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West African Resources boss Richard Hyde on why it’s the place to be for a new gold miner

Inflation pressures have brought green shoots for gold miners, who have seen prices rise by around US$100/oz over the past … Read More
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This article was originally published by Stockhead

Inflation pressures have brought green shoots for gold miners, who have seen prices rise by around US$100/oz over the past fortnight.

But for most of the year it’s been a tough run for ASX-listed gold producers, who have suffered negative sentiment despite for the most part generating solid profits.

However, another reality is for many gold miners with relatively mature operations, costs are on the up.

One gold miner that has seen off the storm this year is $1.37 billion capped West African Resources (ASX:WAF), which is sitting 28% up year to date and 35% over the past 12 months.

If you had invested in the company five years ago while it explored, studied, funded and delivered its Sanbrado gold project in Burkina Faso, you would be sitting on a more than 400% gain.

Since opening the mine at the start of the Covid-19 pandemic in March last year, West African has gone from strength to strength at Sanbrado.

It produced 81,960oz in the three months to September 30, at all in sustaining costs of US$690/oz, some of the lowest in the world without significant copper credits, and is on track to exceed its 280,000oz production target in its first full calendar year in 2021.

Results like those earned the new gold producer the coveted Dealer of the Year Award at this year’s Diggers and Dealers mining forum in Kalgoorlie, and it has since turned dealer too, buying the nearby 6.8Moz Kiaka project from B2Gold and GAMS for a combined US$100m in a bid to become a 400,000ozpa producer by 2025.

While many investors and companies are focused on what they call “Tier 1 mines in Tier 1 jurisdictions”, research from Euroz Hartleys analyst Michael Scantlebury found the lowest cost producers in the September quarter once growth capital was taken into account came from West African producers in WAF and Perseus Mining (ASX:PRU), which recently opened its low cost Yauore operation in the Ivory Coast.

Costs of Australian gold miners Sept Quarter 2021
WAF and fellow African gold miner PRU were strong performers on costs in September. Pic: Euroz Hartleys

Stockhead spoke to West African Resources managing director Richard Hyde about what’s been going so right for the gold producer and why Burkina Faso is the place to be for a new gold miner.

 

Something really notable about West African resources is at a time where pretty much all producing gold stocks have been trending down over the last 12 months; West African’s gone the other way – what do you think’s been the driver behind that?

“We’ve managed to deliver the projects on time, on budget.

“We put a lot of work into the feasibility studies before we funded the project, and that included a lot of drilling work.

“And consequently, our resources and reserves have been reconciling very well, I think that’s a big part of it.

“And also, it’s a new project. So we’ve had a lot of cash flow early in the project, in contrast to some of the older projects in Western Australia.”

 

West African Resources share price today:


 

 

In terms of the project, it looks like it’s going to wind up producing more than you’d expected in its first calendar year.

“I think it goes back to having really solid resources. So the resource work that we’ve done, and the drilling work we’ve done historically, has been to a very high standard.

“So we’ve got a lot of confidence in the resource and then consequently, the reserves. The reconciliation has been very, very good.

“So it’s slightly positive on reserves. The plant’s overperformed since we started, it’s done about 20% higher than nameplate throughput, so we’ve been able to push more tonnes through which has helped as well.

“One of the most important parts of the project has been that the high grade resources at M1 South both for open pits and underground has reconciled positively.

“So that’s been a huge benefit this year and we’re seeing that quarter on quarter, we’ve been producing more than planned and we’re on track to exceed the top end of guidance in production this year.”

 

You see that so much in new projects, when they start to stutter, it’s about grade reconciliation.

“You do, and it’s because when you start a project as a single asset company, you’ve got to manage finances really well.

“And so there’s the temptation to hold back on grade control or to do less drilling. We’ve gone the other way.

“We were a company run by geologists, so myself and (COO) Lyndon Hopkins are both geologists and we’ve got a very strong geology and mining team in country.

“We put a lot of effort into understanding the geology and drilling. We’ve done a lot of drilling and on tight centres as well. So certainly for the higher grade, part of M1 South, even in resource drilling, we were less than 25m centres, down to 12.5m centres for reserve work and then we’ve closed that down further in grade control underground.

