A NATION CHANGER 改变国家 - The ASIA Miner

September/October 2013 | Volume 11 | Issue 3 | Industry Technical Information | 矿 业 技 术 信 息
A NATION CHANGER 改 变 国 家
Focus on Mongolia 聚 焦 蒙 古
Australian mining technology 澳 大 利 亚 采 矿 技 术

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Features
Mining success stories The September/October mining success story focuses on one of the world’s most
important mining developments in many years - the massive Oyu Tolgoi Copper Gold Project in Mongolia’s
South Gobi region. ..................................................................4
September/October 2013 | Volume 11 | Issue 3 | Industry Technical Information | 矿 业 技 术 信 息
Legally speaking The first of a new series of articles examining legal aspects of the mining industry includes
an article about Chinese investment in Australian mining and another about foreign investment in Indonesia..54
Australian mining technology Despite a downturn in the fortunes of the mining industry Australia’s mining
technology continues to make its mark around the world, particularly with mining companies looking to optimize
operations. .......................................................................57
Leading Developments
Asian Intelligence The decline in drilling activity since the end of 2011 continued in the June quarter.
According to IntierraRMG, there were drilling reports from 279 prospects in June compared with the peak in
October 2011 of 1000 prospects. .......................................................8
Mongolia Prophecy Coal has entered into two export contracts for the sale of 30,000 tonnes of coal from the
Ulaan Ovoo mine to a buyer in Russia. ...................................................14
A NATION CHANGER 改 变 国 家
Focus on Mongolia 聚 焦 蒙 古
Australian mining technology 澳 大 利 亚 采 矿 技 术
Exploration Sovereign continues to increase the potential of its Mt Adrah Hobbs gold deposit in southern
NSW as estimates over the length of Pipe 1 increase. ........................................76
Around the Region
Mongolia Aspire Mining has identified a low capital development plan at its Ovoot project. ............... 15
China Majestic Gold has received a positive PEA for the Song Jiagou Gold Project. ..................... 24
PNG A new Mt Kare estimate has more than doubled the measured and indicated resource. .............. 28
Indonesia Kingsrose Mining is implementing various measures to fast track Talang Santo. ............... 30
Philippines Sierra Mining has secured an exploration permit for its Mabilo project. ..................... 35
Central Asia Central Asia Metals is on track to meet production targets at Kounrad. ................... 37
Australia Whitehaven Coal has received approvals for its Maules Creek coal project. ................... 38
India Adani has launched integrated coal mine developer-cum-operator (MDO) operations. ............... 43
Sri Lanka Bora Bora has been granted 156sqkm of licences prospective for graphite. .................. 44
Malaysia Continuing mill ramp-up is enabling Monument to increase production at Selinsing. ............. 46
Laos Continuing improvements are enabling MMG to boost production at the Sepon project. ............. 47
Vietnam Besra exceeded its 60,000 ounce market guidance for the 2012-13 financial year. ............. 48
Oyu Tolgoi LLC chairman Batsukh Galsan presents
Prime Minister Altankhuyag with a sample of the
first concentrate produced at Oyu Tolgoi. Although
the project has been operating for two months it has
had a nation changing impact on Mongolia. Soon
after discovery in 2001 it became obvious that OT
was not just another deposit, but one with potential
to play a major role in transforming Mongolia’s
economy as well as its people, infrastructure and
business. Article starts page 4.
DEPARTMENTS
Photo Oyu Tolgoi LLC.
Advertisers’ Index ....................75
Calendar of Events ...................52
Exploration .........................76
From the Editor .......................2
On the move ........................50
Product News .......................70
Supplier News .......................66
Subscription Form ....................75
MMC has 3rd CHPP module. ................ 14 Ramp up continues at Jiangsu ............... 25 Nickel production at Ban Phuc ............... 48
September/October 2013 | Asia Miner | 1

From The Editor
Australia’s resources boom is not over
ALTHOUGH Australia’s resource-reliant economy is feeling the pain
of lower commodity prices, high construction and infrastructure costs,
and falling investment, it is not right to say the mining boom is over.
Such statements are not conducive to encouraging a turnaround in fortunes
and, if anything, create more doom and gloom than warranted.
There is no question that global mining is in a downturn and this time
Australia’s mining industry is part of it, a situation exacerbated by high
labour costs, retrograde government policies and, until recently, a high
Australian dollar. However, the underlying fundamentals for strong resources
demand are still there with Asia’s emerging economies still growing.
By John Miller /Editor
China’s growth has slowed from virtually unsustainable double figure levels to the mid to
high single digits while its middle class continues to increase unabated, thus increasing
demand for comfortable residential accommodation as well as consumer goods. So much
global emphasis is placed on China’s growth that often the strong growth in India, Indonesia,
the Philippines and other South East Asian nations is overlooked. Then there is also the
growth of other emerging nations in Central Asia, the Middle East, Africa and Central and
South America to consider. All of this creates demand for mineral and energy resources.
Unfortunately, politicians and the mass media have done little to provide encouragement to a
vital part of the Australian economy which has created a great deal of angst for the mining community,
mining support industries and the wider Australian population. This has been very noticeable
at recent mining events, in particular the popular Diggers and Dealers event in Kalgoorlie,
Western Australia, and the big AIMEX show in Sydney. Crowds were down and a number of big
players were noticeable by their absence with sales and investment much harder to attract than
would normally be the case.
These negatives mean that Australia is becoming less globally competitive and is decreasing
as a desirable destination to do business. This trend has been seen in recent reports from The
Fraser Institute and can be seen in the destination of funds raised on ASX increasing to 65% in
2013 for global projects. This is a key issue that needs to be addressed to ensure Australia has
the future revenue streams required to fund projects, infrastructure and research for a more productive
Australia. It will be forced to tackle onerous levels of government spending and regulation
if it wants to boost productivity.
A change of government at Australia’s September 7 federal election would provide a boost for
the country’s mining industry with the Coalition pledging to remove the Mineral Resource Rent
Tax and the carbon tax, both of which could not have been introduced at a worse time for mining
in Australia. While this pledge is not sufficient alone to overcome the downturn, it will create an
optimistic environment for the industry and this must be worthwhile.
Also of importance to mining is the falling Australian dollar which makes resources a lot more
affordable in overseas markets. The Australian dollar slumped 12% in the second quarter, the
biggest slide worldwide behind the Syrian pound, after holding above $1 from mid-June last year
to May 9, the longest stretch above parity since it was freely floated in 1983.
Mining needs even more good news to come its way at a local and global level. Recent
encouragement has come from the fact that business investment in Australia rose during the
June quarter as stronger mining spending outweighed a manufacturing decline. The figures from
the Bureau of Statistics showed that capital spending increased 4% on the first quarter when it
fell 4.1%. Moody’s Analytics economist Katrina Ell says the capital spending numbers confirm
mining investment isn’t headed for a sharp decline in coming quarters. “It’s good news for the
broader economy.” HSBC chief economist Paul Bloxham says the figures are positive. “They
confirm that mining investment is set to plateau, not plummet in the coming year.”
Other Asia Pacific countries are facing similar hurdles owing to global trends and changing
government regulations, many of which have followed the ‘example’ set by Australia. Mongolia,
Indonesia and the Philippines are all resource-rich nations where mining needs encouragement,
not more taxes, royalties, green tape and red tape.
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2 | Asia Miner | September/October 2013

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Mining Success
Oyu Tolgoi a nation changer
NOT since the days of Genghis Khan has
global focus been turned towards the landlocked
North Asian country of Mongolia and
not since the all-conquering warrior controlled
most of Eurasia around 800 years ago has
the work of mankind been able to change the
nation. Might sound like an exaggeration, but
this is what the Oyu Tolgoi Copper-Gold Project
means to Mongolia.
Since it was discovered in 2001 by Ivanhoe
Mines, the company backed by influential mining
personality Robert Friedland and which is now
named Turquoise Hill Resources, Oyu Tolgoi has
already played a major role in transforming the
nation. Oyu Tolgoi, which is Mongol for Turquoise
Hill, has helped Mongolia become the world’s
fastest growing economy in recent years … and
all this during the development phase.
Mongolian trucks headed out of the Oyu Tolgoi bagging plant, bound for the border, 80km to the south. Copper
concentrate is loaded into bags, each weighing about 2 tonnes, with 16 bags loaded onto each truck.
T Munkhbat, D Garamjav and S Sanjdorj, three of the original team who discovered Oyu Tolgoi, with Mongolian
Prime Minister N Altankhuyag and Mining Minister D Gankhuyag at the ceremony marking commercial
production at Oyu Tolgoi.
Now that commercial production has begun,
the massive operation is set to continue the
nation’s growth and play a major role in development
of its people, infrastructure and business,
ensuring Mongolia’s place on the world
stage for generations to come. The current
resource is so large that the mine is expected
to be operating for at least 50 years.
Rio Tinto, one of the world’s largest companies,
is a major shareholder in Turquoise Hill
Resources and has been actively involved
since 2005, formally assuming management
of the project in 2010. Operating company
Oyu Tolgoi LLC is 66%-owned by Turquoise
Hill Resources and 34% by Erdenes Oyu Tolgoi,
which is wholly-owned by the Government
of Mongolia.
Oyu Tolgoi is the largest single investment in
the history of Mongolia. It will require capital
investment of US$6 billion, in addition to the
US$1 billion spent on exploration and evaluation.
This is a very significant stimulus to an
economy where the Gross Domestic Product
was US$6.2 billion in 2010. According to the
International Monetary Fund (IMF), the Government
of Mongolia will be the largest beneficiary
from Oyu Tolgoi and will receive up to 71% of
project cash flow through its ownership as well
as taxes and royalties.
The project is a major employer, and educator,
of Mongolians. During the peak of
construction, more than 15,000 people were
employed, including 10,000 Mongolians. With
the mine now operating there will be a peak
workforce of about 3500, 90% of whom will
be Mongolian.
Indicative of its significance to date is the fact
it was recently named by the government as
creating the most jobs and paying the second
highest taxes of all companies in 2012, even
before sales commenced. Oyu Tolgoi has
also developed significant infrastructure in the
South Gobi, much of which will benefit local
people as well as allowing the mine to operate.
To prepare a strong future workforce, the
company is investing US$126 million in education
and training over five years.
Copper concentrate is processed from Oyu
Tolgoi’s open pit ore. The richest part of the
deposit will be accessed by an associated
underground mine. Most of the ore body sits
deep underground where 80% of the value
lies. These high-grade deposits are the size of
Manhattan Island. Even though full funding to
4 | Asia Miner | September/October 2013

Mining Success
Ore from the open pit is treated at the processing facilities to produce copper concentrate and then trucked to China.
proceed with the underground has not been
approved, early development has begun.
Commercial production
Turquoise Hill’s chief executive officer Kay
Priestly says Oyu Tolgoi will progressively ramp
up in the second half of 2013 and expects to
produce between 75,000 and 85,000 tonnes
of copper-in-concentrates for the year. In full
production it is expected to annually produce
450,000 tonnes of copper and 330,000
ounces of gold. She says during July the concentrator
averaged more than 70,000 tonnes
of ore processed daily and is continuing to
improve.
Commercial shipments of copper concentrate
began on July 9 with the milestone
marked by a ceremony attended by Mongolian
Government officials including Prime Minister
Norovyn Altankhuyag, regional and local
representatives, executives of companies involved
in the project and many workers. The
initial sale was about 5800 tonnes of copper
concentrate and the ceremony coincided with
the first convoy of 16 trucks, carrying 576
tonnes of ‘Oyu Tolgoi - Product of Mongolia’
concentrate departing the site bound for
Gashuun-Sukhait border crossing.
At the ceremony Oyu Tolgoi CEO and president
Cameron McRae said: “Everybody involved
in Oyu Tolgoi is immensely proud today.
Constructing a mine of this scale is a fantastic
achievement but watching Mongolian concentrate
leaving the gates is the moment we have
all been working towards. Today is a big first
step in moving from a world-class construction
project to a world-class copper business.”
‘A long journey’
Rio Tinto Copper Group CEO Jean Sebastien
Jacques said: “World-class, flagship mines
such as Oyu Tolgoi do not start production often
and I am very proud and honoured to be
here. On behalf of everyone in the Rio Tinto
family, I would like to offer my sincere congratulations
to the Oyu Tolgoi workforce, and to
the people of Mongolia.
“It has been a long journey, almost exactly
12 years since the first major discoveries were
made. While that may seem like a long time,
it is only a small portion of the years of operations
we all see for its future; a future that
will need everyone here to work together, to
collaborate and overcome challenges we may
face. It is clear that we do not invest for ourselves
but for our children and grandchildren.
This collaboration towards a common goal is
the foundation of a good and sustainable partnership.
It is what will ensure this operation,
here in the South Gobi, is a mine that people
around the world will see as the leader of the
21st century minerals sector.
“Joined here by many of our partners, I believe
we are embarking on a long and successful
journey together. We know this process is
not simple and are keenly aware of what must
happen for the ore to be mined from the open
pit, to be transported here to the concentrator,
and the multiple steps it goes through to be
turned into a viable and sellable product. But
even as momentous as commencing shipping
is, it is only the next step in our partnership.
“After today, the next step for Oyu Tolgoi is
one that is very hard to imagine without seeing.
More than 1km underground lies one of
the best copper-gold ore bodies anywhere on
the planet. It is high-grade, large and extremely
complex. There is only one way it can be successfully
mined and brought to fruition. Oyu
Tolgoi’s underground block-cave mine will be
one of the most advanced underground mines
anywhere in the world. Rio Tinto is bringing all
our expertise in block cave mining here, for
employees to use.
“This means applying the safest techniques
possible, while also employing economical
ways for Oyu Tolgoi to mine ore deeper than
anyone ever has in Mongolia. It will not be
an easy process and an international project
financing is required to fund it, but the underground
block cave is what sets this mine
apart from other copper mines around the
world. And it is the reason why Oyu Tolgoi is
a multi-generational mine that will bring great
benefits to everyone involved, directly and indirectly.
“Oyu Tolgoi is not only a flagship for Rio
Tinto, it must be a flagship for the people of
Mongolia. We strive for it to be an example of
what can be achieved, a place where people
can work safely, doing something few others
around the world will ever have the opportunity
to experience. It means we all have a great
responsibility on our shoulders and must act
in the best interests of the project to ensure
everyone’s mutual benefit,” Jean Sebastien
Jacques added.
Benefits beyond mining
Oyu Tolgoi has constructed extensive infrastructure
that will benefit neighbours for years
to come. Cameron McRae says, “The road to
the border will carry concentrate to market,
but will also allow people to travel safely and
quickly. The power infrastructure will run the
mine and provide an important link in Mongolia’s
energy grid, but will also heat people’s
homes. The new airport allows travel between
the mine and Ulaanbaatar, but will also connect
people to their families.”
He says Oyu Tolgoi is moving from being an
impressive construction project to a worldclass
mining operation. “Developing the underground
phase is expected to increase
Mongolian GDP by an additional 20% and
over time directly contribute US$34 billion to
the Government of Mongolia.
“However, building underground mines is
expensive. So, even when OT begins to generate
revenue from the open pit in the second
half of 2013, we still need significant external
funding to complete development of the
September/October 2013 | Asia Miner | 5

Mining Success
250km of underground tunnels. Bank funding
in the form of project finance is the most attractive
finance option because it is cheaper
and better tailored to the project than any
other option currently available. I am happy to
report that the process is now well advanced.”
Cameron McRae also spoke about benefits
during the Mongolian Sustainable Finance Forum
held in May:
The Oyu Tolgoi Copper-Gold Project is in the South Gobi, just 80km from the border crossing at Gashuun-
Sukhait.
Initial mining is from the open pit with the vast underground reserves to be mined in the second stage.
Safety
“In order to contribute to sustainable development
and create shared value, we must start
with our greatest asset - our employees. Protecting
their safety and health is our top priority.
Our goal is to create a work environment of
zero harm. A simple principle underpins this
approach - If a job cannot be done safely at
Oyu Tolgoi, it will not be done.
“While the journey to zero harm is long, we
started by developing a corporate culture focused
on health and safety. For this to be imbedded
throughout the company we need to
find creative ways of communicating this. For
example, we recently rolled out a safety video
featuring popular Mongolian rapper Quizza,
rapping about key safety standards and the
responsibility of each individual. The feedback
received from our workforce was overwhelmingly
positive.
“This creative and enjoyable approach to saving
lives, made here in Mongolia, has become a
huge hit across Rio Tinto business units and has
been translated into at least four other languages
and shown on six continents.”
Economic development
He told the forum that Oyu Tolgoi would
eventually be responsible for around 30% of
Mongolia’s GDP. “But even before we have
reached commercial production, Mongolia is
benefitting. Since construction commenced,
we paid more than US$870 million in taxes,
loans and pre-payments. This contribution
to the Government allows it to invest upfront
in sustainable development, in creating the
modern infrastructure that will lead to a bright
and sustainable future. Our economic benefit
doesn’t just come in taxes.
“We have invested time, expertise and
US$126 million in education. This is training
thousands of young Mongolians, constructing
vocational schools, developing the curriculum
and building teacher skills. This is not just
benefitting mining but other sectors like engineering,
construction, finance and IT – helping
create a broad and sustainable economy.
6 | Asia Miner | September/October 2013

Mining Success
“It’s the same with our work to support development
of a supply chain and the creation of
small and local businesses in the South Gobi
and beyond. By working with Mongolian companies
– 67% of our total suppliers in 2012 - our
positive impact multiplies and creates a more
sustainable future for Mongolia.”
Environment
Cameron McRae said: “Because of what we
do and where we operate, our impact on the
environment is critical. We apply and meet
tougher environmental standards than for any
other mine in Mongolia. Water is the Gobi’s
most precious resource, so we invest in water
management. We have introduced modern
mining techniques that reduce water usage.
We recover and recycle all domestic water
and 80% of that used in processing.
“Our target is to be one of the most water efficient
copper mines in the world. Of course, how
we use water is monitored, by us, the Government,
and project financers. But we have taken
this a step further and invited our neighbours to
participate and serve as an additional watchdog.
“We have established the first participatory water
monitoring program in the South Gobi. It is a
partnership between Oyu Tolgoi and herders in
Khanbogd soum who collect data on the water
in their wells and work with Oyu Tolgoi staff to
identify any changes in water levels around the
mine.
“The Gobi is a precious and unique land. It
contains flora and fauna that have survived thousands
of years of some of the planet’s harshest
winters and scorching desert summers. It would
be a tragedy if a mine should come and undo
all of that through mismanagement. We have
made a solemn promise on the biodiversity of
the region. Our plans for a net positive impact will
ensure that when our mine is closed and gone,
the nature that surrounds it will be as diverse as
- and more secure - than when we first found it.”
medicine and improve disease control and husbandry
amongst the herders,” he added.
During the Mongolia Investment Summit
in London earlier this year, Cameron McRae
stated: “In partnership with the Government of
Mongolia, our workforce has created something
remarkable in the Gobi Desert. From an open
wilderness, with no infrastructure, in just 30
months we have built a state-of-the-art mining
complex.
“The Oyu Tolgoi concentrator is up and running.
It is the biggest machine in Mongolia. The
overland conveyer, which carries the ore from
the open pit to the concentrator, could run the
length of London’s Kensington High Street and
almost back again. Visitors find the physical
scale of Oyu Tolgoi impressive, almost intimidating,
but even this pales into insignificance compared
with the positive human and economic
impact the business will bring.”
Working together
At the summit he said: “It is in Oyu Tolgoi’s interests
for Mongolia’s economy to flourish and
diversify. But we also feel a responsibility in
knowing Oyu Tolgoi needs to flourish in order
to prompt others to invest – not just in mining
but across other sectors.
“Undoubtedly, you will have seen recent reporting
of issues raised by the Government around
implementation of the investment agreement.
Let me be clear, Oyu Tolgoi, the international
investors and the Government of Mongolia, all
want the same thing - a world-class mine that
delivers value for shareholders and a bright and
prosperous future for Mongolia.
“Given how crucial Oyu Tolgoi is to Mongolia, it
is important that any concerns among shareholders
are addressed together, between the partners,
and resolved. Most importantly, the Government of
Mongolia, and Rio Tinto and Turquoise Hill are tackling
these issues together for the long term benefit
of the country and all shareholders.
“Constructive progress continues to be made.
And the focus is both on reviewing progress and
ensuring that production and future expansions
are delivered together – and that critical agreements
and finance are supported. Whilst some
of the issues are complex, I am confident these
discussions will resolve them and we will deliver
the promise of Oyu Tolgoi together.
“I am confident that both Mongolia and international
investors will make Oyu Tolgoi an extraordinary
success story. In turn, Oyu Tolgoi’s success
will be a beacon that continues to declare
Mongolia an attractive investment destination.
Mongolia has a bright future and its people a
prosperous one.
“Demand for Mongolia’s natural resources is
strong. The outlook for China and India means
that Rio Tinto, and I’m sure many of you, feel
confident about commodity prices in the medium
and long term. And Mongolia is perfectly
situated, in terms of its people, resources and
geography to meet this demand, and elevate itself
to be a leader on the world stage.”
He concluded: “In 10 years, I want to look at
Oyu Tolgoi and see us as one part of a strong
business community in a diversified economy –
contributing to the development of Mongolia and
the prosperity of ordinary people. It’s a vision we
can achieve together.”
Communities
He also spoke about Oyu Tolgoi’s closest
neighbours, the South Gobi herders. He said:
“They deserve our support and commitment
more than anyone. We provide support in a
number of ways. For example, we recently
studied the potential to support development
of more co-operative businesses among herder
communities. There are great opportunities,
with support, for co-operatives to provide sustainable,
economic solutions for herders.
“Soon we will launch a new training scheme
to support development of private veterinary
The large concentrator complex, and other storage and processing facilities, stand out in the Gobi Desert
of southern Mongolia.
September/October 2013 | Asia Miner | 7

Asian Intelligence
Drilling reports continue to decline
THE decline in drilling activity since the end of 2011 continued in the
quarter to June 30. According to the latest ‘State of the Market: Exploration
Report’ from IntierraRMG, there were drilling reports from 279
prospects in June, which includes reports from more than one drilling
prospect per project. This contrasts with the peak in October 2011 of
1000 prospects reporting drilling activity.
Only 121 of the drilling reports in June 2013 were from gold prospects,
compared with 299 in June 2012 and reports from 405 gold
prospects in June 2011. Drilling on copper prospects has also seen a
sharp cut back in the past year. There were regularly 100 copper prospects
reporting drilling results per month in 2011 and 2012, but only 45
copper prospects reported drilling results in June.
IntierraRMG editorial director Chris Hinde says, “Cumulative drilling
reports for the June 2013 quarter amounted to only 1053 prospects,
compared with 1479 in the March quarter, 1741 in the quarter
to end-December 2012 and 2072 prospects in the three months to
end-September 2012. These cumulative numbers might include multiple
reports of drilling from the same prospect.”
Drilling for gold was reported on 495 individual prospects in the June
quarter, compared with 651 prospects in the three months to the end
of March, and 905 prospects in the year-ago quarter. The decline in
drilling for copper has been similarly steep, with only 144 separate
prospects reporting copper exploration drilling in the June 2013 quarter,
compared with 192 and 235, respectively, in the previous quarter
and the year-ago period.
Chris Hinde says, “The reduced level of exploration drilling has been
felt across the world but South America has seen a particularly sharp
reduction in the search for metals and minerals. Drilling for gold in South
America has more than halved over the past year, with activity on individual
prospects falling from 123 a year ago to just 55 prospects in
the June quarter of 2013. This means South America’s share of the
global search for gold has fallen from almost 14% to barely 11% over a
12-month period.”
Likewise, the report reveals the search for silver in South America has
collapsed from 46 prospects in the second quarter of 2012 to only 16
prospects in the three-months just ended. The continent’s share of total
silver exploration has fallen from 23% to under 16%.
It is a similar picture for the base metals. Drilling for copper in South
America was reported from 40 prospects in the June quarter a year ago
(17% of the world total), compared with only 23 prospects in the quarter
just ended (16% of the total). Zinc exploration has collapsed from 11
prospects a year ago to just one (a fall from a share of almost 17% to
2%). There was no drilling reported for lead in the three months to end-
June, compared with activity on 10 prospects (20% of the total) in the
June quarter last year.
The report reveals that drilling activity in North and Central America
has fallen in line with the global trend; however the region continues to
account for the lion’s share of the gold drilling (over 41% of the total).
North and Central America has fallen behind Australasia, however, in
the hunt for copper, with fewer than 28% of the separate copper prospects,
compared with Australasia’s 35% share in the June quarter.
Although exploration for copper held up well in Australasia (51 individual
prospects, compared with 69 in the June quarter last year), drilling
for gold in the region slumped to 104 prospects in the three months just
ended, compared with 180 in the year-ago quarter. Gold drilling in Asia
fell to 41 individual prospects in the June quarter (77 a year ago), with
16 prospects reporting drilling for copper (27 prospects in the June
quarter of 2012).
Mining finance down 56% in June quarter
DESPITE an extremely challenging first quarter of 2013, the mining
finance environment became even more difficult in the three
months to the end of June. Falling metals prices, nervous bankers
and risk-averse investors all contributed to a slump in funds raised
in the mining sector.
Only US$2.28 billion was received in the three months to end-
June, compared with US$5.16 billion in the March quarter and
US$6.12 billion in the second quarter of 2012.
According to the latest ‘State of the Market: Mining and Finance
Report’ from IntierraRMG, the industry now faces a severe
capital drought and concerning levels of debt. The Australian
Stock Exchange (ASX) saw a slump in mining financing
from US$1.41 billion in the March quarter to just US$0.45
billion in the quarter just ended. The Toronto Stock Exchange
and TSX-Venture did only marginally less business than in the
March quarter (US$1.09 billion, compared with US$1.22 billion).
The London Stock Exchange (LSE) was the only major
stock exchange not to report lower financing for mining companies
(US$0.50 billion, compared with the historically very low
US$0.20 billion previously).
As IntierraRMG editorial director Chris Hinde explains, “At the
corporate level, almost the entire drop in financing has been felt
by the largest companies. The 555 companies monitored by
the IntierraLive mining database that had an end-June market
capitalization of more than US$100 million raised just US$1.43
billion in the June quarter, compared with US$4.08 billion in the
three months to end-March.”
This fall of almost 65% amongst the largest companies landed
hardest, not surprisingly, on the producers (with financing
dropping from US$3.71 billion to US$1.24 billion). Funding by
exploration companies fell 28% to US$1.04 billion.
Chris Hinde concludes, “Cash holdings for the junior companies
are now at critical levels (with overall cash balances of
under US$10 billion for explorers). Many of the smaller companies
will be unlikely to survive until the end of this year unless there is a
dramatic reversal of fortune.”
8 | Asia Miner | September/October 2013

