VANCOUVER, British Columbia, Nov. 15, 2018 (GLOBE NEWSWIRE) — Riverside Resources Inc. (“Riverside” or the “Company”) (TSX-V: RRI) (OTCQB: RVSDF) (R99.F), is pleased to receive new exploration results at its 100%-owned Cecilia Gold Project (the “Project”) in northeastern Sonora, Mexico. Recent rock sampling and mapping was conducted on the Cecilia 1 claim following-up on anomalous areas identified during the reconnaissance soil sampling survey which was conducted over the larger tenure acquired earlier this year. Initially, the exploration work focused on the Cerro Magallanes rhyolite dome complex where historical drilling, mining and other work delineated high-grade gold mineralization. The most recent work by Riverside has been at the Cecilia 1 claim which covers a large area (~50km2) of favorable geology that is bisected by several large regional structures that have been found to host gold mineralization.
Over the past several months Riverside has completed a reconnaissance soil sample survey over the northeastern portion of the claim and followed this up with a sampling and mapping survey that included a Terraspec assisted alteration survey, Innovex geochemical testing, and assaying of selected areas. The soil sampling survey documented several, large linear anomalies that have now been field checked with initial sampling and mapping work. The most recent work has focused on four (4) new areas in addition to the main Cerro Magallanes target area therefore expanding the overall value of the Cecilia Project.
Riverside’s President and CEO, John-Mark Staude, stated:“Riverside has continued working on the Cecilia Project following-up on its initial soil and channel sampling programs further refining the targets on the concession. The recent program has defined several epithermal targets that show significant strike length and need to be drilled. The Cecilia 1 concession expands Riverside’s exploration footprint over a much larger area (58 km2). The fieldwork to date demonstrates the robust nature of the Cecilia Project showing large mineralized structures over significant strike lengths.”
Casa de Piedra target:
The Casa de Piedra target is east of Cerro Magallanes on the recently added Riverside concession, Cecilia 1. The target zone comprises a 2 km long shear fault vein with abundant epithermal mineralization and textures. Casa de Piedra has not seen any exploration making it a high-profile drill target. This target was first identified through soil geochemistry in June 2018 where anomalous Pb, Cu, Te and Hg were noted. In the field the Casa de Piedra target is defined by a 30 m wide N-NE trending structural corridor of altered Cretaceous clastic sedimentary bedrock. Within the main mineralized structure, widespread sericitic, silica and kaolinitic alteration is common including buddingtonite alteration; buddingtonite being a clay often found in proximity to precious metal veins. The structural zone is infilled with quartz veining, quartz veinlets and stockwork and in some areas banded quartz, vuggy quartz and grey calcite. Textures in outcrop are dominated by intact-banded veins and silicified zones and only minor vein breccias. Transport of the clasts appears to be rotated but with minor displacement; anastomosing breccia veins are common in outcrop. Later carbonates are noted, and some carbonate appears to be leached from the matrix surrounding the quartz, leaving a stringy, net texture with residue of the Mn-oxides and crustiform quartz. This mineralized structure is cross-cut by northwest-trending rhyolitic dikes that do not appear to influence mineralization. Rock sampling (24) in this area returned one sample that assayed 0.9 g/t Au and also included other elements typical of the upper parts of hydrothermal veins. This shear vein is not unique, a second large vein system, Los Llanos described below.
Los Llanos target:
The Los Llanos target is located east of the Casa de Piedra vein shear structure east of the Cerro Magallanes peak. The Los Llanos target was first defined by reconnaissance and soil geochemistry where anomalous Pb, Cu and Zn were noted. In the field the Los Llanos target is defined by a 20-30 m wide structural corridor of altered sandstone presently mapped as being 1 km in strike length and trending northeast. Gold mineralization is found in narrow anastomosing veins sometimes as stockwork but primarily as a silicified zone marked by reddish-brown iron oxides. This corridor also hosts rhyolite dikes which are sometimes parallel to the mineralized zone but also cut the zone. To the best of our understanding no exploration work has been done in this area thus making it a newly discovered vein zone. Some evidence of placer mining was noted in the area suggesting gold may have come from this vein; further exploration work is warranted on the Llanos target.
Cruz Target:
The Cruz target lies within a large structural corridor northeast of Cerro Magallanes within horst and graben structural terrain. This large northwest trending regional structure extends tens of kilometers and comes across the northeast portion of the Project, is visible on satellite images, and forms a major structural topographic feature in northeastern Sonora. At the outcrop level, mineralization is noted in veins and stockwork alteration zones of up to 100 meters wide. These zones comprise anastomosing quartz veins with breccia that generally strike N-NE (020) and dip vertical to steeply to the west. Within this 100 m wide zone stockwork show syntaxial and druzzy textures. Gold mineralization is associated with pervasive, widespread sericitic and silica alteration; sulphides are rare but noted in this area. Where these veins cut conglomerate bedrock wide areas of silicified material is noted, two out of seven samples taken from this area returned gold grades of 1.6 g/t and 2.3 g/t Au. These veins continue through the conglomerate into the adjacent granitic bedrock. Geochemistry in this area shows high Pb, Zn and Cu indicating mineralization in the northern portion of the concession may be lower down in a epithermal system.
Cruz II Target:
The Cruz II Target is located in the eastern portion of the Cecilia 1 concession. This target is also a structural corridor of silicification and veining currently mapped at about 2 km in strike length. The structure/vein strikes N-NE (020-030) and cuts through several sedimentary geological units varying in width from several meters to 20 m. Mineralized areas include anastomosing, stockwork or parallel veins with breccias; breccia is sometimes rounded but often angular. Terraspec analysis of altered rock shows pervasive silica and sericite alteration with illite in some areas. In hand sample the alteration is dominated by silicification and Fe-oxides. Individual veinlets are up to 30 cm wide with 3 to 5 parallel veins within a larger 20 m corridor. Stockwork veining, where present, is typically orthogonal and made more obvious by the hematitzation of rare pyrite, sphalerite and galena. Two of eleven samples from Riversides first pass of this area returned gold values of 0.5 g/t Au. Rock geochemistry also shows elements typical of a low-sulphidation epithermal system.
Cerro Magallanes Targets:
The Cerro Magallanes targets encompasses the rhyolitic dome complex in the middle of the Project. Riverside has conducted channel sampling on four main areas. Channel sampling shows consistent gold from the top of Cerro Magallanes at the San Jose target northeast along the Agua Prieta-North Breccia target and then through the Central and East Target areas. Highlights from this previously reported work includes:
San Jose Target – 47m @ 1.12 g/t from underground workings
Agua Prieta – North Breccia – 10m @ 3.34 g/t from surface channel
Central Target – 14m @ 2.44 g/t from underground workings
East Target – 11.5m @ 1.57 g/t
These samples do not cover the entire target thicknesses and further excavations would be needed to extend continuity thus the widths are open and provide an indication of gold mineralization context. The new target areas on Cecilia 1 east and north of Cerro Magallanes provide the opportunity to discover bulk tonnage precious metal mineralization where vein systems of several kilometers in length have been defined.
The map below (see Figure 1) shows the named zones on the Cecilia Project that have been defined by Riversides recent fieldwork.
Figure 1: Shows geological mapping and gold values of the target areas and puts in context the new target areas locations in comparison to Cerro Magallanes.
Figure 2: Shows a cross section of the Casa de Piedra and Los Llanos shear targets with the vertical dimension being extended to show some of the details for the drill targets.
Qualified Person and QA/QC: The scientific and technical data contained in this news release pertaining to the Cecilia Project was reviewed and/or prepared under the supervision of Freeman Smith, P.Geo., a non-independent qualified person to Riverside Resources Inc. who is responsible for ensuring that the geologic information provided in this news release is accurate and who acts as a “qualified person” under National Instrument 43-101 Standards of Disclosure for Mineral Projects.
Rock samples collected were taken to the Bureau Veritas Laboratories in Hermosillo, Mexico for fire assaying for gold. The rejects remained with Bureau Veritas in Mexico while the pulps were transported to Bureau Veritas’ laboratory in Vancouver, BC, Canada for 45 element ICP/ES-MS analysis. A QA/QC program was implemented as part of the sampling procedures for the exploration program. Standard samples and blanks were randomly inserted into the sample stream prior to being sent to the laboratory.
About Riverside Resources Inc.: Riverside is an exploration company driven by value generation and discovery. The company has $2,000,000 in cash, fewer than 45M shares issued and a strong portfolio of gold-silver and copper assets in North America. Riverside has extensive experience and knowledge operating in Mexico and leverages its large database to generate a portfolio of prospective mineral properties. In addition to Riverside’s own exploration spending, the Company also strives to diversify risk by securing joint-venture and spin-out partnerships to advance multiple assets simultaneously and create more chances for discovery. Riverside has additional properties available for option, with more information available on the Company’s website at www.rivres.com.
ON BEHALF OF RIVERSIDE RESOURCES INC. “John-Mark Staude” Dr. John-Mark Staude, President & CEO
For additional information contact:
John-Mark Staude President, CEO Riverside Resources Inc. info@rivres.com Phone: (778) 327-6671 Fax: (778) 327-6675 Web: www.rivres.com
Certain statements in this press release may be considered forward-looking information. These statements can be identified by the use of forward looking terminology (e.g., “expect”,” estimates”, “intends”, “anticipates”, “believes”, “plans”). Such information involves known and unknown risks — including the availability of funds, the results of financing and exploration activities, the interpretation of exploration results and other geological data, or unanticipated costs and expenses and other risks identified by Riverside in its public securities filings that may cause actual events to differ materially from current expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
VANCOUVER, Nov. 15, 2018 /PRNewswire/ – NexGen Energy Ltd. (“NexGen” or the “Company”) (TSX: NXE, NYSE MKT: NXE) is pleased to announce it is the recipient of the 2019 Environmental & Social Responsibility Award given by the Prospectors & Developers Association of Canada (“PDAC”), the leading voice of the mineral exploration and development community.
The PDAC Environmental & Social Responsibility award recognizes an organization’s effort in protecting and preserving the natural environment and establishing positive community relations during the exploration phase or operation of a mine.
Leigh Curyer, Chief Executive Officer, commented: “The receipt of this award recognizes NexGen’s commitment to all aspects of its operations, communities and the environment in which it conducts activities. The NexGen team’s culture of creating positive impacts for all reflects our core objective which extends beyond bringing a mine into production. We look forward to expanding the scope and breadth of our programs previously initiated as we head into 2019 conducting the largest campaign since incorporation in 2011. On behalf of the Executive and Board of NexGen, I would like to thank everyone involved for their dedication and conduct in the pursuit of what has been achieved to date and their relentless focus on future initiatives.”
The 41st annual PDAC awards showcase exceptional leaders in the mineral exploration and mining community. Recipients will be celebrated at an Awards Gala & After Party at the Fairmont Royal York Hotel in Toronto on Tuesday, March 5 during the PDAC 2019 Convention.
About NexGen
NexGen is a British Columbia corporation with a focus on the acquisition, exploration and development of Canadian uranium projects. NexGen has a highly experienced team of uranium industry professionals with a successful track record in the discovery of uranium deposits and in developing projects through discovery to production. NexGen owns a portfolio of prospective uranium exploration assets in the Athabasca Basin, Saskatchewan, Canada, including a 100% interest in Rook I, location of the Arrow Deposit in February 2014, the Bow discovery in March 2015, the Harpoon discovery in August 2016 and the Arrow South discovery in July 2017. NexGen is the recipient of the PDAC’s 2018 Bill Dennis Award and the 2019 Environmental and Social Responsibility Award.
Forward-Looking Information
The information contained herein contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. “Forward-looking information” includes, but is not limited to, statements with respect to the activities, events or developments that the Company expects or anticipates will or may occur in the future. Generally, but not always, forward-looking information and statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or the negative connotation thereof or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative connotation thereof.
Forward-looking information and statements are based on the then current expectations, beliefs, assumptions, estimates and forecasts about NexGen’s business and the industry and markets in which it operates. Forward-looking information and statements are made based upon numerous assumptions, including among others, that the proposed transaction will be completed, the results of planned exploration activities are as anticipated, the price of uranium, the cost of planned exploration activities, that financing will be available if and when needed and on reasonable terms, that third party contractors, equipment, supplies and governmental and other approvals required to conduct NexGen’s planned exploration activities will be available on reasonable terms and in a timely manner and that general business and economic conditions will not change in a material adverse manner. Although the assumptions made by the Company in providing forward looking information or making forward looking statements are considered reasonable by management at the time, there can be no assurance that such assumptions will prove to be accurate.
