International Resource Journal - February 2012 - ADX Energy

The International
Resource Journal
february 2012 Volume 4 Issue 2 www.irjonline.com
IN THIS ISSUE ►
IRJ ONsite
IMCA’s upcoming South
American seminar & asset
threatening events
Exclusive interview
Spotlighting South American
investment options with The
Oil Council
company focus
The industrial giants of
Brazil’s Corporate
Sustainability Index (ISE)
South American
opportunities in 2012
led by IRJ exclusive interview
Petrobras Biocombustivel

2 SECTION Title

EDITOR’S Note
Rising commodities pRIces, insatiable Asian
demand, greater transparency in mineral and hydrocarbon
legislation, stonking oil and gold discoveries...whatever
you want to attribute South
American and notably Brazilian economic growth
to for the past decade, there’s no denying it.
Saying whether or not now is the time for
investors to charge its shores is like predicting
sovereign debt outcomes; it’s interesting
to contemplate, but so is the notion of a world
operating to the doctrines of Kantianism. Regardless
of your inclination, there’s no doubt
that the region is worth watching.
IRJ February captures the goings-on at
Petrobras Biocombustível (Brazil’s bio-fuelled
futures according to chief executive Miguel Rossetto),
tackles Macondo-sized issues in a South
American setting with Hugh Williams, chief executive
of the International Marine Contractors
Association (IMCA) and even ranks the top mining
and industrial entrants on BM&FBOVESPA’s
2012 Corporate Sustainability Index (ISE).
Further afield, we gear up for Mining IND-
ABA in February by looking at Equatorial Resources’
(ASX: EQX) enormous iron ore opportunities
(and portfolio) in the Republic of Congo.
We journey to Saudi Arabia ahead of the Gulf
Environment Forum (GEF) in March, and Jody
Elliot, director of The Resource Channel, offers
sound and frank advice on tackling Australia’s
much-discussed yet under-addressed workforce
shortages in natural resources.
Please direct all mystery, intrigue and
scrutiny to me at nualag@irjonline.com or argue
your case on Twitter at twitter.com/IRJmagazine.
As they have it Portuguese, meus sinceros
cumprimentos,
Nuala Gallagher
Managing Editor

4 SECTION Title
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IRJ Team
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Table of Contents
FEBRUARY 2012 | VoluME 4 | ISSUE 2
RENEWABLES
& ENERgy
MINING
& meTALS
In South America Petrobras Biocombustivel’s chief executive
Miguel Rossetto, addresses the nation’s challenges in becoming
biodiesel’s leading light 010
In South America BM&FBOVESPA’s Corporate
Sustainability Index (ISE) commands sustainable
excellence from outh American natural resource groups in 2012 020
bme Global with partners PME and SENS presents the
Gulf Environment Forum (GEF); Saudi Arabia’s official first port-of-call
for multinationals interested in environmental and economic development 028
Equatorial Resources has the projects, infrastructure,
government accords, local presence and track record to be
a big player in West Africa’s iron ore growth story 038
Continental Coal continues to dominate headlines
and up coal production across its South African portfolio 050
In South America U308 Corp. talks remarkably rapid exploration
success with a uranium, vanadium and phosphate portfolio worth watching 060
In South America Trendix Mining reveals what it takes to be
a leading “first step” explorer and ideal partner in Argentinean mining 074
IRJ comment: The Resource Channel’s founder, director, and IRJ
columnist Jody Elliot provides much-needed advice on
tackling workforce shortages onsite in Australia 084
Intec Ltd continues on applying its expertise as a chloride
hydrometallurgical tech innovator across a range of worldwide projects 092
Excelsior Gold Ltd is taking the Kalgoorlie North Gold Project
to pre-feasibility study for a multi-mine operation and forging
ahead with resource expansion along the way 106
Angkor Gold Corp. is quite something. With a highly prospective
gold portfolio and second-to-none commitment to Cambodia,
this is the team behind the country play 116
Gold-copper explorer Prosperity Resources
has what it takes to lead in Indonesian mining 128
Introducing Al Tuwairqi Holding; Saudi Arabia’s
leading multidisciplinary steel house 136
A job for a Manitou 144

010
106

Table of Contents
FEBRUARY 2012 | VoluME 4 | ISSUE 2
116
OIL & gas
In South America The Oil Council’s media relations head
and magazine editor, Drake Lawhead, spotlights investment
opportunities ahead of the Oil Council Latin America Assembly 154
In South America Chief executive Hugh Williams of
The International Marine Contractors Association (IMCA)
talks asset threatening events, IMCA’s imminent seminar
and reflects on sector growth 162
ADX Resources continues to deliver with its
North African and European portfolio 172
In South America Brazil’s pre-salt reigns supreme, or does it
IRJ recaps the recent developments. 180
In South America Brazil-Canada Chamber of Commerce President
Raul Papaleo talks international partnerships, including
renewable energy development 188
January headlines Oil & gas multinationals moving fast in 2012 198
EVENTS
What’s happening 2012 210

188
000
172

10 COVER FEATURE South American opportunities in 2012
South American
opportunities in 2012
IRJ editor Nuala Gallagher
interviews Miguel Rossetto,
chief executive of Petrobras
Biocombustível

Brazil has long-graced the highest echelons of nations active in
ethanol and biodiesel, and an inherent part of its latter day
growth story has been Petrobras Biocombustível S.A; a unit
founded in mid-2008 by Brazilian multinational energy giant
Petrobras.
Led by chief executive officer Miguel Rossetto, Brazil’s former Minister
of Agrarian Development, Petrobras Biocombustível’s plans for capital
investment in business and social endeavours, increasing output,
research and development, and assisting in furthering ethanol fuels
dialogue and industry standards have been sustained despite global
financial market fragility.
But most importantly, while this is an admirable sentiment to
make—perhaps verging on platitude—it is backed up by the fact that
Rossetto is refreshingly straight-talking when it comes to renewable
energy outlooks and what it will take for Brazil’s biofuels industries to
fulfil their true potential.
“Biodiesel production is a new economic activity in Brazil which, in
six years, anticipated goals, involved more than 100,000 of the country’s
family farmers, and capacitated the Brazilian energy matrix. It is a
response to Brazil’s dynamic economy and society,” he tells IRJ.

12 COVER FEATURE South American opportunities in 2012
Mr Miguel ROSSETTO, CEO of Petrobras Biocombustível & IRJ February interview lead.
Photography c/o Petrobras News Agency

FEBRUARY 2012 The International Resource Journal
13
“My strategic opinion is that Brazil has another
pre-salt in renewable energy (hydro, wind,
solar, biomass); in which ethanol and biodiesel
have a crucial role. A strategic program with clear
goals and objectives is needed to develop this
potential. The energy plan created by the company
Empresa de Pesquisa Energética (EPE) is
well-qualified to be used as reference for a solid
program during the next ten years.”
Aside from Brazil’s abundance of arable land,
supportive government setting and geographical
market demand advantages, the nation’s ability
to initiate (and maintain) fruitful dialogue on
the growth of its renewable fuels industries has
been an incremental asset in their respective
establishment.
And as the Brazilian National Agency of
Petroleum, Natural Gas and Biofuels (ANP)
opened public online dialogue to assist in
the compilation of future biofuels legislation
on January 9, IRJ struck up our own dialogue
with Rossetto about the role Petrobras Biocombustível
is set to play in both Brazilian and
global biofuels.
Nuala Gallagher “NG”: I read about Petrobras
Biocombustível’s pledge in 2010 to invest
US$3.5 billion through 2014 to boost biofuels
output and your current capacity to produce
approximately 700 million litres of biodiesel per
year. Building on that, let’s look at 2011 plans
and how this impressive production volume has
been reached so quickly given that the business
unit was founded on July 29 2008
Miguel Rossetto, CEO of Petrobras Biocombustível
“MR”: The US$3.5 billion investment
in the biofuels sector (production, logistics and
research) was in the 2010-2014 Business Plan,
which has been reviewed and updated. According
to the current 2011-2015 Business Plan,
Petrobras will invest approximately US$4.1
billion in biofuels production, logistics and research.
Petrobras Biocombustível had a total installed
production capacity of 721.4 million
litres of biodiesel at the end of 2011. Additionally,
taking into account the last two bidding
rounds of the Brazilian National Agency of Petroleum,
Natural Gas and Biofuels (ANP), Petrobras
became the leading company in Brazil as it
relates to sales volume.
This shows how the company has grown and
motivates us to stay on track; believing in the
forecast that the future holds a prominent role
for biofuels as the “new pre-salt” of renewable
energy. With this focus in mind, we carry on with
our growth objectives.

14 COVER FEATURE South American opportunities in 2012
Our three wholly-owned biodiesel plants were
already under development by other Petrobras
sectors. Moreover, the company invested in
already built biodiesel plants - in Marialva (in the
state of Paraná) and Passo Fundo (in the state of
Rio Grande do Sul) - where it holds 50 per cent of
the shares.
NG: The Candeias biodiesel plant in Bahia,
your largest single biodiesel production plant,
continues to surpass production targets and
provide a large part of the above total annual
output. I read that it hit a daily production
record of 570,000 litres on November 26, and
13.86 million litres in November.
Candeias has already seen its capacity
double since it was built, but what are the
ultimate goals for this unit How far ‘up’ do
you plan to take production there in line with
investments to 2014
MR: The company is continually assessing growth
perspectives based on market opportunities.
The Candeias Plant (in the state of Bahia) began
operations in 2008, and basically quadrupled its
capacity in less than three years. It is the largest
biodiesel production park owned by Petrobras
Biocombustível. Our current goal is to get the
plant to produce at its new capacity.

FEBRUARY 2012 The International Resource Journal
15
Photography c/o Petrobras News Agency

Photography 16 COVER c/o FEATURE Petrobras South News American Agency opportunities in 2012
NG: Perhaps you can update us on the
development stage reached for plans to set up
another plant in Para, and to start operating
in 2013 with an installed capacity of 120,000
m³/year. Is this facility on track
MR: Currently, the plant is in the agricultural
implementation and industrial projects
development phase. Seedlings production
development is underway in the city of Baião, and
the first production cycle (planting the seedlings in
the production areas) begins this year.
NG: I read that the Candeias, Quixadá (state
of Ceará) and Montes Claros (state of Minas
Gerais) plants each hold the Social Fuel Seal

FEBRUARY 2012 The International Resource Journal
17
in compliance with the National Program
for Biodiesel Production and Use (PNPB);
awarded for social inclusion, jobs generation
and other community developments. In each
case, are there plans to heighten such local
commitments as the funding (2011) pledged
to 2015 is administered to your existing
facilities
MR: For more than three years, Petrobras
Biocombustível has already put forth a great deal
of work with family farming. This role will increase
as a new regulatory structure is established for
the sector, with updated tax incentives, market
growth (both by increasing the percentage diesel
mixture and the development of new segments),
and export incentives.

18 COVER FEATURE South American opportunities in 2012
Efforts in the
ethanol industries
In brief, Rossetto discusses domestic &
international news regarding Petrobras
Biocombustível’s ethanol activities.
NG: Reuters data released on December 30 states
that “Brazilian ethanol demand outstrips supply
by nearly 25 per cent.” Ethanol output fell 17 per
cent in the 2011/12 harvest season and it may
take two years for the country to emerge as the
“biofuel Saudi Arabia.”
How does Petrobras Biocombustível view the
supply-demand push and pull today
MR: We understand that the answer to the ethanol
supply crisis should be to increase the supply
instead of reducing demand or imports.
A supply crisis is a good scenario when the
country can react by increasing production,
which translates to the country’s increase in
revenue and employment rate. This is our case.
Brazil is prepared for this growth. We defined an
agroecological zoning structure for sugarcane
culture, set rules for adequate employment
relations, and we deal with ethanol based on an
energy agenda.
We need to encourage production and
position ourselves in markets that grow based on
demand. We need a program led by the federal
government and supported by all industrial
representatives and state governments to deal
with tax, financing, and logistical issues, and
to establish a new technological standard of
production.
Photography c/o Petrobras News Agency
NG: On December 21 you signed a pact with
Mozambique’s state oil company, Petromoc, to
study ethanol production and domestic sales. You
already have a sugar mill in Sena with a capacity
of 1.2 million metric tons per year, and other
experience in the country. Perhaps you can talk
more about why this was a strategic partnership
to enter
MR: Actually, this pact involved Petrobras,
Petrobras Biocombustível, Guarani and Petróleos
de Moçambique (Petromoc). The study seeks to
determine the possibility of investments to also
produce ethanol from the molasses currently
produced at the mill. The goal is to provide
for the new market that is expected to emerge
in Mozambique with the introduction of the
mandatory blending of 10 per cent ethanol in
gasoline (E10).

FEBRUARY 2012 The International Resource Journal
19
As of today, the company has contracts with
approximately 64,000 family farmers in the
north-eastern region of Brazil and the northern
part of the state of Minas, to whom the company
provides agricultural technical assistance,
executes five-year term contracts, ensures the
purchase of their production, and provides certified
seeds. In the southern region of the country,
the role of Petrobras Biocombustível is through
its partnership with BSBIOS, which has approximately
15,000 family farmers (producers of
canola and soybean in the states of Rio Grande
do Sul, Santa Catarina and Paraná) as raw material
suppliers.
losing sight of its economic, social and environmental
bases.
Regarding the Seal, we understand the importance
of investing in agricultural research and
development in the north-eastern and semi-arid
regions of the country and in developing initiatives
to increase the productivity and diversity of
oleaginous products, increasing the participation
of family farmers in the biodiesel chain.
IRJ thanks Miguel Rossetto, CEO of Petrobras
Biocombustível S.A, & Anabelly Pontes Gerência
de Imprensa / Press Management at Petrobras,
for their assistance
NG: Dating back to your time as Minister of
Agrarian Development for Brazil, I understand
you assisted in elaborating the Social Fuel
Seal. Now that you are on heading up Petrobras
Biocombustível what sort of a leading role does
Petrobras play in ensuring these standards
continually prove effective
Please visit
www.petrobrasbiocombustivel.com.br/en/ (English)
www.petrobrasbiocombustivel.com.br/pt/ (Português)
MR: We are on the same side. Petrobras Biocombustível
ended 2011 as the largest producer
of biodiesel in Brazil, operating five plants. This
position makes it possible for the company to
lead the discussions on the challenges faced by
the industry to keep this growth pattern without

20 RENEWABLES & ENERGY Roll call 2012
IRJ investigate
Roll call 2012: Leading B
Corporate Sustainability

FEBRUARY 2012 The International Resource Journal
21
RENEWABLES & ENERgy
s:
razil’s 2012
Index
020

22 RENEWABLES & ENERGY Roll call 2012
The sustainability tag may be embedded
in vague common parlance (irritatingly) in
some respects, but it takes more than green
grandstanding and sweeping declarations
for industrial and mining groups to make
it into BM&FBOVESPA’s Corporate
Sustainability Index (ISE).
subsequent to founDIng through a merger between
the São Paulo Stock Exchange (Bovespa)
and the Brazilian Mercantile and Futures Exchange
(BM&F) in May 2008—becoming one of the largest
exchanges on earth—BM&FBOVESPA has proved
vocal when it comes to attaching social, economic
and environmental accountability to generating
long-term value for shareholders. It has masterminded
various means for measuring each of
these, the most prominent of which is its Corporate
Sustainability Index (Índice de Sustentabilidade
Empresarial or “ISE”) launched in 2005.
Spanning 18 sectors totalling market cap
worth around 961B billion (Brazilian Real)—
43.72 per cent of all BM&FBOVESPA companies
listed at the time of release—the 2012 ISE was
announced on November 25, 2011.
Entrants will remain on book from January 2,
2012 to December 31, 2012, and the leap from
previous index figures at 43 stocks from 34 companies
to 47 shares from 38 companies has got
plenty of attention. The efforts made by selected
and applying groups vying for inclusion have warranted
the ISE to implement a cap of 40 groups;
a move made to encourage would-be listings to
stay competitive and to foster diversity among
those listed.
Gracing the board for 2012 are household
names in natural resource and heavy industry.
Here are IRJ’s top three from the ISE.
Steel manufacturing:
The Gerdau Group
(BM&FBOVESPA: GGBR3. GGBR4) (“Gerdau”)
abouT: A product of over 110 years in the making,
Porto Alegre-headquartered Gerdau is America’s
biggest long steel producer with an installed
capacity of over 25 million metric tons steel per
year. Its industrial operations span 14 countries
including Brazil (naturally), Chile, Canada, Guatemala,
the U.S. and Spain to name a few.
Servicing buyers in the civil construction, industrial
and agricultural sectors for the most part,
Gerdau provides steel products through a model
based on buying locally and selling in the same
fashion. It’s an admirable approach, reducing pollution
by transportation to market, fostering local
level industrial development, sourcing regional
workforces and maintaining a diverse customer
base—and with some 48 wholly-owned steel mills

FEBRUARY 2012 The International Resource Journal
23
(plus two joint ventures), 32 scrap collection and
processing facilities, two private port terminals, 94
fabricated reinforcing steel facilities and a litany of
other owned, associated and partner sites, it plays
to many company strengths.
WORTHY OF THE ISE Gerdau says that its principles
of sustainability reflect a company-wide
belief that “the economic growth of a company
is based on an ethical and socially responsible
relationship with the environment and with everyone
related to it: employees, customers, suppliers,
shareholders, government and society”.
From a business perspective, it hires locally
(to the tune of 45,000 employees), provides
materials for infrastructure development and
“plays a role in the growth of cities”. Environmental
efforts include investing in recycling
technologies to reduce reliance on natural resources,
and research to optimise its usages for
by-products.
IN THE news: On January 16, reacting to the U.S.
Environmental Protection Agency’s (“EPA”) decision
to publicly release industrial emissions figures
online for the first time, Gerdau Special Steel
North America released a statement regarding its
inclusion on a national list of heavy emitters.

24 RENEWABLES & ENERGY Roll call 2012
“This reflects data provided by Gerdau to the
federal agency in keeping with its commitment to
transparency and corporate responsibility. While
the EPA does not set specific limits for carbon
dioxide emissions, Gerdau complies with the
requirement to measure and report such emissions,
and has implemented efforts to continue
to reduce them through productivity efficiencies
in the steelmaking process at all mills, including
those in Michigan,” the company stated.
“Gerdau is committed to maintaining environmental
standards in all the communities in which
the company operates”.
Mining & energy
VALE S.A
(BM&FBOVESPA: VALE3, VALE5) (“VALE”)
abouT: Global iron ore leader and formerly private-owned
mining giant VALE is the first miner
to hit the ISE and 2012’s run down marks its
second consecutive year on the list. The Rio de
Janeiro-headquartered group is active in 16 Brazilian
states and internationally from Angola, to
Mongolia, to London.
Between its 1942 founding as a Brazilian
Federal Government public entity and its ascent
to a multibillion real group with over 174,000
people (2010) in its employ, VALE has become

FEBRUARY 2012 The International Resource Journal
25
(and remains to be) the world’s biggest exporter
of iron ore as of 1974; privatised (May 6, 1997);
and owner of Canada’s second largest miner, Inco,
for US$18.9 billion (October 2006). Its Sustainable
Development Policy was established on January
2009 to address social, economic and environmental
responsibility across global operations.
WORTHY OF THE ISE 2010 proved to be a pivotal
year when VALE’s first sustainability report
prepared in line with Global Reporting Initiative
(GRI) methodology hit the stands, the first VALE
Science and Technology Community Seminar for
Sustainable Development was staged in Ouro
Preto, Minas Gerais, and its entrance into the
2011 ISE roll call was announced.
Structurally, the company has established
intertwined initiatives stretching from biodiversity
to climate change and a healthy portion of green
within research and development.
The VALE Technological Institute (ITV)
launched in 2009 covers everything from iron ore
industrial processing technologies to the more abstract
evaluation of ecological scientific interests.
The VALE Foundation is active throughout
Brazil and local foundations in Colombia and
Mozambique, and it forges public sector and social
partnerships in order to “strengthen human
capital and contribute to communities’ social
and economic development, leveraging Vale’s
social investments”.
Additionally, programmes in the realms of
human rights, government relations and environmental
management pepper company endeavours
at various levels.
IN THE NEWS: Coverage hasn’t been entirely rosy
for VALE lately. As debate over the 11,233 megawatt
Belo Monte dam project on the Amazon’s
Xingu River plays out, the company’s name has
cropped up. In Belo Monte’s development company,
Norte Energia, VALE holds nine per cent, and
this has sparked rumours that future project output
may support energy-intensive, high polluting industries
and result in environmental detriment.
More agreeably, in a December interview
VALE’s vice president of sustainability, Jennifer
Hooper, detailed company plans for a US$2
billion environmental project to reduce sulphur
dioxide emissions at their Sudbury smelter in
Toronto; the largest project of its kind.
Petrochemicals:
Braskem
(BM&FBOVESPA: BRKM3. BRKM5) (“Braskem”)
abouT: São Paulo-headquartered Braskem is the
continent’s biggest petrochemical player by ca-

26 RENEWABLES & ENERGY Roll call 2012
BM&FBOVESPA’s
Sustainability Mission:
BM&FBOVESPA says ‘report-orexplain’
in 2012
“To urge, promote and practice
concepts and initiatives of
economic, social and environmental
responsibility which contribute to
sustainable development.”
In early January, BM&FBOVESPA (the
Brazilian Securities, Commodities
and Futures Exchange) hit 2012 hard,
recommending that all listed vehicles state
categorically whether they publish an annual
sustainability report, and if not, why not.
The January launch of the report-or-
pacity and the fifth biggest globally by the same
measure. Within its 18-odd plants capable of
producing 11 million metric tons in petrochemical
and other chemical products annually, it owns
the Camaçari (Bahia) and Triunfo (Rio Grande do
Sul) plants; the largest chemical plants in Brazil.
In addition to reigning supreme as Brazil’s
main polyethylene and polypropylene producer, it
employs approximately 6,400 people; a sizable
workforce given its 2002 founding.
Boasting the tagline “The perfect balance
between development and sustainability,” and
wielding a firm focus on “sustainable chemistry,”
the group’s operational efforts in greening its
business activity have proved impressive.
In September 2010 Braskem inaugurated
its green ethylene plant as part of its Triunfo
petrochemical complex in Rio Grande do Sul.
The plant will produce 200,000 tons of green
ethylene destined to become green plastic, and,
given that it is the largest industrial-scale operation
producing ethylene from totally renewable
raw materials on the planet—designed and constructed
in less than two years—it reflects rapid
company growth and capability.
WORTHY OF THE ISE Braskem’s sustainable
development goals are refreshingly detailed,
conveying aims ranging from “being a benchmark
for chemistry safety” to “being the largest
producer of thermoplastic resins made from
renewable raw materials” and the aptly linked
“helping reduce the impacts of post-consumption
plastic waste”.