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Asian Intelligence
Every cloud has a silver lining
DESPITE miners displaying a negative outlook for their prospects
in 2013-14, every cloud has a silver lining, according to the latest
Mining Business Outlook Report from Newport Consulting. The report
suggests that the industry’s future could be sustained if miners
focus on extracting more value from their current assets, and if
the government provides a more supportive policy environment and
greater commitment to national infrastructure.
On the one hand, the report confirms the sector’s apparent downturn.
Close to half of the mining leaders interviewed are ‘not optimistic’ about
their prospects, an increase of 34% compared with just 7% of miners
voicing this outlook in 2010. Leaders are cutting jobs significantly to
control costs and are reducing CAPEX spend. The report warns that if
this hold on investment continues, Australia will be reinforcing its status
as less attractive as an investment destination.
Miners’ key drivers for not spending included the uncertain economic
environment (32%), difficulty in getting development funding (30%), and
budget constraints (12%). Volatile market conditions are the primary
reason for a downbeat view, followed by falling demand (19%) and
lower commodity prices (12%).
While the report’s findings coincide with the general consensus that
the investment phase of the mining boom has ended for now, it also reveals
hopeful trends within the industry, as miners become increasingly
attuned to control areas such as costs, productivity and operational
efficiencies. The report also suggests that mining companies have a
renewed awareness of the need for innovation, which could reinvigorate
Australia’s mining, manufacturing and services sectors and be the
catalyst for an industry-wide resurgence.
Newport Consulting managing director David Hand says, “As miners
have to postpone projects and future investment because of a poor
investment outlook, they have an opportunity to extract maximum value
from existing operations and assets through improved productivity.
This is not a bad thing for the sector. If anything, a renewed focus
on operational efficiencies could deliver healthier profits and shareholder
value in the current difficult economic climate.”
Government must provide a more
supportive policy environment and
greater commitment to national
infrastructure
The report revealed that, while productivity is on the agenda, an overwhelming
66% of leaders reported a low level of productivity. Only 3% of
mining leaders were confident about achieving high levels of productivity
within their operation. A further 8% lacked the knowledge altogether
on how to measure this indicator.
The report concludes with strong dissatisfaction among mining
leaders with the government, particularly around union strength, inflexible
IR regulations and poor national infrastructure. Meanwhile,
although miners show some acceptance of meeting environmental
regulations, they strongly feel that such requirements are adding
costs to their businesses, and delaying operational and development
plans and investment as a result. They universally believe the
MRRT is bad policy for Australia, even though the tax has generated
very little tax revenue so far.
The report, conducted annually since 2010 by operational management
consultancy Newport Consulting, canvasses the views of Australia’s
mining leaders. It draws on in-depth interviews held between April
and June 2013 with 60 mining executives from a broad range of private
and publicly listed companies. The report serves as an independent
pulse-check of Australia’s mining industry.
Newport Consulting is an operational management consulting company
that helps organisations improve their business performance
through operational excellence. Newport was founded in early 2006 by
David Hand and Karin Haberl.
GBCE upgrades low ranking Indonesian coal
GB CLEAN Energy (GBCE) has successfully upgraded 2426 tonnes of
low rank 4018 kcal (nar) Indonesian coal at its commercial scale LiMax-
TM
plant in Holingol, Inner Mongolia, China, and produced 1624 tonnes
of high rank 5353 kcal (nar) coal.
Independent tests confirm that the upgraded coal is suitable for long
distance transport by truck, rail and ocean vessels, and will not reabsorb
moisture. This is the first time a commercial quantity of low rank
Indonesian coal has been successfully upgraded to create a product
capable of being sold in the seaborne market.
The average specifications of the unprocessed coal are TM (AR) 31%,
IM (ADB) 13%, ash (ADB) 10%, VM (ADB) 37%, FC (ADB) 39%, S (ADB)
1%, CV (NAR) 4018 kcal and HGI 59. Average specifications of the processed
coal are TM (AR) 11%, IM (ADB) 8%, ash (ADB) 11%, VM (ADB)
36%, FC (ADB) 46%, S (ADB) 1%, CV (NAR) 5353 kcal and HGI 57.
Drop shatter and water reabsorption tests performed by SGS-CSTC
10 | Asia Miner | September/October 2013
Standards Technical Services Co, a leader in material analysis and
testing, demonstrate that the upgraded coal performs similarly with the
unprocessed coal in drop shatter tests, and, after extensive soaking in
water, it will not reabsorb moisture.
GBCE says its LiMax TM coal upgrading technology is highly cost effective
and efficient. There is no meaningful dust creation. GBCE is now
entering the Indonesian coal market in partnership with local mining
companies.
GB Clean Energy develops and operates coal processing plants that
upgrade low calorific value (CV), high moisture coals into high CV coals.
The plants use GBCE’s proprietary LiMax TM technologies which produce
high CV coals that will not re-absorb moisture and are transportable
over long distances. GBCE’s plant in Inner Mongolia is the first coal
upgrading plant to produce upgraded coals in commercial quantities,
supplying power plants and other industrial users in northern China.

Asian Intelligence
Miners see red over green tape
AUSTRALIA’S mining industry is seeing
red about the doubling of green
tape between governments at federal
and state levels. Representative organizations
say the industry has forked out
an extra $820 million over 10 years to
get Federal Government environmental
approvals with the coal industry being
most affected as companies face a
three-year approvals process, which is
more than double the rest of the world.
Minerals Council of Australia chief executive
Mitch Hooke says the green
tape and approvals process will hamper
Australia’s ability to fulfil resources
demand from China and the developing
world. “A study by the Australian
National University shows that in the
first 10 years of the operation of the
Commonwealth’s project approval
laws under the EPBC Act an extra
$820 million had been added to the
cost of approvals for no extra environmental
protection.
“There is ongoing demand for Australia’s resources but unless we dramatically
improve our approvals system and policy settings more generally,
we risk missing the boat,” he says.
Streamlining the approvals process is an initiative that has been recommended
and actively promoted by the Association of Mining and
Exploration Companies (AMEC) which has been working with state and
federal governments to initiate this reform. “The range, number and
complexity of approvals processes are constantly increasing, resulting
in unnecessary delays, additional costs and taxpayer revenue foregone,”
says AMEC CEO Simon Bennison.
“Industry continues to request a more streamlined and efficient approvals
system, whilst ensuring that environmental, cultural heritage,
native title and community values are not compromised.
“The Council of Australian Governments (COAG) has acknowledged
that considerable Federal Government resources can be saved by delegating
its assessment and approval powers under the EPBC Act to
accredited state and territory governments under the existing bi-lateral
agreement process. This will create a single point of contact for environmental
approvals.
“Expanding the existing bi-lateral agreements, by the Federal Government
delegating its approval powers, is fundamental to maintaining
momentum on projects that are contributing to economic
growth, job creation and ensuring future investment in Australia.
This needs to be back on the table as a key policy issue for the
next term of government to remove the current significant duplications
and additional layers of approval required by the EPBC
Act, whilst maintaining high environmental standards,” says Simon
Bennison.
An example of the impact on the coal industry is Whitehaven Coal,
which recently revealed the consequence of having to wait years to get
environmental approval when it said it had to pay $21 million for infrastructure
access for coal it had not even produced. This was due to the
Monitoring locations for Whitehaven Coal’s CHPP plant in northwest New South Wales.
three-year wait to get final approval for its $767 million Maules Creek
project in New South Wales (NSW).
Although Maules Creek got NSW Government approval last year
and conditional Federal Government approval in February, it then
had to fulfil additional environmental criteria before getting the final
go-ahead.
Whitehaven chairman Mark Vaile said the company had to spend
tens of millions of dollars for the approvals process. “The Maules Creek
application went in just before the State election and change of government,
and when we applied coal prices were sky high, the market was
buoyant and access to capital easier. So the opportunity cost that has
been lost is quite significant. The costs have moved away from us in
the four-year period we’ve been pursuing it and it is little wonder people
do just walk away from these projects.”
Mark Vaile says the State planning department used to be the chief
decision-making group and when an application advanced to the federal
level under the Environment Protection and Biodiversity Conservation
Act, it recognized the work done at the state level. “We really need
to get back to that – there should not be a duplication of assessment
processes between the governments.
“We really need to get back to the way it was designed in the first
place, so that both sets of bureaucracy have confidence in the scientific
work being done by the other level of government. We will be urging
in the lead-up to the federal election, the Coalition and the government
remove the duplication from the process, because it’s putting us at a
disadvantage to other markets across the world.”
Simon Bennison says AMEC is pleased to see the response from the
Coalition with its policy to Boost Productivity and Reduce Regulation.
“AMEC is pleased to hear the Coalition is committed to reducing the
regulatory burden that is creating unnecessary delays and increasing
costs for business. Industry must regain some semblance of international
competitiveness before it is too late.”
September/October 2013 | Asia Miner | 11

Asian Intelligence
Permit sought for offshore
operations
Mining from Mars,
exploration from Venus
By Malcolm G Baillie, Forum for Exploration and Mining Development
chairman
THERE is a great deal of confusion about the difference between exploration
and mining. While each is dependent upon the other, they
are very different activities. That is why companies tend to specialize
in one or the other and why they need entirely different oversight from
government.
The right to explore does not mean an economic deposit will be found.
In fact the odds on an economic discovery are about one in 100. It
takes vision, perseverance and a fair bit of luck to find an economic
deposit even with the best geological tools. Grassroots exploration is
the province of the juniors, whose track records allow them to raise
risk capital. On the other hand, mine development and operation is a
business, subject to evaluation like any other.
Investment is generally long-term and capital intensive, funded in part
by loans. The skills for success are found amongst the majors with
technical, financial and marketing experience.
In Indonesia, there is a widespread misconception that the granting of
an exploration licence is also a licence to print money. Nothing could
be further from the truth - the most that can be said is that the licence
is the basis for raising risk capital.
The number and quality of discoveries in a particular country is directly
proportional to expenditure. In recent years, the level of expenditure
on exploration in Indonesia has fallen dramatically in absolute and relative
terms. EMD is very concerned about this.
The reasons for the low expenditure are obvious. Firstly, the regulatory
structure requires up front and substantial expenditure simply for the
right to explore. Further, the tangle of time and cost-consuming administrative
procedures means that funding earmarked for exploration
does not reach the ground.
It is perfectly reasonable for governments to expect their fair share
of returns from a successful mining operation, but in order for this to
happen there needs to be successful exploration.
Rather than imposts, exploration needs incentives to encourage taking
the risk involved. Delays caused by complex administrative and
permitting procedures need to be addressed. Nowhere is this more
an issue than for forestry permits where processing times have not
uncommonly extended to years. It is difficult to understand why the
same basic procedures apply to exploration permits as to exploitation.
The two activities, although inseparable are of different natures. Mining
is from Mars and exploration is from Venus.
The Indonesian Forum for Mineral Exploration and Development
(EMD) is a not-for-profit association of domestic and foreign-owned
mining sector companies. Its aim is to advance minerals exploration
and project development – contact Malcolm Baillie: malcolmbaillie@
regionaladvisory.com
A vanadium-titanomagnetite (VTM) mineralized core sample from the seafloor off
the west coast of New Zealand’s North Island.
TRANS-TASMAN Resources (TTR) has submitted a mining permit application
under the Crown Minerals Act with New Zealand Petroleum
and Minerals to extract VTM-rich iron sands from the seabed in the
South Taranaki Bight off the North Island’s west coast. The application
covers an area of 65.76sqkm within the Exclusive Economic Zone (EEZ)
between 22km and 35km off the coast of Patea within the company’s
existing prospecting licence.
The application will be assessed by New Zealand Petroleum and Minerals
for technical data on the proposed resource, geology, the proposed
work program as well as Trans-Tasman’s ability to manage the
project, and health and safety.
“This is an important milestone for TTR,” says TTR’s chief executive
Tim Crossley. “But it is just the first step in the overall approvals process.”
The company will also have to get an environmental marine consent
before starting mining and plans to lodge its application for these
consents under New Zealand’s new EEZ legislation in October this year.
Since 2009 TTR has undertaken a detailed baseline study program
and modelling of potential environmental effects. “Based on the environmental
research conducted by NIWA and overseas experience, we
have refined our extraction and processing methodology to minimize the
potential environmental effects of our operations,” Tim Crossley says.
“While the permit covers a relatively small area, the project should
provide long-term employment and benefits to the local communities of
South Taranaki and Wanganui.
“We are currently engaging with indigenous people and existing interests
on our proposed project. The wider public will also have an
opportunity to have their say on the project once we lodge our marine
consents with the Environmental Protection Agency (EPA),” he adds.
Trans-Tasman Resources is a privately-owned New Zealand company.
It was established in 2007 to explore, assess and develop the
potential of the vanadium-titanomagnetite (VTM) rich offshore iron ore
deposits off the Taranaki and west coast of the North Island of New
Zealand. Prospecting work to date suggests there is a vast world-class
mineral resource which could supply Asian markets with a reliable supply
of low-cost iron ore. TTR is committed to conducting all activities in
a safe and environmentally sustainable manner.
12 | Asia Miner | September/October 2013

Brightening the Region,
Guiding Towards Sustainability
For three decades, Banpu as a prominent visionary Asian energy company has been dedicated
to professionalism, based on the corporate governance principle of integrity, transparency,
and fairness; while fostering the sustainable balance in business, social and environmental
development. To our pride, this endeavor has contributed to a brighter and more sustainable
future of the Asia Pacific region.

Mongolia
MMC commissions third CHPP module
The interior of module three of the CHPP at MMC’s Ukhaa Khudag project.
THE third module of the Coal Handling and Preparation Plant (CHPP)
at Mongolian Mining Corporation’s (MMC) Ukhaa Khudag (UHG) Coking
Coal Project has been commissioned. The module is expected to
reach full annual production capacity of 5.0 million tonnes of ROM coal
during the current quarter.
Commissioning of the module will enable MMC to boost its current
annual coal handling and processing capacity from 10 to at least 15
million tonnes. It is designed to operate for a minimum of 6000 hours
per year and has an hourly in-feed operating rate of around 850 tonnes
of ROM coal.
The first and second modules of the CHPP, the first coal handling
and processing facility of its kind in Mongolia, commenced commercial
PROPHECY Coal has entered into two binding coal sale export contracts
for the sale of 30,000 tonnes of coal from the company’s Ulaan
Ovoo mine to a buyer in Russia. The buyer is a substantial coal trader
with annual volume turnover in excess of 2 million tonnes in Russia’s
Buryatia region.
The Buryatia region, with annual consumption of 6 million tonnes of
thermal coal, is facing a coal shortage due to declining production because
of aging of its local mines. An uninterrupted supply of Ulaan
Ovoo coal through sustainable mining is essential to meeting growing
regional demand for premium thermal coal.
Under the offtake agreements, 5000 tonnes of coal per month will
be exported through northern Mongolia’s Sukhbaatar rail station, a
major gateway to Russia. The fresh-coal deliveries are anticipated
to start in November 2013 when mining operations are expected
to resume after pit-dewatering activities at Ulaan Ovoo mine are
completed.
The buyer has also executed a non-binding MOU contemplating the
potential increase in monthly coal sales volume to 30,000 tonnes at
Sukhbaatar, subject to wagon availability and market conditions. The
company has a coal stockyard and rail siding at Sukhbaatar, with loading
facility to support up to 80,000 tonnes of coal per month.
14 | Asia Miner | September/October 2013
operations in June 2011 and February 2012, respectively. Both the
first and second modules have an annual coal processing capacity of
5 million tonnes.
MMC’s CEO Battsengel Gotov says, “We are very pleased that the
last module of CHPP with 15 million tonnes in-feed name-plate capacity
has been successfully completed and commissioned. It is a coronation
of our efforts and development plans in the past 4-5 years turning
from greenfield project to fully integrated coal mining, processing, transportation
and marketing platform.
“As the only washed coking coal producer and exporter in Mongolia,
MMC is well positioned to preserve its competitive position and establish
itself as a long term reliable supplier of consistently high quality coal
products to our customers.”
The capital expenditure for the third module of the CHPP amounted to
about US$76 million, in line with the company’s original estimates. The
CHPP capacity expansion work was undertaken by Sedgman Limited,
Australia, a leading engineering company specializing in coal processing
and material handling technology.
MMC is the largest producer and exporter of high-quality hard coking
coal in Mongolia. It owns and operates an open-pit coking coal mine
at the Ukhaa Khudag deposit within the Tavan Tolgoi coal formation, as
well as the Baruun Naran coking coal deposit, both in the South Gobi
province.
MMC’s wholly-owned subsidiary Khangad Exploration has recently
been granted a special permit for minerals extraction for the Tsaikhar
Khudag (THG) area, which is in the Baruun Naran deposit area. The
licence area covers about 8340 hectares and contains about 55 million
tonnes of JORC-compliant inferred coal resources. The THG mining
licence was issued for an initial term of 30 years and the company will
pay an annual licence fee of about US$41,700.
Prophecy signs coal offtake contracts
Prophecy successfully exported coal to Russia in 2011 and 2012.
The new contracts are an important step in Prophecy’s drive to restart
Ulaan Ovoo on a meaningful scale with sales prices that can potentially
generate investment return. The sales price is robust, and management
believes the offtake agreements and potential additional coal sales contemplated
by the MOU will help establish the long-term viability and
stability of the operations at Ulaan Ovoo.
In addition to exporting coal to Russia through Sukhbaatar, Prophecy
continues to engage Mongolian and Russian officials to work towards
re-opening the Zeltura border crossing between Mongolia and Russia.
This crossing is less than 20km from Ulaan Ovoo and the re-opening
of the border could further increase export sales volume, reduce transportation
costs and achieve greater economy of scale.
A Customs warehouse is being built on the Russian side of the Zeltura border.
The company has received support from and continues to work with officials
from both governments to re-open the crossing.
Mining operations at Ulaan Ovoo mine have been curtailed since July
2012 and fulfilling the Russian offtake agreements is contingent on a mine
restart which requires time and capital expenditures. The company is taking
steps to bring the mine back into production, and has targeted November
2013 as the re-start date.

Mongolia
Low capital development plan for Ovoot
ASPIRE Mining has made a fundamental shift in its development strategy
for the Ovoot Coking Coal Project in northern Mongolia through
identification of a low capital development plan. The concept of using
contractors wherever possible for a 5 million tonne/annum initial
project has reduced initial capital requirements to US$144 million from
US$459 million for the original 6 million tonne stage 1 plan.
Financing has also received support with the receipt of non-binding
letters of intent from Deutsche Bank and BHF Bank to provide US$40
million and US$50 million respectively in Export Credit Agency backed
loans to fund the wash plants and associated site works and engineering.
In addition, the Noble Group has confirmed that a US$20 million
working capital facility announced on January 10 would be made available
to support the Ovoot Project Development and Funding Plan (ODP).
The company says the new ODP and funding options remove a
significant area of funding risk for Northern Railways and its proposed
Erdenet to Ovoot Railway, which will link with the Trans Mongolian Railway
and markets in China, Russia and further afield.
“The ODP is an appropriate response to find a capital efficient path to
development,” Aspire’s managing director David Paull says. “This lower
capital spend when combined with potential sources of capital to fund
the ODP removes mine financing risk and will provide confidence to
future investors in Northern Railways that the Ovoot mine will be operational
when required.”
Commencement of the initial operation is expected to coincide with
commissioning of the railway from Erdenet to Ovoot in 2017. Further
production increases will be internally funded from cashflow.
Aspire’s ODP reduces capital expenditure through its reliance on a
number of factors:
• Extensive use of contractors to supply mining, camp, aviation and
communication services;
• Construction of railway from Erdenet to the Ovoot site in one
phase with completion in 2017, which alleviates the need to
build a sealed haul road and reduces the capex estimate by
$98 million;
• Use of off-the-shelf modular washplants. Annual production of 5
million tonnes is achievable from these plants when combined with
the forecast availability of coal that does not need to be washed in
the early years. Additional investment in wash plant capacity and on
site materials handling capabilities will be needed to lift production
to as much as 12 million tonnes as required; and
• The coal resource remodelling conducted in 2013 which identified
an area of low ash coal that can provide a significant amount of this
coal in early years.
Aspire Mining’s projects are in Mongolia’s north with the Ovoot project the
most advanced.
Mongolia’s second largest coking coal reserve
RESOURCE remodelling by Aspire Mining at Ovoot has resulted in a
23.7 million tonne, or 10%, increase to the open pit resource, which
is now 253.1 million tonnes. Probable and marketable coal reserves
have also increased. Underground resources remain unchanged at
27.9 million tonnes bringing total JORC-compliant resources to 281
million tonnes with 197 million measured tonnes, 72.3 million indicated
and 11.8 million inferred.
Probable reserve tonnes have increased by 34 million tonnes to
255 million ROM at total moisture of 2%. The probable marketable
coal reserve has increased by 8 million tonnes to 188 million tonnes
at product moisture of 9.5%. The upgrades have confirmed that
Ovoot is Mongolia’s second largest coking coal reserve.
During the Mongolian winter an extensive geological structural and
seam reinterpretation of Ovoot’s open pit resource was undertaken
by Aspire’s geological team. This has resulted in improved seam
correlation and a reduction in seam PLY’s, comprising the upper,
lower and OVB seams. The improved consistency of the seams
and structural interpretation gives increased confidence in the
deposit and allows additional tonnage to be included in the geological
model with 96% of resources now in the measured and indicated
categories.
Aspire has also demonstrated the quality of the coking coal from
Ovoot after test work confirmed its superior blend carrying capacity.
Importantly, blends of Ovoot coking coal with non-coking coal from
the government-owned Tavan Tolgoi (TT) mine in southern Mongolia
displayed good coking properties.
“The very positive blending results of Ovoot and TT coals demonstrate
the carrying capacity of Ovoot’s fat coal,” Aspire’s managing director
David Paull says. “This also has the important benefit for Mongolia in
being able to establish a new large and long-term revenue stream for
this blended coal adding substantial value to the Tavan Tolgoi mine.”
Over the next 20 years significant quantities of thermal coal and oxidized
coking coal will be mined from TT. These are obvious blending
partners for Ovoot coal due to their similar rank and vitrinite categories.
TT coals are low in sulphur whereas Ovoot project coking coal
is high properties necessary to produce coke.
September/October 2013 | Asia Miner | 15