Forward-looking information and statements also involve known and unknown risks and uncertainties and other factors, which may cause actual results, performances and achievements of NexGen to differ materially from any projections of results, performances and achievements of NexGen expressed or implied by such forward-looking information or statements, including, among others, negative operating cash flow and dependence on third party financing, uncertainty of the availability of additional financing, the risk that pending assay results will not confirm previously announced preliminary results, imprecision of mineral resource estimates, the appeal of alternate sources of energy and sustained low uranium prices, aboriginal title and consultation issues, exploration risks, reliance upon key management and other personnel, deficiencies in the Company’s title to its properties, uninsurable risks, failure to manage conflicts of interest, failure to obtain or maintain required permits and licenses, changes in laws, regulations and policy, competition for resources and financing, and other factors discussed or referred to in the Company’s Annual Information Form dated March 31, 2017 under “Risk Factors”.
Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information or implied by forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended.
There can be no assurance that forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to update or reissue forward-looking information as a result of new information or events except as required by applicable securities laws.
EMX Royalty Announces Third Quarter 2018 Results and Repayment of Sprott Loan
November 14, 2018 Vancouver, British Columbia, November 14, 2018 (TSX Venture: EMX; NYSE American: EMX) – EMX Royalty Corp. (the “Company” or “EMX”) is pleased to announce that the Company has made its interim filings for the quarter ended September 30, 2018, which are available on SEDAR at www.sedar.com, on the U.S. Securities and Exchange Commission’s website at www.sec.gov and on EMX’s website at www.EMXroyalty.com. Financial results are prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and are expressed in Canadian dollars unless otherwise stated. EMX shareholders wishing to obtain free printed copies of the interim financial statements may contact the Company via email at jharris@EMXroyalty.com or at Suite 501-543 Granville Street, Vancouver, BC, V6C 1X8. Sprott Loan Repayment. EMX has repaid the US $5 million senior secured credit facility loan from Sprott Private Resource Lending (Collector), LP (“Sprott”)1. EMX thanks Sprott for providing timely support of the Company’s royalty, royalty generation and strategic investment initiatives. About EMX. EMX leverages asset ownership and exploration insight into partnerships that advance our mineral properties, with EMX retaining royalty interests. EMX complements its generative business with strategic investment and third party royalty acquisition. For further information contact:
David M. Cole President and Chief Executive Officer Phone: (303) 979-6666 Email: Dave@EMXroyalty.com
Scott Close Director of Investor Relations Phone: (303) 973-8585 Email: SClose@EMXroyalty.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Forward-Looking Statements This news release may contain “forward looking statements” that reflect the Company’s current expectations and projections about its future results. These forward-looking statements may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserves and resource estimates, work programs, capital expenditures, timelines, strategic plans, market prices for precious and base metals, or other statements that are not statements of fact. When used in this news release, words such as “estimate,” “intend,” “expect,” “anticipate,” “will”, “believe”, “potential” and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause EMX’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to: unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project, increased regulatory compliance costs, expectations of project funding by joint venture partners and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company’s MD&A for the quarter ended September 30, 2018 (the “MD&A”), and themost recently filed Form 20-F for the year ended December 31, 2017, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the 20-F and financial statements of the Company, is available on SEDAR at www.sedar.com and on the SEC’s EDGAR website at www.sec.gov. 1 See EMX news release dated May 4, 2018. View in PDF Format
EMX Royalty Corp. Suite 501 – 543 Granville Street Vancouver, BC V6C 1X8 Telephone +1 (604) 688-6390
VANCOUVER, British Columbia, Nov. 13, 2018 (GLOBE NEWSWIRE) — Nevada Copper Corp. (NCU.TO) (“Nevada Copper” or the “Company”) is issuing this news release to clarify its technical disclosure as a result of a recent review by the British Columbia Securities Commission.
On October 11, 2018, the Company filed a technical report for the Pumpkin Hollow project entitled “Pumpkin Hollow Development Options – NI 43-101 Technical report: Pre-feasibility study 5,000 tons/day Underground Project (Case A), Feasibility Study for a 70,000 tons/day Open Pit/Underground Project (Case B), and Preliminary Economic Assessment of an Open Pit Project with Initial Capacity of 37,000 tons/day and Expansion to 70,000 tons/day” (the “October 2018Technical Report”). That report included the results of a preliminary economic assessment (the “PEA”) of the stand-alone development of the open pit at the Project, in addition to the existing Case A and Case B studies. In preparing and presenting the October 2018 Technical Report, the Company sought to provide full disclosure of the various development alternatives being considered for the Pumpkin Hollow project (the “Project”). However, the presentation of multiple development scenarios using different levels of technical and economic studies within the technical report do not comply with the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). As a result, investors should not rely on the October 2018 Technical Report.
Nevada Copper remains confident with respect to the quality of the underlying technical work. Nevada Copper also confirms that it continues its ongoing work on the preparation of a new technical report (the “New Technical Report”) for the Project for release in Q1 2019. The New Technical Report will supersede all prior technical reports for the Project and is expected to incorporate the results of the Company’s previously announced 2018 drilling program and evaluate, in addition to the underground project currently under construction, a standalone, staged, open pit mine development at a preliminary feasibility study level.
Qualified Persons
The technical disclosure in this news release was approved by Gregory French, P.G., Vice-President Exploration & Project Development of Nevada Copper, Robert McKnight, P.Eng., Executive Vice-President of Nevada Copper, both of whom are non-independent Qualified Persons within the meaning of NI 43-101.
About Nevada Copper
Nevada Copper’s (NCU.TO) Pumpkin Hollow project is the only major, shovel-ready and fully-permitted copper project in North America. Located in Nevada, USA, Pumpkin Hollow has substantial reserves and resources including copper, gold and silver. Its two fully-permitted projects include: the high-grade Pumpkin Hollow underground project which is in construction with a view to near-term commencement of copper production; and the Pumpkin Hollow open pit project, a large-scale copper deposit with substantial mineral reserves, and which is currently undergoing an optimization program to target a reduced-capex, staged-development approach.
Additional Information
For further information please visit the Nevada Copper corporate website (www.nevadacopper.com).
Bart Jaworski, Director and CEO of Group Eleven Resources sits down with Maurice Jackson of Proven and Probable to discuss his companies exploration for zinc in Ireland. Listeners will be introduced to the unique value proposition Group Eleven Resources of the largest land position of any explorer or miner in Ireland. All together encompassing approximately 3,200 sq km, or 320,000 hectares or nearly 800,000 acres, which hosts 2 flagship projects the Stonewall and the Ballinalack respectively.
Source: Maurice Jackson for Streetwise Reports (11/12/18)
Bart Jaworski, CEO of Group Eleven Resources, talks with Maurice Jackson of Proven and Probable about his company’s exploration efforts in Ireland.
Maurice Jackson: Joining us today is Bart Jaworski, the CEO and director of Group Eleven Resources Corp. (ZNG:TSX.V; GRLVF:OTCQB), which is known for advanced stage zinc exploration in Ireland. Mr. Jaworski, for someone new to the story, who is Group Eleven Resources and what is the thesis you are attempting to prove? Bart Jaworski: Well, our overall thesis is that by Group Eleven Resources having the largest land position in the richest country for zinc in the world, that being Ireland, we have a very substantiated vision, and that vision is to discover the next big zinc deposit in the country. We already have the second and third largest undeveloped zinc occurrence in the country, that being the Stonepark current resource and the Ballinalack historical estimate, and those are second only to Glencore’s very substantial Pallas Green deposit, which is one of the largest undeveloped zinc deposits in the world. People-wise, of course, you need people with the right mind-set and experience to drive towards this goal of discovery. And we certainly have that part covered with MAG Silver as a strategic backer and people like Peter Megaw and Dan MacInnis involved, as well as,] very experienced Irish geologists like John Barry, David Furlong and Dr. Mark Holdstock, who have spent most of their careers exploring for zinc in this country. Maurice Jackson: Before we discuss the unique value proposition of Group Eleven Resources, I would like to begin our discussion today at the 10,000-foot level regarding zinc, it’s a metal that is not on a lot of radars. What can you tell us about the zinc supply and demand fundamentals? Source: TradingEconomics.com (US$/tonne) Source: Scotiabank (The Daily Mining Scoop) Bart Jaworski: Zinc demand is roughly 14 Mt/year, so that’s about US$40 billion/year turnover (at current prices). Zinc is the fourth most consumed metal, after iron, aluminum and copper. The price of zinc was on fire in 2016 and 2017—roughly doubling from 70c/lb to $1.60/lb; then in 2018, the price took a bit of a breather, falling to about $1.00/lb in September and now starting to rise again towards the $1.20/lb level. Zinc is primarily used for galvanizing steel, which means making steel rust proof and that then feeds the construction and automotive sectors. Zinc is also an essential nutrient for embryonic growth and normal metabolic processes inside the human body. So that’s a bit about the demand side. On the supply side this is where things get interesting. A number of mines around the world have been shutting down because they’ve run out of ore or because they are no longer economic to run because, for example, they’ve been starved of capitalized for too long, etc. Lisheen, Galmoy and Century are a few examples of large mines that have been depleted over the last few years. This has led to a shortage in mine supply, which in turn has led to diminishing global inventories—which are now down to levels we haven’t seen since 2007/2008 and remember, back then, prices reached as high as $2.08/lb. So the question becomes why are prices relatively muted now, despite these multi-year inventory lows? Well, I think the key issues are the trade war rhetoric, Chinese slow down fears and of course, the threat of a supply response. Now obviously, no one has a crystal ball, but I suspect trade war talks will conclude constructively or at least I hope so. The Chinese economy, I suspect, still has a number of very large buffers at its disposal and one has to wonder if the trade talks with the U.S. do indeed falter the Chinese government could notionally just double-down on internal infrastructure growth again bolstering its Belt and Road initiative even further, for example. On the supply response, as a former mining analyst, I definitely learned over the years that slippage on getting new mines up and running happens more often than not. So you always want to take a haircut to guidance on start-ups. Then there is the question of Chinese supply, which accounts for about half of world’s mine supply. Historically it has been the case that whenever zinc price went up, Chinese supply would go up as well, leading to a moderation of zinc prices. This hasn’t been the case so far this cycle. The reason is that China has imposed a number of strict environmental regulations on industry, including mining, over the last year or two. The effect has been that a lot of small “mom and pop” zinc mines in China have been shut down and that has suppressed the supply response from China in a big way. So, that’s the crux of the market. There is one other key bright spot that I believe is starting to show great promise and that is the evolution of zinc batteries. I think this could be a potential game-changer for the industry. The background here is that zinc was always an ideal metal for batteries since Edison’s time 100 years ago; however, the problem has always been “rechargeability,” you couldn’t recharge a zinc battery without needles growing inside the cell and quickly bursting the battery. A few years ago a scientific breakthrough by the U.S. Naval Research Laboratory changed all that and this was written up in the prestigious Science magazine in April 2017; by the way, I recommend people take a look. With the advent of 3D lattice technology, electric charges can now be dissipated homogeneously enough to prevent needle growth and whamo! Zinc now has the potential to compete and offset the likes of Li-ion batteries. That’s pretty exciting. Now there are small zinc batteries for cars and small equipment, etc., which I don’t think will have much impact on zinc demand. Then there are the large zinc batteries aimed for grid power storage and here is where we could definitely move the needle significantly on annual zinc demand. A great example of these large zinc batteries is NantEnergy, which is run by a California-based billionaire named Patrick Soon Shiong. He’s developed a Zinc-Air battery, which run on photons, zinc and air; and he’s demonstrated he can successfully run dozens of cell phone towers and villages completely off the grid in Africa and other regions. There is a great video on Bloomberg interviewing Mr. Soon Shiong on this technology, plus the New York Times has recently written it up as well. Source: NantEnergy Maurice Jackson: Group Eleven Resources projects are strategically located in Ireland, provide us with some historical context on the relationship between zinc and Ireland. Bart Jaworski: Ireland is estimated to be No 1 in terms of zinc found per square km, so it’s a very prospective country. It also hosts some of the world’s largest zinc deposits (e.g., Boliden’s Navan mine and Glencore’s Pallas Green deposit). It’s infrastructure-rich and has year-round tidewater for shipping. The product is clean and you’re close to consumer. Irish zinc concentrates tend to be very good quality. European smelters are around the corner in Norway, Sweden, Belgium, etc. Politically Ireland is a safe, first world jurisdiction with security of tenure and rule of law. And lastly, the Fraser Institute, which is the only think tank that ranks the world’s mining jurisdictions, ranks Ireland No 1 in terms of Policy Perception Index for five years running. So Ireland has all the ingredients you’d want. One key aspect to add is that over the last 70 years of mining history in Ireland, a general rule of thumb of what it