FEBRUARY 2012 The International Resource Journal
27
explain initiative is precedes the Rio+20
United Nations Conference on Sustainable
Development due to be staged in Rio
de Janeiro on July 20-22, and reflects a
noteworthy change in market interests
some 20 years on from the Rio Summit on
Environment and Development of 1992.
in 2010, BM&FBOVESPA became the first
exchange in the Americas to use the GRI
sustainability reporting model within its
annual report, and in proving that its January
pledge was concrete, both the exchange and
GRI have already held workshops “to assist
companies not familiar with sustainability
reporting” throughout January.
Both parties aim to compile a public
database of groups compliant with these
measures by the time Rio+20 is staged.
Its year-on-year goals to 2020 are equally
well-structured. By 2015, Braskem aims to lead
Global Product Strategy implementation in South
America, and by 2020 the group intends to cease
use or production of substances included on
global blacklists.
This is the seventh consecutive year that
Braskem has made it onto the ISE. Statements
note that both its biopolymer research and development
and commitment to health, safety
and the environment are part of its reasoning in
the 2012 selection process. Furthermore, the
company states that it has “improved its eco-efficiency
indicators, reducing waste generation by
67 per cent, effluent generation by 39 per cent,
energy consumption by 15 per cent and water
consumption by 19 per cent”.
IN THE NEWS: Between November’s ISE 2012 announcement
and the year commencing, Braskem
picked up the 2011 Eco Award for best sustainable
project in the Products or Services category
for its green plastic from sugarcane ethanol,
and the 2011 Guia Exame de Sustentabilidade
(again) which named the group as one of Brazil’s
“model-companies for its commitment to social
and environmental responsibility issues,” with a
nod to its green chemicals work.

The 28 Gulf RENEWABLES Environment & FORUM ENERGY 2011 BME in pictures. Global Photography c/o BME Global
028
BME GLOBA
Greening the Kin
at the Gulf Envir
Forum (GEF)

FEBRUARY 2012 The International Resource Journal
29
RENEWABLES & ENERgy
L
gdom
onment

30 RENEWABLES & ENERGY BME Global
Saudi Arabia’s Presidency of Meteorology and Environment (“PME”)
and The Saudi Environmental Society (“SENS”), backed by business
events and consultancy multinational BME Global Ltd (“BME”), are
readying for the limelight at the Gulf Environment Forum
The Kingdom of Saudi Arabia’s ascent to the environmental sector’s world
stage has already proved to be swift and markedly ahead of many nations
as its rulers spearhead the trend, embracing sustainability concerns within
economic development.
The Gulf Environment FORUM 2011 in pictures. Photography c/o BME Global

FEBRUARY 2012 The International Resource Journal
31

32 RENEWABLES & ENERGY BME Global
And with ongoing projects spanning mega
structural feats of engineering to innovative new
vehicles fostering investment in world-first initiatives,
Saudi’s blend of commercial-meets-operational
success in environmental development
continues to propel the nation into the ever more
green global consciousness.
Leading this charge are two influential groups
that have teamed up for the third Gulf Environment
Forum (“GEF”) 2012 to be held at the Jeddah
Hilton from March 25-27; the only event of
its kind, size and stature in the Kingdom.
Founded, launched and directed by HRH
Prince Turki Bin Nasser Bin Abdulaziz, President
of the Presidency of Meteorology and Environment
(“PME”) in partnership with The Saudi Environmental
Society (“SENS”) and BME Global, GEF
is a veritable gateway into Saudi for the many
multinational energy houses keen to participate.
“Having the PME as a co-organiser adds
weight to the event, and from a business perspective,
anyone hoping to operate in the sector
needs to liaise directly with PME. In the case of
internationals who may have found it difficult
previously to penetrate the market, PME’s involvement
in this event makes it a great opportunity
for them,” BME’s marketing manager Mark
Thomas enthuses.
“It’s a growing event in a market that truly
values international expertise. What we’re discussing
in the conference constantly comes back
to the green economy,” conference producer
Simon Smith adds.
“When we consult industry
professionals about the most
pressing challenges to the
environmental sector in the region,
time and time again the answer is
the economy; funding. This event
really takes green innovation across
all sectors to present a much more
contiguous programme.”
Supported by the United Nations Development
Programme (UNDP), GEF promises to
facilitate the conversations, business links and
industry showcases necessary for the Kingdom
to continue its role as a leading light in environmentally
minded economic progress.
Defining challenges & goals
Under the three themes of green innovation,
green economy and corporate social responsibility
(CSR), partners PME, SENS and BME, supported
by the UNDP, have put together a finely crafted,
meticulously researched agenda for 2012
attendees flying in from more than 23 countries.

FEBRUARY 2012 The International Resource Journal
33

34 RENEWABLES & ENERGY BME Global
“We’ve been working with the UNDP since
the conference began and part of its content
comes from that relationship. With them, we’ve
discussed ways we can work together and
formed topics that go hand-in-hand with the research
we’ve done with industry professionals,”
Smith explains.
“We want to root out what the challenges are
and how to get through them. This event differs
from past years in that we’ve put together an
advisory committee—people with many years of
The Gulf Environment FORUM 2011 in pictures.
Photography c/o BME Global
The newly formed GEF 2012
advisory committee comprises of:
Kishan Khoday, Deputy Resident
Representative Saudi Arabia - UNDP
H.E. Dr. Hani Bin Mohammed Bin Ahmed
Aburas, Mayor of Jeddah
Sherif Issa, Senior Manager, Health and
Environment, Mobinil
Dr. Amyn Dahya, Chief Executive Officer,
GEMS-UtilEco
Dr. Mustafa A. Ukayli, Director Environment,
Maaden Corp.
Dr Saiyed, Al-Khouli, Presidency of
Meteorology & Environment
experience in the industry—to help us identify
those topics.”
The result is a speaker schedule that reads
like a guide to the Kingdom’s decision-makers
and green pioneers. Returning keynotes include
conference founder HRH Prince Turki and H.E.
Dr. Hani Bin Mohammed Bin Ahmed Aburas, the
Mayor of Jeddah, Smith says, as well as a raft of
other thought-leaders. The addition of roundtable
sessions marks another step in facilitating knowledge
transfer during the proceedings. The first will
focus on environmental best practise in the workplace,
and the second piloted by the UNDP will be
a session on the road to the United Nations 2012
Rio+20 Earth Summit due to take place in June.
“GEF isn’t a one-off annual event; it’s a
continuing development to make the country
greener,” Thomas notes, accounting for the

FEBRUARY 2012 The International Resource Journal
35
Should I attend
GEF will showcase a broad range of
sectors including:
renewable energy: solar, nuclear, wind and
associated production and utilisation
waste management: municipal, hazardous,
industrial, medical and E-waste, recycling,
waste-to-energy
water and wastewater: treatment,
desalination, wastewater/sewerage
environmental technologies: air, sea, and
climate protection, district cooling and
energy conservation, waste and sewage
management#
Who is attending
CEOs/Managing Directors
Senior Vice Presidents/Vice Presidents
CSR/HSE Directors/Head of Sustainability
Waste/Recycling Plant Managers
Government/NGOs/Environmental Agencies
Business Development Managers
Local & International Investors
crossover between sessions at this meet, and
that of others including the Euro Arab Nuclear
event set to be staged in London in April.
“The idea behind this year was to make the
programme much more wide-scale, to include more
countries and build a bigger picture while drawing
them all closer together,” Smith continues.
“PME has asked that this year the conference
is made more accessible. They’ve subsidised
the delegate price so that it’s not just the
CEO that can attend, it’s anyone from environmental
engineers to students to company experts
and managers.”
In keeping with the wider ambit of industries
catered to and GEF’s mission as a yearround
development, the partners also plan
to stage four pre-conference workshops and
seminars. The first will be an introduction to
the event, aimed at students, to provide an
overview of the subjects broached during the
meet. The other sessions will be led by specific
companies; fitting groups to fuel discussion on
subjects such as building in harsh climates,
integrating sustainability into construction
techniques, waste management and recycling
and solar power technology.
Greening up & talent-spotting
Following on from PME’s emphasis on accessibility
and the multitude of opportunities presented
for delegates to converge effectively is
the GEF awards, initiated in 2011, with two new
accolades to bestow in 2012.
“Last year we offered The Environmental
Protection Award for outstanding achievements

36 RENEWABLES & ENERGY BME Global
The Gulf Environment FORUM 2011 in pictures. Photography c/o BME Global
The Gulf Environment FORUM 2011 in pictures. Photography c/o BME Global

FEBRUARY 2012 The International Resource Journal
37
in protecting the environment through an initiative
or technology,” Thomas says.
“That was won by Huta-Hegerfeld Environmental
Works in 2011, through their technological
advancements in land, sea and air monitoring.
Additionally this year we have the Gulf Youth Prize,
About the awards
—The H.R.H. Prince Turki Bin Nasser
Environmental Prize for Gulf Youth is
the first of its kind in the Gulf region.
Criteria include promoting environmental
awareness, encouraging community
participation and originality, for ideas
targeting one (or more) issue in air, soil,
water and sustainable development.
—The H.R.H. Prince Turki Bin Nasser
Bin Abdulaziz Award for Achievement in
Environmental Protection is judged on:
1. Impact of the initiative or technology on
Saudi Arabia’s air, sea or land environment
(50 per cent)
2. Sustainability of the initiative or
technology (30 per cent)
3. Level of educational awareness on
environmental issues/solutions raised by
the initiative or technology (20 per cent)
which is a SENS initiative and the CSR award.”
Dr. Majdah Abu Ras, Deputy Executive Director
of SENS, has toured the Kingdom’s schools
in a bid to nurture talent and encourage young
people to submit their best ideas for innovative
environmental projects. The first of its kind in the
Kingdom, the winner will receive a donation to their
school/university to implement their project. Another
new category for 2012 is the CSR award, judged
by a HRH Prince Turki-led panel for those organisations
that have executed highly successful and
impactful CSR campaigns in the past 12 months.
By inviting and celebrating young and emerging
talent, GEF is tackling the Kingdom’s challenges
as its transition to a greener economy ensues.
By staging its varied programme of speeches,
roundtables, case study and pre-conference sessions,
its partners are providing every conceivable
opportunity for international energy groups to participate.
Under the esteem of PME and SENS, the
conference has been earmarked by many as an
unrivalled platform for the conversations environmentally
astute groups need to conduct. And now
in its third year, it is undergoing its own transition
from an annual meet to a year-round, Gulf-wide
initiative towards commercially sound sustainable
economic prosperity.
www.bme-global.com

38 MINING & METALS Equatorial Resources
Equatorial Res
Pioneering Africa as
next iron ore provinc

FEBRUARY 2012 The International Resource Journal
39
MINING & METALS
ources
the world’s
e 038
Photography c/o Equatorial Resources

40 MINING & METALS Equatorial Resources
Africa continues to transform into iron ore’s
next major frontier with plans in place for
the development of several new multibillion
tonne projects. And as the reality of African
iron ore production unfolds, which mining
companies will traverse the many issues
surrounding infrastructure, generate lasting
value, and satisfy environmental and social
concerns en-route
Which assets have the capacity to provide nearterm
production backed by iron mineralisation
of a scale and quality that warrants world-class
mines, coupled with management who possess
the drive and motivation to meet the many challenges
of building an operating iron ore mine and
pioneering the world’s next iron ore province
Photography c/o Equatorial Resources
With two 100 per cent-owned large scale iron
projects in the Republic of Congo (ROC), Equatorial
Resources (ASX: EQX) (“Equatorial”) has already
attracted investment from the lion’s share of London’s
blue chip natural resources institutions.
Equatorial’s Mayoko-Moussondji Iron Project
(“Mayoko”) has access to existing bulk commodity
infrastructure and an exploration target of
almost four billion tonnes of iron mineralisation,
and the company’s confirmed geological model
supports the potential to fast-track high grade
hematite production to generate early cashflow.
“I see the West of Africa as the world’s
third great frontier for iron ore. The
value that has been created out of the
Pilbara and South America is going
to be matched in the next 20 years
by an incredible ramp up in iron ore
production along the west coast of
Africa,” John Welborn, managing
director and chief executive says.

FEBRUARY 2012 The International Resource Journal
41
“The challenge is the development of infrastructure,
and at Mayoko we have the opportunity
to rapidly advance to production given the
existence of operational rail and port facilities
which service the project.”
Equatorial is also developing its 100 per
cent-owned Badondo Iron Project in the ROC’s
northwest—similar in geophysical scale to neighbour
Sundance’s Mbalam project, with haematite
samples collected from surface bearing
grades as high as 68 per cent iron. The project’s

42 MINING & METALS Equatorial Resources
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43
Photography c/o Equatorial Resources
exploration target weighs in at between 1.3-2.2
billion tonnes (at 30 per cent to 65 per cent iron)
and combined with Mayoko, Equatorial could be
sitting on up to six billion tonnes of iron across
its wholly owned ground; potentially the largest
iron footprint in the region.
“Badondo is an extremely exciting project,”
Welborn says.
“Our team of very experienced geologists
continue to maintain that the ground is the best
they’ve seen and we are looking forward to the
current drilling program confirming the extremely
high grade potential of this asset.”
Mayoko’s maiden JORC resource is on
course for release during the second half of
2012, and the company will continue to fasttrack
its feasibility work to capitalise on the
benefit of having existing rail and port infrastructure.
Welborn says that Equatorial is going to be
“a big contributor” in the opening up of Africa as
the world’s next iron ore province, and given the
explorer-developer’s unique potential to generate
early cashflow and subsequent scalable production,
it seems a fitting observation to make.
Early DSO & infrastructure at Mayoko
Having secured its wholly-owned 1,000 squarekilometre
permit at Mayoko in June 2010, Equatorial’s
belief in the area’s potential was demonstrated
in December 2011 by the addition of two
new 100 per cent-owned prospecting permits
contiguous to its existing tenement, increasing
the company landholding to more than 3,700
square kilometres. The past 18 months have
been extraordinarily productive, Welborn says,
adding that Equatorial was able to hit the ground
running at Mayoko thanks to the bulk commodity
railway line that runs through its permits to the
deepwater port of Pointe-Noire.
“We have three drill rigs working to define a
maiden JORC resource there in the second half
of this year,” he explains.

44 MINING & METALS Equatorial Resources
Republic of Congo project locations & exploration target.
Photography c/o Equatorial Resources.
“Expanding our footprint by continuing along
that railway west towards the Gabon border,
adding around 3,000 more square-kilometres,
is important given how globally significant the
resource looks to be.”
The rail and access to port are pivotal in
Equatorial’s plans to reach production quickly.
Likening Mayoko to the Tonkolili Iron Project—
from which London-listed African Minerals Limited
(L:AMI) loaded the first shipment to leave
Sierra Leone’s shores for 30 years in 2011—
Welborn notes that projects triggering the start
of West Africa’s globally significant production
profile are those with the infrastructure edge.

FEBRUARY 2012 The International Resource Journal
45
“At Mayoko, with our huge
exploration target made up of
more than 500 million tonnes of
haematite potential overlaying a
large body of magnetite, there is the
very real opportunity to commence
production using existing
infrastructure and to then develop
a much higher capacity production
profile in due course,” he says.
“That’s why we have a particular approach. It’s
unusual to be doing the detailed feasibility work
we’re doing on the rail and port at our relatively
early stage. We’re drilling out our exploration targets
to define a maiden resource and at the same
time preparing for a ramp up to production.”
Mayoko’s iron mineralisation consists
of a large magnetite banded iron formation
(BIF) capped by weathered haematite. At
the Makengui Prospect, from which surface
haematite samples graded as high as 62 per
cent iron, initial drilling in 2011 contained
intersections such as ~20 metres from surface
at 60 per cent iron as part of a 40 metre
intersection showing 55 per cent iron. The
haematite cap is the focus for the current
33,000 metre drilling programme focused on
generating a sufficient sized JORC resource
of haematite mineralisation to justify initial
production.
“The current drilling programme will give us
the opportunity to delineate an initial resource of
between 50 and 100 million tonnes of iron ore,”
Welborn says.
“This will come from an area which represents
a small fraction of the 46 kilometres of iron
strike on the tenement.
“The initial JORC resource will enable us to
identify the high quality, high grade material that
we can ship immediately using existing infrastructure
to start generating cashflow. The resource
base will continue to grow as we work on our
longer-term goal to convert our large exploration
targets into resources.”
Equatorial has a systematic approach to the
work on rail and port requirements seldom seen
at this stage of play. A second stage rail agreement
with the ROC rail authority has been inked,
which will allow the company to fund rail refurbishment
works confident in the knowledge that
its expenditures will be offset as pre-payments
against future transport charges. Negotiations
on similar agreements for building ship loading
facilities to cater to the first production profile are
well advanced, and inland—where the team has
an extensive heavy equipment fleet—Equatorial

46 MINING & METALS Equatorial Resources
has already built an air strip, exploration base camp
housing 40 staff, sample lab and satellite telecommunications
and internet facilities.
In taking up residence at Mayoko, Welborn
adds, Equatorial has chosen to integrate its facilities
within the project’s namesake village and hired over
100 local people in the process.
“We have more than 100 locals as staff onsite
training with us and there are various programmes
in relation to up-skilling the local population with a
view to having them work with us for the long-term,”
he explains.
“We’ve also invested in facilities for the village,
not just our camp: Water purification and pumping
facilities which were broken before we arrived,
providing power and establishing the local medical
clinic to service our workers and provide a previously
non-existent service to the local population.”
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Equipped with the landholding, high grades,
infrastructure, funding, government accords and
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In CMEC’s Belinga project, Core Mining’s Avima project
(note Glencore International AG’s April 2011 investment
in the company) and Sundance’s Mbalam
project (and Sichuan Hanlong Group’s A$1.65
takeover bid for the company), the ROC’s northwest
houses a knot of heavy duty iron-focused residents
with multibillion dollar values. These groups affirm
investor appetite for the locale, and also enable
Equatorial to draw synergies for Badondo with some
of its more advanced neighbours.
SRK Consulting completed detailed mapping
and sampling across the Badondo’s targets during
2011, Welborn says. These results are in the pipeline,
and given that rock chip assays confirm high
grade surface haematite of up to 68 per cent iron,

FEBRUARY 2012 The International Resource Journal
47
anticipation is mounting ahead of the scout drilling
set to commence in the first quarter of 2012.
“This campaign will see us put down a series of
scout holes to illustrate the potential. The best way
of describing what we’re looking to achieve from
this is to look at Mbalam when Sundance first purchased
the project,” Welborn explains.
“They had a limited amount of historical drill results
which demonstrated the potential and they’ve
now defined a JORC reserve of 352 million tonnes
at 62 per cent iron. At Badondo, our scout drilling
programme is designed to achieve a similar start
point and give an early indication of the scale and
quality of future resources.”
Equatorial’s first pass drilling will identify the
depth and consistency of the high grade haematite
found at Badondo and, noting that the only
downside of having so much iron is that it can be
tough to drill, Welborn says that the team eagerly
awaits the arrival of its specially built, heavy duty
yet highly portable diamond drill rig currently on its
way from Perth.
While perhaps overshadowed by Mayoko—and
Equatorial’s break-neck speed progress at the flagship
project—Badondo’s potential hasn’t gone amiss
with the multinationals. It might not have fairly
impacted the company’s market cap just yet, but if
Sundance’s reception with
Mbalam offers any indication, it’s possible that
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the scout campaign could pose massive re-rating
implications for the company.
Interest swirls in Africa’s iron ore frontier
During 2011 a swell of
multinational miners clamoured to
get into the ROC, not least Xstrata,
Glencore, Hanlong, and most
recently Exxaro Resources with a
A$338-million cash takeover bid for
African Iron; a company in which
Equatorial holds a crucial 20 per
cent interest.

48 MINING & METALS Equatorial Resources
Mayoko base camp. Photography c/o Equatorial Resources
“I am convinced that in 20-30 years’ time
people will say that it was obvious Africa would
become a major iron ore producer. Currently we
have almost one billion tonnes of seaborne iron
ore hitting the market every year. In the future
this will grow and a significant percentage of that
growth will come out of Africa,” Welborn says.
“The Congo has had strong and stable oil
production for more than 30 years. The new
mining code of 2005 was a direct response to
the government’s desire to diversify the economy
and reduce the reliance on the oil industry.
Mining has a huge future in the ROC and iron
ore will lead the way.”

FEBRUARY 2012 The International Resource Journal
49
Equatorial is emerging as one of the few
companies blessed with both large projects
and infrastructure advantages, and has a
genuine local-level commitment to lead Africa’s
emergence as the next iron ore frontier. The
prior successes of its board and management
(think Mantra Resources and Coalspur Mines)
and its early positioning of Mayoko towards
fast production have gained the good opinion
of international investors, and moves to carry
out detailed feasibility studies and work with
the government on port and rail reflect an ability
to think outside the box and maximise competitive
advantages.
Welborn has even mastered French—a product
of a professional rugby career in France—
which has been another important factor when
coupled with Equatorial’s commitment to be a
positive economic force in the country; resulting
in strong support from the ROC government for
the company’s agenda.
2012 will be a monumental year for Equatorial
with a maiden JORC resource at Mayoko
underpinning plans to fast-track production and
move the company from an ambitious, successful
explorer-developer to a first stage producer.
In the longer term, the expansion of Mayoko’s
capacity and realising potential from Badondo
will form steps in what promises to be a fascinating
story. All told, Equatorial’s goal to become
a large iron miner and a pioneer of Africa as the
world’s next iron ore province is a mere matter of
time from fruition.
www.equatorialresources.com.au

Continen
50 MINING & METALS Continental Coal Limited
Another coal mine i
to plus-10 Mtpa RO
050
O
co
m
vi
to
Th

FEBRUARY 2012 The International Resource Journal
51
MINING & METALS
tal Coal
n 2012 & onwards
M coal in 2015
n track to commence 2012 production at its third operating
al mine to enter play in under two years in South Africa’s
ajor coal fields surrounded by existing producing mines and
tal infrastructure, can Continental Coal hit its 10 million
nnes per annum ROM coal production goal in 2015
e answer is a resounding yes.

52 MINING & METALS Continental Coal Limited

FEBRUARY 2012 The International Resource Journal
53
In May 2010, Continental Coal Limited (ASX: CCC)
(“Continental”) began cementing itself as a coal
producer for the export and domestic markets,
and a regular face in South Africa’s major coal
fields, by commencing production at its Vlakvarkfontein
mine. Now less than two years on—targeting
production from its portfolio of predominantly
export thermal coal mines of 10 million tonnes
per annum (and higher) run-of-mine (ROM) by
2015—“Contie,” as the company’s executive types
affectionately put it, stands strong with two mines
in production (Vlakvarkfontein and Ferreira), two
development mines where production is imminent
(Penumbra and Wittekrans) more to come from
longer-term projects Vlakplaats, Mooifontein, Wesselton
II, and Leiden.
Characterising Continental is simple: This is
a group that pans the full gauntlet of exploration
and development with multiple mines well-located
to existing infrastructure in active coal producing
regions. Furthermore, once the Penumbra (in
the third quarter of 2012) and Wittekrans (2013)
mines commence output, Continental will surpass
six million tonnes annual production; the
next big step towards its impressive yet achievable
2015 vision.

54 MINING & METALS Continental Coal Limited
Locating Continental
Up & running coal
Vlakvarkfontein - Commenced production in May 2010, delivering 432,565
tonnes ROM (2010) and 1,200,000 tonnes ROM (2011). The mine has 17 million
tonnes of resource sufficient for a 10-plus year mine life, and with three offtake
agreements inked, Continental targets output of 100,000 tonnes of domestic
quality thermal coal per month.
“Getting to a rail line in most cases is a few hundred metres, and the rail and
port allocation is there so that’s the uniqueness about the Continental assets,”
Continental’s executive chairman Peter Landau told IRJ in May 2010.
“As a junior, the market edge for us is that our assets are all adjacent to
existing mining operations, so we’re mining the same coal seams as our peers.”
Ferreira – Acquired by Continental in November 2010—producing 942,950
tonnes ROM and generating sales of 389,680 tonnes (export) for that same
year—Ferreira is enviably well-placed just two kilometres from Continental’s
150,000tpm Delta Processing Operations and the adjacent 1.2 million tonne
per annum Anthra railway siding on the coal-line to the Richards Bay coal
terminal. The company states that production of 136,514 tonnes of a primary
export thermal coal product during the quarter ended 30 June 2011 from the
Delta Processing Operations; a 72 per cent increase on the March 2011 quarter
and a 119 per cent increase on the December quarter.
Production from this project will be gradually replaced by Penumbra following
the commencement of underground operations at this near-term development
project in 2012.

