Volume 9 Edition 2 2012 - The ASIA Miner

March/April 2012 | Volume 9 | Issue 2 | Industry Technical Information | 矿 业 技 术 信 息
印 度 尼 西 亚 的 崛 起
INDONESIA ON THE RISE
Focus on Coal • Project Survey 2012 • Drilling and Blasting
聚 焦 煤 炭 • 2012 年 项 目 调 查 • 钻 探 与 爆 破

FEATURES
International Project Survey The rate of new project announcements slowed in late 2011. Is the boom
in mining investment starting to fade, or is this just a momentary adjustment .....................................20
Drilling & Blasting Cost-effective drilling and blasting comes at a price – but pays dividends. A recent
conference has highlighted the information needed to plan, drill and shoot efficiently. ..........................62
LEADING DEVELOPMENTS
Asian Intelligence Increasingly, consuming nations in Asia are looking to secure supplies of natural resources
by means of strategic acquisitions of either entire resources projects or stakes with linked offtake
arrangements. .......................................................................................................................................4
Indonesia Funding of US$1 million from Kopex has enabled Pan Asia Corp to complete another drilling
phase at the TCM Thermal Coal Project in South Kalimantan. ................................................................6
India India’s mining and construction equipment industry has a bright future with a number of mining and
construction equipment manufacturers announcing big investments. .................................................. 58
Exploration PanAust has confirmed the discovery of the Nam San copper-gold deposit. ....................72
AROUND THE REGION
Indonesia The Tumpangpitu porphyry resource at Tujuh Bujit has increased 70%. ................................8
China China Shenhua Group is using technology to embrace clean coal & energy practices. ...............30
Mongolia Prophecy Coal has received a positive feasibility for Chandgana power project.....................38
Philippines CGA Mining is carrying out a study into an expansion of Masbate production....................42
Cambodia Brighton Mining has started exploration at the Antrong Gold Project....................................44
Vietnam Hazelwood Resources is seeking feedstock for the ATC Ferrotungsten Project. .....................46
Australia Bandanna Energy is on track to begin significant coal production in 2014. ............................48
Malaysia Lynas Corp has received a temporary licence to operate its rare earths plant. .......................52
Papua New Guinea Mt Kare has an initial resource of 2.1 million ounces of gold equivalent. .................53
Central Asia Central Asia Resources is commissioning the plant at its Dalabai project..........................56
India Deccan Gold Mines’ Ganajur Main reource has increased to 308,000 ounces. ............................59
Construction at G-Resources’ Martabe Gold-Silver
Project in Northern Sumatra, Indonesia, has been
proceeding at full pace as the company prepares for
first production by the end of March. Martabe will be
a major boost for the local, regional and national
economies as it is one of the largest projects in current
development in South East Asia. Resources now
stand at 7.86 million ounces of gold and 73.48 million
ounces of silver with exploration ongoing and the
promise of further resource additions.
Photo courtesy G-Resources.
DEPARTMENTS
Advertisers’ Index ........................................70
Calendar of Events ....................................60
From the Editor ............................................2
Product News ............................................68
Subscription Form ......................................70
Supplier News ............................................66
Maiden Lakuwahi resource .................................10 Jiangsu production imminent..............................32 Eagle Downs approved.......................................50
March/April 2012 | ASIA Miner | 1

From The Editor
Indonesia a hotspot for foreign investment
NOT only is Indonesia’s economy South East Asia’s largest, it is also one
of Asia’s most resilient and one of the hottest emerging economies in the
world. Much is written about the continuing growth of China and India
but Indonesia’s strengthening domestic situation, its abundance of natural
resources, supportive government and strong private sector are attracting
global interest.
Mining is playing an important, and growing, role in the economy, particularly
coal exports, but the key to Indonesia’s economic success now
and into the future is its diversity with agriculture, oil and gas, and manufacturing
also playing key roles. This is also ensuring foreign investment
By John Miller /Editor
from a range of sources. It is a big draw for global investment banks chasing fee revenue on
deals and fund raisings, but which are also well aware of the inherent dangers - from corruption,
poor infrastructure and a lack of transparency to market volatility.
Evidence of Indonesia’s current strong economic situation include ratings agencies upgrading Indonesia’s
debt, the stock market being up by a fifth since last October, a well-stocked IPO pipeline
and investment banking fees growing far faster than elsewhere in Asia. Thomson Reuters estimates
show that fee income in the island nation is up seven-fold, rising annually since 2000 to $391.4 million
in 2011. In the same period, fee income trebled across South East Asia. It’s these type of figures
that have attracted global banks to Indonesia and will continue to attract them in the future.
In 2011 Indonesia’s economy grew at its fastest pace since the 1997-98 Asian crisis with experts
saying the vast domestic market in the world’s fourth most populous nation is helping to
shield it from the global economic turmoil impacting its export-oriented neighbours. Gross domestic
product (GDP) grew by 6.5% in 2011 and is expected to show similar growth in 2012.
GDP has grown more than 5% in seven out of the past eight years, and even in 2009, when many
countries slumped into the global financial crisis, Indonesia’s economy managed 4.5% growth.
Foreign direct investment (FDI) in Indonesia grew 20% to a record $20 billion in 2011 as companies
invested in everything from coal mines to car factories to tap the vast natural resources and
240-million strong domestic consumer market. FDI is likely to remain robust over the medium term
after Moody’s Investors Services and Fitch Ratings recently upgraded Indonesia’s credit to investment
grade, a change that allows its bonds to be added to benchmark global indexes.
The country’s Finance Minister Agus Martowardojo recently told the media that he expects
total investments made by private sector and the government to grow as much as 10% this
year, after rising more than 8% in 2011. Adding to this optimism, particularly in the longer term,
is the passage of a bill throughout Parliament in December that aims to expedite land purchases
for infrastructure projects and which could spur significant growth in the construction sector.
Lack of infrastructure and lack of legal protections has held back Indonesia’s growth but there
are signs that the government is tackling the first issue and it has taken steps in the past few
years to also take on the second, with the new Mining Law providing concrete evidence of this
in the mining sector. Economic experts say the country can take further steps to improve the investment
climate by revising rigid labour laws.
As far as mining is concerned, coal will continue to be the major economic player. Indonesia is
the world’s largest exporter of thermal coal and the second largest exporter of coal overall behind
Australia. A recent International Energy Agency coal report stated, “Global demand for coal will
continue to expand aggressively over the next five years despite public calls in many countries for
reducing reliance on the high-carbon fuel as a primary energy source...” Coal is already the single-largest
source of electricity generation globally, and the report says the main reason for the projected
increase in coal demand over the next five years is surging power generation in emerging
economies, particularly China and India. This bodes well for Indonesia’s booming coal industry.
Other mineral resources, including tin, nickel, copper, gold, silver and manganese are also
major contributors to the mining industry’s input. These resources will all play their part in the future
with new coal, precious metals and base metals projects set to come on line.
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2 | ASIA Miner | March/April 2012

Asian Intelligence
Supply security: challenges for consuming nations
By Nick Merritt, Partner and Asia-Pacific head of Infrastructure, Mining and Commodities, and Lily McMyn, Associate at Norton Rose (Asia) LLP
DEMAND for strategically important natural
resources by both the developed and emerging
Asia Pacific economies continues as a
cause and a consequence of economic
growth in the region, which remains strong
despite the impact of the 2008/09 global financial
crisis and the most recent European
debt crisis. With a finite supply of resources
across an unequal geographical spread, considerable
efforts are being made to secure a
steady offtake of raw materials crucial to the
manufacturing and power generation industries.
Increasingly, consuming nations
are looking to secure this
supply by means of strategic acquisitions
of either entire natural
resources projects or stakes with
linked offtake arrangements.
The pressure to maintain a
steady stream of natural resources
has been exacerbated by
several supply chain disruptions
over the last year that have contributed
to price volatility. Natural
disasters, including the
Queensland floods, have disrupted
exports and have led to
a shortfall in global supply, as
have industrial disputes and
local unrest in Philippines,
Papua New Guinea and Indonesia.
Sporadic supply chain disruptions aside,
Asia needs more raw materials, fast. China’s
coal and iron ore import needs have grown
exponentially in the last decade, and imports
of coal by Japan, Taiwan, India and South
Korea are on an upwards trajectory. India is
heavily dependent on imports to fuel power
plants, and a large proportion comes from Indonesia,
Australia and Africa. Increasingly,
power plant developers are making strategic
acquisitions of mines in order to secure offtake.
In September India’s GVK acquired
three coal projects in the Galilee Basin from
Australia’s Hancock Group and Tata Power
has acquired a minority stake in the
KPC/Arutmin mines. Importers have also recently
been looking to Africa with the Riversdale
deal ensuring a supply for Tata Steel.
Resource-rich nations are increasingly recognizing
the burden that growing exports
could place on their own domestic needs and
are acting to protect their manufacturing industries.
Evolving mining legislation often has
an indirectly adverse effect on mineral exports.
In Indonesia, for example, the 2009
New Mining Law and subsequent regulations
include a domestic supply obligation as well
as new rules on the receipt of sale proceeds
into Indonesian bank accounts. Australia’s
Mineral Resource Rent Tax will, if passed, impose
a 30% tax on the profits of big coal and
iron ore companies, which are likely to be exporters.
In China, the use of export restrictions
on the sale of raw materials has been
The leaching, up and downstream separation, and product finishing workshops at
Lynas Corporation rare earths plant in Malaysia.
heavily criticized and in January the World
Trade Organization (WTO) issued a decision
supporting its earlier finding that China’s raw
materials export duties and policies contravene
international trade rules.
Nowhere is resource nationalism more apparent
than in rare earths, a group of essential
materials used in the electronics and
automobiles industries. Almost all manufacturing
countries need rare earths, principally
Japan and South Korea which rely heavily
on exports of electronics, whitegoods and
automobiles. Over 90% of the world’s rare
earths minerals are produced by China,
which has recently tightened its export policy.
In 2010, China reduced its export quota
for rare earths by 40%, a quota which remains
unchanged. Rare earths were not
part of the WTO decision in January, although
it is thought this decision will renew
pressure on China to review the policy.
So how are resource-poor countries protecting
their manufacturing industries and
overall economic stability from scarcity of resources
Increasingly, state-owned enterprises
and export credit agencies are stepping
up, and countries are encouraging overseas
investments in resources. In China the government’s
12th Five Year Plan includes
plans to encourage overseas investment by
Chinese companies in iron ore mines in
order to supply steel mills. In September
2011, a Chinese steel consortium together
with Chinese bank CITIC, paid $1.95 billion
for a 15% stake in the world’s largest niobium
producer, CBMM.
Japan, which no longer has its
own operating copper mines, recently
demonstrated the power of
a nationally co-ordinated approach
to project financing when
it secured long-term supplies of
copper through investment in Caserones
copper mine in Chile. It is
the first mining project in which all
sponsors, offtakers and financial
institutions are Japanese. The
support of JBIC has been significant
- it is actively increasing its
role in acquiring strategically important
natural resources and provided
a significant portion of the
financing of the CBMM project. In
Korea, state-owned POSCO has investments
in the CBMM project and various Australian
coal and iron ore projects. In January 2012 it
invested the equivalent of US$1.8 billion in increasing
its stake in Hancock Prospecting’s
Roy Hill iron ore project in Australia to 15%.
In the rare earths market, the development
by Australia’s Lynas Corporation of a rare
earths refinery in Malaysia is important. It is
the first new rare earths processing plant outside
China in over two decades is at the forefront
of measures aimed at breaking
China’s rare earths dominance. Other major
developments include involvement by Korea’s
KORES in a large-scale rare earth project in
South Africa, alongside five other Korean
companies. For countries dependent on others
for energy and mineral resources, all-national
strategic alliances between
government financial institutions, commercial
banks, sponsors and developers will be key
to securing long term, stable supplies of essential
raw materials.
4 | ASIA Miner | March/April 2012

Indonesia
Kopex funds to complete TCM drill program
FUNDING of US$1 million from Kopex has
enabled Pan Asia Corporation to complete
another phase of drilling at the TCM Thermal
Coal Project in South Kalimantan. Kopex is a
large international coal group which has previously
recommended the TCM project be
advanced to final feasibility stage, following a
positive independent study, which signals its
view of the project’s viability.
The funding is repayable at Pan Asia’s election
in cash or convertible into Pan Asia ordinary
fully paid shares at Aus$0.15 per share within
60 days following final feasibility study completion.
In April 2011, Kopex entered into an agreement
with Pan Asia to co-fund the accelerated
infill drilling program and final feasibility study at
TCM. Its total commitment to date towards the
drilling now stands at US$1.6 million.
In January Pan Asia completed the phase
3 drilling program required for the feasibility
study, adding 11 boreholes and advancing
4250 metres since the end of the September
quarter. The phase 3 program included 30
boreholes for 8680 metres. All geotechnical,
hydrological, geophysics, coal quality analysis,
methane gas testing and spontaneous
combustion sampling required for the feasibility
has been completed. The combined
phase 1, 2 and 3 programs bring drilling to
date on the concession to 50 boreholes, for
a total of 14,274 metres.
In October 2011, the company announced
a 115% preliminary upgrade to its initial
JORC resource at TCM. After completing 18
holes of phase 3, the resource was upgraded
from about 53 million tonnes to about 114.6
million tonnes, representing a significant increase
of 115%. This estimate also includes
35.6 million tonnes in the measured category.
As well as compiling and validating all date
from the most recent drilling, this quarter Pan
Asia is also updating the geological model, undertaking
hydrogeological modelling, geotechnical
modelling, and ventilation and gas
drainage modelling. It is also carrying out mine
design and planning, assessing coal handling
and processing options, designing surface infrastructure
and facilities, and updating its financial
evaluation. This work is also required
for the feasibility study, which the company
aims to finish by the end of March.
Pan Asia is aiming to supply the fast expanding
Asian markets from its thermal coal assets
in Indonesia and through TCM has exposure to
high quality export thermal coal with an average
calorific value of 6566 kcal/kg, 6.41% total moisture,
13.52% ash and 1.52% sulphur.
Gold and silver production imminent at Martabe
An aerial view over G Resources’ Martabe Gold-Silver Project in Sumatra.
G-RESOURCES is close to achieving first
gold and silver production at the Martabe
project in Sumatra. Construction is nearing
completion, the operations management
team is in place for commissioning and startup,
initial mining and stockpiling of ore has
started and key process materials supplies
contracts are in place.
Martabe is seen as one of the more promising
undeveloped mineral deposits in Asia
and resources now stand at 7.86 million ounces
of gold and 73.48 million ounces of silver.
Significant progress has been made in the
final three months of 2011 and the first two
months of 2012 and G-Resources expects to
achieve first production by the end of March.
Concrete works are almost complete, the
two large SAG and ball grinding mills are installed,
all large process tanks are complete, steel
and piping installation is well advanced and the
first phase of the high voltage power plant is
commissioned. The final capital cost estimate
remains unchanged and at the end of December
2011 the company has about US$150 million
in cash on hand and no debt. It has also
arranged a US$100 million stand-by credit facility
with a consortium of international banks.
The mine, discovered in 1997 through regional
stream sediment sampling, is a sulphidation
epithermal deposit and in subsequent years,
other deposits have been discovered. The
Contract of Work covers a 2500sqkm area
with the most significant deposit being Purnama,
where a resource of 66.7 million tonnes
containing 1.74 grams/tonne gold and 21.5
grams/tonne silver, representing a total of 3.7
million ounces of gold and 46 million ounces of
silver, has been defined by diamond drilling.
G-Resources initially aims to annually produce
250,000 ounces of gold and 2 million
to 3 million ounces of silver from the project,
with hopes to expand production to 1 million
ounces of gold within the next five years.
Once production starts, G-Resources will
send the mixed gold and silver bullion produced
at Martabe to Logam Mulia for refinement
and then for sale on the international
market. Logam Mulia is a unit of Indonesian
state miner Aneka Tambang.
Exploration and drilling activities continue to
extend the known Martabe deposits, while
field work and drilling have started on regional
targets within the large tenement area.
6 | ASIA Miner | March/April 2012

Indonesia
70% increase in Tumpangpitu porphyry resource
THE estimated porphyry copper-gold resource
at the Tumpangpitu area of Intrepid Mines’ Tujuh
Bujit project in East Java has increased by more
than 70%. The inferred resource now stands at
1.7 billion tonnes @ 0.41% copper and 0.46
grams/tonne gold for 15 billion pounds of copper
and 25 million ounces of gold.
Mineralization remains open at depth and laterally,
and Intrepid believes that the geological
potential at Tumpangpitu stands at an additional
40%-60% of the current resource tonnage
at a slight reduced grade. The current estimate
does not include five completed holes.
The porphyry resource does not include the
Tumpangpitu oxide gold-silver zone which
stands at 130 million tonnes @ 0.55 grams/
tonne gold and 18 grams/tonne silver for 2.4
million ounces of contained gold and 80 million
ounces of contained silver. This inferred resource
is the subject of an ongoing infill drill program
to provide additional data for the Oxide
Project Heap Leach Pre-Feasibility Study.
The porphyry estimate is based on a resource
block model of about 3.4km by 2.8km.
The vertical extent of mineralization defined to
date is about 1.1km and extends from 200
metres to 900 metres below sea level. It has
been estimated by independent consultants
Hellman and Schofield in accordance with the
JORC Code and NI 43-101, and is based on
41 drill holes in excess of 700 metres for a total
of about 36,600 metres. While the latest estimate
is a significant increase to that of the May
2011 estimate, Intrepid remains confident that
the porphyry copper-gold resource at Tumpangpitu
will continue to grow, as additional
drilling is completed over the coming months.
Intrepid’s CEO Brad Gordon says, “While
we are pleased to have tripled the size of this
porphyry resource in just a little over a year,
we still have not reached the limit of the resource
at Tumpangpitu, let alone across the
entire Tujuh Bukit project, which clearly ranks
amongst the world’s major undeveloped copper-gold
projects. We will soon have 11 drill
rigs available, including one capable of drilling
to depths of almost 2km. We look forward to
initiating drilling at the Salakan porphyry and
continuing to expand our exploration program
across this exciting project area.”
The company expects to start drilling at Salakan
during the current quarter and is accelerating
drilling to further test Tumpangpitu and
additional porphyry and epithermal targets.
Initial resource for Abong Gold Project
BARISAN Gold has announced an initial resource
estimate for its Abong epithermal project
in Northern Sumatra of 405,000 ounces
of gold and 2.9 million ounces of silver. The
deposit is within the Barisan I Izin Usaha Pertambangan
(IUP) owned by PT Linge Mineral
Resources (PT LMR), which is 80% owned by
Barisan Gold. The inferred estimate is on 130
drill holes completed by previous owner East
Asia Minerals for a total of 8660 metres.
At a 0.4 grams/tonne gold cut-off, Mining Associates,
of Brisbane estimates an initial NI
43-101 compliant inferred resource of 8.5
million tonnes @ 1.49 grams/tonne gold and
10.7 grams/tonne silver. Of this tonnage,
5.979 million tonnes are at the Bulan deposit,
403,000 tonnes at Bintang 1 deposit and
2.105 million tonnes at Bintang 2.
Abong is within ‘production forest’ as per
the classifications of the Ministry of Forestry
(MoF) of Indonesia. Production forest is one
of the lowest levels of forest designations in
Indonesia and carries no open-pit mining restrictions
like in some other forest designation
areas. Furthermore, all the prospective areas
at Abong lie outside ‘primary forest’ as per
the classifications of the MoF with relations to
the current two-year forestry moratorium.
The near-term focus of Barisan at Abong is
to concentrate on growing the initial resource.
A view over the Pantan Cuaca Valley at Barisan Gold’s Abong project.
Drilling conducted by East Asia as well as
field exploration conducted both by East Asia
and Barisan have identified zones of potential
extension to the current resource.
To the northwest of the resource, in the Bintang
area, previous drilling has not closed off
the deposit as the most northerly holes have
all encountered mineralization. This is also the
area of the resource where the highest grades
have been returned. Barisan has identified mineralized
outcrops 2km north of the northernmost
drill hole that returned assays of gold.
To the northeast of the current resource,
adjacent to the Bintang area, aeromagnetic
surveys and filed exploration have identified
a potential parallel system to Abong. Mineralized
outcrops have been identified at surface
1.2km to the east of the eastern
boundary of the resource pit shell.
The company has started field exploration in
the northwest area in non-forest designated
areas as it awaits receipt of a forestry borrowuse
permit that will permit exploration work within
the production forest designated area.
Pending the results of the field exploration and
the timing of receipt of forestry borrow-use permits,
Barisan intends re-initiating drilling at
Abong to add ounces to the initial resource.
8 | ASIA Miner | March/April 2012

Indonesia
1.18 million ounce maiden Lakuwahi resource
AN INITIAL 1.18 million ounce, JORC-compliant
gold equivalent resource has been estimated
for Robust Resources’ Lakuwahi
project on Romang Island. The independent
estimate comprising 592,000 ounces of gold
and 27.7 million ounces of silver is in line with
the company’s expectations at the current
stage and limited extent of exploration.
Lakuwahi is within a large 6km by 4km magnetite
destruction zone on the southern section
of Romang Island. Robust has mainly
focused diamond drilling on three prospects
- Batu Mas, Batu Hitam and Batu Hitam West
- and the estimate is based on results of drilling
these three prospects only.
Two-thirds of the gold equivalent ounces are
in the indicated category and there is scope
for a significant resource increase aided by an
aggressive $15 million exploration program in
2012 with seven diamond drill rigs on site.
There is strong evidence that this is only the
first stage of an even more substantial discovery
within the Lakuwahi project area. Untested
and minimally tested anomalies such as
Batu Jagung, Batu Perak and Batu Hitam
South are priority drilling targets for 2012.
The Lakuwahi deposits discovered to date
generally consist of upper oxide, gold and silver
rich caps which are underlain by sulphidebearing
breccias containing potentially economic
concentrations of gold, silver, copper,
lead and zinc. As well as the gold and silver
Drilling at Robust Resources’ Lakuwahi project on Romang
Island.
Outcropping at the Lakuwahi project of Robust Resources.
in the oxide and sulphide, base metal resources
of 95 million pounds of copper, 697 million
pounds of lead and 678 million pounds
of zinc are estimated to occur in the sulphide
portions of the deposit.
As well as the ongoing exploration in the
south and north of the island, Robust is investigating
the viability of mining and treating the
Lakuwahi near-surface gold-silver deposit in
the short to medium term. Metallurgical studies
are well advanced and will continue throughout
the year. Results to date indicate that the oxide
mineralization is highly amenable to standard,
low-cost processing methods.
The fact that two-thirds of the estimate is
classified as indicated means that these resources
can form the basis of a pre-feasibility
study and infill drilling which will lead to a feasibility
study if successful. It is Robust’s intention
to complete the front-end work for
mining, processing, marketing and environmental
pre-feasibility studies on the oxide
project during 2012.
Detailed metallurgical test work is also proceeding
in order to define a treatment path
for the sulphide mineralization. The company
is optimistic that development of the sulphides
can proceed soon after the oxide project
is brought into production.
Approval gives green light to Jogjakarta project
THE regional government has approved the
Environmental Impact Assessment for Indo
Mines’ Jogjakarta Iron Project on the island
of Java. The approval by the Bupati Kulon
Progo provides the green light for the iron
sands project to proceed within the specified
boundaries of the submission.
The assessment, known as AMDAL in Indonesia,
is an independent and comprehensive
assessment of the significant environmental
and social impacts likely to result from implementation
of the proposed iron sands project.
Approval has been received for several key documents
which cover the entire mine life of the
project, including the Environmental Impact
Analysis, Environmental Management Plan and
Environmental Monitoring Plan.
Indo Mines’ managing director Martin
Hacon says the AMDAL submission was
based on world best practice environmental
standards along with extensive consultation
with all stakeholder groups and incorporates
the company’s agreements with the
local community.
“We have been working closely with our Indonesian
partners and the regional government
on the AMDAL process for three years
and this approval reflects the co-operation
brought to the process by all sides. It is the
most significant milestone achieved to date
by the company in the development of the
iron project and provides a framework for a
true partnership between the operators and
the local community.”
The ASX-listed company has recently received
confirmation that the Rajawali Group has
approved proceeding with a $13.2 million
placement, which represents a 19.9% strategic
holding in Indo Mines. This investment
provides cornerstone funding to assist in
completing construction and commissioning
of the demonstration plant at Karawuni, additional
test work required for development of
the iron sands project and completion of project
finance due diligence.
The Rajawali Group is an Indonesian investment
holding company with core operations
in hospitality, plantations, mining and minerals,
including coal, infrastructure and transportation.
Its combined portfolio is estimated
to be in excess of US$2 billion.
Indo Mines also received a funds boost
late in 2011 from the sale of its interest in
the Mangkok Coal Project in South Kalimantan
to a private Indonesian group. It received
US$1.6 million cash with the
purchaser also assuming all liabilities relating
to the project with effect from September
1 and amounting to about US$2.7
million. The purchaser also agreed to pay to
Indo Mines a royalty for production in excess
of 450,000 tonnes at the rate of US$6
per tonne to a maximum of 850,000 tonnes.
10 | ASIA Miner | March/April 2012

