Daily Mining Monitor
African Consolidated Resources (LON:AFCR) has completed a Preliminary Economic Assessment on Pit 2 of the Pickstone Gold project. The PEA confirms early indications of a high grade open pit able to produce at a rate of 50kt pm and a mined grade of 4.6g/t at a 2.0 g/t cut-off. At this cut-off grade the open pit will produce an estimated 720,000 gold ounces over a life of mine of 10 years. Applying a 1.0 g/t cut-off at the same production rate, the open pit will yield 850,000 gold ounces for a life of mine of 16 years. The project will require an estimated investment in the order of US$60 million which in turn will yield an NPV10% of approximately US$300 million (IRR 128%) and a payback anticipated within 18 months applying a 2.0 g/t cut-off. The gold price assumed is US$1500/oz whilst an estimated operating cost of approximately US$450/oz is applied.
Alecto Minerals (LON:ALO) has released an exploration update on its Wayu Boda Gold Project located in the central-southern Adola greenstone belt in southern Ethiopia. The Company has conducted extensive mapping and rock chip sampling focussed on the artisanal workings in the northern section of the licence. These occur in three locations, with a distance of 2km between the northernmost to the southernmost workings. The workings target quartz vein swarms and larger individual quartz veins hosted in metavolcanics and the occasional pits target the host rock itself. Rock chip sampling of artisanal workings have recovered grades of up to 47.4g/t of gold while gold grades up to 31.7g/t Au have been returned from sampling of artisanal waste dumps. Additionally, Alecto has also acquired Aster and high resolution Ikonos satellite imagery over the Wayu Boda Licence. On-going work includes geophysics, soil sampling and ground magnetics with the full results will be published in Q1 2013. The presence of widespread artisanal workings demonstrates the prospectivity of the license areas, however it has also hampered the trenching programme, which has intersected mined out veins and vein swarms, thought to contain high grade gold mineralisation. Artisanal pits which were measured by Alecto go to a depth of 10m. At their widest point, artisanal workings occur over a 50m width perpendicular to the strike of mineralisation. The mineralisation is open to both the north and south, with the newest artisanal pits at these two extremes. To the west and east of the target area extensive alluvial workings exist. The mined areas may connect to each other underneath shallow tertiary volcanic cover.
Bushveld Minerals (LON:BMN) has released an update on its Mokopane Tin Project. Groenfontein, has already been drilled and has a JORC resource of over 5kt of tin and Bushveld has short-term plans to explore a further four targets. The next (second) target, Zaaiplaats an abandonded tin mine and formerly South Africa’s second largest tin producer, is located in the Bushveld Granites, approximately 3 km northwest of Groenfontein. Initial geological investigations, including surface geochemical sampling and a survey of old Zaaiplaats underground workings, support the model that an extensive zone of disseminated tin mineralisation is present in and around the old Zaaiplaats tin mining area. Bushveld has now completed a surface geochemical sampling programme defining the zone of outcropping tin mineralisation and a detailed survey of old Zaaiplaats' underground mine workings was conducted which has allowed the Company to site boreholes above remnant pillars and avoid holing into old workings. Vertical chip sampling profiles were taken in order to estimate the grades remaining at Zaaiplaats, gave intersections that yielded grades greater than 0.2% SnO₂ for 12 out of 15 profiles in the open pit and 8 out of 15 underground profiles at the old Zaaiplaats mine. A total of 15 vertical underground chip sample profiles were taken along the sidewalls of the surveyed tunnels . Some of the underground lines that were sampled indicated that the grade is higher than 1% SnO2 in some areas with most areas exceeding 0.1% SnO2. GyroLAG (PTY) LTD. has been commissioned to fly an airborne magnetic and radiometric survey over the prospect area, this may help to further delineate mineralization and aid in identifying ore bodies in the area that could have a similar signature to the Zaaiplaats area. This survey is expected to be completed in the first quarter of 2013. The drilling programme announced in April 2012 at the Zaaiplaats target is making steady progress. The objective is to drill a total of 45 boreholes by mid-December 2012. Of these, 27 holes with depths ranging from 20m to 150m have been drilled as of 30th November 2012. The distribution and grade of the near-surface disseminated tin mineralization is becoming clearer as a result of this drilling. A resource statement is expected by mid-May 2013. Initial metallurgical testwork at the first target, Groenfontein, and the second target, Zaaiplaats, is nearing completion and the results are expected in December 2012. Metallurgical testwork will include mineralogical characterisation, grading analysis on various size fractions, densimetric tests on Sn recovery, and gravity recovery simulation using a shaking table.
