SA Mines and Energy Journal : June - July 2013
JUNE/JULY 2013 SA MINES & ENERGY JOURNAL 8 INDUSTRY NEWS WPG Resources has decided not to take up its option to acquire a 25 percent joint venture interest in the Giffen Well magnetite iron ore project in central South Australia. To exercise this option, WPG would have been required to pay $5 million to the project's owner. The company said that despite the encouraging results of its prefeasibility study (PFS) announced in March, the current market uncertainties meant that the risks for the project were too high unless the asset could be acquired on better terms. Taking into account the highly constrained capital environment for the mining sector, the company decided that it was in the best interests of shareholders to pursue other objectives. Commenting on the company's decision, WPG's Executive Chairman Bob Duffin said he was disappointed that a sensible outcome could not be negotiated with the owner. "The mining sector is adjusting to a capital constrained environment now, " he said. "There is a very limited pool of investors willing to fund the estimated $40 million required to complete the project's BFS, let alone those willing to fund the $1.5 billion capital expenditure required to bring the project into production. " WPG is now accelerating its program reviewing new project investment opportunities. WPG opts out of Gi en Well High grade copper-gold discovery on the Yorke Some of the highest grade copper-gold drill results in the 150- year history of South Australia's historic Moonta-Wallaroo mining region were announced by Adelaide Resources recently. The results came from the company's first drilling program on its wholly-owned Alford West prospect in the Moonta Copper-Gold Project. Located at the southern end of South Australia's world- renowned Olympic Copper Gold Province, this area has already yielded major producing mines such as BHP Billiton's Olympic Dam, OZ Minerals' Prominent Hill and the famous Moonta- Wallaroo mines. Significant other deposits discovered in the area in recent years and currently in pre-development stage include OZ Minerals' Carrapateena and Rex Minerals' Hillside, the latter being some 60km south of Adelaide Resources' project tenement. The shallow, high-grade copper and gold intersections at Alford West include exceptional hits of 20 metres at 4.20 percent copper and 0.27 grams per tonne gold and 45 metres at 1.55 percent copper and 1.81 g/t gold. According to Adelaide Resources' Managing Director, Chris Drown, they are some of the most significant copper-gold assay results ever achieved from exploration on the State's Yorke Peninsula. "These initial copper and gold grades are comparable with the grades from early drilling at the likes of the now producing mines at Olympic Dam and Prominent Hill, and exceed early exploration results from Rex's Hillside project, " he said. "We believe they will be some of the best exploration results that any company, big or small, will achieve in Australia in 2013. " The Mindarie Mineral Sands mining operation was officially launched last month. Located 150km east of Adelaide in SA's Murray Mallee region, the project is operated by Murray Zircon, who acquired the mining leases from Australian Zircon in 2011 after that company went into administration. Patrick Mutz, Chief Executive at Murray Zircon, announced that the operation would employ over 130 staff for the duration of its 15 year life. Mr Mutz said the company had worked tirelessly on rehabilitating the previously mined areas on its tenements in order to gain the confidence of regulators and the local community. Murray Zircon is wholly owned by China's Orient Zirconic, which is one of China's largest zircon processing companies, specialising in the manufacture of zirconium products for a variety of uses including ceramics, electronics, fibre connectors and batteries. Murray Zircon chairman Chaodian Chen said the Mindarie project formed part of the company's vertical integration strategy. "The Mindarie project is just the first step Orient Zirconic is taking in its global search for resources.'' The project will produce up to 120,000 tonnes of heavy mineral concentrate each year, to be transported by road to Port Adelaide for export and processing in China. Premier Jay Weatherill was present at the launch and welcomed the resumption of mining at Mindarie - South Australia's first operating mine to be majority owned by a Chinese interest. "There's a truckload of Chinese investors that are here looking at opportunities for future investment in South Australia,'' he said. SACOME Chief Executive Jason Kuchel said local miners needed to seek investment offshore due to difficult investment conditions in Australia, which are particularly challenging for the smaller operators at the moment. Mr Kuchel said supportive government policy to provide investors with policy and taxation stability would greatly improve the investment environment, and enable other projects in the State to get off the ground quicker. He also said infrastructure upgrades were critical to unlocking opportunities in the sector. "We can actually realise many more of these types of projects if we see investment in key infrastructure projects. '' Patrick Mutz will be speaking at SACOME's next breakfast event on 20 June and will focus on the companies mining activities and exploration program in the Mallee region. Celebrations as Mindarie is born again Premier Weatherill was amongst guests at Mindarie's official opening.
April - May 2013
August - September 2013