Indonesia
Reliance prepares for phase two drilling at Tanoyan
The Tanoyan Gold Project of Reliance Resources is in North Sulawesi.
THE phase one drilling program at Reliance Resources’ Tanoyan Gold
Project in North Sulawesi has been completed with 88% of drill holes
intersecting reportable gold. There were 44 holes completed in the
program for 5041.8 metres with an updated NI 43-101 resource estimate
to be undertaken. The company is also preparing for a 10,000
metre, phase two drill program.
The Tanoyan project consists of five principal vein systems - Sondana,
Ramai, Talong, Modupola and Lingkobungon - which are predominantly
orientated northeast to southwest and dip steeply to the
northwest or southeast. Drilling to date has primarily focused on the
Sondana and Modupola veins.
Phase one drilling was designed to increase the size and improve the
classification of the existing resource of 2.22 million tonnes @ 1.3
grams/tonne for 91,100 ounces of contained gold. The company is confident
that the drilling has resulted in a material increase in the size of
the resource. It confirmed that gold mineralization along the Sondana
Vein occurs over a strike length of about 2km, extending from surface
to a minimum of 100 metres vertical depth over much of its length. The
vein is still open to the north and open down-dip over much of its length.
From surface indications, the Sondana Vein system extends an additional
1.1km north giving an overall strike potential of at least 3.1km.
This extension will be a priority target during the phase two program,
which is designed to further explore the potential of the Tanoyan epithermal
gold vein system and to form the basis of ongoing studies to
ascertain the commercial viability of a large gold mine.
Experience from drilling the Sondana North zone during phase one
has shown that deeper drilling intersected mineralization of higher
grade and greater widths than encountered in historical drill holes.
Also updated detailed mapping and surface sampling of the vein system
from phase one has advanced the company’s understanding of
structural controls of mineralization.
In addition to following up extensions at Sondana and additional
drilling at the Talong-Modupola and Lingkobungon vein systems,
phase two drilling will also target Ramai Vein, 700 metres west of Sondana.
This 1.7km-long vein has only been tested by six historical drill
holes, several of which intersected significant gold mineralization including
7 metres @ 5.3 grams/tonne, 2 metres @ 5.2 grams/tonne
and 16 metres @ 0.6 grams/tonne. The continuous nature of Ramai
Vein as seen on surface suggests it has similarities with Sondana Vein.
Reliance, which changed its name early this year from Golden Peaks
Resources, has a portfolio of five tenements on the islands of Sulawesi
and Halmahera in East Indonesia. It is conducting surface exploration
programs on the Palopo, Kapa Kapa and Roko gold projects.
Asia Resources begins trial iron sand production
THE iron sands project of Asia Resources
Holdings Limited in East Java has started trial
production. An initial 5000 tonnes of raw iron
sand has been mined and sent to the worksite
of Dampar for processing. As well as the
trial production, Asia Resources has also
started marketing activities targeting both
local and overseas customers for the sales of
its iron sand.
At the initial production stage, Asia Resources
will sell low concentrations of processed
iron sand but it is the ultimate aim of the
group to provide high-quality iron concentrates
at a low cost which will be exported to
medium-size steel–makers in China and
other regions in Asia.
Asia Resources also plans in the long run
to establish refinery plants near the mine for
filtering the iron sand in order to improve the
concentration and quality of the iron sand.
In mid-2010 Asia Resources Holdings acquired
a 55% equity interest in PT Dampar
Golden International, a company incorporated
in Indonesia and which has exclusive
rights to manage the site of an iron sands
project in East Java.
Asia Resources intends seeking opportunities
to further improve its production techniques
and transport logistics, and commence
the planning and installation of more equipment
at the mine in order to increase its production
capacity. The company emphasises
that the actual production of the mine may
deviate from the results of the trial production.
The actual production amount of the mine
may or may not be satisfactory.
Asia Resources Holdings is an investment
holding company that is listed on the Hong
Kong Stiock exchange. It operates in two
segments - manufacturing and sale of pharmaceutical
products operations, and iron ore
exploration and exploitation operations.
14 | ASIA Miner | March/April 2012

Indonesia
Encouraging assays from Zulham prospect
ENCOURAGING gold assays have been returned
from initial drilling of the Zulham epithermal
prospect within Centurion Minerals’
Banda Raya property in North Sumatra. The
holes were designed to test the continuity of
north-trending, near-surface, mineralized
breccias and wall rocks that have been previously
reported.
Two hand-held mobile drill rigs capable of
drilling 5.5cm diameter core to a maximum
depth of 15 metres have been utilized to drill
13 holes to date with results indicating that
the breccia is the most favourable host rock
for gold mineralization. Best results are 5 metres
from 3.5 metres @ 2.76 grams/tonne
gold including 4 metres from 4.5 metres @
3.44 grams/tonne; 3.2 metres from 1 metre
@ 1.79 grams/tonne including 1.9 metres
from 2.3 metres @ 3 grams/tonne; 2 metres
from surface @ 2 grams/tonne; 2.2 metres
from 2.8 metres @ 1.19 grams/tonne; and 2
metres from 8 metres @ 1.02 grams/tonne.
Gold mineralization in the drill holes and in
previously announced channel samples, extend
the gold mineralization for about 300
metres along the structure believed to control
the mineralization. In addition, three Breccia
boulders located on a ridge crest a further
200 metres to the north, yielded 20
grams/tonne gold from a 1 metre channel
sample in one boulder, and 6 grams/tonne
and 3 grams/tonne from rock chip samples
in the other two, respectively.
All of these results are indicative of potentially
large epithermal gold mineralization at the
Zulham prospect. Infill short-hole drilling is
ongoing and Centurion is preparing for a firstphase
deep drilling program to test the extension
of the breccia zones.
The Zulham prospect is about 1km northeast
of the Keladi prospect where past explorer
Highlands Pacific reported nine rock chip samples
that returned between 2 and 27
grams/tonne gold over a 500 metre-long vein
system. Centurion geologists have located a 4
metre-wide quartz vein that extends for at least
100 metres. An extensive exploration program
is under way within the Keladi prospect.
The Zulham and Keladi prospects, the Simpang
Tiga epithermal gold showing, which is
about 500 metres northwest of Zulham, and
the nearby Geudob gold-rich porphyry-type
occurrence lie within a 4km area along the
Miwah-Menawan lineament, which is the prominent
structural control for gold mineralization
in the region. Earlier this year Canadian-based
Centurion closed the second tranche of a brokered
private placement which brought total
funds raised from the financing to Can$1.25
million. These funds are being used to further
exploration on Banda Raya.
Centurion’s properties in North Sumatra are adjacent to East Asia Minerals’ Miwah project.
Ark eyes off advanced Marsuparia project
AN option for ASX-listed Ark Mines to acquire
ownership and control of the Marsuparia
Contract of Work (CoW) in Central Kalimantan
has been further extended to allow the
company to complete its due diligence and
obtain shareholder approval. Marsuparia is an
advanced gold exploration project where
more than US$22 million has spent by the
current owners, including 18,000 metres of
diamond drilling. The Marsuparia sixth generation
CoW covers 20,840 hectares and includes
six major prospects and numerous
other targets. There have been bonanza gold
grades returned in the epithermal deposits
while mineralization extends beyond 850 metres
in a copper porphyry zone.
The Ongkang epithermal gold-silver deposit
is expected to be in production by the end of
this year. Significant mine accommodation
and infrastructure is established at the project
and in the area while river transport is also
available to a major Kalimantan port, and
forestry permitting is advanced.
The total payment to the vendor is Aus$4
million in cash and the issue of 10 million Ark
shares value at a total of $2 million. Ark’s acquisition
and subsequent exploration costs
have recently been offset by a placement
which raised Aus$1.05 million. The work
being undertaken now includes geological, financial
and legal due diligence. Pan Asia has
also proposed that its managing director
Roger Jackson be appointed as a director of
PT Pacific Masau Minerals (PT PMM).
Once the due diligence and acquisition
have been completed, and shareholder approval
obtained, Ark can then begin working
with PT PMM to reinstate exploration activities.
Ark believes Marsuparia has potential
to be a company transforming acquisition,
with the Ongkang project expected to be
the initial primary focus.
March/ April 2012 | ASIA Miner | 13

Indonesia
Reliance prepares for phase two drilling at Tanoyan
The Tanoyan Gold Project of Reliance Resources is in North Sulawesi.
THE phase one drilling program at Reliance Resources’ Tanoyan
Gold Project in North Sulawesi has been completed with 88% of drill
holes intersecting reportable gold. There were 44 holes completed in
the program for 5041.8 metres with an updated NI 43-101 resource
estimate to be undertaken. The company is also preparing for a
10,000 metre, phase two drill program.
The Tanoyan project consists of five principal vein systems - Sondana,
Ramai, Talong, Modupola and Lingkobungon - which are predominantly
orientated northeast to southwest and dip steeply to the
northwest or southeast. Drilling to date has primarily focused on the
Sondana and Modupola veins.
Phase one drilling was designed to increase the size and improve the
classification of the existing resource of 2.22 million tonnes @ 1.3
grams/tonne for 91,100 ounces of contained gold. The company is confident
that the drilling has resulted in a material increase in the size of
the resource. It confirmed that gold mineralization along the Sondana
Vein occurs over a strike length of about 2km, extending from surface
to a minimum of 100 metres vertical depth over much of its length. The
vein is still open to the north and open down-dip over much of its length.
From surface indications, the Sondana Vein system extends an additional
1.1km north giving an overall strike potential of at least 3.1km.
This extension will be a priority target during the phase two program,
which is designed to further explore the potential of the Tanoyan epithermal
gold vein system and to form the basis of ongoing studies to
ascertain the commercial viability of a large gold mine.
Experience from drilling the Sondana North zone during phase one
has shown that deeper drilling intersected mineralization of higher
grade and greater widths than encountered in historical drill holes.
Also updated detailed mapping and surface sampling of the vein system
from phase one has advanced the company’s understanding of
structural controls of mineralization.
In addition to following up extensions at Sondana and additional
drilling at the Talong-Modupola and Lingkobungon vein systems,
phase two drilling will also target Ramai Vein, 700 metres west of Sondana.
This 1.7km-long vein has only been tested by six historical drill
holes, several of which intersected significant gold mineralization including
7 metres @ 5.3 grams/tonne, 2 metres @ 5.2 grams/tonne
and 16 metres @ 0.6 grams/tonne. The continuous nature of Ramai
Vein as seen on surface suggests it has similarities with Sondana Vein.
Reliance, which changed its name early this year from Golden Peaks
Resources, has a portfolio of five tenements on the islands of Sulawesi
and Halmahera in East Indonesia. It is conducting surface exploration
programs on the Palopo, Kapa Kapa and Roko gold projects.
Asia Resources begins trial iron sand production
THE iron sands project of Asia Resources
Holdings Limited in East Java has started trial
production. An initial 5000 tonnes of raw iron
sand has been mined and sent to the worksite
of Dampar for processing. As well as the
trial production, Asia Resources has also
started marketing activities targeting both
local and overseas customers for the sales of
its iron sand.
At the initial production stage, Asia Resources
will sell low concentrations of processed
iron sand but it is the ultimate aim of the
group to provide high-quality iron concentrates
at a low cost which will be exported to
medium-size steel–makers in China and
other regions in Asia.
Asia Resources also plans in the long run
to establish refinery plants near the mine for
filtering the iron sand in order to improve the
concentration and quality of the iron sand.
In mid-2010 Asia Resources Holdings acquired
a 55% equity interest in PT Dampar
Golden International, a company incorporated
in Indonesia and which has exclusive
rights to manage the site of an iron sands
project in East Java.
Asia Resources intends seeking opportunities
to further improve its production techniques
and transport logistics, and commence
the planning and installation of more equipment
at the mine in order to increase its production
capacity. The company emphasises
that the actual production of the mine may
deviate from the results of the trial production.
The actual production amount of the mine
may or may not be satisfactory.
Asia Resources Holdings is an investment
holding company that is listed on the Hong
Kong Stiock exchange. It operates in two
segments - manufacturing and sale of pharmaceutical
products operations, and iron ore
exploration and exploitation operations.
14 | ASIA Miner | March/April 2012

Indonesia
Waterfall drilling confirms multiple vein zones
RESULTS from drilling of Waterfall target at the Mencanggah prospect
of Southern Arc Minerals’ West Lombok property have confirmed
multiple discrete high-grade shoots developed within the West Lombok
epithermal systems. These results will be further interpreted and
ranked with results from the other Mencanggah and Pelangan targets
for future drilling. The decision to initiate phase one exploration at the
Waterfall target, rather than higher priority targets such as Bising and
Tibu Serai, was a strategic decision as the company worked to establish
a strong corporate and security presence in the region. There
were 27 holes completed totalling 6634 metres.
Drilling tested outcrops of banded and brecciated epithermal chalcedonic-quartz
veins for the presence of high-grade shoots at depth.
Highlight intersections are 4.75 metres from 168.5 metres @ 15.6
grams/tonne gold and 15 grams/tonne silver including 2 metres from
169.7 metres @ 36.1 grams/tonne gold and 31 grams/tonne silver, and
1.6 metres from 122.35 metres @ 11.0 grams/tonne gold and 2.6
grams/tonne silver. Along the 2km of cumulative vein strike drill tested
at Waterfall, best results appear to be localized on sections of the vein
that strike north-northwest, which is the prominent structural control
for gold mineralization throughout the property. At least three northnorthwest
trending vein segments remain under tested for potential
high-grade shoot development and will require more infill drilling.
The company currently has two rigs drilling on the Jati and Tanjung
targets on the Pelangan prospect, where previous exploration identified
a continuous 1.5km-long mineralized epithermal breccia hosting
at least one high-grade lode structure. Previous drilling intersections
include 10.05 metres @ 13.4 grams/tonne gold and 8 grams/tonne
silver, 9.2 metres @ 5.9 grams/tonne gold and 11 grams/tonne silver,
and 26.2 metres @ 4.2 grams/tonne gold including 3.45 metres @
12.3 grams/tonne. Southern Arc has recently completed a prospectivity
study for porphyry exploration targets on the West Lombok project.
The study identified 17 new porphyry exploration targets
throughout the property. Southern Arc has started drill testing and will
continue evaluating these targets with detailed ground work.
Southern Arc’s chairman and CEO John Proust says, “We have a
strong relationship with the West Lombok Regency, which holds a
10% stake in the West Lombok project. We are the number one employer
in the district, providing significant economic and social benefits
to local communities. All of our exploration activities have been implemented
based on extensive consultation with the local authorities.”
The location of anomalies on Southern Arc’s West Lombok tenements.
Miwah metallurgy results prove encouraging
ENCOURAGING results from preliminary metallurgical
testing have formed the basis for
East Asia Minerals to begin more detailed studies
in preparation for scoping and feasibility
work at the Miwah Gold Project in Aceh province
of Northern Sumatra. Initial results suggest
that Miwah’s mineralized material is
readily leachable using processing techniques
conventional to the gold mining industry.
The testing returned up to 93% recovery for
conventional cyanidation and East Asia is
preparing to carry out more comprehensive
metallurgical testing during the remained of
the year. There were four samples sent for
test work based on 48-hour leach time on a
notional 80% passing 100um grind size. The
samples were taken from core drilled by East
Asia with testing performed by G&T Metallurgical
Services of Kamloops, British Columbia,
Canada. Each sample consisted of 10 metres
of core from two different drill holes identified
to represent a similar mineralogical
assemblage and gold grade.
Sample 1 from the low-grade, alunite alteration
zone had an average gold grade of
0.77 grams/tonne and silver grade of 0.63
grams/tonne, and returned a recovery rate of
48% for gold and 81% for silver. Sample 2
from the high-grade, vuggy silica alteration
zone had an average gold grade of 7.35
grams/tonne and silver grade of 34.8
grams/tonne, and showed recoveries of 93%
for gold and 79% for silver.
Sample 3 from the low-grade, alunite alteration
zone had an average gold grade of 0.59
grams/tonne and silver grade of 5.31
grams/tonne with recoveries of 71% for gold
and 89% for silver. Sample 4 from the lowgrade,
copper-rich potential feeder zone had an
average gold grade of 0.77 grams/tonne and
silver grade of 5.46 grams/tonne, and showed
recoveries of 68% for gold and 78% for silver.
16 | ASIA Miner | March/April 2012

Company Profile
ONE ASIA
RESOURCES limited
One Asia Resources Limited is focused
on the exploration and development
of the Awak Mas and
Pani gold projects located on the Island
of Sulawesi, Indonesia. One
Asia is targeting to become a producer
by the end of 2014 with
combined annual production from
Awak Mas and Pani of 200,000
to 250,000 ounces of gold.
The Awak Mas project is a multimillion
ounce joint venture with
Vista Gold Corp. whereby One
Asia can earn 80% by completing
a Definitive Feasibility Study (DFS)
and Amdal (the equivalent to an
Environment Impact Statement).
The company expects to have this
completed by late 2012.
The Awak Mas project is located
in the Luwu Regency of
South Sulawesi and is accessible
from the Provincial city of Makassar
via a 367 km paved highway
to Palopo then a further 41 km on
paved and gravel roads to site.
The city of Makassar hosts an international
airport with daily flights
to Jakarta and Singapore.
The Awak Mas project is held
under a 7th generation Contract
of Work (CoW), which allows for
100% foreign ownership. The
project lies within a non-forested
area and sits within land for other
uses classification, which allows
for mining.
Awak Mas has a current JORC
resource of 2.13m ounces of Au,
of which 1.89m ounces Au is
measured and indicated. Over
100,000m of drilling has been
completed to date on the project.
The Company is currently completing
a DFS on the Awak Mas project
with a production profile of
4mt pa on the Awak Mas deposit.
The Awak Mas deposit has excellent
metallurgical characteristics,
testing indicates very high recovery
rates 90%+.
In addition, to the known deposit
several other prospective areas
have been identified. Current and
ongoing exploration work to date
has revealed 6 additional prospect
areas outside the Awak Mas deposit
area. The Salu Bulo prospect
has returned significant drill intercepts
including; 26m @2.87 g/t
Au, 24m @ 2.46 g/t Au, 72m
@1.95 g/t Au (incl. 30m @ 3.15
g/t Au), 20m @ 3.32 g/t Au,
12m @ 3.43 g/t Au and 30m @
2.95 g/t Au. Additional drilling results
received from November
2011 include the following; 39m
@ 1.85 g/t Au, 17m @ 2.8 g/t
Au, 24m @ 1.86 g/t Au and 30m
@ 1.44 g/t Au. Excellent upside
potential exists for additional gold
resources at increased grade from
the Salu Bulo prospect area alone.
Exploration work on this area is currently
ongoing.
One Asia is targeting to commence
commercial production
from the Awak Mas in 2014, at a
gold production rate of 150,000
to 175,000 ounces per annum.
One Asia’s other gold project,
the Pani Project in North Sulawesi,
has over 500,000 ounces of
oxide gold resource identified
from previous work. One Asia has
a 90% interest in a joint venture to
develop the Pani gold property.
The project is located in the North
arm of Sulawesi and is approx.10
km from the coast and is
accessible via paved road
and dirt road.
The Pani project currently
hosts an oxide resource of
530,000 ounces Au in a
450m x 200m drilled area,
this zone remains open at
depth and strike, excellent
upside potential exists to increase
this resource. One Asia is
undertaking a drilling program to
further define and increase the
known resource of the deposit.
Recently competed field work
has confirmed that the current deposit
continues at depth and strike.
Trenching results on the eastern
slope of the Pani ridge include
24m @1.62 g/t Au and 44m @
1.06 g/t Au. West Pani trenching
results include 22m @ 1.50 g/t
Au and 10m 2.26 g/t Au. South
Pani trenching results include
118m @0.98 g/t Au and 96m @
0.90 g/t Au. Exploration work
here is ongoing and the Company
expects some promising drilling results
later this year.
The mineralization is entirely
oxide and testing by BHP has indicated
that +95% recoveries are
possible using heap leach type
processes.
The company plans to develop
the Pani deposit as an open pit
heap leach operation and is targeting
to place the Pani project
into production in the next 2-3
years at a production rate of
50,000-75,000 ounces of gold
per annum.
One Asia is intending to undertaking
a program to develop
these projects into producing
gold mines within the next 2 to 3
years with an annual production
of 200,000 to 250,000 ounces
of gold per annum.

’
’
Project Survey 2012
Annual Survey of Global Mining Investment
The rate of new project announcements slowed in late 2011. Is the boom in
mining investment starting to fade, or is this just a momentary adjustment
By Magnus Ericsson and Viktoriya Larsson
THE number of new investment projects announced by the global
mining industry increased steadily for two six-month periods, starting
from a low point in the first half of 2010 to more than 90 new projects
in the first half of 2011. During the second half of 2011, however, it appeared
the growing debt crisis also impacted the mining sector. The
number of new projects announced declined when compared with
the first half 2011, and also when compared with the second half of
2010. Is this just a random variation—or has global mining project investment
peaked much quicker than anticipated by most analysts
During 2011, 136 new mining projects with a total projected value
of $74 billion were registered in Raw Materials Group’s Mines/Projects
database. Overall, investment activity in 2011 was higher than in
2010 but the most recent developments raise questions for the future.
As mentioned above, however, it is too early to draw far reaching conclusions
about the state of the mining industry from this material, as
its annual figures remain healthy.
It is now more difficult to predict the industry’s 2012 investment
trends than it has been for both 2010 and 2011, but RMG remains
optimistic in the long-term outlook for the sector. Population
growth and economic development in the emerging economies
are positive and provide a strong base for continued growth in
metal demand: hence the need for increased mine production and
for new-project investment.
At the end of 2011, the total value of announced investment in the
global mining industry’s project pipeline as recorded in RMD Metals
Mines/Projects database was $676 billion, an increase of more than
20% compared with investment status at the end of 2010. In the previous
year, growth was of the same order of magnitude, but the quick
recovery of 2010 reversed in late 2011. RMG, along with most observers,
expected the recovery to continue throughout 2011 but the
European debt crisis, coupled with some hesitation concerning metal
prices, slowed mining investment.
The number of projects announced in the third and fourth quarters
of 2011 declined when compared with the same period in 2010 and
the number of new projects announced annually has remained static
Mining Project Investment Pipeline, 2011
Investment Share Share Trend
( x US$ B) (Percent) (2010 to 2011)
Greenfield Projects
Early Stages
Conceptual &
Prefeasibility 280 041
÷
Feasibility 172 025
Construction 066 010
÷
Brownfield Projects
All Stages 158 024
TOTAL 676 100
Source (for all data): Raw Materials Data, Stockholm, Sweden, December 2011.
since 2009. However, caution must be exercised when estimating the
total amount in the investment pipeline, as there is a tendency for the
pipeline to accumulate projects that are no longer active. It is sometimes
difficult to determine when a marginal project is to be considered
abandoned and should be taken off the list. Currently, RMG
removes projects about which there has been no news within eight
years of first mention.
Also, absolute figures at each year end are not directly comparable,
primarily because it is impossible to ensure that all possible projects are
included. For example, due to a publishing schedule change, this
year’s survey was compiled slightly earlier than in the past, thus posing
the possibility that it may not include some projects announced
late in 2011. It’s also possible the apparent decline in the number of
projects listed in the survey could result from decreased coverage of
the very smallest projects. However, our conclusion that mining investment
has slowed is firm, despite these uncertainties. Our expectation
from a year ago, of a continued increase in the number of
announced new projects all through 2011, proved to be too optimistic.
Project Costs on the Rise
The trend of increasing investment costs, which we previously highlighted
in late 2010, has continued through 2011. We also noted previously
that many projects are being expanded when moving from the
feasibility to the construction phase and this tendency continued in
2011. Cost increases are thus not due entirely to increasing unit costs
but also to rapid growth in metal demand. Additional important cost
drivers are more complex ore bodies, deeper lying deposits with lower
grades and more remote locations of new mines. Costs for equipment
and construction work seem to be increasing again and many
equipment suppliers are operating near full productive capacity.
Problems caused by lack of experienced staff, which disappeared
in 2009 and 2010, have re-emerged although not at the severe levels
experienced in late 2007 and early 2008. The difficulties in recruiting
students to attend mining schools in Europe and North
America continue, but in China and India and other emerging
economies the situation is different and mining engineering and geology
studies remain popular.
Metal prices fell in the second half of 2011 but remain comparatively
high, particularly when taking into account the three most economically
important metals: iron ore, copper and gold. These three
metals together account for 73% of the total value at the mine stage
of all metals produced globally. Given the continued strong metal demand
from China, India and other emerging economies RMG does
not expect metal prices to drop dramatically in 2012—on the contrary,
we believe they will hold up fairly well.
Although the investment pipeline continued to grow in 2011, the
inflow of new projects slowed in the second half, while the share of
projects at the feasibility stage declined for the second consecutive
year. This may be due to the very sharp drop in exploration activity in
20 | ASIA Miner | March/April 2012