takes to break-even economically in Ireland is what is known as “10 and 10” or 10 Mt at 10% Zinc+Pb combined. That reflects the infrastructure and tidewater (so in more remote part of the world were you need to truck in your diesel and truck out your concentrates; you may need 50–100 Mt to break-even. In Ireland you typically need much less, which is very comforting to know). Source: Boliden (location of zinc smelters in green) Maurice Jackson: Bart, now that we know the virtues of exploring for zinc in Ireland, how much of a land position does Group Eleven Resources have in Ireland? Bart Jaworski: We have the largest land position of any explorer or miner in Ireland. All together we hold approximately 3,200 sq km, or 320,000 hectares or nearly 800,000 acres. This gives us the dominant position over two geological basins, which gives us the ability to think big and think outside the box, and this greatly aides our exploration approach. Source: Group Eleven (G11 licenses in orange) Maurice Jackson: You mention approach, is there anything different that you are doing that others are not? Bart Jaworski: Well, yes, absolutely! Our “Big Think” approach is what really makes us different. Essentially, we are tearing up the old geology textbooks and putting them back together again using a very open minded and thorough approach to exploration by systematically conducting detailed data compilation. Mining data in Ireland goes back all the way to the 1200s and beyond and we are coupling that with cutting edge exploration techniques such as seismic surveys, airborne geophysics, ionic leach soil sampling, etc. Now, not just anybody can have the “Big Think.” You can’t have the “Big Think” without the ground position, right? Because if you come up with a great idea, it’s likely on someone else’s ground and you can’t do anything about it. You also can’t do the “Big Think” without the right people—big picture thinkers—and that’s again where the likes of Peter Megaw and Dan MacInnis, both from MAG Silver, come in, as well as deep Irish bench-strength with the likes of Dr. Mark Holdstock, John Barry and David Furlong. Maurice Jackson: A virtue of having the largest ground position in Ireland is that Group Eleven has two flagship projects. Let’s delve into them shall we. Mr. Jaworski, introduce us to your first flagship project, the Stonepark and the unique value propositions it presents. Note: Red and Black outlines are G11. Blue outline is Glencore Note: This map is a zoom-in on the Pallas Green/Stonepark area; shows the Carrickittle and Limerick South prospects, which may be a quasi-mirror image to the small red blobs to the north of Pallas Green Bart Jaworski: Well, at Stonepark we are very excited because we are right next door to Glencore’s Pallas Green deposit, and we think we might have at least some of the key mineralizing faults from that deposit trending onto our ground. Our ground, by the way, covers nearly the entire prospective geology in this area, outside of Glencore’s ground. We have by far the largest land position in this region much bigger than Glencore’s area and we cover about 1200 sq km or 300,000 acres. We also already have a maiden resource 43-101 compliant in the Inferred Category on our ground totaling 5mt @ 11% Zinc+Pb (Stonepark deposit). That is located only about 1km away (very close) from Glencore’s Pallas Green deposit, which hosts about 44mt @ 8% Zinc+Pb. Our deposit is about 200–400m deep. whereas Glencore’s Pallas Green is 300–1300m deep, with its new discovery called Caherline about 10mt @ 10% Zinc+Pb at the deepest part of that range (i.e., towards 1300m). We know Glencore has been actively drilling at Pallas Green since early 2017. So from the above you can see that our Stonepark deposit is much shallower and about 30–40% higher grade. That’s a good starting point. But the key is this! This is an emerging camp. The discoveries here at Pallas and Stonepark are relatively new and yet this is already the most metal-endowed region within all of Ireland, outside of Boliden’s Navan deposit. And yet the main mineralization structures (or faults) have not yet been found. It’s a complete mystery. Usually in Ireland, the zinc occurs butted up against a fault. But in this camp the main structure appears to be further away, suggesting that what has been discovered to date is actually the periphery of the system. Thus, the heart may be lurking somewhere underneath, in what we call the Limerick volcanics. So the question becomes how do we find the center of the system? And this is where our preliminary drilling and the Tellus survey come in. We announced last week the start of a preliminary 1500–2000m drill program, which will be primarily aimed at answering the big geological questions on the architecture of this camp. If we hit some mineralization too, that’s great, but the primary aim is geological. We’re going to couple this data with a large ongoing airborne survey that is currently being flown by the Irish Geological Survey. It’s called Tellus and it comprises flying 2,500 sq km or 620,000 acres or so, covering our ground, Glencore’s ground and our nearby Silvermines ground and using three state-of-the-art detection methods all together, which are radiometrics, magnetics and electro-magnetics. This information will be publicly available early next year and will hopefully tell us where the major faults are and how they line up with the known mineralization in this camp. Now we already have our suspicions on where this key fault corridor might be—one clue is that the main Pallas Green body seems to trend in a NW orientation; this is from an academic paper that was published in 2015. If you continue that trend towards the south you line up perfectly with our Carrickittle and our Limerick South prospects. At Carrickittle, for example, there are about a half dozen historical holes that intersected about 5m @ 12% Zinc+Pb and they have been largely forgotten about since the late 1960s. However, now that we know about Pallas Green and Stonepark, these 1960s prospects are starting to look at lot like the small satellites you see just outside the Pallas Green deposit to the north, which poses an interesting question: Do we have a “quasi-mirror image” down to the south? So this is one of key ideas we are working on and that is what we’ll be working on as part of the “Big Drill of 2019.” Maurice Jackson: Let’s move north now and discuss your second flagship project, Ballinalack. What has the company excited there? Note: above shows regional cross-section across Ireland, demonstrating that the zinc (red) occurs in two prospective horizons (blue and yellow) at Ballinalack. We have BOTH of these horizons (This is unique, given if you move north, you lose the blue layer; if you move south, you lose the yellow layer.) Bart Jaworski: At our second flagship project, Ballinalack, we also have an exciting idea that we will be testing as part of the Big Drill of 2019. It is located about 50km away from Boliden’s giant Navan zinc mine, which has approximately 100 Mt @ 10% Zinc+Pb; it’s mostly mined out now, but still operating. It’s the biggest mine in Europe and considered one of the top five zinc deposits in the world. Ballinalack is unique as it’s still close enough to Navan to have well-developed Navan Beds on the property in addition to the other prospective horizon called the Waulsortian limestone. In fact, Ballinalack is the only known zinc occurrence in Ireland that has significant mineralization in both horizons. Interestingly, in the 1970s, when Ballinalack was discovered, the old-timers only drilled down to about 300m to define the historical estimate, which by the way totals 7.7 Mt @ 7.3% Zinc+Pb, which is not too far off from our 10 and 10 rule of thumb. So drilling beyond 300m was considered “very deep” at that time. Now, of course, mining reaches much deeper, for example, at Boliden and Pallas Green, drilling is going down well beyond 1000m or 3300 feet. Our big idea at Ballinalack is that the Navan Beds directly underneath the historical estimate have not yet been tested for Navan-style mineralization. Case in point, of the 30 holes historically drilled deep enough to actually intersect the Navan Beds in the vicinity of the old estimate, a surprisingly high number, about half of the holes, hit significant mineralization. And directly underneath the historical estimate the area is virtually undrilled. So our preliminary drilling of two holes earlier this year was also primarily aimed at geology, and we successfully identified (1) that cross-faults exist and they seem to have a lot more to do with mineralization than ever recognized before, and (2) that the Ballinalack fault is much steeper than previously thought, which shows definitively how previous drilling was missing the target. By the way, Group Eleven Resources intersected 10m @ 10% Zinc+Pb in an area of known mineralization, which is also comforting, plus a zone of mineralization in the Navan Beds. Note: The orange zone (4a-4e) is our hanging-wall Navan Bed target (which has been virtually undrilled) and targets 1, 2 and 3 are our footwall Navan Bed targets where historical drilling has yielded significant mineralization worthy of follow up (all the red dots are the historical holes, which were drilled deep enough to intersect Navan Beds, and half of them hit. ‘n/a’ means not assayed for silver. Maurice Jackson: What are your plans going forward at Ballinalack? Bart Jaworski: We will be relogging and in some cases re-assaying some of the historical core with the aim of sharpening our understanding of the architecture of this area even further, and we will then do more drilling in 2019 as part of the Big Drill. Maurice Jackson: Are these brownfields explorations that the company is undertaking? Bart Jaworski: If “brownfield” means an area that was previously mined, then the answer is no. However, I think in this case, you are referring to the notion that in these areas we have seen significant heavy lifting already done on the exploration side by previous operators, than definitely yes. Maurice Jackson: For someone new to the term brownfields, please share how that improves the probability of discovery. Bart Jaworski: Well, with the heavy lifting already done for us, this puts us in great position to allow us to get up the learning curve much quicker than if we had to drill all those initial holes ourselves. So we’re walking on the shoulder of a giant amount of historical work, and if you infuse that with cutting edge technology and truly open minded thinking—that’s where the magic happens. Maurice Jackson: For current and prospective shareholders, the story doesn’t end with zinc. You have recently discovered some silver at the Ballinalack. How was “Big Think” responsible for the discovery and share the results with us. Note: Drill core from G11 recent drill hole (G11-1344-02) at Ballinalack Bart Jaworski: Correct, at Ballinalack only some of the historical intervals were ever assayed for silver and those that were often had good silver numbers in them, say between 20–100 g/t, and our highest was about 380 g/t. So we know there is silver in the system, but that was never calculated historically. I see that as a potential sweetener to the story, which has yet not been borne out. Also at Stonepark and the broader Limerick basin, we have the idea that because you have a lot of volcanics intruding limestones, you might expect to see some overlooked deposit types, which can host a much higher precious metal component, for example, CRD deposit types that you see in Mexico. That is I believe what captured the imagination of Peter Megaw. I think all that I’ve mentioned above speaks to the open-minded approach that we have and hence the “Big Think.” Maurice Jackson: What is management’s philosophy, are you looking to build mines or are you focused on exploration? Bart Jaworski: Similar to most juniors, our exit strategy is to make a large discovery and then sell it to the highest bidder. We are not interested in becoming miners. Maurice Jackson: Switching gears, I’ve learned from some of the most serially successful in industry—from Rick Rule, Doug Casey, Jayant Bhandari, Mickey Fulp and Bob Moriarty—that the people running the business are equally if not more important that the latent material in the ground. Mr. Jaworski, please introduce us to your board of directors and management team and the unique skill sets they bring to the Group Eleven Resources. Bart Jaworski: We have four on the board currently. Dan MacInnis is our chairman. (a) He is the retired CEO of MAG Silver (and currently sits on the MAG board) (b) Dan has over 40 years of experience and has been involved with seven discoveries during his career including Duck Pond and Juanicipio (c) Interestingly, Dan worked in Ireland for five years back in the late 1970s/early 1980s with Noranda, so he definitely knows the lay of the land in Ireland. Alessandro Bitelli is our chair of the Audit Committee. He is currently the CFO of Lundin Gold, and interestingly was the CFO of RedBack when it was taken over for $10 billion by Kinross back in 2010. Brendan Cahill is a lawyer and all round very sharp guy. He’s the CEO of Excellon Resources, which is mining the Platosa silver deposit in Mexico. On the management side: We have John Barry and David Furlong, who I’ve mentioned earlier in our discussion. Both are Irish geologists. ex-Rathdowney Resources (which is another European zinc development company). John was the founder and CEO of Rathdowney. So both John and David have deep experience with Irish-style zinc deposits and with operating in Ireland. Dr. Mark Holdstock is a very well-known geologist in Ireland. He recently joined us (in early 2018). He led the team that discovered the 20-Mt SWEX extension of the Navan orebody. So John, David, Mark and myself, we’re a home team. All of us live in the country we’re operating in and that’s different from many juniors and a big plus because we have our ear close to the rail. And now onto the advisers: Peter Megaw is the brainchild behind MAG Silver’s success in Mexico with the Juanicipio discovery. Peter is the chief exploration officer at MAG. and he’s a big help on our “Big Think” initiative. We also have John Prochnau and Frank Hallam as advisers. John Prochnau is on Doug Casey’s Exploration Hall of Fame actually for his Esquel and Alligator Ridge discoveries. John also worked on our Ballinalack project back in the 1970s. Frank Hallam has a lot of experience in M&A with the majors and has been involved with over a $1 billion in financings over his career. Last but far from least are Shaun Heinrichs, our CFO, and Spiros Cacos, our VP Investor Relations. Maurice Jackson: Tell us about Bart Jaworski; what makes him qualified for the task at hand? Bart Jaworski: I’m an exploration geologist and ex-mining equity analyst. I have about 24 years of experience since 1994, my first year in the field. I was an analyst for about 12 years. Initially, I began with Raymond James in Vancouver for about nine years and then for over three years with Davy in Ireland. I’ve been on a lot of site visits and met with a lot of CEOs and VP Ex’s over that time frame. I also covered many exploration and mining companies over the years. The reason I ended up in Ireland is because my wife, who is Irish, wanted to move back home after being in Canada with me for nine years. And that’s how I ended up at Davy in Dublin covering the UK listed golds, plus Rio Tinto and the iron ore sector. As an exploration geo I discovered the original soil anomaly at Coffee Creek, which later became a multi-million ounce gold deposit (which was taken out for $0.5 billion when Goldcorp took over Kaminak). Going back a little further, I also helped discover industrial minerals in the Iskut area. Maurice Jackson: Tell us about your capital structure. Bart Jaworski: We have just under 60 