Fox Marble (LON:FOX) announced yesterday afternoon that it had received notices issued by the ICMM (The Independent Commission for Mines and Minerals) purporting to annul four of the five mining licences issued to various subsidiaries of Fox Marble and requiring that operations be suspended in those quarries. These quarries consist of two sites in Rahovec, one in Peja and one in Suhogerll. Fox Marble believes that these notices have been issued unlawfully and erroneously and do not comply with the legislation as set out in the Law on Mines and Minerals, in particular section 9 of this law which states that any alleged breach of the conditions of the licences must be disclosed to the licensee and that licensee must be given between 60 and 120 days to cure the alleged breach. This has clearly not been adhered to and the Company has received advice from its Kosovan legal counsel that these notices are unlawful and unenforceable. Accordingly, Fox Marble is taking legal action in Kosovo in support of its position and is confident that its licences will be restored to full operational status in due course. Fox Marble opened its first quarry at Cervenilla last month and this license remains in order and operations are unaffected with marble being extracted. Whilst this latest development is disappointing the Company believes the licenses will be restored and it does not impact current operations.
KEFI Minerals (LON:KEFI) has released more positive results from drilling at the Jibal Qutman in Saudi Arabia and the completion of the geophysical IP survey at the Selib North. Diamond Drilling at Jibal Qutman has returned further good intersections including 7m at 6.13g/t Au and 3.8m at 5.46g/t Au a slight improvement on the results in November. Trench results also showed good grades over good widths including 15m at 4.67g/t Au, 3m at 6.59g/t Au and 20m at 1.89g/t Au. A total of 35 diamond drill holes have been completed on a 100m x 25m and 50m x 25m grid to test the shallow open cut potential of the gold mineralisation, which is hosted in a series of quartz veins over a 3km zone. Five holes are to be re-drilled due to low drill core recoveries (as low as 10% over several metres) in the mineralised zones. It is observed from the trench mapping that higher gold grades are associated with the highly fractured parts of the quartz veins, which are often lost in the drilling process, and that there is supergene enrichment. At Selib North the IP (induced polarisation and resistivity) and SP (Self Potential) surveys have now been completed and the preliminary interpretation has identified 3 target zones ready for drill testing. These results continue to support the model that high grade gold is hosted in quartz veins, surrounded by lower grade quartz stringer zone and in separate zones of stacked flat lying veins in the west and south of the prospect.
Ncondezi Coal (LON:NCCL) completed its Mine DFS and is now focussing the Phase 1 development on a 300MW Integrated Mine and Power Plant. The mine Definitive Feasibility Study confirms technical and economic viability of a large scale, long life, open pit mine supporting an integrated 1800MW power plant project. Ncondezi to implement phased development approach rather than pursue immediate development of the large scale, high capital expenditure project as defined in the Mine DFS. Phase 1 of project execution focused on 300 megawatt integrated mine and power plant project. Application for Mining Concession to be submitted to Ministry of Mineral Resources of the Republic of ozambique, a key prerequisite for project development. Negotiations on 300MW bankable Power Purchase Agreement with Electricidade de Mozambique is underway. Initial discussions with EPC contractors indicate potential availability of up to 85% debt financing for 300MW Project. Power permitting process has started with negotiations on Power Framework Agreement with Ministry of Energy.
Ormonde Mining plc (LON:ORM) announced that it has procured placing commitments in respect of 25,474,547 new ordinary shares of nominal value €0.025 each in the capital of the Company. The Placing, conducted by Davy, with shares placed with new and existing institutional and private investors, at a price of £5.5p per share raised in aggregate £1.4M (approximately €1.7M) (before expenses). The net proceeds from the Placing will enable Ormonde to further advance the development of its flagship Barruecopardo Tungsten Project in Salamanca Province, western Spain.