’
Project Survey 2012
2009, which resulted in a smaller number of early-stage projects being
launched during the height of the financial crisis, but it is difficult to determine
with certainty at this stage. The share of projects at the construction
stage also declined slowly during 2011 when compared with
2009 and 2010, but investment in brownfield projects increased in
absolute terms while the relative share has increased marginally.
Brownfield projects require less funding, with the average brownfield
project valued at $322 million, while the average investment for greenfield
projects is $623 million. Although this statistical comparison does
not take into account the capacity of each project, our view is that
brownfield projects also are generally more cost-effective when measured
on a capacity basis.
However, it is difficult to accurately monitor the progress of brownfield
projects from project studies to construction because they are
often carried out internally and quickly, without public disclosure. Our
total investment figure for projects under construction is undoubtedly
an underestimate, particularly for this project category. Typically, a
project takes at least a year—usually even longer—to develop, depending
on its size, location, existing infrastructure, availability of financing
and many other factors.
All of this year’s survey statistics are based on projects with an announced
investment estimate. The RMD Metals database also includes
approximately 1,800 projects—mostly in the conceptual
stage—for which no investment figure has been announced. The investment
total for all mining projects, including projects for which no
investment estimate has been published, is therefore larger than the
$676 billion recorded at the end of 2011—but it is difficult to estimate
how much larger. If it is assumed that the projects without published
investment estimates have a similar cost structure to those projects
whose costs are known, the total figure would increase considerably.
It could, however, also be argued that unannounced-project costs are
lower, as most mega-projects are conducted by public companies
that must publicly disclose all significant expenditures. If this is indeed
the case, the total figure would be smaller. Projects involving metals
not covered in this survey but included in the database also represent
a specific investment total but one that is estimated at a much
lower level than the major metals represented in the survey.
Many of the early stage projects included in this year’s total investment
figure will not, or at least not during a period of low metal
prices, pass from the conceptual study phase to the construction
stage for a number of reasons, including insufficient profitability, inadequate
ore reserves, failure to secure financing, technological problems
or excessive political risk. However, historically RMG has
observed that 60%–75% of all projects announced will materialize
during a three-year period.
Iron Ore, Gold Grab More Investment Dollars
Iron ore, copper, gold and nickel, in that order are the most important
investment targets for mining companies. These four metals account
for 84% of the total project pipeline. They also dominate the mining
business in terms of the total value of its output; they are cumulatively
valued at $490 billion or 79% of the total value of all non-fuel mineral
production during 2010. Iron ore investment surpassed that of copper
with a project pipeline of $215 billion—compared with $179 million for
copper—while gold and nickel are at much lower levels ($111 billion
and $64 billion, respectively), distantly followed by a group of metals
that include uranium, lead/zinc and PGMs, valued at $15–$20 billion.
Mining Project Investment by Metal, 2011
Investment Total Share Share Trend
(US$ billion) (Percent) (2010 to 2011)
1. Iron ore 215 032
2. Copper 179 026
3. Gold 111 017
4. Nickel 64 009
5. Uranium 25 0v4
÷
6. Lead/zinc 18 003
÷
7. PGMs 16 002
÷
8. Diamonds 8 001
÷
9. Other 40 006
Total 676 100
Investment levels for both iron ore and gold increased by 33% to
35% in 2011. Iron ore continued its extraordinary growth, generating
$53 billion in new projects during 2011. Activity in the gold pipeline recovered
particularly strong in 2011 after a weak 2010 produced a
new-project growth rate of only 11%. New gold projects were valued
at $28 billion in 2011, compared with just $7 billion in 2010. Copper
grew by $24 billion or 15%, much lower than the $32 billion of project
investment added in 2010 when its growth rate was 25%.
Gold projects are typically relatively small, in terms of investment,
but the number of projects is high. In 2011, 53 new gold projects
were announced, not surprising considering the record high gold
prices of 2011. Newly announced iron ore projects totaled 21 in 2011,
along with 24 new copper projects. The average iron ore project investment
figure was about $2 billion, with the smallest projects at
$200 million and the largest more than $10 billion. Average investment
per gold project was about $250 million in 2011, up from $205
million in 2010.
Iron ore’s share of total new project investment announced in 2011
remained stable at 47%-48% reflecting the high price level for iron
ore and continued strong demand mainly in China. Iron ore projects
are huge in all respects: the four largest projects of all categories are
iron ore with an investment amount of more than
$10 billion for each of them. The Olympic Dam copper project is the
fifth largest and the largest non-iron ore project. The continuing demand
growth for steel and the concomitant high prices paid for iron
ore point to a strong increase in iron ore production during the next
three to five years. However, in recent months there also have been
announcements of project delays and postponed start-ups, indicating
that the risk of iron ore production over-capacity developing—at
least during the next couple of years—is low.
The number of nickel projects and investment in the pipeline declined
as a result of the bleak outlook for the nickel market. An increase
in new silver projects noted in 2010 dwindled to nothing in
2011. Interest in uranium has continued to grow although the
Fukushima accident might dampen investor interest again. Lead/zinc
projects’ share of the total pipeline has continued to decrease, as has
PGMs. Rare earths, which attracted a lot of interest in 2010, also subsided
in 2011. Iron ore was really the only winner in 2011.
Latin America Slips, but Stays on Top
Latin America maintained its leading position in attracting mining investment
in 2011, but its share of the total investment pipeline fell to
28%, the same level recorded in 2009 and a figure that is no longer
more than double that of investment in any other region, as was the
’ ’
’ ’
March/April 2012 | ASIA Miner | 21

’
’
Project Survey 2012
Mine Investments by Region, 2011
Investment Share Share Trend
(US$ billion) (Percent) (2010 to 2011)
Africa 099 015
÷
Asia 073 011
Europe 075 011
÷
Latin America 192 028
North America 124 018
Oceania 113 017
TOTAL 676 100
case for Latin America in 2010. North America’s share grew to 18%
and Oceania’s to 17%.
Africa also increased its share of total world investments to 15%
while Europe maintained its position and Asia dropped from 13%
to 11%, continuing a decline that began after reaching a high of
14% in 2009. The investment pipeline in North America grew by
$38 billion in 2011, and in Oceania by $32 billion. This represents
44% and 40% for these regions, respectively; much higher than
the global average of 20%.
Latin America’s project pipeline includes many more very large
projects than any other region; for example, 56 Latin American-based
projects involve investments of more than $1 billion, compared with
33 projects in Oceania, 20 each in Africa and Asia, and 17 in Europe
(12 of which are located in Russia and the Ukraine, with the rest in
Sweden and Greenland).
Europe has continued to move up and has passed Asia as the
least favored region, but its relative share remains 11% of the total at
$75 billion. The rising investment trend there, with more new projects
in Finland, Sweden, Greenland and in 2011 also in Norway, has
strengthened. The European Commission continues to follow the development
of the local mining sector closely and although the new
Raw Materials Initiative has not, to date, resulted in any major new
support initiatives for the European mining sector, the conditions for
the mining industry have not deteriorated.
In Africa, the African Union has continued work on the African Mining
Vision, which aims to create conditions for mining investment in
Africa that enable both the host countries and the investors to benefit
from them. The African countries want to take advantage of strong demand
from China to create a competitive situation between traditional
investors from Europe and North America and new Chinese investors.
’ ’
U.S. as a Fading Player Not so Fast…
The growing trend toward resource nationalism has manifested itself
in various ways in both emerging and developed mining countries.
Demand for increased royalties or taxes on “super profits” have been
widespread, including established mining nations such as Australia.
Calls for increased state ownership or at least increased ownership by
domestic owners have not been limited to emerging economies such
as Zimbabwe and Namibia; in Finland, the idea of establishing a new
state mining company has been discussed among politicians.
Total investment share attracted by the top 10 countries increased
in 2011 to 71%, passing the previous high of 68% in 2008. The trends
mentioned above could be the explanation for a strong growth of projects
in North America and Oceania during 2011. Australia, Canada
and the U.S. together accounted for only 26% of the total project
pipeline at the end of 2010. In December 2011, their combined share
was 34%, with total value up from $150 billion to $223 billion, an increase
of almost 50% in one year. In our 2010 analysis we wrote off
the U.S. as a mining nation and that proved premature.
Australia maintained its position as the number one nation for mining
investments. The iron ore boom continues there and of the top
20 projects in Australia, 13 are in iron ore and 11 of them require investment
of more than US$1 billion. Canada, in second place, has a
much wider mix of projects, including several gold and base metal
projects among the top 20, along with five iron ore projects, six gold
projects and two copper projects on the list.
The combined announced investment value of projects in those
two nations is slightly less than $100 billion. The rest of the Top 10 list
changed considerably in 2011. Chile moved up to rank third, with a
total of $54 billion. Brazilian mining investments fell in 2011 and only
accounted for 7% of the total or $46 billion. Russia recaptured fifth
place in 2011, and even though the number of Russia-based projects
decreased, the investment volume increased by 18%. The United
States showed the strongest growth over 2011, up by 38% and rising
from eighth place to seventh. Mexico dropped out of the Top 10
and was replaced by Guinea, where three giant iron ore projects involve
a total investment of $16 billion.
Following the Top 10 in descending order are Mexico, Argentina,
Papua New Guinea, China, Indonesia, Sweden, Democratic Republic
of Congo and Kazakhstan, each with a portfolio of projects between
$8-$13 billion. It should be noted that some projects are much
bigger than others, and one new project announced or one major
project completed in a small country can make a big difference in the
position of this country relative to others. Thus, not too much importance
should be put on relative positions outside the Top 10.
The figure for China is most certainly an underestimate, since
many of the projects run by state-owned companies are never reported
in such a way that they reach the international mining press.
With comparable reporting from China there is no doubt that the
country would be high up among the top 10 countries. Chinese
projects are mostly small, with an average investment value of $170
million per project, compared with Canada where the average project
is currently valued at $695 million.
Chinese mining investment activity outside China is still marginal.
China’s scramble for resources in Australia, Africa and elsewhere,
which has come into clearer political focus, still represents minimal investment
values despite rapid growth in recent years—but it is growth
from an almost zero start position. It will take years before Chinese
companies become powerful global players in the mining industry,
but it will eventually happen.
Top 10 Countries for Mining Investment, 2011
Investment Share Rank in
(US$ billion) (Percent) 2010
01. Australia 099 15 01
02. Canada 092 14 02
03. Chile 054 08 04
04. Brazil 046 07 03
05. Russia 046 07 06
06. Peru 044 06 05
07. United States 032 05 08
08. South Africa 025 04 07
09. Philippines 017 03 09
10. Guinea 016 02 11
TOTAL 471 71
22 | ASIA Miner | March/April 2012

Project Survey 2012
One of the political goals set for the Chinese mining industry in
2011 is to strengthen control over its mines in foreign countries,
but it has proven difficult to meet the very ambitious targets set by
central authorities.
Magnus Ericsson is CEO and a director of Raw Materials Group (P.O.
Box 3127, SE-169 03 Solna, Sweden, +46-8-7440065) and a profesor
at Luleå University of Technology. Viktoriya Larsson is a research
analyst at RMG.
About This Survey
This annual review of metal mining projects is compiled from Raw Materials
Group’s Raw Materials Projects database (see demo at www.rmg.se).
The full database is available from RMG on an annual subscription basis
and includes more than 3,150 projects as of January 2012, ranging from
those in the prefeasibility stage to those currently under construction. Of
the total number of projects listed in the database, more than 1,300 include
detailed descriptions of resources/reserves, grades, planned investment
cost, and completion date.
This survey includes all countries with known projects. In the process
chain from ore to metal, its main focus is on the mining stage. Pure smelter
projects are not listed. In some cases, however, where the process is fully
integrated from mining to refining, such as acid pressure leach hydrometallurgical
nickel projects, all stages are included.
Eligibility for a full listing requires each project to have an announced investment
cost estimate, reserve/resource data and an estimated annual production
figure. Comparability of information from different companies, countries
and regions varies, as specific project information or definition may be unclear
for various reasons, or the project may also involve large unreported infrastructure
costs. Raw Materials Group attempts to resolve these factors, but
cannot rectify all discrepancies arising from definitions and comparability.
Information contained in the survey is global in scope. However, it
should be noted that completely accurate coverage of some regions is difficult
to attain due to lack of information or corporate reporting standards
and requirements. In total, mine projects are included from more than 70
countries and the survey’s aggregate figures are considered to reflect overall
investment trends in the mining industry reasonably accurately. For more
information, visit www.rmg.se or call +46-8-7440065.
Major Mining Investment Projects Worldwide, Year End 2011
Project Name Location Status Type Products Controlled by Project Cost (US$ M)
Gold
Cerro Casale Chile Prefeasibility OP Au, Cu Barrick, Kinross Gold 6,000
Galore Creek Canada Prefeasibility OP Au, Ag NovaGold Res, Teck 5,187
Donlin Creek USA Feasibility OP Au, Cu Barrick, NovaGold 5,187
Pascua-Lama Chile Construction OP Au, Ag Barrick 4,700
KSM Au/Cu Canada Prefeasibility OP Au, Cu Seabridge 4,685
Dome Mountain Canada (Susp.), restart/feasib UG Au Metal Mountain 4,187
Pueblo Viejo Dominican Republic (Susp.), restart/constr OP Au, Ag Barrick, Goldcorp 3,800
Wafi Papua New Guinea Feasibility OP Au Harmony, Newcrest 3,000
Metates Mexico Prefeasibility UG Au, Ag Chesapeake 2,701
Tasiast Mauritania Operating, exp/constr OP Au Kinross Gold 2,700
Minas Conga Peru Feasibility OP Au Newmont Mining, Buenaventura 2,500
Cadia East Australia Feasibility UG Au, Cu Newcrest 1,752
Livengood Au/Ag USA Conceptual OP Au, Ag Intl Tower Hill 1,614
Eleonore Canada Construction UG Au Goldcorp 1,409
Courageous Lake Canada Prefeasibility OP Au Seabridge 1,263
Sukhoy Log Russia Feasibility OP Au, Pt Gov’t of Russia 1,240
Detour Lake Canada Closed, reopen/plans OP Au Detour Gold 1,208
South Deep South Africa Operating, exp/plans OP, UG Au Gold Fields 1,148
Natalka Russia (Susp.), restart/constr OP Au PolyusGold Inter 1,037
Bystrinskoye Russia Feasibility OP Au, Cu Norilsk Nickel 1,021
Bloemhoek South Africa Conceptual UG Au Wits Gold 1,000
Hycroft USA Operating, exp/feasib OP Au, Ag Allied Nevada 0,985
Rosia Montana Romania Feasibility OP Au, Ag Gabriel Res 0,876
Prosperity Canada Feasibility OP Au, Cu Taseko 0,807
Target North South Africa Prefeasibility UG Au Harmony 0,785
Meliadine Canada Prefeasibility OP, UG Au Agnico-Eagle 0,762
Cerro Negro Argentina Feasibility UG Au Goldcorp 0,750
Brisas Venezuela Feasibility OP Au, Cu Gold Reserve 0,731
Panimba Russia Conceptual OP Au PolyusGold Inter 0,715
Tropicana Gold Australia Feasibility OP Au Anglogold, Independence 0,707
Akyem Ghana Feasibility OP Au Newmont Mining 0,700
Fruta del Norte Ecuador Prefeasibility OP Au, Ag Kinross Gold 0,700
Lobo/Marte Chile Prefeasibility OP Au Kinross Gold 0,700
Lihir Mine Papua New Guinea Operating, exp/plans OP Au Newcrest 0,696
Rainy River Canada Conceptual OP, UG Ay, Ag Rainy River Res 0,684
Bakyrchik Au Kazakhstan (Susp.), restart/feasib OP, UG Au Rio Tinto 0,682
Angostura Colombia Feasibility OP, UG Au, Ag Greystar 0,638
Toroparu Guyana Prefeasibility OP Au, Cu Sandspring 0,617
Martabe Indonesia Construction OP Au, Ag G-Resources 0,576
Sosa Meddez Venezuela (Susp.), restart/constr UG Au Gov’t of Venezuela 0,550
Copper
Olympic Dam Australia Operating, exp/feasib UG Cu, U BHP Billiton 8,200
Tampakan Philippines Feasibility OP Cu, Au Xstrata, Indophil Res 05,200
Udokan Cu Russia Prefeasibility OP Cu, Ag Metalloinvest 05,000
Oyu Tolgoi Mongolia Construction OP Cu, Au Rio Tinto, Gov’t of Mongolia 04,600
Pebble East USA Feasibility OP, UG Cu, Au Anglo American, Northern Dynasty 04,500
Andina Chile Operating, exp/constr OP, UG Cu, Mo Coldelco 04,390
24 | ASIA Miner | March/April 2012

Project Survey 2012
Project Name Location Status Type Products Controlled by Project Cost (US$ M)
Cobre Panamá Panama Feasibility OP Cu, Au Inmet 04,320
Las Bambas Peru Feasibility OP Cu Xstrata 04,20
Chuquicamata Chile Operating, exp/feasib OP Cu, Mo Codelco 03,828
Escondida Chile Operating, exp/plans OP Cu, Au BHP Billiton, Rio TInto, Mitsubishi, JX Nippon Mining, Mitsub Materials 03,500
El Teniente Chile Operating, exp/constr UG Cu, Mo Codelco 03,039
Rekodiq Pakistan Feasibility OP Cu, Au Antofagasta, Barrick, Gov’t of Balochistan 03,000
Resolution USA Prefeasibility UG Cu, Mo Rio Tinto, BHP Billiton 03,000
Schaft Creek Canada Prefeasibility OP Cu, Au Copper Fox, Teck 02,968
Aynak Afghanistan (Susp.), restart/plans OP Cu MCC, Jiangxi Copper 02,890
Sierra Gorda Chile Feasibility OP Cu, Mo QuadraFNX, SMM 02,877
Los Azules Argentina Prefeasibility OP Cu, Au Degerstrom 02,851
Haquira Peru Conceptual OP, UG Cu First Quantum 02,824
Cumo USA Prefeasibility OP Cu, Mo Mosquito Cons 02,800
Los Bronces Chile Operating, exp/constr OP Cu, Mo Anglo American, Mitsubishi 02,800
Frieda River Papua New Guinea Prefeasibility OP Cu Xstrata 02,570
El Morro Chile Feasibility OP Cu, Au New Gold Inc 02,520
Galeno Peru Prefeasibility OP Cu, Au Minmetals, Jiangxi Copper 02,500
La Granja Peru Prefeasibility OP Cu, Mo Rio Tinto 02,500
Collahuasi Conc Chile Operating, exp/feasib OP Cu, Mo Anglo American, Xstrata, Mitsui, JX Nippon Mining 02,400
Ministro Hales Chile Construction OP Cu Codelco 02,300
Quellaveco Peru Feasibility OP Cu, Mo Anglo American 02,200
Toromocho Peru Prefeasibility OP Cu, Mo Chinalco 02,150
Casino Copper Canada Prefeasibility OP Cu, Au Western Copper 02,141
Agua Rica Argentina Feasibility OP Cu, Au Xstrata Coldcorp, Yamana 02,055
Caserones Chile Construction OP Cu JX Nippon Mining, Mitsui Mining 02,000
El Pachón Argentina Feasibility OP Cu, Mo Xstrata 01,900
Salobo Brazil Feasibility OP Cu Vale 01,808
Bozshakol Kazakhstan Feasibility OP Cu, Au Kazakhmys 01,800
El Arco Mexico Feasibility OP Cu Grupo Mexico 01,700
Lomas Bayas Chile Operating, exp/constr OP Cu Xstrata 01,600
Canariaco Norte Peru Prefeasibility OP Cu, Au Candente 01,565
Iron Ore
Lac Otelnuk Fe Canada Prefeasibility OP Fe Adriana 12,981
Serra Sul Brazil Conceptual OP Fe Vale 11,297
Simandou Guinea Prefeasibility OP Fe Rio Tinto 10,000
Timir Fe Russia Conceptual OP Fe Alrosa Group 10,000
Zanaga Congo Prefeasibility OP Fe Xstrata, ZIOC 07,545
RGP5 Australia Operating, exp/constr OP Fe BHP Billiton 05,650
Minas Rio Brazil Construction OP Fe Anglo American 05,000
Kalia Fe Guinea Feasibility OP Fe Bellzone 04,456
Sino Iron Ore Australia Construction OP Fe Citic Pacific 04,060
KeMag Canada Feasibility OP Fe Tata Steel 03,800
Jack Hills Australia Operating, exp/constr OP Fe Mitsubishi, Posco, Resource Cap, Sinosteel 03,788
Prioskolskoye Russia Conceptual OP Fe MMK OJSC, Ural 03,656
Cerro Copan Peru Conceptual OP Fe Cuervo Res 03,500
Jimblebar Australia Operating, exp/constr OP Fe BHP Billiton 03,400
Balmoral South Australia Feasibility OP Fe Clive Palmer 03,373
Pampa de Pongo Peru Conceptual UG Fe Nanjinzhao 03,280
Mbalam Cameroon Feasibility OP Fe Sundance Res 03,277
Hawson Australia Prefeasibility OP Fe Carpentaria, BMG 02,870
LabMag Canada Prefeasibility OP Fe Tata Steel 02,750
Bong Mine Liberia Closed, reopen/feasib OP Fe Wugang, China Union 02,600
Jibóia Brazil Conceptual OP Fe ENRC 02,600
Tonkolili Sierra Leone Construction OP Fe African Minerals 02,600
Southdown Australia Prefeasibility OP Fe Grange Res, Sojitz 02,570
Moonshine Australia Conceptual OP Fe Macarthur Min 02,521
Apolo Brazil Feasibility OP Fe Vale 02,509
Putu Liberia Prefeasibility Fe Severstal, Afferro Mining 02,500
Vale Northern Brazil Operating, exp/constr OP Fe Vale 02,478
Apurimac Peru Prefeasibility OP Fe Strike 02,300
Nickel
Ambatovy Madagascar Construction OP Ni, Co Sherritt, Sumitomo Corp, Kores, SNC Lavalin, Samsung Group, Hyundai 05,500
Weda (Halmahera) Indonesia Feasibility OP Ni, Co Eramet, Mitsubishi 04,000
Koniambo New Caledonia Construction OP Ni Sud Pacifique, Xstrata 03,800
Marlborough Australia Feasibility OP Ni, Co Clive Palmer 03,400
Kalgoorlie Heron Australia Prefeasibility OP Ni, Co Heron Res 02,600
Voisey’s Bay Canada Operating, exp/constr OP Ni, Cu Vale 02,281
Mindoro Philippines Feasibility OP Ni, Co Severstal 02,200
Wingellina Australia Feasibility OP Ni, Co Metals X 02,046
Pujada Philippines Conceptual OP Ni Asiaticus 02,000
Vermelho Brazil Construction OP Ni, Co Vale 01,908
Mt Margaret Australia Feasibility OP Ni, Co Glencore 01,524
Ramu Papua New Guinea Construction OP Ni, Co MCC 01,370
Turnagain Canada Conceptual OP Ni, Co Hard Creek Ni 01,319
Rönnbäcken Sweden Prefeasibility OP Ni, Co IGE 01,260
Mayaniquel Guatemala Prefeasibility OP Ni, Co Anfield 01,227
Yerilla Ni Australia Conceptual OP Ni, Co Heron Res 01,200
Gag Island Indonesia Feasibility OP Ni, Co Antam 1,160
Dumont Ni Canada Prefeasibility OP Ni, Co Royal Nickel 1,112
26 | ASIA Miner | March/April 2012