Mongolia
SouthGobi receives pre-mining agreements
SOUTHGOBI Resources has received pre-mining agreements
(PMAs) relating to three mineral exploration licences. The PMAs
granted by the Mineral Resources Authority of Mongolia (MRAM)
cover the Zag Suuj coal deposit and areas associated with the
Soumber deposit, and will enable SouthGobi to progress to the
mining licence application process.
The PMAs relate to three mineral exploration licences held by the
company’s wholly-owned Mongolian subsidiary SouthGobi Sands
LLC. The three PMAs were issued by MRAM following due process
by Mongolian authorities in accordance with the Minerals Law of
Mongolia and other applicable laws and regulations. One licence
relates to certain areas associated with the Soumber deposit outside
the existing mining licence and the PMA previously granted on
January 18, 2013.
The three PMAs, together with the PMA granted on January 18, were
the subject of applications originally made in 2011. On July 11, 2012,
SouthGobi announced that SGQ Coal Investment, a wholly-owned
subsidiary of SouthGobi Resources that owns 100% of SouthGobi
Sands LLC, filed a Notice of Investment Dispute on the Government
of Mongolia pursuant to the Bilateral Investment Treaty between Singapore
and Mongolia.
SouthGobi is pleased that the grant of the three PMAs, together with
the one granted on January 18, has been achieved without the need
to commence arbitration or conciliation. Accordingly, SouthGobi has
withdrawn the notice in recognition that this dispute has been resolved.
SouthGobi is listed on the Toronto and Hong Kong stock exchanges,
in which Turquoise Hill Resources has a 58% shareholding. Turquoise
Hill took management control of SouthGobi in September 2012 and
made changes to the board and senior management. Rio Tinto has a
majority shareholding in Turquoise Hill.
Earlier this year the company entered into a coal supply agreement
with Winsway Coking Coal Holdings for the sale of 1.2 million tonnes of
standard semi-soft coking coal from its Ovoot Tolgoi mine in 2013. The
agreement reaffirms the company’s longstanding relationship with Winsway,
a key customer, as SouthGobi continues to focus on its 2013
commercial objectives. The company resumed operations at Ovoot
Tolgoi in March after having been fully curtailed since the end of the
second quarter of 2012.
SouthGobi is focused on exploration and development of its metallurgical
and thermal coal deposits in the South Gobi region. It hold 100% of
SouthGobi Sands LLC, the Mongolian registered company that holds the
mining and exploration licences in Mongolia and operates Ovoot Tolgoi.
Modun granted licence for Nuurst
Drilling at Modun Resources’ Nuurst Thermal Coal Project, 120km southeast
of Ulaanbaatar.
AN application made by Modun Resources for a mining licence at
the Nuurst Thermal Coal Project in central Mongolia has been approved
by the Mineral Resources Authority of Mongolia (MRAM). The
approval is a significant milestone on the ASX-listed company’s road
to production.
MRAM granted the approval over a total area of 2497 hectares covering
the planned open pit mine, plus an encompassing area for surface
infrastructure. The project met all the key criteria of technical, economic
and environmental sustainability as set out by the governing body. The
licence area also includes the resource area that remains open to the
north of the planned mine.
Modun’s managing director Rick Dalton says, ‘This keeps us on a
12-18 month time-frame towards first production of coal. It is the culmination
of a tremendous effort by the Mongolian team, with Perth
management support and confirms the willingness of the Mongolian
Government to support the development of high quality projects such
as Nuurst.”
Modun continues to move the project forward at speed, with a detailed
feasibility study to commence expanding on the initial mining
study which identified the potential for an 84.7 million tonne mine of
sub-bituminous thermal coal for a 30-year mining operation, with annual
production ramping up to 3 million tonnes by the fourth year of operation.
Indicative production costs are estimated at US$13 per tonne over
the life of the mine, at today’s costs, reflecting the low overall mining
ROM strip ratio of 2.3:1.
The feasibility work is an important step for obtaining the financing
required for the mine development, and will seek to confirm the overall
infrastructure and mine costs, and the final mine plan in order to
maximize the economic benefits from the mine. This will include some
hydrogeological drilling on site.
Nuurst is near key infrastructure which not only helps move product
from the project to the end user, but is in close proximity to reduce operating
costs. It is 6km from existing railway infrastructure, 120km south
of Ulaanbaatar and 600km by rail from the Chinese border. Other major
nearby infrastructure includes a 35kV power supply within 6km and a
220kV powerline 22km from the licence boundary.
Earlier this year Modun was the only international company selected
as a preferred supplier of coal briquettes to the Mongolian Government
under their Clean Air Initiative. The next step is that the key terms and
conditions of the product sale and purchase agreement will be negotiated
directly with the government, with the briquette plant to have an
initial annual nameplate capacity of 200,000 to 250,000 tonnes.
16 | Asia Miner | September/October 2013

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Type:
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Internal No.:
Year of Manufacture:
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Engine:
Road Header
Voest Alpine/Sandvik
ATM 105 IC
A105/41
H201010041
2004
6000 h
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18 | Asia Miner | September/October 2013

Mongolia
Guildford on track for coal production
DEVELOPMENT progress at the North Pit of Guildford Coal’s South-Gobi
open cut coking coal mine project in Mongolia is continuing as
planned. The company remains on track to commence production and
selling hard coking coal in the fourth quarter of 2013.
Pre-mining activities at South-Gobi commenced during the second
quarter with a focus on North Pit development. This work includes the
removal of overburden by mining contractor Grand Power Mining as
well as an upgrade to larger equipment. Excavations on three standard
type test pits have been completed to validate coal quality specifications
that will help determine saleable products.
The quality specifications returned from tests are encouraging and
coupled with efficient mining techniques will mean the operation, when
stabilized, will produce predominantly a coal type close in specification
to prime coking coal.
Once the initial open cut excavation is complete and mine infrastructure
in place, the North Pit will be ready for compliance inspection, one of the
final milestones to enable Guildford to commence commercial production.
The North Pit is estimated to contain 70.4 million tonnes of coking
coal while the East Pit’s maiden inferred resource is 40.5 million tonnes.
Equipment comprises relatively small capacity excavators and trucks
but production rates being achieved are satisfactory and consistent
with the overall project schedule. Larger equipment including a Caterpillar
300 Tonne excavator and Caterpillar 777 dump trucks were due
to start arriving on site during the current quarter.
Negotiations with suppliers and constructors of mine support facilities
including accommodation camp, workshops, fuel bay, offices and
crushing plant are proceeding, and construction work was expected to
begin in August. A drilling program at North Pit to verify an increase in
mineable reserves is due for completion in October.
Discussions with potential offtake parties regarding supply agreements
are continuing. Some potential customers have expressed a
desire to visit the mine site and visits were expected to commence in
August. Following the visits Guildford hopes the negotiations can be concluded,
enabling unit coal price and revenue estimations to be made.
The South Gobi project is in South Gobi province, about 1000km
southwest of Ulaanbaatar and 130km by road from the Chinese border
station of Ceke where coal from Mongolia is delivered to China. The
project is also about 50km east of Nariin Sukhait which includes the
Ovoot Tolgoi and MAK mines, which produce and export coking and
thermal coal to customers in China.
Guildford has an equity share in two projects in Mongolia – South
Gobi and Mid Gobi - through its shareholding in Terra Energy LLC.
Mid Gobi covers around 36,000 hectares in the coal-bearing Ongi Gol
basin, is about 200km south of Ulaanbaatar and just over 200km west
of the Mongolian rail grid.
Overburden removal activities adjacent to the completed test pit at Guildford
Coal’s South Gobi project.
Xanadu starts new Oyut Ulaan program
THE second phase of exploration has started at Xanadu Mines’ Oyut
Ulaan Copper-Gold Porpyhry Project in the South Gobi region. The
program will include around 1500 metres of diamond core drilling, 350
line kilometres of ground magnetics and 1000 metres of trenching.
The drilling will target extensions to the gold-rich porphyry copper mineralization
identified by reconnaissance drilling carried out earlier this
year. Field work is expected to be completed by early October with
results to follow shortly after.
Xanadu has also entered into definitive documents to complete the
acquisition of Oyut Ulaan from Temujin Mining Corp. Xanadu and Temujin
have agreed to amend the original acquisition terms such that Xanadu
will acquire a 90% interest in the project for the following:
• Work in kind to complete the mining licence application (completed);
• Payment of US$600,000 plus the issue of 5 million Xanadu shares; and
• The issue of Series A & B performance share options contingent on
recognition of a JORC resource of up to 900,000 tonnes contained
copper equivalent.
The new terms substantially de-risk the acquisition for Xanadu by
materially reducing the upfront share consideration in exchange for a
modest cash payment and the issuance of performance share options
contingent on JORC resource targets. Temujin’s acceptance of performance-based
consideration is a strong sign of confidence in both the
project’s potential and improving business conditions in Mongolia.
Xanadu’s CEO George Lloyd says, “Xanadu and Temujin have worked
closely together to reach a sustainable agreement that will allow both
parties the opportunity to unlock value at the highly prospective Oyut
Ulaan copper-gold porphyry project.”
Oyut Ulaan is about 450km southeast of Ulaanbaatar and about
60km west of the regional centre of Sainshand and the Trans Mongolian
Railway. The project covers a large district of around 40sqkm
comprising numerous mineralized porphyry centres.
Between 2001 and 20076 Ivanhoe Mines Mongolia carried out
several phases of geological mapping, surface geochemistry,
trenching and limited shallow drilling aimed at identifying shallow
porphyry mineralization. Between 2009 and 2011 Temujin drilled
several holes which confirmed the presence of gold-rich porphyry
mineralization.
Xanadu has also relinquished the northern portion of the Sharchuluut
Copper Porphyry Project, 40km northwest of the Erdenet copper mine.
The relinquished area is equal to around half of the original licence area
and was considered not prospective due to the presence of basement
sedimentary rocks and to reduce exposure to a water buffer zone.
September/October 2013 | Asia Miner | 19

Mongolia
Coal confirmed at Ovorhangay licences
DRAIG Resources recently implemented an exploration program
across a number of licences in Mongolia with the objective
of confirming the prospectivity of target areas for coal.
Exploration at the Teeg and Urtnii-Am licences in the Ovorhangay
region was the most successful component with the
confirmation of coal-bearing sediments.
Outside the favourable results at Teeg and Urtnii-Am, no
new discoveries were made during the exploration program.
Results from other target areas indicate that some of the licences
have low prospectivity.
The company’s eight exploration licences are managed under
a joint venture arrangement. A subsidiary of Draig holds a
75% interest in the JV and subsidiaries of Trinity Mongolia hold
10% and 15% interests. The Draig subsidiary is manager of
the JV. Draig also owns 16% of Trinity.
Four licences are in the Ovorhangay region and four are in
the South Gobi region. The recently completed an exploration
program tested areas of interest among the existing licences
and built upon previous works.
The objective of the program with regard to the Ovorhangay
licences of Teeg and Urtnii-Am was to build on knowledge gained
from previous exploration and improve the understanding of the
structural setting to assist with the determination of future exploration.
A 9.5sqkm area on the east of Teeg was mapped at
a scale of 1:10,000 and traverses totalling 15.5km were conducted
on both licences. A total of 134km of magnetic survey
lines at 200-400 metre line spacings were also undertaken along
with the collection of surface rock outcrop samples which will be
tested for magnetic susceptibility analysis for use in subsequent
interpretation work.
Voyager granted licence extension
20 | Asia Miner | September/October 2013
Draig Resources’ coal exploration licences are in the Ovorhangay and South Gobi regions
of Mongolia.
Seven trenches with a combined total length of 219 metres, mainly
on Teeg’s eastern and northern areas, were dug to determine the presence
of coal near the surface, and 17 Rotary Air Blast drilling holes for
a total of 500 metres were completed in the eastern area of Teeg and
northern area of Urtnii-Am, with the deepest hole being 31 metres. Coal
was present in three holes for a total length of 61 metres.
These positive results, together with the existing 47 drill holes and other
geophysical work, provide the foundation for the next stage of exploration.
Exploration work at Khongor licence in Ovorhangay region did not
identify coal while exploration at Zamt Uul licence in the South Gobi
region was also unsuccessful. Draig’s Board will now consider plans for
further exploration at Teeg and Urtnii-Am licences and will continue to
assess the coal potential of other licences.
THE Mineral Resources Authority of Mongolia (MRAM) has granted Voyager
Resources a three year pre-mining operations agreement on three
licences at its flagship Khul Morit Copper Project in southern Mongolia.
The extension is valid until April 26, 2016, and enables the company to
resume its deep drilling program. Another licence area at the project is
only in its fifth year of validity.
The company aimed to recommence drilling after the Mongolian national
holiday of Nadaam in a program targeting the copper porphyry
system that has shown comprehensive indications of existence at Khul
Morit.
The granting of the Khul Morit pre-mining agreement together with a
recent agreement with a subsidiary of Xstrata Copper to transfer the
right to Xstrata’s Eastern Block claims in the copper-rich region of the
Carajas in Brazil, presents an exciting opportunity for the ASX-listed
company and continues to provide world-class exposure to copper.
Khul Morit is in the Erdene Island Arc Terrain, which is one of a number
of tectonic terrains that extend across the Gobi and southern regions of
Mongolia that have been proven to host a number of mineralized copper
porphyry systems, including the giant Oyu Tolgoi deposit.
The geological and alteration signatures at Khul Morit are typical of
large copper porphyry systems globally. In particular the quartz tourmaline
breccias, which indicate a high level copper mineralized porphyry
system, and the classic phyllic alteration, typical of the low level core of
a porphyry system. These are both favourable indications and support
Voyager’s view that Khul Morit has the potential to host a significant
copper porphyry system.
More than 55,000 metres of drilling has been completed at Khul Morit
to date, a high percentage of which targeted the near surface hydro
thermal breccias. It’s only in recent months that the company has targeted
the copper porphyry system that shows all the signatures to exist
at Khul Morit.
Voyager also has the Daltiin Ovor (80%) and Khongor (100%) copper-gold
projects in southern Mongolia. Daltiin Ovor is 600km southwest
of Ulaanbaatar and is within the Bayankhongor Gold Belt. The
project has been previously trenched and drilled with high-grade gold,
silver and copper mineralization being identified in three separate exposures
over a strike length of approximately 900 metres.
Confidence in the potential of the Khongor project rests with the presence
of ore grade copper gold mineralization at the Main Zone, the
classic alteration patterns and the confirmed structural complexity of
the area and likely dislocation of mineralization. The company continues
to assess a number of options to further advance both these projects.

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Mongolia
Selenge transitions into development
Checking core trays at Haranga Resources’ Selenge Iron Ore Project.
HARANGA Resources’ Selenge Iron Ore Project is transitioning into
development after completion of a successful exploration phase. The
exploration has resulted in Haranga owning the largest internationally
recognized iron ore resource in Mongolia, with Selenge now hosting
254 million tonnes of iron ore at an average in situ grade of 17.2% iron
for 44 million tonnes of contained iron.
Haranga has held a successful meeting with the Minerals Council
of Mongolia to discuss the potential development of Selenge. This is a
necessary procedure for the application and granting of a mining licence,
and paves the way for the next step of the full mining licence application.
The drilling program for the new field season is being optimized. In addition
to testing a number of new targets identified in the June quarter,
Encouraging Altan Nar test results
the program will also focus on hydrogeological and geotechnical drilling
over known resource areas.
Haranga is also working towards defining a mineable reserve by the
end of the year with the grade and tonnage curve to be analysed for a
selection of different cut-offs. It is also assessing the feasibility to develop
a smaller scale production scenario with the aim of achieving early
production and cashflow.
As part of its feasibility study work, Haranga has started a metallurgical
and process design study using independent technical experts
with specific experience in beneficiating low-grade material to produce
+65% iron concentrate. It has also started a tender process to select a
suitable engineering group to undertake a full bankable feasibility study
for development of the project and expects this to start in the latter half
of the year.
The company has also started initial discussions with a number of potential
offtake partners for iron ore concentrate derived from the project.
Selenge consists of five contiguous licences covering almost
600sqkm within Mongolia’s premier iron ore province. It is next to the
Eruu Gol iron ore mine and in the same structural corridor as the large
iron ore deposits at Tumurtei and Tumur Tolgoi. Eruu Gol is a banded
magnetite skarn deposit believed to contain about 300 million tonnes
of iron ore at around 35% iron, while Tumurtei is believed to contain
around 230 million tonnes.
In 2009, China Investment Corporation invested US$700 million to
secure a 33% stake in Eruu while the deposit was still in the development
phase. The mine has since built a dedicated rail spur to the Trans
Mongolian line and annually exports around 3 million tonnes of iron ore
concentrate, with plans to increase production to 4.5 million tonnes.
EXPLORATION and metallurgical testing at Erdene Resource Development
Corp’s Altan Nar Gold Project in southwest Mongolia has shown
that the epithermal system hosts two styles of mineralization. The tests
show the dominant gold mineralization style is amenable to cyanidation
leach with recoveries of greater than 80%.
A series of two to four metre drill core composites were collected
from holes across the property. The samples represent mineralization
from the majority of the DZ and three additional prominent discoveries
outside of the DZ.
The results indicate that, with the exception of localized overprinting
gold-arsenopyrite breccia zones, the majority of the gold mineralization
tested to date is highly amenable to cyanidation. Excluding two samples
from the over-printing gold-arsenopyrite zone, 12 samples from
across the Altan Nar property returned an average gold recovery of 81%.
For this metallurgical program, a number of core samples were used
in composite with grades ranging from 0.7 to 11.6 grams/tonne gold,
containing varying amounts of associated sulphides. For the bottle roll
test work, each core sample was crushed to minus 2mm and pulverized
to 95% passing 75 microns.
Duplicate samples were analysed by fire assay to determine the average
head grade of each sample. A 400 gram pulverized drill core
composite sample was then bottle rolled and leached for 24, 36 and
48 hours in a diluted cyanide solution to extract the gold. Gold analyses
were then undertaken on the total gold in the cyanide solution.
Maximum or near maximum gold recoveries for these composites were
reached within 24 hours.
An analysis of the head assays versus the assays to the tailings, used
as a check of the solution assays, demonstrated that on average 77%
of the gold went into solution, indicating the solution assays are statistically
accurate. Future projects will be designed to maximize recoveries
through additional grind size and retention time studies.
“These results demonstrate the potential for rapid, high gold recoveries
and, when combined with the extensive, shallow gold mineralization
identified to date across the 5km-long Altan Nar project, are
very encouraging,” says Erdene’s president and CEO Peter Akerley.
“These results have potential to significantly enhance the economics
and development timeline for the project, and provide further support
for prioritizing drilling of multiple new targets in our next round of drilling,
anticipated in the latter half of 2013.”
Meantime, a surface exploration program to define drill targets is under
way at the Khuvyn Khar copper porphyry prospect, 40km west of
Altan Nar. The program, consisting of detailed mapping, core re-logging
and geophysics, is a follow-up to drilling completed by the company
in 2011.
22 | Asia Miner | September/October 2013

Mongolia
Mongolia mining briefs
Boroo performs well
Centerra Gold’s Boroo Gold Project is performing well, prompting the company
to increase its 2013 gold production guidance to a range of 65,000-
75,000 ounces from 55,000-60,000 ounces. The increased guidance followed
an impressive second quarter which saw 27,061 ounces produced,
up from 11.175 ounces in the corresponding quarter of 2012.
The quarterly increase can be attributed to the resumption of heap leach
operations and the processing of higher grades of ore through the mill.
The total boosted year-to-date production at Boroo to 52,663 ounces.
Centerra president and CEO Ian Atkinson says the company understands
that the Mongolian Government has added a number of deposits,
including its Gatsuurt property, to the list of mineral deposits of strategic
importance which, if approved by Parliament, would exclude Gatsuurt
from the application of the Water and Forest Law.
“In light of this development, along with the recent decline in the gold
price, the company is reviewing the Gatsuurt deposit mine plan and is
studying its capital and operating costs.”
Denison expenditure down
Exploration expenditures on Denison Mines’ Gurvan Saihan joint venture
(GSJV) uranium properties totalled $56,000 and $397,000 for the three
months and six months ended June 30, 2013, compared to $2.516 million
and $2.822 million for the same periods in 2012. Exploration activities have
been reduced in 2013, as the company focuses on completing the field
programs and studies necessary to convert exploration licences to mining
licences. By comparison, the company completed a 29,600 metre drill program
on the Urt Tsav and Ulziit properties in the second quarter of 2012.
Denison and Mon-Atom LLC, the Mongolian state-owned uranium company,
are continuing to pursue restructuring of the GSJV to meet the requirements
of the Nuclear Energy Law. The company currently has an 85% interest
in the GSJV, with Mon-Atom LLC holding the remaining 15%.
Depending on the amount of historic exploration that was funded by the
Government of Mongolia, Mon-Atom LLC is entitled to hold a 34% to 51% interest
in the GSJV. Discussions with relevant government agencies are ongoing.
Alag Bayan licence cancelled
Central Asia Metals has been notified by the Mineral Resource Authority
of Mongolia that the exploration licence for the Alag Bayan project in the
southern Gobi region has reached the end of its renewal period, and has
been cancelled.
The company acquired the exploration licence in 2008 and carried out
a significant amount of exploration work, including 10,171 metres of diamond
drilling and several geophysical surveys.
These efforts defined a small oxide resource in the centre of the licence,
and several mineralized intersections on the western boundary of the licence.
However, the size and grade of these were insufficient to justify
conversion to a mining licence.
The company’s CEO Nick Clarke says, “The cancellation of the exploration
licence at Alag Bayan is a disappointment, however, the company
will continue to look for new opportunities in Central Asia and elsewhere.”
Meritus revises agreement
Meritus Minerals has received advice from its Mongolian partner that it
is unable to meet the funding obligations specified in the June 23, 2012,
option agreement under which the partner could earn a 51% interest in
Gutain Davaa LLC, the subsidiary of Meritus that holds the high grade
Gutain Davaa gold project.
As the partner has been making good progress establishing relationships
with the local community and the administration of Batshireet Suom
where the project is located, variations to the agreement have been negotiated
to ensure that this important aspect of obtaining a mining licence
continues without interruption.
The variations to the agreement allow for the partner to earn a 20% interest
in Gutain Davaa LLC by ensuring that certain payments are made and
that various phases of work are completed and paid for. As a result of this
development Meritus is seeking alternative sources of finance to develop
the project. Securing finance in the current environment has proved very
difficult and the various uncertainties that have developed in the foreign
investment legislation and mining legislation in Mongolia have not helped.
A number of these issues are expected to be resolved now that Mongolia’s
Presidential election has been completed.
New CFO for Altan Rio
Altan Rio Minerals has appointed Anthony Jackson as chief financial
officer, replacing Robert Scott. Anthony Jackson is a principal of Bridge-
Mark Financial Corp and a founder of Jackson & Company Chartered
Accountants, a company that assists private and public companies with
their accounting and tax requirements.
As part of an ongoing overhead reduction initiative, BridgeMark has
been engaged to provide back office and management services. Bridge-
Mark provides accounting and financial services including administrative,
compliance, reporting and finance functions to a number of TSX Venture
listed mineral exploration businesses.
In May the company reduced the land holdings on its Chandman-Yol property
to 82,878 hectares from 140,426 hectares. The reduced land package
has no negative impact in terms of prospectivity of the project, as all known
anomalous zones and permissive geology have been maintained.
Origo increases Kincora stake
Origo Partners plc has acquired a further 4.35 million shares of Kincora
Copper, representing 2.1% of the issued and outstanding shares. Origo
now has ownership or control over an aggregate of 70,426,643 common
shares, 19,047,619 share purchase warrants and holds the $2,500,000
note which is convertible into units.
This means if Origo were to convert the note in full, it would hold a further
10 million common shares and a further 10 million warrants. Assuming
exercise of the warrants, conversion of the note in full and exercise of the
unit warrants, Origo would hold 44% of Kincora.
During the 2013 field season Kincora plans to refine exploration data,
conduct further analysis and specify target generation of the copper porphyry
target at the West Kasulu, Leca Pass and other new areas of its
flagship Bronze Fox licence in light of positive results from activities completed
in late 2012.
Khan continues legal battle
Khan Resources is continuing its legal action regarding the takeover of
its Mongolian uranium permits.
The company says a submission on the merits and damages arising
from the Mongolian Government’s “expropriatory and unlawful treatment
of Khan” was filed with an International Arbitration Tribunal on December
7, 2012. With that filing, Khan’s claim was revised upwards from $200
million to $326 million.
A Statement of Defense and Counterclaim by the Respondents was
submitted to the Tribunal on April 5, 2013. The company submitted its response
to the Statement of Defense and Counterclaim on June 28, 2013.
Additional information was provided to the participants of the International
Arbitration action by the company on July 28, 2013. The Government
of Mongolia’s response to this submission is due in early October. The
formal hearing by the Tribunal on the merits and damages for the case is
scheduled for November 11 through November 15.
September/October 2013 | Asia Miner | 23