FEBRUARY 2012 The International Resource Journal
55
About to enter play
Penumbra - Production from the Penumbra coal project is forecast to achieve
a targeted rate of 750,000 tonnes per annum ROM in the third quarter of 2012,
Continental states. As outlined by the project’s Bankable Feasibility Study
(BFS), its development capital cost is forecast at ZAR284m (approximately A$40
million), with the majority of 2011-2012 expenditure focused on the development
and infrastructure of the underground mine. In line with plans to move from
beneficiating production from Ferreira to beneficiating production from
Penumbra at the company’s Delta Processing Operations, and to use the Anthra
Rail Siding for transport to the Richards Bay coal terminal in the same manner,
existing offtake agreements will also be sustained across project transition.
De Wittekrans Complex - Home to total proven and probable saleable
reserves of 43.77 million tonnes and JORC compliant resources of 167 million
tonnes, the Wittekrans coal project will become the company’s “largest new
mine development in the coming years,” says Continental, noting plans for initial
production of 3.6 million tonnes per annum ROM from conventional opencast and
underground mining operations at Wittekrans over a 30-year mine life. Within the
Complex there are four projects— De Wittekrans, Knapdaar, Vaalbank and Project
X—and reports state that project development is on track to begin in the second
half of 2012 with full production from the proposed initial open cast operation
expected in 2013. Approximately 27 per cent of the total saleable reserves are
to be mined from the proposed open cast operation, the company says, with 73
per cent to be mined from proposed underground mine development.

56 MINING & METALS Continental Coal Limited
2012 production at Penumbra
It goes without saying that Continental’s successes
at Vlakvarkfontein and Ferreira are well
known, as is the breakneck speed at which both
coal projects saw development through to fruition.
Aided in part by the company’s smart moves
to secure projects in existing coal-producing
provinces surrounded by the bulk commodity infrastructure
necessary to make-or-break a mine,
and in equal measure by the team’s steadfast
motivation to bring its projects along, the past
couple of years have delivered a litany of triumphs
from both operations.
Vlakvarkfontein’s 17 million tonnes of resource
and 10-plus year mine life is backed by
three offtake agreements—confirming somewhat
unsurprisingly that parties are keen to get
their hands on the 100,000 tonnes of thermal
coal that Continental targets per monthly output.
And at just two kilometres from Continental’s
150,000tpm Delta Processing Operations,
adjacent to the 1.2 million tonne per annum
Anthra railway siding which provides swift and
sizable passage direct to the Richards Bay coal
terminal, Ferreira’s infrastructure setup is about
as good as it gets.

FEBRUARY 2012 The International Resource Journal
57
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Both operating mines suggest that Continental’s
plans to take Penumbra to first coal
in 2012, leading to 750,000 tonnes of run of
mine production per year, are in the right hands.
In fact, rumour has it that the team was a little
ahead of schedule in January, having sent in the
underground contractors and started work on
the concrete ramp down into the boxcut.
Drawing similarities between up-and-running
Ferreira and incoming Penumbra is easily done and
with good reason. As production mounts from Penumbra’s
underground operations it will gradually
replace that of Ferreira, utilising both Continental’s
Delta Processing Operations and the Anthra railway
siding just like its predecessor, and also assuming
the company’s existing offtake agreements in what
looks to be a smooth transition, sustaining plans
to grow the overall production profile of the company
portfolio. In addition, the commencement of
production at Wittekrans will, by all accounts, prove
pivotal as Continental continues towards the 10
million-plus tonnes per annum ROM 2015 goal.
Stepping up with Wittekrans in 2013
Slated to deliver another 3.6 million tonnes of production
and housing a current resource capable of

58 MINING & METALS Continental Coal Limited
A Bureau Veritas Group Company
Inspectorate through its various laboratories offers
a range of analytical testing services to the
Southern African mining industry.
Through our Rustenburg, Johannesburg and
Middelburg laboratories we cover full geochemical
exploration testing including PGM, Base Metals;
Metals & Ores and Coal as well as the analysis of
water and environmental samples.
Inspectorate SA, backed by Inspectorate Global
offers a comprehensive pit to port service including
on-site mine laboratories scope to the mine’s
particular requirements.
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celia.barbosa@inspml.co.za | www.inspml.co.za
sustaining a 30-plus year mine life, Wittekrans will
be the next mine to come online after Penumbra.
In line with company aims to hit full production
from Wittekrans’ proposed initial open cast operation
in 2013, optimisation works are underway
ahead of plans for debt financing to fund project
development. And given that the company aims
to develop one new mine every twelve months,
there’s every reason to suppose that, permits
depending, construction at Wittekrans could be
underway by the second half of 2012.
Penumbra’s debt financing agreement may
offer some indication of the kind of arrangement
Continental envisages for Wittekrans as well. Both
Barclays and ABSA have agreed to stump up an
aggregate debt facility of US$65 million for Penumbra’s
development, and given that the project
remains on track (if not a little ahead) it is quite
possible that the reflection it has on Continental
will prove attractive to would-be Wittekrans debt
financing participants. Equally so, according to
the September 2011 completed BFS, Wittekrans
looks set for export coal operating costs of around
US$55 per tonne; a comfortable operating margin
for what remains on course to be a large, welllinked,
well-mastered near-term coal play.

FEBRUARY 2012 The International Resource Journal
59
Time to wake up the markets
While today Continental’s cashflow, project and
annual output all remain on the up-and-up, a
glance back to five years ago delivers less favourable
market memories of when coal was far from
a standout investment option in terms of commodities.
Continental’s efforts in scouting out advantageously
priced opportunities in prime South
African producing coal ground back in 2008—prior
to export coal prices rising significantly—have
and continue to pay off, and the company’s move
to secure key assets ahead of the crowd is not
one to forget now that its portfolio and production
profile continues to grow.
The 2015 plus-10 million tonnes per annum
ROM coal production target edges ever closer
and it’s likely that by the time Penumbra and
Wittekrans take current output over six million
tonnes per year, the markets will have fully
caught on. Production at Penumbra in 2012 is on
track. Plans for Wittekrans are as well, backed
by past operational and financing successes. For
any coal investor keen to gain exposure to the full
ambit of exploration-through-to-output, it goes
without saying that Continental obviously a stock
worth grabbing.
www.conticoal.com

60 MINING & METALS U3O8 Corp.
U3O8 Corp.
South America’s rapid
uranium, phosphate &
vanadium growth story
060

FEBRUARY 2012 The International Resource Journal
61
MINING & METALS
At the Berlin project, Colombia, an aerial cable system transports equipment & employees,
& also minimises environmental footprint. Photography c/o U3O8 Corp.

62 MINING & METALS U3O8 Corp.
Geologists onsite at the Berlin project, Colombia. Photography c/o U3O8 Corp.

South American-focused uranium,
phosphate and vanadium explorer U3O8
Corp. (TSX-V: UWE) has achieved
remarkable exploration success. Just 18
months after adding two projects to its
exploration portfolio, U3O8 Corp. now
has three advanced uranium plays in
Colombia, Argentina and Guyana. The
company’s resource has rocketed from seven
million pounds of uranium in early 2011
to 40 million pounds in global uranium
resources—and this resource is expected to
grow to 50 million pounds in Q1, 2012.
The fastest-growing resource is in its Berlin
project in Colombia’s Caldas Province, where
on January 18 the team posted its maiden
NI 43-101 resource (Indicated: 1.5 million
pounds uranium at 0.11 per cent) (Inferred:
19.9 million pounds uranium at 0.11 per
cent) defined in only three kilometres of a
10.5 kilometre mineralized trend.

64 MINING & METALS U3O8 Corp.
In Colombia: Building a drilling platform. Photography c/o U3O8 Corp.
Establishing the first resource at Berlin was
an important step forward, but when combined
with the outstanding metallurgical recoveries
recently announced from the project, U3O8
Corp. has demonstrated that it has a companymaker
in its hands. Metallurgical recoveries
were 97 per cent for both uranium and phosphate
and 79 per cent for vanadium. Recoveries
from rare earths such as yttrium and neodymium
are an impressive 96 per cent and 82
per cent respectively.
“We acquired Berlin in May 2010 and soon
recognized its potential as a very big deposit. We
were drilling within four months of the acquisition
and are very pleased to have advanced to
a maiden NI 43-101 uranium resource of 21
million pounds on just three kilometres of a
10.5 kilometre long mineralised trend. The Berlin
resource also includes 8.7 million tonnes of
phosphate, and almost 100 million pounds of
vanadium plus rare earths and other metals.
Historic drilling and our own trenching suggest

FEBRUARY 2012 The International Resource Journal
65
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Berlin could contain 70-80 million pounds of uranium
over the entire mineralized trend,” says Dr.
Richard Spencer, President and Chief Executive
of U3O8 Corp.
“With this first NI 43-101 resource and our
initial metallurgy, we’re in a good position to
move to a scoping study on Berlin in 2012. We’ll
also continue close-spaced drilling with the aim
of growing the resource to 40-50 million pounds
of uranium in 2012, while exploring the rest of
the 10.5 kilometre mineralized trend at Berlin.”
While the company priority is Berlin, given
its diverse mix of high-value commodities and
a clear path to considerable size potential,
U3O8 Corp. is also actively exploring two other
advanced projects: The Laguna Salada Project
in Chubut Province, Argentina—which contains
an NI 43-101 uranium-vanadium resource and
is ready for a scoping study this year—and the
Kurupung Project in Guyana where the company
has a growing NI 43-101 uranium resource.
A game-changing Colombian flagship
As multinationals compete for stakes in prime
uranium ground on the African continent and
projects from Namibia to Niger take centre stage,

66 MINING & METALS U3O8 Corp.
U3O8 Corp. recognised that South America
posed huge technical and market value potential
for company-making projects.
“Today, Africa produces 17 per cent of the
world’s uranium. From a technical point of view,
one looks at the contiguous geology from Africa
to South America—continents once joined together—and
this suggests that South America could
have similar prospectivity,” Spencer explains.
“We feel that exploration in South America
is akin to where Africa was 10-15 years ago and
offers a new frontier with reasonably priced opportunities
for a company of our size. We’ve been
able to acquire and advance some excellent projects,
and the Berlin project in Colombia and the
Laguna Salada project in Argentina result from
that acquisition opportunity.”
“Had Berlin been in Namibia, we
would have faced stiff competition
in acquiring the project.”
At the Berlin project, Colombia, there is a greenhouse to p
flora ahead of drill pad restoration. Photography c/o U3O
French government in 1981, whereupon Minatome
exited Colombia.
“We picked up the Berlin project when we
U3O8 Corp.’s maiden NI 43-101 resource at
Berlin converts part of a historic resource of 38
million pounds at 0.13 per cent uranium estimated
in the early 1980s by French group Minatome.
Minatome did initial exploration which confirmed
interesting grades in uranium and vanadium
prior to the company being nationalised by the
acquired all of Mega Uranium’s South American
uranium assets in May 2010. This was just at the
time that access to the property was becoming
easier, thanks to Mega’s efforts and foresight,
so we were able to get onto the ground and start
exploration immediately after the acquisition,”
Spencer says.

FEBRUARY 2012 The International Resource Journal
67
from the first step is washed with hydrochloric
acid—similar to swimming pool acid—and extracts
97 per cent of the uranium, 97 per cent of the
phosphate and 79 per cent of the vanadium, as
well as achieving good recoveries of a range of
other elements.
ropagate indigenous
8 Corp.”
“Extraction of the uranium,
vanadium and phosphate is very
efficient,” Spencer says.
“These three commodities make
up about two thirds of the in situ
value of the mineralised rock.
Also, the rare earths are important
contributors of the overall value
of the rock; we’re excited to have
recovered 96 per cent yttrium and
82 per cent neodymium.”
Convinced of Berlin’s extensive, diverse mineral
potential, U3O8 Corp. set about doing initial
metallurgical tests early on. This work culminated
in a two-step process using a proven ferric leach
method and a weak acid wash that showed high
recoveries for the basket of commodities contained
in the mineralised rock at the project.
In step one, a ferric leach tackles the calcite
while also recovering a portion of the metals. In
step two, the resulting low-carbonate residue
U3O8 Corp.’s results are significant having
established a viable approach using proven
technology to recover the principle commodities
(uranium, vanadium and phosphate) as well as
the other metals as potential by-products.
“Conceptually, from the metallurgical results
so far it looks as though the other metals may
more-or-less pay for the recovery of the uranium.
That could make Berlin a potentially low-cost
uranium project,” Spencer says.

68 MINING & METALS U3O8 Corp.
“And from an environmental point of view,
the fact that we’re getting these remarkable
extractions is fundamental. This means that we
have the potential to generate a clean waste
product that has very low metal content.”
Additional work is underway to refine the
parameters used in the ferric leach tests to optimize
the efficiency of the process and further
reduce reagent costs. Beneficiation tests are also
being conducted, including flotation trials and
the use of organic acid in which vinegar is used
in an initial leach.
January 18 – Berlin’s maiden NI 43-101
From 82 bore holes for 18,685 metres
drilled on the southern three kilometres,
the uranium resource at a cut-off grade of
0.04 per cent U3O8 is:
—Indicated Resource: 1.5 million pounds
(“mlb”) U3O8 (0.6 million tonnes at a
grade of 0.11 per cent U3O8); and
—Inferred Resource: 19.9mlb U3O8 (8.1
million tonnes at a grade of 0.11 per
cent U3O8).
Contained in the same mineralized layer
as the uranium resource, are resources of:
—Phosphate – Inferred Resource: 0.8
million tonnes (8.7 million tonnes at a
grade of 9.3 per cent P2O5); and
—Vanadium – Inferred Resource: 97mlb
V2O5 (8.7 million tonnes at a grade of
0.50 per cent V2O5).
U3O8 Corp. is well on its way to demonstrating
that the Berlin deposit could be of significant
size, and its initial metallurgical tests show excellent
recoveries that could make it a high-value
multi-commodity project. Building on these positive
results, 2012 is set to be another strong
growth year at Berlin. One drill rig will focus on
expanding the current resource towards the company’s
target of 40-50 million of uranium at the
project and a second rig will do exploration drilling
over the 7.5 kilometres north of the resource
area to demonstrate the potential of the entire
property. A scoping study will also commence to
evaluate its economics.
U3O8 Corp. has taken a key portion of the
Berlin project a long way fast and plans for its
second scoping-ready project, Laguna Salada,
look equally promising.
Scoping out Argentina
U3O8 Corp.’s Laguna Salada project contains
an initial NI 43-101 inferred resource of 3.8 million
pounds of uranium and 6.3 million pounds
of uranium in the Indicated category, as well
as potential co-product, vanadium. The project
could not be simpler; the mineralisation lies
within three metres of surface in soft unconsolidated
gravel, and mining would involve no blasting
or crushing.

FEBRUARY 2012 The International Resource Journal
69
Trenching works at the Laguna Salada project, Argentina. Photography c/o U3O8 Corp.
Spencer says that by simply scooping up the
pebbly gravel and putting it through an inexpensive
sieve to screen out the pebbles, U3O8 Corp.
has been able to concentrate the uranium-vanadium
rich fine sand to grades of 620-670 parts
per million of uranium, which is approaching the
grades that are treated in similar deposits elsewhere
in the world.
On September 21, 2011 just 15 months
after acquiring the property, the company announced
alkaline leach results on the uranium
and vanadium-bearing gravels that included 94
per cent uranium and 51 per cent vanadium
recovery with the best results achieved in only
four hours of leaching.
Put simply, Laguna Salada could be an earth
moving operation, making for a potentially lowcost
mine. Road-building equipment could be
used to mine the near-surface mineralisation that
sits on flat top mesas that stand 10 metres proud
of the surrounding plain. There would be negligible
strip ratio. The gravel would be sieved to remove
the pebbles and concentrate the mineralisation,
and the uranium would be extracted using alkaline
leach. Moreover, the property shows potential
for further growth in the current resource.

70 MINING & METALS U3O8 Corp.
Trenching in Argentina. Photography c/o U3O8 Corp.”

FEBRUARY 2012 The International Resource Journal
71
“We have a uranium resource of about 10
million pounds reported last May and since then
we’ve been exploring around the extensions of
the resource area. We believe we could double
the resource in the short-term,” Spencer says.
“We’ve been exploring using a backhoe and
trenching because the material is so soft that
you can’t go deeper without the sides of the
trenches collapsing. We’re acquiring a specialised
drill designed for soft unconsolidated gravel
and this should be onsite in the first quarter of
2012. This vibrosonic drill will enable us to look
at the continuity of grades in uranium-vanadium
deeper down, and possibly expand the resource
at depth as well as laterally in adjacent areas.”
U3O8 Corp. plans to increase the resource
at Laguna Salada to 20-25 million pounds of
uranium this year. Metallurgical test results have
revealed the project’s amenability to low-cost,
simple mining with good recoveries. And with an
NI 43-101 resource defined, the project is ready
to progress into a scoping study in 2012.
Into Guyana & 2012 goals
“In an ideal world, we’d drive hard on all three
of our projects in Colombia, Argentina and
Guyana. While the recent announcement of a
$10 million bought deal will add to our treasury,
we have to prioritise and the clear focus is on
the high-value deposit developing on the Berlin
Project,” Spencer explains.
“The simplicity and low-cost potential of the
Laguna Salada Project ranks this project second.
As the Kurupung Project in Guyana is emerging
into a large uranium district, we’ve decided to focus
on exploration drilling with the aim of setting
up for aggressive resource growth in 2013.”
U3O8 Corp.’s Kurupung Project shows significant
promise. The exploration team has
identified multiple uranium-bearing structures in
the Kurupung Batholith, and defined NI 43-101
uranium resources of 1.3 million pounds Inferred
and 5.8 million pounds Indicated on the first two
of 10 delineated to date.
Comparable-type uranium deposits such as
Paladin Energy’s Valhalla in Australia and Michellin
in north-eastern Canada underscore the
fact that these tend to be very large deposits. In
fact, these albitite-hosted deposits tend to be in
the neighbourhood of 60-130 million pounds of
uranium, and U3O8 Corp. believes that the Kurupung
has similar size potential.
“We’re busy with an update on the Kurupung
resource on another two structures, [for]
which estimates are due out by early March.
This would see compliant resources grow to
around 20 million pounds of uranium based on
only four of the 10 structures identified to date.

72 MINING & METALS U3O8 Corp.
Cutting drill core samples, Guyana. Photography c/o U3O8 Corp.
The airstrip next to the base camp,
All of the structures are still open along trend
and at depth, leaving considerable room for
resource expansion,” Spencer says.
“In 2012, we’ll drive forward on exploration
drilling in the Kurupung with the aim of finding
more mineralised structures to add to our current
inventory. Then we’ll move back to aggressive
resource drilling in 2013.”
The way forward is clear for U3O8 Corp.
in 2012: Continue drilling to grow the current
resource at Berlin and drill into the northern
part of the property to show the potential of
the entire 10.5 kilometre trend and undertake
a scoping study. For Laguna Salada, a similar
growth path focuses on resource expansion and
completion of a scoping study. In Guyana, further
exploration is planned ahead of resource
expansion in 2013. This focused strategy aims
to see U3O8 Corp. reach a targeted 70-80 million
of uranium resources by the end of 2012.

FEBRUARY 2012 The International Resource Journal
73
Guyana. Photography c/o U3O8 Corp.
Given the milestones that the company’s aggressive
approach has achieved in the past 18
months, each project promises to be a compelling
story in its own right, led by Berlin’s remarkable
development to date.
With a portfolio nearing 50 million pounds of
uranium resources by March, not to mention resources
in phosphate, vanadium, rare earths and
other commodities, this company is establishing a
track record of driving rapid resource expansion.
It’s delivering on logical milestones on three strong
projects while setting up for another year of rapid
growth in 2012. U3O8 Corp. is fast breaking away
from the pack of junior explorers into a handful of
mid-tier uranium companies as the markets move
to reflect its true value.
www.u3o8corp.com

74 MINING & METALS Trendix S.A.
Trendix S
The mineral hun

FEBRUARY 2012 The International Resource Journal
75
MINING & METALS
.A.
ter
074

76 MINING & METALS Trendix S.A.
Argentinean miner Trendix S.A is standing out in early-stage South American
exploration as it continues to discover a range of multi-commodity mineral
deposits across its large native landholding.
As a South American early-stage explorer, born and bred, the story of Trendix S.A.
(“Trendix”) began during the Argentinean mining boom of the early 2000s. Today the
company deems itself to be a “first-step” group with a track record in detecting areas
with positive elements, including attractive geology and geochemistry suggesting the
existence of mineral deposits.
“At the time of our formation we had discovered a great project called Cordon
de Esquel which contained more than four million ounces of gold,” recalls CEO and
President Tomás Heredia.

FEBRUARY 2012 The International Resource Journal
77

78 MINING & METALS Trendix S.A.

FEBRUARY 2012 The International Resource Journal
79
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“Since that time we have been dedicated to
basic exploration.”
The founding Trendix partners have almost
30 years of South American exploration experience
between them; a wealth of knowledge
which has enabled the team to acquire a prospective
portfolio of projects totalling 200,000
hectares across Argentina.
In addition to the core company speciality, metals,
Trendix has kept its portfolio diverse across its
landholding by including projects focused on other
commodities including coal and perlite.
“Following a preliminary analysis of the available
information at a site, we undertake all the
initial basic research tasks to define [whether it
houses] mining potential,” explains Heredia.
“From this point we can establish the existence
of a mining prospect and it then becomes
our task to find a partner with greater technical
and financial capabilities to advance the next
stages of exploration.”
Two of company’s current key projects —Cerro
Choique and La Luz-Ivan Trend—represent the success
that Trendix has had in applying this model;
both are under exploration by foreign companies
with the capabilities Heredia describes.
“We have other projects [for] which we also
have high expectations,” he adds.