Project Survey 2012
Project Name Location Status Type Products Controlled by Project Cost (US$ M)
Sorowako Mine Indonesia Operating, exp/plans OP Ni Vale, SMM 1,100
Goongarrie Ni Australia Prefeasibility OP Ni, Co Heron Res 1,094
Fenix Ni Guatemala Feasibility OP Ni Solway Group 0,984
Mindoro Philippines Feasibility OP Ni, Co Severstal 0,960
Nonoc Philippines (Susp.), restart/feasib OP Ni, Co Philnico 0,950
Agata North Philippines Conceptual OP Ni, Co Mindoro Res 0,906
Santa Fe/Ipora Brazil Conceptual OP Ni Teck 0,875
PGMs
Bafokeng Pt South Africa Construction UG Pt, Pd Royal Bafokeng Nation, Anglo American 1,782
Ferguson Lake Canada Conceptual OP, UG Pd, Cu Starfield 1,330
Garatau South Africa Feasibility UG Pt, Pd Nkwe 1,134
Sheba’s Ridge South Africa Feasibility OP Pt, Pd Aquarius, Anglo American, Gov’t of South Africa 0,972
Afplats South Africa Feasibility UG Pt, Pd Implats 0,906
Mogalakwena South Africa Operating, exp/constr OP Pt, Pd Anglo American 0,798
Sedibelo South Africa Prefeasibility OP Pt, Pd Bakgatla 0,700
Frischgewaagd South Africa Construction UG Pt, Pd JNMC, Anglo American 0,688
Akanani South Africa Conceptual UG Pt, Pd Lonmin, Shanduka Group 0,650
Fedorova Tundra Russia Feasibility UG Pt, Pd Barrick 0,640
Impala South Africa Operating, exp/constr UG Pt, Pd Implats 0,604
Booysendal South Africa Feasibility UG Pt, Pd Shanduka Group, Lonmin 0,589
Impala South Africa Operating, exp/constr UG Pt, Pd Implats 0,544
Unki Zimbabwe Construction UG Pt, Pd Anglo American 0,457
WBJV Project 1 South Africa Feasibility UG Pt, Pd PMG Ltd, JNMC, Anglo American 0,443
Silver
Kanimansuri Tadjikistan Prefeasibility UG Ag, Pb Gov’t of Tadjikistan 2,000
Navidad Argentina Prefeasibility OP Ag, Pb Pan Am Silver 0,760
Corani Peru Feasibility OP Ag, Pb Bear Creek Mg 0,574
Malku Khota Bolivia Conceptual OP Ag, Cu South American 0,411
Escobal Guatemala Prefeasibility UG Ag, Au Tahoe 0,327
Saucito Mexico Construction UG Ag, Au Penoles 0,309
Diamonds
Star Canada Feasibility OP Dia Shore Gold 1,931
Argyle Australia Operating, exp/constr OP Dia Rio Tinto 1,500
Venetia South Africa Operating, exp/plans OP Dia Anglo American, Ponahalo 0,888
Cullinan South Africa Operating, exp/plans UG Dia Petra Diamonds 0,632
Gahcho Kue Canada Feasibility OP Dia Anglo American, Mountain Prov 0,534
Renard Canada Prefeasibility OP, UG Dia Stornoway Diam 0,514
Jwaneng Botswana Operating, exp/feasib OP Dia Anglo American, Gov’t of Botswana 0,500
Ekati Canada Operating, exp/plans OP, UG Dia BHP Billiton 0,323
Luo-Camatchia Angola Construction OP Dia Escom Mining, Alrosa Group 0,300
Verkhotina/Grib Russia Feasibility OP Dia Arkhangelskgeol 0,300
Uranium
Viken Sweden Prefeasibility OP U, V Cont Precious 3,734
Elkonskoye Russia Conceptual ISL U Atomenergoprom OJSC 3,600
Kvanefjeld Greenland Prefeasibility OP U, REE Greenland Min 2,295
Imouraren Niger Construction ISL U Areva, Gov’t of Niger, KEPCO 1,669
Rossing South Namibia Prefeasibility OP U Rio Tinto, Itochu, APAC Res 1,480
Khiagdinskoye Russia Operating, exp/plans In situ leach U Atomenergoprom OJSC 1,367
Cigar Lake Mine Canada Construction UG U Cameco, Areva, Idemitsu Uran, Tepco 1,107
Michelin Canada Prefeasibility OP, UG U Paladin 0,990
Etango Namibia Feasibility OP U Bannerman Res 0,638
Trekkopje Namibia Construction OP U, V Areva 0,461
Pecs Uranium Hungary Conceptual UG U Wildhorse 0,400
Zinc
OzernoyePb/Zn Russia Construction OP Zn, Pb IFC Metropol 1,330
Mehdiabad Iran Feasibility OP Zn, Pb Gov’t of Iran, Union Res 1,300
Gamsberg Mine South Africa Feasibility OP Zn, Pb Vedanta, Exxaro Res 0,860
Dugald River Australia Feasibility UG Zn, Pb Minmetals 0,850
Admiral Bay Australia Prefeasibility UG Zn, Pb Kagara Ltd 0,745
Selwyn Canada Conceptual OP Zn, Pb Selwyn Resources, Yunnan Chihong 0,689
Bahuerachi Mexico Conceptual OP Zn, Ag JNMC 0,619
Garpenberg Sweden Operating, exp/plans UG Zn, Ag Boliden AB 0,580
Izok Lake Canada Feasibility OP Zn, Pb Minmetals 0,539
Citronen Fjord Greenland Feasibility UG Zn, Pb Nyrstar 0,502
Hilarion Peru Prefeasibility UG Zn, Pb Votorantim 0,500
Terrazas Mexico Prefeasibility OP Zn, Cu Andromeda Res 0,500
Oued Amizour Algeria Feasibility UG Zn, Pb Terramin Aust, gov’t of Algeria 0,413
Hackett River Canada Conceptual OP, UG Zn, Ag Xstrata 0,409
Accha Peru Conceptual OP Zn, Pb Nochschild 0,351
Crandon USA Conceptual UG Zn NRWG 0,350
Emba Derho Eritrea Prefeasibility OP Zn, Cu Sunridge Gold 0,332
Tulsequah Canada Construction UG Zn, Ag Chieftain Metals 0,312
Lady Loretta Australia Construction UG ZN, Pb Xstrata 0,252
George Fisher N Australia Operating, exp/feasib UG Zn, PB Xstrata 0,250
Lombador Portugal Feasibility UG Zn Lundin Mining 0,250
28 | ASIA Miner | March/April 2012

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China
Shenhua Group embraces coal technology
China Shenhua Group
is implementing
cutting edge
technology to
embrace ‘clean’ coal
and energy practices.
Shenhua is
implementing coal
bed gas, coal to
liquids (CTL) and
chemicals, and the
production of alumina
from coal ash.
AS WELL as increasing coal production to
maintain its ranking as China’s largest producer,
China Shenhua Group is implementing cutting
edge technology to embrace ‘clean’ coal and
energy practices. Among the new coal technologies
Shenhua is implementing are coal bed
gas, coal to liquids (CTL) and chemicals, and
the production of alumina from coal ash.
Coal to liquids and chemicals is a new
growth engine. The success of Shenhua
Ordos’ direct coal liquefaction project,
Shenhua Baotou’s MTO project and Shenhua
Ningxia Coal’s MTP project have enabled
China to become a leader in coal
chemical technologies.
The Shenhua Ordos CTL and Chemical
Branch of China Shenhua CTL and Chemical
Company Ltd are primarily involved in demonstration
production of direct coal liquefaction
and indirect coal liquefaction. The Shenhua Direct
Coal Liquefaction Project applies direct
coal liquefaction technologies with independent
intellectual property rights. The construction
program aims at a final annual oil
throughput of 5 million tonnes and is divided
into two phases, with the first phase consisting
of three production lines, including 14 sets of
main production plants for coal liquefaction,
coal hydrogen making, etc. After completion
and operation, with an annual coal consumption
of 9.7 million tonnes, 3.2 million tonnes of
oil products of various types will be produced,
including 2.15 million tonnes of diesel oil and
310,000 tonnes of liquefied gas.
China’s state news agency Xinhua has recently
reported that Shenhua Group has
started building a $21.4 billion facility to produce
alumina from coal ash. Xinhua quoted
Shenhua’s deputy manager Ling Wen as saying
the company plans to invest 135.8 billion
Yuan (US$21.4 billion) in the project, near Jungar
coal mine at Ordos city, Inner Mongolia.
Xinhua stated the project would include a
6600MW power plant, an alumina plant and a
gallium plant, all of which will use materials recycled
from coal burning. Ordos, which is
home to one-sixth of China’s coal reserves, will
be able to produce 3 billion tonnes of alumina.
Meanwhile, Shenhua Group subsidiary,
Shenhua Shendong Coal Group Corporation,
produced 202 million tonnes of commercial
coal in 2011, becoming the first 200
million tonne commercial coal production
base in China, while raw coal output
reached 219 million tonnes in 2011, up
nearly 11.2 million tonnes from the previous
year. The same field became China’s first
100 million coal production in 2005.
Shendong coalfield covers a large area partly
in northern Yulin in Shaanxi Province and partly
in southern Ordos in Inner Mongolia. It has
223.6 billion tonnes of proven coal reserves.
Impressive infrastructure at a Shenhua Group coal property in China.
神 华 集 团 拥 有 的 煤 炭 技 术
中 国 神 华 集 团 在 增 加 煤 产 量 确 保 其 在 中 国 的
最 大 生 产 商 地 位 的 同 时 , 正 在 采 用 尖 端 的 技
术 开 始 着 手 清 洁 煤 和 能 源 业 务 。 在 新 的 煤 炭
技 术 中 , 神 华 正 在 实 施 的 是 煤 层 气 、 煤 制 油
(CTL) 和 煤 化 工 , 以 及 从 粉 煤 灰 中 提 取 氧 化
铝 的 技 术 。
煤 制 油 和 化 工 是 一 个 新 的 增 长 引 擎 。 神 华 鄂
尔 多 斯 直 接 液 化 煤 制 油 项 目 、 神 华 包 头 煤 制
烯 烃 项 目 和 神 华 宁 夏 煤 业 的 煤 制 丙 烯 项 目 的
成 功 使 中 国 成 为 煤 化 工 技 术 领 域 的 领 先 者 。
中 国 神 华 煤 制 油 化 工 有 限 公 司 神 华 鄂 尔 多
斯 煤 制 油 化 工 分 公 司 主 要 从 事 煤 直 接 液 化 和
间 接 液 化 示 范 生 产 。 神 华 直 接 液 化 煤 制 油 项
目 采 用 具 有 自 主 知 识 产 权 的 煤 直 接 液 化 技
术 。 总 建 设 规 划 为 年 产 油 品 500 万 吨 , 分 两
期 建 设 , 其 中 一 期 工 程 有 三 条 主 生 产 线 组
成 , 包 括 煤 液 化 、 煤 制 氢 等 14 套 主 要 生 产
装 置 。 建 成 投 产 后 , 每 年 用 煤 量 970 万 吨 ,
可 生 产 各 种 油 品 320 万 吨 , 其 中 柴 油 215 万
吨 、 液 化 气 31 万 吨 。
据 中 国 国 家 通 讯 社 新 华 社 最 近 报 道 , 神 华
集 团 已 经 开 始 建 造 一 个 价 值 214 亿 美 元 的 设
施 , 用 来 从 粉 煤 灰 中 提 取 氧 化 铝 。 新 华 社 引
用 了 神 华 集 团 副 总 经 理 凌 文 的 讲 话 , 他 称 ,
公 司 将 对 这 个 位 于 内 蒙 古 鄂 尔 多 斯 市 准 格 尔
煤 矿 附 近 的 项 目 投 资 1358 万 元 人 民 币 (214
亿 美 元 )。
新 华 社 称 该 项 目 包 括 一 座 总 装 机 容 量 为
6600 兆 瓦 发 电 厂 、 一 座 铝 加 工 厂 和 一 座 镓
加 工 厂 的 建 设 , 这 些 厂 房 都 将 使 用 燃 煤 回 收
的 材 料 。 鄂 尔 多 斯 拥 有 中 国 煤 炭 储 量 的 六 分
之 一 , 能 够 生 产 30 亿 吨 氧 化 铝 。
同 时 , 神 华 集 团 的 子 公 司 神 华 神 东 煤 业 集
团 公 司 在 2011 年 产 出 2.02 亿 吨 商 品 煤 , 成
为 中 国 首 个 2 亿 吨 商 品 煤 生 产 基 地 , 同 时 ,
2011 年 的 原 煤 产 量 达 2.19 亿 吨 , 同 比 增 长
1120 万 吨 。 同 样 的 领 域 在 2005 年 建 成 了 中
国 第 一 个 亿 吨 级 煤 炭 生 产 基 地 。
神 东 煤 田 占 地 广 阔 , 覆 盖 了 陕 西 省 榆 林 北
部 和 内 蒙 古 鄂 尔 多 斯 南 部 的 部 分 区 域 。 已 证
实 煤 炭 储 量 达 2236 亿 吨 。
30 | ASIA Miner | March/April 2012

China
Production imminent from Jiangsu plant
GALAXY Resources expects to achieve first
production at the Jiangsu Lithium Carbonate
Project in Jiangsu Province by the end of
March. Mechanical completion of the plant
was completed in December with the commissioning
process being undertaken during
the current quarter.
After receiving construction completion certificates
for all areas of the plant from EPCM
contractor Hatch Engineering, Galaxy began
the cold commissioning process which involves
ensuring the integrity of plant, equipment, electrical,
instrumentation and control systems.
Galaxy’s managing director Iggy Tan said
this process had been progressing well without
any major defect issues being identified.
It was expected to be completed in mid-February.
“Some areas of the plant like micronizing
and packaging have progressed to hot
commissioning and operation. The company
is very satisfied with the progress to date and,
if no major defects are identified, we expect
the plant to be well into hot commissioning
by late February and the first lithium carbonate
produced by the end of the quarter.
“Our operations team continues to be fully
involved in all stages of commissioning activities
to ensure a smooth transfer from the commissioning
to the operations phase,” he said.
The plant fire protection system has been
inspected and accepted by a third-party and
local government. An environment system
completion report was submitted to the
Jiangsu Provincial Government, with an onsite
inspection scheduled, and this is expected
to lead to final production and start
up approvals. During February the kilns, with
associated coolers, and the sodium sulphate
Construction advances on the reagents and utilities plant at Galaxy Resources’ Jiangsu lithium carbonate plant.
plant were to be commissioned with this involving
the final dry out and firing of both the
calciner and the sulphation kiln.
Galaxy says the spodumene unloading system
at the Two Lions wharf, overland conveyor
and ore storage area have been fully commissioned,
with trial shipments being successfully
unloaded. A 31,000 tonne spodumene shipment
from Galaxy’s Mt Cattlin mine in Western
Australia was successfully unloaded and conveyed
to the plant ore storage area.
At Mt Cattlin Galaxy mines lithium pegmatite
ore and processes it on site to produce
a spodumene concentrate and
tantalum by-product. At full capacity, Galaxy
will annually produce 137,000 tonnes of spodumene
concentrate and 56,000 pounds of
contained tantalum. The concentrate is
shipped to the Jiangsu plant which is expected
to annually produce 17,000 tonnes of
battery grade lithium carbonate.
Galaxy also has a farm-in agreement with
Lithium One to acquire up to 70% of the
James Bay Lithium Pegmatite Project in Quebec,
Canada, while it is also advancing plans
for a lithium-ion battery plant, to produce
350,000 battery packs annually for the electric
bike market.
江 苏 碳 酸 锂 工 厂 即 将 投 产
银 河 资 源 有 限 公 司 旗 下 位 于 江 苏 省 的 江 苏 碳
酸 锂 项 目 预 计 在 3 月 底 实 现 首 次 生 产 。 该 厂
在 12 月 份 完 成 了 机 械 竣 工 , 当 前 季 度 正 在
进 行 试 运 行 。
银 河 资 源 在 收 到 总 包 工 程 管 理 公 司 - 赫 氏
工 程 公 司 给 出 的 碳 酸 锂 工 厂 所 有 区 域 的 竣 工
证 书 后 , 开 始 冷 试 车 , 其 中 包 括 确 保 厂 房 、
设 备 、 电 气 、 仪 器 和 控 制 系 统 的 完 善 。
银 河 的 董 事 总 经 理 Iggy Tan 称 , 该 过 程
进 展 顺 利 , 没 有 发 现 任 何 大 纰 漏 。 预 计 于 2
月 中 旬 结 束 。“ 工 厂 的 一 些 区 域 例 如 微 粉
和 包 装 车 间 正 在 准 备 进 行 热 试 车 和 运 营 。
公 司 对 迄 今 为 止 的 进 展 感 到 非 常 满 意 , 如
果 没 有 发 现 重 大 缺 陷 , 我 们 预 计 工 厂 在 2 月
末 进 入 热 试 车 阶 段 , 首 批 碳 酸 锂 将 在 本 季
度 末 产 出 。”
“ 我 们 的 运 营 团 队 会 继 续 全 面 参 与 到 试 运
行 的 各 个 阶 段 中 , 以 确 保 从 试 运 行 到 运 营 阶
段 的 顺 利 过 渡 ,” 他 说 道 。
工 厂 的 防 火 系 统 已 经 检 查 完 毕 , 并 已 得 到
第 三 方 和 当 地 政 府 的 认 可 。 环 境 体 系 完 善 报
告 已 经 递 交 江 苏 省 政 府 , 现 场 检 查 工 作 已 经
提 上 日 程 , 预 计 将 推 进 最 终 生 产 和 启 动 的 通
过 。2 月 份 , 煅 烧 窑 及 相 关 的 冷 却 设 备 和 硫
酸 钠 设 备 将 进 行 试 运 行 , 其 中 包 括 煅 烧 窑 和
硫 酸 窑 的 最 后 干 燥 和 烘 烤 。
银 河 资 源 称 , 双 狮 码 头 的 锂 辉 石 装 卸 系
统 、 带 式 传 送 机 和 储 矿 区 域 已 经 全 面 试 行 ,
试 运 货 物 已 经 成 功 卸 载 。 来 自 银 河 资 源 位 于
西 澳 大 利 亚 州 的 Mt Cattlin 矿 区 的 3.1 万 吨 锂
辉 石 已 经 成 功 卸 载 , 并 通 过 传 送 带 运 至 工 厂
的 储 矿 区 域 。
在 Mt Cattlin 矿 区 , 银 河 资 源 开 采 伟 晶 岩
型 锂 矿 石 , 并 在 现 场 处 理 , 生 产 锂 辉 石 精 矿
和 钽 副 产 品 。 全 面 投 产 后 , 银 河 资 源 每 年 将
生 产 13.7 万 吨 锂 辉 石 精 矿 和 5.6 万 磅 钽 。 这
些 精 矿 将 运 至 江 苏 的 工 厂 , 预 计 每 年 生 产
1.7 万 吨 电 池 级 碳 酸 锂 。
银 河 资 源 还 与 Lithium One 公 司 签 署 了 一
份 矿 权 买 入 协 议 , 获 得 了 位 于 加 拿 大 魁 北 克
省 的 詹 姆 斯 湾 伟 晶 岩 型 锂 矿 项 目 70% 的 股
权 , 同 时 , 公 司 正 在 推 进 建 设 一 个 锂 离 子 电
池 厂 的 计 划 , 目 标 是 每 年 为 电 动 车 市 场 生 产
35 万 个 电 池 组 。
32 | ASIA Miner | March/April 2012

China
Surface drilling identifies four new GC veins
The GC Silver-Lead-Zinc Project in Guangdong Province will be Silvercorp’s second
production base in China.
高 城 的 地 表 勘 探 作 业 发 现 了 四 个 新 矿 脉
希 尔 威 金 属 矿 业 公 司 位 于 广 东 省 的 高 城 银 - 铅 - 锌 项 目 实 施 的 地 表 勘
探 作 业 发 现 了 四 个 新 的 高 品 位 银 、 铅 和 锌 矿 脉 以 及 大 量
的 脉 状 构 造 和 独 立 的 矿 囊 , 使 该 矿 权 地 的 矿 脉 总 数 增 至 33 个 。 此
次 勘 探 作 业 还 成 功 地 使 现 有 矿 脉 进 一 步 沿 下 倾 方 向 和 走 向 延 伸 。
此 次 地 表 勘 探 作 业 的 目 的 是 将 推 断 资 源 量 升 级 为 控 制 和 探 明 资 源
量 , 并 在 高 城 勘 察 和 圈 定 新 的 矿 脉 。2011 年 , 两 个 钻 机 共 实 施 了
34 个 钻 孔 , 钻 进 14370 米 。
四 个 新 发 现 的 矿 脉 为 V6-1、V8-2、 V9W-1 和 V9W-2, 重 要 矿 段 包
括 : 银 品 位 2450 克 / 吨 、 铅 品 位 1.29%、 锌 品 位 11.65%、 锡 品 位 0.41% 的
0.4 米 矿 段 ; 银 品 位 432 克 / 吨 的 3.13 米 矿 段 , 其 中 0.4 米 银 品 位 达 3120 克 /
吨 , 铅 品 位 0.95%、 锌 品 位 3.67%、 锡 品 位 0.38%; 银 品 位 489 克 / 吨 、 铅
品 位 2.57%、 锌 品 位 3.81%、 锡 品 位 0.70% 的 1.15 米 矿 段 ; 银 品 位 1495 克 /
吨 、 铅 品 位 6.72%、 锌 品 位 7.76%、 锡 品 位 0.41% 的 0.55 米 矿 段 ; 银 品 位
637 克 / 吨 、 铅 品 位 0.91%、 锌 品 位 1.13%、 锡 品 位 0.05% 的 0.4 米 矿 段 ; 银
品 位 525 克 / 吨 、 铅 品 位 2.45%、 锌 品 位 1.55%、 锡 品 位 0.07% 的 1.86 米 矿
SURFACE drilling by Silvercorp Metals at the GC Silver-Lead-Zinc
Project in Guangdong Province has discovered four new high grade
silver, lead and zinc veins, and a number of vein structures and isolated
mineralized pockets, increasing the total number of mineralized
veins at the property to 33. The program also successfully extended
the existing veins further to down dip and striking directions.
The surface drilling program aimed to upgrade inferred mineral resources
to the indicated and measured categories, and to explore
and define new mineralized veins at GC. During 2011, a total of 34
holes for 14,370 metres were completed by two drill rigs.
The four newly discovered veins are V6-1, V8-2, V9W-1 and V9W-2
and significant intercepts were: 0.40 metres @ 2450 grams/tonne silver,
1.29% lead, 11.65% zinc and 0.41% tin; 3.13 metres @ 432
grams/tonne silver including a 0.4 metre intersection containing 3120
grams/tonne silver, 0.95% lead, 3.67% zinc and 0.38% tin; 1.15 metres
@ 489 grams/tonne silver, 2.57% lead, 3.81% zinc and 0.70% tin; 0.55
metres @ 1495 grams/tonne silver, 6.72% lead, 7.76% zinc and 0..41%
tin; 0.40 metres @ 637 grams/tonne silver, 0.91% lead, 1.13% zinc and
0.05% tin; 1.86 metres @ 525 grams/tonne silver, 2.45% lead, 1.55%
zinc and 0.07% tin including 0.56 metres @ 1595 grams/tonne silver,
7.90% lead, 3.97% zinc and 0.16% tin; 3.42 metres @ 305
grams/tonne silver, 2.48% lead, 2.03% zinc and 0.34% tin including
1.26 metres @ 566 grams/tonne silver, 0.55% lead, 0.69% zinc and
0.17% tin, and another 0.55 metres @ 1060 grams/tonne silver, 2.06%
lead, 0.52% zinc and 0.04% tin; and 0.64 metres @ 470 grams/tonne
silver, 0.39% lead, 3.42% zinc and 0.16% tin.
Mine and mill construction at GC is well under way. More than 610 metres
of the 4 metre x 4.5 metre stage 1 ramp have been completed while
the 6-metre diameter shaft opening, ventilation shaft opening and ore bin
foundation have been prepared to allow for the pouring of concrete. The
main shaft headframe has been installed with more than 22 metres of
the main shaft and more than 70 metres of the ventilation shaft sunk.
The water recycling tanks for the mill and assay lab have been completed
while the mine office building and staff accommodation building
are more than 60% complete. Earth work and ground preparation has
been completed for the crushers, ball mills, flotation, filtration and
loading shed of concentrates.
段 , 其 中 0.56 米 银 品 位 达 1595 克 / 吨 , 铅 品 位 7.90%、 锌 品 位 3.97%、 锡 品
位 0.16%; 银 品 位 305 克 / 吨 、 铅 品 位 2.48%、 锌 品 位 2.03%、 锡 品 位 0.34%
的 3.42 米 矿 段 , 其 中 1.26 米 银 品 位 达 566 克 / 吨 , 铅 品 位 0.55%、 锌 品 位
0.69%、 锡 品 位 0.17%, 另 外 , 还 包 括 0.55 米 银 品 位 高 达 1060 克 / 吨 , 铅
品 位 2.06%、 锌 品 位 0.52%、 锡 品 位 0.04%; 银 品 位 470 克 / 吨 、 铅 品 位
0.39%、 锌 品 位 3.42%、 锡 品 位 0.16% 的 0.64 米 矿 段 。
高 城 的 矿 井 和 厂 房 建 设 工 作 正 在 顺 利 进 行 之 中 。4x4.5 米 的 一 阶
段 斜 坡 道 已 经 完 工 610 米 以 上 , 同 时 , 直 径 6 米 的 竖 井 、 通 风 井 和
矿 仓 地 基 已 经 准 备 好 进 行 混 凝 土 浇 筑 工 作 。 主 井 井 架 的 安 装 工 作
已 经 完 成 , 主 竖 井 超 过 22 米 , 通 风 井 超 过 70 米 。
选 厂 的 回 水 池 和 化 验 室 建 设 已 经 结 束 , 同 时 , 矿 区 办 公 楼 和 职 工
宿 舍 楼 已 经 完 工 60% 以 上 。 破 碎 机 、 球 磨 机 、 浮 选 设 施 、 过 滤 设 施
和 精 矿 库 的 土 方 工 程 和 场 地 平 整 工 作 已 经 完 成 。
希 尔 威 正 在 将 高 城 项 目 建 设 成 为 其 继 湖 南 省 月 亮 沟 矿 区 之 后 的 第
二 个 中 国 生 产 基 地 , 随 后 将 把 最 近 收 购 的 位 于 湖 南 省 的 BYP 金 - 铅 -
锌 矿 项 目 建 设 成 第 三 个 生 产 基 地 。
34 | ASIA Miner | March/April 2012