China
Positive assessment for Song Jiagou
MAJESTIC Gold Corp has received a positive
preliminary economic assessment (PEA) for the
producing Song Jiagou Gold Project in Shandong
province, eastern China. Based on PEA
estimates, Majestic plans to move ahead with
continued development of Song Jiagou, including
more detailed engineering studies as well as
applications for expanded mining licences.
The PEA was prepared by SRK Consulting
China Ltd as an open pit mining project using
a five year trailing average gold price of
US$1355 per ounce. SRK was asked to consider
three development scenarios:
Utilizing only indicated resources and the existing
mill capacity (7400 tonnes/day);
Utilizing all of the indicated and inferred mineral
resources but not relocating the two nearby
villages, and with mill expansion to 10,000
tonnes/day; and
Utilizing all of the indicated and inferred mineral
resources, relocating the two nearby villages and
with mill expansion to 12,000 tonnes/day.
The pre-tax net present value established by
the PEA for scenario 1 is US$477 million, for
scenario 2 is US$777 million and scenario 3 is
US$1.056 billion.
SRK received and validated the database
provided by Majestic and removed repeated
samples. The database used for the resource
estimation consists of samples from
77 surface drill holes, 19 underground drill
holes, 46 trenches and 85 underground
workings. It contains 20,836 gold samples
in total, including 13,316 from drill holes,
3221 from trenches, and 4299 from underground
workings.
Within the mining licence and exploration
permit area, the Song Jiagou project contains
28.615 million indicated tonnes @ 1.38 grams/
tonne for 1.269 million ounces of gold and
35.309 million inferred tonnes @
1.43 grams/tonne for 1.623 million
ounces. The majority of these
resources are entirely within the
boundaries of the current mining
licence. This licence covers an
area of 0.3421sqkm and extends
to a depth of 250 metres
surrounded by an exploration
permit covering 3.15sqkm.
The mine is currently in production
with a daily mining capacity of
5000 to 10,000 tonnes. The PEA
is based on conventional open pit
mining using excavators to load
40 tonne trucks which haul ore to
the processing plant - a distance of
about 4 km. Ore break is by self-propelled
air track drills. Benches are 10
metres high and the overall slope of
the pit is 48 degrees. The mine is
scheduled to operate 330 days per
year, 3 shifts per day and 8 hours
per shift.
Song Jiagou has three processing
plants. Two were put
into operation in 2006 with daily
capacities of 200 tonnes and
1200 tonnes and the third was put into operation
in May 2011 with a capacity of 6000
tonnes. Ore extracted from the underground
mine is processed in the 200 tonne plant while
ore mined in the open pit is processed in the
other two plants.
Classifiers in the processing facilities at the Song Jiagou project.
A north-eastern view of the Song Jiagou open pit.
宋 家 沟 评 估 结 果 乐 观
马 捷 斯 提 克 金 矿 公 司 收 到 了 宋 家 沟 金 矿 项
目 的 初 步 经 济 评 估 (PEA) 报 告 , 该 项 目 位 于
中 国 东 部 的 山 东 省 。 基 于 PEA 评 估 , 马 捷 斯
提 克 计 划 继 续 进 行 对 宋 家 沟 项 目 的 开 发 , 其
中 包 括 更 进 一 步 的 工 程 研 究 , 以 及 对 开 采 许
可 证 延 期 的 申 请 。
这 份 初 步 经 济 评 估 报 告 是 SRK 中 国 咨 询 公
司 为 其 作 为 露 天 采 矿 项 目 准 备 的 , 假 设 未 来
五 年 黄 金 平 均 价 格 为 每 盎 司 1355 美 元 , 要 求
SRK 提 供 三 种 开 发 方 案 :
1. 仅 利 用 指 示 资 源 量 和 现 有 的 开 采 能 力
(7400 吨 / 天 );
2. 利 用 所 有 指 示 和 推 断 矿 产 资 源 量 , 但 不
重 新 安 置 两 个 邻 近 的 村 庄 , 开 采 能 力 增
加 至 10000 吨 / 天 ;
3. 利 用 所 有 指 示 和 推 断 矿 产 资 源 量 , 重 新
安 置 两 个 邻 近 的 村 庄 , 开 采 能 力 增 加 至
12000 吨 / 天 。
初 步 经 济 评 估 报 告 确 定 的 这 三 种 情 况 的 税
前 净 现 值 , 分 别 为 4.77 亿 美 元 、7.77 亿 美 元
和 10.56 亿 美 元 。
SRK 收 到 并 确 认 了 马 捷 斯 提 克 提 供 的 数 据
库 , 删 除 了 重 复 的 样 品 。 用 于 资 源 量 评 估 的
数 据 库 由 来 自 77 个 表 面 钻 孔 、19 个 地 下 钻
孔 、46 个 钻 槽 和 85 个 地 下 巷 道 的 样 品 组 成 。
数 据 库 包 含 总 共 20836 个 黄 金 样 品 , 其 中
13316 个 来 自 钻 孔 ,3221 个 来 自 钻 槽 ,4299
个 来 自 地 下 巷 道 。
在 开 采 权 和 勘 探 许 可 范 围 内 , 宋 家 沟 项
目 包 括 2861.5 万 吨 指 示 资 源 量 , 品 位 为
1.38 克 / 吨 , 含 金 126.9 万 盎 司 。 推 测 资 源
量 为 3530.9 万 吨 , 品 位 为 1.43 克 / 吨 , 含 金
162.3 万 盎 司 。 以 上 资 源 大 部 分 集 中 在 在 现
有 开 采 许 可 界 线 内 。 现 有 的 开 采 许 可 区 面
积 为 0.3421 平 方 千 米 , 向 下 延 伸 至 250 米 的
深 度 , 外 围 是 面 积 为 3.15 平 方 千 米 的 勘 探 许
可 区 。
宋 家 沟 金 矿 目 前 已 经 投 产 , 开 采 能 力 为
5000 至 10000 吨 / 天 。
初 步 经 济 评 估 报 告 基 于 常 规 露 天 矿 , 使 用
挖 掘 机 为 40 吨 卡 车 装 载 矿 石 运 往 加 工 厂 -
距 离 约 为 四 公 里 。
使 用 自 行 式 风 动 履 带 式 凿 岩 机 破 碎 矿 石 。
工 作 面 高 度 为 10 米 。 整 个 矿 坑 的 坡 度 为 48
度 。 该 矿 计 划 每 年 开 工 330 天 , 每 天 三 班 ,
每 班 八 小 时 。
宋 家 沟 矿 拥 有 三 个 加 工 厂 。 其 中 两 个 加 工
厂 于 2006 年 投 产 , 加 工 能 力 分 别 为 200 吨 / 天
和 1200 吨 / 天 , 第 三 座 加 工 厂 于 2011 年 5 月 投
产 , 加 工 能 力 为 6000 吨 / 天 。 从 地 下 矿 山 提
取 的 矿 石 是 在 加 工 能 力 为 200 吨 / 天 的 加 工 厂
加 工 的 , 在 露 天 矿 开 采 的 矿 石 则 是 在 另 外 两
座 加 工 厂 加 工 。
24 | Asia Miner | September/October 2013

China
Ramp-up continues at Jiangsu plant
Production at the Jiangsu Lithium Carbonate Plant is steadily increasing. Photo courtesy Galaxy Resources.
GALAXY Resources is continuing to ramp-up
production at the Jiangsu Lithium Carbonate
Plant in China’s Jiangsu province. Production
in June increased month-on-month to 604
tonnes. The plant is designed to annually produce
17,000 tonnes of battery grade (99.5%
purity) lithium carbonate.
June production was up from the May figure
of 521 tonnes while lithium carbonate sales
(battery and technical grade) totalled 548
tonnes in the month, slightly ahead of May’s
538.2 tonnes. Battery grade lithium carbonate
production and sales also recorded increases
during June. The May production figures
were down slightly on April due to a one week
scheduled outage for the completion of a major
power upgrade on site as part of the ongoing
ramp-up.
The increasing battery grade sales are a
result of the completion of stringent qualification
and approvals processes by a number of
major battery cathode manufacturers in China.
The company expects further potential
customers to complete the approvals process
in coming months which will boost Galaxy’s
customer base.
Galaxy’s new management and the Jiangsu
team are undertaking a thorough review and
assessment of ways to accelerate the rampup
process to boost production towards
the plant’s full capacity of lithium carbonate.
The plant is in the Yangtze River International
Chemical Industrial Park of the Zhangjiagang
Free Trade Zone, less than 1 hour’s drive
northwest of Shanghai.
Galaxy’s interim managing director Anthony
Tse says, “Production at Jiangsu has been
steadily increasing following the recommencement
of operations at the plant in February
2013. We continue to ramp-up operations at
the plant, which at current production rates,
already ranks as the second largest lithium
carbonate production facility in China.”
Galaxy is an Australian-based global lithium
company with production facilities, hard rock
mines and brine assets in Australia, China,
Canada and Argentina. It wholly owns the
Jiangsu Lithium Carbonate Plant. When it
reaches full annual capacity, the plant will be
the largest producer in the Asia Pacific region
and fourth largest in the world.
Galaxy is also advancing plans to develop
the Sal de Vida lithium and potash brine project
in Argentina situated in the ‘lithium triangle’.
This is where Chile, Argentina and Bolivia
meet, and is currently the source of 60% of
global lithium production. Sal de Vida has excellent
promise as a future low-cost brine mine
and lithium carbonate processing facility.
Lithium compounds are used in the manufacture
of ceramics, glass and electronics,
and are an essential cathode material for longlife
lithium-ion batteries used to power e-bikes
and hybrid and electric vehicles. Galaxy is bullish
about the global lithium demand outlook
and is positioning itself to become a major
producer of lithium products.
江 苏 工 厂 继 续 增 加 产 量
银 河 资 源 公 司 继 续 逐 步 增 加 位 于 中 国 江 苏
省 的 碳 酸 锂 工 厂 产 量 。 六 月 份 产 能 已 经 逐 月
增 长 至 604 吨 。 该 厂 计 划 年 产 17000 吨 电 池 级
(99.5% 纯 度 ) 碳 酸 锂 。
六 月 份 产 能 较 五 月 份 521 吨 有 所 增 长 , 六 月 碳
酸 锂 销 量 ( 电 池 和 技 术 级 别 ) 总 数 为 548 吨 ,
较 五 月 份 538.2 吨 略 有 增 加 。 电 池 级 碳 酸 锂 产
能 和 销 量 在 六 月 均 有 提 升 。 由 于 初 期 建 设 中 的
一 处 主 要 电 力 系 统 升 级 造 成 一 周 电 力 中 断 , 五
月 份 产 能 数 字 较 四 月 略 有 下 降 。
由 于 中 国 许 多 大 型 电 池 正 极 制 造 商 取 得
资 格 证 并 通 过 审 批 , 电 池 级 的 销 量 有 所 增
加 。 公 司 希 望 更 多 潜 在 客 户 能 够 在 未 来 几
个 月 内 完 成 审 批 流 程 , 从 而 扩 大 银 河 资 源
的 客 户 群 。
银 河 的 新 管 理 层 和 江 苏 团 队 正 对 一 系 列
加 速 初 期 建 设 进 度 的 方 法 进 行 全 面 的 审 查
和 评 估 , 以 期 使 工 厂 实 现 满 产 运 营 。 工 厂
位 于 张 家 港 自 由 贸 易 区 的 扬 子 江 国 际 化
学 工 业 园 , 距 离 上 海 西 北 部 不 到 1 小 时 车
程 。
银 河 资 源 的 临 时 执 行 董 事 Anthony Tse
称 ,“ 江 苏 工 厂 自 2 月 份 恢 复 经 营 以 来 产 能 已
经 稳 定 增 长 。 我 们 将 继 续 按 照 当 前 的 生 产 速
度 运 营 该 工 厂 , 目 前 它 已 经 成 为 中 国 第 二 大
碳 酸 锂 生 产 中 心 。”
银 河 是 一 家 总 部 位 于 澳 大 利 亚 的 全 球 性 锂 公
司 , 其 锂 生 产 设 施 、 硬 岩 矿 山 及 盐 水 资 产 遍
及 澳 大 利 亚 , 中 国 , 加 拿 大 和 阿 根 廷 。 该 公
司 全 资 持 有 江 苏 碳 酸 锂 厂 。 当 其 达 到 年 最 大
产 能 时 , 该 厂 将 成 为 亚 太 地 区 第 一 大 、 世 界
第 四 大 生 产 商 。
银 河 还 在 筹 划 发 展 位 于 阿 根 廷 “ 锂 三 角 ” 的
Sal de Vida( 生 命 之 盐 ) 锂 和 钾 卤 水 项 目 。
此 处 是 智 利 、 阿 根 廷 和 玻 利 维 亚 相 交 的 地
方 , 目 前 全 球 60% 的 锂 产 自 这 里 。Sal de Vida
项 目 极 具 潜 力 成 为 未 来 低 成 本 的 卤 水 矿 和 碳
酸 锂 加 工 基 地 。
锂 化 合 物 用 于 生 产 陶 瓷 、 玻 璃 和 电 子 产
品 , 并 且 是 长 寿 命 的 锂 离 子 电 池 的 重 要 电 极
材 料 , 该 电 池 用 于 驱 动 电 动 自 行 车 、 混 合 动
力 车 及 电 动 汽 车 。 银 河 对 未 来 全 球 锂 需 求
十 分 看 好 , 并 将 自 己 定 位 于 锂 产 品 的 主 要
生 产 商 。
September/October 2013 | Asia Miner | 25

China
Niobium and tantalum found at Baicao
FOLLOWING the discovery of widely dispersed
niobium and tantalum ores at the Baicao
Vanadium Project in Sichuan province,
China Vanadium Titano-Magnetite (VTM) Mining
Company Limited has adjusted normal
mining operations in a bid to preserve the valuable
resources. The decision will affect operations
for a period of no more than 11 months
starting in July 2013.
China VTM engaged the Sichuan Geochemistry
Exploration Team to conduct a preliminary
survey at Baicao and compile a preliminary survey
report. The survey indicates that there may
be economically mineable niobium and tantalum
ore resources at the Baicao Mine and based
on these results, the Sichuan team has recommended
the group conduct further exploration.
If China VTM continues normal mining operations
at Baicao, some of the potential niobium
and tantalum ore resources might be lost. To
better preserve the potential resources, the
Sichuan team has recommended the group
take preservation measures during the period
when further exploration work is conducted.
Having considered the recommendations of
the Sichuan team and the decreasing market
prices of iron ore products in recent years,
China VTM’s Board considers that it is important
to preserve the potential niobium and tantalum
resources and has decided to accept
the recommendation and adjust normal mining
operations.
During this period, production of vanadium-bearing
iron ore will be significantly reduced.
Accordingly, the Board expects that
the production volume of Baicao’s vanadium-bearing
iron concentrates for the second
half of 2013 and the first half of 2014 will be
reduced by not more than 300,000 tonnes
and 250,000 tonnes, respectively. As such,
the revenue and profits for those periods will
be substantially reduced, as compared to
those for the same periods in 2012 and 2013,
respectively.
Niobium and tantalum have a wide range
of applications due to their high melting point
and high corrosion resistance. For instance,
niobium and tantalum
have been applied
in national defence,
aviation and
aerospace related
industries. In particular,
niobium and
tantalum have been
used in the production
of capacitors
in computers,
high-end electrical
appliances for civil
use, and electronic
circuitry in various
kinds of electronic
instruments. In addition,
both minerals
are used in the
production of high
strength alloy steels.
Further, due to their
temperature stability,
niobium and
tantalum have been
used in the production
of superalloy
for jet engines and
rocket engines.
China VTM and subsidiaries are engaged
in mining, ore processing, iron pelletizing
and sale of vanadium-bearing iron concentrates,
ordinary iron concentrates, iron
pellets and titanium concentrates. It owns
and operates four vanadium-bearing titano-magnetite
mines, two ordinary iron ore
mines, five processing plants and two iron
pelletizing plants.
China VTM’s projects and supporting infrastructure in Sichuan province.
白 草 矿 发 现 铌 钽
随 着 四 川 省 白 草 钒 矿 项 目 发 现 广 泛 分 布
的 铌 钽 矿 石 , 中 国 钒 钛 磁 铁 矿 业 有 限 公 司
(VTM) 已 经 对 正 常 的 开 采 工 作 进 行 调 整 , 以
便 保 全 有 价 值 的 资 源 。 开 采 营 运 由 2013 年 7
月 起 受 影 响 为 期 不 超 过 十 一 个 月 。
中 国 VTM 与 四 川 省 地 勘 局 化 探 队 合 作 进 行
白 草 的 初 期 勘 察 工 作 , 并 编 制 了 一 份 初 期 勘
察 报 告 。 该 勘 察 结 果 指 出 白 草 矿 区 可 能 存 在
具 有 经 济 价 值 、 可 开 采 的 铌 和 钽 矿 石 资 源 ,
基 于 以 上 结 果 , 四 川 化 探 队 建 议 该 公 司 进 行
进 一 步 的 勘 探 工 作 。
如 果 中 国 VTM 继 续 在 白 草 进 行 正 常 的 开 采
工 作 , 部 分 潜 在 的 铌 和 钽 矿 石 资 源 可 能 会 流
失 。 为 了 更 好 的 保 全 潜 在 的 资 源 , 化 探 队 建
议 公 司 在 进 一 步 勘 探 工 作 进 行 的 这 段 时 间 内
采 取 保 全 方 案 。
考 虑 到 四 川 化 探 队 的 建 议 和 近 些 年 铁 矿 石
市 场 价 格 的 下 滑 , 中 国 VTM 董 事 会 认 为 保 全
铌 和 钽 资 源 十 分 重 要 , 并 决 定 接 受 以 上 建
议 , 调 整 正 常 开 采 工 作 。
这 段 时 间 钒 铁 矿 的 产 量 将 大 幅 减 少 。 董 事
会 预 期 , 白 草 今 年 下 半 年 及 明 年 上 半 年 钒
铁 精 矿 产 量 , 将 分 别 减 少 不 超 过 30 万 吨 及
25 万 吨 。
因 此 相 对 于 2012 年 和 2013 年 同 期 , 这 段
时 间 的 收 入 和 利 润 会 大 幅 降 低 。
得 益 于 铌 和 钽 高 熔 点 和 强 抗 腐 蚀 性 的 特
点 , 它 们 有 广 泛 的 用 途 。 比 如 , 铌 和 钽 已
经 用 于 国 防 、 航 空 和 航 天 相 关 的 产 业 。 例
如 , 铌 和 钽 已 经 用 于 生 产 计 算 机 电 容 、 高
端 民 用 电 子 产 品 , 以 及 各 种 电 子 设 备 的 电
子 线 路 。
此 外 , 两 种 矿 物 也 用 于 生 产 高 强 度 合 金
钢 。 同 时 , 由 于 它 们 的 温 度 稳 定 性 较 好 ,
铌 和 钽 也 用 于 生 产 飞 机 引 擎 和 火 箭 引 擎 所
用 的 超 耐 热 合 金 。
中 国 VTM 及 其 子 公 司 从 事 开 采 、 矿 物 处
理 、 球 团 矿 生 产 , 以 及 销 售 钒 铁 精 矿 、 普 通
铁 精 矿 、 球 团 矿 和 钛 精 矿 。 该 公 司 拥 有 并 经
营 四 个 钒 钛 磁 铁 矿 矿 场 , 两 个 普 通 铁 矿 , 五
个 生 产 设 施 和 两 个 铁 矿 球 团 厂 。
26 | Asia Miner | September/October 2013

1863-2013

Papua New Guinea
Mt Kare measured and indicated resource up 120%
AN updated resource estimate for Indochine
Mining’s Mt Kare Gold-Silver Project has more
than doubled the resource in the measured
and indicated category. Indochine officials
say the update has confirmed improved confidence
in the project.
The total resource totals 42.5 million tonnes
grading 1.54 grams/tonne gold and 13.5
grams/tonne silver for 2.1 million ounces of gold
and 18 million ounces of silver for 2.45 million
gold equivalent ounces, a 20% increase in gold
ounces compared to the 2011 resource estimate.
A key outcome from the estimate is a significant
increase in the higher confidence measured
and indicated resource categories to
28.4 million tonnes @ at 1.68 grams/tonne
gold and 17.2 grams/tonne silver for a total
of 1.53 million ounces of gold or 1.82 million
ounces gold equivalent. This represents a
120% increase in gold ounces compared to
the indicated category of the 2011 estimate.
High grade zones include 400,000 ounces
with an almost 50% increase in grade to 5.4
grams/tonne gold in 2.3 million tonnes within
the WRZ and BZ zones, with alternative modelling
showing 10 grams/tonne gold.
There has been a 350,000 ounce increase in
overall gold resources with further high grade
potential. The high grade zones offer an accelerated
production option of an underground
project at substantially lower capital costs than
the pre-feasibility study (PFS), while continuing
the exploration of high grade zones. The
resource includes 380,000 gold ounces of
near-surface oxidized material in all resource
categories, offering an additional lower-cost
development option
Indochine’s CEO Stephen Promnitz says,
“We are pleased to have reached this key
milestone in the ongoing development of Mt
Kare. The major increase in quality of the resource
estimate is significant as we have delivered
a 120% increase in the measured and
indicated material, providing confidence to
progress development.
“Importantly, this resource estimate includes
400,000 ounces of gold at 5.4 grams/tonne
from the recently explored higher grade WRZ
and BZ zones. Alternative modelling of the two
high grade zones was conducted using uncapped
analytical results, at a cut-off grade
of 2 grams/tonne gold (instead of 0.5 grams/
tonne). Results for the high grade zones
showed almost twice the grade, at 10 grams/
tonne for 500,000 ounces of gold equivalent
in 40% less tonnes.
“At a higher cut-off grade of 6.0 grams/tonne
gold, initial modelling suggests grades of nearly
20 grams/tonne. This could allow for rapid
development of an exploration adit to further
drill high grade zones and potentially fast-track
development at lower capital costs, with an
improved return on investment in comparison
with last year’s PFS. This is how the adjoining
Porgera gold mine started.”
The exploration camp at Indochine’s Mt Kare project.
Preparing for drilling at the Mt Kare Sold-Silver Project
Sampling enhances Misima copper gold potential
DATA received from recently completed
sawn-channel sampling and mapping at WCB
Resources’ Misima Copper-Gold Project has
confirmed the existence of a potentially significant
precious metal-rich porphyry copper
style target. This program is part of an ongoing
systematic exploration strategy which continues
to upgrade the project.
Detailed mapping and channel sampling
have now been completed over an area measuring
in excess of 800 by 500 metres. Results
include 170.9 metres @ 0.36% copper,
0.33 grams/tonne gold and 10.1 grams/tonne
silver, and 181.8 metres @ 0.39% copper,
0.07 grams/tonne gold and 13.6 grams/tonne
silver.
WCB’s president and CEO Cameron Switzer
says, “These results again highlight the robust
nature and upside of this project. The data significantly
upgrades the project from a number
of perspectives.
“Firstly, the surface expression or footprint
where the stockwork veining and skarn is developed
is comparable to many other commercial
projects throughout the world. Secondly,
the level of copper, gold and silver anomalism
is significant given that the alteration indicators,
geological data and geochemical vectors
point to the peripheral or distal regions of the
system. Typically, in these types of deposits
the zone where the majority of the metal is located
has not yet been tested at Misima.
“Thirdly, we have demonstrated that this system
has significant by-product precious metal
credits which are critical additions to the overall
potential value. In addition, the complex geological
relationships, including the vein types
and density, all point to a strong hydrothermal
system with significant potential. Management
and the Board are further encouraged as
mapping continues to expand the system to
the north, east and south. This data along with
the magnetic data are critical for drill targeting.”
Misima Island has previously demonstrated
mineral deposit pedigree through past production
of 4 million ounces of gold and 20
million ounces of silver from various operations
but most recently the Misima Mine owned by
Placer Dome Asia Pacific. This mine ceased
open pit production in 2001 and closed in
2004.
Misima consists of 53 sub blocks covering
an area of 180sqkm. The exploration licence
was targeted due to the presence of a significant
high order copper stream sediment
anomaly in multiple drainages which has received
limited detailed follow-up activity. Furthermore,
additional high order gold and zinc
anomalies have been identified and require
detailed follow-up work. WCB can obtain up
to a 70% interest in the project by spending
Aus$9 million within a 4-year timeframe subject
to standard regulatory approvals.
28 | Asia Miner | September/October 2013