million shares outstanding. So at our current share price (14c) our market cap is only CA$8.4 million or about US$6 million. About 20 million warrants and options outstanding: more than half of those are set to expire this December. Cash: our last Quarterly Financials have $3.2 million in the till. We have no debt. Maurice Jackson: Let’s discuss some numbers: What is your burn rate? Bart Jaworski: Burn is about $100k–$130k/month, so call it roughly $1.5 million per annum. So our runway is still fairly comfortable, at least another 12 to 15 months doing what we need to do, depending on how hard we step on the gas pedal. Maurice Jackson: Do you have institutional Investors at this point? Bart Jaworski: Yes, we’ve been lucky enough to garner the support of about a dozen institutions, mostly during the IPO, but some pre-IPO and some post-IPO. Most well-known institutions include Sprott, US Global, Galileo and Logiq. Maurice Jackson: What is the float? Bart Jaworski: About half our 60 million shares are owned by high-net worth investors, which is about 30 million shares. The rest is owned by MAG, Teck, the funds and insiders. Maurice Jackson: Are there change of control fees? If yes, please convey the terms. Bart Jaworski: There are no change-of-control fees for M&A transactions but there are fees associated with management being fired by the board without cause, which is fairly standard. Maurice Jackson: When is the last time you purchased shares and at what price? Bart Jaworski: I actually bought shares last just after our last press release last week at a price of 13c and 12.5c. I believe at least one other insider bought shares on the heels of last weeks’ press release as well. Maurice Jackson: Any redundant assets such as patented mining claims and or reversionary interests, meaning are Group Eleven Projects 100% owned by Group Eleven Resources? Bart Jaworski: We don’t have any patented mining claims in Ireland. We own all our licenses 100% except at Ballinalack where we have 60% interest with the remainder owned by a large Chinese zinc producer called Nonfemet. At Stonepark, where we own roughly 77% and the remainder owned by a small Irish exploreco. Important to note, these joint venture interests are participating, i.e., they have to pay their share of exploration costs or they get diluted down. Maurice Jackson: All right, sir, you’ve survived the storm. Mr. Jaworski, multilayered question, what is the unanswered question for Group Eleven Resources, when should we expect results, and what will determine success? Source: G11, October 2018 (L to R: David Furlong, John Barry, Bob Moriarty and Bart Jaworski) Bart Jaworski: Results, we are currently doing a “preliminary drilling” campaign (1500–2000m) and we should have results from that over the coming weeks and months. The results of the Tellus survey will also be forthcoming early next year and that will tell us a lot. We will then couple the two datasets, i.e., the drill data and the airborne data and that should lead to very high-priority drill targets, which will be part of our Big Drill in 2019. A few months ago we put out a maiden resource at Stonepark measured 5mt @ 11% Zinc+Pb combined. We are working on updating the Ballinalack historical estimate, but we are not sure yet if we can upgrade to a current estimate without re-drilling, but we are looking into it so that something else to be aware of. MAURICE JACKSON: What keeps you up at night that we don’t know about? BART JAWORSKI: Well, I’m an optimist, as long as people keep remembering the lessons of Adam Smith and the Wealth of Nations. I think we’ll be ok and the world economy will keep on growing and with it, so will the prosperity of humanity. Other than that I try not to sweat the small stuff. Regarding Group Eleven, obviously exploration is a risky and cyclical business, so one needs to be aware and cognizant of that. However, with high-risk comes high-rewards, and that’s really what I’m focusing on as a shareholder myself. Maurice Jackson: Finally, what did I forget to ask? Bart Jaworski: I guess one important element of the Irish exploration landscape is the support from the government, specifically iCRAG, which stands for the Irish Centre for Research in Applied Geosciences. This is a government-industry-academia partnership that is well-funded and has a number of very smart people working on a number of fronts. One of the main remits of iCRAG is to help companies like Group Eleven find the next zinc mine in Ireland. So, interestingly, the individual who recently stepped into the role of CEO and Director at iCRAG is a gentleman by the name of Dr. Murray Hitzman. Dr. Hitzman was once at the White House shaping Science and Technology policy, as well as, the head of the Colorado School of Mines and more recently at the U.S. Geological Survey. He is one of the leading experts on Irish-style zinc deposits and has written many academic papers on the subject. When Murray was announced as the Head of iCRAG, I personally thought this was a major signal by the Irish government and a catalyst, really, for future discoveries in Ireland. Maurice Jackson: For someone listening that wants to get more information on Group Eleven Resources the website is here. And as a reminder, Group Eleven Resources trades on the TSX-V: ZINCG and on the OTCQB: GRLVF.For direct inquiries please contact Spiros Cacos at 604 630 8839 Ext. 503 and he may also be reached at s.cacos@groupelevenresources.com. And last but not least please visit our website provenandprobable.com, where we interview the most respected names in the natural resources space. You may reach at contact@provenandprobable.com. Bart Jaworski of Group Eleven Resources, thank you for joining us today on Proven and Probable. Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.
Disclosure: 1) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. Proven and Probable disclosures are listed below. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: MAG Silver. Click here for important disclosures about sponsor fees. 3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. Proven and Probable LLC receives financial compensation from its sponsors. The compensation is used is to fund both sponsor-specific activities and general report activities, website, and general and administrative costs. Sponsor-specific activities may include aggregating content and publishing that content on the Proven and Probable website, creating and maintaining company landing pages, interviewing key management, posting a banner/billboard, and/or issuing press releases. The fees also cover the costs for Proven and Probable to publish sector-specific information on our site, and also to create content by interviewing experts in the sector. Monthly sponsorship fees range from $1,000 to $4,000 per month. Proven and Probable LLC does accept stock for payment of sponsorship fees. Sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734. The Information presented in Proven and Probable is provided for educational and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The Information contained in or provided from or through this forum is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information on this forum and provided from or through this forum is general in nature and is not specific to you the User or anyone else. You should not make any decision, financial, investments, trading or otherwise, based on any of the information presented on this forum without undertaking independent due diligence and consultation with a professional broker or competent financial advisor. You understand that you are using any and all Information available on or through this forum at your own risk. Images and graphs provided by the author.
Nov 08, 2018 12:28 pm By Tekoa Da Silva I had the chance to sit down once again with Rick Rule, the president and CEO of Sprott U.S. Holdings, Inc. The topics of discussion covered what can often “go wrong” with general and administrative expenses, change of control provisions, changes in corporate strategy (referred to as “mission drift” in this context), and uniquely structured insider private placements.
“Many junior mining companies don’t regard shareholders as partners, they regard them as unsecured creditors,” explained Rule. “[So] anticipating outcomes based on the self-interest of the executives is the best way to understand [how] things are going to unfold.” Commenting on general and administrative expense items, Rule noted that, “I have seen several circumstances where $10 million market cap companies with $800 thousand in the treasury were paying the CEO $450 thousand a year. In other words, the CEO’s salary alone was taking up 5% of market cap — on an annual basis. That means the CEO, him- or herself (if you assume they have $800 thousand left in the company), will bankrupt the company in [less than two years].” Speaking toward change of control provisions, Rule recounted that, “Many people raise money from private parties with the view that they’re going to make a discovery and sell the discovery. And what you learn is that many management teams get paid twice. I have seen, in a number of circumstances, management teams [install] change of control provisions … where if the company is sold (which was their stated intention), they get compensation on sale equal to five years of their average salary and bonus expense, and five years of ancillary expenses — things such as rent and health benefits.” “That’s one of the reasons why some management teams are willing to entertain merger and acquisition,” Rule added, “where their only participation in the company is as option holders. I’ve had a lot of bad experience, frankly, with change of control provisions, which is one of the reasons I study them.” On the subject of oddly structured insider private placements, Rule explained that, “Private placements, where the company loans the executives the money to [buy] the private placement, … [are] the private placements … I really dislike. In other words … the private placement is just a recycle that allows the management team to sell the stock and strip the warrant — which is an artificial way of increasing their [own] options position. And that’s fairly common.” When asked how one can protect themselves from the aforementioned (and more), Rule explained that, “One of the ways you can defend yourself … is by limiting your speculations (irrespective of apparent prospectivity or promotion) to companies that are headed by people who have been serially successful in the past … With a class-1 team at the helm [you’re] more likely to be successful.” “As a speculator,” Rule concluded, “your gains are [usually] hard won. I’m reminded of the scientists’ observation that the harder they work, the luckier they get.” To watch the full video interview with Rick Rule, the president and CEO of Sprott U.S. Holdings, Inc. click here. Read in browser »
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Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this document. These factors should be considered carefully and undue reliance should not be placed on these forward-looking statements. Although the forward-looking statements contained in this document are based upon what management currently believes to be reasonable assumptions, there is no assurance that actual results, performance or achievements will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this presentation and Sprott does not assume any obligation to update or revise. Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any fund or account managed by Sprott. Any reference to a particular company is for illustrative purposes only and should not to be considered as investment advice or a recommendation to buy or sell nor should it be considered as an indication of how the portfolio of any fund or account managed by Sprott will be invested. Past performance does not guarantee future results. The views and opinions expressed herein are those of the author’s as of the date of this commentary, and are subject to change without notice. This information is for information purposes only and is not intended to be an offer or solicitation for the sale of any financial product or service or a recommendation or determination by Sprott Global Resource Investments Ltd. that any investment strategy is suitable for a specific investor. 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Dear Subscribers, we welcome you to visit Riverside Resources new website: www.rivres.com. The logo has changed but the value proposition and commitment to increasing shareholders value remains.
Riverside Resources Inc.
Head Office – Vancouver
550 – 800 West Pender Street, Vancouver BC, V6C 2V6 Telephone: 778-327-6671 Fax: 778-327-6675 Toll Free: 1-877-RIV-RES1 (748-7371)
From the offices of Amir Adnani: Scott Melbye, our executive VP just returned from the Nuclear Energy Institute Uranium Fuel Conference in Boston. His takeaways are indicative of improving fundamentals that are driving the uranium market:
There was a strong turnout for this conference that focuses solely on nuclear fuel cycle issues. Continuing the trend of recent industry meetings, a number of attendees from the investment community were also present.
Cameco’s care and maintenance of the McArthur River mine was also a leading topic of conversation, particularly their ongoing procurement activity focused on the backfilling of customer contract commitments from open market purchases. While the price is already up over 60% from the 12-year low, they advised their purchasing program is still only in the early stages. They have increased their targeted purchase volumes expecting to buy 1-3 million pounds additionally by years-end and 10-12 million pounds in 2019.
UxC gave an unusually upbeat presentation on the uranium market, titled “Market on the Mend” noting global nuclear energy generation in 2018 has now surpassed the level of global nuclear power output that existed pre-Fukushima. They also stated 2018 has been a key year on the supply side with accelerated rebalancing of fundamentals due to the massive cuts to global production and increased investor purchases of uranium. They added that this was the first time since 2010 that global reactor demand and supplies fell back into balance (and deficit) as a result.
While Enricher underfeeding has contributed to oversupply of the uranium market over the past several years, both Urenco and Tenex confirmed the 20 million lbs. per year source of supply has peaked and is slated to decline. All expansion plans have been scrapped and older centrifuges are being taken off-line and decommissioned. The return of Japanese demand and supplies to other new entrants is contributing to the fuller utilization of existing capacity for enrichment activities and less for uranium creation.
In meetings with most of the utilities present, discussions centered around the Department of Commerce section 232 on foreign imports. This has put off some procurements plans on hold until the outcome is more clear, but the utilities acknowledge that their uncommitted requirements are rising in the coming years and a renewed procurement cycle needs to take place.
Finally, keynote speaker, Michael Shellenberger made a number of compelling arguments for nuclear in the global energy debate:
Over the past 40 years, nuclear energy has been shown to be the safest form of generating electricity, having saved over 1.8 million lives, compared to alternatives.
Nuclear power scaled up over this time to provide 6% of global electricity at a cost of $1.8 trillion, whereas, solar and wind has taken $2 trillion to scale up to provide only 3% of global energy.
Germany, which has increased its share of renewables while phasing out nuclear power, produces 10 times more CO2 per unit of energy than nuclear-heavy France, and German energy is twice as expensive as France’s.