“So it’s back to first principles. I think that’s the most important part of any mining project, getting the geology right and getting the resources right.

“So that includes detailed drilling, underground sampling, detailed underground grade control drilling, and then it gives us the confidence to plan our reserves and build our mine plan.”

 

A lot of companies, particularly sort of bigger companies, at the moment are fairly shy about moving into what they call ‘not tier one’ jurisdictions. Do you think that companies and investors are missing the boat a bit if they’re not looking in places like West Africa, where we just seem to be seeing so many new large sources of gold being found?

“Definitely, if you look globally the best place to go looking for a gold deposit is in West Africa.

“Endeavor’s becoming the Northern Star of West Africa, it’s already over a million ounce production per annum from a number of operations in Burkina and Ivory Coast.

“And if you think about that line of that was trotted out … previously we’ve heard a lot about Tier 1 assets in Tier 1 jurisdictions.

“And the reality is, I don’t think a lot of those are Tier 1 assets. You can look at (Northern Star’s) Pogo (in Alaska), which was … represented as a Tier 1 asset in a Tier 1 jurisdiction and it hasn’t performed.

“So you need good geology, and that’s the cornerstone of building any company and West Africa has got the best geology in the world for gold deposits.

“Some of the best gold mines in the world are in West Africa. And they really don’t get a lot of publicity in ‘Tier 1’ investment jurisdictions like North America and Australia.

“So that’s our view and we still see potential to grow the company through discovery and potential future acquisitions in the region.”

 

And that’s certainly the case when you’ve got around a decade currently at Sanbrado and then you’ve got the Kiaka gold project that you’ve acquired as well, so you’re looking at doubling down in Africa at up to 400,000 ounces per annum.

“Sanbrado right now has more than 12 years at more than 200,000 ounces per annum. And then when we combine that with Kiaka, which we think is going to be a plus 200,000oz plus-15 year project, definitely, we will see ourselves as a mid-tier producer in two assets that are 45km apart.

“If you think historically about successful companies that have been built in Western Australia, there’s a lot of benefit to having synergy through operations. And also through building the operations, you end up with quality processing plants that have got synergies between them, where if you can have common spares that reduces your costs.

“And having new plants keeps sustaining costs lower because you’re not rebuilding plants. So a lot of the assets in more mature jurisdictions like Western Australia, their all in sustaining costs can be quite reasonable.

“But then when you add growth capital in or capital works projects to maintain operations, that’s really where we start to see costs creeping up.

“We’re in this to make money for our shareholders and stakeholders and the two best performing or the two highest margin producers on the ASX right now are West African gold producers in Perseus and West African Resources.

“It just shows you that new projects over there, they generate a lot of free cash flow early on. West Africa seems to me that it is kind of where the West Australian Goldfields were at in the 1980s and 90s when new discoveries were being made.”

 
Just on the process of building and operating a mine from another country in the middle of a pandemic. What’s that experience been like for you and how were you able to achieve it and keep everything on track. What’s the Covid situation been like in Burkina Faso?

“The Covid situation in West Africa has been pretty stable. It’s a region that already deals with significant health issues given there’s endemic malaria, but also meningitis is an issue as well.

“There’s a lot of endemic diseases in the region. Burkina actually has an extremely young population, so the average age in Burkina is less than 20 years old. So it (Covid) has obviously been in the country and in the region, but we haven’t seen that really affect the economy in Burkina.

“One of the benefits of being an international gold producer is that we can hire from a broader region.

“Here at the moment, 90% of our workforce comes from Burkina Faso and 50% of our workforce is from the local area, and we’ve got world’s best training programs in place so that those people will end up getting training and certificates that would be equivalent to the training that’s given in Australia.

“Things are pretty tough here (in WA) at the moment for producers because they can’t get people in.

“We’ve got expat staff and highly skilled technical staff that do come from Australia and New Zealand. But also we’ve got them coming from North America. We’ve got expats from the UK, from Europe.