Pulding prospect returns positive samples
SURFACE sampling at Coppermoly’s Makmak
tenement on the south coast of New Britain
Island has produced some positive results. At
Pulding prospect assays from the sampling returned
encouraging copper results while samples
at Wara Creek prospect did not result in
highly anomalous iron assays.
The objective of the 2013 sampling at Pulding
was to further test the extent of local surface
mineralization revealed in 2010 and 2012
sampling programs. There were 18 rock chip
+/-float and 63 soil samples collected over a
strike kilometre to the south of earlier samples.
Float samples returned the best results with
two returning greater than 1% copper and five
exceeding 0.1% copper.
Coppermoly’s exploration tenements are on the island
of New Britain.
No anomalous gold, silver or molybdenum
results were observed while the
highest copper assay reported in soil was
387ppm. From this survey a prospective
SSE-NNW trending lineament has been
targeted for ongoing evaluation using
aeromagnetic data and detailed geological
mapping to test for further live, mineralized
structures.
Previously the Wara Creek area provided
a series of rock chip samples with assays in
excess of 50% iron to a maximum of 72%. A
prospective source was interpreted to lie upstream
of these samples, associated with a
magnetic high.
The 2013 program concentrated on this
area and in particular the Avit River basin
from which 28 float, rock chip and stream
sediment samples were collected. While
several float rock samples yielded high iron
content, from 33.35% to 38.6% iron, highly
anomalous iron assays were not reproducible
nor was any anomalous precious or
base metal observed.
Owing to the ruggedness of local relief
and surface weathering, source outcrop for
these highly ferruginous samples have yet
Focus on Simberi enhancements
Papua New Guinea
to be pinpointed. While the local magnetic
anomaly remains of interest, considerable
further exploration activity will be required
to confirm the nature of its source. This will
include prospecting local area creeks and
conceivably exploratory drilling.
Two other magnetic anomalies at Makmak
were also sampled but neither has been assessed
as being prospective for economic
base metal mineralization.
During the current quarter Coppermoly
plans exploration programs to meet the
licence requirements during the current
tenement years, which extend into the December
quarter. This will entail, as a minimum,
drilling of two holes on Simuku and
surface exploration activities on the Nakru
and Taleluma exploration licences.
During the June quarter, Coppermoly entered
into a binding agreement with Barrick
(PNG Exploration) Limited and Coppermoly’s
wholly-owned subsidiary, Copper Quest
PNG Limited, to re-acquire Barrick’s interest
in the Nakru, Taleluma and Simuku tenements
on New Britain Island. These licences cover
copper, gold, silver, zinc, molybdenum and
iron mineralization.
FOLLOWING lower than expected production
at the Simberi Gold Project St Barbara is focusing
on lifting operational performance and
reliability, including final commissioning of the
oxide plant expansion. During the June quarter
the project produced 12,900 ounces, down
from 15,100 ounces in the previous quarter
and from 14,600 ounces in the corresponding
period of 2012.
Mining rates during the quarter were impacted
by heavy rainfall and fleet reliability issues.
Planned improvements and upgrades to the
mining fleet are proposed during the current
financial year.
Mill performance was impacted by delays
to commissioning of the Simberi oxide plant
expansion project attributable to delays in receiving
permits and delays in electrical commissioning
of the new 3.5 million tonnes/
annum processing circuit. As a result the old
2 million tonnes processing circuit was used
throughout the quarter with downtime due to
mechanical issues also adversely impacting
throughput. The plant expansion is substantially
complete with final commissioning pending
issue of government permits.
Lower mining and processing throughput
rates coupled with higher maintenance costs
contributed to higher cash operating costs
per ounce during the quarter. St Barbara is
continuing to work on a number of initiatives
to resolve bottlenecks, reduce spend and lift
operational reliability.
Despite the operating results, St Barbara is
achieving encouraging results in exploration
focused on identifying additional oxide resources
to support the expansion.
During the June quarter channel and trench
sampling continued on four near-mine gold
prospects to define oxide targets for drill testing
in the current quarter, all of which are potentially
underlain by sulphide mineralization.
Additional surface geochemical sampling
continued at Pigicow, Pigiput and Samat. Diamond
drilling was conducted at Botlu, Pigicow,
Samat and Sorowar.
At Botlu one hole intersected 2 metres from
92 metres @ 11.7 grams/tonne gold and at
Pigicow significant trenching results include
18 metres @ 1.6 grams/tonne. At Patan encouraging
anomalous intersections were returned
from trenching and drilling is planned
during this quarter.
Exploration continues on Tatau Island to the
south of Simberi Island. At Mt Tiro a series
of short drill holes was completed to extend
near-surface oxide mineralization as a potential
source of material for the Simberi plant. Significant
results include 12 metres from 15 metres
@ 8.8 grams/tonne, including 3 metres
from 15 metres @ 28.6 grams/tonne; and 23
metres from 10 metres @ 2.3 grams/tonne,
including 2 metres from 31 metres @ 13.5
grams/tonne.
At Mt Siro drilling also intersected near-surface
oxide mineralization in one hole, which returned
15 metres from 4 metres @ 0.9 grams/
tonne and 5 metres from 50 metres @ 2.8
grams/tonne.
September/October 2013 | Asia Miner | 29

Indonesia
Full steam ahead at Talang Santo
AFTER receiving Indonesian Government approval
to resume full mining activities at Talang
Santo, Kingsrose Mining is implementing
various measures to fast track development.
This decision was made as part of an on-site
review by project management and company
directors during June, which also resulted in
suspension of normal mining at the nearby
Way Linggo mine.
The approval in late June from the Directorate
General of Minerals and Coal follows a
difficult nine months for Kingsrose. This period
has seen mining by subsidiary PT Natarang
Mining at Talang Santo suspended owing to
government safety and maintenance regulations,
falling production at Way Linggo, lack of
capital and volatile gold prices.
As well as the Talang Santo and Way Linggo
decisions, the review resulted in the following:
• Commence a ‘step-back’ review of the
Way Linggo mine and its surrounds to find
nearby lodes.
• Optimize the use of mining and other operations
personnel which resulted in a reduction
of 153 personnel.
• Continue the suspension of all non-essential
spending.
• Re-start exploration activities on a graduated
basis once cashflow from production
allows.
AFTER consultation at regency and provincial
levels and the assessment of relevant
forestry maps, it has come to the attention
of Barisan Gold that a material portion of its
Upper Tengkereng prospect in Aceh province
is outside a forest area. This means the land
can be explored without issuance of a forestry
borrow-use permit.
In light of this, Barisan has decided to re-initiate
exploration and drilling activities at the
prospect. A drill rig has been mobilized to site
and drilling was expected to resume in late August
after the Ramadan holiday.
The company plans to initially drill up to 3000
metres that will seek to target, expand and define
the high-grade zones intercepted in a hole
drilled in December 2010. Each hole will take
about 4-6 weeks to complete with another 2-4
weeks for assaying. This program will count towards
the work commitment required under the
company’s exploration licence.
30 | Asia Miner | September/October 2013
At Talang Santo, mine development on
Level 3 continues with the pumping station
finished and more than 50 metres of horizontal
development completed by June 30.
This development covers part of the distance
that needs to be driven to allow an
internal shaft to link the evacuation lane
between Levels 2 and 1 through to Level
3. Sampling along the development faces
and from pilot holes across the vein structure
has highlighted the presence of fine
clay zones carrying very high gold grades.
This is similar to what occurred in Way
Linggo mine.
Results include 1.1 metres @ 18.8 grams/
tonne gold and 49 grams/tonne silver, 2.3 metres
@ 12.2 grams/tonne gold and 49 grams/
tonne silver, 2.2 metres @ 25.7 grams/tonne
gold and 63 grams/tonne silver, 2.7 metres @
15.1 grams/tonne gold and 24 grams/tonne
silver, and 1.9 metres @ 34.9 grams/tonne
gold and 76 grams/tonne silver.
The rate of mining at Way Linggo fell during
the second quarter owing to the cessation of
development of the silver vein located below
Level 4 and adjacent to the main vein structure
and the decision was taken to continue
the suspension of ore extraction from above
Level 3. Ore was milled through the process
plant in two campaigns during the quarter,
The company’s subsidiary PT Gayo Mineral
Resources drilled the hole in 2010 which
returned 691 metres @ 0.4 grams/tonne
gold and 0.3% copper. The hole included a
90 metre interval towards the top of the hole
containing 0.7% copper and 0.4 grams/tonne
gold and ended in 40 metres containing 1.5
grams/tonne gold and 0.5% copper.
Five other primary porphyry targets at Barisan
project are all in primary forest classification
which is subject to the extended moratorium
of the Indonesian Government released
on May 13, 2013, which prohibits the issuance
of new forestry borrow-use permits for
all projects in primary forest for an additional
two years until May 12, 2015. The targets will
remain on care and maintenance during the
moratorium.
In January 2012, Barisan released an initial NI
43-101 resource for its Abong project, also in
Aceh, of 8.5 million tonnes @ 1.5 grams/tonne
The Talang Santo mine is at the northern end of the
Way Linggo project tenement area in South Sumatra.
resulting in 446 ounces of gold and 10,889
ounces of silver being produced.
A positive recent development has been
a share placement in July which raised
Aus$15.3 million. Funds will be used to fast
track development and ramp up production at
Talang Santo.
Upper Tengkereng exploration to resume
gold and 10.7 grams/tonne silver. Abong is in
production forest hence is not restricted by
the moratorium. In the past few months, Barisan
has worked diligently with various levels of
governments to obtain a forestry borrow-use
permit for Abong. Despite strong support
from regency and provincial governments, the
company continues to wait to receive permission
to proceed with its application from a local
timber company who shares the surface
and forestry rights.
Following a recommendation of the regency
government, Barisan has been granted a suspension
of its IUP while it seeks final support
from the timber company. The suspension,
valid for 1-year, allows the company to protect
its timetable for completion of exploration.
The company is selling its interest in the
Collins prospect. A number of approvals have
been received from authorities and closure is
expected in the third quarter.

Indonesia
Maiden resource estimate for West Lombok
THE maiden resource estimate for Southern
Arc Minerals’ West Lombok property
on Lombok Island confirms the company’s
model for a multi-pit project on a number of
epithermal gold deposits and enhances the
area’s potential for bulk tonnage porphyry
copper-gold mineralization. The estimate by
SRK Consulting Canada shows an inferred
resource of 1.49 million ounces of gold,
1.82 million ounces of silver and 397.3 million
pounds of copper from three open-pittable
epithermal gold deposits and one porphyry
copper deposit.
The mineral estimate is based on drilling at
four locations in the 13km by 7km mineralized
belt with Southern Arc and SRK believing the
estimate could be expanded and upgraded
with additional exploration. The three gold
deposits - Raja, Bising and Tibu Serai - are
estimated to hold 11.78 million tonnes averaging
1.5 grams/tonne for contained metal
of 567,820 ounces of gold and an additional
1.82 million ounces of silver from Raja deposit.
The Selodong porphyry copper deposit
is estimated to contain 66.75 million tonnes
averaging 0.43 grams/tonne gold and 0.27%
copper for 922,800 ounces of gold and 397.3
million pounds of copper.
THE final forestry permit (Pinjam Pakai) has
been awarded to Finders Resources’ Indonesian
operating company which allows development
at its 95%-owned Wetar Copper
Project in eastern Indonesia to begin followed
by production. In addition, the company has
added 10,000 tonnes of contained copper to
its ore reserve estimates as part of a feasibility
study update.
The Pinjam Pakai is the final permit required
to complete project financing and commence
project development. In preparation for development,
Finders intends to restart its demonstration
plant in order to generate early cash
flow, and complete the revision of capital and
operating cost estimates for a refreshed feasibility
study required to update bank credit
approvals.
Finders’ managing director Chris Farmer welcomed
the permit. “Finders can now fully focus
its efforts bringing the project into production.
Wetar is one of the lowest-cost mines set
32 | Asia Miner | September/October 2013
Southern Arc, and previous operator, Newmont
Mining, have completed more than 55,000
metres of diamond core drilling on the three main
prospects - Pelangan, Mencanggah and Selodong
- since 1996. Of these holes, 99 were
included in the current resource report, with the
rest either exploratory holes or focused on different
targets. Only a small portion of the ‘favourable
ground’ has been drill tested to date.
SRK’s report states: “The property hosts at
least four separate mineral deposits within a
10km strike length. All deposits identified are
still open along strike and at depth and further
drilling could discover additional mineralization,
especially at Raja where the possibility of finding
mineralization that could be amenable to
underground mining seems very good.”
SRK recommends:
• Further drilling is required at Raja to upgrade
the resource status to infill intercepts to nominal
25 metre centres and to extend resources
down-plunge of open high-grade shoots.
• Scout drilling to test the Lala structure 350
metres east of, and parallel to, Raja. Numerous
high-grade rock chip samples have
been collected along an 800 metre strike zone.
• At Tibu Serai, where the current resource
zone is only drilled on a 250 metre-long
Finders receives Wetar forestry permit
for development and will produce a premium
LME Grade A copper cathode.”
Wetar comprises two high-grade deposits,
Kali Kuning and Lerokis, each 3km from the
coast and suitable for open pit mining. The
project will benefit from existing infrastructure –
particularly a wharf, camp and roads and partially‐stripped
copper ore bodies from a prior
gold mining era.
Between February 2009 and December
2010, Finders successfully operated a 5
tonne/day Solvent Extraction/Electro Winning
(SX/EW) demonstration plant testing copper
sulphide leach kinetics, while optimizing process
designs and generate project finance
data. Wetar produced and sold about 2500
tonnes of LME Grade A copper cathode, all
sold at a premium to the LME price and without
specification issues.
The test heaps are at heights similar to commercial
operations worldwide and the SX/EW
technology used is industry standard. SX/EW
zone of MSB, further drilling is required to
test open extensions.
• Scout drilling is warranted at several other
targets with high-grade rock chip sampling
at Mencanggah, including the Mahoni zone.
• Further drilling is required on Bising to infill
the upper high-grade parts of the structure
and test open extensions along strike and
down dip.
• Selective ground IP geophysics is recommended
to focus porphyry drill testing on
higher priority porphyry targets.
Moving a man-portable drill rig at a Southern Arc
Minerals property in Indonesia.
technology is responsible for 22% of global
copper production. The Wetar development
comprises restarting the current demonstration
plant followed by incorporating the Whim
Creek plant to lift annual production to 25,000
tonnes.
As part of the feasibility study update
the combined ore reserve now stands at
8.9-million tonnes, at an average grade of
2.4% copper, for some 210 000 tonnes of
contained copper, an increase of 7%. This
equates to more than $50 million of incremental
revenue and $35 million of additional
pre-tax cash flow at current copper
prices. The increased reserves are at Kali
Kuning deposit with Lerokis remaining unchanged.
In addition there are a number of promising
prospects within existing tenements,
including Meron, Karkopang and the South
Coast of Wetar which have potential to expand
the resource base of the project.

Philippines
Red Mountain drilling at Lobo
RED Mountain Mining is undertaking a staged drilling program to
test high-grade gold epithermal lode exploration targets on its Lobo
mining property in the Batangas Gold Project. Initial targets include
the at-surface and near-surface Pica and Japanese Tunnel prospects,
based on currently drilled and sampled outcropping mineralization at
these prospects, and limited to a maximum depth of 150 metres.
The company says the drilling will test the validity of the exploration
targets at the prospects and will be completed in two stages
by mid-November, subject to financial capability. The total exploration
target at Pica and Japanese Tunnel is estimated in a range of
400,000 to 700,000 tonnes grading from 3.6 grams/tonne to 5.3
grams/tonne gold equivalent for 45,000 to 120,000 gold equivalent
ounces.
Stage one started in mid-July with two diamond holes at Pica and
three at Japanese Tunnel. The objective is to confirm thickness and
grade of the previously drilled and/or trench channel sampled highgrade
gold mineralization. This will allow for further refinement of the
exploration target and planning of further drilling aimed at defining
potential mineral resources. Stage two will consist of extension and
infill drilling at both prospects at sufficient density (eg 40 metres x 20
metres) to define mineral resources.
Red Mountain’s managing director Jon Dugdale says, “We are
looking forward to drilling the near-surface, high-grade vein discoveries
to confirm the exploration targets and ultimately define further
high-grade resources and enhance our substantial gold resource
base at the Batangas Gold Project.”
Total mineral resources at Batangas at a 0.85 grams/tonne gold
lower cut-off include 2.76 million indicated tonnes @ 2.3 grams/
tonne for 208,000 ounces and 3.02 million inferred tonnes @ 2.1
grams/tonne for 200,000 ounces.
Meanwhile, recent trenching and surface sampling at the Ulupong
prospect at Lobo has returned high-grade results. Best result from
epithermal veins was 3 metres @ 2.45 grams/tonne gold and 7.07
grams/tonne silver, including 1 metre @ 4.22 grams/tonne gold and 4.6
grams/tonne silver. Infill soil sampling has defined a 500 metre-long by
100 metre-wide anomaly in this area.
The company is focused on upgrading the Batangas resources through
discovery of new, high grade, gold zones at Archangel and Lobo. It
will continue drilling to increase the size and grade of the resources at
Batangas followed by a scoping study to demonstrate the viability of a
potential high-margin gold project development. Batangas is 120km
south of Manila in southern Luzon.
Funding solution for Siana resumption
RED 5 Limited aims to raise up to US$47,420,802 through an entitlements
offer to eligible shareholders. Company officials hope these
funds will lead to the company recommencing mining operations and
production at the Siana Gold Project.
“Given the challenging environment for equity markets and the
consequent offer discount offered to shareholders,” according to
a company statement, “the Board considers that the appropriate
course of action is to offer this opportunity to our supportive shareholder
base in order to provide the necessary cash to repay an outstanding
US$25 million prepaid swap facility and implement tailings
storage solutions which will lead to recommencement of operations
and production at the Siana mine.”
Red 5’s current cash position is $5.89 million and the company has
held constructive discussions with its senior lender regarding the prepaid
swap facility. By virtue of the Siana mine being placed on care and
maintenance and not in production, the company is deemed to be in
breach under the facility. While the senior lender has not sought remedies
under the facility, it continues to reserve its rights.
Red 5 and the senior lender have entered a standstill agreement
whereby the lender has agreed that until and including September 15,
2013, it will not call on the facility; enforce payment of the facility; and
not seek any of the remedies available to it for non-payment of any
amounts owed.
Managing director Steve Norregaard says, “We have a solution to
returning to production at Siana and a rights issue is the best way
to ensure all shareholders who have seen the project come so far
play an equal role in funding our short term capital needs. After the
operator and contractor changes of earlier this year we have a quality
asset in need of additional capital. Despite recent market fluctuations,
Siana’s fundamentals as a lowest quartile cost gold mine
make it a very attractive asset. Returning to production is the best
way to realize this value.”
After extensive analysis of available tailing storage solutions for the
mine, officials say the focus has turned to construction of a small interim
lined storage pond downstream from the existing tailings dam, which
would provide tailings capacity for up to four months followed by a
thickening and filtering
system to create a cemented
paste product
which mixed with
waste rock will provide
a stable tailings and
waste land form.
The company says
this method is able
to accommodate a
minimum 18 months
of tailings storage prior
to ultimate completion
of a new purpose-built
facility. This combination
of methods would
potentially see the processing
plant recommence
operations by
October.
Red 5’s Siana project is in the northeast of Mindanao.
34 | Asia Miner | September/October 2013

Philippines
New drilling for Sierra’s Mabilo project
SIERRA Mining has secured an exploration permit that paves the way
for a new drilling program at its Mabilo Copper-Gold Project in eastern
Luzon. The drilling program is aimed at estimating mineral resources on
the North and South Bodies that were intersected in previous drilling. It
will also test a previously identified modelled extension and potentially
estimate a mineral resource.
Earlier drilling returned best intersections of 60 metres from 26 metres
@ 2.28 grams/tonne gold, 11.8 grams/tonne silver, 3.28% copper and
49.05% iron; 62 metres from 51 metres @ 2.66 grams/tonne gold, 10.3
grams/tonne silver, 2.76% copper and 48.82% iron; 97 metres from 39
metres @ 2.25 grams/tonne gold, 7.1 grams/tonne silver, 2.22% copper
and 50.26% iron; and 87 metres from 34 metres @ 2.94 grams/
tonne gold, 7.9 grams/tonne silver, 2.94% copper and 43.44% iron.
Results from preliminary metallurgical test-work were positive, with
excellent initial recoveries achieved for both copper and magnetite. No
work has yet been completed for precious metals.
The new drill program is expected to initially comprise 16-20 vertical
diamond core holes from 100 metres to 150 metres deep. If initial results
validate the earlier model for the large SW dipping block, up to
15 further holes may be required to test the deeper extensions and
generate data for a resource estimate.
Sierra acquired the Mabilo and Nalesbitan projects in 2011, both
in the Paracale Gold District of eastern Luzon and has also recently
lodged an application for a 2985-hectare exploration permit east of
Mabilo.
Since acquiring Mabilo, Sierra completed a drilling campaign in late
2012 and discovered two areas of high grade copper-gold-silver magnetite
skarn mineralization. It has also done a new ground magnetic survey.
Mabilo comprises one permit application of about 500 hectares. It
A TMI image used for ground magnetic survey work at the Mabilo Copper-Gold
Project.
is easily accessed by 20km of all-weather road from the highway at the
nearby town of Labo.
The Paracale district is one of the largest historical gold producing
regions in the Philippines, with recorded gold production dating from
the 12th Century. Government records indicate that prior to the Second
World War there were 12 gold mines successfully operating in the
district annually producing 250,000 ounces predominantly from narrow
quartz-sulphide veins. Total historical gold production including alluvial
gold is estimated to have been in excess of 5 million ounces.
Meanwhile, Sierra will hold a shareholders meeting to approve the recently-signed
joint venture with Galeo Equipment and Mining Co, under
which Galeo can earn a 36% interest in Mabilo.
Narrow veins impact Co-O production
MEDUSA Mining has reduced production estimates at its Co-O Gold
Project in eastern Mindanao after narrower than expected gold veins affected
performance. Anticipated production in the June quarter was reduced
to 15,600 ounces and for the first half of 2013 to about 62,200
ounces.
The second half of 2013 will also be negatively affected, following a
delay in commissioning of a new mill. The revised production forecast
for the three months to September 30 is now about 17,000 ounces
and 35,000 ounces for the three months to December 31.
Medusa says the veins on Level 8 in the vicinity of the shaft, 100 metres
below the current mining levels, were expected to be 1.4 metres to
5.5 metres wide, but on three veins the widths are less than 1 metre in
conjunction with extensive faulting.
Meanwhile, Medusa has appointed a new contactor, CPC Engineering,
to complete the mill expansion project at Co-O. Completion was
expected in August, at least four weeks late due to the previous contractor,
Arccon, going into administration. Medusa says that because of
the mill delay, lower production and weaker gold prices, it is reviewing
its cost base.
Exploration drilling has been reduced to two surface and two underground
drill rigs, which will reduce exploration expenditure to about
US$12 million in the year to June 2014 from about US$25 million to
year-end June 30, 2013. Production and cash cost forecasts are under
review pending completion of commissioning and additional Level 8
development.
The feasibility study on the Bananghilig deposit is also being reviewed
following lower gold prices and in recognition of the newly-discovered
high grade zone, B2. An option under consideration is the separate
mining of B2 and ore treatment at the Co-O Mill, which would mean
much lower capex than a new large stand-alone operation at Bananghilig.
The company says if this initiative is successful and gold prices remain
subdued, it would mean a saving of about US$220 million in
capex over the next 3 years for the planned new stand-alone mill.
Medusa’s managing director Peter Hepburn-Brown is pleased the
company can move to mill construction and commence commissioning
at Co-O with minimum disruption and minor delays. “The high grade
B2 zone adjacent to the Bananghilig 1 million ounce deposit provides
various options for future development. We are continuing to drill at B2
so options can be evaluated, including possibly treating high grade
material at the Co-O mill, to increase production while postponing the
need to build a new stand-alone milling facility.”
September/October 2013 | Asia Miner | 35

Central Asia
Celsius begins coal drilling program
The Uzgen Basin Coking Coal Project is in the central region of the Kyrgyz Republic.
CELSIUS Coal was due to begin an extensive multi-rig drilling program
in mid-July at the Kargasha/Kokkia areas of the Uzgen Basin Coking
Coal Project in Kyrgyz Republic. The work is part of the company’s
2013 exploration program which began in early July and is designed
to expand the existing 255 million tonne JORC-compliant resource and
bring targeted areas into the indicated category.
The ASX-listed company has mobilized high production diamond
core drill rigs to the site and plans to undertake 4000-5000 metres of
drilling. Following the success of the 2012 exploration season success,
the aim of the 2013 program is to:
• Increase the company’s resource inventory;
• Target exploration in areas with limited historical drilling which are
most prospective for the highest ranking coals;
• Move some inferred resources into the indicated category; and
• Collect data for mining studies.
Bulk samples will also be collected and tested with
results distributed to prospective customers and
off-takers. Based on progressive assessment of the
exploration results, capacity is available to expand the
drilling program.
“Based on 2012 work, we are looking at the right approach
to start mining, including some very low cost
scenarios both in terms of capital and cash cost,” says
Celsius chairman Alexander Molyneux. “The point is to
acquire the data we need to move on so we can be
mining here within the next two years or so.”
Celsius has a field team of 40 people for the 2013 program,
including its own geological staff and third-party
contractors. Celsius anticipates the field program will
be completed in October, assuming no expansion to
the program. The subsequent focus will be on lab analysis,
resource modelling and desktop studies.
The 2013 program will be more extensive than the maiden 2012 drill
program, involving more work focused to support a mining licence application
and subsequent production. A number of larger diameter PQ
core holes will be drilled to procure samples that will be used to more
accurately determine certain coking coal specifications, particularly
coke strength after reaction. Additionally, more environmental base line
and geotechnical data will be collected for mining studies.
Meanwhile, phase one of a Xinjiang premium metallurgical coal market
study conducted for Celsius has identified a significant, and widening,
demand-supply gap for coking coal in China’s Xinjiang region,
which borders the Kyrgyz Republic. The independent survey forecast
coking coal prices to increase to US$235 from US$145 per tonne by
2017 – fuelled by rapid blast furnace steel capacity growth and a dearth
of local availability.
Alhambra pursues financing alternatives
WITH its Kazakhstan mining operations suspended due to lack of funds,
Alhambra Resources continues to pursue various financing alternatives.
Should a financing be successfully concluded, a portion of proceeds
will go towards resuming the mining of ore.
In its report covering the first quarter of 2013, which was released in July,
Alhambra stated that it recognized $500,000 in revenue in the quarter from
the sale of 339 ounces of gold at an average price of $1599 per ounce,
compared to $3.1 million in revenue from the sale of 1846 ounces of gold at
an average price of $1694/ounce during the first quarter of 2012.
During the quarter no fresh ore was stacked on its heap leach pads nor
was any waste mined. Gold sales were realized from the drawdown of recoverable
gold inventory from work-in-progress (WIP). As of March 31 the
estimated recoverable gold classified as WIP was 37,418 ounces.
The decrease in sales volume was as a result of Alhambra not mining
any fresh ore to stack on the heaps plus the inability to maintain optimum
operating conditions, such as ripping and fluffing of leach pads,
maintenance of optimum levels of cyanide and resin, due to the corporation’s
financial constraints. Revenues from gold sales were also
negatively impacted by a 6% decline in the average price of gold in the
first quarter of 2013 compared to the 2012 first quarter.
During the March quarter no field work was carried out in Kazakhstan
although proposed 2013 drilling and soil sampling locations
were prepared. As of March 31 there were 2593 Shirotnaia assay
results pending from the laboratory, and in addition, 6755 samples
were prepared for export, with 2871 RC samples from Shirotnaia, 386
RC samples and 650 soil samples from Zhusaly, 959 soil samples and
2 rock chip samples from Vasilkovskoe East, and 1887 soil samples
from Dombraly East.
Currently Alhambra’s efforts are focused on arranging financing,
the use of proceeds from which will be directed towards the settlement
of outstanding accounts payable, the re-initiation of the
stacking of ore on the heap leach pads and resumption of exploration
and development programs. The corporation has identified
a number of exploration targets it wishes to drill once funds have
been raised.
In addition the corporation plans to begin a pre-feasibility study directed
towards bringing into production the transitional and sulphide
zones of the Uzboy deposit. However, these programs as well as the
corporation’s ability to continue are dependent on Alhambra completing
one or more of the financing deals it is investigating.
36 | Asia Miner | September/October 2013