In summary, this was an upbeat conference with a positive tone compared to recent years and encouraging for a continued recovery in the uranium price. Best, Amir Amir Adnani | President & CEO URANIUM ENERGY CORP NYSE AMERICAN: UEC | www.uraniumenergy.com
CITIC Metal and Zijin Mining invested more than C$800 million to advance Ivanhoe’s three world-scale mine projects in Southern Africa
Ivanhoeannounced the MakokoDiscovery on its 100%-owned Western Foreland exploration licences near Kamoa-Kakula– the company’s third major copper discovery in the DRC
Toronto, Ontario–(Newsfile Corp. – November 8, 2018) – Ivanhoe Mines (TSX: IVN) (OTCQX: IVPAF) today announced its financial results for the third quarter ended September 30, 2018. All figures are in U.S. dollars unless otherwise stated. Ivanhoe Mines is a Canadian mining company focused on advancing its three principal projects in Southern Africa: the development of new mines at the Kamoa-Kakula copper discovery in the Democratic Republic of Congo (DRC) and the Platreef platinum-palladium-nickel-copper-gold discovery in South Africa; and the extensive redevelopment and upgrading of the historic Kipushi zinc-copper-germanium-lead mine, also in the DRC.
Highlights
On September 19, 2018, China-based CITIC Metal Co., Ltd. (CITIC Metal) completed a long-term, strategic cooperation and investment agreement that saw its direct subsidiary, CITIC Metal Africa Investments Limited (CITIC Metal Africa), invest C$723 million ($555 million) to advance Ivanhoe’s three projects in Southern Africa. Under the terms of the investment agreement, CITIC Metal Africa acquired a 19.5% stake in Ivanhoe Mines through a private placement at a price of C$3.68 per share.
Also on September 19, 2018, Zijin Mining Group Co., Ltd. (Zijin Mining), Ivanhoe’s joint-venture partner at the Kamoa-Kakula Project, exercised its anti-dilution rights at a price of C$3.68 per share, generating additional proceeds for Ivanhoe of C$78 million (approximately US$60 million). This resulted in Zijin retaining a 9.7% ownership stake in Ivanhoe Mines – its level of ownership prior to the completion of CITIC Metal Africa’s strategic investment.
Pursuant to the terms of the strategic cooperation and investment agreement with CITIC Metal, Yufeng “Miles” Sun, President of CITIC Metal Group Limited, and Tadeu Carneiro, former Chief Executive Officer of Brazil-based Companhia Brasileira de Metalurgia e Mineração (CBMM), have joined the Ivanhoe Mines Board of Directors. Mr. Sun and Mr. Carneiro were nominated by CITIC Metal. Mr. Carneiro is an independent director of Ivanhoe Mines.
On October 1, 2018, Ivanhoe announced the Makoko Copper Discovery on its 100%-owned Western Foreland exploration licences, near Kamoa-Kakula in the DRC. Makoko, Ivanhoe’s third major copper discovery in the DRC, shows geological characteristics identical to the tier-one Kamoa-Kakula Discoveries. Drilling is continuing on other Western Foreland targets.
Underground development at the planned initial mine at Kakula is making steady progress and is expected to reach the high-grade copper mineralization later this year. The service and conveyor declines each have been advanced more than 1,000 metres through underground development work. The 3,535-metre decline development contract is scheduled to be completed by the end of 2018.
A pre-feasibility study (PFS) for phase 1 of the Kamoa-Kakula Project is underway and is expected to be completed early in 2019. The planned initial, six-million-tonne-per-annum (Mtpa) mine and concentrator at Kakula is estimated to have an initial capital cost of $1.2 billion. Subsequent expansions and a smelter can be funded from cash flows or project finance. Ivanhoe and Zijin Mining are exploring options to accelerate building of the first two mines at Kamoa-Kakula, and the potential for expanding production to 18 Mtpa, and beyond.
A total of 25,298 metres of drilling was completed at Kakula, Kakula West and Kamoa North and surrounding areas during Q3 2018, increasing the total drilling completed during the first nine months of 2018 to 62,224 metres.
On July 30, 2018, Ivanhoe announced a new Mineral Resource estimate for the Kipushi Mine in the DRC that increased zinc-rich Measured and Indicated Mineral Resources by 16%, from 10.2 million tonnes to 11.8 million tonnes.
The new estimate also increased Kipushi’s zinc grade from 34.89% to 35.34%. In addition, the mine’s copper-rich Measured and Indicated Resources have increased by 40% from 1.6 million tonnes to 2.3 million tonnes, with a slight increase in the copper grade from 4.01% to 4.03%.
The updated Mineral Resource will be used in the preparation of the Kipushi definitive feasibility study (DFS), which is expected early in 2019. The DFS will update and refine the findings of the PFS issued last December. Similar to the PFS, the DFS will focus on the initial mining of Kipushi’s Big Zinc Zone.
The December 2017 PFS analyzed the plan to bring Kipushi’s Big Zinc Zone into production in less than two years, with a life-of-mine, average annual production rate of 225,000 tonnes of zinc and cash costs of $0.48 per pound of zinc. The planned return to production would establish Kipushi as the world’s highest-grade, major zinc mine.
On October 8, 2018, Ivanhoe announced that the sinking of Shaft 1 at the Platreef platinum-palladium-nickel-copper-gold discovery in South Africa reached the top of the Flatreef orebody, at a depth of approximately 780 metres. Sinking has reached a depth of 809 metres and will continue to its planned final depth of 982 metres. The Platreef mining team delivered the first ore from the underground mine development to surface stockpiles for metallurgical sampling.
The estimated thickness of the mineralized reef (T1 & T2 mineralized zones) at Shaft 1 is 26 metres, with grades of platinum-group metals ranging up to 11 grams per tonne (g/t) 3PE (platinum, palladium and rhodium) plus gold, as well as significant quantities of nickel and copper. The 26-metre intersection will yield approximately 3,000 tonnes of ore, estimated to contain more than 400 ounces of platinum-group metals.
Surface construction for Platreef’s Shaft 2 is progressing. Blasting and excavation of a box cut to a depth of approximately 29 metres below surface is underway. Construction of a concrete hitch for the headframe is expected to be completed early in 2019.
Based on the findings of an independent, DFS issued in July 2017, the Platreef Mine is projected to be Africa’s lowest-cost producer of platinum-group metals, with a cash cost of $351 per ounce of platinum, palladium, rhodium and gold, net of by-products, including sustaining capital costs.
At the end of Q3 2018, Kamoa-Kakula had recorded 11.27 million work hours free of lost-time injuries, Kipushi 1.72 million work hours, and Platreef 666,009 work hours.
Principal projects and review of activities
1. Platreef Project 64%-owned by Ivanhoe Mines South Africa
The Platreef Project is owned by Ivanplats (Pty) Ltd (Ivanplats), which is 64%-owned by Ivanhoe Mines. A 26% interest is held by Ivanplats’ historically-disadvantaged, broad-based, black economic empowerment (B-BBEE) partners, which include 20 local host communities with a total of approximately 150,000 people, project employees and local entrepreneurs. In April 2018, Ivanplats reconfirmed its Level 3 status in its fourth verification assessment on a B-BBEE scorecard. A Japanese consortium of ITOCHU Corporation, Japan Oil, Gas and Metals National Corporation and Japan Gas Corporation owns a 10% interest in Ivanplats, which it acquired in two tranches in 2010 and 2011 for a total investment of $290 million.
The Platreef Project hosts an underground deposit of thick, platinum-group metals, nickel, copper and gold mineralization on the Northern Limb of the Bushveld Igneous Complex in Limpopo Province, approximately 280 kilometres northeast of Johannesburg and eight kilometres from the town of Mokopane.
On the Northern Limb, platinum-group metals mineralization is hosted primarily within the Platreef, a mineralized sequence that is traced more than 30 kilometres along strike. Ivanhoe’s Platreef Project, within the Platreef’s southern sector, is comprised of two contiguous properties: Turfspruit and Macalacaskop. Turfspruit, the northernmost property, is contiguous with, and along strike from, Anglo Platinum’s Mogalakwena group of mining operations and properties.
Since 2007, Ivanhoe has focused its exploration and development activities on defining and advancing the down-dip extension of its original discovery at Platreef, now known as the Flatreef Deposit, which is amenable to highly mechanized, underground mining methods. The Flatreef area lies entirely on the Turfspruit and Macalacaskop properties, which form part of the company’s mining right.
Health and safety at Platreef
At the end of Q3 2018, the Platreef Project reached a total of 666,009 lost-time, injury-free hours worked in terms of South Africa’s Mine Health and Safety Act and Occupational Health and Safety Act. It has been four months since the last lost-time injury occurred at the Platreef Project, which continues to strive toward its workplace objective of an environment that causes zero harm to employees, contractors, sub-contractors and consultants.
Shaft 1 now extends to a depth of 800 metres below surface
Shaft 1 reached the top of the high-grade Flatreef Deposit (T1 mineralized zone) at a depth of 780.2 metres below surface in September 2018. The Platreef mining team has delivered the first ore from the underground mine development to surface stockpiles for metallurgical sampling. The estimated thickness of the mineralized reef (T1 & T2 mineralized zones) at Shaft 1 is 26 metres, with grades of platinum-group metals ranging up to 11 grams per tonne (g/t) 3PE (platinum, palladium and rhodium) plus gold, as well as significant quantities of nickel and copper. The 26-metre intersection will yield approximately 3,000 tonnes of ore, estimated to contain more than 400 ounces of platinum-group metals.
Current shaft depth is 809 metres and sinking is continuing through the mineralized reef. The 750-metre-level station was successfully developed, with steelwork and concrete construction ongoing. The station will provide initial, underground access to the high-grade orebody, enabling mine development to proceed during the construction of Shaft 2. With a hoisting capacity of six million tonnes a year, Shaft 2 will become the mine’s main production shaft and will allow access for the first raise-bore shaft that will provide ventilation to the underground workings during the mine’s ramp-up phase.
As shaft sinking advances, two additional stations will be developed at mine-working depths of 850 metres and 950 metres. Shaft 1 is expected to reach its projected, final depth of 982 metres below surface in early 2020. Shaft 1 ultimately will become the primary ventilation intake shaft during the project’s initial, four-Mtpa production case.
Figure 1: Members of the PlatreefProject team and its South African sinking contractor,
Aveng Mining, in Shaft 1 at the intersection of the Flatreef Deposit.
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Shaft 2 early-works construction progressing
Shaft 2, to be located approximately 100 metres northeast of Shaft 1, will have an internal diameter of 10 metres. It will be lined with concrete and sunk to a planned, final depth of more than 1,104 metres below surface. It will be equipped with two, 40-tonne, rock-hoisting skips capable of hoisting a total of six million tonnes of ore a year – the single largest hoisting capacity at any mine in Africa.
The headgear for the permanent hoisting facility was designed by South Africa-based Murray & Roberts Cementation. The first seven blasts for Shaft 2’s box cut were successfully completed, with the last two remaining blasts expected to take place before the end of 2018. The blasting will enable the excavation of the box cut to a depth of approximately 29 metres below surface and the construction of the concrete hitch (shaft collar foundation) for the 103-metre-tall concrete headgear that will house the shaft’s permanent hoisting facilities and support the shaft collar. Excavation of the box cut and construction of the hitch foundation is expected to be completed in early 2019, enabling the beginning of the pre-sink that will extend 84 metres below surface.
Figure 2: Shaft 2 box-cut excavation in progress.
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Underground mining to incorporate highly productive, mechanized methods
Ivanhoe plans to develop the Platreef Mine in phases. The initial annual production rate of four Mtpa is designed to establish an operating platform to support future expansions. This is expected to be followed by a potential doubling of production to eight Mtpa, and then a third expansion phase to a steady-state 12 Mtpa, which would establish Platreef among the largest platinum-group-metals mines in the world.
The mining zones in the current Platreef mine plan occur at depths ranging from approximately 700 metres to 1,200 metres below surface. Shaft 2 will provide primary access to the mining zones; secondary access will be via Shaft 1. During mine production, both shafts also will serve as ventilation intakes. Three additional ventilation exhaust raises are planned to achieve steady-state production.
Planned mining methods will use highly productive, mechanized methods, including long-hole stoping and drift-and-fill mining. Each method will utilize cemented backfill for maximum ore extraction. The ore will be hauled from the stopes to a series of internal ore passes and fed to the bottom of Shaft 2, where it will be crushed and hoisted to surface.
The current mine plan has been improved beyond earlier projections in the 2015 PFS mine plan by optimizing stope design, employing a declining Net Smelter Return (NSR) strategy and targeting higher-grade zones early in the mine’s life. This strategy has increased the grade profile by 23% on a 3PE+Au basis in the first 10 years of operation and by 10% during the life of the mine.
Platreef project financing continuingto advance
Ivanhoe continues to advance the arrangement of project financing for the development of the Platreef Project. Negotiation of a term sheet is progressing well with the Initial Mandated Lead Arrangers (IMLAs), which are KfW IPEX-Bank, a 100% subsidiary of the German promotional bank KfW; Swedish Export Credit Corporation; Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division); and Societe Generale Corporate & Investment Banking.