China
Sino Prosper seeks Guizhou gold property
SINO Prosper State Gold Resources Holdings
has entered into an agreement to acquire
77% of a Chinese company that owns
the Qing Jiao Gold Project in Guizhou
Province. The transaction involves acquisition
of a majority stake of Guizhou Qianxi’nan Prefecture
Longyu Mining from Leung Ngai Man,
who is chairman and substantial shareholder
of Hong Kong-listed Sino Prosper.
The initial value of the acquisition is
RMB550 million (HK$674.85 million). It enables
Sino Prosper to further diversify its portfolio
of precious metal assets in China, which
include the producing Aohanqi project in
Mineralization in an underground adit at one of Sino Prosper’s Chinese properties.
Inner Mongolia and the production-ready
Zhongyi Weiye polymetallic-gold property in
Heilongjiang Province.
The target company is primarily engaged
in gold mining and exploration as well as the
sale of mineral products. It holds a mining
permit on the Qing Jiao project, which has
a mining area of about 0.6sqkm at Xiongwu
Village, Xingyi City. The current mining permit
from the Chinese Government is valid
until July 2015.
Under the terms of the framework agreement
made by Mr Leung with the existing
owner (vendor) of the target company, the
vendor must obtain the renewed exploration/mining
rights of other existing contiguous
gold properties and integrate these
mining rights as mining permits then to be
held by the target company.
Completion of the acquisition is subject to a
number of conditions and due diligence satisfactory
to Sino Prosper. Among these conditions
is the requirement for completion of a
JORC-compliant technical report from a competent
person designated by the company
which demonstrates the indicated and measured
gold resources at Qing Jiao to be not less
than 13 tonnes and a valuation report showing
the aggregate value of the mine to be not less
than RMB720 million. The technical report is
expected to be available in August 2012. Sino
Prosper will then hold an extraordinary general
meeting to seek approval from independent
shareholders for the acquisition.
Sino Prosper’s CEO Richard Sung says,
“We are very excited by the potential Acquisition
and its positive impact on expanding and
further diversifying Sino Prosper’s resource
base and future production. The proposed
acquisition is consistent with our strategy of
acquiring producing or near-production assets
through our strategic relationships in
China. We are confident that the acquisition
and the developments at our Aohanqi project
in Inner Mongolia and Zhongyi project in Heilongjiang
Province will continue to enhance
the value of Sino Prosper.”
Sino Prosper is developing the production-ready
Zhongyi Weiye property with five
exploration licensed tenements and has acquired
and significantly expanded the Aohanqi
operating mine.
中 盈 并 购 贵 州 金 矿
中 盈 国 金 资 源 控 股 有 限 公 司 与 一 家 中 国 公 司
签 署 了 协 议 , 获 得 其 77% 的 权 益 , 该 中 国 公
司 持 有 贵 州 省 的 箐 脚 金 矿 项 目 。 在 此 次 交 易
中 , 中 盈 向 其 公 司 主 席 兼 主 要 股 东 梁 毅 文 收
购 贵 州 黔 西 南 州 龙 宇 矿 业 的 大 部 分 股 权 , 中
盈 是 一 家 在 香 港 上 市 的 公 司 。
此 次 并 购 的 初 始 代 价 为 5.5 亿 人 民 币 (
6.7485 亿 港 元 )。 该 并 购 令 中 盈 在 中 国 的 贵
金 属 资 源 资 产 组 合 更 加 多 元 化 , 其 中 包 括 在
产 的 内 蒙 古 敖 汉 旗 项 目 和 即 将 投 产 的 黑 龙 江
中 谊 伟 业 多 金 属 金 矿 项 目 。
目 标 公 司 主 要 从 事 金 矿 开 采 和 勘 探 及 矿 物
产 品 销 售 业 务 。
目 标 公 司 拥 有 箐 脚 项 目 的 采 矿 许 可 证 , 采
矿 面 积 约 为 0.6 平 方 公 里 , 位 于 兴 义 市 雄 武
乡 , 拥 有 包 括 黄 金 在 内 的 多 种 金 属 资 源 。 当
前 持 有 的 中 国 政 府 授 予 的 采 矿 许 可 证 有 效 期
至 2015 年 7 月 。
根 据 梁 先 生 与 目 标 公 司 原 股 东 ( 卖 方 ) 之
间 订 立 的 框 架 协 议 , 卖 方 必 须 取 得 其 他 现 有
邻 近 金 矿 的 重 续 勘 探 / 采 矿 权 , 并 将 这 些 采
矿 许 可 权 与 采 矿 许 可 证 合 并 , 然 后 由 目 标 公
司 持 有 。
收 购 事 项 须 在 一 系 列 符 合 中 盈 要 求 的 条 件
及 满 意 的 尽 职 调 查 后 完 成 。 这 些 条 件 中 包 括
由 该 公 司 指 定 合 格 人 员 按 照 JORC 准 则 编 制
的 技 术 报 告 证 明 目 标 矿 山 控 制 及 探 明 黄 金 资
源 储 量 不 少 于 13 吨 、 以 及 估 值 报 告 指 出 目
标 矿 山 总 值 将 不 少 于 7.2 亿 元 人 民 币 。 上 述
技 术 报 告 预 计 于 2012 年 8 月 完 成 。 此 后 , 中
盈 将 召 开 股 东 特 别 大 会 以 寻 求 独 立 股 东 批 准
收 购 协 议 。
中 盈 的 首 席 执 行 官 Richard Sun 称 ,“ 我
们 对 于 该 潜 在 并 购 所 带 来 的 正 面 影 响 感 到 十
分 兴 奋 , 它 将 进 一 步 扩 展 并 使 中 盈 的 资 源 基
础 及 未 来 生 产 变 得 更 多 元 化 。 此 次 并 购 计 划
与 我 们 实 行 的 通 过 公 司 在 中 国 的 战 略 关 系 收
购 在 产 或 即 将 投 产 资 产 的 策 略 相 符 。 此 次 收
购 以 及 内 蒙 古 敖 汉 旗 项 目 和 黑 龙 江 省 中 谊 项
目 的 发 展 将 继 续 增 加 中 盈 的 资 源 价 值 , 我 们
对 此 充 满 信 心 。”
中 盈 正 在 开 发 即 将 投 产 的 包 括 五 个 矿 区 之
探 矿 权 的 中 谊 伟 业 项 目 , 而 且 已 经 收 购 并 大
力 扩 展 了 敖 汉 旗 运 营 矿 区 。
36 | ASIA Miner | March/April 2012

Mongolia
Positive study for Chandgana power project
PROPHECY Coal Corporation has received a
positive feasibility study for its 600MW
Chandgana Mine-Mouth Power Project and
expects to conclude engineering, procurement
Gathering coal samples from Prophecy Coal’s Chandgana Tal deposit.
and construction (EPC) contract selection during
quarter two. Prophecy intends to build the
plant adjacent to its Chandgana Tal coal deposit
and expects construction to start in April
Survey identifies coal exploration targets
2013 with the first 150MW unit being commissioned
in October 2015.
Capital cost is projected to be US$744 million
or US$1240 per kW and includes the power
plant, overhead transmission lines and administrative
costs but not mine development cost.
This power project has first-mover advantage
to supplying Mongolia much needed
electricity, which currently comes from antiquated
plants totalling about 700MW. The
coal resource is next to a two-lane highway
and 150km from the existing power grid.
Once power and the mine are brought online,
there is good potential to introduce additional
units at lower capital costs.
In the long run, the volume of coal resource
along with the project’s proximity to China,
being about 400km from Chinese border and
1000km from Beijing, offers potential to scale
up capacity and export electricity to China.
Prophecy has had a strong response regarding
EPC contracts, including four Chinese
and a number of international
companies. It has prepared and distributed a
request for proposal and expects to have key
EPC proposals by March 31. As part of any
successful proposal, an EPC firm is expected
to bring in a lender for debt financing.
A GEOPHYSICAL survey completed by Draig
Resources (formerly C @ Limited) on two coal
licences in Ovorhangay Aimag of central
southern Mongolia has assisted in identification
of potential black coal extensions. This
work has also identified target areas for further
exploration drilling this year.
The field work over the Teeg and Nariin Teeg
licences in the Bayanteeg district comprised
32km of geophysical (resistivity) survey work.
A total of 12 lines of geophysical survey work
were carried out on the Teeg licence and 3
lines on the Nariin Teeg licence with the target
depth of penetration being about 250 metres.
The results of the survey are being interpreted
by Dash Meg Engineering and
analysed by Nordic Geological Solutions LLC
(NGS). Draig’s managing director Mark Earley
says, “The survey was carried out referencing
existing drill holes completed during the due
diligence process prior to acquiring the licences
to allow for better correlation of the
coal seams. Preliminary review of the field
data has identified a number of highly potential
drilling targets in both licences.
“I would like to acknowledge the teams
from Dash Meg Engineering and NGS that
undertook the field work in very difficult conditions
with temperatures averaging below
minus 30 degrees.”
Drill core from Draig Resources’ coal properties in
Ovorhangay province.
Draig is planning its drilling program over its
eight coal licences in Ovorhangay and South
Gobi provinces, and aims to define a JORCcompliant
resource during the second quarter
of 2012.
The Ovorhangay licences are about 130km
from the province capital Arvayheer and
520km southwest of Ulaanbaatar. The closest
town to the South Gobi licences is Gurvantes,
about 276km from the province’s capital Dalandzadgad.
The four South Gobi licence
areas are less than 80km from the Chinese
border crossing at Shivee Khuren/Ceke and
are within the South Gobi Basin which is characterized
by the largest concentration of
major black coal deposits in Mongolia.
In late 2011 Draig acquired the highly
prospective coal licences through BDBL LLC,
a subsidiary of Peabody-Winsway.
Draig re-listed on the Australian Securities
Exchange in early January 2012 following
completion of a capital raising and the acquisition
of the Mongolian licences. The company
raised Aus$17 million in the process
and these funds have been used to acquire
BDBL as well as providing sufficient funds for
its 2012 exploration, further possible acquisitions
and necessary working capital.
38 | ASIA Miner | March/April 2012

Mongolia
Coking coal confirmed at New Coal Discovery
THE presence of coking coal has been
confirmed at the New Coal Discovery area
to the north east of Aspire Mining’s existing
Ovoot coal resource in northern Mongolia.
Initial raw coal analysis shows mid-volatile
coal with CSN of 7-9, low moisture and
high calorific values, values of which are
similar to Ovoot.
The New Coal Discovery area is open to
the northeast, southeast, south and southwest
of the existing Ovoot resource and exploration
drilling is continuing.
Aspire expects to complete 16,500 metres
of exploration drilling through 2012.
Exploration targets include the New Coal
Discovery area, and the Hurimt and Zuun
Del prospects within the Ovoot project. In
2011, Aspire drilled an additional 74 holes
for 17,700 metres at Ovoot.
Aspire recently completed infill drilling required
for completion of a pre-feasibility
study (PFS) covering development of a
ROM open pit mine at Ovoot annually producing
15 million tonnes.
The PFS was expected to be completed
by the end of February.
New resource and reserve calculations
are being prepared and will contribute to an
updated resource and reserve statement
which is expected to be completed in the
March quarter. Aspire is also completing a
detailed airborne magnetics program over
the 500sqkm Ovoot project area with the
aim of improving the understanding of
basement and controls on coal distribution,
and to see through the significant amount
of alluvial cover sitting above much of the
basin to identify further drilling targets.
The airborne survey is being conducted
by Geosan LLC while mining consultancy
SRK Consulting will analyse the data during
the March quarter with a view to providing
additional drill targets for later in 2012. At
present only 20% of the Ovoot basin has
been effectively drilled.
The company has also brought forward a
drilling program on the eastern area of its
Hurimt prospect, which is within the Ovoot
project and 15km from the existing resource
area. It has entered into a contract
with Major Drilling Group to establish a second
camp and initially supply one multi-purpose
drill rig. The Hurimt drilling was
expected to start in February and involves
an initial six-hole, 2000 metre plan, targeting
exposed Jurassic sediments to determine
stratigraphic continuity with the
existing resource area.
Aspire has entered into a strategic marketing
and logistics alliance agreement with
a subsidiary of Noble Group to assist with
development of Ovoot Coking Coal Project.
Noble owns 8.3% of Aspire.
Aspire’s managing director David Paull
says, “This alliance cements our relationship
with Noble and we look forward to
working closely to de-risk Ovoot’s development
path.
“In particular, the alliance provides a
framework to confirm access and cost of
various supply chains to customers in the
seaborne market as well as completing the
important groundwork required to appropriately
brand Ovoot coking coal as a high
value feedstock for coke plants globally.”
40 | ASIA Miner | March/April 2012

Mongolia
UNDUR Tolgoi Minerals (UTM) has started its
winter work program on the Undur Tolgoi licence
area in the South Gobi to follow up
sampling which has identified copper and
gold anomalies. The 9260 hectare exploration
licence is about 100km east of the
world-class Oyu Tolgoi project.
A soil sampling program over the entire
tenement of about 1540 samples has been
designed to identify any anomalous areas
within the tenement.
Previous work has identified two interesting
zones of anomalous copper, gold and
silver. From the results of the sampling, a
hydrothermal system will hopefully be identified
using indicator elements and a tighter
soil program may be required to further define
the anomalous zones.
A geophysical program will also be undertaken
with magnetic and gravity surveys initially
run to gather a baseline of the tenement.
After analysing the results from magnetic and
gravity surveys an IP survey will be run over
the tenement as IP will be used to tie into the
magnetic and gravity survey.
Winter work program at Undur Tolgoi
UTM further expects to have the sampling
results from the laboratory by mid-May.
These results would then be used as the
basis from which to determine the appropriate
size and placement of the surveys.
The Vancouver-based company believes
The Undur Tolgoi project is in the South Gobi region, about 100km east of Oyu Tolgoi.
there is a strong probability that its program will
uncover a continuation of the geological porphyry
copper body discovered at Oyu Tolgoi.
However, it is a very early stage exploration
project and substantial additional work is required
to gauge the potential for mineralization.
March/April 2012 | ASIA Miner | 41

Philippines
Study progresses for Masbate plant expansion
FRONT-END engineering and design work for
the expansion of production facilities at CGA
Mining’s Masbate Gold Project is nearing
completion. The work is part of a scoping
study into the expansion, which will increase
annual production rates to 10 million tonnes.
In parallel with the study, CGA has commissioned
an optimization study reviewing the
current crushing and grinding circuits.
This study has been commissioned due to
the successful impact of the supplementary
crusher on throughput rates with the work
awarded to Lycopodium. The aim is to understand
what throughput can be achieved
The interior of the crushing facilities at CGA Mining’s Masbate Gold Project.
by upgrading the crushers and mills within
the existing foundations and footprint. It has
the potential to materially reduce the up-front
capital cost of the expansions.
Repairs to the SAG mill at Masbate were
completed during December with plant re-start
occurring on December 25 and full production
being achieved by the end of December. All repair
design, weld supervision, testing and quality
control, alignment and re-commissioning
was conducted under the supervision of Metso
Australia. The work included welding of the
cracked joins using an improved weld procedure
and the installation of 72 strengthening
gussets to each end of the mill to further enhance
the mill design and integrity.
Drilling continues at and around the mine site
with the aim of defining additional resources.
It has largely been confined to the mining lease
area targeting resource infill and upgrade at
Panique, Libra East, Main Vein, Colorado, Blue
Quartz and Aquarius. Exploration drilling has
also been carried out at Colorado East.
Excellent results have been returned from
drilling at Libra East, Main Vain, Aquarius,
Panique and Old Lady prospects indicating a
strong possibility of additional resources. Highlights
include 3 metres from 105 metres (true
width) @ 2.96 grams/tonne gold, 2 metres
from 21 metres @ 3.58 grams/tonne, 2 metres
from 94 metres @ 3.58 grams/tonne, 5 metres
from 123 metres @ 3.17 grams/tonne, 1 metre
from 10 metres @ 12.01 grams/tonne, 5 metres
from 73 metres @ 7.49 grams/tonne, 6
metres from 60 metres @ 6.15 grams/tonne,
8 metres from 102 metres @ 2.85
grams/tonne, 13 metres from 65 metres @
3.64 grams/tonne, 15 metres from 107 metres
@ 3.56 grams/tonne, 13 metres from 103 metres
@ 5.44 grams/tonne, 16 metres from 110
metres @ 2.16 grams/tonne and 26 metres
from 85 metres @ 2.57 grams/tonne.
Regional mapping and sampling is continuing
toward the south of the permit area with this
program locating a number of promising new
prospects that have yet to be fully evaluated.
Seven exploration drill rigs are operating on site
and an eighth, with deep hole capability, is
scheduled to arrive during the current quarter.
Philex extends Padcal mine life
AN evaluation of mine reserves at Philex Mining
Corporation’s Padcal Gold Project has
enabled the company to extend the mine life
by more than three years. Based on the evaluation
which outlined reserves of 85.6 million
tonnes, the mine life has been extended from
September 2017 to December 2020.
This follows another strong year for the
Philippines-based company with a 22% increase
in the value of the Padcal mine’s ore
production, from P13.24 billion in 2010 to
P16.15 billion in 2011. Continuing high
metal prices also saw shipments increase
by 14.42% - from P1`2.85 billion in 2010 to
P145.82 billion in 2011.
Production volume increased slightly from
9.36 million dry metric tonnes (DMT) of ore
in 2010 to 9.49 million DMT in 2011 while
shipment volumes was relatively flat at
65,133 DMT of concentrates in 2011 from
65,361 DMT in 2010.
For the month of December along, the Padcal
mine, which is in the Baguio District,
Benguet Province, Cordillera Administrative
Region, Luzon, delivered 819,938 DMT of
ore, resulting in 5830 DMT of concentrates.
The concentrates contain 57.34 grams of
gold per DMT, 24.73% copper and 56.24
grams/DMT of silver. This is equivalent to a
content of about 10,767 ounces of gold
worth P743 million, 3.18 million pounds of
copper at P478 million, and 10,559 ounces
of silver valued at P13 million.
Philex effected two shipments last December
for Pan Pacific Copper Co and Louis
Dreyfuss Commodities Suisse SA containing
about 9873 DMT of concentrates with an estimated
gross value of P2.24 billion. The concentrates
contain about 18,979 ounces of
gold worth P1.39 billion, 5.4 million pounds
of copper valued at P818 million and 18,707
ounces of silver worth P25 million.
42 | ASIA Miner | March/April 2012

Cambodia
Brighton undertakes Antrong exploration
BRIGHTON Mining Group is undertaking intensive
exploration at the Antrong Gold Project.
The work programs, including sampling,
trenching and drilling, are focusing on areas
that have previously produced significant exploration
results as well as areas that have
been identified through prior reconnaissance
as hosting mineralization.
The ASX-listed company’s exploration work
was delayed late last year due to a longer
than usual wet season and unprecedented
flooding in the regional parts of Cambodia
that directly affected the project areas. The
work is being carried for the duration of the
current dry season and includes follow-up
drilling at the Antrong concession, preliminary
drilling at Ropoah concession, infill soil sampling,
auger sampling, trenching and stream
sediment sampling on all concessions.
Geophysics will also be undertaken on all
concessions, include flying aeromagnetic surveys.
In addition, ground geophysics using
down hole electromagnetic conductivity (EM)
at Antrong and induced polarization (IP) will
be done to test geological areas of interest.
The Antrong concession is 230km northwest
of Phnom Penh in the province of Mondulkiri.
The concession covers an area of
58.5sqkm and is about 9km northeast of the
Okvau project of OZ Minerals.
Gathering samples from Brighton Mining’s Antrong project.
The Antrong drilling program is following up
previous drilling which returned intersections
including 3 metres @ 6.91 grams/tonne gold
including 2 metres @ 9.45 grams/tonne; 5.7
metres @ 5.06 grams/tonne including 1
metre @ 11.1 grams/tonne; and 2 metres @
4.6 grams/tonne.
It also includes new areas of interest where
previous highly encouraging results showed
geochemical soil samples peaking at 331 and
228 ppb gold in the Tev and O’Thmey West
prospects; rock chip samples peaking at
46.1, 21.4, 14.0 and 11.5 grams/tonne gold
in O’Thmey South prospect; additional rock
chip samples of 26.3 grams/tonne found to
the south of O’Thmey; and anomalies where
ASTAR images and coincident geological interpretations
have been identified.
The work programs also include preliminary
drilling with follow-up trench sampling at
Ropoah where significant results were encountered,
including geochemical soil samples
peaking at 313 ppb gold and rock chip
samples peaking at 54.2 grams/tonne gold
and 4430 grams/tonne silver.
Stream and soil auger sampling is also
being carried out at Kang Roland North,
which has been identified as hosting another
large granodiorite similar to that at Antrong
which hosts the Okvau project.
44 | ASIA Miner | March/April 2012

Vietnam
Feedstock negotiations for ferrotungsten plant
WHILE the Hazelwood Resources ATC Ferrotungsten Project in Vietnam
remains in a production-ready state, financing for the procurement
of feedstock and first fill materials is being negotiated against a
backdrop of significant volatility and uncertainty in capital markets.
The plant, with annual production capacity of 4000 tonnes of ferrotungsten,
was completed under budget in the third quarter of 2011
and commissioning is continuing.
A corporate advisory and fund raising mandate has been renewed
with Hartleys Limited, which has a proven track record of successfully
arranging funding for Hazelwood’s activities. The company is actively
being presented to a range of local and international investors to assess
the most appropriate funding strategy for the procurement of inventory
and first fill for the ferrotungsten project.
With official Chinese export figures showing a continued decline in
The furnace hall at the Hazelwood Resources ATC Ferrotungsten Project in Vietnam.
the volume of ferrotungsten exported from China, in part due to export
tariffs and other restrictions imposed by the Chinese Government,
Hazelwood believes there is a bright future for its Vietnamese
plant and Western Australian minerals projects.
As with all ferroalloys, the export of ferrotungsten from China is
subject to a 20% export tariff and the VAT rebates for exporters
have been abolished. Tungsten, in particular, is considered a strategic
metal and the Chinese, who control about 70% of the world’s
reserves, have placed numerous restrictions on the mining, processing
and export of the material.
Outside of China, there are few sources of supply of ferrotungsten
which is used in tool steels and high speed steels. European and
Japanese specialty steel makers are the largest non-Chinese consumers
of tungsten in steels. Hazelwood and ATC have an agency
agreement with Wogen Resources for the distribution of ferrotungsten
to Wogen’s existing network of specialty steelmaking customers.
Hazelwood is conducting a strategic review to determine the optimum
structure for realizing value from its ATC refining business as
well as its minerals assets in Australia. Syntella Partners of New York
have been engaged to assist with this exercise and are presenting
the company to a range of North American investors.
In Western Australia a bankable feasibility study is progressing on
Hazelwood’s Big Hill Tungsten Project, which is expected to supply
tungsten from 2013 while the Mt Mulgine Tungsten Project is being
assessed as a possible additional source of feedstock.
46 | ASIA Miner | March/April 2012