80 MINING & METALS Trendix S.A.

FEBRUARY 2012 The International Resource Journal
81
“Our geologist team has discovered the
Valcheta project in the Rio Negro province,
which we expect to contain significant gold and
copper resources.
“Perhaps our most prominent project is the Ñirihuau
Basin project with an estimated potential of at
least 20 million tonnes of sub-bituminous coal.”
After the Rio Turbio mine in the province of
Santa Cruz, the Ñirihuau Basin project is the
second largest coal discovery in Argentina to date.
Furthermore, unlike Rio Turbio, the coal contained
at this project also has features that make
it suitable for consideration as coking coal.
Given the successful transition of Cerro
Choique and La Luz-Ivan Trend into the hands
of next-stage explorers, the high copper-gold
expectations and Valcheta and the landmark
potential of the Ñirihuau Basin project, it is
clear that Trendix is more than a metals-focused
native explorer; it is the first port of call for
South American-focused groups looking for assets
across diverse classes with truly outstanding
project development potential.
Thwarting financial fragility
Trendix has successfully dealt with the global
economic crisis in a professional and profitable
manner, and aggressive, ongoing ground activities
across its tenements suggest that plans are
in place to advance exploration efforts regardless
of ongoing market volatility.
“The international crisis of 2007/2008 sent
foreign investors away from Argentina, but our
company was able to continue its activity,” confirms
Heredia.
“Unlike other companies the crisis found us
without debt, so it was possible for us to maintain
and even strengthen our mining properties,
as well as enabling us to continue promoting our
projects to potential investors.”
Even during the depths of the crisis Trendix continued
to sign contracts with international players.
“In 2008 we signed an exploration contract
with purchase option, with the Korean oil company
Golden Oil Corporation, which catered for the
first exploration works at the La Luz-Ivan Trend
project, located in the central Rio Negro province,”
says Heredia.
“This is a project where important contents of
silver, gold and some base metals such as copper,
lead and zinc were found, as well as indium.”
In addition to housing a multitude of mineralised
discoveries to date, the 24,000 hectare
La Luz-Ivan Trend project could potentially
produce almost 200,000 ounces of gold equivalent,
Heredia adds.
“The results of the first exploration campaign—
which included tasks such as geochemical and

82 MINING & METALS Trendix S.A.
geophysical studies, drilling, trenching and detailed
geology—have been very encouraging, which
is why investment preparations have been made
for the next phase of works,” he explains.
In mid-2011, the company signed an exploration
contract with another foreign group, Malbex
Resources of Canada.
“This project was initially discovered and
explored by Trendix, and we were able to confirm
the existence of a low sulfidation epithermal gold
deposit of a ‘hot spring’ type,” Heredia says.
“We are confident that the next works to be
carried out by our partner will be able to define
a potential of at least 500,000 ounces of gold
at this site.
“Despite unfavourable external and internal
conditions, Argentina remains a country with
enormous potential where you can still do good
business—especially when it comes to mining,”
he adds.
Argentinean flair
Golden Oil and Malbex aren’t the only foreign explorers
to partner with Trendix. The company has
worked closely with groups from the U.S., Australia
and Canada, and has built up a reputation as
a reliable Argentinean partner in the process.
“Our business is closely linked to foreign
exploration companies and we work on two main
lines of action. First, we offer to investment companies
our own projects in order to obtain the
necessary funds to continue the geological mining
research,” explains Heredia.
“The second variant, also routinely used, is
the promotion of third party projects on which we
can guarantee property titles and at the same
time ensure the existence of favourable geological
conditions, to justify investment in exploration
tasks forward in time.
But the mining business is not easy, Heredia
reminds. Globally, it requires continuous learning
and collaboration between first-stage explorers
like Trendix, and those that rank highly in terms
of technical and commercial expertise.
“Our main business is based on the supply
of precious metals projects and we are confident
that metals prices will continue their slow but
steady increase in the coming years,” he says.
“We are among those who still believe that
gold is definitely the best shelter in times of crisis.”
And with good reason. Argentina is South
America’s second biggest gold producer after
Peru, and the thousands of ounces of yellow
metal potential housed within Trendix’ tenements
are likely to be attractive to a host of
mine developers.
The company’s strategic approach to partnering
with such firms—and to securing much-needed

FEBRUARY 2012 The International Resource Journal
83
investment—has already served it well. Equally,
the non-metallic discoveries made to date further
suggest that as an explorer seeking to deliver key
early-stage projects to the right groups, the company
has not only insulated itself from financial
pitfalls; it has continually proved how capable it is
as a multi-project, multi-commodity hunter, and
how ideal a partner it can be.
Heredia says that Trendix has plenty of plans
in the pipeline–not least taking Valcheta to the
next stage of exploration by proving its economic
viability as a future project, establishing export
contracts with a view to becoming a leading
producer-exporter of perlite and setting up a
carbon project. Put simply, if you’re looking at
early stage exploration in Argentina, Trendix is a
well-respected company to consider, and as the
country emerges as a choice mining destination,
this company can look forward to more projects,
partners and noteworthy discoveries.
www.trendix.com.ar

84 MINING & METALS The Problem with Australia’s Skill Development Efforts
The Problem with Austra
Skill Development Effort
Jody Elliott, director of The Resource
Channel, shares home truths and practical
steps in combating Australia’s much-discussed
(yet under-addressed) workforce shortages in
construction, resources and beyond.

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85
MINING & METALS
lia’s
s
084

86 MINING & METALS The Problem with Australia’s Skill Development Efforts

FEBRUARY 2012 The International Resource Journal
87
If you haven’t yet heard, Australia needs
skilled workers.
The project pipeline is staggering with 75 advanced
projects either underway or due to start in
the next two years and another 286 projects currently
undergoing some degree of pre-feasibility assessment.
All up, the current decade-long pipeline
is generating more than 61,000 new operational
jobs in mining, the same in construction and more
than 3,000 new operational jobs in oil and gas.
And this doesn’t even begin to consider the replacement
demand with 10 per cent of employees
expected to leave the industry each year, including
a high percentage through retirements.
Australia expects construction jobs on new
projects to peak at 45,000 in 2012 and 2013.
According to the government’s National Skills
Taskforce Report of 2010, the resource sector
could be 36,000 tradespeople short by 2015.
All of which begs the question, what is Australia
doing about addressing the need If the
100 or so media articles which appear each
month citing ‘the skills shortage’ are to be believed,
the answer is ‘lots’. The issue, however, is
how much of this work is being translated to the
average Australian seeking an opportunity in the
launched a A$558 million fund which will provide
130,000 Australians with the opportunity to
learn new skills for jobs in sectors suffering from
critical skill shortages. Whilst the fund will cover
skill development for a number of industry sectors,
a significant proportion will be directed to
civil and general construction.
Industry is now being encouraged to make
bids to their respective Industry Skills Councils
to secure matched funding to train its current or
prospective workforce.
The Gillard Government is also providing a
further $75 million in 2011-12 budget through
the Critical Skills Investment Fund (CSIF) which
forms a part National Workforce Development
Fund. The CSIF will increase the workforce capacity
and productivity of critical industries, with the
first round being targeted at the resources and
renewable energy sectors.
One can hardly argue that the government is
not doing its bit, most notably supported by Western
Australia, South Australia and Queensland
state governments, all similarly implementing
programs and initiatives aimed to skill, skill, skill.
The issue however, is that projects require
two distinct workforces:
‘land of promise’.
The Gillard government has recently
• The construction workforce; mainly comprised
of those who work for large con-

88 MINING & METALS The Problem with Australia’s Skill Development Efforts
struction companies and their subcontractors;
and
• The operational workforce; mainly comprised
of individuals with an employment relationship
with a resources company, or with a specialist
contractor engaged by the company.
Data from the Australian Bureau of Agriculture
and Resource Economics (ABARE) indicates
that total construction employment for advanced
and less advanced major projects may be up to
100,000 over the decade.
The 100,000 required for construction won’t
sit directly with major industry employers—it will
be the domain of labour hire/contracting companies
who will be working on both mining and oil
and gas projects. And herein lies the problem.
The current structure of construction projects
means that suppliers in this space are
unable to ‘carry’ additional employee numbers
as trainees as they work on a project-to-project
schedule. Because construction contractors
can’t know where the next contract will be in
advance, their ability to provide opportunities
for trainee positions is severely limited. Couple
this with the requirement from companies to
tender on a competitive pricing model and
trainees become a ‘nice to have’. In fact, many
skilled workers are hired on a project-to-project

FEBRUARY 2012 The International Resource Journal
89
basis, which similarly impacts any ability for
construction contractors to provide ongoing
skill development for even these workers.
Where mining and oil and gas operations are
concerned, the issue won’t impact so severely.
They have the luxury of time to determine how
their workforce plans will be accommodated. This
might be a combination of skilled migration, retention
programs, sourcing skilled workers from
other industries and offering increased trainee
opportunities, and specifically reaping the benefits
of government programs.
Where mining and gas operators will feel the
pinch however is during the construction phase.
Already Australia is seeing delays in the construction
and commissioning of some its largest projects
and only recently, Leighton Holdings chief
executive David Stewart said that the company
won’t bid for work on the massive Gorgon gas
project in Western Australia until it can secure
workers amid labour shortages.
Mr Stewart went on to say that whilst there
had been delays on the liquefied natural gas
(LNG) project, the federal government’s migration
and industrial policies were making life difficult
for contractors in resource hotspots. “If someone
wants 2,000 people in three months at some
location, we can’t commit to that because I don’t
know where I’m going to get them from,” he said.
So, what more could industry be doing to ensure
the skill development funding and programs
provided by government are resulting in tangible
employment opportunities for Australians in the
first instance
Firstly, every company should be held accountable
to factor in 10 per cent of their workforce as
trainees, graduates and apprentices. Companies
can determine how they wish to structure their
programs and around what skills, based on their
needs. However, the target sets the expectation
that all companies are committed to bolstering the
overall intake of new skills to industry. Companies
should be encouraged to report training numbers.
Secondly, operators should factor in the cost
and additional manning required for their labour
hire/construction suppliers to provide entry level
opportunities, apprenticeships, graduate programs
and training on-the-job. Key Performance
Indicators (KPIs) and specific requirements
should be documented in the initial tender documents
and later, in the Human Resources Management
Plan (HRMP) where the supplier is held
accountable for deliverables.
Again, the number of trainees should be 10
per cent of their manning numbers (it won’t solve
the overall demand, but is achievable for those
companies concerned).
Thirdly, labour hire companies and employers

90 MINING & METALS The Problem with Australia’s Skill Development Efforts
Photo credit: andesign101 / Shutterstock.com
must advertise a minimum 10 per cent of their
roles as ‘no industry experience required’. This
obviously is dependent on the role, but anecdotal
evidence suggests that there are already thousands
of people willing, able and motivated to enter
the industry and who are trade or degree qualified
or who have obtained relevant tickets/licenses,
but who cannot get an entry level opportunity due
to having no experience. By simply removing the
requirement to have industry specific experience
in order to be considered for roles such as rigging,
scaffolding, equipment operators, and a number
of trades (such as carpenters, painters, steelfixers)
and professional roles (such as HR, IT, Finance and
some engineering), the industry will automatically,
and very quickly and effectively create a strong and
new pipeline of people. It is my guesstimate that
industry would achieve a 30 per cent intake of new
recruits by this way alone.
Unless mining and oil and gas operators support
those organisations providing the construction
skills for their projects, Australia runs a very
real risk of many experiencing significant delays
at best—and not proceeding at worst.
The focus on increased training programs
and funding is diminished to mere rhetoric unless
industry employers increase and make known
entry opportunities for those without direct industry

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91
experience, and this applies to all job types and disciplines.
The angst is felt just as keenly in engineering
and professional groups as those seeking to be
a labourer or truck driver on a mine site.
Critically, operators must address the issues
relating to the construction workforce. You can’t
demand technical expertise, cost efficiencies and
project delivery without supporting the development
of skills for this sector. The current structure
of the tender and delivery process offers no
feasible scope for construction contractors to
carry inexperienced or trainees.
All the training programs in the world won’t
resource Australia’s pipeline if tangible trainee
or entry level opportunities to gain experience
are not offered.
About the author
Jody Elliott is the director of awardwinning
employment information website
for the Australian resource sector, The
Resource Channel. Through an alliance
formed with IRJ, The Resource Channel
has been a contributor since August, 2010,
regularly supplying articles relating to the
Australian resource sector.
Elliott has fifteen years in senior and
management roles across human
resources, career and organisational
development, and recruitment. She
has held positions at WMC Resources,
CSR, Australian Rail Track Corporation,
Santos and more recently three years as
Recruitment Manager with BHP Billiton.
Please forward your feedback or
enquiries to
info@theresourcechannel.com.au.

92 MINING & METALS Intec Ltd.
092
Demonstra
Going interna

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93
MINING & METALS
ted & in demand
tional with Intec Ltd.

94 MINING & METALS Intec Ltd.

FEBRUARY 2012 The International Resource Journal
95
Chloride hydrometallurgical technology innovator Intec Ltd. has
applied its patented process to projects from spent pickle liquor
recycling and the processing of copper-gold concentrates to rare
earth metals—from Japan to the U.S. to the Middle East—and
the results surpass expectation.

96 MINING & METALS Intec Ltd.

FEBRUARY 2012 The International Resource Journal
97
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From rare eaRTh metals to gold, copper, zinc,
lead, cobalt or nickel, metals market-watchers
forecast significant sustaining growth leading to
2020 and beyond, and ravenous consumers will
inevitably rely on cutting edge minerals processing
and industrial wastes recycling if their appetites
are to be sated. All manner of challenges
are thrown up by the mineral deposits exploited
today; the deeper mined, more complex metallurgy
and generally more costly ore many miners
are grappling with as easy-cash mineable assets
diminish. And while today’s conventional processing
and waste-handling methods meet the needs
of the majority, it goes without saying that where
economic and environmental improvements can
be made, we’re all keen to hear more.
This globally-pressing force majeure is one
that Sydney-founded chloride hydrometallurgy
specialist Intec Ltd. (ASX: INL) (“Intec”) knows
well, and applying, demonstrating and improving
its patented technology has propelled the team
onto the world stage with good reason.
Since speaking with IRJ in March, 2011,
Intec been busy tackling metallurgical issues in
recycling spent pickle liquor (SPL) for the galvanizing
industry, rare earth metals recycling,

98 MINING & METALS Intec Ltd.
successfully processing electric-arc furnace
(“EAF”) dust, arsenopyrite gold recovery trials in
the U.S. state of Colorado and even a new joint
venture minerals processing agreement in the
Middle East. All considered, across these varied
projects it appears that each time Intec gets
involved, new cost and impact benefits abound.
“We’re small, highly specialised and we’re a
key player in our field. We’re very happy to present
ourselves as such on a world scale,” chief executive
and managing director Philip Wood says.
“The world demand for metals
generally will only continue to
increase. The means of processing
those metals will be all-important
and people have to be open to new
processing, which is where Intec
comes in from both an economic
and environmental point of view.”
If mounting appreciation for Intec’s work
offers any indication, plenty of major international
groups are already carefully eyeing the
company’s achievements.
Into Rare Earth Metals
While Intec continues to apply its technology and
garner success in founding areas of expertise such
as zinc, copper-gold concentrates, refractory gold
projects and the needs of the galvanizing industries
to name a few, Wood says that the company’s
moves into rare earth metals are perhaps its most
prominent of late. The plight of rare earths—their
metallurgical complexity and routine accompaniment
by radioactive elements such as thorium and
uranium—is clearly defined, but Intec’s technology
continues to turn up highly attractive options for
tackling processing and waste handling woes, welltimed
as demand continues to rise.

Project highlights 2011
“We have found that, essentially, our technology
readily gets the rare earth metals dissolved
into solution—a major achievement in itself—and
then the question is how to recover them as
purely as possible as products in order to get the
premium price for them” Wood explains.
“Currently, we’re focusing on industrial
waste that contains rare earth metals rather than
the original mineral ore. We’ve been involved
in Japan; a nation with abundant uses for rare
earth metals which wants to develop alternative
In late-2010 through to early-2011, Intec
implemented two successful demonstration
trials for its SPL recycling technology.
These efforts satisfied all key project
criteria, producing high-quality zinc
metal, hydrochloric acid, iron and calcium
products for sales evaluation.
—At the plant in Burnie, Tasmania, Intec
successfully developed, implemented
and completed the first of two phases of a
project to utilise large stockpiles of EAF
dust. By July, 2011, Intec exported the
full 8,000 tonne stockpile of EAF dust in
40,000 tonnes of a specifically blended zinc
concentrate product.
—In September 2011, the company
announced in its quarterly report the
penning of its 50/50 Middle East joint
venture through local subsidiary Intec
International Projects Pty Ltd. This
agreement covers full test work and
engineering to stage one feasibility study
for the partner’s project.
—Between 2010-2011, Intec signed a
collaboration agreement with Energy Booster
of Organisations in Europe (“EBOO”) and
with this new partner, advanced a new
industrial waste recycling opportunity for
the Intec Process in rare earth metals. This
has lead to re-examining the retrofit of Intec’s
existing infrastructure at Burnie as part of the
Intec R.E.cycling project.

100 MINING & METALS Intec Ltd.
Intec: A history of technological
development
Intec’s processing technology dates
back to the early 1990’s, when Wood
left international investment banking.
He worked in capital raising for Intec
technology with a consortium of mining
companies and joined the company board
before later becoming managing director
and chief executive.
The Intec Process is based on chloride
hydrometallurgy, and involves combining
sodium chloride with other halides such as
bromide and iodide. It incorporates a mixed
halides leach which dissolves base and
precious metals into a solution before these
saleable metals are separately recovered.
Original applications of the Intec Process
focused on mineral processing in coppergold
concentrates, refractory gold
concentrates and zinc and lead feedstocks.
Intec’s efforts in industrial wastes recycling
followed, as has its wider works in spent
pickle liquor in the galvanizing industry
and most recently rare earth metals. A focus
on zero waste and economical handling
of complex metallurgy reigns supreme
throughout the geographical locations,
metals and minerals targeted to date.
In addition to its core projects, the team
maintains a focus on its long-term project
pipeline and is open to future options for
technological application.
sources of supply to market dominant China.
Also, Japan wants to recycle rare earth metals
from its industrial wastes—quite a lot of them
contain these payable metals.”
Working with Australia’s CSIRO and Japanese
parties, Intec’s aptly-named R.E.cycling
Project has run successful test work which
shows that its technology can separate the
rare earth (‘R.E.’) metals, readying them for
sale. These activities have been carried out at
CSIRO’s Perth laboratories and the Intec research
facility in Burnie, Tasmania, which Wood

FEBRUARY 2012 The International Resource Journal
101
says the company will reconfigure during 2012
in order to advance its works in rare earths beyond
the process development stage.
“While the volumes aren’t large, the value
is. Each tonne of industrial waste residue contains
well above $10,000 of rare earth metals.
Relatively small tonnages, if properly treated, can
generate substantial revenues,” he explains.
“It can be done at a relatively small plant like
Burnie. If that’s a demonstrated success, we’ll
work with the Japanese to suggest that rather
than sending small amounts down to Australia,
they’d be well-advised to set up their own larger
scale plant in Japan using our technology.”
The work underway at Intec’s Burnie plant
hasn’t gone unnoticed further afield. A U.S.-based
major group has recently commissioned the
company to run test work on their residues and
Wood says that the same concept applies: Running
testing in Intec’s native Australia to reach a
level of confidence warranting the partner company
to consider building versions of the facilities
to scale, utilising Intec’s technology in their own
project area. Formulating this proven concept is

102 MINING & METALS Intec Ltd.
another milestone for the team; a globally transferrable
means of partnering and further proving
its technology, which will be an ever more viable
option as global demand keeps on rising.
Intec Middle East & more minerals
processing
As a region synonymous with industrial development,
natural resource extraction and booming
demand for the products thereof, entering the
Middle East is both a challenge and desirable
move for many. Describing Intec’s entrance into
the market and the group’s need for the right
partner, Wood introduces the IRC Project; a 50/50
joint venture through Intec’s co-owned subsidiary,
Intec International Projects Pty Ltd. (IIP).
“IIP’s client has existing operations whereby via
their plant they’re throwing away around 200,000
tonnes per annum of filter cake, which contains
about 10 per cent zinc, around 10 per cent lead,
and also indium and germanium,” he says.
“We’ve done the test work and
signed the contracts for a feasibility
study leading to construction of a
commercial scale plant at the project
site, and then subsequent options
for expansion.”
As a major Intec focus in minerals processing,
this project involves a significant test work
and engineering programme, initial stage one
treating of 25,000 tonnes per annum feedstock
leading to 200,000 tonnes per annum (as produced
in current operations) and handling another
two million tonnes stockpile.
“We’re optimistic that this will be a fairly major
source of revenue generation in this current
financial year,” Wood says.
Reflecting on the $1.5 million profit Intec has
posted for 2010-2011—largely due to the $5 million
agreement with JX Nippon Mining and Metals
Corporation, which saw the Asian group pay to access
Intec’s technology—Wood notes that the IRC
Project is not the only undertaking which may give
the company cause for celebration in 2012.
Intec & future innovation
Back in March, Wood said that predicting where
Intec will next apply its technology is tricky. He
hinted that the team might move into rare earth
metals, noting industrial wastes from high tech
usages such as iPhones and hybrid cars as one
avenue of interest, but maintained that with such
wide-ranging interest streaming in from all over
the world and continued success wherever its
technology is administered, the company remained
steadfastly open to every viable project

FEBRUARY 2012 The International Resource Journal
103

104 MINING & METALS Intec Ltd.
presented – particularly those with strong funding
support from a suitable project partner.
This approach, utilising facilities in Burnie
and combining them with international requests,
has served the company well in some of the most
uncertain times financial markets have endured
in living memory. Moreover, with strategicallyforged
partnerships and well-proven technology,
Intec has no need to revisit the volatile capital
markets or seek any other funding for its endeavours.
The only construction cost, Wood says,
will be future works at the Burnie plant aimed
at reconfiguring the current setup to capacitate
its rare earth metals works; and Intec’s balance
sheet is equipped to handle this.
One year from now, the Melbourne SPL plant

FEBRUARY 2012 The International Resource Journal
105
significant advances will unfold towards project
utilisation proposals. And in the Middle East, the
IRC Project feasibility study will be underway.
At each respective project Intec’s technology
continues to deliver economical and environmental
benefits, and now with a proven concept
for partnering and demonstrated works at Burnie
backing its use to scale, it appears that the
company has cracked it. Chloride hydrometallurgy
may not be overlooked for much longer, and
as the tide continues to turn alongside booming
metals demand, Intec and its partners will lead
the way in innovative, more effective minerals
processing and industrial wastes recycling.
(with project partner GB Galvanizing Service Pty
Ltd. (GBG), the largest galvanizing operator in
the state, and backing from Victoria’s EPA) will
be well into construction. The rare earth metals
processing facilities at the Burnie plant will be
progressing through the commissioning phase.
All EAF dust will be processed and Intec will be
on the hunt for more. In the Denver gold trials,
Further reading
IRJ first met Intec and introduced its technology
in March, 2011. To read this article and learn
more about the company, please visit http://
www.internationalresourcejournal.com/brochures/Mar_11/Intec/index.php
To read more about Intec’s projects, please visit
http://www.intec.com.au/uploaded_files/document_uploads/2011%20Nov%2021%20-%20
AGM%20Presentation.pdf
To read more about Intec or contact the team,
please visit http://www.intec.com.au

Excelsior Go
Western Australia’s next
multi-mine gold triump
106 MINING & METALS Excelsior Gold
Excelsior Gold’s Zoroastrian pit (L-R) Directors David Hamlyn, Peter Bird, David Potter & Nicholas Ong.
Photography c/o Excelsior Gold

FEBRUARY 2012 The International Resource Journal
107
MINING & METALS
ld
h
106

108 MINING & METALS Excelsior Gold
Excelsior Gold Limited’s Kalgoorlie North Gold
Project already houses over 723,000 ounces of
diverse gold resources, but the team is just getting
started as it takes priority pits to pre-feasibility
study for a multi-mine gold operation and embarks
on further resource definition
The Eastern GolDFIelds’ Kalgoorlie region has been an inherent
part of Western Australia’s gold mining history for well
over a century. It has and continues to host some of the most
diverse, exciting and commercially viable mineral deposits
known to man, and as for the doomsayers who believe that
the region’s potential has been exploited to the full

FEBRUARY 2012 The International Resource Journal
109
Diamond drilling in the Excelsior pit. Photography c/o Excelsior Gold