“And (with) the travel in and out of Europe, Africa was open, it was formally closed until about July last year, when things opened up again with Europe (and it) has been open for the last 12 months.

“So that’s enabled us to fly out of Europe. And also having the strength in our local workforce as well has been a real benefit.

“There’s a maturing mining industry in Burkina. It’s not quite mature yet, but we’ve got some very experienced local geologists and engineers, surveyors, some of the technical roles that you’d be struggling to fill here in Western Australia at the moment, you can fill those positions in Burkina because there’s been mining there for well over a decade now.”

Sanbrado mine owned by West African Resources
Pic: West African Resources

 

I’m interested still in your view on that sort of Tier 1, Tier 2 and below, that dichotomy. I don’t know, do you view it a bit of a psychosis for investors and a bit of a buzzword more than it is reality? Obviously some places will have more jurisdictional risk, but at the end of the day, you know, companies are looking to make money and build communities.

“I think a lot of the talk (is) around Tier 1 assets in Tier 1 jurisdictions but really they’re, Tier 3 or Tier 4 projects when it comes to cash generation.

“Each jurisdiction has got its own challenges. So some of these jurisdictions in North America and even Australia, now have got issues with green tape and social issues.

“So we’ve got over 1300 people on site at the moment in staff and contractors, and we pay wages – certainly for Burkinabe workers, that are much higher than the average wages in the country.

“And the positive thing about money in a developing country like Burkina Faso is that you’re definitely generating goodwill from the local people, and you’re making a difference in people’s lives.

“And something that’s very positive about mining that we probably don’t talk enough about.

“The good thing about doing work in developing new projects – and Perseus has done the same thing with Yauore – is that most of those projects generate cashflow early.

“You’ve got generally got oxide mineralisation from surface which is generally higher grade and it’s got excellent metallurgical characteristics. So there are high recoveries and cheap processing costs that allow you to pay back capital and then eventually grow the company or deliver back to shareholders, which is what we want to do.

“That’s just the reality of building new projects in West Africa. It’ll be the same for new discoveries in Western Australia, as long as they’re near enough to surface. Some of these projects that are interesting and have been discovered recently, they’ll still have pre-strip, they’ll still have capital required up front before you can start generating cash flow, particularly if they’re under cover.

“Generally projects in West Africa are at or near surface so they generate cash flow early.

“Western Australia has always led the charge as far as world’s best practice in exploration and mining, there is no doubt about that. And that’s why the key people in our company have been trained here in Western Australia and then we’ve taken those skills to West Africa to go and find and develop new projects.

“And what I think we’ll find over the next decade is the new techniques that have been applied in Western Australia, like flying airborne geophysics and VTEM, is a very good example where it’s been successful in delineating new projects and new targets in Western Australia.

“West Africa generally, and Burkina Faso definitely, hasn’t had enough modern exploration techniques applied in the discovery of gold and other deposits. So I think that’s going to happen and West African will be flying VTEM next year over all our projects.

“So I’ve been really impressed with what I’ve seen in Western Australia and we’re hopeful it will generate more targets and more deposits for us too.”

The post West African Resources boss Richard Hyde on why it’s the place to be for a new gold miner appeared first on Stockhead.


Author: Josh Chiat

Articles

The Buckingham Graphite Project – Noble Mineral Exploration (TSX.V: NOB)

CEO, Vance White and Exploration Manager, Wayne Holmstead had us out to the Buckingham Graphite property to highlight the opportunity it presents the company….

CEO, Vance White and Exploration Manager, Wayne Holmstead had us out to the Buckingham Graphite property to highlight the opportunity it presents the company. Graphite of this quality will be in high demand as several auto manufacturers have publicly stated they will shift to EV’s by 2030. Furthermore, the Quebec government is already taking steps to ensure that Quebec is a leader in Battery metals, manufacturing and clean energy.

About The Buckingham Graphite Project

The Buckingham graphite property is located in the Outaouais area of the Grenville Subprovince of Quebec. It consists of 30 claims (1803 hectares) and contains 3 separate graphite occurrences. The main occurrence (McGuire) was worked by Stratmin Inc. in 1985-86 when a ground electromagnetic survey was done following a regional airborne survey. Three diamond drill holes were completed to intersect the electromagnetic anomalies, 2 of which intersected graphite mineralization which was found to be hosted by marble and gneissic rocks.