Vietnam
First ore from Bai Go deposit expected by May
OLYMPUS Pacific Minerals is continuing development of the Bai Go
deposit at its Phuoc Son Gold Project in central Vietnam and expects
to be on first ore by May with planned capacity reached by August.
The mill at Phuoc Son, which began producing during 2011, is continuing
to operate at its current daily design capacity of 500 tonnes.
Although the company expects lower combined first quarter gold
production from its Phuoc Son and Bong Mieu operations this is not
likely to adversely affect the 2012 production forecast. Production
was expected to be lower during this quarter owing to scheduled general
plant maintenance and the Vietnamese Lunar New Year Holiday
which began on January 23 and lasted two weeks.
Consolidated production for the year ended December 31, 2011,
represented the fifth consecutive year the company has expanded production
with a 29% increase compared to 2010. The company produced
42,868 ounces from its Vietnam operations during 2011, up
from 33,234 ounces in 2010. This exceeded the forecast of 40,000
ounces despite the commissioning of the Phuoc Son plant being delayed
by several months due to record-breaking monsoon rain.
The company expects to substantially expand its combined gold
production capacity by 2014 with its Bau project in East Malaysia expected
to be the major contributor. The first phase of the Bau Central
project is now in full feasibility phase. Vietnam’s production and development
activities will provide cash to assist in funding a portion of
future development expenditures.
Late last year Olympus Pacific’s Phuoc Son operating body, Phuoc
Son Gold Company (PSGC), received the Certificate of Merit for social
and economic development by the People’s Committee of Quang Nam
Province, Vietnam, for completion of the Phuoc Son Gold Plant. Olympus
Pacific completed construction of the plant in the first quarter of
2011 and commissioned the state-of-the-art facility in June. It is the
company’s second gold production facility built in Vietnam since 2005.
The Certificate of Merit is the highest provincial award a company can
receive for its contribution to social and economic development. Quang
Nam People’s Committee chairman Le Phuoc Thanh presented the
award on December 19 to PSGC’s general director Le Minh Kha.
The processing facilities at Olympus Pacific Minerals’ Phuoc Son Gold Project in Central Vietnam.
March/April 2012 | ASIA Miner | 47

Australia
Bandanna on track for 2014 production
BRISBANE-based Bandanna Energy is on
schedule to begin significant coal production
in 2014. The company has a total JORC resource
supply of 1.62 billion tonnes between
its Bowen and South Galilee basin project
tenements. It has also secured an annual 4
million tonne port allocation in stage one of
the Wiggins Island Coal Export Terminal at
Gladstone, central Queensland.
This agreement is a major milestone for the
Drilling at Bandanna Energy’s Springsure Creek thermal coal project in central Queensland.
company in its bid to move from exploration
into coal production. The company’s managing
director Dr Ray Shaw says, “Bandanna is now
very much on the front foot in transitioning to
its next phase of corporate development.”
Bandanna has one of the largest thermal
coal inventories of any Australian company,
holding 16 coal exploration permits in
Queensland’s Bowen and Galilee basins. It is
the only ASX-listed company with significant
coal development plans in the Galilee basin.
An increase of 31% in the company’s total
resources was announced in December
2011, after drilling results were received from
the Springton domain program within the
Springsure Creek project.
Ray Shaw says, “The indicated resource not
only defines Springsure Creek as a world-class
thermal coal resource project but showcases
Bandanna’s resolve to consistently meet its exploration,
environmental and engineering targets
and timelines, and for the project to
remain on course for coal production in 2014.”
The company will focus its drilling efforts in
2012 at the Springsure Creek deposit within
its group of Bowen Basin projects, with a
total of 80 holes planned to collect geotechnical,
gas and hydrological data for a definitive
feasibility study.
Bandanna has reached an agreement with
the indigenous Kairi people for the cultural
heritage management at its Springsure Creek
Coal Project and Arcturus project in the
Bowen Basin. A cultural heritage management
plan will be developed with the Kairi as
the area’s traditional owners, in conjunction
with the projects’ environmental impact studies
for the development of mines at the sites.
Aston awaits Maules Creek decision
ASTON Resources is eagerly awaiting the
findings of the Planning Assessment Committee
(PAC) which reviewed its application
for environmental approval of its flagship
Maules Creek project in northern New South
Wales. The committee was given an extension
by the NSW Department of Planning and
Infrastructure to allow it time to consider the
substantial amount of material provided by
Aston regarding the Gunnedah basin project.
Aston’s interim chief executive officer Peter
Kane is hopeful of a positive outcome: “We are
confident in the quality of our environmental assessment
and our response to public and government
submissions. We look forward to the
receipt of the PAC report and we remain on track
to deliver first coal in the second half of 2013.”
The company recently signed a joint venture
agreement with Boggabri Coal for the design,
construction and operation of a shared rail
spur. The companies will also incorporate a
special purpose agency to operate the spur.
Both Aston and Boggabri will grant and register
easements over land they hold within the
rail corridor to ensure that access to the main
rail line is protected until the end of both mine
lives. The cost of the transmission power lines,
upstream communications and control equipment
as well as the haul roads accessing the
mines will be shared evenly.
Peter Kane says the joint venture agreement
provides cost effective infrastructure for the
Maules Creek project. “We are excited to be
working together with our near neighbours to
avoid duplication, minimize construction costs
and lock in a long-term access corridor.”
48 | ASIA Miner | March/April 2012

Australia
Funds boost from sale of MetroCoal stake
METALLICA Minerals has sold 9 million
shares in its coal group MetroCoal to Hong
Kong-based DADI Engineering Development
Group, a subsidiary of the DADI Chinese coal
engineering group. MetroCoal owns several
large thermal coal projects in southeast
Queensland’s Surat Basin.
The sale has netted Metallica an Aus$4.5 million
cash boost which will be funnelled into the
company’s advanced NORNICO nickel-cobaltscandium
project northwest of Townsville. It
brings the company’s cash reserve to more
than Aus$12 million. Metallica continues to
hold around 30% in MetroCoal and intends to
maintain its share for the remainder of the year.
The funds will also be used in progressing
Metallica’s emerging zircon-rutile mineral
sand projects in Victoria’s Gippsland region,
for which it hopes to announce a maiden resource
estimate by April. The first drill program
at the projects has been completed as
part of the due diligence undertaken in Metallica’s
proposed acquisition of the two tenements
from Rio Tinto. There have been 43
drill holes completed for 2290 metres. The
company says the program was designed to
test both the data supplied by Rio Tinto and
Metallica subsidiary Oresome Australia’s own
exploration targets at significant areas of
heavy mineral sand concentration at the
Stockdale-Glenaladale and Mossiface areas.
Metallica’s managing director Andrew
Drilling at Metallica Minerals’ mineral sands tenements in Victoria’s Gippsland region.
Gillies says given the expected large extent,
size and grade of the Gippsland HMS mineralization
and the current strong zircon and
rutile prices along with the excellent outlook
on the demand/supply fundamentals for
these commodities, the company is excited
about the project’s potential.
March/April 2012 | ASIA Miner | 49

Australia
Aquila approves Eagle Downs development
THE Eagle Downs hard coking coal joint venture
could be in operation by late 2015 after
the board of Aquila Resources approved its
development. Aquila Coal and Vale SA subsidiary
Bowen Central Coal are partners in
the project, which will be an underground
multi-seam longwall mine, annually producing
an average of 4.5 million tonnes in the first 10
years of a 48-year mine life.
Aquila Resources’ Isaac Plains coal project in central Queensland’s Bowen Basin.
The project is in central Queensland’s
Bowen basin, immediately down dip from the
operating BHP Billiton Mitsubishi Alliance
Peak Downs coal mine. A definitive feasibility
study released in May 2011 contained two
options for the mine’s development. One assessed
the project’s approval without contracted
rail and port arrangements, with
longwall coal production aligned with the first
available new rail and port facility. The other
option aligned all coal production with the first
available new port and rail facility. This was
Aquila’s preferred option, however the management
committee has instead chosen to
progress with the first option.
Aquila also voted in favour of undertaking
mine development to stave off a potential
buy-out by Bowen under the terms of its joint
venture agreement. Aquila sees Eagle Downs
as a highly valuable asset in the significant
hard coking coal market.
The companies are now working to identify
and secure suitable rail and port services for
the project, with the development schedule
aligned with the first available freighting facilities.
Once rail and port contracts are secured,
longwall mining operations will begin
at the Harrow Creek upper coal seam, which
is one of three seams to be targeted. Aquila
expects initial production will begin between
late 2015 and early 2016.
The joint venture has approved Aus$77.4
million for the early works budget at the project
during the 2011-12 financial year. Civil works
including site access roads, power connection
and gas drainage are already under way.
Aquila also expects to finish access to the underground
drifts before June 2012, in preparation
for the drift driveage during 2012-13.
Mineral Hill processing above expectations
COPPER concentrate production at KBL
Mining’s Mineral Hill project in central western
New South Wales has increased by 25% on
the company’s forecast monthly output, resulting
in export shipments being scheduled
every three weeks.
The average hourly mill feed rate is also
above schedule at 35 tonnes or 290,000
tonnes annually, which is producing 1900
tonnes of copper concentrate. KBL completed
four copper concentrate shipments in
2011, but expects this number to increase
significantly during 2012.
The company’s executive chairman Jim
Wall says, “The gains in process plant performance
are contributing to reducing forecast
unit costs and are positive for further
operational improvement. The performance
from the mine is especially pleasing that it is
meeting the increased demand from the plant
at better than anticipated grades. The company
is looking forward to a successful 2012
at Mineral Hill as mining and processing is
now in a steady state and performance is
above expectations.”
Meantime, drill results from the Pearse
gold-silver deposit within the Mineral Hill project
have confirmed high grade mineralization.
The 470 metre reverse circulation drill program
was completed in December 2011 to
collect ore samples for test work to support
the start of mining at the deposit. High grade
intersections include 14 metres @ 25.5
grams/tonne gold and 56 grams/tonne silver,
and 51 metres @ 9.8 grams/tonne gold and
72 grams/tonne silver.
Jim Wall says these results have prompted
KBL to plan a start to open-cut mining at
Pearse from July this year at an annual rate of
120,000 tonnes of ore during the first two
years. The addition of gold and silver dore production
from Pearse as well as underground
mining at KBL’s existing operation at Parkers Hill
is expected to increase annual production at
Mineral Hill to 5400 tonnes of copper, 21,500
ounces of gold and 265,000 ounces of silver.
In November 2011, KBL updated the resource
at Mineral Hill’s Southern Ore Zone to
a JORC-compliant 5.2 million tonnes containing
222,000 ounces of gold, 61,000 tonnes of
copper and 6 million ounces of silver.
The Mineral Hill mine, which is about 65km
north of the town of Condobolin, was mothballed
in 2005 by Triako when copper and
gold prices plummeted. Substantial resources
were left undeveloped and the discovery of
the nearby high-grade gold-silver Pearse project
has allowed KBL to step in and cost-effectively
upgrade the operation and
commission it in the fourth quarter of 2011.
50 | ASIA Miner | March/April 2012

IRONCLAD Mining is preparing the first shipment
of iron ore from its Wilcherry Hill magnetite
project in South Australia, after
mobilizing a crushing plant and beginning
construction of a dry magnetic separation
(DMS) plant in January. IronClad plans to
ramp up the project in three stages to become
a large-scale, long-life facility.
In January the company received the final
approval from the South Australian government
to commence production at Wilcherry
Hill. Its environmental protection and rehabilitation
program at the joint venture with Trafford
Resources was the final piece of the
project awaiting statutory approval. This
green light paved the way for the company to
start producing its first ore, with up to 1 million
tonnes of premium grade direct shipping
ore expected to be produced in the first 12
months of operations.
The company’s executive chairman Ian
Finch says the extremely quick start-up was
due to the fact that there was no major construction
needed. “Most of the processing
plant is mobile with its own accompanying
Australia
Production under way at Wilcherry Hill
power sources and can quickly be put in
place. The only significant construction is the
DMS section of the plant and the main component
parts were ordered some time ago,
while the civil structure to house them is
under construction in the USA.”
The project is 105km west of South Australia’s
steel industry capital of Whyalla and
about 40km north of Kimba in the northern
Eyre Penisula. It covers four tenements over
an area of almost 1000sqkm. Access into the
project area is via the Eyre Highway to Kimba
and then graded service roads and pastoral
station tracks. IronClad plans to ramp up production
at the plant rapidly, annually producing
12 million tonnes by 2015, when
production will be shifted to the nearby Hercules
deposit. This deposit has a current
JORC inferred resource of 198 million tonnes,
which is confirmed in a banded iron formation
extending more than 10km. IronClad says the
current resource estimate is based on drilling
from only 2km of the formation, meaning
there is potential for a total resource of up to
2 billion tonnes.
The first sales of ore are expected to generate
up to $12 million for the company, which is
needed as soon as possible in order for Iron-
Clad to complete the DMS, purchase shipping
containers and site works at Lucky Bay port.
Ian Finch says it’s anticipated the first stage of
the project will cost about $40 million to complete
and bank finance for a majority of the
capital costs is about to become available.
The company has received international
recognition for its innovative approach at
Wilcherry Hill, particularly for the production
of premium grade DSO from crystalline magnetite
iron ore by crushing and screening, and
adding magnets during processing.
Another of the company’s unique concepts
is the floating harbour which cuts road
and rail transport distance from mine to port
by about 350km. Originally, Port Adelaide
was the most viable port despite being almost
500km from the mine. Now the company
has developed a floating port at Lucky
Bay, 10km offshore, to be serviced by two
self-propelled barges. The facility is scheduled
to be operational within three years.
March/April 2012 | ASIA Miner | 51

Malaysia
Lynas receives temporary licence for LAMP
Construction work at the Lynas Advanced Material Plant.
LYNAS Corporation has been granted a temporary
licence to operate the Lynas Advanced
Material Plant (LAMP), in Gebeng,
Malaysia. The temporary licence is regarded
as a pre-operating licence for the rare earths
processing facility.
The ASX-listed company made application
to the Malaysian Atomic Energy Licensing
Board (AELB) for the licence. On January 3,
2012 the AELB provided hardcopy documents
relating to the application for public
comment with documents on display for 14
days. In accordance with recommendations
of the International Atomic Energy Agency review
of the LAMP in June 2011, the documents
include a detailed waste management
plan and safety case.
The temporary licence allows Lynas to
commission the LAMP and, subject to continuous
oversight by Malaysian regulatory authorities,
progressively ramp up to nameplate
capacity and sell its products. The licence is
for two years and if Lynas complies with requirements,
a permanent operating licence
can be issued within the two years.
The AELB says the licence can be withdrawn
if any conditions are broken. Lynas must submit
plans for a permanent disposal facility within 10
months and make a $50 million financial guarantee
with the government. It stated, “The
residue that is produced is the responsibility of
the company and if necessary, will be returned
to its source” in Mount Weld, Australia.
Lynas executive chairman Nicholas Curtis
says, “The Malaysian regulatory authorities
have put in place a comprehensive process
to monitor and evaluate our compliance with
the highest international standards and our
responsibility to operate the plant in a safe
and sustainable manner. Lynas maintains a
deep commitment to the communities in
which it operates as well as ongoing communication
with interested parties to reinforce
the facts about the safety of the LAMP.”
In the chairman’s address to the company’s
2011 annual general meeting, Nicholas Curtis
said: “We are on the verge of implementing
our vision of being the global leader in rare
earths for a sustainable future.
“In a major milestone, production of rare
earths concentrates from our Mt Weld mine
commenced in May 2011. The plant was officially
opened in August and has been very successfully
commissioned. It is achieving final
concentrate grades in excess of 37%.
“The LAMP in Malaysia is on the verge of
being completed and will be ready to receive
the first feed from Mt Weld in the first
quarter of 2012. Our Malaysia operational
capability has grown significantly in the last
year, up from 30 people at the end of 2010
to more than 220 currently.”
Working capital facility granted for Raub project
PENINSULAR Gold’s wholly-owned subsidiary,
Raub Australian Gold Mining Sdn Bhd (RAGM),
has entered an agreement with Alkhair International
Islamic Bank Berhad (AIIB) for an Islamic
working capital facility of up to US$6 million.
The Murabaha Facility provides RAGM with
additional working capital during 2012 for use
at the Raub Gold Project.
It also provides RAGM with additional flexibility
to purchase consumables for the Raub
gold plant and finance general working capital
requirements whilst the production at the plant
is ramped up during 2012 towards the target
annual production rate of 2 million tonnes of
ore processed.
The facility is available for one year from the
first drawdown, providing that the first
Murabaha Transaction takes place no later
than February 11, 2012. Each transaction will
be subject to a profit rate of 2.75% above the
bank’s cost of funding rate, currently 5% per
annum, and each transaction will be for a period
of three months. Upon fulfilment of relevant
conditions, the facility allows for the profit
amount that is due on a maturing Murabaha
Transaction to first be paid at the end of each
transaction period, while the principal may be
rolled over.
AIIB has been granted security for the facility
under the agreement with a debenture over
RAGM’s current and future fixed and floating
assets ranking after security in favour of
RAGM’s existing financier, Bank Kerjasama
Rakyat Malaysia Berhad, and a corporate
guarantee from Peninsular.
As well, a legal charge over the mining lease
for Raub, which is owned by Akay Holdings
Sdn Bhd has been granted in favour of AIIB.
Akay is a privately-owned Malaysian company
with a 15.1% shareholding interest in Peninsular
and is 99.9% owned by Dato Sri Andrew Tai
Yeow Kam, the chairman and chief executive
of Peninsular who is also a director of RAGM
and Akay. This new legal charge over the lease
is in addition to those already provided by Akay
to Bank Rakyat in 2009 as security for existing
debt facilities. Akay has provided the new legal
charge as security to AIIB at no additional financial
cost to the company or RAGM.
In addition to the facility, RAGM has debt facilities
of RM169 million (about £34 million) from
Bank Rakyat of which RM100 million is being
used to finance expansion of the production
capability at the gold plant.
52 | ASIA Miner | March/April 2012

Papua New Guinea
New estimate for Mt Kare
gold-silver deposit
IN a major milestone for Indochine Mining, an initial JORC-compliant
resource of 2.1 million ounces of gold equivalent has been announced
at its Mt Kare gold-silver deposit in Papua New Guinea’s Central Highlands.
This estimate confirms the 2007 evaluation of the gold-silver
mineralization at the prospect.
The total indicated and inferred mineral resources are estimated at
28.3 million tonnes @ 1.9 grams/tonne gold and 22.5 grams/tonne
silver containing 1.76 million ounces of gold and 20.40 million ounces
of silver or a grade of 2.3 grams/tonne gold equivalent for 2.13 million
ounces of gold equivalent at a 0.5 grams/tonne gold cut-off grade.
This latest resource estimate is based on information as of August
2011 from 365 drill holes completed by previous owners and explorers
during the last 18 years, including 25 not used in the 2007 estimate.
Indochine says this more robust approach to data modelling
resulted in higher grades but slightly less tonnage.
The mineralization occurs as both sulphide-rich steeply dipping
veins and localized quartz-pyrite-roscoelite veins within five zones:
the Western Roscoelite containing 52% of the mineralization, Black,
C9, Central and Upper.
An aerial view of Indochine Mining’s Mt Kare site with the resources and camp site outlined.
The company is now aggressively progressing its pre-feasibility
study (PFS) with three drill rigs operating as part of a program to improve
and increase the current resource. Large diameter drill core is
also being collected for metallurgical test work as part of the PFS,
which is scheduled for completion in August 2012.
Recent drill holes have shown high-grade mineralization consistent
with previously drilled major zones including veins, breccias and sulphides.
Indochine says a number of drill holes are ‘twinning’ previous
holes for metallurgical test work, and is expecting high grade gold
zones to be repeated.
Assay results from the most recent holes include 87 metres @ 27
grams/tonne gold and 39 grams/tonne silver from 27 metres and 15
metres @ 148 grams/tonne gold and 59 grams/tonne silver from 81
metres.
Indochine’s chief executive officer Stephen Promnitz says, “We are
entering an exciting period with considerable news flow anticipated
over the next nine months from drill results and from the PFS.”
The gold and silver mineralization at Mt Kare is hosted in sandstones
and siltstones forming a broad north-east strike fault zone which extends
through to Barrick’s 30 million ounce Porgera gold deposit
about 15km to the northeast.
March/April 2012 | ASIA Miner | 53

Papau New Guinea
Final green light for Ramu project
ALMOST two years of legal delay has ended
with Papua New Guinea’s Supreme Court rejecting
an appeal to overturn approval for the
US$1.5 billion Ramu nickel-cobalt project of
China Metallurgical Group Corp (MCC) and
Highlands Pacific. The appeal was heard in
the Supreme Court after the National Court
of Madang also refused to grant an injunction
from protesters in July 2011.
The Ramu Joint Venture company was
granted approval for the project in Madang
province in July 2000, and was due to be in
production by 2009. Now the Supreme
Court’s decision not to uphold an appeal to
prevent operation of the company’s purpose-built
deep sea tailings placement system
has finally cleared the way for the mine
to begin operating.
Highlands Pacific’s managing director John
Gooding says, “This is very positive news for
the project, the landowners and the country,
and this should help restore investor confidence
in PNG and the Ramu nickel project. It
is very unfortunate that a fully permitted project
which used the best international advice and
which conducted significant community and
landholder consultation was delayed at great
cost for so long by the actions of a few.
“It is now time to get on with the commissioning
and operation of the project, we will
continue to work closely with the PNG government
and the regulators to ensure that
the project meets the licensing and permitting
requirements.”
The Ramu project is about 75km southwest
of the provincial capital Madang and contains
an estimated 143 million tonnes @ 1.01%
nickel and 0.1% cobalt. These mineral resources
have the potential to extend the mine
life by up to 20 years. Final commissioning and
construction works were completed at the
mine in late-2011, with the country’s chief
mines inspector giving the project load commissioning
approval in December to be in full
production by mid-2013. The mine will annually
produce 31,150 tonnes of nickel and 3300
tonnes of cobalt as a high-grade concentrate.
The joint venture designed a conventional
deep sea tailings placement system which
will see tailings deposited into a deep sea
trench using a 150 metre pipe almost half a
kilometre off the coast. It has been designed
to international standards and was originally
approved by the government in 2000 as part
of the project’s comprehensive environment
impact statement and the granting of the project’s
special mining lease.
The company says this process is proven
technology often used in locations where
there is a deep basin close to the shore, and
the tailings stream will be very similar to the
naturally occurring sediments into the sea off
PNG’s Rai coast.
Laying the slurry pipeline from the Ramu mine site to the
north coast of PNG, near Madang.
Coppermoly and Barrick JV on New Britain
COPPERMOLY and Barrick Gold are forming
a joint venture to further explore and evaluate
Coppermoly’s tenements on New Britain Island.
A $20 million funding commitment from
Barrick has been met under a farm-in agreement
for the Simuku, Nakru and Talelumas
deposits, with Coppermoly retaining a 28%
interest in all three tenements.
The cash contribution will go towards completion
of a feasibility study, which will be delayed
until after production has started.
Coppermoly says the joint venture will provide
its shareholders with significant earning
potential through the retention of a substantial
stake in the three advanced projects.
A total of 10,248 metres has been drilled
across 37 diamond holes at Simuku which
hosts an inferred resource of 200 million
tonnes grading 0.47% copper equivalent.
Assay results for the holes are still pending.
Copper, gold and zinc mineralization has
been intersected at three prospects within
the Nakru tenement. The Nakru-1 coppergold
system is the most advanced with 27
drill holes completed over 5928 metres. The
highlight is one intersection of 213.75 metres
grading 0.92% copper and 0.33
grams/tonne gold from 74.45 metres.
Coppermoly completed its first diamond
drill hole at the Nakru-4 prospect in December
2011, intersecting 22 metres @ 0.21
grams/tonne gold and 0.15% copper including
an interval of 1 metre @ 1.54 grams/tonne
gold and 1.17% copper.
The company’s managing director Peter
Swiridiuk says, “These results confirm the
presence of widespread copper and gold
mineralization at depth in the Nakru system.
Further drilling will be required to test for tonnage
potential on all prospects, including
other geochemical and geophysical targets
yet to be drill tested.”
There have been 31 diamond drill holes
completed at the Nakru-1, 2 and 4 prospects,
intersecting copper, gold and zinc, however
Coppermoly says further drilling will define the
extent of the mineralization.
Nakru is in a remote central part of New
Britain with access to a modern deep water
container port at the provincial capital of
Kimbe, which is accessible by daily flights
from the PNG capital Port Moresby. The
company believes the existing infrastructure
in Kimbe is ideally suited for any future development
of Nakru.
Talelumas is the largest of the three tenements,
covering 75sqkm along the mineralized
Kulu-Awit copper belt. It hosts
porphyry-style copper and gold mineralization
which has been historically explored with
airborne geophysics and geochemical sampling.
Rock samples from the Isme Creek
deposit have returned 9.47 grams/tonne
gold, 7.94% zinc, 552 grams/tonne silver,
0.15% copper and 7.05% lead, a combination
similar to that found at Nakru.
54 | ASIA Miner | March/April 2012