110 MINING & METALS Excelsior Gold
Don’t count on it—just look at Norton Goldfields
Limited’s (ASX: NGF) Paddington Gold
Operations, Integra Mining Limited’s (ASX: IGR)
evolving Majestic discovery, and gold explorerdeveloper
Excelsior Gold Limited’s (ASX: EXG)
(“EXG”) 100 per cent-owned, 98 square kilometre,
723,000 ounce Kalgoorlie North Gold Project
located 45 kilometres north of Kalgoorlie,
surrounded by bore fields, mills and multimillion
ounce deposits.
There are some excellent deposits being
found in the Kalgoorlie region at present and
there is potential for even better discoveries than
some of those deposits that have been mined in
the past 10 years,” says EXG executive director
David Hamlyn.
“We believe Kalgoorlie North is
an excellent area with the potential
to offer several great deposits in
the future. We believe that given
the extensive and widespread
mineralisation there exists a multitude
of opportunities to develop a series of
mines in these tenements.”
Now progressing with the pre-feasibility study
for a multi-mine heap leach / toll treat processing
operation at Kalgoorlie North’s Excelsior and
Zoroastrian previously producing deposits—which
house approximately 618,000 diverse grade gold
ounces on their own—and six satellite deposits
within a four kilometre radius from Excelsior,
EXG has high grade and base feed ore, backed
by conceptual mining works (2011) and strong
resource model drill testing results released in
January 2012.
“We have concentrated on the Excelsior-Zoroastrian
area and got to a stage where resources
are large enough for us to initiate our pre-feasibility
studies. In future, our exploration charge
will move into other areas where there’s still very
good exploration and resource growth potential,”
Hamlyn explains, noting that the extensive drilling
database the company acquired has enabled
it to act quickly on priority areas.
“There are another 22 resource targets and
51 other areas where there’s quite significant drill
intercepts and we simply haven’t had the time to do
resource modelling on them. Those areas can likely
be brought into the resource quite quickly.”
Pre-feasibility backed by January success
Stacked at 723,000 ounces gold resource and
counting—more than enough to warrant its development
model—Kalgoorlie North possesses all
manner of location-specific advantages for EXG.
It boils down to proximity to processing facilities,

FEBRUARY 2012 The International Resource Journal
111
Reverse Circulation Drilling
Contractors
PO Box 2084, BOULDER WA 6432 - 29 Broadwood St, WEST KALGOORLIE WA 6430 - Phone: 08 9021 8002 - Fax: 08 9021 8039 - reddrill@bigpond.com
operating mines, workforce, Kalgoorlie itself,
existing infrastructure and known mineralisation.
Onsite, Excelsior (currently 405,300 ounces) and
Zoroastrian (123,000 ounces) are just 300 metres
apart, and the six satellite deposits within a
four kilometre radius of Excelsior house another
73,000 ounces of resources.
“That’s where our idea of the heap leach and
toll milling scenario comes into play,” Hamlyn says.
“Regarding the conceptual pit design, the
Excelsior shear zone is broad and the grade is
modest, but the extent of the mineralisation
means that when we do our pit optimisations it
pulls down very deep on the deposit.”
Grades average around 1.3 to 1.4 grams at a
0.6 grams per tonne (g/t) cut-off, he says, but the
shear zone produces so much mineralisation that
the conceptual pit pulls down to a vertical depth
of about 175 metres. As a result, Excelsior offers
excellent base feed potential from a sizable standalone
pit, and when the satellites are incorporated
its significance becomes clear—as EXG’s December-run
drilling programme results showed on January
13, further supporting the resource model and
potential to push the open pit deeper.
“A lot of the drill holes in that programme
are outside the conceptual pit design. The
idea was to test areas around its margins to

112 MINING & METALS Excelsior Gold
see if we could get sufficient or better grades
in some areas of our model and extend the pit
down deeper, particularly in the northern end,”
Hamlyn explains.
“The results have provided encouragement
about that, particularly in the north, and it looks
like it’ll be a bigger pit.”
Initial assay results include 13 metres
at 1.85 g/t gold from 156 metres;
18 metres at 2.97 g/t gold from 81
metres; 7 metres at 1.90 g/t gold from
20 metres; and 5 metres at 4.25 g/t
gold from 101 metres.
December drilling also collected metallurgical
samples from both Excelsior and a number
of the satellites, which are now in the laboratory
for testing, and pit optimisation works are well
underway.
Simultaneously, Zoroastrian’s multiple high
grade quartz veins within the same dolerite unit
as the Paddington mine to the south prove how
diverse the mineralisation at Kalgoorlie North truly
is. Describing how the “bonanza” gold bearing
rock chip samples up to 916 g/t Au (true width
of 300mm) returned from the previously mined
Zoroastrian open pit have enabled EXG to define
high grade resources beneath it, Hamlyn says

FEBRUARY 2012 The International Resource Journal
113
Zoroastrian open pit. Photography c/o Excelsior Gold

114 MINING & METALS Excelsior Gold
Excelsior diamond core (L-R) Directors David Hamlyn & Peter Bird. Photography c/o Excelsior Gold
Zoroastrian’s high grade potential as a lower
tonnage underground operation complements
Excelsior’s extensive base feed grade; a favourable
scenario for any mill operator interested in securing
offtake from the initial five-year mine life envisaged.
“We haven’t tied down contracts yet, but we
have been speaking with parties about potentially
doing toll treating,” Hamlyn says.
“It’s really a case of putting together the mining
scenario for a long-term toll treatment option
rather than a small one-off open pit.”
Initial results for the multi-mine scenario
are on course for release during the second half
of 2012. Meanwhile, EXG will commence the
resource modelling for the 22 areas of interest
outside of Excelsior, Zoroastrian and the satellites
accounted for in its pre-feasibility study.
Resource & team definition
In readying for works aimed at further resource
definition across the Kalgoorlie North tenements,
EXG has bolstered its ranks with another geologist
and plans to draw from the strong local
knowledge of its team. The company plans to
make the transition to producer rather than take
Kalgoorlie North to saleable commercial levels

FEBRUARY 2012 The International Resource Journal
115
years to get it into production, of course, we’re
always keeping our eye out.”
EXG’s market activity is equally well-managed,
he notes. With a strong team of discerning
brokers and largely long-term company stakeholders,
EXG’s share price doesn’t fluctuate
greatly despite the financial volatility hindering
many gold juniors today.
At the heart of the company’s value, stock
activity and sustaining interest, sits an outstanding
gold project with historic production, surrounded
by bulk infrastructure and processing,
and a team focused on systematically taking priority
portions to pre-feasibility levels while getting
the most out of the wider tenement area.
EXG is keenly watched by investors and
and exit, Hamlyn says. And given its uncapped
potential for resource expansion, it’s plain to see
that options for building on first production success
at Excelsior-Zoroastrian are great; rarely the
wholly owned preserve of juniors in such infamous
gold provinces.
“We haven’t sought additional tenements
because given our development stage we’d see
that as a distraction of funds away from the main
game,” Hamlyn says, noting that discovery costs
stand at less than $10 per ounce.
“We’re concentrating fully on Kalgoorlie
North and we’re likely to for the next couple of
neighbouring explorer-producers with good
reason. January’s drilling results have expanded
the project’s development potential ahead
of the 2012 pre-feasibility study release, and
Kalgoorlie North is shaping up to be a gem in
Western Australia’s long-established number
one gold address.
www.excelsiorgold.com.au

116 MINING & METALS Angkor Gold Corp.
116
Angko
Cambodia: G
play comman

FEBRUARY 2012 The International Resource Journal
117
MINING & METALS
r Gold
old’s next major country
ds more than box ticking
Photography c/o Angkor Gold Corp.

Photography c/o Angkor Gold Corp.

As multinational miners continue to wake
up to the Kingdom of Cambodia’s enormous
project potential, Angkor Gold Corporation
is demonstrating a remarkable commitment
to country development and advancing its
large landholding of potentially companymaking
gold discoveries.

120 MINING & METALS Angkor Gold Corp.
In Deloitte’s 2012 Tracking the Trends Mining report,
Glenn Ives, America’s Mining Leader, Canada,
states: “Today, mining is front page news—every day
and across the globe. For mining companies, this
greater visibility comes with greater responsibility.”
These are words to underestimate at your peril,
particularly as gold prices soared in 2011 and historically
less-developed mineral provinces grow ever
visible, and with respect to country plays housing
extensive deposits, few are more keenly anticipated
than Cambodia.
Our search for a group to epitomise ‘greater
responsibility’ took IRJ to Canadian gold junior and
early-moving Cambodian explorer Angkor Gold
Corporation (TSX.V - ANK) (“Angkor”); the company
in possession of seven mining tenements in the
north-eastern part of the country—approximately five
per cent of the nation’s mining concessions—whose
foundations incorporate positive community-level
impact as a high priority.
“We’re not just sitting on this real estate.
We’ve done preliminary stream sediment and
satellite imagery work on our three MOUs. We have
implemented a systematic exploration programme
following a very aggressive timeline on our four
exploration licenses. We’re exploring good wellmineralised
tenements,” says Scott Donahue, Vice
President of Corporate Affairs.
“We report responsibly, continue to explore and
build value for the people in the communities where
we work. The government recognises that and
some of our MOUs stem from companies that didn’t
undertake actual exploration activities; instead they
just sat on the licenses,” Chief Executive Officer
Mike Weeks agrees.
“Cambodia’s opportunity extends
beyond an exploration play. It offers
a huge opening, making it a country
play for organisations that operate
properly—for groups that do things
right.”
Angkor is firmly focused on proving up its gold
resources, and having completed five years’ worth
of exploration in 24 months—with consolidated
maiden NI 43-101 reports on four licenses, drill
ready targets over several dozen prospects (and
more under assembly for this field season) and
Phase One of its 2012 three-phase multi-prospect
drill programme well underway—potential for defining
a company-maker is certainly implied. In fact,
management’s belief in its ground is so great that
it funded exploration itself as a private company,
and expects that the Angkor shares its executives
continue to buy on the public market will prove
highly valuable when works culminate in a large
proven resource.

FEBRUARY 2012 The International Resource Journal
121
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122 MINING & METALS Angkor Gold Corp.
Gaining Ground & Exploring Oyadao
Likening Cambodia to the emergence of mammoth
gold deposits in Colombia—where many companies
are now kicking themselves for not picking up
prime ground when they had the chance—Weeks
says that Angkor first ventured into the country by
way of a joint venture agreement with Liberty Mining
International Pty Ltd. for the Banlung North,
Banlung South, Oyadao North and Oyadao South
mining licenses in October 2009.
In April 2010, Angkor raised its interest in
the 1,167 square kilometres of licenses to 51
per cent, later acquiring up to 90 per cent that
September and inking an option to purchase
the last 10 per cent in April 2011—three months
after picking up its three MOUs (Memorandum
of Understanding) with the Cambodian Ministry
of Mines in January 2011, which added another
1,499 square kilometres to its landholding.
“It’s a country play, not just one area, and
we’re working to that philosophy. On the Oyadao
license alone we have four or five really exciting
prospects,” Weeks adds.
Border, Border North, Border Central and
Border South within Oyadao North, Ratanakiri
province, have been the main subjects of Angkor’s
December 2011 drilling. Border is the most advanced
prospect on the Oyadao license—one of five
within the property that may house potential vein
Oyadao in 2012
• Border Prospect – Angkor is
carrying out a 2,000 metre drill
programme from November
to June; the Border North drill
programme is ongoing; the
Border Central EM geophysics
are ongoing; and further drill
programme activity is to be
determined based on results.
• Phum Syarung Prospect – Angkor
plans drilling during May-June, EM
Geophysics and a follow-up 900
metre drill programme.
• Ogama Prospect –Future activity
is to be determined, and plans at
the drill ready ground include a
600 metre campaign, to tighten the
grid to 100 metres in the northeast,
and extend it to 500 metres x
500 metres to define targets on the
north-east anomaly.
• Dok Yong Prospect – Angkor will
be drilling from February through
to June, extending three kilometres
north to south by four kilometres
east to west its grid and soil
geochemistry at 25 metre intervals;
conducting mapping along the
aforementioned lines, and a 400
metre drill program to test targets.

FEBRUARY 2012 The International Resource Journal
123
Photography c/o Angkor Gold Corp.
and lode systems—and results to date include 5.4
metres at 7.4 grams per tonne (“g/t”) gold including
a two metre interval at 17.01 g/t and five metres at
5.9 g/t including one metre at 14.30 g/t.
On January 17, Angkor released figures for
the first five of nine holes drilled, primarily targeting
the Border North vein system. Results include
34.29 g/t gold and surface grab samples recording
gold values up to 13.7 g/t.
“The more work we do in the area, the more
we uncover,” Donahue says.
“The story now is the drilling in Border North
which is 600 metres away from the Border Central
prospect and less than a kilometre from our newly
discovered soil geochemistry anomaly.”
Angkor’s efforts in extending its soil
geochemistry grid around the Border Central and
Border North prospects have been duly rewarded.
A very large copper anomaly extending 400 by
600 metres is similar to the porphyry system the
company is exploring in its Banlung tenement,
Okalla prospect. A pilot surface EM survey is
planned to test the geochemistry anomaly in mid-
January. A further five by 100 metre holes will test
this target by April 2012, Donahue says, and the
team plans to develop and prove out this target
during the months to come, as well as to further
explore a number of other locations which indicate
very positive potential within the Oyadao licenses.
“There’s also the Phum Syarung prospect.

124 MINING & METALS Angkor Gold Corp.
Banlung in 2012
• Okalla Prospect – From January
through April, Angkor will
concentrate on completing grid
cutting and defining clear lines;
EM Geophysics; and a 4,000
metre drill program (due to be
completed by April)
• Katieng Prospect – During May-
June, Angkor will carry out
trenching and drilling to follow
up on soil geochemistry results
(June)
• Kunmum Prospect – During May-
June, Angkor will conduct infill
drilling and extend the current
soil geochemistry to define its
2009 anomaly in extreme east of
Banlung; and run a follow up drill
program (June – July)
Last season, a soil geochemistry programme was
initiated and follow-up testing run [on] 11 drill
targets totalling 1,000 metres drilled. We’re cutting
grids and implementing surface EM geophysics
there, concurrently with our Okalla and Border
anomalies,” he details.
“And there’s the Dok Yong prospect which
is well over seven square kilometres of diverse
mineralised area south of Oyadao South,
where we’re working on cutting grid lines for
soil geochemistry followed by a 400 metre drill
programme this season as well.”
With many more promising leads to follow,
Angkor’s Oyadao license looks likely to command
centre stage as assays from drill core and stream
samples are posted throughout the year.
Drilling Banlung & Advancing MOUs
At its 90 per cent owned Banlung and Banlung
North licenses, home to the Okalla, Katieng
and Kunmum prospects, Angkor’s ceaseless
exploration schedule continues and Okalla leads
activity. The 27 holes put into the prospect area
to date, aimed at defining its structure, have
outlined a 500 by 600 metre mineralised area
which equates to approximately 90 million tons of
minable deposit for every 100 metres drilled.
• Highlights from this programme include 95
metres at 0.55 g/t gold including a one metre
interval at 34 g/t, and two holes drilled
down to the 300 metre mark reveal that
mineralisation extends at depth.
• Other highlights include 80 metres at
0.23g/t gold, 740 ppm copper, 72.8 metres
at 0.24 g/t gold, 1,180 ppm copper, 100
metres at 0.23 g/t gold, 796 ppm copper
and several other large intervals exceeding
90 metres of mineralisation. All indicators

FEBRUARY 2012 The International Resource Journal
125
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point towards a very large copper-goldmolybdenum
porphyry system.
• Angkor’s EM geophysical programme
aimed at enhancing drill targets is also well
underway, and as IRJ goes to press, the
team expects to move into next-phase February
drilling within a matter of days.
• It has been almost a year since Angkor
and the Cambodian Ministry of Mines
signed on the company’s three MOUs; a
move underpinning its belief in Cambodia
as a country play and reflecting the
government’s approval for the way the land
is being explored.
• “They were attractive because satellite
imagery indicated similar geology to our
existing tenements,” Weeks says.
“And the results of our stream sediment
survey on [our] Trapean Kraham MOU have just
come in from ALS-Chemex laboratories in Laos,
showing a strong gold anomaly in the east.”
As Angkor formulates its work programmes
for Koan Nheak, Siem Panh and the Trapean
Kraham tenement, Weeks says that in keeping
with beliefs about Cambodia as a country play,
further potential land acquisitions are up for
discussion and ought to take shape in 2012.

126 MINING & METALS Angkor Gold Corp.
Cambodia & the UNDP
The United Nations Development
Programme (“UNDP”) has partnered
with Cambodia and pledged US$7.9
million (2010-2015) by way of its
Development Policy Initiative (DPI).
The DPI concentrates on two main aims:
Strengthening economic governance
to foster sustainability, diversity and
inclusivity within Cambodia’s future
economy; and developing capacity for
economic policy analysis and dialogue
in line with policy implementation.
A central focus of the DPI is the
development of the country’s extractive
and natural resource industries,
aimed at encouraging transparent and
responsible growth.
“We continue to analyse additional acquisitions
that are strategically advantageous to
Angkor,” he says.
“And interest in Angkor and Cambodia is
coming along,” Donahue adds.
“Our goal is still to be an exploration company
and to work with a strategic group to develop what
we prove up. We’ve already been approached by
a few and while we have a bit more drilling to do
ahead of that, there’s certainly interest.”
“From our perspective, they would have to
have like-minded goals for the area.”
Since day one these goals have depended
on exploring responsibly and demonstrating truly
altruistic country and community commitment.
Cambodia is Open for Business
As a company wielding a lofty track record in social
development globally, Angkor’s commitment
to integrating its every move with exemplary community
development programmes stands unrivalled.
This team is about giving back and setting
the standard for responsible exploration—not
box ticking or being seen to perform accordingly,
as Cambodia has endured in the past. Building
better value for and with the citizens in the areas
Angkor works is simply viewed as part of doing
business, and encompasses a variety of functions
from providing water, medical and educational
support around its tenements to personal
community pledges in far flung locations oceans
away from its exploration activities.
“We have four exploration camps underway
at the moment, and we focus on those areas but
we have a wider view as well,” Weeks says.
“We saw a need at a school in an area we’re
likely to work in during the next year, and we initiated
and assisted the school in building latrines
and water facilities.”

FEBRUARY 2012 The International Resource Journal
127
On and around the exploration camps Angkor’s
first focus is clean water, Weeks says. Secondly, the
team concentrates on improving healthcare facilities
and implementing programmes.
“We have a 40-foot container on route to
deliver an ambulance and medical supplies from
Canada that will be put to good use in the rural
clinics and provincial hospital,” he continues.
“And finally, the most fun part is working on
the education side with the children.”
An educational charge both surprising and
resplendent of the company’s exploration record
and commitment to country, is its plans to set up
Cambodia’s first university degree programme in
geology. This is the brainchild of Angkor’s exploration
VP, Dr. Adrian Mann, and it is by no means a
mere pipedream. The School of Geosciences, which
is a technical college, was opened in November last
year and the students are already in session.
“We’ve checked it out and worked with the
UNDP; the first technical class from which around
38 people will graduate next year,” Weeks says.
“We’re hoping that the degree-granting program
will be a reality for Cambodia’s universities
in the future.”
Up-skilling the keen native population is also
par for the course in Angkor’s day-to-day exploration
work. Utilising local labour has been part of
company efforts to implement sound practice
infrastructure for future development, and Weeks
describes the artisanal miners active across the
company’s tenements as “the best explorers we
have,” as he explains how their efforts in panning
and digging manually for gold continue to provide
initial indications of mineralisation for Angkor.
“They only touch the surface, and if a family
of seven or eight can pick up a couple of ounces
a month, given the average salary in these rural
villages, that’s a huge return for them. They take
what is visible which doesn’t hurt us,” he adds.
Angkor in Cambodia is a story of one of the
world’s most exciting opening mineral provinces
paired with precisely the right responsible group
to develop resources for long-term country and
company prosperity. The landholding amassed—
and the many indications of abundant resources
turned up by exploration to date—are a direct
result of the way that this team does business.
Throughout 2012 from the Border prospect,
Okalla prospect and its MOUs, Angkor has a lot of
opportunities for significant gold discovery. And
backed by solid exploration and an exemplary
commitment to Cambodia ahead of its emergence
as a country play, this is a gold junior well
worth watching.
www.angkorgold.ca

prosperity resources l
Making a name in In

MINING & METALS
imited
128
donesia

130 MINING & METALS Prosperity Resources Limited

FEBRUARY 2012 The International Resource Journal
131
Shifting its focus from a developed mining region Down Under
to remote Indonesia was never likely to be an easy move, but one
Australian explorer has made that change look like plain sailing.

132 MINING & METALS Prosperity Resources Limited
ProspeRITy Resources lImITed (ASX: PSP)
(“Prosperity”) is fast making a name for itself in
the tricky arena of Indonesian exploration. This
Western Australian gold-copper explorer is listed
on the Australian Securities Exchange, but has
targeted the Southeast Asian archipelago as its
strategic focus.
The company’s main focus is on gold-copper
porphyry and skarn mineralisation in Aceh Province
in the north of the island of Sumatra.
Prosperity holds a 41,000 hectares land
package aligned along the coast of Aceh, which
covers an underexplored, but potentially highly
prospective mineralised belt adjacent to the
Sumatra Fault—an important feature controlling
location of mineralisation in Sumatra.
Since commencing exploration the company
has identified 10 porphyry intrusive centres and
related mineralised skarn and alteration zones
confirming the huge potential of the land package.

FEBRUARY 2012 The International Resource Journal
133
Prosperity also has significant land holdings in
the historic mining region of Tennant Creek in the
Northern Territory, and iron ore and gold interests
in the Murchison region of Western Australia.
The company’s experienced management
team—which has vast experience in exploration,
operations, legal and project financing—is focused
on adding value to quality acquisitions.
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Prosperity began life focused on properties in the
west of its native Australia.
“We were essentially focused on iron-ore
properties in the mid-west, and a few gold properties
scattered around Western Australia,” says
Chairman and CEO Mo Munshi, who has been
with the company since early 2007.
“We had managed to raise a little bit of
money and we went and drilled the iron ore properties
we owned.
“Everything was chugging along okay, but
then the global financial crisis came along in mid-
2008, by which time it had become pretty clear
that the company needed a change in direction.”
It was at this time that Neil Rutherford of
Rutherford Mineral Resource Consultants came
on board as head of geology for the group and
shared his view that its gold properties in Australia
were surplus to requirements.
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“The iron-ore projects in the mid-west also left
a lot to be desired considering the financial environment
the world was in and we decided that the
only site worth keeping hold of was our Tennant
Creek copper and gold tenements,” says Munshi.
Prosperity found that even at this site there
remained some significant issues to be resolved
and by the end of 2008 the company shifted its
focus to Indonesia.
“I believe that Indonesia—despite all its political,
administrative and bureaucratic challenges—
is a country worth pursuing if you have the right
partners,” Munshi remarks.

134 MINING & METALS Prosperity Resources Limited
Entering Aceh
When the company entered the Indonesian mining
sector in mid-2008 it took a low-key approach
in looking for the right projects in Aceh.
“Neil [Rutherford] took a look at the sites we
had secured and took the view that there was
definitely potential in this ground, which was formerly
owned by Meekatharra Minerals, and was
also subject of an old Rio Tinto contract of work,”
says Munshi.
“We were very fortunate to be supported
by the local authorities and we were granted
three new IUPs, each of 10,000 hectares in size,
which—along with two existing 5,000 hectare
blocks, and one 1,000 hectare block MMU—is
how we got to 41,000 hectares in total and an
area covering some 410 square kilometres.”
Some of the benefits of working in this part
of Aceh is its accessibility by road from local
coastal towns and its proximity to the town of
Labuhan Haji in the north and the major urban
centre of Tapaktuan in the south.
Rutherford notes that both Rio Tinto and
Meekatharra had already carried out broad scale
regional stream sediment work in the area as well,
which Prosperity used as a focus for initial activities.
“We basically worked through these areas
and came to realise that there were some interesting
targets, and we started to work on one of
the prospects called Pala,” Rutherford remarks.
“We sampled soils and rocks, undertook
ground magnetics, trenching, mapping and
drilled 16 shallow holes, and what we ended up
with were some really encouraging results.”
The firm then shifted its focus onto a second
prospect called Jelatang, south of Pala, where
it also achieved some encouraging results from
similar work.