Papua Mining PLC (LON:PML) announced an exploration update. Aries Mining Limited, a wholly owned subsidiary of Papua Mining PLC, has been granted three new exploration licences by the Minister for Mining in PNG. The three licences, ELs 2048, 2050 and 2051 lie in the central part of New Britain island and cover a total area of 492 square kilometres. These three licences lie within a strongly prospective zone which is underlain by volcanic and intrusive rocks which are known to host extensive mineralized systems within the West New Britain area.
Stellar Diamonds PLC (LON:STEL) announced an upgraded resource for the Tongo kimberlite dyke project in eastern Sierra Leone. The resource has a grade of 120 carats per hundred tonnes using a 1mm cut-off and contains 1,074,000 carats in a JORC compliant inferred resource, a 63% increase. The modelled diamond value is between $225 and $270 per carat. The 2.5km Dyke-1 remains open at depth and is one of four known dykes on the Tongo project.
Stratex International PLC (LON:STI) announced an update on the Company's portfolio in Senegal, where the Company is earning-in to 75% of the Dalafin Exclusive Exploration License. Stratex has now exercised its option to vest 51% of Dalafin gold EEL in eastern Senegal - 636 sq km of highly prospective terrain in the centre of the Birimian Kédougou-Kenieba gold belt which has already seen multiple major gold discoveries. The results of extensive soil and rock-sampling programmes have now led to a detailed understanding of the Konkonou, Baytilaye, Saroudia, and Madina Bafé areas and the identification of a fifth target area – Faré. The results have been integrated with high-resolution airborne geophysical survey (magnetic and radiometric) data to generate multiple drill targets with rotary air blast drilling to commence in January 2013. In Mauritania reconnaissance visits to each licence have been completed, Environmental Impact Notes submitted and mapping and outcrop sampling continues on the Azrag licence.
Thor Mining PLC (LON:THR) announced an update to the staged acquisition of the Spring Hill gold project south of Darwin in Australia's Northern Territory. Thor has received from Western Desert Resources, its co-venturer in the project, a signed instrument of transfer for the transfer of a further 26% interest in the Spring Hill gold project, for lodgement with the Northern Territory Department of Resources for approval. Subject to the receipt of ministerial approval to the transfer, Thor's total interest in the Springhill gold project will increase to 51%. In addition, the terms of the staged acquisition have been varied to set the timing of the pricing of the securities to be issued to Western Desert Resources in consideration for the acquisition, to the date the companies agreed that the expenditure requirement had been met. As a result, 21,666,667 Thor CDI's in total will be issued to Western Desert Resources upon receipt of ministerial approval to the transfer.
West African Minerals Corporation (LON:WAFM) announced that it has completed the first 114 reverse circulation (RC) holes (5,581m) on its 100% owned Binga exploration permit in south-western Cameroon. The drilling at Binga tested a variety of magnetic and non-magnetic geophysical anomalies over an extensive strike length of approximately 60kms. This is part of a 20,000m planned scout drilling exploration programme to test WAFM's major geophysical anomalies on the Binga, Lélé and Djadom leases for iron mineralisation. A scout drilling programme is now underway at Djadom South adjacent to the Mbarga deposit.
Daily Oil & Gas Monitor
Roxi Petroleum (LON:RXP) - Countdown to Christmas: OK, so 30 days from the 23rd of November isn’t quite Christmas day, but Roxi’s 30 day NK-12 well should finish on the 23rd of December, as close as you can get to make it potentially a good Christmas present. As it is an appraisal well, and there has been a number of successful wells drilled to date, it would be more news worthy if the well failed to intersect a productive reservoir. Nevertheless, since the recent news flow from the Company has been disappointing (withdrawal of KNOC from recent farmout discussions), we believe that this could be just the shot in the arm the management team, and investors, need just before the festive season.
In this news:
• NK-12 well at the NW Konys asset (Galaz) spudded on 23 November 2012.