Papua New Guinea
Bulolo gold production plant
being designed
CHURN-DRILL testing has uncovered visible gold at Pacific Niugini’s
Bulolo joint venture in Papua New Guinea’s Morobe goldfields, with a
grid-based drilling and bulk sampling program being undertaken to
validate the gold grades in newly-tested areas. Detailed design of the
proposed production plant is also well under way, with the aim of processing
1000 tonnes an hour with an initial annual production rate of
40,000 ounces. The initial plant will use process equipment purchased
from a project in Tasmania.
Pacific Niugini expects the rate of gold recovery to be higher than
historical performances due to the developments in gravity processing
technology. Historic gold production at the Bulolo Gravels totalled 2.1
million ounces when they were dredged to a depth of 36 metres between
1932 and 1956.
Pacific Niugini’s Bulolo joint venture is in the historic Morobe Goldfields, about 75km
southwest of Lae.
The company’s subsidiary Pacific Niugini Minerals formed a joint venture
in October 2011 with PNG Forest Products (PNGFP) to consolidate
its gold interests in the Bulolo area, and resolve all competing land use
and legal actions between both companies and several other groups.
PNGFP is the largest industry in the Bulolo region, with grazing
rights over some of the gravel beds. It owns major timber, agricultural
and retail operations, employing 1200 people. PNGFP also owns a
nearby hydro-electric power station which will provide substantial access
to power supply for mining projects. It has previously sought to
halt any exploration as well as the restarting of gold mining. With both
companies reaching an agreement, gold production is highly likely to
recommence at Bulolo.
The joint venture agreement will see Pacific Niugini transfer a 25%
registered interest in its Bulolo licence to PNGFP while still holding its
30% participating interest in the area to the south of Bulolo town, and
a 25% participating interest in other parts of the licence area. PNGFP
has agreed it will not be entitled to any compensation as a result of
interruption to its agricultural activities during exploration or mining.
In turn, Pacific Niugini will receive a 50% interest in PNGFP’s Widobosh
mining licence, which is 10km north of the Bulolo licence. The
fact that it already has been granted a mining licence area bodes well
for rapid progression to operations commencing. There is historical
evidence of significant gold production from this tenement.
The company’s managing director Paul Cmrlec says the agreement
means bulk testing and subsequent mining at the area can
begin. “The legal challenges between the parties relating to gold exploration
and future mining activities are to be discontinued.”
March/April 2012 | ASIA Miner | 55

Central Asia
Plant commissioning under way at Dalabai
Core samples from Central Asia Resources’ Dalabai project in Kazakhstan.
COMMISSIONING of the processing plant at
Central Asia Resources’ Dalabai Gold Project
in Kazakhstan is under way. Once commissioning
is complete leaching will begin on
25,000 tonnes of ore with full-scale leaching
expected to start by the end of March.
Commissioning began in late January following
a delay in deliveries of cyanide to the project
owing to changes in Kazakh industrial
chemical regulations and a further delay
caused by extreme cold temperatures in mid-
January. The extreme temperatures posed a
risk to successful start-up when cyanide solution
is first applied to the heap and before the
chemical process of leaching begins. These
risks are specific to the first few days of heap
leaching and will not impact on ongoing mining
or heap leach operations, which will continue
throughout the winters at Dalabai.
Despite the delays, crushing and stacking
continued on stockpiled material and about
120,000 tonnes of ore will be ready for
leaching when regular cyanide deliveries
begin by the end of March. Central Asia
also paused mining operations during this
period but they will resume once the company
produces gold-in-resin as this will confirm
timing of revenue and the completion
of a mine engineering review.
Managing director Angela Pankhurst says
the company also took this opportunity to
optimize operations. “Consultant mining engineer
Stewart Brown has been reviewing operations
and is providing the training
necessary to implement improvements and
realize significant cost savings.”
The Dalabai resource stands at 3.98 million
tonnes @ 0.97 grams/tonne gold for 124,000
ounces. Processing will commence at an annual
rate of 15,000 ounces and this will ramp
up to an annual average of 25,000 ounces of
gold and 550,000 ounces of silver for 2.7
years. There is significant exploration upside
to increase production and mine life.
Chris Campbell-Hicks completed his contract
as country manager on January 31 and
the company has appointed Marat Medueov
as plant manager and consultant metallurgist,
and Duncan Greenaway as chief operating
officer. Gary Patrick will assist with commissioning
and optimization.
Central Asia also has the Altyntas heap
leach gold project which is being prepared for
development in 2013. The resource stands at
16.5 million tonnes @ 1.14 grams/tonne gold
for 598,000 ounces and this year the company
aims to carry out test work, exploration
and a scoping study.
There are also the Kepken and Kengir projects
which have the potential to provide feed
for the Altyntas operation. To date Kepken
has 11 million tonnes @ 1.16 grams/tonne for
438,000 ounces while Kengir has 2.62 million
tonnes @ 1.4 grams/tonne for 125,000
ounces as well as copper potential. There is
also the early exploration Bizhe project which
has potential to provide feed for Dalabai as it
is just 18km away.
El Maniel seeks Kyrgyz opportunities
EL MANIEL International has entered into preliminary
discussions with several parties to explore
mineral resources opportunities in the
Kyrgyz Republic. The company held a number
of meetings in the capital, Bishkek, and is considering
setting up representative companies
and offices there in the immediate future.
El Maniel’s CEO Jamie Khoo says, “We
were thrilled to learn from preliminary discussions
that Kyrgyzstan is mineral rich with significant
world-class gold deposits and this
meets our predominant interest and objectives
in pursuing new horizons for our gold
business domain. We also believe these initiatives
will open doors to promising gold resources
in the Central Asian region.”
The Kyrgyz Republic is in the heart of Central
Asia and the mountainous country, which
is about the size of the US state of Washington,
is landlocked and bordered by Kazakhstan
to the north, Uzbekistan to the west,
Tajikistan to the southwest and China to the
east. Its capital and largest city located in the
north of the country is Bishkek. The country’s
largest gold mine, Kumtor, is also one of the
largest world-class gold mines in Central Asia
and is operated by Centerra Gold.
El Maniel International, a company quoted
and traded on the US OTC Market, also has
projects in Ghana and Papua New Guinea,
where it has established a base camp for a
new project at the Bulpat Creek on Misima Island.
“We are very excited with this promising
new asset totalling 108 acres and based on
the geological survey report issued in 2009 for
this alluvial claim, the projected gold reserve is
estimated to be in the region of 85,000 ounces
valued at US$136 million at a gold price of
$1600 per ounce,” Jamie Khoo says.
Misima Island has a total land area of
202.5sqkm and the project site has excellent
road access from the sea port in Misima
town and Misima airport. There is also alluvial
gold mining equipment in place. The
company’s projected initial monthly alluvial
gold production from the project is estimated
at 500 ounce.
“We remain aggressive in our endeavours to
enhance the top-line growth of the company
and we believe that this can be achieved
through new acquisitions or joint ventures in
world-class gold mining properties so as to increase
our bottom line and to take the company
to greater heights,” adds Jamie Khoo.
56 | ASIA Miner | March/April 2012

HAMBLEDON Mining looks set to benefit
from an injection of funds from the European
Bank for Reconstruction and Development
(EBRD) for development of underground operations
at Sekisovskoye Gold-Silver Project
in Kazakhstan. The EBRD posted a project
summary document (PSD) on its website
earlier this year relating to a potential US$15
million debt facility along with an equity investment
of US$3 million for Hambledon’s
underground plan and other group projects.
It is also proposed that EBRD will be issued
with warrants to a value of US$2 million.
In the PSD, EBRD says, “The bank supports
the development of responsible mining
and pursues projects that increase private
sector participation, and are committed to
improving environmental standards and energy
efficiency. The investment in Sekisovskoye
which the EBRD is considering
will contribute to further improvements of the
application of best environmental, health
and safety standards at the deposit.”
Hambledon’s CEO Tim Daffern says, “We
are very pleased by the prospect of this
partnership with EBRD. The Board is excited
about the future of the company
which can only be enhanced by having the
backing of a lender and investor of the
stature of EBRD.”
Meanwhile, Hambledon continues to advance
its underground drill program to validate
and expand the geological resources
at Sekisovskoye. There have been 67 holes
completed for more than 9000 metres in
the upper levels of the underground ore
zones and the results are consistent and in
many areas exceed the geological and mineral
resource modelling previously carried
out. The best most recent intersections include
9 metres @ 4.86 grams/tonne gold,
2 metres @ 3.5 grams/ tonne and 4 metres
@ 2.62 grams/tonne.
The Sekisovskoye deposit comprises
about 10 large mineralized zones intermingled
with numerous shallow and sinuous
mineralization zones. These zones show
wide variation in thickness from 0.35 metres
to 30 metres, with a weighted average of 5.5
metres. They display a localized pinch and
swell structure with variable gold and silver
content. The large average width makes for
easier and lower cost mining.
The ore body to be mined in 2012 is ore
Central Asia
Potential funds boost for Sekisovskoye
body number 11 where mining started in the
final quarter of 2011. The drill results and
mined grade compare favourable and provide
robust confirmation of the geological
model. Good progress has been made in expanding
the underground mining zones with
three levels being mined and a fourth was
due to begin in February. Ground conditions
have been good and water inflow within the
excavation zones minimal, providing confidence
that the bulk mining methods to be
employed later will be technical feasible.
March/April 2012 | ASIA Miner | 57

India
India next Asian hub for mining and construction equipment
By Faseem T and Md Abdul Samad, research analysts, Beroe Inc
THE Indian mining and construction equipment
industry has a bright future in the next
five years owing to the government encouraging
foreign investment in the equipment manufacturing
sector. A number of major mining
and construction equipment manufacturers
have announced big investments in India.
There is a large demand for coal from the
cement industry and power sector in India
while increasing consumption of steel has
also improved the prospects of iron ore mining.
The construction industry in India is also
expected to grow to a size of about US$6.5
billion by 2014, according to estimates from
the Confederation of Indian Industries (CII).
These factors are expected to drive the
equipment market in India.
In the case of excavators, the market was
expected to grow by 30% in 2011 alone. In
order to meet its burgeoning equipment demand,
India is highly dependent on China,
with 60% of heavy equipment sourced from
China. Construction and mining equipment
imports from China amounted to about
US$300 million in 2010-11.
The price sensitivity of Indian consumers is
one of the reasons Chinese equipment is preferred.
Chinese manufacturers like Guangxi LiuGong
Machinery have a good presence in
India. The company started selling its products
in India in 2002 and with the growth in demand
for its products, its subsidiary LiuGong
India Private Limited started a manufacturing
unit for heavy earthmoving and construction
equipment at Pithampur, Madhya Pradesh.
Among the Indian companies, BEML Ltd, a
public sector company, is well poised to garner
a good share in the market. BEML exports mining
equipment to more than 24 countries in
Asia, Europe and Africa. It also has a wide
range of equipment for both surface and underground
mining. With the experience it has in
the industry, the company has even ventured
into contract mining in foreign countries. BEML-
Midwest Ltd, a joint venture of BEML with Indonesian
partners Midwest Granite Ltd and PT
Sumber Mitra Jaya, is looking forward to bidding
for mining contracts in India and abroad.
Major players like Caterpillar, Volvo, Hitachi,
etc are expected to reduce Chinese dominance
by investing in new and existing production
facilities in India. Major companies are
trying to ramp up their capacities in various
mining and construction equipment areas.
In September 2011 Volvo came up with
two excavator models, the EC210B Prime
and EC290BLC Prime (21 ton and 30 ton excavators),
from its plant at Bangalore. The
company plans to increase production by
three times during the course of the next year
to meet increased demand.
Telcon, a joint venture of Tata Motors from
India and Japan’s Hitachi, is the current
leader of excavators in India. They have a
good customer base especially for their
crawler excavators and can capitalize on existing
customer relations.
Hyundai Construction Equipment India Private
Ltd is another global player planning to
improve sales in India. In November 2011
they launched their 34 tonne R-340 LC-7 excavator
in India. The company is currently importing
its high-end excavators, which fall into
a range of operating weights from 30 tonne
to 80 tonne, from South Korea.
Caterpillar is keen to expand its presence
in India through its tie up with Tractors India
Limited (TIL) and Gmmco. The company sells
its trucks, backhoe loaders and excavators
through Indian outlets of TIL and Gmmco.
Caterpillar, being the world leader in mining
and construction equipment, is expected to
take advantage of its expertise in the field. As
part of its 2015 corporate strategy, Caterpillar
is looking forward to increase the manufacturing
capacity of a wide range of products in
emerging economies like India.
The company invested US$62 million in its
off-highway truck manufacturing facility in
Chennai in November 2011. This is in addition
to an investment of US$108 million
Caterpillar made in the Chennai facility in
2010. The company also plans to start a
new facility to manufacture its Perkins
branded 4000 series engine, which will involve
an investment of US$150 million.
Worldwide, the company plans to invest
US$800 million over the next five years to increase
its capacity for large excavators and
haul trucks used in mining applications.
Another major player to look up to is the
JCB. The UK-based excavator manufacturer
has captured a major share in the backhoe
loader market in India. The advantage with
JCB is its large network of retail outlets. The
business model of having retail outlets is different
from the model followed by other players
in India. Most of the players focused on
having tie-ups with institutional clients while
the JCB focused on retail outlet-based sales.
Even though JCB group has mining equipment
in its portfolio, it has kept away from the
mining sector in India. However, as the Indian
mining sector opens up, JCB is expected to
introduce its mining equipment and expects
to leverage the benefits of its closeness to
customers through retail outlets as well as its
good service network.
With the growth in mining and construction
equipment, a number of other related industries
are also expected to come up. In December
2011 Wipro Infrastructure
Engineering of India announced a joint venture
with Kawasaki of Japan to set up a manufacturing
unit in Bangalore for hydraulic
pumps used in excavators. The plant is expected
to become operational by July 2012
and will manufacture pumps used in excavators
within a range of 7 tonnes to 10 tonnes.
Mining and construction equipment distribution
in India is not as well organized as in
other countries. Currently, different players
have different distribution models. Komatsu
is distributing equipment through its partner
L&T’s distribution network while Hitachi sells
equipment through a number of distributors.
In certain Indian states there are multiple players
distributing Hitachi equipment. Kobelco
and Volvo are also following a similar distribution
model to Hitachi. Caterpillar equipment
is distributed by TIL in north and north-eastern
India and Gmmco in the peninsular region.
In the coming years, major players are
expected to improve their distribution as well
as service network.
The expected robust growth in India’s mining
and construction sectors will open new
avenues for equipment manufacturers. The
Indian construction equipment market is expected
to grow to an annual average of
about 70,000 units during the five year period
from 2011 to 2015.
Big players are expected to take advantage
of the supportive policies of the government
on a large scale. The huge investment and
renewed market strategies of major players
are expected to change the dynamics of the
Indian mining and construction equipment industry
in the next few years.
58 | ASIA Miner | March/April 2012

India
Ganajur Main gold resource increases 16%
Outcropping of gold-bearing rocks at Deccan’s Ganajur Main project.
There are an estimated 93,000 tonnes of inferred resources in the
sulphide zone @ 1.82 grams/tonne for 5000 ounces and a further
17,000 tonnes in the oxide zone @ 3.26 grams/tonne for 2000
ounces. The total inferred resource is now estimated at 109,000
tonnes @ 2.06 grams/tonne for 7000 contained ounces.
The new estimate is limited to the material that has reasonable
prospects for eventual economic extraction by constraining this within
an optimized pit shell. The modelled gold zones extend from surface
to a depth of about 120 metres and the resources are reported at a
cut-off grade of 1.0 gram/tonne gold.
Deccan Gold Mines has also carried out comprehensive metallurgical
studies at the AMMTEC Laboratory in Australia as part of the
scoping study. The results are being studied in association with SRK
to derive a suitable flow sheet and plant design for a proposed processing
plant at Ganajur Main with a daily capacity of 2000 tonnes.
The Government of Karnataka has issued an order agreeing to allot
land and water required for the establishment of a gold processing
plant near Ganajur and Deccan is working with local authorities to finalize
a site. The mining lease application of Deccan’s subsidiary, Deccan
Exploration Services Private Ltd, over the Ganajur Main prospect
and covering an area of 0.29sqkm is under consideration of the Indian
Government’s Ministry of Mines to whom it was recommended by the
State Government of Karnataka.
THE mineral resource at Deccan Gold Mines’ Ganajur Main gold
prospect in southern India has increased by more than 16% to 308,000
ounces, of which more than 90% is in the indicated category. The revised
estimate is part of an ongoing scoping study at the prospect to
evaluate the economic viability of an open pit mine at Ganajur Main.
The JORC-compliant estimate was prepared by SRK Mining Services
India, which estimated the initial resource statement for the project
in 2010. Deccan retained SRK in February 2011 to undertake a
scoping study to assess the mining potential of the prospect, which
is in the Ganajur-Karjagi Block of Haveri district in the State of Karnataka.
This process has involved Deccan carrying out further exploration,
including infill and step-out drilling.
There are now estimated to be 1.921 million tonnes of indicated resources
in the sulphide zone @ 3.83 grams/tonne gold for 237,000
contained ounces and 631,000 tonnes in the oxide zone @ 3.19
grams/tonne for 65,000 contained ounces. This makes for total indicated
resources of 2.552 million tonnes @ 3.67 grams/tonne for
301,000 ounces.
Gold-bearing rock at a Deccan Gold prospect.
March/April 2012 | ASIA Miner | 59

2012 Calendar
PDAC 2012
March 4-7, 2012, Toronto, Canada
www.pdac.ca
Coal Investment Summit
March 5-6, 2012,Sydney, Australia,
www.informa.com.au
Global OHS
March 5-9, 2012,
Kuala Lumpur, Malaysia
www.ibcasia.com
Mining Victoria
March 21-22, 2012, Ballarat, Australia
www.informa.com.au
8th Asia Mining Congress
March 26-30, 2012, Singapore
http://www.terrapinn.com/conference/asiamining-congress/
6th Coaltrans Russia and CIS
March 27-28, Moscow
www.coaltrans.com
2nd Coal Upgrading
and Conversion 2012
April 24-27, Indonesia
www.ibcasia.com.sg
ConbuildMining 2012
May 2-5, Indonesia
www.mmiasia.com.sg
CIM, Canada Conference and Exhibition
May 3-9, Edmonton, Canada
www.cim.org
Mining Vietnam 2012
March 7-9, 2012, Hanoi, Vietnam
www.oesallworld.com
Clean Coal Forum
March 29-30, Beijing, China
www.chinadecisionmakers.com
Future Mongolia
May 16-19, Ulaanbaatar
www.future-mongolia.com
Indonesia Mining 2012
March 12-13, 2012, Bali, Indonesia
www.claridenglobal.com
Ozmine 2012
April 16-18, Jakarta, Indonesia
www.austrade.gov.au/ozmine2012
2nd Coaltrans Mongolia
May 23-24, Ulaanbaatar, Mongolia
www.coaltrans.com
11th Coaltrans India
March 13-14, 2012, New Delhi
www.coaltrans.com
10th Coaltrans China
April 17-18, Beijing, China
www.coaltrans.com
Resources and Energy Symposium
May 21-23, Broken Hill, Australia
www.symposium.net.au
Mines & Money Hong Kong
March 19-23, 2012, Hong Kong
www.minesandmoney.com/hongkong
Minex Central Asia
April 17-19, Astana, Kazakhstan
www.minexasia.com
6th Asia Mining Partnering Forum 2012
May 24-25, Beijing, China
www.asiaminingforum.com
Ludowici at Mining Vietnam
LUDOWICI, established in Australia for
more than 150 years, is continuing its expansion
in Asia by exhibiting at Mining Vietnam
2012 in Hanoi during March and
Balikpapan Mining Expo in Indonesia during
June. The company will be at Stand
D3-6 at Mining Vietnam.
Ludowici’s business development manager
Jim Cronin says, “Our operational network
in Asia now includes wholly-owned
subsidiaries in China, India and strong local
agents in Indonesia, Vietnam and the Philippines.
“The Ludowici brand is synonymous
with quality and reliability in the mining industry
worldwide. We are confident of
achieving sales growth as the Asia mining
market achieves its growth potential.”
Ludowici was founded in 1858 and is one
of Australia’s oldest established companies.
Today it is a leader in the design, manufacture
and supply of high-quality minerals processing
and materials handling equipment.
It delivers diversified global manufacturing
and engineering, and supplies equipment to
blue-chip global mining clients.
Products servicing the mining industry include
vibrating screens and feeders, the
patented Reflux Classifier, centrifuges,
screening media, wear resistant products
and rubber material handling hose.
Ludowici’s vision is to build an international
business by innovating for customers, sharing
the knowledge of its people and developing
its own technology. From its head
office in Brisbane, Ludowici’s global operation
covers the majority of mining resource
countries worldwide. It has placed special
emphasis on driving sales growth in Asia
through operations in India and China,
agents in Indonesia, Vietnam, Philippines
and customers in Thailand, Laos and PNG.
The mining industry has accepted Ludowici’s
Reflux Classifier as next generation
beneficiation technology with sales of
more than 50 worldwide since launch.
This equipment can be configured for separating
fine particles on the basis of density
or size. Visit www.ludowici.com.au,
email j.cronin@ludowici.com.au or phone
+61 7 3121 2900
First ‘Future Mongolia’ in May
WITH the support of the Mongolian Government,
the German Engineering Federation
(VDMA) in cooperation with
multi-national professional groups, is coorganizing
the first trade show for sustainable
development in Mongolia called
Future Mongolia. The trade fair will be held
at Buyant Ukhaa Sport Complex in Ulaanbaatar
from May 16-19.
Capital goods producers from many
parts of the world will present their latest
products and services, and fair coordinator
VF Messen GmbH from Germany expects
up to 120 exhibitors.
Mongolian Ambassador to Germany
Baldorj Davaadorj says Mongolia needs
state-of-the-art machinery and technologies.
He and his collaborators at the embassy
in Berlin have promised to support
Future Mongolia as has VDMA, Europe’s
biggest and probably most influential industry
association boasting 3000 member
companies. He hopes to see as many
manufacturers as possible showcasing
their machinery, equipment and services.
60 | ASIA Miner | March/April 2012