FEBRUARY 2012 The International Resource Journal
135
“We thought about the next step and decided
to fly a regional airborne magnetics survey, because
we realised there was quite a lot of magnetite
showing up within these targets,” Rutherford notes.
Munshi says that the company’s optimism regarding
its sites in Aceh has been met with much
caution when considering the state of global markets
and also the difficulties that could crop up
working in a remote part of Indonesia.
“We are well aware of these issues, but we
do think that with the world’s markets turning
around, that Europe is not going to hang over our
heads for much longer,” he remarks.
“But we will always be judged by our peers,
especially big brothers with deep pockets, and
we’ve got some of the largest mining companies
in the world knocking on our door right now.
“I think you’ve got to go step-by-step in Indonesia
and you’ve got to make sure that you really
do your homework, but these companies are very
interested in what we’re doing.
“They are very keen to get on the ground, but
we’re taking a very careful approach to our work
in Aceh,” he adds.
As businesses across the world hunt for more
and more sources of in demand copper, and with
Prosperity’s sites in Indonesia revealing intriguing
and positive results, the company could soon see
itself becoming one of the major players within
Southeast Asia’s booming mining sector.
www.prosperity.net.au

136 MINING & METALS Al Tuwairqi
Photography c/o Al Tuwairqi Holding

FEBRUARY 2012 The International Resource Journal
137
MINING & METALS
136
Al Tuwairqi
A GCC steel leader on
the international stage

138 MINING & METALS Al Tuwairqi
Photography c/o Al Tuwairqi Holding
Founded in 1977 on the brink of Saudi
Arabia’s steel manufacturing surge and since
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business acumen, innovative leadership and
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The brainchild of founder and Chairman Dr.
Hilal Hussain Al-Tuwairqi, ATH emerged from early
contracting and trading activities to become Saudi
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Since day one the group’s mission statement
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industries and putting the region on the map.

FEBRUARY 2012 The International Resource Journal
139
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140 MINING & METALS Al Tuwairqi
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ATH’s refined capital and operational structure,
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FEBRUARY 2012 The International Resource Journal
141
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142 MINING & METALS Al Tuwairqi
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Photography c/o Al Tuwairqi Holding
global partnerships and implement groundbreaking
new investment projects in 2012.
Making the news
As ATH continues to serve as a privately-owned
success story in the Kingdom’s densely stateowned
steel industries, headline-making deals
have ensued further afield.
The latest came on September 12, 2011,
when ATH announced its joint venture agreement
with POSCO, the world’s third-largest steelmaker
by market value. The partners will collaborate on
Tuwairqi Steel Mills Limited (TSML); the project
ATH is establishing at Port Qasim, Karachi. Once
complete, TSML will bring modern technology to
the region, have a capacity of 1.28 million tonnes
and cost US$260 million. More than $225 million
has already been invested and POSCO has
pledged 15 per cent in equity for the project. The
signing ceremony held in Karachi was attended
by Dr. Al-Tuwairqi and Mr. Joon-Yang Chung,
POSCO’s Chairman and chief executive who each
signed the agreement. Minister of State Saleem
H. Mandviwalla also attended, and he described
the partnership as one of synergy which will
greatly help in augmenting the efforts towards
the forward and backward integration of the
project.
“This agreement will not only further
strengthen the bond among the three companies
but also the countries these organizations are
representing,” Dr. Al-Tuwairqi said.
“We are hopeful that this is the beginning
of a long lasting relationship between ATH and
POSCO and it will also help build trust of more
foreign investors in the country.”

FEBRUARY 2012 The International Resource Journal
143
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Dr. Al-Tuwairqi urges for GCC
import levy
As President of the Arab Iron & Steel Union,
Dr. Al-Tuwairqi’s commitment to his native
steel industries was evident on December 13
as he spoke at the Metal Bulletin Iron & Steel
conference in Dubai.
He advised the GCC to impose a 20 per
cent import levy on rebar; a move to quash
environmentally detrimental dumping practises.
Describing how such a tax would safeguard
the interests of responsible steel houses within
the region, his words rang true of ATH’s own
commitments to responsible operation.
ATH has captured the admiration of industry,
international communities and entered successful
partnerships throughout its various businesses.
The founding vision of Dr. Al-Tuwairqi
as evidenced by the group’s actions to date has
proved strong enough to see out market downfalls,
succeed as a private entity and enabled
ATH to bring its quality products and expertise to
a growing range of projects.
Running such a tight ship across so many
diverse business disciplines can’t be easy, but
wherever ATH emerges it brings with it the highest
standards of safe, commercially savvy and
innovative operation.

A jo

MINING & METALS
b for a Manitou
144

146 MINING & METALS Manitou
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Although Manitou South Africa was established
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successful one, and the company has now
established three bases in Johannesburg, Cape
Town and Durban.
The quality of these magnificent machines
has resulted in a brilliant reputation in the heavy

FEBRUARY 2012 The International Resource Journal
147

148 MINING & METALS Manitou
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FEBRUARY 2012 The International Resource Journal
149
duty equipment industry. Over the last 14 years,
hundreds of companies have trusted Manitou’s
machines with getting the job done, and done well.
In its competitive market place Manitou is, by
some considerable distance, the league leader—a
position it has resolutely maintained, and doesn’t
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Some of the most popular Manitou products
include telescopic handlers, forklifts, truck
mounted forklifts, access platforms, warehousing
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The company also provides an unparalleled
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Managing Director Lindsay Shankland is
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“The greatest benefit to our clients is that they
are getting the world’s best equipment; Manitou is
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“Within South Africa what we trust most in
the business, is our service delivery.”

150 MINING & METALS Manitou

FEBRUARY 2012 The International Resource Journal
151
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Manitou’s impressive stock is brought in from
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being built across the water, all the machines
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Once in South Africa the workforce—which
has risen to almost 60—offers a modification
service for the very specific needs of its local
clients. The adaptation of machines has been
hugely popular with mining operations in South
Africa, many of which are working in unusually
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It is also very important to the company that
it brings cost-effective mechanisation to local
and overseas mining operations, with a variety
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While Manitou has an illustrious and unparalleled
history of providing equipment to the
mining industry, it has also become increasingly
diverse over the years.

152 MINING & METALS Manitou
“In South Africa, mining and construction
were originally about 65 per cent of our business,”
explains Shankland. “Mining is still the
biggest portion of our business; that’s where we
built our reputation, but we also supply machines
right across various business platforms, especially
where they require a rough terrain or semirough
terrain machine.”
The company’s versatility can also be seen
in its extracurricular activities. It recently cosponsored
Mozambique’s Guinjata Sport Fishing
Club’s brilliantly-titled, ‘Z-Craft/Mercury Species
Bonanza’ and even flexed its muscles at a
SA Strongman Union competition held in Nigel,
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of a Manitou forklift to set up some of the extraordinary
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Foothold on the future
Manitou is constantly looking for new ways to
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company has worked on the development of underground
mining machines.
“During 2011 we displayed our first flameproof
soft rock and hard rock underground utility
vehicle,” enthused Shankland.
“We’ve now agreed with Manitou France

FEBRUARY 2012 The International Resource Journal
153
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154 ONSITE The Oil Council’s Latin American Assembly
Attention investors:
The Oil Council’s Latin
to spotlight sector o

FEBRUARY 2012 The International Resource Journal
155
American Assembly
pportunities
154

156 ONSITE The Oil Council’s Latin American Assembly
Drake Lawhead, The Oil Councilâs head of content and member magazine editor
InternaTIonal oil and gas industry network The
Oil Council will stage its Latin American Assembly
on January 25-26 in Bogotá, Colombia. Over 300
industry delegates will attend the meet—Latin
America’s only oil and gas conference to focus
purely on business—and as headlines continue
to draw attention to the great discoveries, challenging
markets and multinationals flocking to
the region, the assembly is on course to provide
a much-needed platform for discourse between
thought-leaders and decision-makers.
“The fact is, it is a good time to see what’s
on offer in Latin America’s energy market,” says
Drake Lawhead, The Oil Council’s head of content
and member magazine editor.
“Whether times are good or bad, there is
always a discussion to be had.”
Grabbing a few minutes to go Ed-to-Ed (sorry),
IRJ editor Nuala Gallagher asked Drake about
why now is a pivotal time for global investors to
pay close attention to opportunities within this
burgeoning growth sector.
Nuala Gallagher (“NG”): Thanks for stopping
by, Drake. Perhaps you can begin by telling
me a bit about the scheduled session Accessing
Local and International Capital Markets. What
are the topics up for discussion and who will be
doing the talking It goes without saying that
this is a buzz subject commanding plenty of attention
globally, but is it going to be a positive
conversation in this context
Drake Lawhead (“DL”): The panel is about
the availability of capital in 2012 for E&P [exploration
and production] activities—where is it coming
from, where is it going, what is the appetite for
lending and borrowing, etc. Although it’s true that
2011 saw share values eroded nearly across the
board for oil and gas companies, the industry as a
whole is fairly resilient in its ability to raise capital.
Perhaps because E&P has always been a
risky investment activity, energy investors are not
necessarily as reluctant to re-enter the market
after a rough period as investors in other industries.
That doesn’t make it immune to the Euro-

FEBRUARY 2012 The International Resource Journal
157
pean and wider economic crisis that might unfold
in 2012, but a lot of people do expect capital to
loosen up in the first half of 2012 as a lot of companies
who perhaps shelved fundraising plans at
the end of 2011 look to test the market.
The bottom line is that for an E&P company
with good management, a strong story and drillbit
success, there is always capital available—and
there are plenty of those companies to be found
operating in South America, which is why we consider
the region to be so exciting.
NG: On day two you’re going to be looking at
the frontier opportunities coming to the fore and
I was interested to see that you note Belize, Guatemala
and Nicaragua as potential hotspots for
Central American discussion. I understand you
have a particular interest in the offshore Guyana
play as well. How do you expect those conversations
to shape up How far do you think we can
look beyond the pre-salt and are these regions
industry radar-ready
DL: Tullow’s Zaedyus discovery proved to an
extent the thesis of an offshore West Africa analogue
existing in the Guyanas. It’s an idea that’s
been around long enough (investors are familiar
with the plethora of power point slides showing
the ‘unzipping’ of Africa and South America),
but 2011 was an important year for it. There are
certainly a lot of big companies holding cards in
the area— ExxonMobil, Shell, Total, and Repsol
to name a few—but there are also independent,
highly prospective and leveraged companies
like CGX Energy who are hunting elephants, and
who will be speaking at the Assembly. It’s an
expensive frontier from a well-cost and development
point of view, but the potential is there for a
Jubilee-sized discovery.
I don’t think anyone has referred to Central
America as a potentially major new oil province,
but for the right company, there might be value
to unlock. Pacific Rubiales, who are a sponsor of
the Assembly, is a savvy company with a track
record of finding value and who have acreage in

158 ONSITE The Oil Council’s Latin American Assembly
Guatemala, for example. It’s not on every investor’s
radar right now and maybe it never will be,
but it is intriguing and worthy of discussion.
NG: In your Managing Risk and Navigating
Regulation session, you’ll be looking at the implications
behind the possible opening up Venezuela’s
sector to multinationals; a particularly newsworthy
subject as past Orinoco participants continue to
dominate newsflow. Looking specifically at the E&P
level investment impact such a development might
have, what do you expect in terms of attendee
perspective during this conversation
DL: Something that isn’t always appreciated
is the extent to which Venezuela’s resource
nationalism and high barriers to foreign participation
in its hydrocarbon sector is responsible
for the Colombian story in the last five years,
and the evolving Peruvian story. Venezuela could
have the greatest amount of oil reserves of any
country in the world, which dwarfes the reserves
of Colombia and Perú, but the opportunities for
foreign investment are few and far between. On
the other hand, as a result of investment-friendly
policies and Ecopetrol’s adoption of a Statoilstyle
business model, Colombia has proven to
be a highly rewarding and productive business
opportunity in the last few years. Perú has good
geology, but the market is still watching closely
to see what kind of policies it will implement and
that’s one of the things we will discuss at the Assembly—
Dr Aurelio Ochoa, Perúpetro’s President
will be addressing that subject.
Between the Venezuelan and Colombian
models are many different paths that a country
might go down, and each has to figure out what
is in its best interests according to its own economic
and political imperatives and constraints.
That’s what the panel will address; where is Perú
heading What happens after Chavez in Venezuela
How will Pemex and Petrobras negotiate

FEBRUARY 2012 The International Resource Journal
159
else is set to appear and what they plan to address.
I wonder, will there be some crossover
between the leading speakers and the conversational
sessions scheduled
DL: We are fortunate to have good speakers
appearing on the agenda, but they are not any
more impressive than the delegates, all of whom
are senior. There around four CEOs on a panel,
but there are 50 CEOs in the audience, which
reflects the nature of the Assembly as a forum
of equals rather than a seminar—think Davos.
That’s why you won’t see any corporate powerpoint
presentations. The panel discussions are
frank, lively, and interactive so the audience can
put the questions right to the speakers. That’s
how you get the most out of the incredible line up
of speakers on the agenda.
future contracts with foreign companies What
kind of political and regulatory risk faces companies
considering jumping into a Latin American
operation It’s a lot to bite off in a panel discussion
but we offer a high-level flow of ideas rather
than a workshop or seminar, so we’ll do our best!
NG: There are a number of keynote speakers
that caught my eye, not least Javier Gutiérrez
Pemberthy, President of Ecopetrol, and Ali
Moshiri, President of Chevron Africa & Latin
America E&P. Perhaps you can talk about who
As for the makeup, it’s a good mixture of
IOCs like Chevron, Total, Repsol, ExxonMobil,
Occidental, and similar, NOCs like Ecopetrol,
Perúpetro and Statoil, and independents such
as Pacific Rubiales, Gran Tierra and Pluspetrol
down to some of the emerging Argentine Shale
players and frontier explorers. Many of the
companies don’t operate in the region at all, but
they have their eye on it.
That’s on the operational side, but the banking
and investment community is also there.
Primarily, we are talking about the business of

160 ONSITE The Oil Council’s Latin American Assembly
oil and gas and the investment landscape. For
example, Temasek, one of the biggest investors
in the world, is sending a delegation lead
by their Head of Energy Investment; prominent
investors like U.S. Global Funds’ Frank Holmes
will be sharing their insights also.
NG: We’ve seen a lot of market volatility and
a lot of variable analytical forecasts on global
economic growth throughout 2011, spilling into
the first few days of this year. Simultaneously, the
recently released UN World Economic Situation
and Prospects report states that Brazil (along
with China and India) is set to coax our global
economy forward at around 5.4 per cent average
growth in 2012 and 5.8 per cent in 2013.
All things considered, why is it a good time for oil
and gas investors to attend the assembly
DL: Whether times are good or bad, there
is always a discussion to be had. The Assembly
is not promoting particular companies, or even
trying to persuade anyone to invest in Latin
America. We are not sponsored by any bank or
government so our motives are very different.
We believe that even when the capital markets
are relatively thin, you have to build your pipeline,
relationships, and knowledge base so that
when the markets recover you are prepared.
That’s precisely what the Assembly offers:
High-level networking and thought-leadership
from industry leaders.
Having said that, it isn’t hard to see that
there are superb opportunities for E&P firms
across South America and there is always capital
available for good companies with a good
story to tell. Nothing is going to replace oil and
gas as an energy source any time soon, so the
demand fundamentals are strong enough to
keep the credit lines open to the industry. The
fact is, it is a good time to see what’s on offer in
Latin America’s energy market.
NG: Lastly, what are your predictions ahead
of proceedings What are the big questions your
members are asking and the answers we might
expect to see from the decision-makers. Perhaps
more importantly, how will the Assembly facilitate
discussion of the more contentious news items
doing the rounds today
DL: The only prediction I am comfortable
with making is that the discussions will be fascinating.
I’m not concerned about outcomes and
decisions—I’m only concerned with the quality of
the discussions and debates that go into them.
As a member-lead organisation, we are not as
interested in our own opinions as we are in hearing
about what our members, partners, and the
wider market are saying. Assemblies like this are

FEBRUARY 2012 The International Resource Journal
161
part of our global portfolio of events and they
are a foremost source of thought leadership and
high-level discussion in the industry.
Of course, there are some key issues that I
know people will be looking for clarity on. Namely,
how favourable are the terms of the new Colombian
bidding round Will Colombia see a wave of
consolidation How will Perúpetro handle foreign
participation in its hydrocarbon sector Who
benefits from Argentina’s gigantic shale reserves
and will the Government incentivise it adequately
enough for developers What is the investment
appetite across these plays and what can we
expect from the local and international capital
markets in 2012 How are IOC/NOC relationships
evolving on the continent What are Asian NOCs
hunting for and how big is the appetite
I’m personally looking forward to hearing
from the industry about these unresolved questions,
whether that’s on a panel discussion, a
keynote speech, or in the countless discussions
that take place between our 300 delegates
during the lunches, coffee breaks and cocktail
receptions. As you know yourself from covering
these events, it’s the sidelines where a lot of the
action takes place!
For more information about The Oil Council’s
Latin American Assembly please visit:
http://www.oilcouncil.com/event/latam

IRJ intervie
The International M
Association (IMCA
Macondo-sized lear
Safety & Environm
Rio de Janeiro, Sou
162 EXCLUSIVE INTERVIEW IMCA
162

FEBRUARY 2012 The International Resource Journal
163
EXCLUSIVE INTERVIEW
ws:
arine Contractors
) to address
ning curves at its
ent Seminar in
th America

164 EXCLUSIVE INTERVIEW IMCA
Hugh Williams, chief executive of
The International Marine Contractors
Association (“IMCA”), talks asset
threatening events, IMCA’s imminent
safety seminar in Brazil, and fostering
international industry-wide “collaboration
and consolidation”.
The InternaTIonal MaRIne Contractors Association
(“IMCA”) has always assisted members active
in South America’s growing offshore, marine
and underwater engineering industries, especially
since its June 2009 founding of the IMCA
South America Section in Rio de Janeiro, Brazil,
focusing on the region’s oil and gas sector.
Its South American member base is diverse—
from the major contractors to clients including industry-leader
Petrobras. The Section also liaises
with local trade bodies such as IADC, ABEAM and
ABESPetro, and continues to work with a growing
number of local contractors.
The industry is currently seeing a boost to
collaboration and consolidation amongst various
bodies like IMCA, as demonstrated by a number
of joint or co-sponsored events. In fact, IMCA
chief executive Hugh Williams expects the 2012
IMCA Safety and Environment Seminar under the
theme of ‘Risk and impact in marine operations’
(Rio de Janeiro 21-22 March) to convene a veritable
cornucopia of participants.

FEBRUARY 2012 The International Resource Journal
165
“Membership in the region is growing and
we hope the seminar in Rio will provide a good
platform for discussion and give IMCA a further
boost,” he tells IRJ, noting that the seminar’s
underlying theme of ‘asset threatening events’
looks to be one of the biggest challenges facing
oil and gas groups in the wake of Macondo.
“We are delighted to have a
Petrobras keynote address, plus
further Petrobras, Brazilian Navy
and local speakers and to get IBP’s
[Instituto Brasileiro de Petróleo, Gás e
Biocombustíveis] support.”
Specific major incidents aren’t easy subjects to
address in a conference, but generic conclusions
can be drawn and rally renewed emphasis on competence,
equipment and operational procedures—
historic IMCA focuses. With an acute understanding
of each issue, well-matched by a burgeoning presence
in South America, IMCA’s role in the long-term
strategic development of good practice and international
standardisation is not to be underestimated
as we go about tackling these topics; undoubtedly
the most pressing issues of our time.
Defining & addressing asset
threatening events
Across IMCA’s four core divisions—diving, marine,

166 EXCLUSIVE INTERVIEW IMCA
offshore survey and remotely operated vehicles
(ROVs)—assisting around 850 companies in
60 countries, runs an awareness of commonlyaccepted
industry parlance and how discussions
are shaped regionally. As evidenced by IMCA materials
and their ongoing translation and adaptation,
the trade association has a worldwide focus
on a wealth of issues. Internationally, this is vital
to ensure IMCA’s tools are utilised effectively,
particularly as the association continues to raise
its profile in South America and tackle globally
pertinent challenges there.
Specifically, in expanding a historic focus on
occupational health issues to address concerns
of high risk/low probability events in the March
2012 seminar, IMCA’s reference to ‘asset threatening
events’ deals with incidents like Macondo
and Montara—major disasters bringing competency
issues into sharp focus.
“Those are the events we must try to avoid.
‘Asset threatening’ for many individuals in oil and
gas might mean a hydrocarbon explosion, but
that’s rarely the case for IMCA contractor members,”
Williams clarifies.
“For us, this might mean the threat of collision,
grounding or sinking a vessel or failure of a
major piece of vessel equipment.
“There is a consensus among some people that

FEBRUARY 2012 The International Resource Journal
167
there has been great emphasis given to the little
incidents—the slips, trips and falls—and less to the
big ones. In IMCA we’ve done both, I believe, and we
Agenda: IMCA’s 2012 IMCA Safety
and Environment Seminar
Set to take place on March 21-22 at Sofitel Rio de
Janeiro, Copacabana, IMCA’s Annual Safety and
Environment Seminar will address safety, the
environment, health and legislation within marine
operations and major incidents. Comprised of a
range of speakers and round table discussions, the
agenda includes, but is not limited to:
Day One
• Risk and impact in marine operations,
Raphael Neves Moura, ANP
• What would be the legal consequences if
the Macondo accident happened in Brazil
Luciana Vianna Pereira, Baker & MacKenzie Int.
• Workshop, discussion & feedback: The
legal consequence issues from the
Macondo accident
Day Two
• Human reliability applied in emergency
evacuation in a marine oil terminal, Maria
Ventura de Oliveira, PEA, UFRJ
• Workshop, discussion & feedback:
Learning from incidents – case studies
• Offshore diving and marine operations in
Brazil, Captain Alex Rubim, Brazilian Navy
want to make sure we cover all incidents. That’s why
this seminar is focused on the big events.”
Drawing attention to asset threatening events
for vessel operations, equipment and related personnel
enables IMCA to disassociate the hydrocarbon
process concerns and address good practice
and competence within its field of expertise. However,
would it be possible to do this without the
hindsight imposed by events like Macondo
There are different ways of looking at the situation,
Williams says. Many safety-focused conferences
dwell on the fact that it takes a disaster
for us to assume new safety approaches—just
look at how Piper Alpha triggered works on emergency
shutdown valves and safety case regime
mechanisms, and how Alexander Kielland warranted
higher standards of underwater inspection.
In reality, he notes, if you consider offshore
statistics over the past 20-odd years there are
plenty of positive aspects worth noting as well.
“Firstly, it’s been continuously better than most
other industries—certainly compared with onshore
construction, farming, fishing and ordinary shipping—so
the offshore industry is without doubt doing
the right things in that respect,” he says.
“Secondly, the offshore statistics have continued
to come down year-on-year and now reached a
good level, though sadly not zero, so there’s more
to do but a lot has been accomplished.”