Although the nature of the graphite on the Buckingham Property has not been determined, graphite concurrences in this area are normally coarse grained, flake graphite. This type of graphite is the most desirable of the naturally occurring types that is used to produce lithium-based batteries. Lithium-based batteries are required for a variety of ‘green’ technologies, including electric vehicles. The global demand for these types of products is expected to rise as world governments lean towards environmentally friendly products rather than petroleum-based ones.

The second graphite occurrence (Cummings) is described as a “deposit in the form of narrow bands of graphite occurring in gneiss and marble over a length of 300 m and a width of 30 m. The graphite occurs in several irregular bands within the 30 m zone.” The Cummings Occurrence is located about 1.5 km southeast of the McGuire Occurrence.

The third graphite showing on the property is called the Robidoux Occurrence and is located about 4 km east of the McGuire Occurrence. It was described by the Quebec Superintendent of Mines in a 1910 report as a “partially uncovered graphitic bed over a length of about forty feet. Some shallow pits have also exposed graphitic outcrops, presumably of the same bed, for an additional distance of 75 to 100 feet. The bed where exposed by the main stripping is about four feet thick and dips into the side of a low hill at an angle of 40 to 50 degrees.” It was also noted that “the graphite ore contains over 30% carbon.”

About Noble Mineral Exploration

Noble Mineral Exploration Inc. is a Canadian-based junior exploration company which, in addition to its shareholdings in Canada Nickel Company Inc., Spruce Ridge Resources Ltd. and MacDonald Mines Exploration Ltd., and its interest in the Holdsworth gold exploration property in the Wawa, Ontario area, holds approximately 72,000 hectares of mineral rights in the Timmins-Cochrane areas of Northern Ontario known as Project 81. Project 81 hosts diversified drill-ready gold, nickel-cobalt and base metal exploration/VMS targets at various stages of exploration. More detailed information is available on the website at www.noblemineralexploration.com

For additional information please visit www.insidexploration.com/nob/ and be sure to follow Insidexploration through our various social media platforms.

Website https://insidexploration.com
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Disclaimer

The content of this video contain forward looking statements and are subject to change. We caution the viewer that this video is for informational purposes and should not be considered investing advice. Prior to making investment decisions, we encourage you consult a financial advisor and always do your own due diligence.






Author: MikeyMike426

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Energy & Critical Metals

EV Nickel starts trading on TSX Venture Exchange

  TORONTO – EV Nickel Inc.’s [EVNI-TSXV] initial public offering (IPO) prospectus dated November 19, 2021, has been filed with and accepted by the…

 

TORONTO – EV Nickel Inc.’s [EVNI-TSXV] initial public offering (IPO) prospectus dated November 19, 2021, has been filed with and accepted by the TSX Venture Exchange and has begun trading on the Exchange.

The closing of the IPO, scheduled for December 2, 2021, was expected to have gross proceeds of $5,440,292 for a total of 1,442,200 flow-through (FT) common shares at 86 cents per FT common share and of 5.6 million units at 75 cents per unit. The company has 30,355,667 common shares issued and outstanding

EV Nickel, classified as a Tier 2 issuer, is a Canadian nickel exploration company, focused on the Shaw Dome area, south of Timmins, Ontario. The Shaw Dome area is home to its Langmuir project, which includes W4, the basis of a 2010 historical estimate of 677,000 tonnes at 1% nickel for approximately 15 million pounds of Class 1 nickel.

EV Nickel’s objective is to grow and advance a nickel business, targeting the growing demand for Class 1 nickel from the electric vehicle battery sector. EV Nickel has almost 9,100 hectares to explore across the Shaw Dome area and has identified 30 km of additional strike length.

