company further firms up the high grade gold potential in drilling, which has already begun at the Tagpura North Prospect.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.
Po Valley Energy raising A$1.35M to upgrade Sillaro gas plant
Italy focused Po Valley Energy (ASX: PVE) has secured commitments for A$1.35 million in funding to upgrade the Sillaro gas plant to enable higher production.
Production from Sillaro is presently constrained at about 1.8 million cubic feet of gas per day (MMcfd) pending installation of a condensate separator.
Po Valley managing director Giovanni Catalano told Proactive Investors that following installation of the separator, which is expected in early 2013, production will reach 3MMcfd.
The funds were raised through a private placement of about 11.3 million shares priced at $0.12 each to several Australian institutional and sophisticated investors.
Several of the company’s non-executive directors have also supported the placement though this is subject to shareholder approval.
The first tranche of 7.4 million shares will be issued on 6 December 2012 and the second tranche of 3.85 million shares will be issued to the non-executive directors if shareholder approval is obtained at an extraordinary meeting of shareholders which the company plans to hold in late January 2013.
Sillaro field
Production from the Sillaro field started in December 2009 but experienced faster than expected decline in wellhead pressures in April 2010.
The decision was then made to drill Vitalba1dirA to access the remaining attic gas at the field, estimated at about 3.5 billion cubic feet.
However, the impact of cold weather in January 2012 resulted in an increase in condensate production at the Sillaro gas site and production was halted for four days while excess condensate was removed from the processing facility.
Investigations confirmed that the condensate production was originating from the PL2 C1+C2 producing level, leading the level to be shut-in until the condensate separator is installed.
Looking ahead
Besides the expected return in Sillaro production to 3 million cubic feet of gas per day, Po Valley is also moving to bring its Bezzecca gas field in northern Italy into production.
The company has already secured a preliminary production concession from the Italian Ministry of Economic Development, allowing it add 4.1Bcf of gas to its proved and probable reserves.
Importantly, Bezzecca will be its third producing field and will use the existing Castello surface gas plant.
The final award is expected around the end of the calendar year once the Environmental Impact Assessment (EIA), which was submitted in February 2012, has been fully reviewed by the Lombardy Region.
Bezzecca was discovered in 2009 with the Bezzecca-1 well flowing gas at a combined rate of 3.9 million cubic feet per day during testing.
Analysis
The expected increase in production from Sillaro will substantially increase the company’s revenue.
Po Valley had recorded revenue of €2.1 million (A$2.6 million) in the September 2012 quarter from production of 2.4MMcfd of gas from both the Sillaro and Castello fields.
Production could increase to about 3.6MMcfd following the upgrade, increasing revenue to about €3 million.
Po Valley held cash of about €2.2 million as of 30 September 2012.
Production from Sillaro is presently constrained at about 1.8 million cubic feet of gas per day (MMcfd) pending installation of a condensate separator.
Po Valley managing director Giovanni Catalano told Proactive Investors that following installation of the separator, which is expected in early 2013, production will reach 3MMcfd.
The funds were raised through a private placement of about 11.3 million shares priced at $0.12 each to several Australian institutional and sophisticated investors.
Several of the company’s non-executive directors have also supported the placement though this is subject to shareholder approval.
The first tranche of 7.4 million shares will be issued on 6 December 2012 and the second tranche of 3.85 million shares will be issued to the non-executive directors if shareholder approval is obtained at an extraordinary meeting of shareholders which the company plans to hold in late January 2013.
Sillaro field
Production from the Sillaro field started in December 2009 but experienced faster than expected decline in wellhead pressures in April 2010.
The decision was then made to drill Vitalba1dirA to access the remaining attic gas at the field, estimated at about 3.5 billion cubic feet.
However, the impact of cold weather in January 2012 resulted in an increase in condensate production at the Sillaro gas site and production was halted for four days while excess condensate was removed from the processing facility.
Investigations confirmed that the condensate production was originating from the PL2 C1+C2 producing level, leading the level to be shut-in until the condensate separator is installed.
Looking ahead
Besides the expected return in Sillaro production to 3 million cubic feet of gas per day, Po Valley is also moving to bring its Bezzecca gas field in northern Italy into production.
The company has already secured a preliminary production concession from the Italian Ministry of Economic Development, allowing it add 4.1Bcf of gas to its proved and probable reserves.
Importantly, Bezzecca will be its third producing field and will use the existing Castello surface gas plant.
The final award is expected around the end of the calendar year once the Environmental Impact Assessment (EIA), which was submitted in February 2012, has been fully reviewed by the Lombardy Region.
Bezzecca was discovered in 2009 with the Bezzecca-1 well flowing gas at a combined rate of 3.9 million cubic feet per day during testing.
Analysis
The expected increase in production from Sillaro will substantially increase the company’s revenue.
Po Valley had recorded revenue of €2.1 million (A$2.6 million) in the September 2012 quarter from production of 2.4MMcfd of gas from both the Sillaro and Castello fields.
Production could increase to about 3.6MMcfd following the upgrade, increasing revenue to about €3 million.
Po Valley held cash of about €2.2 million as of 30 September 2012.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.
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