168 EXCLUSIVE INTERVIEW IMCA
IMCA’s move to address asset threatening
events also incorporates a new top-down concept;
a focus on corporate competence. The
association is known globally for its support
materials and guidance when it comes to allthings-onsite
in the offshore environment, but in
line with new competency requirements under
enactment today, Williams says, the implication
of corporate responsibility is another important
part of the conversation.
“IMCA has provided a lot of guidance for the
competence of individuals working on ships in
offshore construction. If above them, the company
and supervision from onshore is not competent,
then the wrong instructions arrive onsite.
As a result we also need to look further up the
ladder,” he explains.
“Some of the most significant
accidents of late have come from
senior management failings rather
than an individual onsite. That’s where
corporate competence comes in and
I think that it will be a global effect
from Macondo.”
Marrying international interests with a South
American setting, IMCA will effectively answer

FEBRUARY 2012 The International Resource Journal
169
industry calls for greater competence, properly
define future focus on asset threatening events,
and continue to offer members active in offshore
Brazil a much-needed vehicle for collaboration
and consolidation both during and after the
seminar.
The South American setting
Like any membership body in an emerging region
of offshore industry, IMCA’s success in South
America depends on forging relationships with
key Brazilian organisations. They don’t come
more prominent than Petrobras, but Williams
explains that there is plenty more for the association
to accomplish.
“We have five oil company IMCA members in
the region and those are relationships we look
forward to building on. Our relationships with
existing contractors in the region are good, particularly
with the multinationals, but there are
more local contractors that don’t know us so well
yet,” he says.
“They are equally as important to us as our
existing members and the majors, and we hope
that as our relationship with Petrobras results in
the company increasingly using our materials,
this will impact along the supply chain and others
will move in the same direction.”
This is an approach that has served IMCA
Need-to-know IMCA
guidelines
All our guidelines are freely available to
download from our website in English.
They are available selectively in Brazilian
Portuguese & Latin American Spanishfor
the IMCA Safety, Environment &
Legislation Series; IMCA Diving Division
Series; IMCA Marine Division and DPVOA
Series; and the IMCA Offshore Survey
Division Series from
www.imca-int.com/regions/
southamerica/publications/
well, starting with the super-majors in Europe
where member take-up includes BP, ENI, Shell,
Statoil and Total—each of which has actively distributed
IMCA materials globally.
Concurrently from an operational perspective,
IMCA has persevered in relaying to Brazilian counterparts
and companies the validity of its key guidelines,
including recognition by IMCA of Brazilian
initial diver training, saturation diver training and
diving supervisors’ qualifications that many international
players are well-versed in.
“Brazil has led the development of some
of the world’s deepest and most challenging
offshore projects. The work has been achieved

170 EXCLUSIVE INTERVIEW IMCA

FEBRUARY 2012 The International Resource Journal
171
individually because of its location being more
distant from some of the other oil patches and almost
everything is done in Portuguese,” Williams
notes, drawing parallels with future expansion in
Russia and China where again, working English
may not prove commonplace.
“IMCA has endeavoured to
translate key documents for
members to use locally. Our diving
document D14, the international
code of practice for offshore diving,
is a good example. It’s the bible
among diving publications and
we’ve translated that first as well as
equivalent documents in offshore
services and ROV.”
IMCA exists in order to help facilitate members’
work to the best of its ability, Williams continues,
and regardless of geographical, linguistic
or local industry intricacies, that’s exactly
what the team will continue to do throughout
the world.
“Each sector faces human, geopolitical, technical,
environmental and financial challenges
and will benefit from the avoidance of waste and
improved technology, each being an IMCA aim,”
he concludes.
“We continue to deliver these through collaboration
and standardisation across the sector
globally.”
Brazil’s offshore is the preserve of major
multinationals and local contractors alike. Bids
are lodged. Multimillion dollar drilling campaigns
are run. Designers, fabricators and installers are
converged, and in turn IMCA’s role as an industry
voice for development of health, safety, environmental
and technical good practice guidelines
grows ever instrumental. Its materials are in play
globally. Its ability to enter emerging markets and
cement key relationships is proven. But perhaps
most importantly, as it tackles asset threatening
events and builds its profile in South America,
IMCA’s ability to tailor and fine-tune regional
member support and to foster world-scale collaboration
and consolidation spells good news
for South America’s offshore industry surge.
www.imca-int.com

172 OIL & GAS ADX Energy
ADX Energy
Exploring the Med
By ensuring it adds value to all of its projects, ASX-listed exploration firm ADX
Energy has been setting high standards in the Strait of Sicily, Eastern Europe and
North Africa, while also dealing with the effects of a famous revolution.
172

FEBRUARY 2012 The International Resource Journal
173
OIL & GAS

174 OIL & GAS ADX Energy
Oil and gas exploration and appraisal company
ADX Energy Ltd (ASX: ADX) (“ADX Energy”) operates
five oil and gas permits in North Africa and Europe.
First listed on the ASX as AuDAX Resources in
1987 as a gold and base metal explorer, the firm
continued as such until 2005.
“Essentially the company had a gold and
base metal management team, but in 2007
under our then new managing director Wolfgang
Zimmer, we acquired Alpine Oil and Gas Pty
Ltd who held our current Tunisian assets,” says
chairman Ian Tchacos.
In 2010, the year Tchacos joined the firm as
a specialist oil and gas chairman, the company
changed its name in tune with its new focus as
an oil and gas explorer.
Today, ADX Energy has a wide global presence
with offices in Perth, Vienna, and Tunis.
“Even though we’re a relatively small company,
what probably sets us aside is that we
have the capability to operate our assets, and in
building our asset base we make sure we get into
proven oil and gas basins early,” says Tchacos.
The company has two significant growth opportunities
in Tunisia, including its onshore Chorbane
permit, in which it holds a 40 per cent interest
and which yielded a discovery last year with a
resource potential of 51 million barrels (mean).
It is expected that upcoming testing will
reveal between 30 and 40 per cent recovery at
the site, which Tchacos says could be “transformational
in terms of cash flow and materiality”
for the company.
Offshore in the Sicilian Channel the firm holds
a large acreage position with enormous potential
for a gas condensate province on Europe’s

FEBRUARY 2012 The International Resource Journal
175

176 OIL & GAS ADX Energy
doorstep consisting of three large permits that
straddle the border between Tunisia and Italy.
These include the Dougga gas condensate discovery,
which is 60 per cent owned by ADX Energy.
An independent audit found that this site alone
contains a mean resource of approximately 240
billion cubic feet of sales and 40 million barrels
of liquids, which could generate more than US$6
billion in sales revenue from the field.
ADX Energy is planning to undertake appraisal
and exploration drilling to confirm the commerciality
of a development at Dougga, as well as its
nearby discoveries at Kerkouane and Lambouka
sites in the Sicilian Channel.
“With 60 per cent ownership we plan to farm
down to about 30 per cent and get a number of
wells drilled that will demonstrate the commercial
viability of these strategic assets,” says Tchacos.
Adding value
ADX Energy aims to add value to all of its projects
through its technical skills, as well as by enabling
the commercialisation of existing discoveries.
The company funds its drilling activity via
farmouts and through its retention of large interests
in material prospects that have the potential
to deliver exceptional shareholder returns.
Most of the exploration work performed by
the company is done in joint venture partnerships,
which helps spread the risk, but also enables
access to a broader range of ideas.
The company also aims to work openly with
its investors and build their confidence by achieving
stated operational and corporate goals.
“It has been challenging with the financial
crisis as investors tend to have fairly short-term
investment horizons, while the Jasmine uprising

FEBRUARY 2012 The International Resource Journal
177
in Tunisia has also set us back,” says Tchacos.
“Fortunately confidence is returning in Tunisia
after free elections and I think Tunisia will become
a shining example to the rest of the region.”
The firm’s Sicilian Channel acreage consists
of three different permits, two in Italy and one in
Tunisia, which has exploration potential in excess
of 1 billion barrels based on exploration to date.
“This is an area that was last actively explored
in the 1980’s by Shell, but now we have Shell,
Repsol and ENI picking up acreage all around us,
so we see this area as having real potential for a
renaissance in exploration,” notes Tchacos.
In 2010 ADX Energy picked up a large block
in the Panonian basin in Romania.
“We’ve been undertaking some reconnaissance
work in Romania, preparing ourselves
for both 2D and 3D seismic acquisition, and we
expect that over the next two or three years we’ll
be drilling up to three wells,” says Tchacos.
“It’s in a confirmed oil and gas basin and we
see excellent potential for some relatively lowcost,
high-reward hydrocarbons, which should be
pretty shallow and easy to access.”
“We see further opportunities in the Mediterranean,
Eastern Europe and possibly Eurasia where
there are proven hydrocarbons, potentially material
resources and good access to markets,” he adds.
“We are well positioned with experienced
people in Vienna that have worked in many of
these areas, understand the geology and have
experience working across different jurisdictions.”
After the revolution
Tunisia’s Jasmine Revolution would have major
political, economic and social implications for

178 OIL & GAS ADX Energy
the rest of the Arab world, but on a somewhat
lower scale investment from foreign companies
would also be affected; this was certainly the
case for ADX Energy.
“The beginning of last year was difficult for
us; not so much because we felt that we were at
risk, but because the replacement of president
Ben Ali created a power vacuum,” says Tchacos.
“In Tunisia we were ready to drill a well in
December 2010, but we didn’t actually get to
mobilise our rig until August of last year, due to
concerns about our ability to mobilise a rig in
populated areas where the police didn’t have a
strong control over the population.
“Another reason for the delays was related
to the Libyan situation as we found that a lot of
our contractors in Tunisia had equipment tied
up in Libya.
“When you look at both the offshore and
potential onshore developments, these sorts of
developments are absolutely critical in country
building,” Tchacos remarks.
The company has been able to work closely
with the Tunisian authorities who deferred ADX
Energy’s work programme commitments having
recognised that the political situation had caused
severe delays to its operation.
“We were able to keep our licenses in good
standing, because it was recognised that some
of these delays were brought upon us and were
not of our own doing,” notes Tchacos.
A busy year
ADX Energy is looking forward to what is likely to
be a busy 2012. Tchacos says that next month
the company is likely to begin testing an onshore

FEBRUARY 2012 The International Resource Journal
179
discovery it made late last year, which could lead
to a mean in place resource of close to 51 million
barrels based on the company’s estimates.
“If testing shows that we can recover 30 to
40 per cent of that then that’s going to be transformational
in terms of both cash flow and materiality,”
says Tchacos.
“Parallel to that we hope to start progressing
with seismic studies in Romania and we hope to
also be in a position where we can start farming
out our offshore acerage.”
Tchacos says that over the course of the next
five years he would like to see the company develop
a diversified production base, both from its
onshore Tunisian discovery and from its developments
in the Sicilian Channel.
Tchacos says that moving forward the company
will continue to look for early entry opportunities
into new exploration areas, where it could add
value from its technical and commercial experience
with a much larger balance sheet behind it.
ADX Energy has found itself in a healthy
position, and with its sites and offices spread
across the Mediterranean and Europe, the company’s
plans to start the commercialising process
at some of its projects will no doubt lead
to its growth into a strong, growth-orientated
mid-cap company.
www.adxenergy.com

180 OIL & GAS Brazil’s pre-salt
Offshore Bra
story: Explor
investments i
Brazilian President Lula da Silva posing with the team responsible for the hypothetical
Photo discovery Credit: in the DivulGAção pre-salt. Petrobras Photo Credit: / ABr Ricardo / Wikimedia Stuckert Commons / PR / Wikimedia Commons

FEBRUARY 2012 The International Resource Journal
181
OIL & GAS
zil’s pre-salt
ation & tech
n 2012
180

182 OIL & GAS Brazil’s pre-salt
Tales of discovery from Brazil’s offshore pre-salt (or pré-sal) territories
were ten-a-penny in 2011, and considering the 109 oil discoveries made
worldwide in the first nine months of the annum (of which 19 were in
Brazil and 17 in pre-salt itself) it’s obvious why the play has column
inches bursting at the seams.
Pre-salt yarns have done the rounds in the oil and gas community for some
time—lest we forget the decades of exploration already carried out and the proverbial
jackpot reserves totalling up to eight billion barrels of oil equivalent discovered
by Petroleo Brasileiro S.A (“Petrobras”) in the Tupi pre-salt field in 2006—but
now that ‘Brazil Offshore’ has transitioned to noun-status in industry vernacular,
it looks like the leading role played by the pre-salt is just beginning.
Ensuing interest in these sorts of plays in Brazil doesn’t mean that the growth
story is going to be an easy read (even if it does hold as much as 50 billion barrels
of oil) and if its rigorously forecast boom in interest and activity is going to happen,
a gamut of challenges will have to be overcome.
Firstly, there are issues related to commercial recovery of the hydrocarbons
buried at capacious levels below the ocean floor under thick layers of salt. Waters
are super-deep at around 2,000-plus meters, and carbonate reservoirs are
no more forgiving at around 5,000-plus meters over great expanses. Secondly, at
around twice as expensive to extract compared to conventional oil recovery today,
these great depths demand technological investments and firm focus on exploration.
Thirdly, given their depth and distance from shore, logistical headaches
look likely. And fourthly, there is the issue of installed capacity meeting potential
output—just a smattering of the hurdles up ahead.
Photo Credit: DivulGAção Petrobras / ABr / Wikimedia Commons

FEBRUARY 2012 The International Resource Journal
183
Opting in with Petrobras
One group seeking to tackle development gripes head on is Petrobras, whose
pre-salt success to date is pioneered by the Tupi accumulation in the Santos
Basin where hydrocarbon volumes are estimated at five to eight billion barrels
of oil equivalent (boe). The company also has the Guará well in the Santos Basin
which reportedly houses between 1.1 to 2 billion barrels of light oil and natural
gas, specifically, at gravity of approximately 30o API.
These are remarkable volumes quotes by any estimation, and according
to the company results from wells drilled and tested to date, ‘there is no doubt
regarding the technical and economic feasibility of the commercial development
of the accumulations that were found’.
A brief history
Initial drilling commenced in the Santos basin in 2004, fuelled in large part by
the belief held by technical members of the Petrobras team that the deeper presalt
layer of the Santos basin would house major oil reservoirs.
The first 2006 discovery took place when the team drilled down to 7,600 meters
from the surface of the water and both a giant gas accumulation and reservoirs
of oil condensate were found. Within the year the major Tupi discovery was
made—the largest hydrocarbon find globally since the Kazakh Kashagan discovery
in 2000—this time at just over 5,000 meters from the surface of the water.
In May 2009 extended well testing at Tupi revealed it to be capable of producing
around 30 barrels of oil per day (bpd).
In June 2009, first oil was processed from the Santos basin pre-salt at the
Capuava Refinery (Recap), in São Paulo. Various other wells have since been
drilled, continually delivering oil finds and proving that the potential highlighted
in 2004 was spot on.

184 OIL & GAS Brazil’s pre-salt
In headlines
Tupi may have since undergone a name change to the Lula field, but it remains
to be the company’s first major pre-salt play.
Figures released for 2011 in December revealed that Lula played a crucial
part in Petrobras reaching record annual output levels across its operations.
Averages for oil (2,084,262 barrels/day) natural gas excluding liquefied gas
(60,664,000 cubic meters) and oil and gas (2,465,828 barrels of oil equivalent)
were posted, and the company stated that the production hike in December was
due to new wells onstream— P-57 (Jubarte) and P-56 (Marlim Sul) in the Campos
Basin—and higher output from FPSO Angra dos Reis in the Lula field.
On January 24, news broke that Petrobras plans for a fourth production well
to come onstream in March, boosting crude output from Lula by 95,000 barrels
a day. Furthermore, the company plans to increase the volumes of natural gas
piped from Lula to the shore to 2.8 million cubic meters a day this year.
Ahead of this announcement, on January 19, came reports that the company
had signed a deal to construct its first floating storage and offloading unit
(or FSO) to tackle the distance between Lula and Brazil’s Atlantic Ocean coast.
Plans to convert an existing tanker hull 80 kilometres offshore from the Campos
basin company base into an FSO—adding to the existing pipeline and due for
completion in around 18 months—reflect the group’s continuing interest in developing
the pre-salt in the years to come and addressing the cost, logistics and
installed capacity challenges in place today.
Photo Credit: DivulGAção Petrobras / ABr / Wikimedia Commons

FEBRUARY 2012 The International Resource Journal
185
Aligning with government plans
Brazil’s President Dilma Rousseff and various heads from the cabinet have
been vocal in their support of plans to develop the pre-salt into a highly attractive
stream of revenue for both semi-state run Petrobras and the country. Rousseff—formerly
energy secretary for the southern state of Rio Grande do Sul and
later mines and energy minister—is not only taking a supportive political stance;
she is knowledgeable about them and has been actively involved in developing
Brazil’s offshore for many years.
Aside from years spent crafting models for granting offshore concessions
following the Tupi discovery, the running issue from a legislative perspective has
been how best to arrange and distribute royalties payments from future value
generated by pre-salt players; a conundrum that was highlighted on January 17
when ministerial sources suggested that the fields are likely to go to auction this
year (not in 2013 as previously expected) while a resolution to royalties agreements
remains unknown. Various analysts continue to question whether disagreements
over the division of royalties between federal and state government
sources will slow up the development process.
Fact check: Pre-salt & sub-salt
While they are routinely used interchangeably in media
coverage, pre-salt and sub-salt are not one and the same.
Pre-salt is explored underneath an autochthonous salt
layer which is overlain by stratigraphically older rocks,
whereas sub-salt is explored below an allochthonous salt
layer overlying stratigraphically younger rocks.

186 OIL & GAS Brazil’s pre-salt
Latter day multinational milestones
November 16, 2010 – Oil and gas technology, information services and project
management giant Schlumberger inaugurated the first multinational research
centre wholly dedicated to Brazilian exploration and production. The Brazil Research
and Geoengineering Center was designed to foster the use of geosciences
and engineering to improve activity in the deepwater reservoirs and pre-salt
of offshore Brazil.
December 1, 2010 – The Brazilian Congress approved and submitted to
President Lula some new legislation proposing a production-sharing model for
pre-salt and offshore oil and gas reserves. It looked to move on from two pieces
of legislation enacted earlier that year, by focusing on (i) granting mechanics, (ii)
operatorship, (iii) consortium participation, (iv)consortium decision-making, (v)
bidding criteria, and (vi) offtake entitlement.
May 12, 2011 - The Brazilian National Agency for Petroleum, Natural Gas
and Biofuels (ANP) grants British Petroleum (BP) approvals to purchase 10 exploration
and production blocks in Brazil from Devon Energy, including interests
in eight licence blocks in the Campos basin (where blocks include the pre-salt
Wahoo discovery) and Camamu-Almada basin.
September 26, 2011 – The second international Pre-salt Brazil conference
is staged in Rio de Janeiro.
November 22, 2011 – The ANP suspends all Chevron drilling until “safe conditions”
are re-established following the oil spill off the coast of Rio de Janeiro. The
state-level reaction to Chevron’s incident is widely viewed as a precautionary measure
to safeguard plans for future pre-salt and wider hydrocarbon development.
Photo Credit: DivulGAção Petrobras / ABr / Wikimedia Commons

FEBRUARY 2012 The International Resource Journal
187
December 29, 2011 – Having become the second biggest integrated oil
company in Brail in 2001 and picked up 16 exploration licenses in the Campos,
Espiritu Santos and Santos basins in 2005, oil and gas major Respol Sinopec
(JV) (25 per cent) and project partners BG Group (30 per cent) and Petrobras
(45 per cent and operator) announced that they have submitted a Declaration of
Commerciality to ANP for the Guará area in the pre-salt area of Santos Basin.
January 17, 2012 – Ministerial sources suggest that Brazil will take pre-salt
plays to auction within the year, earlier than previously predicted.
January 25, 2012 – Repsol Sinopec announced that it had found oil traces
in the deepest area of offshore Brazil under exploration. Oil was found in
2.789 meters of water at the BM-C-33 exploration block in the Campos Basin,
ANP stated online.
In 2012 - Anadarko Petroleum plans to sell its Brazilian business ventures
spanning one million gross acres, valued at over US$3 billion. This portfolio
includes some pre-salt areas, and is said to have caught the eye of multinational
major players including Total, of France (already active in Brazil),
Norway’s Statoil (already active in Brazil) and Maersk, of Denmark (active in
Brazil since 2007).

Brazil Canada
Chamber of Commerce

188
OIL & GAS

190 OIL & GAS Brazil Canada Chamber of Commerce
The Brazil Canada Chamber of Commerce works
to strengthen international relations and commerce
between Canada and Brazil. Maintaining strong
relationships with both countries, the Brazil Canada
Chamber of Commerce works closely to identify
membership, investment and trade opportunities
between these two economically powerful nations.

FEBRUARY 2012 The International Resource Journal
191

192 OIL & GAS Brazil Canada Chamber of Commerce
C
Raul Papaleo, pResIDent of the Brazil Canada
Chamber of Commerce, stated that annual trade
between Canada and Brazil has now reached
about $7 billion, a notable increase, but still relatively
small when you consider that the combined
GDP of the two nations tops $4 trillion. Over the
last four to five years, investment has increased,
so expecting a future trade increase between
Canada and Brazil is only natural.
“The trade is very small, but now we have
the space and the patience of both governments
to increase the level of trade,” Papaleo
said. “Our role in this is to foster the increase
in trade and increase in investment between
Canada and Brazil.”
Beginning in 1973, the Brazil Canada
Chamber of Commerce works to secure
business memberships. Last year, the chamber
had 67 corporate members and that figure
has since doubled—a sure sign that the group
is kicking its goals in networking and building
contact companies and people interested in
conducting business in and between both
locations
Investing internationally
Opportunities exist for Canadian companies to
operate in Brazil, and opportunities exist for
Brazilian companies to operate in Canada. The
Brazil Canada Chamber of Commerce provides
the information necessary that allows these
business operations to prosper in foreign nations.
In maintaining this flow of intelligence, the
M
Y
CM
MY
CY
CMY
K

FEBRUARY 2012 The International Resource Journal
193
Canada's Most
International Bank has
Expanded into Brazil!
Scotiabank is proud to be the most active Canadian bank operating in São Paulo,
offering clients local expertise and global reach.
Our professionals in Brazil and in some 50 countries around the world help
clients seize opportunities, unlock value, and achieve their financial goals. We
have been operating in Brazil with a representative office since the early 1970’s
providing trade finance and correspondent banking services through Scotiabank
offices and affiliates abroad. After a recent acquisition, we are proud to announce
that Scotiabank now operates a wholesale bank in Brazil with a multiple banking
license, enabling us to offer access to a range of corporate and investment banking
and capital markets products and services.
At Scotiabank, our local expertise is complemented by our international reach
helping clients achieve results.
For more information, please contact (55-11) 2202-8100 or visit
www.br.scotiabank.com/english
Trademark of The Bank of Nova Scotia. Used under license, where applicable. In Brazil, Scotiabank is a marketing name of Scotiabank Brasil S.A. Banco Múltiplo.
The products and services described herein may not be available in all jurisdictions and are offered by different legal entities authorized to use the Scotiabank trademark. For more specific information, please contact your
Scotiabank Brasil representative.