“We are excited to get out into the public markets and begin telling the world about our wonderful assets, on the Shaw Dome, just south of Timmins,” said Sean Samson, president and CEO. “The world needs more nickel and especially the type of high-grade, clean nickel that we plan to build our business around. Decarbonization is the challenge of a lifetime and we plan to source the material that will help the EV [electric vehicle] companies grow and help address that challenge.”





Author: Editor

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Base Metals

Vision Lithium to Buy The Cadillac Canadian Lithium Property

Canadian-based exploration company Vision Lithium agreed to acquire 100% interest in 215 contiguous mining claims in Quebec, Canada.  Combined with an…

Vision Lithium Property Portfolio
Cadillac lithium property located approximately 40 km west of Val-d’Or. Source: Vision Lithium

Canadian-based exploration company Vision Lithium agreed to acquire 100% interest in 215 contiguous mining claims in Quebec, Canada. 

Combined with an additional 105 stakes claimed by the company, the group of claims will be collectively referred to as The Cadillac lithium property.  

Details of the agreement include the vendor groups receiving an aggregate cash consideration of $102,427.92 from Vision Lithium, as well as ​​issue a total of 4,300,000 common shares of the company. The shares are not divided evenly, with 1.5 million each going to the CMH Group and Fancamp, the Leblanc-Lavoie Group will receive 1 million and 300,000 Shares will go to the Tremblay Group. The company will also pay each vendor group a 2% net smelter return royalty on the claims. 

President & CEO of Vision Lithium Yves Rougerie commented in a press release, “The Cadillac lithium project is an exciting addition to our growing portfolio of lithium properties. The Property is located 10 km south of the Trans-Canada highway and only metres from the secondary road, ensuring easy access for logistics, materials and qualified manpower.”

The claims acquired by Vision Lithium combined with the additional 105 claims staked, means the property holds a total of 320 claims covering 18,378 hectares. The property is easily accessible year-round in an area with well-maintained roads. This is especially helpful since Quebec can become covered in snow for multiple months of the year, and established infrastructure gives the company a head start.

There are also at least 4 pegmatite dikes which are spaced approximately 100 metres apart and traced for at least 300 metres along on the property. 

Rougerie continued “The property hosts a cluster of close-spaced parallel lithium-bearing dikes. Spodumene has been observed in the outcropping dikes and we believe there are likely more dikes in the cluster. The dikes have seen surprisingly little historical exploration with only a handful of samples and no drilling to date.” 

High Potential for Additional Lithium Discoveries

Lithium crystals have been observed on all four dikes of the property, with even a few large crystals visible. 

The property is located approximately 10 km south of Cadillac, a historic mining town, and about halfway between the major mining centres of Rouyn-Noranda and Val-d’Or in Quebec. 

“We believe the potential for additional lithium discoveries within the main cluster area is excellent and the larger property also has tremendous upside potential for discovery. The entire area acquired and staked is very large at almost 200 square kilometres. We plan to aggressively explore the Property over the winter by drilling the main cluster of dikes and to plan and complete field work next summer over the large tract of land,” Rougerie said. 

There are a number of closing conditions and post-closing obligations for the company until the transaction is officially completed. This includes the execution of certain deeds and instruments of conveyance, and the approval of joining the TSX Venture Exchange. Completion of the transaction is expected to be finished in the coming days. 

Vision Lithium focuses on exploring and developing mineral assets such as lithium and copper in different parts of Canada. Other than the claims they have just received in the recent transaction, the company has operations in Manitoba, and multiple properties in New Brunswick and Quebec. The first drill program at the company’s Dome Lemieux copper property in Quebec has commenced. Vision has also recently completed the Red-Brook copper and zinc drill program in New Brunswick. 

Vision Lithium is focused on developing their Sirmac lithium project in Quebec which is a hard rock source of lithium. Lithium can either come from hard rock sources or brines, and about 50% of each make up the world’s lithium compound production. Both sources can produce battery-grade lithium, but the extraction process is very different. The company plans on using existing methods to extract lithium for the battery market. This is a key area for the company as demand for battery materials is soaring in the middle of a global energy transition. 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

The post Vision Lithium to Buy The Cadillac Canadian Lithium Property appeared first on MiningFeeds.





Author: Matthew Evanoff

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