In October 2018, Export Development Canada (EDC) advised Ivanhoe that it would not renew its IMLA mandate, as it is currently reviewing its market position for South Africa. EDC informed Ivanhoe that its decision was not, based on the due diligence completed to date, related to any specific concern it had with the company or the Platreef Project. In addition preliminary discussions are underway with leading South African financial institutions regarding the financing of the black economic empowerment partners’ contribution to the development capital which would thereby reduce the amount that would otherwise have to be contributed by Ivanhoe on their behalf.
Long-term supply of bulk water secured for the Platreef Mine
On May 7, 2018, Ivanhoe announced the signing of a new agreement to receive local, treated water to supply most of the bulk water needed for the first phase of production at Platreef. The Mogalakwena Local Municipality has agreed to supply a minimum of five million litres of treated water a day for 32 years, beginning in 2022, from the town of Mokopane’s new Masodi Treatment Works. Initial supply will be used in Platreef’s ongoing underground mine development and surface infrastructure construction.
Under terms of the agreement, which is subject to certain suspensive conditions, Ivanplats will provide financial assistance to the municipality for certified costs of up to a maximum of R248 million (approximately $19.6 million) to complete the Masodi treatment plant. Ivanplats will purchase the treated wastewater at a reduced rate of R5 per thousand litres for the first 10 Ml/day to offset a portion of the initial capital contributed.
Development of human resources and job skills
Work progressed on the implementation of Ivanhoe’s Social and Labour Plan (SLP). The company has pledged a total of R160 million ($13 million) during the first five years, culminating in November 2019. The approved plan includes R67 million ($6 million) for the development of job skills among local residents and R88 million ($7 million) for local economic development projects.
2. Kipushi Project 68%-owned by Ivanhoe Mines Democratic Republic of Congo
The Kipushi copper-zinc-germanium-lead mine, in the DRC, is adjacent to the town of Kipushi and approximately 30 kilometres southwest of Lubumbashi. It is located on the Central African Copperbelt, approximately 250 kilometres southeast of the Kamoa-Kakula Project and less than one kilometre from the Zambian border. Ivanhoe acquired its 68% interest in the Kipushi Project in November 2011; the balance of 32% is held by the state-owned mining company, La Générale des Carrières et des Mines (Gécamines).
Health, safety and community development
At the end of Q3 2018, the Kipushi Project had achieved a total 1,724,816 work hours free of lost-time injuries. On September 16, 2018, it had been a year since a lost-time injury had occurred at the Kipushi Project.
The Kipushi Project operates a potable-water station to supply the municipality with water. This includes power supply, disinfectant chemicals, routine maintenance, security and emergency repair of leaks to the primary reticulation. The Kipushi Project also installed and commissioned new overhead powerlines to the pump station. Other community development projects continued during Q3 and included the Kipushi women’s literacy project.
Kipushi Mineral Resources
The Kipushi Project’s current Mineral Resource estimate was updated with an effective date of June 14, 2018, and was prepared by the MSA Group, of Johannesburg, South Africa, in compliance with 2014 CIM Definition Standards.
Zinc-rich Measured and Indicated Mineral Resources, primarily in the Big Zinc Zone, total 11.78 million tonnes at grades of 35.34% zinc, 0.80% copper, 23 g/t silver and 64 g/t germanium, at a 7% zinc cut-off – containing an estimated 9.2 billion pounds of zinc. Zinc-rich Inferred Mineral Resources total an additional 1.14 million tonnes at grades of 33.77% zinc, 1.24% copper, 12 g/t silver and 62 g/t germanium. The Inferred Mineral Resources are contained partly in the Big Zinc Zone and partly in the Southern Zinc Zone.
Copper-rich Measured and Indicated Mineral Resources contained in the adjacent Fault Zone, Fault Zone Splay and Série Récurrente Zone total an additional 2.29 million tonnes at grades of 4.03% copper, 2.85% zinc, 21 g/t silver and 19 g/t germanium, at a 1.5% copper cut-off – containing 144 million pounds of copper. Copper-rich Inferred Mineral Resources in these zones total an additional 0.44 million tonnes at grades of 3.89% copper, 10.77% zinc, 19 g/t silver and 55 g/t germanium.
The new Mineral Resource estimate incorporates Ivanhoe’s second phase of underground drilling at Kipushi that was completed in 2017.
Pre-feasibility study for Kipushi completed in December 2017; definitive feasibility study underway
The Kipushi Project’s PFS, announced by Ivanhoe Mines on December 13, 2017, anticipated annual production of an average of 381,000 tonnes of zinc concentrate over an 11-year, initial mine life at a total cash cost of approximately $0.48 per pound of zinc.
Highlights of the PFS, based on a long-term zinc price of $1.10 per pound, include:
After-tax net present value (NPV) at an 8% real discount rate of $683 million.
After-tax real internal rate of return (IRR) of 35.3%.
After-tax project payback period of 2.2 years.
Pre-production capital costs, including contingency, estimated at $337 million.
Existing surface and underground infrastructure allows for significantly lower capital costs than comparable greenfield development projects.
Life-of-mine average planned zinc concentrate production of 381,000 dry tonnes per annum, with a concentrate grade of 59% zinc, is expected to rank Kipushi, once in production, among the world’s largest zinc mines.
Estimated life-of-mine average cash cost of $0.48 per pound of zinc is expected to rank Kipushi, once in production, in the bottom quartile of the cash-cost curve for zinc producers internationally.
The planned primary mining method for the Big Zinc Deposit in the PFS is sublevel, long-hole, open stoping, with cemented backfill. The crown pillars are expected to be mined once adjacent stopes are backfilled using a pillar-retreat mining method. The Big Zinc Deposit is expected to be accessed via the existing decline and without any significant new development. The main levels are planned to be at 60-metre vertical intervals, with sublevels at 30-metre intervals.
Geology and exploration
Work is focused on additional information required for the ongoing feasibility study as well as planning the geological delineation drilling for the underground mine development. The design criteria targeted areas along the edge of the Big Zinc, which presently are inaccessible from the historic workings.
Figure 3: BukasaLengesha, a boilermaker at Kipushi, inspecting the recently installed ore-loading flask at the bottom of Shaft 5.
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Significant progress has been made in modernizing the Kipushi Mine’s underground infrastructure as part of preparations for the mine to resume commercial production. In Q3 2018, the Kipushi Project successfully completed initial, pre-production testing as part of the equipment commissioning process for the new, large-capacity rock crusher that has been installed 1,150 metres below surface. The Sandvik jaw crusher has a maximum capacity of 1,085 tonnes an hour. The 54-tonne machine was re-assembled and installed in the crusher chamber after it was disassembled on surface and its pieces were lowered down Shaft 5, which is the Kipushi Mine’s main production shaft.
Ivanhoe completed the upgrading of a significant amount of underground infrastructure at the Kipushi Project, including a series of vertical mine shafts to various depths, with associated head frames, as well as underground mine excavations. A series of crosscuts and ventilation infrastructure still are in working condition. The underground infrastructure also includes a series of pumps to manage the influx of water into the mine.
Figure 4: Kipushi’s new primary rock crusher at the mine’s 1,150-metre level. The crusher was successfully cold-commissioned in September.
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Shaft 5 is eight metres in diameter and 1,240 metres deep. It now has been upgraded and re-commissioned. The main personnel and material winder has been upgraded and modernized to meet international industry standards and safety criteria. The Shaft 5 rock-hoisting winder now is fully operational, with new head- and tail-ropes also installed. The two newly manufactured rock conveyances (skips) and the supporting frames (bridles) have been installed in the shaft to facilitate the hoisting of rock from the main ore and waste storage silos feeding rock on the 1,200-metre level.
The main haulage way on the 1,150-metre level between the Big Zinc access decline and Shaft 5 rock load-out facilities has been resurfaced with concrete so the mine now can use modern, trackless, mobile machinery.
With the underground upgrading program nearing completion, the project’s focus now will shift to modernizing and upgrading Kipushi’s surface infrastructure to handle and process Kipushi’s high-grade zinc and copper resources.
3. Kamoa-KakulaCopper Project 39.6%-owned by Ivanhoe Mines Democratic Republic of Congo
The Kamoa-Kakula Copper Project, a joint venture between Ivanhoe Mines and Zijin Mining, has been independently ranked as the largest copper discovery ever made on the African continent – with adjacent prospective exploration areas within the Central African Copperbelt in the Democratic Republic of Congo. The project is approximately 25 kilometres west of the town of Kolwezi and about 270 kilometres west of Lubumbashi.
Ivanhoe sold a 49.5% share interest in Kamoa Holding Limited (Kamoa Holding) to Zijin Mining in December 2015 for an aggregate consideration of $412 million. At the time, Kamoa Holding held a 95% interest in the Kamoa Project. In addition, Ivanhoe sold a 1% share interest in Kamoa Holding to privately-owned Crystal River Global Limited (Crystal River) for $8.32 million – which Crystal River will pay through a non-interest-bearing, 10-year promissory note. Since the conclusion of the Zijin transaction in December 2015, each shareholder has been required to fund expenditures at the Kamoa-Kakula Project in an amount equivalent to its proportionate shareholding interest in Kamoa Holding.
A 5%, non-dilutable interest in the Kamoa-Kakula Project was transferred to the DRC government on September 11, 2012, for no consideration, pursuant to the 2002 DRC mining code. Following the signing of an agreement with the DRC government in November 2016, in which an additional 15% interest in the Kamoa-Kakula Project was transferred to the DRC government, Ivanhoe and Zijin Mining now each hold an indirect, 39.6% interest in the Kamoa-Kakula Project, Crystal River holds an indirect 0.8% interest and the DRC government holds a direct 20% interest. Kamoa Holding holds an 80% interest in the project.
Health and safety at Kamoa-Kakula
At the end of Q3 2018, the Kamoa-Kakula Project had achieved a total of 11,271,678 work hours free of lost-time injuries. It has been approximately seven years since the last lost-time injury occurred at the project. This outstanding achievement reflects the dedication and safety-focused culture of the entire Kamoa-Kakula exploration and development teams.
Kamoa-Kakula Mineral Resources
Ivanhoe issued an updated Mineral Resource estimate for the Kamoa-Kakula Project on February 26, 2018. It included an updated Kakula Mineral Resource estimate and was prepared by Ivanhoe Mines under the direction of Amec Foster Wheeler E&C Services Inc., of Reno, USA, in accordance with the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves. The Qualified Persons for the Kamoa-Kakula Mineral Resource estimate are Dr. Harry Parker, RM, SME, and Gordon Seibel, RM, SME, both of Amec Foster Wheeler E&C Services Inc.
Indicated Mineral Resources for the combined Kamoa-Kakula Project now total 1,340 million tonnes grading 2.72% copper, containing 80.7 billion pounds of copper at a 1.0% copper cut-off grade and a minimum thickness of three metres. Kamoa-Kakula also has Inferred Mineral Resources of 315 million tonnes grading 1.87% copper and containing 13.0 billion pounds of copper, also at a 1.0% copper cut-off grade and a minimum thickness of three metres.
The Kakula estimate covers a mineralized strike length of 13.3 kilometres and is based on results from approximately 151,000 metres of drilling in 271 holes completed by December 31, 2017. Indicated Mineral Resources total 585 million tonnes at a grade of 2.92% copper, containing 37.7 billion pounds of copper at a 1% copper cut-off. At a 2% copper cut-off, Indicated Mineral Resources total 330 million tonnes at a 4.07% copper grade, containing 29.6 billion pounds of copper. At a 3% copper cut-off, Indicated Mineral Resources total 174 million tonnes at a grade of 5.62% copper, containing 21.5 billion pounds of copper.
Inferred Mineral Resources total 113 million tonnes at a grade of 1.90% copper, containing 4.7 billion pounds of copper at a 1% copper cut-off. At a 2% copper cut-off, Inferred Mineral Resources total 44 million tonnes at a 2.59% copper grade, containing 2.5 billion pounds of copper. At a 3% copper cut-off, Inferred Mineral Resources total nine million tonnes at a grade of 3.66% copper, containing 0.7 billion pounds of copper.
The average true thickness of the selective mineralized zone (SMZ) at a 1% copper cut-off is 10.1 metres in the Indicated Mineral Resources area and 6.7 metres in the Inferred Mineral Resources area. At a higher 3% copper cut-off, the average true thickness of the SMZ is 4.7 metres in the Indicated Mineral Resources area and 3.3 metres in the Inferred Mineral Resources area.
The Kakula Mineral Resources are defined within a total area of 24.9 square kilometres at a 1% copper cut-off. At the same cut-off grade, the areal extent of Indicated Mineral Resources is 19.4 square kilometres and the areal extent of the Inferred Mineral Resources is 5.5 square kilometres. The Kakula Discovery remains open for significant expansion in multiple directions, while the remainder of the southern parts of the Kamoa-Kakula mining-licence area is virtually untested.