194 OIL & GAS Brazil Canada Chamber of Commerce
chamber has forged close ties with federal governments
in both nations, as well as the ministries
of foreign affairs .
“The first and most evident sector that
presents opportunities for companies in both
countries to join or to establish their own operations
in the other country is information technology
and communication,” Papaleo said. “This is
the most evident opportunity, but we have large
opportunities in terms of size of projects in the
infrastructure area.”
Notably, opportunities exist in research and
development, engineering, and manufacturing,
particularly in Brazil. This allows for Canadian
organisations to offer their expertise in these
areas, such as assisting in building infrastructure
there. With a need for new roads, highways,
airports and buildings, Brazilian cities must remodel
to accommodate for traffic requirements.
What other opportunities exist for Canadian
companies operating and investing in Brazil
In Brazil’s largest city, São Paulo, overwhelming
population and traffic has driven demands for a
monorail, rail-based transportation, to increase efficiency
and reduce congestion. The value of such
a system is more than $1 billion, Papaleo notes.
Monorails represent a ‘new era’ way of thinking in
terms of transportation, and also tie in with

FEBRUARY 2012 The International Resource Journal
195
“Our goal is to offer access to resources
and network opportunities for anyone
interested or active in investment or
trade amongst Canada or Brazil,”

196 OIL & GAS Brazil Canada Chamber of Commerce
reductions in greenhouse gas emissions, energy
conservation and efficiency, and clean energy.
There are also opportunities in Brazil to become
involved in oil and gas extraction, with more
than $60 million outlined for future investments in
new oil wells, allowing the country to become the
first- or second-largest oil producing nation in the
world, according to Papaleo.
Energy sector development
Ease of operations between the two nations
is also fruitful because Canada and Brazil are
similar in many ways, Papaleo says, however he
feels Canadian businesses can to help Brazilbased
companies become more advanced in
renewable energy production, such as wind
energy and solar energy. It is an area he expects
will see much growth in Brazil over the coming
two to three years, partly because Canada
is considered an advanced nation in terms of
renewable energy and production.
Brazil has committed to sustainable means,
through clean-tech energy and energy sources.
These represent a Canadian growth sector and
an area of opportunity and expertise where
Canadian organisations would be able to assist
those in Brazil.
“Our goal is to offer access to resources and

FEBRUARY 2012 The International Resource Journal
197
Canadian Wealth Management Expertise
provided to Brazilian clients since 1919
At RBC Wealth Management, we provide a comprehensive and secure wealth
management solution to help you preserve and build your wealth, manage
and diversify our assets and achieve your personal financial goals.
Experience the numerous benefits of working with a Canadian-based
professional with language capabilities and cultural affinity, and discover
how you can use RBC’s unique combination of global expertise and local
knowledge to your advantage.
To learn more, visit www.rbcwealthmanagement.com or call us at
(416) 974-8626 or from Brazil call toll free 0-800-891-6893.
There’s Wealth in Our Approach.
RBC Wealth Management is the global wealth business of Royal Bank of Canada and affiliates. The value of investments may fall as well as rise. You may not get back the full amount that you originally
invested. ®/ TM Trademark(s) of Royal Bank of Canada. Used under licence. Above mentioned services are offered through Royal Bank of Canada or its affiliates.
network opportunities for anyone interested or
active in investment or trade amongst Canada
or Brazil,” Brazil Canada Chamber of Commerce
states.
“No matter the size of your business, joining
the Brazil Canada Chamber of Commerce is one
of the best investments you can make.”
The Brazil Canada Chamber of Commerce
seems more growth ahead, and has an aggressive
target for growing its corporate membership;
something it feels only adds further value to its
core operations.
The chamber strives for a 50 per cent increase
in trade and investment over the next two
years, while it is also hoping for a repeat performance
in doubling its member size.
To Be Canada, an organization that identifies
and supports business opportunities in Canada
and Brazil, and was featured in the October issue
of IRJ sister publication, The Canadian Business
Journal, is a member of the Brazil Canada Chamber
of Commerce.
www.brazcanchamber.org

NEWS in review
Oil & gas multinationals
moving fast in 2012
THE U.S.
Total pens US$2.3bn U.S shale deal
IRJ – January 3 - French energy conglomerate Total
SA (“Total”) inked a US$2.3 billion shale deal
with Chesapeake Energy Corp. (“Chesapeake”)
and EnerVest (“EnerVest”) almost two years to
the day since it penned a $2.25 billion accord
with Chesapeake back on January 4 2010.
This deal, one of the latest in the forming
trend of European and Asian energy majors seeking
to partake in U.S. shale oil and gas, will award
Total a 25 per cent stake in a joint venture with
both with stateside partners and lend the firm
exposure to the Utica Shale area of eastern Ohio,
the company reported.
Total stated that payments of $610 million to
Chesapeake and $290 million to EnerVest have
been passed and a further $1.42 billion due by
the 2014 year-end is pledged to Chesapeake for
future well completion works. The deal spans approximately
619,000 net acres, of which 77,000
stem from EnerVest.
Exploration and Production President Yves-
Louis Darricarrere said that the deal provides
Total with “a material position in a valuable longterm
resource base under attractive terms.” It
also builds on the January 2010 accord, under
which partners Total and Chesapeake are active
in the Barnett Shale area in Texas.
Total sits among the top six global oil supermajors
and houses business interests from unconventional
oil and gas to solar and chemicals.
Chesapeake is the second largest natural gas
producer in the U.S.

AUGUST 2011 The African Business Journal
199

200 SECTION Title
NEWS in review
“two good quality oil samples” at a total depth of
5,334 metres. Results to date suggested that the
well can flow at over 3,000 barrels of oil per day
(bpd) and the company said that further evaluation
will determine whether it warrants greater
attention.
“We are encouraged by the results of our first
pre-salt exploration well in this region, which was
also the first ever deepwater well targeting presalt
reservoirs in the Kwanza Basin,” Lars Nydahl
Jorgensen, Maersk Oil’s head of exploration said
OFFSHORE ANGOLA
Maersk makes Angolan deepwater
discovery
IRJ – January 4 – Maersk Oil (“Maersk”) of Danish
energy and shipping giant AP Moller-Maersk,
announced in statement an oil discovery at a
deepwater exploration well in the Kwanza Basin
in offshore Angola.
The company stated that initial interpretation
of data from its Azul-1 well in Block 23, in
which it holds 50 per cent interest, had delivered
in the statement.
“The result may be a further step towards
our goal of building up a significant business in
Angola.”
“There is substantial evaluation work ahead
of us to determine whether the discovery is
enough to invest further to get production going,”
he said, noting that full well appraisal may take
several years and the prospect remains early
stage.
Other partners in Block 23 include concessionaire
Sonangol E.P. (20 per cent) and Svenska
Petroleum Exploration of Sweden (30 per cent).

AUGUST 2011 The African Business Journal
201
Maersk’s statement also notes plans for future
exploration wells across Blocks 8 (Maersk: 50
per cent) and 23 between 2012 and 2013.
On December 31, Maersk announced plans
to pick up 15 per cent interest in another Angolan
prospect, Block 16, from Devon Energy.
Maersk is already the operator of Block 16, and
this acquisition would take its total interest in the
play to 65 per cent subject to closing conditions
and government approvals.
LEBANON
Lebanese Min. sees int’l gas drilling
contract tenders in 2012
IRJ – January 5 – Lebanese Minister of Energy
Gibran Basil stated in a Reuters interview that
the nation will look to take its coastal waters to
international gas drilling contract tender within
three months and close on any contracts forged
within the year. The highly prospective offshore
terrain has been firmly rooted on the global
energy news agenda since U.S. and Israeli firms
made large natural gas discoveries, and reports
state that the area may be home to reserves
worth billions of U.S. dollars.
“Launching the international tenders can and
should be completed in the next three months
and we will make a big effort to do this,” Basil
told the news agency.
“The last step will be signing the first contract
which we will do in the next year or less.”
He explained that given approval from the
cabinet, the ministry ought to be able to set up a
committee to oversee future exploration activity

202 SECTION Title
NEWS in review
within one month. He also noted that multinational
entities from the U.S., Asia, Europe and
Africa have expressed interest in drilling offshore
of the country.
“All the big international companies have not
only shown an interest but have participated in
conferences that we held and bought the information
we have,” he told Reuters, adding that
some firms have “begun to pay money.”
Basil also stated that ocean border disagreements
with southern neighbour Israel will not
delay or otherwise impact plans to reach the
tendering stage, noting that Lebanon’s hydrocarbons
are not confined to the 850 square kilometre
area under dispute; home to previous U.S.
and Israeli discoveries.
find at its acreage in the Barents Sea less than
one year after announcing a first discovery, and
stated hopes for more to come.
The newly discovered Havis find may house
between 200 million and 300 million barrels
ARCTIC OCEAN
Statoil announces “substantial” oil find
in Barents Sea
IRJ – January 9 – Norwegian oil group Statoil ASA
(“Statoil”) announced a second “substantial”
of oil equivalent (boe). It is seven kilometres
southwest of the Skrugard find, the company
said, and both discoveries combined could
deliver a total of between 400 million and
600 million boe. Early reports suggest that
Havis could be an incremental addition as
part of Statoil’s plans to increase hydrocarbon

AUGUST 2011 The African Business Journal
203
in the Barents Sea in nine months,” Lund said.
“Skrugard and Havis open up a new petroleum
province in the north.”
In addition to Statoil (50 per cent) partners
in Havis include multinational energy players Eni
S.p.A. of Italy (30 per cent) and Norway’s stateowned
vehicle Petoro AS (20 per cent).
TURKEY
production by one third to 2.5 million barrels per
day by 2020. Chief executive Helge Lund told
Reuters that the company expects more success
in the locale as exploration continues, and Statoil
envisages first production from Havis by the end
of the decade.
“We believe we now understand [the geology]
and have cracked the code in this area,” Lund
said in statement.
“We think we will be able to make additional
finds in this licence in the future.
“Havis is our second high-impact oil discovery
Hayward’s Genel targets 100,000bpd at
Tawke oilfield, Kurdistan
IRJ – January 10 – Turkish oil group Genel Energy
Plc (“Genel”) announced that it will lift production
at the Tawke field in Kurdistan from current
output at around 60,000 barrels per day (bpd) to
around 100,000 bpd during 2012.
Genel’s confidence in the production increase
is backed by an independent report which
reveals that Tawke houses 78 per cent more
proven and probable reserves than previously
thought, quoting around the 509 million barrels
mark. Tawke project partner and operator DNO
of Norway (Genel: 25 per cent, DNO: 55 per cent)

204 SECTION Title
NEWS in review
also boosted outlook for the field in July 2011
when it stated that “ultimate” recoverable reserves
stand at around 636 million barrels.
Genel was formed in the latter half of 2011
when ex-British Petroleum (BP) chief Anthony
Hayward bought Turkey’s Genel Enerji. The company
originally rumoured from September was
slated to rocket into the FTSE250, and project
partners moved quickly at Tawke, spudding the
project’s first of five wells, Tawke-16, by the end
of December 2011.
“The major plant and pipeline upgrade we
have announced today underlines our confidence
in the huge potential of the Tawke field and the
Kurdistan region of Iraq,” Genel chief executive
Hayward said.
“We are delighted by the upward reserves
revision which further reinforces our belief that
these are genuinely world-class assets in an area
of outstanding geological heritage.”
In reaching the 100,000 bpd benchmark,
Genel will drill five development wells and carry
out a range of upgrade works concurrently.

AUGUST 2011 The African Business Journal
205
INDONESIA
Chevron to drill wells towards
Indonesian oil output hike in 2012
IRJ – January 12 – Energy multinational Chevron
Corporation (“Chevron”) has big plans for well
drilling and improvements in Indonesia during
2012, an official from upstream oil and gas authority
BPMigas stated, Thursday.
The U.S. headquartered group, Indonesia’s
top oil producer, will drill 380 new oil wells to up
output in the country by approximately 11,200
barrels per day (bpd), and carry out works on 211
On December 23, BPMigas said that it believes
Chevron’s deepwater natural gas project
could commence production in 2015. Located off
the East Kalimantan coast, the Chevron Indonesia
Deepwater Development is said to be capable
of peak output totalling 1 billion cubic feet, and
plans include initial production towards a peak of
around 110 million cubic feet a day from the first
well set to come onstream, Bangka.
Indonesia has undergone long-running oil
production decline and many believe that the
country has struggled to secure new investments
in the sector.
existing wells to raise their output to the tune of
4,200 bpd, source Lambok Hutauruk stated.
Hutauruk told press that Chevron Pacific Indonesia,
the group’s local subsidiary, will surpass
its current 2012 production forecast of 330,000
bpd and reach 350,000 bpd. Reuters quotes
Harris Djauhari, an official of Chevron Pacific
Indonesia, as noting that planned drilling will be
crucial if such a soar in output is to be achieved.
He also said that factors including land issues
and local frictions are on the company radar as it
goes about these activities.
THE NORTH SEA
Norwegian licenses granted &
investments abound
IRJ – January 17 – Oil and gas discovery hotspot
Norway has offered up some 60 blocks or partial
blocks in a bid to raise dwindling production by
encouraging exploration and 42 companies have
snapped up stakes or operator status.
Reuters figures stated that 27 of the groups

206 SECTION Title
NEWS in review
have taken on operator roles, 56 of the blocks or
partial blocks are located in the Norwegian Sea
and six are in the North Sea; surpassing the total
of 50 blocks awarded the year previous.
Among the big hitters taking part is Norway’s
Each headline telling of multinational interest
in Norway’s oil industry is welcome news following
announcements made by the Norwegian Petroleum
Directorate, Monday, which stated that the nation’s
total 2011 oil and gas production fell by five per cent.
Statoil ASA (“Statoil”) which stated Tuesday that it
has been granted 11 licenses on the Norwegian
Shelf; nine for the North Sea and two for the Norwegian
Sea. Statoil’s Norwegian Shelf exploration director,
Gro Gunleiksrud Haatvedt, said in statement
that many are “in the mature areas of the North
Sea,” which is “an important core area for Statoil.”
“Access to acreage around existing installations
is an important precondition for maximizing
potential on the Norwegian shelf,” he added.
Other operator-status licensees include
France’s Total with five, ExxonMobil with two and
ConocoPhillips with one.
Also that day, Swedish independent firm Lundin
Petroleum announced plans to up its exploration/
development budget for offshore Norway by 40 per
cent to US$960 million. Chief executive Ashley Heppenstall
noted company plans to double current
production in offshore Norway to 2015.
SOMALIA
Range & Red Emperor spud Somalia’s
first exp well in 20 years
IRJ – January 18 – Shares in Range Resources
(ASX: RRS) (AIM: RRL) (“Range”) and Red Emperor
(AIM:RMP) (ASX:RMP) (“Red Emperor”)
near-doubled since December as market watchers
keenly anticipated the January 18 announcement
that the partners have spudded their first
of two planned exploration wells in Dharoor
Valley, Puntland; the first exploration well to be
drilled in Somalia for 20 years.
“We consider the spudding of the historic
Shabeel-1 well a monumental achievement,”
Range’s executive director Peter Landau stated.
“Red Emperor is delighted to announce

AUGUST 2011 The African Business Journal
207
to the market such a significant and historic
achievement. We wish to firstly acknowledge and
pay tribute to our joint venture partners for the
years of hard work and toil that has led to this industry
defining event,” Red Emperor’s executive
director Greg Bandy stated.
Initial operations have also commenced
ahead of spudding the second planned well,
Shabeel North-1, company statements reveal.
Red Emperor reports that according to internal
company estimates, the blocks may house in
excess of 300 million barrels of recoverable oil.
Both groups hold 20 per cent working interests
respectively over the two licenses in question
across the Dharoor and Nugaal valleys. Combined,
the valleys span almost 36,000 kilometres and
existing estimates state that they may house a total
19 billion barrels of oil. Other participants are Horn
Petroleum, the project operator, through which
Africa Oil holds a 45 per cent working interest.

208 SECTION Title
NEWS in review
Got news Got Twitter
IRJ publishes daily news which may be found free online at
www.internationalresourcejournal.com/resourcenews.
You can also get involved, share your views and incite debate through our new
Twitter account at twitter.com/IRJmagazine or by emailing our editorial team.
Topics lighting up IRJmagazine Twitter in January:
• Suspense building towards the January 23 Brussels meeting of the European Union (EU) and
plans to impose sanctions on Iranian oil trading
• The announcement made by Sierra Leone’s Mines and Mineral Resources Minister, Minkailu
Mansaray, on January 19. Mansaray stated that the ministry plans to publish mining revenues
online in a bid to up transparency as the sector grows.
• Rio Tinto’s January 24 purchase of outstanding common shares in Ivanhoe Mines, of Canada,
ahead of what Rio copper chief Andrew Harding says will be “a very important phase in
the development of the Oyu Tolgoi project,” in reference to Ivanhoe’s multibillion dollar
Mongolian copper project.
ATLANTIC PROMISE
Tullow & R.D Shell accord seeks
“transformational” frontier plays
IRJ – January 18 – Explorer-producer Tullow Oil
Plc (“Tullow”) announced that it will team up with
energy giant Royal Dutch Shell (“Shell”) to explore
for “transformational” discoveries in “underexplored
frontier basins” in the Atlantic by way of a nonbinding
memorandum of understanding between
the groups.
Tullow, whose ascent into the global oil and gas
industry consciousness has been propelled by its
past successes in opening up frontier exploration

AUGUST 2011 The African Business Journal
209
plays and making significant discoveries, says that
the accord “combines the knowledge base and
specialist capabilities of both companies.” Tullow’s
various triumphs in regions including Uganda and
Ghana have seen the company grow to a plus-
US$20 billion market value entity.
Both parties have teamed up to great acclaim
before; last year they made a significant
discovery following the penning of their 2009
agreement which saw Shell partake in Tullow’s
exploration licence in French Guiana.
Also that day, Tullow announced that it is on
course to post record full-year earnings in mid-
March. At the time of publication, the company’s
stock (GMT) was up five per cent on its pricing for
the year previous.
Sergio Gabrielli, is to step down from the company
and assume a government role in his home
state of Bahia prior to running for governor of the
state in 2013, financial broadsheet Valor Economico
reported.
Gabrielli, who has headed up Brazil’s largest
oil and gas group by revenue since 2005, is due
to depart on February 12 and will be replaced by
Petrobras’ gas and energy director, Marias das
Graca Foster, the paper states.
As a business friend of President Rousseff,
Foster is tipped to be a prime choice as Petrobras
continues to pursue its aim of aligning its
operations with government plans to develop
Brazil’s bountiful offshore oil reserves.
Reports noted that Gabrielli has declined
to comment on rumours that he might consider
entering political realms. As early as yesterday,
BRAZIL
Petrobras chief Gabrielli to leave for
politics
IRJ – January 23 – The chief executive of Brazilian
state-run oil and gas giant Petrobras, Jose
Sunday 22, he chose not to confirm his departure
from Petrobras during a telephone interview
with Reuters news agency. His achievements
include piloting the company during its landmark
sub-salt discovery, and overseeing the largestever
share offering Petrobras has run, totalling
approximately $70 billion.

What's hAPPE

NING 2012
1 Gas to Power London, United Kingdom
6-9 Mining Indaba 2012 Cape Town, South Africa
6 11th Annual Wind Power Finance & Investment Summit San Diego, California
7 CSP Today South Africa 2012 Johannesburg, South Africa
7 EU-Renewable Energy Project Finance Summit Amsterdam, Netherlands
9 Hydrocarbon Technology Congress, Macau (HTC Macau) Macau, Hong Kong
12-13 California Resource Investment Conference 2012 Indian Wells, USA
21 2nd Annual Rare Earths & Strategic Metals Sydney, Australia
22 Environmental Management in Mining 2012 Perth, Australia
22 3rd Annual Renewable Energy Finance & Infrastructure Summit Vienna, Austria
AOG 2012 - Australasian Oil & Gas Exhibition & Conference Perth, Western Australia
24 Seventh Annual Water Symposium Sydney, Australia
Feb
2012
OIL & GAS
MINING
RENEWABLE

OIL & GAS
MINING
RENEWABLE
Mar
2012
7 2012 Green Energy Summit & Exposition Milwaukee, Wisconsin
13-14 Unconventional Gas Forum 2012 Barcelona, Spain
13-15 Oil & Gas Africa 2012 Cape Town, South Africa
19-21 Tenth China International Offshore Oil & Gas Exhibition Beijing, China
21-23 The 7th Asiasolar Photovoltaic Industry Exhibition Shanghai, China
26 The Eighth Annual Asia Mining Conference Singapore
30-31 Calgary Resource Investment Conference 2012 Calgary, Canada

4-6 Mining and Metals 2012 Exhibition and Conference Astana, Kazakhstan
12 Green Africa Banjul, Gambia
16-18 Developing Unconventional Gas (DUG) Conference & Exhibition Fort Worth, Texas
16 Technoport RERC (Renewable Energy Research Conference) 2012 Trondheim, Norway
17 Ninth International Mining History Congress Johannesburg, South Africa
24-25 MMEC 2012, 3rd Mozambique Mining and Energy Conference & Exhibition
Maputo, Mozambique
24-26 MiningWorld Russia 2012 Moscow, Russia
25-27 Sibmining 2012 Novosibirsk, Russia
25 World Iron Ore Forum Dubai, United Arab Emirates
26-27 The Fifth Annual Sub-Saharan Africa Oil & Gas Conference 2012 Houston, Texas
26 Global Manganese Ore Forum Dubai, United Arab Emirates
Apr
2012

3 Ecorevolution 2012 Colombo, Sri Lanka
3 ACSEE 2012 - The Second Asian Conference on Sustainability, Energy and the Environment
Osaka, Japan
13 World Congress on Water, Climate & Energy 2012 Dublin, Ireland
14-16 DUO (Developing Unconventional Oil) Denver, Colorado
20 Resources & Energy Symposium 2012 Broken Hill, Australia
22-24 MOC - Mediterranean Offshore Conference & Exhibition Alexandria, Egypt
26-Jun 2
ALTA 2012 Nickel-Cobalt-Copper, Uranium & Gold Perth, Australia
May
2012
OIL & GAS
MINING
RENEWABLE

What The Fifth Nigeria Upstream
Where Radisson Edwardian Mayfair,
London
When 21-24 May 2012
Why “Our Fifth Nigeria Upstream
conference provides a benchmark
diagnosis of the post-election oil and
gas-LNG industry state-of-play in this
key sub-Saharan OPEC producer:
For exploration and development in
the onshore Niger Delta, offshore/
deepwater Nigeria and interior basins,
plus across the oil/energy value chain
following the long-drawn out reform
and corporatisation process which has
been taking place.
Now the playing field has been
improved for local energy firms,
while foreign state oil companies
have added portfolio, and a new set of
independents has entered the market,
while super majors retain core assets
in-country, and ambitious Government
plans exist for LNG projects and gas
development across the fast-growing
economic landscapes of Nigeria.”
4-8 The 25th World Gas Conference Kuala Lumpur, Malaysia
5 Processing of Industrial Minerals & Coal 12 Istanbul, Turkey
5-6 Second Annual Mining Americas Summit 2012 Denver, Colorado
12-14 Global Petroleum Show Calgary, Canada
18-20 SIM 2012 - Senegal International Mining Show Dakar, Senegal
18-22 World National Oil Companies Congress London, United Kingdom
27 XII International Symposium for Environmental Geotechnology, Energy and
Global Sustainable Development Los Angeles, California
Jun
2012

Jul
2012
OIL & GAS
MINING
RENEWABLE

01 the 7th Conference on Sustainable Development of Energy, Water and Environment
Systems – SDEWES Conference Ohrid 2012 Ohrid, Macedonia
08 Global Conference on Global Warming Istanbul, Turkey
09 Intersolar North America (Conference and Exhibition) San Francisco, California
10-12 Life-of-Mine 2012 Brisbane, Australia
16 Africa Mining Congress Johannesburg, South Africa
16-20 Advanced Resource Estimation Perth, Australia
17-20 HydroVision International 2012 Louisville, Kentucky
24-26 Queensland Mining & Engineering Exhibition Mackay, Australia
24-26 Oil Sands and Heavy Oil Technologies Conference & Exhibition Calgary, Alberta, Canada
29 6th ACAS International conference: Nature and Culture:
Environmental Issues in Asia Manila, Philippines
31-02 aug Coal Seam Methane World 2012 Brisbane, Australia

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