Drilling & Blasting
Cost-effective Drilling Comes at a Price
But Pays Big Dividends
Recent conference highlights the information needed to plan, drill and shoot efficiently
By Russell A. Carter, Managing Editor, E&MJ
THE success or failure of an individual blasthole to achieve its intended
effect doesn’t carry much statistical clout in a blast pattern
comprising up to 1,500 holes, or at a mine that routinely conducts
multiple daily blasts—or across a global industry that measures total
daily blasthole production in the five-figure range or higher. It’s only
when the reasons for consistent drilling and blasting (D&B) success or
failure become systemic to an operation that a noticeable change in
productivity becomes apparent, occasionally leading to spirited discussions
within and between mine departments about “what are we
doing wrong” or much less frequently, “What are we doing right”
As described by an experienced applications engineer for one of
the major drill-equipment suppliers, D&B is “all about putting the right
amount of energy in the right place at the right time at minimum cost
to achieve maximum control over the shot rock volume and the resulting
particle size distribution in the muck pile.” The benefits of a
well-designed blast—or the repercussions of a poorly executed D&B
plan—reverberate far away from the actual blast site, as shown in the
accompanying diagram that depicts how various elements of D&B
practice can influence downstream operations.
Although the physics of sinking a simple hole into the ground seem
straightforward, the path to consistently effective D&B strategy meanders
through a thicket of thorny issues that demand attention, ranging
from an understanding of local geological conditions, proper drilling
equipment selection and climate considerations, to the type of explosives
required or locally available, for example. Accompanying those
considerations are other factors such as volume of material to be excavated
according to mine plan, hole diameter, optimum bench height,
stemming material source, fragmentation requirements, and desired
level of equipment utilization and availability, among others.
Attendees at The Mining Forum, held in mid-October in Johannesburg, South Africa,
were offered more than two dozen presentations on drilling and blasting technology
and best practices. Inset: During the event, sponsored by Sandvik and supported by
AEL and Thunderbird Pacific, a check from forum proceeds for more than $12,000 was
presented to Compass, a South African charity organization focused on care and education
of abused women and children.
The positive or negative effects of a mine’s drilling and blasting methods extend far beyond
the blasthole or blast pattern. (All figures courtesy of Sandvik Mining and Construction.)
Adding to the technical difficulty is the quick pace of daily job duties,
technological progress and product introductions that can make it
hard for mine personnel to stay current on best practices for D&B
success. In October 2011, Sandvik Mining & Construction convened
its first Mining Forum, aimed at bringing participants up to date by focusing
on fundamentals as well as recent technological developments
in surface-mine drilling and blasting operations. The three-day event,
which included 112 participants from 25 mineral producers and mining
contractors, was held in Johannesburg, South Africa, against the
backdrop of the African continent’s vast mineral potential—and
equally immense needs for drilling and blasting equipment, techniques
and management strategies to effectively cope with its widely varying
mine-site conditions.
Realizing Regional Potential
Although most forum presentations addressed specific aspects of
D&B practice, leadoff speaker Chris Brindley, president of Sandvik
Mining & Construction Region Africa, began by highlighting Africa’s
strengths and weaknesses as they relate to the global mining industry.
Noting that it’s somewhat difficult to mentally grasp the sheer size
of the continent, Brindley displayed a slide showing how outline maps
of the United States, Western Europe, China, India and Argentina
could all be superimposed upon a map of Africa—with room to spare.
Its 30.3-million km2 of land area contain mineralization currently representing
about 90% of the world’s known platinum resources, 80%
of its chromite, 65% of diamonds and 40% of gold. Its 2010 estimated
population of 1.013 billion people account for 14.8% of world
population—a share that is expected to grow to 24% by 2050—and
60% of the current population is under the age of 24.
However, the challenges facing African economic development are
equally expansive, including the threat of nationalization of private assets,
political corruption and instability, the prospect of increased taxation
on mining, a shortage of skilled workers and difficult logistics.
“Africa is probably the wealthiest continent in the world when it
comes to minerals,” said Brindley. “But as you can see, it faces a lot
of challenges. Until [these challenges] are resolved, it will be difficult
to get major capital funding for projects in this part of the world.”
62 | ASIA Miner | March/April 2012

Drilling & Blasting
On the other hand, he noted, “Africa is one of the best places in the
world to find new orebodies.”
Brindley said Sandvik currently has business operations in 12
African countries, employing roughly 3,250 workers; and eight distributors
throughout the continent.
Determining Drillability
In addition to the regional macro-economic trends and political issues,
Africa-based mineral producers share mine-site operational
challenges that are common throughout the global industry. Among
these, the search for improvement in D&B economics may not be
paramount in the list of cost-cutting concerns but is definitely rising
rapidly in importance. Several of the forum’s presentations dwelt on
fundamental aspects of identifying and selecting the most appropriate
drilling equipment and methods for a given application.
Charles Deacon, Sandvik’s vice president of marketing for the Africa
region, explained that D&B activities may account for as much as 15%
of total production costs, and are actually the most controllable of
these costs. Across an entire operation, D&B can affect excavation
rates, cost of loading, secondary breakage requirements, ore grade
dilution, processing rates, slope stability concerns and mine site safety.
One of the basic informational needs for determining the best drilling
approach for the application, said Deacon, is knowledge of rock mass
“drillability”—defined by three factors: drilling rate (penetration), bit
wear rate (time elapsed between regrinds), and bit life (distance drilled
before reaching end of economic bit life). The most well-known indicator
of drillability is the Drilling Rate Index, a relative measure of penetration
rates in a given rock type. DRI is determined by two common
tests that measure rock toughness and rock surface hardness. In
general, the lower the DRI, the lower the drilling rate that can be expected,
and vice versa.
Armed with knowledge of local rock characteristics, the customer
still faces a long list of factors that must be considered when choosing
the proper drilling method. These involve both technical and commercial
issues, according to Deacon, and include:
Technical
• Hole diameter
• Hole depth/bench height
• Production rate
• Size of operation
• Terrain/mobility/flexibility
• Special techniques required
• Legal requirements – dust, noise, etc.
Commercial
• Rock hardness
• Hole angle
• Power availability
• Ownership
• Price
• Fleet size
• Economic life
• Technical support
• Parts supply
• Training
• Operating cost
Putting Together the Right Rotary String
For those operators considering rotary drilling methods, Mark Baker,
Sandvik’s global product line manager for rotary tools, highlighted the
physical limits of the equipment and the importance of using the
proper drill string and bit setup. He emphasized that effective control
of the feed and rotation applied by a rotary drill rig are essential to
productive and cost effective operation of the drill. Excessive loading
by either parameter will significantly reduce consumable life and increase
mining costs.
In addition, careful selection of every drill string component is vital to
achieve accurate holes, optimal fragmentation and operational efficiency.
A complete rotary drill string assembly can include the following:
• Shock sub (optional) – Recommended or use in applications with
high levels of axial and lateral vibration (>10g) such as drilling in
fractured formations. Benefits include increased drill availability, reduced
mast maintenance and less rotary drive head repairs,
smoother on-bottom running and improved torque control.
• Top sub – The connection between the drill pipe and rotary motor
or shock sub.
• Drill pipe – Based on the outer blasthole diameter, a proper drill
string OD should be selected that will provide the necessary column
support to reduce flexing, as well as sufficient annular area
for cuttings evacuation.
• Deck bushing – Guides the drill string, reduces risk of wobbling,
prevents reduction of rotary head torque and supports drill stringconfiguration
in producing straight holes.
• Bottom sub or stabilizer – Allows for connection of the bit to the
pipe. Roller stabilizers are used for improved hole stability in hard
and broken formations, where hole caving is prevalent. Blade stabilizers
are used in softer formation where the gauging and scraping
of the hole wall improves hole quality.
• Rotary bit – Proper drill bit selection is vital for achieving desired results.
Pay attention to factors such as ground conditions (rock
hardness, abrasiveness, competency and ground water); study
product specifications and local availability; determine correct cutting
structure, bearing configuration (sealed or air-cooled) and airnozzle
sizing for site conditions.
Baker cited several case studies in which changeover to a properly
configured drill string produced significant results, including:
• A copper-gold mine at which average drill pipe life without a shock
sub was 25,000–30,000 m with eventual breakdowns usually due
Recommended effective material and hole-diameter ranges for each major drilling method.
March/April 2012 | ASIA Miner | 63

Drilling & Blasting
to thread failure from vibration. With shock subs in place, drill pipe
life increased to 42,000 m, with end failure resulting from eventual
surface erosion.
• In another application, drill pipe conversion from 40/20 ft to 33 ft
(x2) resulted in less handling, improved ease of rotation and longer
service life. Savings amounted to S270,000 per year, primarily from
improved efficiency.
Turning Money into Air—and Vice Versa
Compressed air requirements differ among drilling methods. Rotary
drilling requires low-pressure, high-volume air fed through the center
of the drill pipe to the bit for hole cleaning (cuttings removal) and bearing
cooling. Similarly, top hammer drill-rig compressor capacity is calculated
according to hole-cleaning requirements, but with DTH drilling
the rating of the hammer defines the required compressor capacity.
Whether a customer chooses rotary or percussion drilling, it’s important
for them to understand and know how to determine the right
compressed-air volume and pressure for the selected drilling application,
explained Karl Ingmarsson, vice president of marketing for
Sandvik Mining & Construction. At a minimum, the user should be familiar
with the following concepts:
• The purposes of compressed air in drilling.
• How to make a quick and simple calculation of correct up-hole
velocity.
• Why sufficient volume is required for a DTH hammer to perform
well.
• How to match rod or tube size to tophammer bit sizes.
• How to estimate cutting settling velocity and target exit velocity.
• Why air nozzle selection is important for rotary tools.
• How to interpret in-cab pressure readings.
• How to compensate for high altitude.
Stating that “air is money,” Ingmarsson provided examples of how
much fuel a typical, small DTH drill rig would burn in its lifetime (at 70
l/hr and average load factor of 74%, roughly 2.8 million l or 743,000
gal), or a large rotary blasthole drill (at 140 l/hr with same load factor,
about 5.6 million l or 1.48 million gal)—of which about 2.3 million l
and 4.5 million l, respectively, would be consumed to run the rig’s
compressor alone. And with so much fuel being burned to provide
compressed air, is that air being used economically
Not usually, explained Ingmarsson. In recent years, as diesel engine
OEMs built better monitoring systems into their products, a rig’s nondrilling
fuel-burn rate has become much more noticeable. Traditional
rigs, when in drilling mode, provide maximum air volume regardless of
actual drilling conditions; when not drilling, they maintain maximum
pressure, thus loading the engine for no particular benefit.
After an extended effort to find ways to alleviate this problem, Sandvik
recently introduced its Compressor Management System (CMS), designed
to reduce fuel consumption, extend engine life and reduce associated
drilling costs by electronically managing compressor operation to
provide the necessary amount of air required at all times, ensuring the
compressor runs at full volume only when needed (See E&MJ, May 2011,
“New System Manages Main Compressor on Rotary Drills,” pp.30-34).
It also provides continuous feedback to the operator on downhole conditions
and indicates how CMS is responding to current drill demands.
According to Ingmarsson, CMS is currently available as a retrofit for
Sandvik’s rotary drill rig models, and will be available for DTH rigs in 2012.
64 | ASIA Miner | March/April 2012

Drilling & Blasting
Playing it Straight
No matter what drilling method is selected, overall D&B performance
will suffer unless holes are drilled straight and according to plan, from
collar to bottom. When an operation “drills holes that look like
spaghetti,” according to Arne Lislerud, surface applications manager
for Sandvik, it can expect:
• Floor humps, hindering efficient loading due to uneven pit floors;
• Unstable pit walls and difficult first-row drilling;
• Safety concerns from flyrock;
• Stemming material blowouts that generate safety, excessive dust
and “bad toe” concerns;
• Poor blast direction, affecting quality of floors and walls;
• Misfires that produce safety hazards
The keys to achieving consistent straight hole drilling, said
Lislerud, are simple: Be aware of the numerous issues that lead to
drillhole deviation; operate with a technically sound drill rig, drill
string and instrumentation; and motivate drillers to strive for best results.
Good practice dictates only 2%-3% maximum drillhole deviation
in regular production drilling operations. For collar position
error control, Lislerud recommends:
• Using tape, optical squares or alignment lasers or GPS for measuring-in
collar positions;
• Marking collar positions using painted lines, not movable objects
such as rocks, etc.;
• Protecting completed drillholes with shothole plugs to prevent
holes from caving in (and filling up);
• Using GPS guided collar positioning devices, such as Sandvik’s
TIM3D drill rig navigation system.
Similarly, to control drill-hole deflection:
• Select bits less influenced by rock-mass discontinuities;
• Reduce drill string deflection by using guide tubes, etc.;
• Reduce drill string bending by using less feed force;
• Reduce feed foot slippage since this will cause a misalignment of
the feed and lead to excessive drill string bending;
• Avoid gravitational effects that lead to drill string sag when drilling
inclined shotholes (>15°);
• Avoid excessive bench heights.
Choosing the proper bit face design can enhance drill-hole straightness,
he also noted. When a percussion bit first starts to penetrate
through a rock-joint surface at the hole bottom, for example, the
gauge buttons tend to skid off this surface and thus deflect the bit.
More aggressively shaped gauge inserts (ballistic / chisel inserts) and
bit face gauge profiles (drop center) reduce this skidding effect by enabling
the gauge buttons to “cut” through the joint surface quickly,
thus resulting in less overall bit deflection.
The right bit-skirt design also helps: As the bit cuts through a joint
surface, an uneven bit face loading condition arises; resulting in bit
and drill string axial rotation that is proportional to bit impact force imbalance.
A rear bit skirt support (retrac type bits) reduces bit and string
axial rotation by “centralizing” the bit.
Other deviation countermeasures include using a longer bit body,
adding a pilot tube behind the bit, using lower impact energy, or employing
a drilling control system that can rapidly react to varying torque,
feed and percussion or pulldown demands based on hole conditions.
Additional information regarding the 2011 Mining F orum can be obtained
at www.theminingforum.com.
March/April 2012 | ASIA Miner | 65

Supplier News
International alliance conquers desert challenges
MONGOLIA’S Gobi Desert unleashes extreme challenges under adverse
conditions, contests that are providing Australia’s GW Engineers
(GWE) with opportunities to exhibit their extensive bulk
materials handing expertise under the most demanding circumstances.
At the remote Ovoot Tolgoi coal mine, GWE’s design abilities
are assisting SouthGobi Resources defeat all the environmental
contests Mongolia can impose.
Ovoot Tolgoi’s coking coal is excavated with shovels then transferred
via front-end loaders and excavators to 100 tonne capacity
road trucks. The constant truck convoy negotiates a 50km journey
over a dirt highway to the Chinese border crossing at Ceke, where
coal is loaded into rail wagons for the journey to China’s steel manufacturing
regions.
The mine annually delivers 1 million tonnes of unprocessed and
un-sized coal, and is ramping up production to beyond 6 million
tonnes. Consequently, the first stage of GWE’s challenge is focused
on the design of a facility that can handle high capacity production
rates and improve coal quality. This facility will include a dump hopper
to accommodate 200 tonne haul trucks, installation of a rotary
breaker, transfers, conveyors and a truck loading bin that can operate
regardless of the Gobi’s extremes.
Increased operational economies, productivity gains, improved
output quality and risk minimization are the same key objectives
that drive GWE’s specialist mining and heavy industrial design
teams, and GWE is concentrating on how bringing the best of Australian
engineering practices into this remote region will help realize
Ovoot Tolgoi’s challenging objectives.
GWE’s design engineers explored how each objective could be met
and the project’s risks minimized under environmental extremes. Isolated
and remote mines are no strangers to GWE, however the limited
local infrastructure and finite construction windows mandated
that the project’s design incorporate as much off-site prefabrication as
possible. For similar reasons, maximizing production efficiency makes
the standardization of critical components and spare parts another
strategic consideration in the GWE design. Wherever practical all pulley,
gearbox, and motor sizes are uniform, streamlining plant maintenance
as well as simplifying spares inventories.
GW Engineers Mechanical and Electrical Division director Graham
Wall says, “The need for SouthGobi Resources to efficiently
extract and move ever increasing quantities of coal under adverse
conditions presents safety and environmental risks that demand
practical and sustainable engineering solutions. The design challenges
also involve ongoing assessment and control of Health,
Safety, Environment and Community (HSEC) management standards
and minimization, avoidance or elimination of identified HSEC
risks in compliance with SouthGobi Resources’ site and operational
performance requirements.”
The desert climate imposes temperature extremes, conditions
that necessitate all equipment and buildings be designed to remain
productive and operational across a 70 degree Celsius variant (from
66 | ASIA Miner | March/April 2012

Supplier News
-35 to +35). To protect operators and maintenance staff from blizzards
and wind chill all conveyor gantries, stairwells and transfer
towers will be enclosed within insulated sandwich panels and
heated. Piping will be lagged, motors trace heated, special lubricants
used and concrete pours scheduled only during the annual
permafrost free period.
To add to the environmental challenges, what little surface water
exists remains frozen from November to March. Water for fire fighting
and coal processing will need to be stored, filtered and continuously
heated using coal-fired boilers to keep it circulating.
Electricity is another ongoing issue so back-up generators are
being incorporated into the designs.
The high fines content of the coal and its propensity to fracture
easily after handling results in dust generation potential. GWE’s dust
suppression solutions include orientating stockpiles to counter the
strong prevailing desert wind, the design of enclosed transfer towers
and conveyors, plus the inclusion of a dust-stilling chamber
above the dump hopper and loading out via truck bins.
Solving the Australian mining industry’s most demanding mechanical
and structural design challenges throughout the last
three decades has equipped GWE’s growing design teams with
an expansive understanding of the resource sector’s priorities.
Emerging technologies, new techniques and contemporary design
trends are assimilated to support the development and introduction
of new solutions to exacting challenges in the evolving
international mining industry.
www.gwa.com.au
SouthGobi Resources’ Ovoot Tolgoi Coal Project in the harsh terrain of southern Mongolia.
March/April 2012 | ASIA Miner | 67

Product News
Technology keeps Ok Tedi drivers more alert
OK TEDI Mining has become the first company in Papua New Guinea
to implement Optalert Alertness Monitoring technology. The challenging
landscape and PNG’s remoteness, coupled with 11 metres of
annual rain, makes safety a real concern at Ok Tedi.
Ok Tedi’s managing director Nigel Parker says safety is a clear focus
for this mature mine, which opened in 1981. “Ok Tedi is the most
complex business I have been involved in, yet complexity is one of its
greatest strengths. The foot print of Ok Tedi is extraordinary – from the
town of Tabubil, which is Ok Tedi’s town, to the mines 20km north
and covers 150km of road logistics from Tabubil to Kiunga river port.
Then we have 800 river km of barging product to the ocean and discharging
onto silo vessels from where we load export vessels.”
Responsible for a workforce of 5000, Nigel Parker adds the mine is
very important to the community, with an estimated 200,000 locals
benefiting from its activities. “The whole province lives off Ok Tedi and
we are a major contributor to the economy of PNG. We are a significant
Ok Tedi Mining’s drivers are now using Australian technology to improve safety at and
around the mine.
company for this country, yet have some specific safety challenges.”
Of those, he cites the rugged and narrow roads up and down the
mountain, extreme weather such as fog and low cloud, and the size
of the pit itself. “Driver fatigue is a major issue. The 150km line-haul
trip is very challenging as the road drops from 1500 metres above
sea level to about 1 metre at the port. It is a steep road and every day
is different because of the weather and amount of traffic. That is why
we looked to Optalert to help manage fatigue.”
Optalert technology works through tiny invisible light emitters and
receivers built into the frame of the patented OPTALERT Driving
Glasses, measuring the velocity of the driver’s eyelid 500 times per
second. An alarm is sounded up to 30 minutes prior to sleepiness
characteristics setting in.
The technology is a culmination of more than 15 years of research into
the physiology of drowsiness by Optalert founder and chief scientist,
Melbourne-based Dr Murray Johns, whose system has allowed a next
generation approach to the very human problem of fatigue control.
To date, the Optalert Fatigue Risk Profiler system is the only real-time
driver safety system in the world that detects the early onset of drowsiness
during a journey by accurately measuring a person’s level of alertness.
The system gives drivers information about their levels of alertness
well in advance of drowsiness actually taking effect. The reading fluctuates
through the course of the shift and is displayed on the dashboard
as a 0 to 10 score. The score is then reported to the control room.
Optalert has rolled out across the Ok Tedi project in August 2011,
with the bus fleet flagged as a particular safety concern for the mine as
each of the eight buses carries up to 57 passengers on trips to and
from the mine every day.
Nigel Parker says he is pleased with the results seen so far. “We really
want the drivers to accept Optalert as a tool for their own safety
and one that can predict fatigue. The reports we have received are encouraging
and moving forward, as the drivers start to see that they do
have control over the vehicle, I’m sure we will see the full benefits.”
Hitachi commissions EX3600-06 excavators in Mongolia
OFFICIAL Hitachi dealer for Mongolia, ZAMine Services LLC, successfully
commissioned the first of three EX3600-06 hydraulic excavators on
January 16, 2012 at a major coal mining operation in Mongolia. The assembly
and commissioning went without a hitch and the machine has
completed close to 500 hours of operation without any problems.
Fitted with a 24 cubic metre rock bucket, the excavator is proving
to be a highly productive and efficient mining machine with an excellent
loading match to the trucks operating at the site. Hitachi excavators
have earned an enviable reputation for reliability and
productivity while maintaining one of the lowest costs per tonne of
material mined in the industry.
The last eight months has seen ZAMine receive orders for 14 large
size Hitachi Excavators ranging from 45 ton to 350 ton class machines
and more are expected in the coming year.
ZAMine Services has made a substantial investment in people,
parts, tools and facilities to support Hitachi Mining Equipment operating
in Mongolia.
Hitachi EX3600-06 hydraulic excavators are being used at a major coal operating
in Mongolia.
68 | ASIA Miner | March/April 2012

ADVERTISING INDEX
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70 | ASIA Miner | March/April 2012

Exploration Spotlight
Drilling confirms new Nam San deposit
DRILLING results have confirmed the discovery of the Nam San copper-gold
deposit adjacent to the Phu Kham open pit at PanAust’s Phu
The Phu Kham district has become an important target for potential new discoveries
by PanAust. The target area extends over a 7km corridor to the north of Phu Kham.
Kham Copper-Gold Project. Lateral continuity of mineralization has
been confirmed over at least 200 metres and the zone remains open
to the east, northwest and at depth.
The discovery hole at Nam San intersected 78 metres from 336 metres
@ 1.51% copper and 0.31 grams/tonne gold while subsequent
drilling has intersected 70 metres from 456 metres @ 1.09% copper
and 0.88 grams/tonne gold in one hole; and 28 metres from 158 metres
@ 0.86% copper and 0.18 grams/tonne gold, and 22 metres from
446 metres @ 0.71% copper and 0.08 grams/tonne gold in another.
The Nam San deposit is interpreted to be a fault‐displaced extension
to the Phu Kham deposit and is hidden beneath a sequence of
limestone and granite. The zone is about 200 metres north of the Phu
Kham deposit within a sequence of volcanic rocks similar to those
which host that deposit.
PanAust intends to accelerate drilling at Nam San over the next six
months with the objective of defining an inferred mineral resource in
the second half of 2012. In addition to this initiative, conceptual studies
have commenced to investigate possible underground access,
mining methods and mining rates.
PanAust’s managing director Gary Stafford says, “Although it’s early
days, these results confirm the discovery of a relatively high‐grade deposit
of significant thickness. If future drilling and studies confirm the
economic attractiveness of Nam San, likely access will be by decline
and/or shaft outside the current Phu Kham open‐pit design limits.
“Conceptually, we could foresee a source of high‐grade ore from
an underground mine development either partly displacing lower
grade ore from the Phu Kham open‐pit or providing feed to an expanded
or new processing facility at or near Phu Kham. To that extent,
we are also looking forward to the results of our drilling
campaign at the nearby LCT deposit.”
Sampling and drilling confirm Maangob potential
RESULTS from recent drilling and underground adit sampling at the
Maangob target of Mining Group’s Comval Copper-Gold Project confirm
the potential to host an economic deposit. The ASX-listed company
has completed the purchase of an 80% interest in Comval from
Canada’s Cadan Resources.
Mining Group is advancing the exploration and evaluation of Comval
by undertaking full data compilation and a review with a view to calculating
a maiden JORC-compliant estimate for the Tagpura and Maangob
targets, and is also undertaking resource definition and extensional drilling
at Tagpura and extensional/exploration drilling at Maangob, Kalamatan
and newly identified targets. It is also undertaking a high level
scoping study to assess the economic viability of these projects.
Sampling and drilling results from the Maangob skarn target include
86 metres @ 1.01% copper and 0.20 grams/tonne gold in an adit
channel sample, and 170 metres @ 0.46% copper and 0.06
grams/tonne gold including 34 metres @ 1.20% copper and 0.20
grams/tonne gold in a drill hole.
Mining Group’s managing director Andrew Maurice says, “The assay
results are significant as they confirm the potential of Maangob to host
an economic copper/gold deposit. Mining Group is delivering on its
strategy to explore and develop the Comval copper/gold project.
“The assay results from recent drilling activity also provide further information
to assist with extensional and infill drill programs scheduled
for later in 2012. These programs are aimed at advancing the exploration
and development of the Comval copper/gold project.”
Maangob skarn is about 1000 metres northwest of the old Tagpura
open pit. Cadan drilled 23 RC drill holes and 2 diamond drill holes at
Maangob and installed more than 800 metres of underground exploration
adits which were sampled in detail late in 2011.
Cadan collected 247 two metre continuous horizontal wall channel
samples from within the adits. These samples were submitted to Intertek-Mcphar
Laboratories in Manila for assay. The sampling has
identified a zone of copper mineralization about 100 metres wide by
250 metres long based on a 0.25% copper cut-off. This mineralization
is open along strike to the north and south and down dip.
Late in 2011 Cadan drilled two diamond drill holes to test north and
south along strike of mineralization previously identified from RC drilling
carried out in proximity to the adit tunnel system. Two holes were
drilled with NQ core and half core was submitted to Intertek-McPhar
as two metre down hole samples.
72 | ASIA Miner | March/April 2012