• Appraisal well targeting the Cretaceous sand of NW Konys.
• Expected to take approximately 30 days, after which a further announcement will be made.
• Already three producing wells at Galaz; NK 6, NK 7 and NK 8 (formerly NK 14), producing >700 bopd.
• Roxi's interest in the field is ~34.2%.
Sound Oil (LON:SOU) - Moving Quickly on Rapagnano: Quickly following on from the award of the licence, the Company has disclosed its intentions to get operations underway by the 19th of December and on line mid-January. Given the fact that the holiday period is almost upon us, we consider this to be a “stretch target.” Irrespective of whether the Company meets this tight target, or not, it underlines the ambition within management to unlock the value within the Company’s portfolio, and if the Company does not meet it dead on, we wouldn’t expect it to be too much after. After appearing to be a bit aimless for a little while, the Company appears to have found its direction once again.
Clontarf Energy (LON:CLON) - Peruvian Farm Out – But All is Not as it First Appears: As mentioned earlier that the catalyst for the stock would be dependent upon the successful farm-out of the 100% owned Blocks 183 and 188 in Peru, the Company has made significant strides by signing an MoU with an Italian group to jointly explore and develop Peruvian blocks. While this is good news, we urge caustion, as MOU’s, by their very nature, are not generally binding, and even if it is successful, the fact that the final farm-deal is dependent upon the Farminee concluding discussions successfully with a European investment banking group for funds it to participate. Given the cash balance of £0.49mm, a farmout is key for initiating next leg of exploration programme. Clontarf believes that Block 183 presents “compelling gas opportunity” and Block 184 offers oil-prone leads and prospects. The on-going discussion with a European power generation group, over a projected 160MW first phase power generation project provides ready market for gas resources on Block 183. Thus today’s news is encouraging and positive for Clontarf. We now wait for the final announcement of the farm-our agreement.
In this news:
• Clontarf has entered into a Memorandum of Understanding (the "MOU") with an Italian group to co-operate on jointly exploring and developing each of Peruvian Blocks 183 and 188.
• This group, in turn, is in advanced discussions with a European investment banking group for it to participate as a partner in Blocks 183 and 188.
• Pursuant to the MOU a timetable has been established to reach the final required Farm-out Agreement. The MOU terms have addressed the key issues in such agreements including funding of the exploration programme: it is proposed that any farm-out agreement will include the drilling of two wells in Block 188 and one well in Block 183.
• Clontarf intends to retain a significant minority position on both licence blocks and also to recover historical expenditures from the parties farming in.
Jupiter Energy (ASX:JPR) - Success Continues: The Company’s ability to strike oil has been prodigious over the last one year. Success of J-58 - the sixth exploration well on Block 31 (Kazakhstan) extends company’s 100% drilling success at the field. Initial analysis indicates 152m of gross reservoir and approximately 75m net pay in the Mid Triassic carbonate reservoir unit, which is better than J-55 discovery well, also drilled on the southern extension of the block. Success of two consecutive wells on the southern extension establishes prospectivity of the area, providing scope for further upside potential. With plans to file trail production application for both J-51 and J-53 wells before year end, progress update on J-55 and J58 and new reserve report due in early 2013 – we expect series of positive news flow over next few months. Having successfully completed this year’s six well drilling campaign, clarity on the 2013 drilling and development strategy would be welcomed by the investors.
In this news:
• Well J-58 has been drilled to its final depth of 3,220m; mud logs, core and open hole wireline logs indicate hydrocarbons in the Mid Triassic horizon.
• Initial analysis indicates 152.8m of gross reservoir and approximately 75.6m net pay in the Mid Triassic T2B carbonate reservoir unit.
• In addition, analysis of the Mid Triassic T2A carbonate reservoir indicates an additional 120.1m of gross reservoir and approximately 52m of net pay.
• Production casing will now be run and cemented in Well J-58 prior to a period of up to ninety days of flow testing from the Mid Triassic T2B Horizon.
• The J-58 structure is mapped as a separate accumulation to that of East Akkar.