KakulaPFS currently underway
A PFS for phase 1 of the Kamoa-Kakula Project is underway. The study is considering a six-Mtpa mine and concentrator at Kakula, and is expected to be completed early in 2019.
Underground development progressing at the Kakula Deposit
Each of the twin declines at Kakula had been advanced more than 1,000 metres from the portal face toward the mineralized zone at the end of Q3 2018. Construction of the 1,050-metre-level dam has started and is planned to be commissioned by mid-2019. The next priority will be the drifts to the development tip and bottom of Ventilation Shaft 1, which will be developed via raise boring. The 3,535-metre decline development contract is scheduled to be completed by the end of 2018.
The detailed design and tenders for the conveyor system for the main decline, the development tip and west tip one are well advanced. The earthworks design for the surface conveyor drive station has been completed and construction is due to start shortly. All tenders for major conveyor components, including steelwork, drives, belting and pulleys, have been received and are being adjudicated. Tenders for the rock breaker and apron feeders have been adjudicated. Adjudication for the steelwork fabrication has been completed and the order will be placed shortly. Commissioning of the conveyor system is planned to be completed by September 2019.
Contract discussions have been concluded for construction of Ventilation Shaft 1 by raise boring. Bottom access to the shaft is expected via the Kakula declines by January 2019 and reaming of the shaft is expected to start in February 2019.
Exploration activities continue at Kakula and Kamoa North
Exploration drilling during Q3 2018 was split between Kakula and Kamoa North, with 25,298 metres drilled during the quarter in 66 holes. A total of 21 holes were completed in Kamoa North.
Drilling at Kamoa North focused on continued testing of previously identified, shallow, high-grade trends that were not fully evaluated in the 2017 program. The results of this program are due to be released when the final assays are returned. Exploration has continued at Kakula, with known mineralization remaining open and unconstrained to the north of Kakula West.
Regional geophysical surveys
The seismic survey to complete the final part of seismic transects toward the northern part of the area was completed early in Q3 2018. Vertical seismic profiles (VSPs), were completed down a number of boreholes during the quarter. VSPs are used to calibrate the seismic survey and facilitate a more accurate conversion of travel time of the seismic signal to depth below surface.
Ongoing upgrading work enables Mwadingusha power station to supply 32 megawatts of clean electricity to national grid
In January 2018, Ivanhoe announced that ongoing upgrading work at the Mwadingusha hydropower plant in the DRC had almost tripled the plant’s interim power output from 11 to 32 megawatts (MW). This represents 45% of the plant’s designed capacity. Three of Mwadingusha’s six generators now have been modernized. The remaining three generators are due to be upgraded and fully operational by the end of 2019 – restoring the plant to its installed output capacity of approximately 71 MW of power.
The work at Mwadingusha, part of a program to eventually overhaul and boost output from three hydropower plants, is being conducted by engineering firm Stucky, of Lausanne, Switzerland, under the direction of Ivanhoe Mines and its joint-venture partner, Zijin Mining, in conjunction with the DRC’s state-owned power company, La Société Nationale d’Electricité (SNEL). Once fully reconditioned, the three plants will have a combined installed capacity of approximately 200 MW of electricity for the national grid, which is expected to be more than sufficient for the Kamoa-Kakula Project.
The Kansoko Mine, Kakula Mine and Kamoa camp have been connected to the national hydroelectric power grid since the completion of a 12-kilometre, 120-kilovolt, dual-circuit power line between Kansoko and Kakula last December. The design of permanent, 11-kilovolt reticulation to the vent shafts and mine has started, which includes substations, overhead lines and surface cables.
Figure 5: Engineers inspecting pipes (penstocks) feeding water to turbines driving generators inside the Mwadingusha hydroelectric power plant
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The Kamoa-Kakula Sustainable Livelihoods program is committed to sustainable development in the communities within the project’s footprint.
The main objective of the livelihoods program is to enhance food security and the living standards of the people who reside within the project’s footprint. The program is mainly implemented through fish farming and food crops, including farming of maize (corn) and vegetables, plus poultry production and beekeeping.
Additional, non-farming-related activities for Q3 2018 included education and literacy programs; the completion of a new school at the Muvunda village; a community water program; the continuation of the brick-making program; the creation of unskilled job opportunities; and the completion of the Kakula mine resettlement project.
Figure 6: Fabrice Mazeze with fresh tomatoes produced in the livelihoods vegetable garden.
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Figure 7: Community adult literacy program at Kamoa-Kakula, sponsored by Kamoa Copper and Ivanhoe Mines and implemented in partnership with Alfa Congo, a non-profit, non-governmental organization based in Kinshasa.
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4. Western Foreland Exploration Project 100%-owned by Ivanhoe Mines Democratic Republic of Congo
Exploration continuing on Ivanhoe’s 100%-owned Western Foreland exploration licences west of Kamoa-Kakula
Ivanhoe’s DRC exploration group is targeting Kamoa-Kakula-style copper mineralization through a regional drilling program on its 100%-owned Western Foreland exploration licences, located to the north and west of the Kamoa-Kakula Project.
During Q3 2018, the team commissioned two extra rigs for its dry-season exploration drilling campaign. Three rigs began drilling north and west of Kamoa at the Kamilli, Mbali and Kiala targets, with one remaining at Makoko. A total of 8,895 metres in 17 diamond drill holes were completed during the quarter.
Four holes have been completed at Kiala and a further eight at Kamilli and Mbali. Detailed geological interpretation and assay results are pending. Drilling continued at Makoko throughout the quarter; 11 holes were completed.
Figure 8: HéritierTshiminyiKatembo, a driller with Ivanhoe’s contractor, Titan Drilling, examinesa piece of drill core from the Makoko area on Ivanhoe’s 100%-owned Western Foreland exploration licences.
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On October 1, 2018, Ivanhoe announced the Makoko Copper Discovery on its 100%-owned Western Foreland Exploration licences, near Kamoa-Kakula in the DRC. The Makoko Discovery is Ivanhoe’s third major copper discovery in the DRC and shows characteristics identical to Ivanhoe’s tier-one Kamoa-Kakula Discoveries.
Selected drill holes at the Makoko Discovery include:
DD004 (the Makoko discovery hole) intersected 3.94 metres (true width) of 5.46% copper, at a 2.0% copper cut-off, and 3.94 metres (true width) of 5.46% copper at a 1.0% copper cut-off, from a downhole depth of 306 metres.
DD010 intersected 3.21 metres (true width) of 6.78% copper, at a 2.0% copper cut-off, and 3.95 metres (true width) of 5.81% copper at a 1.0% copper cut-off, from a downhole depth of 441 metres.
DD017 intersected 3.19 metres (true width) of 6.49% copper at a 2.0% copper cut-off, and 4.64 metres (true width) of 4.88% copper, at a 1.0% copper cut-off, from a downhole depth of 471.7 metres.
DD025 intersected 3.00 metres (true width) of 7.61% copper at a 2.0% copper cut-off, and 3.00 metres (true width) of 7.61% copper, at a 1.0% copper cut-off, from a downhole depth of 406 metres.
DD046 intersected 7.44 metres (true width) of 7.81% copper at a 2.0% copper cut-off, and 9.39 metres (true width) of 6.51% copper, at a 1.0% copper cut-off, from a downhole depth of 523.51 metres.
The initial discovery hole at Makoko, DD004, was drilled in September 2017; follow-up and infill drilling has been ongoing since then. Drilling to date at Makoko has defined a flat-lying, near-surface stratiform copper deposit, similar to the Kamoa and Kakula deposits. The structure contour map indicates that the mineralized formation in the Makoko area is within 1,000 metres of surface. The majority of the drilling to date at Makoko has intersected the copper-rich zone between 400 metres and 800 metres below surface. The mineralized zone at Makoko strikes approximately south-southeast. It has been tested over a strike length of 4.5 kilometres and a dip extent of between one and two kilometres. Copper mineralization remains open both along strike and down dip.
Figure 9: Drilling locations at Ivanhoe’s Makoko Discovery.
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The Grand Conglomerate unit (coarse-grained clastic sedimentary rock), the base of which hosts copper mineralization in the Western Foreland area, underlies the majority of the area covered by Ivanhoe’s exploration licences, with the base of the unit interpreted to be generally within 600 metres of surface.
At the nearby Kakula Discovery, the highest copper grades are associated with a siltstone-sandstone unit occurring within the Grand Conglomerate, located approximately one metre above the top of the Mwashia sandstone unit. Mineralization at Kakula consistently is bottom loaded, with grades increasing down-hole toward the contact between the host Grand Conglomerate and the underlying sandstone unit.
Copper mineralization at the Makoko Discovery similarly is located at the base of the Grand Conglomerate, just above the contact with the underlying Roan footwall rocks. This location is consistent with copper mineralization seen in earlier drilling into the Kakula Discovery and elsewhere in the Western Foreland area.
High-grade copper intersections at Makoko are associated with a rhythmically-banded, fine-grained siltstone-sandstone unit similar to the siltstone-hosted mineralization at Kakula, although at Makoko the host package of rocks also includes zones of reworked diamictite. The siltstone-rich zones appear to have been controlled by the underlying basin architecture at the time of deposition.
Sulphide copper mineralization generally is fine-grained and shows typical downward vertical zonation of chalcopyrite to bornite to chalcocite, similar to Kakula. The dominant copper sulphide mineral at Makoko tends to be bornite.
Selected quarterly financial information
The following table summarizes selected financial information for the prior eight quarters. Ivanhoe had no operating revenue in any financial reporting period and did not declare or pay any dividend or distribution in any financial reporting period.
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Review of the three months ended September 30, 2018, vs. September 30, 2017
The company recorded a total comprehensive loss of $7.9 million for Q3 2018 compared to a total comprehensive loss of $21.2 million for the same period in 2017. Exploration and project expenditure for Q3 2018 amounted to $2.4 million and was $9.2 million less than for the same period in 2017 ($11.6 million). The decrease in exploration and project expenditure was the main reason for the decrease in the total comprehensive loss and is attributable to the capitalization of costs incurred at the Kipushi Project subsequent to the finalization of its PFS in December 2017.
With the focus at the Kipushi and Platreef projects being on development and the Kamoa-Kakula Project being accounted for as a joint venture, the total $2.4 million exploration and project expenditure in the three months ended September 30, 2018, related to exploration at Ivanhoe’s 100%-owned Western Foreland exploration licences. In Q3 2017, $10.8 million of the total $11.6 million exploration and project expenditure related to the Kipushi Project.
The company’s share of losses from the Kamoa Holding joint venture increased from $6.8 million in Q3 2017 to $7.8 million in Q3 2018. The following table summarizes the company’s share of the comprehensive loss from Kamoa Holding for the three months ended September 30, 2018, and for the same period in 2017:
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The costs associated with mine development are capitalized as development costs in Kamoa Holding, while the exploration expenditure is expensed. Capitalization of costs at Kakula commenced during Q2 2017, coinciding with the start of the Kakula box cut. Expenditure attributable to exploration at Kamoa North, Kakula West and in the saddle area between Kakula West and Kakula still is expensed.
The interest expense in the Kamoa Holding joint venture relates to shareholder loans where each shareholder is required to fund Kamoa Holding in an amount equivalent to its proportionate shareholding interest. The company is advancing Crystal River’s portion on its behalf in return for an increase in the promissory note due to Ivanhoe.
Finance income for the three months ended September 30, 2018, amounted to $12.1 million, and was $4.1 million more than for the same period in 2017 ($8.0 million). The increase mainly was due to interest earned on loans to the Kamoa Holding joint venture to fund operations that amounted to $10.4 million in 2018, and increased by $3.3 million as the accumulated loan balance increased.
Review of the ninemonths ended September 30, 2018, vs. September 30, 2017
The company’s total comprehensive loss of $42.0 million for the nine months ended September 30, 2018, was $4.5 million higher than for the same period in 2017 ($37.5 million). The increased loss mainly was due to an exchange loss on translation of foreign operations of $23.9 million for the nine months ended September 30, 2018, resulting from the weakening of the South African Rand by 14% from December 31, 2017, to September 30, 2018, compared to an exchange gain on translation of foreign operations recognized in the same period of 2017 of $1.4 million.
Exploration and project expenditure for the nine months ended September 30, 2018, amounted to $6.6 million and was $22.9 million less than for the same period in 2017 ($29.5 million). Exploration and project expenditure for the nine months ended September 30, 2018, related to Ivanhoe’s 100%-owned Western Foreland exploration licences, while $28.4 million for the same period in 2017 related to the Kipushi Project.
Finance income for the nine months ended September 30, 2018, amounted to $33.4 million, and was $9.8 million more than for the same period in 2017 ($23.6 million). The increase mainly was due to interest earned on loans to the Kamoa Holding joint venture to fund operations that amounted to $28.7 million in 2018, and increased by $9.4 million as the accumulated loan balance increased.
