INTRODUCTION
In the news: Almonty Industries (CVE:AII) , North River Resources (LON:NRRP), Mariana Resources (LON:MARL), Hummingbird Resources (LON:HUM) & Berkeley Energy (LON:BKY)
We are marketing Lewis Black, the President and CEO of Almonty Industries (AII CN), in London this week. We are keen to set up one-on-one meetings and conference calls for our audience overseas. Almonty is currently acquiring Woulfe Mining with a view to becoming the third largest tungsten producer in the world and the leading one outside China (China produces around 80% of the world’s tungsten). The merging of Almonty and Woulfe Mining would imply a combined market share of some 40% of the ex-China market, so this is going to be a serious player. The group will have combined operations in the stable jurisdictions of Spain, Australia and (from Woulfe) South Korea. It would have a market cap of C$66m.
We are also marketing James Beams of North River Resources† in London from today. The company made an announcement to the market on 11 August proposing an Open Offer that is designed to raise US$4m to fund the Phase 1 works at the Namib Lead-Zinc Project in Namibia, including a Front End Engineering and Design (FEED) study and continued mine development work ahead of the granting of the Mining Licence. The proposed offer will be fully underwritten by Greenstone Resources, which is already a 29.5% shareholder. Shareholder approval for this was overwhelmingly granted at a General Meeting on 28 August.
METALS & MINING EQUITIES
Mariana Resources* — Au-Cu Mineralisation Extends Beyond Reported Mineral Resource at Hot Maden — The AIM-quoted exploration company focused on Turkey and South America has reported further high-grade Au-Cu intercepts from the Phase 2 drilling programme at the Hot Maden Project in Turkey. These results follow on from the publication of the initial 3Moz Au Eq mineral resource, and extend the limits of mineralisation both down-dip and to the north. Assays have also been received for two holes (HTD-19 and HTD-21) drilled to the south and intended to explore for large-scale extension of the N-S trending mineralisation.
Resource Extension Drilling
• HTD-18 — 108m at 3.0 g/t Au and 1.3% Cu from 292m down-hole
• HTD-20 — 88.5m at 1.8 g/t Au and 2.3% Cu + 1.9% Zn from 1.5m down-hole
• HTD-22 — 44m at 7.7 g/t Au and 1.2% Cu from 342m down-hole
Scout Holes (Southern Area)
• HTD-19 — 12m 2.1 g/t Au and 0.7% Cu from 209m down-hole, and 36m at 4.3% Zn/13m at 7.75% Zn from 271m and 312m down-hole respectively
• HTD-21 — 64m at 0.8 g/t Au and 0.3% Cu +140ppm Mo from 103m down-hole
HTD-18 and HTD-22 serve as ‘step back’ holes to HTD-15 and HTD-11/12 (included within the resource estimate), indicating extension of the mineralisation at depth. Hole HTD-20 indicated a near-surface northern extension of the mineralisation identified by HTD-04 and scissor hole HTD-17, and also intercepted significant zinc mineralisation.
Drill Holes HTD-18 and HTD-22 Indicate Extension of Mineralisation at Depth
RFC Ambrian Comment: It is clearly encouraging that extension drilling continues to yield strong results following the release of the maiden 3Moz resource, with key positives being the potential for resource extension to the north and the intersection of significant zinc mineralisation. The orebody had previously been considered to be closed off to the northern end, while the zinc potential had not been considered within the scope of the project. The company additionally believes the emergence of elevated molybdenum assays could increase the scope of the project if greater tonnage could be achieved.
Hummingbird Resources — Taurus Increases Bridge Facility from US$10m to US$15m — The AIM-quoted gold development company with projects in Mali and Liberia has announced that Taurus has increased its bridge facility from US$10m to US$15m. The additional funds will primarily be used to continue some of the long lead-time items relating to the development of the Yanfolila Gold Project in western Mali. Specifically, it is expected to fund the commencement of initial pit de-watering, land acquisition around the mine site and the finalisation of due diligence in preparation for full draw-down. The company also announced that earthworks, mainly for the preparation of the site of the processing plant, have now been completed.
RFC Ambrian Comment: The increase in the bridge facility demonstrates Taurus’ continued commitment to the development of the Yanfolila Project. The facility was initially put in place in August 2014 and was intended to fund activities until the draw-down of a US$75m project debt package that would repay it and help fund the main project development. The release of the main project debt package is awaiting the completion of due diligence by Taurus.
Hummingbird aims to commence construction at Yanfolila later this year and to commence gold production during 2016. An optimisation study was completed on the project in February 2015. Total resources at the project were 1.8Moz, with development focused on two of the five deposits on which resources had been identified. A Total of 514,000oz of gold was planned to be recovered over a mine life of 6.5 years, for gold recovery of 79,000oz pa. Capex was US$72m and all-in-sustaining cash costs were estimated at US$733/oz. At a gold price of US$1,250/oz, Hummingbird’s share of the project had an NPV8 of US$72m and an IRR of 35%.
BERKELEY ENERGY — Infill Drilling at Zona 7 Confirms High Grades — The uranium company that is focused on the development of the Salamanca Uranium Project in western Spain has announced that assay results from the first 39 holes of the recent 90-hole infill drill programme confirmed the continuity of the high-grade mineralisation at the important Zona 7. Results included 40m grading 949ppm U3O8 and 26m @ 1,103ppm U3O8.
The drill programme was designed to upgrade the currently Inferred resource (23Mt grading 589ppm U3O8 for 30Mlb U3O8) at Zona 7 into the Indicated category. Stockwork vein mineralisation at Zona 7 is hosted in fine grained metasediments, with the mineralised envelope generally flat lying and occurring in partially weathered and fresh rock, under limited cover.
RFC Ambrian Comment: These results are significant as they help to advance the Zona 7 deposit from an exploration project to a development project. The scoping and pre-feasibility studies completed on the project to date have focused on the development of other resources. The current resource at Zona 7 was announced in November 2014 and was some 39% higher grade than the resources on which the PFS was based, giving an indication of the potential benefits to economics of the deposit’s inclusion in the project.