Central Asia
Kounrad on track to meet 2013 target
CENTRAL Asia Metals is on track to meet its
10,000 tonne annual production target at the
Kounrad SX-EW Copper Project in Kazakhstan.
Following record monthly output of 1114 tonnes in
April, the plant produced 3081 tonnes in the June
quarter and 4587 tonnes in the first half of 2013.
The plant’s total output since the start of operations
in April 2012 has exceeded 11,400 tonnes.
This was achieved over a period that included the
commissioning, ramp-up and the first winter of operations,
during which severe conditions were experienced.
Kounrad’s operational capability during
all conditions, especially the winter months, is now
proven and in the first 14 months of continuous production the company
has gained valuable experience of operating the plant in a challenging
environment.
Central Asia Metals continues metallurgical test work and engineering
studies on expanding copper production at Kounrad. Options being
assessed include expansion of production at the current plant as well
as construction of a second plant. The company expects to be in a position
to decide on the most appropriate option in the fourth quarter, and
a decision to start construction will be subject to completion of a new
framework agreement allowing for acquisition of the remaining 40%.
The project is operated by two subsidiaries of Central Asia Metals -
CAML Kazakhstan BV is 60% owner of Kounrad Copper Company LLP,
operator of the SX-EW facility, and Sary Kazna LLP is 60% holder of the
Subsoil Use Contract, which conducts the dump leach operations. The
new agreement supersedes the previous agreement which was entered
into with JSC SAT & Company as announced on February 2, 2012.
The Kounrad SX-EW Copper Project in central eastern Kazakhstan, about 620km north of Almaty and
18km north of the town of Balkhash.
It will result in Central Asia Metals owning 100% of Kounrad. The acquisition
will be effected by the transfer of the 40% ownership from
Central Asian Investment Consulting Company LLP, a subsidiary of the
SAT Group, to Mr Kenges Rakishev then a subsequent transfer to Central
Asia Metals’ subsidiaries.
The company expects to receive the transfer of the remaining 40% to
its wholly-owned subsidiary, CAML Kazakhstan BV, by the end of 2013.
Upon completion the company will issue shares to Kenges Rakishev
representing 20% of the post-acquisition enlarged share capital. He
will also be appointed a non-executive director. Kenges Rakishev is a
prominent business leader in Kazakhstan who serves as chairman of
several large companies.
Meantime, the company’s Alag Bayan exploration licence in Mongolia
has been cancelled by the Mineral Resource Authority of Mongolia
after reaching the end of its renewal period. The size and grade
of the identified resource were insufficient to justify conversion to a
mining licence.
Almalyk continues growth in Uzbekistan
THE annual general shareholders meeting of Almalyk Mining and
Metallurgical Complex (AMMC) decided to direct 39.4% of the company’s
total net income for 2012 to further development of its Uzbekistan
operations. Earlier this year the company decided to build a
lead plant valued at about US$60 million, which will take about three
years to complete and will be integrated into the existing polymetallic
complex.
Once operational, the plant will annually produce up to 15,000 tonnes
of lead. The source fields for the raw materials will be the Kalmakyr
and Sary Ceku deposits in the Tashkent region, the ore mine of Handiza
in Kashkadarya region, and the lead-zinc-barite ore deposit in the
Uch-Kulach mine in central province Jizzakh.
Shareholders decided to direct 19.8% of the 2012 income to repay
loans borrowed for the implementation of investment projects,
with 16.8% directed to sponsorship, 8% to geological surveys, 4.2%
on the reserve fund of the enterprise and the remainder on other
purposes.
The company’s annual report revealed that net profit in 2012 increased
by 6.5% compared to 2011 up to about 137.2 billion soms.
The authorized capital of the company is worth 198.2 billion soms. The
Uzbek state owns 97.5% of the company’s share capital.
The Almalyk plant is the only copper producer in Uzbekistan and one
of the largest manufacturers of non-ferrous metals in Central Asia.
The plant also accounts for nearly 90% of silver production and 20%
of gold production in the country. The plant comprises two mining
companies, two processing plants and two metallurgy plants. The
resource base includes copper-porphyry ores at the Kalmakyr and
Sary Ceku fields, the lead-zinc-barite ore deposit at Uch-Kulach and
the lead-zinc ore deposit Khandyza in Kashkadarya region.
Almalyk Mining And Metallurgical Complex Public Joint Stock Company
was founded in 1949 and engages in mining and production of
nonferrous metals in Asia. The company operates two mining divisions,
two concentrating divisions and two smelters in which it explores for
gold, copper and silver. Its products include copper, gold, molybdenum,
and lead and zinc products. It was formerly known as the Almalyk
Copper-Molybdenum Complex and changed it to the current
name in 1997.
The Almalyk ore mining area of 850sqkm is in the south of the Tashkent
region, in the northwest part of the Kuraminsky range’s foothills.
The area’s industrial centre is the town of Almalyk, 65km from the city
of Tashkent. The area is connected by a road and a railway link is made
through the Ahangaran Station.
September/October 2013 | Asia Miner | 37

Australia
Construction of Maules Creek under way
Whitehaven Coal has received the approvals
required to commence construction of its
$767 million Maules Creek Project in northwest
New South Wales (NSW). The project
is considered one of only a few remaining
tier 1 undeveloped coal assets in Australia
and is also one of the nation’s largest coal
deposits with 320 million tonnes of marketable
reserves.
Maules Creek is approved to annually extract
up to 13 million tonnes of coal and rail 12.4
million tonnes of product from the site in any
calendar year. It has a low stripping ratio of
6.4:1, relatively low capital development costs
and competitive operating costs.
Current resources are expected to support
a large open cut operation for in excess of 30
years and first coal sales are expected to occur
in the second half of calendar 2014. The
project is expected to employ more than 340
full time equivalent employees and contractors
in the construction phase and about 470
during ongoing operations. It hosts high quality,
low ash, low sulphur and low phosphorus
semi-soft coking coal and low ash, low sulphur,
high energy thermal coal.
“Approval is a significant and very welcome
milestone for our business, shareholders,
employees and the northwest NSW economy,”
Whitehaven’s managing director Paul
Flynn says. “The project is one of the most
significant investments currently under way
in regional NSW. The regional support for this
project has been immense and very gratifying.
“Throughout the three-year approval phase
our project development team has developed
an extremely comprehensive project delivery
strategy, which has been validated by all levels
of government. The project has been through
one of the most rigorous planning approvals
processes ever undertaken by a mine in NSW
and has been reviewed by a wide range of
highly regarded environmental experts.”
Following a detailed review of the Maules
Creek capital budget, capital expenditure to
deliver the full production capability is expected
to be about $767 million. Of this amount,
about $160 million has been spent, largely
related to the Coal Handling and Preparation
Plant (CHPP) and land purchases.
Initial site preparation including fencing, storage
and access roads is under way. The most
critical element of the construction phase is
the rail spur and loop, and construction was
expected to commence in August, with an
approximate 12-month build time. The rail
Whitehaven Coal’s Maules Creek Coal Project is in
the Gunnedah Basin, about 19km northeast of the
town of Boggabri.
spur and loop comprises a common section
of 7.9km to be shared with Boggabri Coal and
11.9km for the Maules Creek section.
The CHPP is largely fabricated and is in close
proximity to the site. Negotiations to finalize
other related contracts including power supply
and bulk earthworks are well advanced.
Yancoal considers privatization plan
YANCOAL Australia has received a proposal
from its holding company and controlling
shareholder, Yanzhou Coal Mining Company
regarding a possible privatization of Yancoal.
Under the proposal, Yanzhou would acquire
via a scheme of arrangement all of the shares
in Yancoal that it does not own.
The independent directors of Yancoal are
considering the proposal and have commenced
appropriate due diligence investigations
and discussions in light of the
proposed terms put to them by Yanzhou.
The independent board committee of Yancoal
is undertaking these investigations and
discussions and believes it is important to
assess the outcome of its due diligence investigations
in light of the proposed terms of
the proposal and to engage in discussions
with Yanzhou based on those findings before
making a recommendation to minority
shareholders of Yancoal.
The proposal is to acquire via a scheme of
arrangement the remaining 22% of Yancoal’s
issued shares from its minority shareholders
in exchange for Yanzhou Chess Depositary Interests
(CDIs). Yanzhou’s proposed exchange
ratio is 0.91 Yanzhou CDIs for every Yancoal
ordinary share held. All of the shares in Yancoal
not owned by Yanzhou would be acquired
under the proposal and Yancoal would
be delisted from ASX.
In NSW Yancoal operates the Moolarben
mine near Mudgee in the Central West; the
Ashton, Austar, Abel, Tasman and Donaldson
mines in the Hunter Valley; and Duralie
and Stratford in the Gloucester region north
of Newcastle. The company also operates
Yarrabee mine near Blackwater in central
Queensland and has a near 50% share in
Middlemount mine northwest of Rockhampton.
Yancoal also has investments in two coal terminals
- Wiggins Island at Gladstone, Queensland,
in which it holds 5.6% and NCIG in Newcastle in
which it holds 27%. On behalf of Yanzhou, Yancoal
manages Cameby Downs mine in southwest
Queensland, Premier mine in southwest
Western Australia, Longwall Top Coal Caving
Technologies and Ultra Clean Coal.
The company says all of its mines, except
the two underground mines which were in
the process of moving longwalls, performed
strongly in the June quarter.
During the quarter mining commenced in
the new Stage 3 area of the Austar mine,
underpinning its long-term future. The
Moolarben mine also achieved a quarterly
production record of 1.65 million tonnes of
saleable coal, a sales record of 1.82 million
tonnes and has been nominated for an
environment award following introduction
of ‘stealth’ trucks to the mine. The Middlemount
mine has successfully transitioned
into an owner-operator mine.
38 | Asia Miner | September/October 2013

Australia
Liberty to explore for coking coal
Liberty Resources’ new tenement is in the coal-rich Bowen Basin, close to other
projects run by a number of the world’s biggest mining companies.
AFTER a four year wait Perth-based gas and fertilizer group Liberty Resources
has been granted formal access to a prospective premium
coal tenement in Queensland’s Bowen Basin in an area surrounded
in the immediate vicinity by world coal majors. The company is now
planning an early maiden drill campaign to prove up a JORC standard
resource.
The 30sqkm tenement is about 170km southwest of Mackay and has
BHP Billiton, Rio Tinto, Peabody and Vale coal mines and projects as
neighbours, some as close as 700 metres. The initial drilling program
will explore the potential for coking coal deposits.
Prior to the granting of the tenement, Liberty completed an extensive
literary review and modelled the coal seams in the permit area
using historical exploration data. The review concluded that Rangal
MetroCoal makes progress at Bundi
METROCOAL continues to make positive progress with its 2013
field program, including drilling, at the Bundi Thermal Coal Project in
Queensland’s Surat Basin. This exploration program and associated
technical studies will provide the information and data necessary to
complete the mine design and Environmental Impact Statement (EIS),
and will also form the basis for a mining lease application.
The Aus$3 million exploration program is advancing on time and within
budget and by the end of the June quarter 60% of the drilling component
was completed. The current downturn in the resource sector has
also resulted in some cost savings with the team of external contractors
on the project.
With 10 bore holes planned within the project’s resource target area, six
had been completed by June 30 and the results are with independent laboratories
for analysis. The purpose of drilling these holes is to further define
the thermal coal resource including the delivery of data on groundwater,
geotechnical, gas desorption and infill drilling. This data will be used in the
application for a mining lease which is expected to be lodged in late 2013.
The EIS program is concentrating on the installation of groundwater
monitoring equipment which will be a major component of the initial
data obtained for the program. Consultation with key stakeholders is
40 | Asia Miner | September/October 2013
Coal Measures and the Fort Cooper Coal Measures are likely to
occur on the tenement and that any coal on the permit is likely to
be high quality Bowen Basin coal similar to that being mined at the
nearby mines.
Liberty’s managing director Andrew Haythorpe says early planning
for a drill program on the permit recognized the shallowness of the
coal seams in the area and the near-term potential to develop a
commercially attractive JORC coal resource. “We lodged an application
for this tenement with the Queensland Department of Natural
Resources and Mines in 2009 and not only has it taken that long
to secure access, but we have well moved on in advancing our
low cost gas and fertilizer aspirations on the east coast and potentially
overseas.
“The tenement is a high quality asset surrounded by existing coal
mining and export infrastructure at a time that some coal types continue
to attract premium prices globally because of supply constraints. As
the local regional coal seams are shallow, it is anticipated that a drilling
schedule of around 20 holes or so at no more than 100 metres or so
depth, will be sufficient to generate a JORC standard estimate if drilling
is successful.”
Export rail infrastructure connecting the tenement to two major coal
export ports, is barely 2km distant. It is just 10km southeast of BHP
Billiton-Mitsui’s Poitrel coking coal mine; 700 metres south of BHP Billiton-Mitsubishi’s
Daunia coking coal project; Peabody’s Olive Downs
mining lease abuts the eastern boundary; and Vale-Aquila’s Eagle
Downs deposit is just 6km to the west.
The holding is in addition to Liberty’s primary focus on the initial
development of a proposed new Aus$1.4 billion Queensland gas
treatment plant linked to an eventual larger scale upgrade of the
same project to a world-first $4 billion integrated low-cost gas, electricity
and fertilizer complex.
also planned. MetroCoal held a very successful information evening
with many landholders from the Bundi Project area on July 23. While
at a very early stage of the EIS process, the company believes it is
very important that the already positive relationships with landholders
be maintained through proactive and open communication. The EIS is
due for completion in the first half of 2014.
It is planned that the seams will be mined underground utilizing a
modern high productivity longwall mining system to annually produce
about 5 million tonnes of medium ash, low sulphur thermal coal. Subject
to funding, underground development is expected to start in 2016
with longwall production in 2018.
MetroCoal continues to pursue a joint venture partner and the first
of a new level of interest saw a recent site visit from a large Chinese
energy group. This visit, coupled with interest from a number of Indian
companies, has highlighted knowledge and interest in the Surat
Basin as a major thermal coal province.
Meantime, one of China’s leading coal services groups, Dadi Engineering
Development (Group) Co, has increased its shareholding
in MetroCoal to 22.6% after purchasing 6.25 million shares in an
off-market transaction.

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India
Karnataka mining slowly recovering
ALTHOUGH the Supreme Court earlier this year allowed category A
and B mines to resume operations in Karnataka, only about a dozen
mines out of 117 have started operations with miners struggling to
cope with the shortage of capital funds brought about by difficult global
economic conditions. The liquidity problems mean that a number of
miners are unable to clear the penalty dues which are a pre-condition
for resumption of mining, or allocate fresh funds for drilling.
After the court halted mining in the mining-rich state in 2011, India’s
export of iron ore halved to around 30 million tonnes in the fiscal year
ended March 31, 2013. Only about a dozen mines are currently operational
and with no cash flow as well as no available capital at this
stage, it is difficult to see many of them re-opening.
Procedural delays have also complicated matters. Around 25 are
awaiting various approvals from authorities and the delay is crippling
the state’s mining and steel industry. The process of forest renewals
was stopped in September 2010 and this moratorium was only lifted
after the Supreme Court order in April. A production cap also makes it
uneconomical to mine for many operators.
Following allegations of rampant illegal mining, the court in August
2011 banned mining in Karnataka. After various rounds of hearing, the
court through its April 18 order allowed resumption by 117 mines in
categories A and B. Forty-nine leases in Category C mines, found to
be flouting regulations, were cancelled.
State-owned miner NMDC does not appear to have been hit as hard
as others by the ban and other regulations. Iron ore production from
The company is annually producing almost
8 million tonnes and aims to produce
more than 10 million tonnes in the
near future.
its Karnataka mines was up 4.83% to 2.07 million tonnes in April-June
2013 compared to the previous year. The company is annually producing
almost 8 million tonnes and aims to produce more than 10 million
tonnes in the near future.
Overall, NMDC posted 5.83% growth in iron ore sales to 7.26 million
tonnes for the quarter ending June 30, compared to total sales of
6.86 million tonnes in the corresponding period last year. Production of
iron ore also rose by 0.29% for April-June quarter 2013 at 6.83 million
tonnes, as against 6.81 million tonnes of iron ore produced in the same
period of 2012.
The company has also been pursuing its growth program vigorously.
NMDC, as part of its forward integration program and value
adding, is setting up a 3 million tonnes/annum steel plant at Nagarnar
in Chhattisgarh, for which most of the major packages have been
finalized and awarded.
42 | Asia Miner | September/October 2013

India
Adani begins MDO operations
ADANI Enterprises, which is part of global
integrated infrastructure place Adani Group,
has launched its integrated coal mine developer-cum-operator
(MDO) operations with
the start of coal production at the Parsa East-
Kente Basan mine in Chhattisgarh. Coal from
this mine will be supplied to Rajasthan state
electricity board power plants, including Rajasthan
Rajya Vidyut Utpadan Nigam Ltd (RR-
VUNL) which owns the mine.
Relatively new in India, MDO is a concept wherein
a coal block owner contracts entire operations
to a third party, which takes responsibility for land
acquisition, resettlement and rehabilitation, mining,
developing and operating the particular mine
by investing in it and then supplying coal at a
tender determined price to the power plants of
the mine-owning state electricity boards.
It is the first of four MDO contracts secured by
Adani Enterprises and marks the beginning of
the Adani Group’s vertically integrated resources
business in India. The company has outlined
a phased capital outlay of Rs3000 crore for the
entire block, which holds reserves of more than
450 million tonnes of coal and will annually produce
2 million tonnes initially to be ramped to 15
million tonnes a year from 2017 onwards.
With this development, Adani Enterprises is set
to emerge as India’s largest private coal miner
with access to produce up to 90 million tonnes
of coal over the next 30 years and reserves of
more than 3 billion tonnes, enough to produce
about 18,000 megawatts of electricity by state
electricity boards.
Adani Group chairman Gautam Adani says,
“The commencement of coal mining at Parsa
Kente is a milestone event in India’s coal mining
sector. With this we at Adani rededicate
ourselves to work resolutely towards the energy
security of the country.” The Parsa East- Kente
Basan block was awarded to RRVUNL in 2007.
RRVUNL issued a call for tenders seeking MDO
services and this was won by Adani Enterprises.
The contract is being executed by Adani Mining,
a subsidiary of Adani Enterprises.
The contract will also see Adani Mining set
up a coal washery, coal handling plant and rail
siding infrastructure to transport the coal to the
doorstep of RRVUNL’s power plants in Rajasthan.
The washed coal from Parsa East-Kente
Basan block will be of a superior quality and will
help RRVUNL run its power plants at a plant load
factor of more than 95% and will ensure the state
is in power surplus contrasted to its current situation
of being electricity deficient.
The other three MDO blocks contracted to
Adani Enterprises are Parsa block in Chhattisgarh,
owned by Chhattisgarh State Power
Generation Co, with reserves of 150 million
tonnes; Machakatta block in Odisha, owned by
MahaGuj Collieries, with 1.2 billion tonnes; and
Chendipada coal block, also in Odisha, owned
by UCM Coal Company with 1.5 billion tonnes.
Adani House at Mundra. Adani Group owns and operates
the Mundra Port, which is the largest private
port in India.
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September/October 2013 | Asia Miner | 43

Sri Lanka
Bora Bora granted additional land
A graphite sample from one of Bora Bora Resources’ Sri Lankan projects.
GRAPHITE explorer Bora Bora Resources has been granted an additional
156sqkm of exploration licences prospective for high grade
graphite over the Baduraliya, Neluwa and Paragoda project areas in
central and southern Sri Lanka. With the grant of these licences Bora
Bora now holds 197sqkm of exploration licences in Sri Lanka.
The additional licences give the company a significant ground position
over and around several known historical producing, high grade graphite
regions including areas to the south of the Kahatagaha-Kolongaha
Graphite Mine (KKGM), which has been in production since 1872 and
produced more than 300,000 tonnes of graphite at 90% or greater total
graphitic carbon (TGC).
The new licences pave the way for Bora Bora to commission airborne
electromagnetic (EM) surveys to determine the graphite potential of the
central project areas. The Matale, Paragoda North and Paragoda South
Torch River works towards merger
CANADIAN-BASED Torch River Resources is working towards a proposed
agreement to merge with Plumbago Refining Corporation (PRC).
The goal of the merger is to create a combined company that will be in
a better position to advance development of 20 former high-grade lump
graphite mines in southern Sri Lanka.
Torch and PRC have commenced their respective due diligence processes
and are proceeding with discussions of the terms by which a
merger can be achieved. Site visits were planned during August and
the companies are encouraged that an agreement may be negotiated.
Both companies believe the merger could be viewed as a positive
development in the worldwide effort to create new supplies of natural
graphite. The marketplace has been largely dominated by exports from
China for much of the past 20 years, however that situation has been
changing as internal consumption patterns in China have increased.
As a result, the need for new, reliable, and cost-effective supplies of
graphite has become a topic of concern for many graphite users.
In Canada as many as 10 companies are seeking to quantify and
build graphite operations. While these are welcome developments in
the Canadian junior mining space, the reality is that the sector may become
saturated with projects. In addition, projects that consist of lowgrade
deposits may encounter high processing costs and in turn large
44 | Asia Miner | September/October 2013
projects will be the first areas targeted for airborne EM surveys. Graphite
is a conductive form of carbon that electromagnetics have historically
had success in detecting on land and from the air.
Matale covers 32sqkm of exploration licences and 114sqkm of applications
northwest of Kandy and is directly contiguous to KKGM. The
project surrounds a region with three producing graphite mines. It is
considered highly prospective for graphite mineralization of 90% or
greater TGC and contains a series of old pits and workings from historical
artisanal operations that exploited graphite from deposits at surface.
The Paragoda North and South Projects cover 62sqkm of exploration
licences to the northwest of Kandy and 30km south of KKGM. The
projects cover two distinct ridges along strike from the main geological
feature to the north that is believed to contribute to the source of graphite
mineralization found at KKGM.
In southern Sri Lanka the Baduraliya project covers 42sqkm of exploration
licences in Matugama region in a historical high grade graphite-bearing
and producing area. The Neluwa project covers 52sqkm
of exploration licences in the same region. The Ambalangoda project
covers 9sqkm of exploration licences in the Galle region, an area identified
by the Sri Lankan mines department as one of the country’s main
graphite-bearing areas. The Rakwana project covers 15sqkm of exploration
licence applications in a region that formerly produced high
grade graphite.
Plumbago Lanka, 75%-owned by Bora Bora, signed an agreement
with the Sri Lankan Board of Investment on October 24, 2012 granting
a tax exemption period of 12 years. The concession is subject to a minimum
spend over the next four years of US$20 million. Plumbago has
assembled an experienced team of Sri Lankans including a miner with
10 years’ experience at KKGM and a 34-year veteran of the graphite
industry who has worked at the Bogala, KKGM and Ragedara mines.
capital expenditures in order to achieve enough scale to reduce operating
costs. High capital expenses and operating expenses increase
the risk of those projects.
Conversely, low-cost operations such as the one that may be possible
as a result of the merger of Torch and PRC, have potential to
position the merged company well ahead in the race to supply global
graphite markets.
Over the past two years PRC, which is registered in the Dutch Caribbean
territory of Curacao, has acquired full ownership of a Sri Lankan
subsidiary, Sarcon Development, which has been pursuing a development
program to re-activate 20 former producing mines in Sri Lanka.
Sarcon has licensed 49 sites which are all are permitted and have received
technical backing from Sri Lanka’s Geological Survey and Mines
Bureau.
Torch and PRC estimate the mines could be re-activated within 3 to
5 months of commencing the necessary start-up work, including the
completion of a resource estimate and receipt of a positive economic
feasibility study to support the viability of the mines. In addition, Sarcon
has obtained exclusive exploration rights for a 116.1sqkm grid in western
and southwest Sri Lanka believed to include the majority of known
graphite mines on public land in Sri Lanka.