The company’s share of losses from the Kamoa Holding joint venture increased to $21.7 million for the nine months ended September 30, 2018, from $17.3 million for the same period in 2017. The following table summarizes the company’s share of the comprehensive loss of Kamoa Holding for the nine months ended September 30, 2018, and for the same period in 2017:
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Financial positionas atSeptember 30, 2018 vs. December31, 2017
The company’s total assets increased by $576.4 million, from $1,271.3 million as at December 31, 2017, to $1,847.7 million as at September 30, 2018. The increase mainly was due to the proceeds received on completion of the equity investment by CITIC Metal Africa Investments Limited (CITIC Metal Africa) and Zijin exercising its anti-dilution rights, for gross proceeds of $555 million and $60 million respectively.
Cash and cash equivalents and short-term deposits increased by $358.1 million and $116.2 million respectively. The company utilized $8.3 million of its cash resources in its operations, which includes interest of $2.9 million received during the nine months ended September 30, 2018.
The company’s investment in the Kamoa Holding joint venture increased by $44.5 million from $552.4 million as at December 31, 2017, to $596.9 million as at September 30, 2018, with each of the current shareholders funding the operations equivalent to their proportionate shareholding interest. The company’s portion of the Kamoa Holding joint venture cash calls amounted to $37.4 million during the nine months ended September 30, 2018, while the company’s share of comprehensive loss from the joint venture amounted to $21.7 million.
The net increase of property, plant and equipment amounted to $64.1 million, with a total of $92.4 million being spent on project development and to acquire other property, plant and equipment. Of this total, $40.6 million and $50.9 million pertained to development costs and other acquisitions of property, plant and equipment at the Platreef Project and Kipushi Project respectively.
The main components of the additions to property, plant and equipment at the Platreef and Kipushi projects for the nine months ended September 30, 2018, and for the same period in 2017, are set out in the following table:
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To view an enhanced version of this table, please visit:
The company’s total liabilities increased by $1.3 million to $61.1 million as at September 30, 2018, from $59.8 million as at December 31, 2017.
Liquidity and capital resources
The company had $539.5 million in cash and cash equivalents and $116.2 million in short-term deposits as at September 30, 2018. At this date, the company had consolidated working capital of approximately $646.7 million, compared to $181.9 million at December 31, 2017.
On September 19, 2018, Ivanhoe announced the completion of a major strategic equity investment totalling C$723 million ($555 million) in Ivanhoe Mines by CITIC Metal Africa, a direct subsidiary of CITIC Metal Co., Ltd. (CITIC Metal), one of China’s leading international resources companies. Ivanhoe Mines issued 196,602,037 common shares to CITIC Metal Africa through a private placement at a price of C$3.68 per share. Zijin exercised its anti-dilution rights, generating additional proceeds for Ivanhoe of C$78 million ($60 million). The exercise by Zijin of its anti-dilution rights also was at a price of C$3.68 per share.
The Platreef Project’s restricted cash, which were funds of $290 million invested by the Japanese consortium of ITOCHU Corporation, Japan Oil, Gas and Metals National Corporation and Japan Gas Corporation, has been fully utilized and the project’s current expenditure is being funded solely by Ivanhoe as the Japanese consortium has elected not to contribute to current expenditures. Since the Platreef Project’s restricted cash was fully utilized, the company has contributed a total of $10.0 million on behalf of the Japanese consortium.
Since December 8, 2015, each shareholder in Kamoa Holding has been required to fund Kamoa Holding in an amount equivalent to its proportionate shareholding interest. The company is advancing Crystal River’s portion on its behalf in return for an increase in the promissory note due to Ivanhoe.
The company’s main objectives for 2018 at the Platreef Project are the continuation of Shaft 1 construction, securing a bulk-water supply and completion of early-works construction of Shaft 2. At Kipushi, the principal objectives are the completion of the feasibility study and continued upgrading of mining infrastructure. At the Kamoa-Kakula Project, priorities are the continuation of decline construction at Kakula and the completion of a PFS for Kakula. The company has budgeted to spend $13 million on further development at the Platreef Project; $25 million at the Kipushi Project; $3 million on regional exploration in the DRC; and $5 million on corporate overheads for Q4 2018 – as well as its proportionate funding of the Kamoa-Kakula Project, expected to be $32 million for Q4 2018.
The company has a mortgage bond outstanding on its offices in London, United Kingdom, of £3.2 million ($4.2 million). The bond is fully repayable on August 31, 2020, secured by the property and incurs interest at a rate of LIBOR plus 1.9% payable monthly in arrears. Only interest will be payable until maturity.
In 2013, the company became party to a loan payable to ITC Platinum Development Limited, which had a carrying value of $26.6 million as at September 30, 2018, and a contractual amount due of $32.2 million. The loan is repayable once the Platreef Project has residual cashflow, which is defined in the loan agreement as gross revenue generated by the Platreef Project, less all operating costs attributable thereto, including all mining development and operating costs. The loan attracts interest of LIBOR plus 2% calculated monthly in arrears. Interest is not capitalized. The difference of $5.6 million between the contractual amount due and the fair value of the loan is the benefit derived from the low-interest loan.
This news release should be read in conjunction with Ivanhoe Mines’ Q3 2018 Financial Statements and Management’s Discussion and Analysis report available at www.ivanhoemines.com and at www.sedar.com.
Qualified Person
Disclosures of a scientific or technical nature in this news release have been reviewed and approved by Stephen Torr, who is considered, by virtue of his education, experience and professional association, a Qualified Person under the terms of NI 43-101. Mr. Torr is not considered independent under NI 43-101 as he is Ivanhoe Mines’ Vice President, Project Geology and Evaluation. Mr. Torr has verified the technical data disclosed in this news release.
Ivanhoe has prepared a current, independent, NI 43-101-compliant technical report for the Platreef Project, the Kipushi Project and the Kamoa-Kakula Project, which are available under the company’s SEDAR profile at www.sedar.com:
The Kamoa-Kakula 2018 Resource Update dated March 23, 2018, prepared by OreWin, Amec Foster Wheeler, MDM (Technical) Africa, Stantec Consulting International and SRK Consulting (South Africa), covering the company’s Kamoa-Kakula Project.
The Platreef 2017 Feasibility Study Technical Report dated September 4, 2017, prepared by DRA Global, OreWin, Amec Foster Wheeler, Stantec Consulting, Murray & Roberts Cementation, SRK Consulting, Golder Associates and Digby Wells Environmental, covering the company’s Platreef Project.
The Kipushi 2017 Prefeasibility Study Technical Report dated January 25, 2018, prepared by OreWin, The MSA Group, SRK Consulting (South Africa) and MDM (Technical) Africa, covering the company’s Kipushi Project.
These technical reports include relevant information regarding the effective dates and the assumptions, parameters and methods of the mineral resource estimates on the Platreef Project, the Kipushi Project and the Kamoa-Kakula Project cited in this news release, as well as information regarding data verification, exploration procedures and other matters relevant to the scientific and technical disclosure contained in this news release in respect of the Platreef Project, Kipushi Project and Kamoa-Kakula Project.
Information contacts
Investors
Bill Trenaman +1.604.331.9834
Media
North America: Bob Williamson +1.604.512.4856 South Africa: Jeremy Michaels +27.82.772.1122
Certain statements in this news release constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws. Such statements and information involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company, its projects, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Such statements can be identified by the use of words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict” and other similar terminology, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. These statements reflect the company’s current expectations regarding future events, performance and results and speak only as of the date of this release.
Such statements include without limitation, the timing and results of: (i) statements regarding Shaft 1 providing initial underground access to the high-grade orebody at the Flatreef Deposit; (ii) statements regarding Shaft 1 reaching the planned, final depth at 982 metres below surface in early 2020; (iii) statements regarding the timing of Shaft 2 development, including that excavation of the box cut and construction of the tower hitch foundation are expected to be completed by early 2019 and that Shaft 2 will be sunk to a final depth of more than 1,104 metres; (iv) statements regarding the operational and technical capacity of Shaft 1; (v) statements regarding the internal diameter and hoisting capacity of Shaft 2; (vi) statements regarding the company’s plans to develop the Platreef Mine in three phases: an initial annual rate of four million tonnes per annum (Mtpa) to establish an operating platform to support future expansions; followed by a doubling of production to eight Mtpa; and then a third expansion phase to a steady-state 12 Mtpa; (vii) statements regarding the planned underground mining methods of the Platreef Project, including long-hole stoping and drift-and-fill mining; (viii) statements regarding supply of treated water from the town of Mokopane’s new Masodi treatment plant, including that it will supply five million litres of treated water a day for 32 years; (ix) statements regarding the timing and completion of a pre-feasibility study for a six Mtpa mine and concentrator at Kakula early in 2019; (x) statements regarding the timing, size and objectives of drilling and other exploration programs for 2018 and future periods; (xi) statements regarding exploration on the Western Foreland exploration licences; (xii) statements regarding completion of the twin declines at Kakula by the end of 2018; (xiii) statements regarding the timing and completion of a definitive feasibility study at the Kipushi Project; (xiv) statements regarding expected expenditure of $13 million on further development at the Platreef Project; $25 million at the Kipushi Project; $3 million on regional exploration in the DRC; and $5 million on corporate overheads for Q4 2018 – as well as its proportionate funding of the Kamoa-Kakula Project, expected to be $32 million for Q4 2018; (xv) statements regarding Platreef projecting it to be Africa’s lowest-cost producer of platinum-group metals; and (xvi) statements regarding the construction of a 1,050-metre-level-dam at the Kakula deposit to be commissioned in mid-2019.
As well, all of the results of the pre-feasibility study of the Kamoa-Kakula Project and preliminary economic assessment of development options for the Kakula deposit, the feasibility study of the Platreef Project and the pre-feasibility study of the Kipushi Project, constitute forward-looking statements or information, and include future estimates of internal rates of return, net present value, future production, estimates of cash cost, proposed mining plans and methods, mine-life estimates, cash-flow forecasts, metal recoveries, estimates of capital and operating costs and the size and timing of phased development of the projects. Furthermore, with respect to this specific forward-looking information concerning the development of the Kamoa-Kakula, Platreef and Kipushi projects, the company has based its assumptions and analysis on certain factors that are inherently uncertain. Uncertainties include: (i) the adequacy of infrastructure; (ii) geological characteristics; (iii) metallurgical characteristics of the mineralization; (iv) the ability to develop adequate processing capacity; (v) the price of copper, nickel, zinc, platinum, palladium, rhodium and gold; (vi) the availability of equipment and facilities necessary to complete development; (vii) the cost of consumables and mining and processing equipment; (viii) unforeseen technological and engineering problems; (ix) accidents or acts of sabotage or terrorism; (x) currency fluctuations; (xi) changes in regulations; (xii) the compliance by joint-venture partners with terms of agreements; (xiii) the availability and productivity of skilled labour; (xiv) the regulation of the mining industry by various governmental agencies; and (xv) political factors.
This release also contains references to estimates of Mineral Resources and Mineral Reserves. The estimation of Mineral Resources is inherently uncertain and involves subjective judgments about many relevant factors. Estimates of Mineral Reserves provide more certainty but still involve similar subjective judgments. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The accuracy of any such estimates is a function of the quantity and quality of available data, and of the assumptions made and judgments used in engineering and geological interpretation (including estimated future production from the company’s projects, the anticipated tonnages and grades that will be mined and the estimated level of recovery that will be realized), which may prove to be unreliable and depend, to a certain extent, upon the analysis of drilling results and statistical inferences that ultimately may prove to be inaccurate. Mineral Resource or Mineral Reserve estimates may have to be re-estimated based on: (i) fluctuations in copper, nickel, zinc, platinum group elements (PGE), gold or other mineral prices; (ii) results of drilling; (iii) metallurgical testing and other studies; (iv) proposed mining operations, including dilution; (v) the evaluation of mine plans subsequent to the date of any estimates and/or changes in mine plans; (vi) the possible failure to receive required permits, approvals and licences; and (vii) changes in law or regulation.
Forward-looking statements and information involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indicators of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements or information, including, but not limited to, the factors discussed below and under the “Risk Factors” section and elsewhere in the company’s Q3 2018 Financial Statements and Management’s Discussion and Analysis, as well as unexpected changes in laws, rules or regulations, or their enforcement by applicable authorities; the failure of parties to contracts with the company to perform as agreed; social or labour unrest; changes in commodity prices; and the failure of exploration programs or studies to deliver anticipated results or results that would justify and support continued exploration, studies, development or operations.
Although the forward-looking statements contained in this release are based upon what management of the company believes are reasonable assumptions, the company cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the company does not assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring after the date of this release.
The company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of the factors set forth in the “Risk Factors” section and elsewhere in the company’s Q3 2018 Financial Statements and Management’s Discussion and Analysis.
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