Malaysia
National Instruments
opens facility
NATIONAL Instruments (NI) opened the National Instruments Academy
& Innovation Nucleus (NI-AIN) on July 5 in Technology Park Malaysia, Kuala
Lumpur. It is NI’s largest shared services lab facility in the world with RM20
million worth of hardware and software technology tools. The facility is a
private public partnership between the Government of Malaysia and NI.
The facility is one of the Entry Point Projects (EPP) within the Electrical
& Electronics NKEA under the Economic Transformation Program (ETP)
spearheaded by NI, TPM and SMECORP, and facilitated by PEMANDU.
This shared services lab facility is envisioned to be an SME incubator
centre for high-value design and engineering services, and a technology
commercialization hub. The setup aims to lower entry barriers and
enable access to facilities for SMEs to nurture innovation, develop the
talent pool, build capabilities and promote intellectual property creation
amongst small and medium enterprises (SMEs) in Malaysia.
The facility occupies close to 930 square metres of floor space that
will be used for training and certification, talent development programs
in science, technology & innovation (STI) and also enabling local SMEs
to innovate across a wide range of industry applications such as control
and instrumentation, radio frequency and wireless communication, green
technology, renewable energy, transportation, oil and gas and agro-science.
NI-AIN is regarded as the knowledge hub for local SMEs, institutes of
higher learning, multinationals, government-linked companies, research
institutions as well as regional clients from ASEAN and OIC countries to
utilize the hardware and software facilities, and also to tap into the knowledge
network of NI LabVIEW certified users from all around the world. With
this ecosystem, companies and users can leverage on the unified Lab-
VIEW platform as the foundation to infinite designs and solutions in the
measurement and control systems for a wide range of applications, and
will assist the companies to accelerate productivity, innovation and discovery.
In conjunction with the NI-AIN facility, NI will further aid the advancement
of the local SME community through its engineering innovation and
entrepreneurship program called Planet NI. This program will help entrepreneurs
in established small businesses and start-ups increase their
access to world-class development tools, technical training and technology-based
markets so they can achieve sustainable prosperity and
contribute to the socioeconomic development of the country nations.
NI Managing Director for South East Asia Chandran Nair (fifth from left) presents a token
of appreciation to the Minister in PM Department and CEO of PEMANDU, Senator Dato’
Seri Idris Jala (fourth from right). Also present at the opening were (from left) TPM GM
for legal and contract management Nik Najihah, Adrian Ching, AIM CEO Mark Rozario,
PEMANDU director for E&E and innovation Datuk Chris Tan, NI managing director for Penang
Raj Purushothaman, MDeC director Hasannudin Saidin and TPM GM for business development
Zulkifli Fitri Ismail.
September/October 2013 | Asia Miner | 45

Malaysia
Monument increases gold production
THE continuing ramp-up in mill capacity resulting from the 2012 plant
expansion is enabling Monument Mining to increase gold production at
its Selinsing project. In the quarter ending June 30 the company produced
12,919 ounces while in the financial year to June 30 Monument
produced 52,982 ounces.
The quarterly figure was 25% higher than the same period of 2012
and slightly lower than the 13,255 ounces produced in the previous
quarter. The financial year production was 19% higher than the previous
year.
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For the year Monument sold 57,905
ounces at an average realized price of
$1576 per ounce of which 50,677 ounces
was from the year’s production.
®
During the quarter Monument sold 21,500 ounces
at an average realized price of $1419 per ounce of
which 7228 ounces resulted from gold released from
the restricted metal account upon conversion of the
convertible notes. There were 14,272 ounces sold
from the quarter’s production. For the year Monument
sold 57,905 ounces at an average realized price of
$1576 per ounce of which 50,677 ounces was from
the year’s production.
Ore mined for the quarter was 314,481 tonnes, a
190% increase on the same period in 2012 while
ore processed was 268,045 tonnes, a 142% increase.
The large increase in ore mined is due to
better equipment availability, drier weather and substantial
contributions of oxide ore from Buffalo Reef
pit. The large increase in ore processed is due to
the increase in mill capacity resulting from the 2012
expansion.
Monument recently updated resources and reserves
at Selinsing, including the adjacent Buffalo
Reef property. There are proven and probable reserves
of 222,900 ounces of gold from 4.89 million
tonnes of material at a grade of 1.4 grams/tonne.
These reserves are within a newly estimated measured
and indicated resource of 289,400 ounces from
6.307 million tonnes of material @ 1.4 grams/tonne.
The inferred resource is an additional 48,000 ounces
from 1.07 million tonnes also at 1.4 grams/tonne.
Monument’s vice president of exploration Todd W
Johnson says, “The new NI 43-101 reserve allows the
operations to continue until the end of 2017 at the current
mining rate and 1 million tonne/annum processing
rate. All of the Monument mine staff have been
working hard to help achieve gold production targets
and help define additional resources for possible future
development and are responsible for the successful
mine performance.”
Monument has also finalized an agreement to explore
and develop 14 blocks totalling 3920 hectares owned
by the Federal Land Development Authority (FELDA) of
Malaysia. These FELDA lands are generally east and
south of the existing resources and Monument tenements
and will allow additional exploration, infill drilling
and development of the Buffalo Reef Central, Buffalo
Reef South, and Selinsing resources.

Laos
Sepon transition boosts copper production
CONTINUING productivity improvements following
the transition to an owner-operated
mine have enabled MMG to boost copper
production at the LXML Sepon Copper-Gold
Project. Copper production during the June
quarter was higher than all comparable periods
and MMG is maintaining its annual copper
cathode production guidance from Sepon
at 83,000 to 88,000 tonnes despite a major
scheduled shutdown of the copper processing
plant.
All mining activity at Sepon is now undertaken
by MMG employees enabling the company
to efficiently and directly manage safety, volume
and costs. Sepon exceeded designed
nameplate capacity for the fifth consecutive
quarter achieving year-to-date records in copper
production and sales in 2013.
Actual C1 costs for the first half of 2013 were
US$0.97 per pound and MMG maintains annual
guidance at a C1 cost of US$0.95-
US$1.05/pound, compared to 2012 production
of 86,295 tonnes at a cash cost of
US$0.98/pound.
Higher than expected gold production costs
in the first half due to ore availability and grade
resulted in actual C1 costs of US$1880 per
ounce. While second half C1 costs are expected
to be within original annual guidance, MMG
has revised annual guidance to be US$1475-
US$1625/ounce. Annual production guidance
has also been revised and Sepon expects to
produce 40,000-50,000 ounces in 2013, down
from 45,000-55,000 ounces.
Exploration drilling defined sufficient oxide
gold mineralization at Discovery East and Phavat
North to move to resource drilling. Primary gold
drilling achieved some success at Ban Mai and
Non-Nakachan and Discovery West. Highlights
of primary gold results include 26 metres from
441 metres @ 5.5 grams/tonne gold from Discovery
West and 40.2 metres from 17.5 metres
@ 4.6 grams/tonne from Non-Nakachan. Preliminary
primary copper exploration has commenced
as part of the S90 program.
A tragic incident occurred at Sepon on June
27 when an employee was fatally injured after
being struck in the head by a tree branch while
conducting land clearance work. A thorough
investigation has been conducted including an
independent review.
Overall, MMG remains on track to deliver
annual guidance of 170,000-185,000 tonnes
of copper. Total copper production of 89,235
tonnes in the first half of 2013 was 33% higher
than the first half 2012 and 10% higher than
the previous quarter.
MMG says copper cathode demand from
China remained firm in the June quarter with a
number of unforeseen events impacting global
supply. As a consequence, Chinese bonded
warehouse stocks have fallen by half since
the start of the year to around 400,000 tonnes
at the end of June and premiums for imported
cathode approaching US$200/tonne, a
level not seen since 2009. Chinese demand
for copper concentrates has also been firm,
with imports for the first five months increasing
30% compared to the previous year. During
the second quarter mine supply disruptions
forced spot market TCRCs well below annual
contract levels.
PanAust lifts Ban Houayxai gold forecast
The mine and processing facilities at PanAust’s Ban Houayxai Gold-Silver Project in central Laos.
A REVISED mine plan based on the 2013 ore
reserve estimate has prompted PanAust to
schedule increased annual gold production
for this year to more than 110,000 ounces
at the Ban Houayxai Gold-Silver Project. The
ASX-listed company has maintained 2013
production guidance for its other Laos operating
mine, Phu Kham.
During the June quarter Ban Houayxai produced
28,712 ounces of gold at a C1 cash
cost of US603 per ounce after silver credits,
a reduction of 11% on the March quarter. Ban
Houayxai has emerged as a low-cost gold
producer on both a C1 and total cash cost
basis. Total cash costs fell 26% to US$757/
ounce gold after completing a new lift at the
tailing storage facility (TSF).
Total tonnes milled increased 13% quarter-
on-quarter to an annual rate of 4.4 million
tonnes. A higher mill throughput rate was
achieved following a reline of the SAG mill in
March which allowed the grinding media charge
to be increased.
The silver grade of ore processed increased,
up 9% to 6.93 grams/tonne, with a greater proportion
of transitional ore in mill feed.
Phu Kham produced 15,483 tonnes of copper-in-concentrate,
a 13% increase on the previous
quarter due to higher ore processing rates
and copper head grade, at a C1 cash cost of
US$1.45 per pound and total cash costs remain
in line with the previous quarter at US$2.12/
pound. An increase is C1 costs from the March
quarter reflects unscheduled maintenance on
ball mill no 2 together with lower precious metal
credits following the fall in prices.
Consecutive monthly mining records in
May and June led to quarterly records for
total material mined of 10.5 million tonnes
and ore mined of 5.1 million tonnes. These
increases and positive grade reconciliation
meant a lower proportion of marginal grade
mineralization was required to maintain mill
feed and consequently copper and gold
head grades exceeded budget. The operation
processed ore at an annual rate of
17.4 million tonnes despite the mill operating
time falling to 90% as a result of the ball
mill maintenance. The lower availability was
offset by a record quarterly average hourly
mill throughput rate of 2222 tonnes.
Construction of the Phu Kham Increased
Recovery Project was completed in April and
by June 30 the relative improvement in copper
recovery was estimated to be five percentage
points consistent with the design recovery model.
Meanwhile, a pre-feasibility study at Phonsavan
Copper-Gold Project will be completed
during the current quarter while a scoping study
is under way at Long Chieng Track (LCT) deposit
aimed at identifying development options for the
gold-silver and copper-gold mineralization.
September/October 2013 | Asia Miner | 47

Vietnam
Nickel production begins at Ban Phuc
Officials and staff at the opening of Asian Mineral Resources’ Ban Phuc project
during June.
FIRST production at Asian Mineral Resources’ Ban Phuc Nickel Project
in Son La Province was marked on June 29 by an opening ceremony
attended by officials from both central and provincial government, as
well as the local community. The company believes the strong attendance
is indicative of the broad support for the project within Vietnam.
Speaking at the opening ceremony, Ministry of Natural Resources
Vice Minister Nguyen Linh Ngoc and People’s Committee of Son La
Province chairman Cam Ngoc Minh noted in particular the significance
of the opening of the first nickel mine in Vietnam and the importance of
the continued development of the nickel industry for the province and
Vietnam’s economy.
Ban Phuc is 160km west of Hanoi and produces a high-quality nickel
concentrate, with a significant copper by-product. Operations at the underground
mine re-commenced on May 10, 2013 and, with the commissioning
of the processing plant, production will ramp-up over the remainder
of 2013 to an annual run-rate of more than 6600 tonnes of nickel, 3300
tonnes of copper and 200 tonnes of cobalt contained in concentrate.
Asian Mineral Resources’ CEO Simon Booth said, “The commencement
of concentrate production from the Ban Phuc Nickel Project is a
significant milestone for the company and elevates it to producer status.
The efforts of our dedicated workforce and the ongoing support
of the central and local government of Vietnam have been keys to the
success of the project.
“What has been particularly pleasing is that together we have built this
project with zero lost time injuries, recently passing the milestone of one
million man-hours lost time injury free. This is a world-class achievement
and credit goes to all supervisors, employees and our contractors.”
The company also continues to focus on progressing opportunities
to expand production, including extensions to the Ban Phuc massive
sulphide vein, and selected higher-grade portions of the disseminated
sulphide deposit. This will enable it to leverage the 30% additional installed
capacity at its processing plant.
Asian Mineral Resources’ 90% owned subsidiary, Ban Phuc Nickel
Mines LLC (BPNM), has recently satisfied all conditions precedent associated
with its credit agreement executed with LienViet Post Bank
for the provision of a US$20 million project financing loan for the Ban
Phuc project. All cash collateral previously provided by BPNM has been
released and BPNM is now able to draw down funds under the US$20
million project debt facility.
Besra boosts production guidance
FOLLOWING record June quarter production Besra Gold exceeded
its 60,000 ounce market guidance at its Vietnamese projects for the
2012-13 financial year and has set 65,000-70,000 ounces as its target
for the current fiscal year. The new guidance is an 8-16% increase on
2012-13 and continues the year-on-year increase it has achieved for
the past five years.
The 60,187 ounces produced during 2012-13 included a record 18,481
ounces during the quarter ending June 30. A number of daily records were
also set in the quarter at the Bong Mieu and Phuoc Son projects in central
Vietnam, including daily mill throughput and ore mined at both sites.
Besides setting production guidance, Besra’s Board has also approved
wide ranging cost cuts and efficiencies which will reduce central corporate
costs by US$1.5 million for a projected total of US$5.2 million in fiscal year
2014. CEO John Seton says, “We are fulfilling an aggressive cost cutting
and efficiency program. Whilst the currently depressed market and decline
in gold price have added impetus to this program, it is also the result of a
thorough review of our operations and associated costs led by CFO Jane
Bell and COO Darin Lee.”
Significant corporate cost efficiencies will be achieved by reducing external
consultants in ICT and investor relations, reduction in travel and components
of officer remuneration packages. In operations the significant
cost reductions will be achieved by the renegotiation of a number of key
materials contracts, bringing several other contracts in house, such as mill
and mine maintenance and a reduction in expatriate headcount and bonuses.
In addition, three long serving executives have relinquished their positions.
Changes in mining methodology and further mill automation leading to
reduced consumables and improved recovery rates will also contribute
to cost reductions. Additionally, operations are increasing mill throughput
which reduces fixed costs per tonne.
The Board is also investigating opportunities to maximize the value of
its Vietnam assets which may include a transaction culminating in partial
divestment and the listing of the company’s local operating subsidiaries on
a Vietnamese exchange. This would enable the company to increase its
focus on, and redirect capital towards, development of its main asset at
Bau in Eastern Malaysia, which it regards as a world-class goldfield.
Feasibility for the Jugan Hill deposit at Bau is progressing well, with metallurgy
and process conceptually resolved. The internal feasibility was
scheduled for completion in August and will be followed by an external
engineering, procurement and construction management analysis.
Besra is also undertaking a further feasibility study for the Ho Ray Thac
Trang (HRTT) deposit at Bong Mieu. HRTT is a brownfield project 2.5km
east of Bong Mieu mill with 57,730 measured resource ounces, 101,797
indicated ounces and 216,764 inferred ounces. The study is scheduled
for completion by September.
48 | Asia Miner | September/October 2013

WWW.SUMATRA-MINER.COM
November
, Aryaduta Hotel Palembang, South Sumatra - Indonesia
.
.
.
Confrence Topics Will Include:
.
.

On The Move
Medusa Mining has appointed a new CFO to replace
Roy Daniel who has retired. Company secretary
Peter Alphonso has been appointed CFO.
Roy Daniel joined Medusa as CFO in December 2004
and the company says he has made an outstanding
contribution to its development and progress, especially
in establishing the corporate culture required to
succeed in off-shore jurisdictions. Peter Alphonso has
been instrumental in developing the administrative and
financial procedures of Medusa’s Philippine companies
since joining it in September 2006.
Asian Mineral Resources (AMR) has appointed John
Tasovac as chief financial officer. He will manage all
finance and accounting matters and will be based in
Hanoi, Vietnam. He brings more than 20 years of international
finance experience in the mining industry.
He joins AMR from Xstrata, where he was general
manager of finance for Xstrata Copper Project Development
South American Division in Chile. Prior
to this, he held various finance management roles
with Xstrata Copper’s operations, Minera Alumbrera
in Argentina and BHP Iron Ore in Australia. Paula
Kember is stepping down from her role as CFO and
will continue as corporate secretary.
BMT Group Ltd announces that Wendy Barnes has joined the Board of
Directors as a non-executive director. She is presently a non-executive
member of the main Board of OFWAT, the economic regulator of the
water industry in England and Wales, a non-executive director of the
Foreign & Commonwealth Office Services and a non-executive director
at the Met Office.
Marengo Mining has announced the resignation of
chairman Louis Gignac and M Caron from the
Board in line with the company restructure and demands
placed on them from their other executive
positions. Continuing directors and staff of Marengo
thank them for their input and assistance in the recently
completed redomicile to Canada. Marengo
has appointed current director John Hick as chairman.
He has been a director since June 2008. It
has also appointed Pieter Britz as a director.
Aggreko, a leader in the supply of temporary power
and temperature control, has appointed Rod Saffy
as area general manager for Aggreko Australia-Pacific.
He will take charge of the company’s Western
Australia operations. He will be based in Perth and
is tasked with ensuring Aggreko is well positioned
to cater to its western customers’ ongoing needs.
Mindoro Resources has appointed its CEO Tony
Climie to the Board of Directors, Penny Gould
to the position of executive vice president and corporate
secretary, and Edsel Abrasaldo to the position
of vice president operations. These appointments
reinforce Mindoro’s long-term commitment to
ensuring not just the preservation, but growth of the
company’s assets and building maximum value for
shareholders.
Monument Mining has announced the departure of
Todd Dahlman as chief operating officer. The departure
is caused by a restructuring of the company
and Monument does not intend to fill this position at
this time. Monument thanks Todd Dahlman for his
contributions to the company.
LionGold Corp chief executive officer and managing
director Nicholas Ng Yick Hing has been appointed
a non-executive director of Australian gold miner,
Citigold Corporation. With an 18% stake, LionGold
is the single largest shareholder of Citigold and has
two nominees on the company’s Board of Directors.
LionGold’s group general counsel Raymond Tan
Soo Khoon was appointed as a director of Citigold
in February 2013, along with group chief operating
officer Matthew Gill who is stepping down following
Mr Ng’s appointment. Investor relations director Lesley
Bendig has resigned from LionGold.
SouthGobi Resources has appointed Enkh-Amgalan
Sengee as new president and executive
director of SouthGobi Sands LLC (SGS), the company’s
wholly-owned subsidiary. He joins SGS from
Clean Energy LLC, a subsidiary of Newcom Group,
where he was CEO and led the successful development
of the first commercial scale wind farm in
Mongolia. Meantime, SouthGobi has appointed
Brett Salt as chief commercial officer and he has,
therefore, resigned as a non-executive director.
50 | Asia Miner | September/October 2013

On The Move
Christopher Start has resigned as managing director
of Kingsrose Mining for personal reasons. The
company’s finance director, Timothy Spencer, assumed
the role of interim managing director while the
Board considers a permanent arrangement.
MMG has appointed Xu Jiqing to the role of executive
general manager – strategic planning.
Based at the company’s head office in Melbourne,
Xu Jiqing assumes responsibility for strategic planning
as a member of the Executive Committee
reporting to chief executive officer Andrew Michelmore.
Xu Jiqing was a non-executive director of
MMG from May 2009 and has been re-designated
as an executive member of the Board.
Astra Resources has appointed Niren Raj to the
Board. Niren Raj began working as a lawyer in 1989
and then established a debt recovery, commercial
dispute and insolvency practice with a well-known
firm in Brisbane. He brings to the Board a commercial
and legal expertise to enhance Astra Resources
as it seeks to build a global business.
Crazy Horse Resources announces that Mitchell
Alland has resigned as the company’s president,
executive chairman, secretary and as a director to
pursue other opportunities. Darryl Cardey, the
company’s CFO, will replace Mitchell Alland as acting
president, chairman and secretary.
Cokal Limited has appointed Lieutenant General
(Retired) Agus Widjojo to the Board as a
non-executive director. Mr Widjojo is well respected
amongst Indonesia’s leaders and is considered
a key contributor in the development of
Indonesia’s international ties.
Raman Joshi will head Manitowoc Cranes’ operations in the Greater
Asia-Pacific (GAP) region, which covers much of Asia and Australasia,
but excludes China. He takes over as executive vice president of GAP
from Gilles Martin, who has left the company to pursue other interests.
Raman Joshi’s most recent role, which he will continue to occupy in
conjunction with the new position, was as vice president of Manitowoc
Cranes India.
Killara Resources, which has coal interests in Indonesia,
has appointed Robert Kipp as managing
director. He is a founding member of Killara
and one of its original shareholders. Prior to this
appointment, Robert Kipp held the position of executive
finance director with responsibility for dayto-day
management.
Cuesta Coal has appointed Hanping Liu as
non-executive director. Mr Liu has a master of Law
and is also a qualified accountant. He currently
holds the position of Associate General Manager of
Beijing Guoli Energy Investment Co.
RungePincockMinarco (RPM) has appointed Mike Rowlands to a new
leadership position - head of coal for Australasia, Russia and CIS. He
has more than 30 years of experience in both open cut and underground
coal, and his appointment bolsters RPM’s core coal capabilities in advisory
expertise and software development. He has extensive practical
experience as a senior mine engineer working both on the client side for
both open cut and underground operations, as well as in consulting firms
as a consulting manager for underground coal.
Kazax Minerals announces the appointment of
Moshtagh Moshtagi to its Board of Directors. He
is a leading entrepreneur in the field of steel and
raw materials trading and has successfully developed
a number of businesses over the past three
decades. His knowledge of the iron ore market
and iron ore processing will greatly enhance the
board’s strategic thinking. The company also announces
the resignation of Anton Drescher, Paul
Larkin and Carlos Ballon.
September/October 2013 | Asia Miner | 51

Eventts
2013 ASIA Miner
calendar of events:
• Invest Mongolia 2013, September 3-4, Ulaanbaatar.
www.frontier-conference.com
• Mining Indonesia 2013, September 4-7, Jakarta.
www.pamerindo.com
• Discover Mongolia, September 5-7, Ulaanbaatar, Mongolia.
www.discovermongoliaforum.com
• Mining Philippines, September 10-12, Manila.
www.chamberofmines.com.ph/events
• Coal Club Indonesia, September 17.
www.coalclubindonesia.com
• Mining Mongolia, September 19-21, Ulaanbaatar, Mongolia.
www.miningandconstructionmongolia.com
• China International Steel & Raw Materials Conference 2013,
September 24-26, Qingdao. www.ironoreconference.com
• Minex Russia 2013, October 1-3, Moscow.
www.minexrussia.com
• XVII International Coal Preparation Congress, October 1-6, Istanbul,
Turkey. www.icpc2013.com/en/
• 2013 Coal Handling & Storage, October 22-24, St Louis, Missouri,
USA. www.coalhandlingshow.com
• China Coal and Mining Expo, October 22-25, Beijing.
www.chinaminingcoal.com
• Shaft Sinking
• Mine Development
• Contract Mining
• Raiseboring
• Raise Mining
• Underground Construction
• Engineering & Technical Services
• Specialty Services
• Mining 2013 Myanmar, October 31-November 2, Yangon, Myanmar.
www.miningmyanmar.com
• China Mining 2013, November 2-5, Tianjin.
www.china-mining.org/en/
• Djakarta Mining Club, November 11, Jakarta, Indonesia.
www.djakarta-miningclub.com
• Sumatra Miner: Inaugural Coal Mining & Technology of South
Sumatra, November 19-21, Palembang, South Sumatra.
www.sumatra-miner.com
• Coal Club Indonesia, December 4.
www.coalclubindonesia.com
52 | Asia Miner | September/October 2013

Events
Two new Indonesian mining clubs
TWO new mining clubs - Coal Club Indonesia and Djakarta Mining Club
– are meeting after being launched in Jakarta in April. The clubs are organized
by Mining Media International, publishers of The ASIA Miner and
Coal Age Indonesia.
Principal foundation member of both clubs is Caterpillar and foundation
sponsor is Orica. Platinum sponsor is Leighton while gold sponsors are
Weir Minerals and Reed Exhibitions.
The next Djakarta Mining Club event is September 6 with guest speaker
Bill Sullivan from Christian Teo Purwono & Partners. Another event is
scheduled for November 11. In 2014 events are scheduled for January
21, March 18, May 19, July 8 and September 16.
The next Coal Club Indonesia networking event is scheduled for September
17 with another event on December 4. 2014 events are scheduled for
February 18, April 21, June 12, August 18, October 20 and December 3.
Coal Club Indonesia meets every two months at various coal strongholds
throughout Indonesia. It represents a natural development for Indonesia’s
thriving coal industry and has been developed to enable B2B
and B2G connections to be made, thus creating opportunities for local/
domestic and international businesses in a rapidly growing industry.
Djakarta Mining Club meets every two months in Jakarta and serves to
foster bilateral business relationships while promoting sustainable mineral
production through educational outreach, promotion of exploration and
planned dialogue between mining stakeholders.
Both clubs have been well received with interesting speakers and
strong attendance.
Further information is available by emailing Dimas at dabdillah@mining-media.com
in Indonesia or Lanita at lidrus@mining-media.com in Australia or visit
www.djakarta-miningclub.com or www.coalclubindonesia.com.
Inaugural Sumatra Miner conference
WITH Sumatra striving to benefit from the potential of the island’s vast
coal resources, but hindered by the global coal downturn, lack of capital
investment, poor infrastructure and a trend to move away from low
ranking coal, the timing of the Sumatra Miner inaugural coal mining and
technology conference and exhibition could not be better.
The event will be held in Palembang from November 19-21, 2013, and
is being organized by Mining Media International, publishers of The ASIA
Miner and Coal Age Indonesia.
Producers and explorers in Sumatra are invited to showcase their success
by participating in the event while equipment and service providers are also
invited to attend the event or the pre and post conference workshops in
order to keep participants abreast of the latest technologies available.
Delegates will include coal mining companies, industrial coal consumers,
coal preparation operators, equipment OEMs, contract operators,
power plant fuel managers, infrastructure contractors, transport and logistics
operators, trans-shipment and export terminals, conveyor contractors
and operators, EPC companies, dust control companies, specialist
coal environmental contractors, and stockpile experts.
For information visit www.sumatra-miner.com or email dabdillah@mining-media.com
or lidrus@mining-media.com.
September/October 2013 | Asia Miner | 53

Legally Speaking
Chinese investment in Australia’s mining sector
– frequently asked questions
This is the first in a series of seven articles prepared by HFW (Holman Fenwick Willan) which answer
frequently asked questions concerning Chinese investment in Australia’s mining sector.
THE rapid growth of China has given rise to a strong increase in global
demand for mineral resources. According to the Composition of Trade
Australia for 2011-2012 published by the Department of Foreign Affairs
and Trade (1), Australia’s top three mineral resource exports are iron
ore, coal and gold. China is Australia’s largest export market for iron ore,
second largest for gold and fourth largest for coal (2). With such a
strong trade relationship between China and Australia, mining companies
from both countries are keen to elevate their relationships to
longer term partnerships.
In this series of seven articles we will examine:
• Australia’s foreign investment notification regime, with particular
empahsis on investments in the mining sector.
• The typical business structures for Chinese companies investing
in Australia’s mining sector.
• The legislative regime applicable to the mining sector.
• The implication of the Personal Property Securities Act 2009
(Cth) on the mining sector.
• Land access rights needed by mining companies.
• Environmental bonds.
• Government taxes and royalties relating to minerals.
In this first article, we will look at Australia’s foreign investment notification
regime in so far as it applies to investments in the mining sector.
Foreign investment is welcome in Australia. In 2011-12, a total
of 11,420 applications for foreign investment were considered with
10,703 approved, 13 rejected, 534 withdrawn and 170 exempt (3).
Approved foreign investments from China amounted to AUD16.2 billion,
65% of which were in mineral exploration and development (4).
Australia’s Foreign Acquisitons and Takeovers Act 1975 (Cth) requires
a foreign investor to notify Australia’s Foreign Investment Review
Board (FIRB) of its proposed investment. Notification to FIRB
of certain proposed investments is mandatory. Notification to FIRB
of other proposed invstments is often voluntarily made as the consequences
of completing an investment that is subsequently determined
to be contrary to Australia’s national interest are significant
(and can include an unwinding of the investment transaction).
FIRB will review the proposed investment and make a recommendation
to the Commonwealth Treasurer. Based on that recommendation,
the Treasurer will decide either that the Commonwealth
Government has no objection to the proposed investment (with or
without conditions) or that the Commonwealth Government prohibits
the proposed investments on the grounds that it is “contrary to
Australia’s national interest”.
The types of proposed investment transactions typically notified
to FIRB are:
1. (Foreign government investors) any direct investment, starting
up a new business or acquisition of an interest in land, including
any interest in a prospecting, exploration, mining or production
tenement by foreign government investors, regardless of the
value of the investment.
A foreign government investor includes a body politic of a foreign
country, entities in which governments, their agencies or related entities
have an aggregate interest (direct or indirect) of 15% or more
from a single foreign country or an aggregate interest of 40% or
more from more than one foreign country, or entities that are otherwise
controlled or could be controlled by foreign governments, their
agencies or related entities, and any associates.
An investment of an interest of 10% or more is considered to be
a direct investment. An investment that involves interest below 10%
may also be considered a direct investment if the acquiring foreign
investment investor is building a strategic stake in the target, or can
use that investment to influence or control the target;
2. (Australian business or corporations) acquisition by a
private foreign entity (and its associates) of an interest of
15% or more (or an acquisition by 2 or more private foreign
entities (and their associates) of an aggregate interest of
40% or more) in an Australian business or corporation that
is valued above Aus$248 million or in an offshore company
whose Australian subsidiaries or gross assets are valued
above Aus$248 million;
3. (Australian urban land) acquisition of an interest in Australian
urban land, including:
• acquisition of an interest in a share in an Australian urban land
corporation; or
• acquisition of an interest in a prospecting, exploration, mining
or production tenement where it provides the right to occupy
Australian urban land and the term of the tenement is likely to
exceed five years; or
• acquisition of an interest in an arrangement involving the sharing
of profits from the use of Australian urban land.
Australian urban land refers to all land other than land that is
used wholly and exclusively for carrying on a business of primary
production;
4. (Operational mine) acquisition of an operational mine where
the mining assets are valued at or above Aus$54 million (or
Aus$5 million for property subject to heritage listing).
In each case the threshold amounts are as at 2013 and will be
indexed annually.
The Treasurer reviews each foreign investment proposal against a
national interest test. ‘National interest’ is not defined in the legislation.
Each proposal is decided on a case-by-case basis. Guidance
is drawn from the Australian Government’s Foreign Investment Policy,
and relevant considerations include existing governmental policy
and legislation, national security, competitive effects, impact on Australian
government policies, impact on the general economy and the
community, and the character of the investor. Previous decisions by the
Treasurer indicated that acquisition of a controlling shareholding, assets
in a sensitive area (eg, near areas used by Australia’s defence forces),
assets at lower than market value, or a target that will be delisted from
54 | Asia Miner | September/October 2013

Legally Speaking
the Australian Stock Exchange after the transaction, will be subject to
close scrutiny from the Treasurer.
For more information, please contact:
James Donoghue, Partner, on +61 8 9422 4705 or email james.
donoghue@hfw.com;
Connie Chen, Special Counsel, on +61 2 9320 4616 or email connie.
chen@hfw.com.
(1) Composition of Trade Australia for 2012-2012, page 50.
(2) Composition of Trade Australia for 2012-2012, pages 53, 54 and 57.
(3) Foreign Investment Review Board Annual report 2011-12, page 10.
(4) Foreign Investment Review Board Annual report 2011-12, page 30.
Disclaimer: Whilst every care has been taken to ensure the accuracy
of this information at the time of publication, the information is intended as
guidance only. It should not be considered as legal advice.
Foreign investment in Indonesian mining companies
and divestment requirements - Two sides of the
same coin for foreign investors
By Erwan Sentana, of ES&P Law Firm Jakarta, Indonesia
Indonesia consists of hundreds of islands with many coal reserves and
various mineral resources, such as gold, nickel, manganese, iron ore,
copper, bauxite, tin, zircon, etc. Many large foreign companies have
operated in the coal and minerals mining industries and enjoyed available
investment facilities in accordance with prevailing regulations and
strategic policy issued by the Government of Republic of Indonesia.
These are reviewed from time to time to fully support and offer more
advantages for foreign investors and attract other prospective investors
seeking coal and mineral concessions for their investments in Indonesian
mining industries.
On the other side, Indonesia applies restrictions in respect of divestment
obligatory rules for foreign investors who hold shares in Indonesian
mining companies. Divestment is deemed as a ‘domestic
sentiment’ merely intended to give more control of operator mining
companies from foreign investors to government or local owners. This
article outlines requirements for investment and divestment in Indonesia’s
mining sector.
General foreign investment overview
In principle, foreign investors, either as individuals and/or a company,
who wish to conduct investment in Indonesia must have an Indonesian
legal entity registered and domiciled in Indonesia. The legal
entity must be in the form of a limited liability company (Perseroan
Terbatas or PT) duly established under Law No 40 of 2007 regarding
Limited Liability Companies (Company Law) and Law No 25 of 2007
regarding Investment (Investment Law), generally called PT PMA.
Foreign investment can be made after a minimum of two participants,
which may consist of all foreign participants or a joint venture
with local partner being founders of the proposed new PT PMA,
lodge an application to obtain a Principle Licence of Investment (Izin
Prinsip Investasi) from the Indonesian Foreign Investment Coordinating
Board (BKPM).
Following issuance of Principle Licence of Investment, the incorporation
of a new PT PMA together with its Articles of Association in a
notarial deed can be made by the founders and will require the approval
of Minister of Law and Human Rights of the Republic of Indonesia. PT
PMA may start its production activities after holding a Business Licence
(Izin Usaha) issued by BKPM.
Moreover, Article 5 (3) of Investment Law clearly provides that foreign
investment can also be performed in PT PMA by the following mechanism
- shares acquisition; and other ways in accordance with prevailing
regulations, inter alia merger and acquisition.
Prior to the investment, it is very important for foreign investors
to examine in detail the proposed business sector for the investment
they wish. As described above, Indonesia applies investment
restrictions referring to Investment Negative List setting out
the type of business sector which is closed or open with certain
requirements for foreign investment. The Government of Indonesia
reviews provisions in the Investment Negative List from time to
time based on regulation or policy, which is intended to open opportunities
for foreign investment in Indonesia. Currently, Investment
of Negative List is regulated in President Regulation No 36
of 2010 regarding List of Business Sector which is Closed and
Opened with Certain Requirement for Investment (Regulation
No 36). In addition to examine the required Investment Negative
List, it is also important to check the proposed business sector
with the classification set out at KBLI (Kelompok Baku Klasifikasi
Lapangan Usaha Indonesia/Indonesian Standard for Business
Field Classification) which is lastly regulated in the Regulation of
Head of Statistic Centre Board No 57 of 2009.
Article 1 of Regulation No 36 provides the list of certain business sectors
which is expressly closed for investment covering areas of agriculture;
forestry; industry; transportation; communication and information;
and culture and tourism. Article 2 of Regulation No 36 provides the list
of business fields which are opened with certain requirement, covering
17 business fields including the sector of energy and natural resources.
The Government of Indonesia is, however, currently considering reviewing
the existing Investment Negative List set out in the Regulation
No 36 by proposing to open six business fields formerly closed for
foreign investment. These fields will include transportation, industry, and
communication and information. It is reported that even though the six
business fields will be opened but they will need certain requirements.
Further, current minimum value of investment required for PT PMA is
expressly determined by BKPM. Pursuant to recent regulation issued
by Head of BKPM No 5 of 2013 regarding Guideline and Procedure
of Licensing and Non Licensing of Investment (Regulation No 5 of
September/October 2013 | Asia Miner | 55

Legally Speaking
2013), total investment value for PT PMA must be more than 10 billion
Rupiahs or its equivalent in US Dollars.
The investment value is including the stocks equity of PT PMA and
optionally can also include loan to be obtained by PT PMA, provided
that the minimum of 2 billion 500 million Rupiahs or its equivalent in US
Dollars should be paid by shareholders for the issued stocks at the
time of incorporation PT PMA. Regulation No 5 of 2013 also provides
that the minimum stock ownership of stockholder who has the lowest
percentage of ownership must be at the minimum of 10 million Rupiahs
or its equivalent in US Dollars.
Mining company divestment requirements
Divestment is generally defined as the transfer of shares owned by foreign
shareholder to local shareholder in PT PMA within a certain period
of time and requiring minimum level of percentage of shares.
In the mining sector, divestment obligatory in PT PMA is specifically
regulated in Law No 4 of 2009 regarding Mineral and Coal Mining (Mining
Law). Article 112 of Mining Law requires foreign shareholders who
own shares in mining companies which hold Mining Business Licence
(IUP) and Special Mining Business Licence (IUP-K), to divest their
shares five years after commencing mine production. The shares are
to be offered to the Government, local government, state-owned enterprises,
local state-owned enterprises or private national companies.
The Implementation of the Mining Law, currently regulated under Government
Regulation No 23 of 2010 in conjunction with Government
Regulation No 24 of 2012 regarding Implementation of Business Activities
for Mineral and Coal Mining (Regulation No 24), which provides that
the divestment must be made gradually so up to the 10th year, the local
ownership must reach the minimum amount of 51% in the mining company.
The ownership of local parties in each year after the fifth year must not
be less than the following percentage of total issued shares: 6th year 20%;
7th year 30%; 8th year 37%; 9th year 44%; 10th year 51%.
Local owners are protected from the divestment. This is regulated in
Article 98 of Regulation No 24, which provides that in the event of any
increase of capital in PT PMA, percentage of local ownership must not
be diluted, so it becomes less than the above percentage.
Procedure of mandatory divestment should comply with right of first
refusal mechanism from foreign shareholder to local partner which refers
to Article 97 of Regulation No 24 and this is subject to corporate
approval for divestment purposes under Company Law.
Based on recent development on this restriction, the Government of
Indonesia is discussing through internal mining and industry ministries
proposals to review existing Regulation No 24. It is reported that the Director
General of Mineral and Coal of the Energy and Mineral Resources
Ministry will consider giving more flexibility on divestment requirements
for Indonesian mining companies owned by foreign investors carrying
on both upstream and also downstream business in a company.
Although the divestment obligation stipulated in the Mining Law and
Regulation No 24 is intended only for IUP and IUP-K holders, it should
also apply to the Contract of Work (CoW/KK) and Coal Contract of
Work (CCoW/PKP2B) made by and between mining companies (including
the ones owned by foreign investors) and Indonesian Government
before the published date of Mining Law. Such CoW and PKP2B
are still in force but obliged to be adjusted with the provisions in Mining
Law at the latest one year after the published date of Mining Law. As the
adjustment should cover all articles in the CoW and PKP2B, then it can
be concluded that the divestment obligation stipulated in the Mining
Law and Regulation No 24 should also be applied in the amendment
of CoW and PKP2B. The contracts are also required to be adjusted for
obtaining IUP through application of IUP no later than six months before
the expired date licence of CoW and PKP2B.
Regarding the CoW and PKP2B made by the Indonesian Government
and the PT PMA mining company, the adjustment on the divestment
obligation can only be made by involvement of the mining company in
renegotiation of the contracts.
A current issue of divestment involves PT Freeport Indonesia, a giant
US mining company holding gold and copper licences which is planning
to go public and have its stocks listed in the Indonesian Stock
Exchange (IPO). While the obligation of divestment has not yet been
performed completely, the Government is now re-negotiation with Freeport
on the required divestment obligation.
Freeport holds CoW from the Government of Indonesia with total concession
of 212,000ha. It is reported that Freeport would like to divest
15% of its existing shares, of which 10% will be offerred to the Indonesian
partner, cq Government of Indonesia, and the remaining 5% will
be released to the Indonesian stock exchange. The Government now
holds only 9.36%. If the Government refuses the offer, local government
of Papua or State-Owned Enterprise then can hold the offered shares.
By the issuance of Regulation No 5 of 2013, the Government of Indonesia
should have clearer legal position that the divestment requirement
of Freeport will not be effected by its proposed IPO, and the divestment
must still comply with the percentage stipulated in Regulation No 24.
Another divestment issue in mining also occurs in the CoW between
the Government of Indonesia and PT Vale Indonesia Tbk, holder of a
nickel CoW covering 190,000ha in Soroako, South Sulawesi. The intensive
renegotiation is still in process in which PT Vale Indonesia Tbk
has not agreed on the offer from the Government of Indonesia including
the divestment obligation of 51% shares into local ownership and the
extension of CoW to become IUP.
Conclusion
Divestment obligatory requirement for foreign investors is a must in every
PT PMA which holds IUP or IUPK for carrying on mining business
in Indonesia as set forth in the Mining Law and Regulation No 24. This
also applies for CoW and PKP2B holders, although such obligation
must be applied by renegotiation of contracts between the parties of
the CoW and PKP2B.
Erwan Sentana is managing partner at ES&P Law Firm Jakarta, Indonesia,
holds Advocate Licence from Indonesian Advocate Association (PERADI)
and registered as Capital Market Legal Consultant at Indonesian Capital
Market Supervisory Agency (BAPEPAM). His areas of practice specialize
on mining, corporate restructuring, M&A, capital market and litigation. He
has been appointed by a US mining company to acquire coal concessions
and also by Australian and European investors to search for mining business
opportunities in Indonesia.
Disclaimer - This article is not intended as legal advice or legal consultation
on any specific matters. The information contained in this article should not be
relied on without first seeking the advice of an eligible attorney.
56 | Asia Miner | September/October 2013

Australian Mining Technology
CSIRO uses x-ray vision to detect unseen gold
POWERFUL x-rays can now be used to rapidly and accurately detect
gold in ore samples, thanks to a new technique developed by CSIRO
- a move that could save Australia’s minerals industry hundreds of millions
of dollars each year.
Working with Canadian company Mevex, CSIRO has conducted a pilot
study that shows that gamma-activation analysis (GAA) offers a much
faster, more accurate way to detect gold than traditional chemical analysis
methods. This will mean mining companies can measure what’s coming
in and out of their processing plants with greater accuracy, allowing them
to monitor process performance and recover small traces of gold, worth
millions of dollars that would otherwise be discarded.
GAA works by scanning mineral samples, typically weighing around
half a kilogram, using high-energy x-rays similar to those used to treat
patients in hospitals. The x-rays activate any gold in the sample, and
the activation is then picked up using a sensitive detector.
According to project leader Dr James Tickner, CSIRO’s study showed
that this method is two-to-three times more accurate than the standard
industry technique ‘fire assay’, which requires samples to be heated up
to 1200°C. “The big challenge for this project was to push the sensitivity
of GAA to detect gold at much lower levels – well below a threshold
of one gram per tonne.”
Last year, Australia produced more than Aus$10 billion worth of gold.
Even if GAA only led to a modest 5% improvement in recovery, that
would be worth half a billion dollars annually to the industry.
James Tickner explains that a gold processing plant may only recover
between 65 and 85% of gold present in mined rock. Given a typical
plant produces around Aus$1 billion of gold each year, this means
hundreds of millions of dollars’ worth of gold is going to waste. “Our
experience suggests that better process monitoring can help reduce
this loss by about a third.”
He says that the other major benefit of GAA is that it is easily automated,
allowing for much quicker analysis of ore samples. “Fire assay
Fault lines lead to gold
usually involves sending samples off to a central lab and waiting several
days for the results. Using GAA we can do the analysis in a matter of
minutes, allowing companies to respond much more quickly to the data
they’re collecting. A compact GAA facility could even be trucked out to
remote sites for rapid, on-the-spot analysis.”
Another great advantage of GAA is that it is more sustainable – unlike
fire assay it doesn’t require the use of heavy metals such as lead. It is
also very adaptable. “While most of the work we’ve done has been
based on the gold industry, the technique can be modified for other
valuable commodities such as silver, lead, zinc, tin, copper and the
platinum group metals,” James Tickner says.
Now that the research team has proved the effectiveness of the technique,
their next goal is to partner with local and international companies
in order to get a full-scale analysis facility up and running in Australia.
They hope to achieve this within the next two years.
- This article originally appeared in CSIRO’s ‘Resourceful’ magazine
The CSIRO has developed a new technique which uses powerful x-rays to
detect gold in ore samples.
SMALL-SCALE fault systems in the Earth’s crust
have a strong correlation with the location of
gold, a recent study of the St Ives Goldfields in
Western Australia has found. The research, published
in science journal Ore Geology Reviews,
found that all major gold deposits are controlled
by faults, but small fault systems are more likely
to lead to gold than larger ones.
Researcher Dr Carsten Laukamp says the relationship
between fault systems and gold traces
is key to understanding the genesis of gold and
could be used to help locate any commodity.
“Determining the spatial relationship between
geological features such as fault lines, and gold
traces, is not only important to understand how
deposits form, it can also guide mineral exploration
because we can use this information to
develop predictive mineral maps.”
Carsten Laukamp and the team developed a
predictive mineral map of the St Ives Goldfields
that shows new prospective areas where there is
a high likelihood that gold could be located. “We
used information such as rock type, colour, shape
and size and geological boundaries – all information
we can gather from drilling samples – to develop
the map,” he says.
“This research is one step in the development
of predictive mineral maps that integrate
various types of geological data. Next, we’ll
incorporate data collected from aircrafts and
satellites, such as geophysical and spectroscopic
data, which will improve the information
value and accuracy of the predictive mineral
map.”
This research was carried out by a collaborative
team of researchers from Curtin University
of Technology, the ARC Centre of Excellence for
Core to Crust Fluid Systems and CSIRO.
- This article originally appeared in CSIRO’s
‘Resourceful’ magazine
The predictive mineral map of the St Ives
Goldfields.
September/October 2013 | Asia Miner | 57

Australian Mining Technology
Geoscience enters cloud to tackle challenges
CLOUD computing and one of the world’s most powerful supercomputers
will form the backbone of a national integrated geoscience data network
being developed by CSIRO, Geoscience Australia and AuScope. The
network is supported by world-class visualization and spatial information
storage software and features ‘virtual laboratories’ that allow researchers to
process big data online, in the cloud and in a fraction of the time traditionally
taken on a desktop.
It is set to break down barriers and open access to Australia’s wealth of
geoscience data, enabling researchers to tackle society’s biggest challenges
including natural disasters, climate change, water security and sustainable
development of mineral and energy resources.
CSIRO project leader Dr Robert Woodcock says the network aims to
overcome systemic, compatibility problems to save researchers, government
and industry time and money. “Geoscience data is collected
by different organizations that use a range of software and produce
data in various formats that are often incompatible. This makes processing
and bringing data together slow and expensive, even for relatively
small queries.
“The network will make the approach to data more uniform across organizations,
so information can be brought together more readily and at little
to no cost, regardless of where it comes from and who is accessing it,”
he says.
Geoscience Australia senior adviser Dr Lesley Wyborn says the network
will make valuable earth science data available to users in real-time
from a range of sources across, which is what researchers need
in order to solve today’s societal issues. “The network’s early version is
focused on minerals exploration, but it has potential to be expanded into
real-time accurate prediction of the impact of natural hazards.
“At the moment, most tsunami warning systems are working on theoretical
models of what might happen if you have an earthquake at a
specific time and area, and when the tide is at a certain height. We
hope that with expansion of the network, we will be able to bring in all
available data, meld it together and give emergency managers a snapshot
of what is happening at that exact point in time,” she says.
The network will utilize the National Computational Infrastructure’s supercomputer,
which has the processing power of more than 15,000 desktop
computers. “The network will enable us to do better science, while
also helping government and companies,” says Robert Woodcock. “The
minerals industry will benefit with easy access to valuable data that could
eliminate some of the guess work in exploration, whereas scientists might
use the data to predict impacts of climate change.
The national earth science data network expands on the AuScope Grid,
which is a portal for Australia’s geoscience information that is available to
industry and the wider community. At the forefront of e-research and data
interoperability, the grid was developed by AuScope in collaboration with
several universities, government and research organizations, including
Geoscience Australia and CSIRO.
The Virtual Geophysics Laboratory exploits cloud computing and is a key aspect
of the network.
Moving towards online drilling
INTELLIGENT mining has a simple idea at its core – not just knowing
where to drill, but knowing where not to drill. The downhole
logging and sensing program run by the Deep Exploration Technologies
Cooperative Research Centre (DET CRC) is a case in
point – it’s about finding ways to help miners look ahead at both
the mining prospects and hazards, knowing what to avoid and what
to concentrate on.
Program 2, as it is known, pulls together a variety of advanced mining
sensory techniques, many of which hadn’t even been thought of a
decade ago. If successful, it will provide the end users – mining companies
– with the gift of foresight.
The program has some of Australia’s best mining research organizations
welded to the task, including Curtin University, CSIRO, Geoscience Australia
and Adelaide University. Not only has the CRC brought together these
research providers, it has also brought together industry participants, including
Barrick Gold, BHP Billiton, Newcrest, Anglo American, Gold Fields,
Vale, IMDEX and Boart Longyear. Some affiliates, such as Globaltech and
Teakle Composites, are part of the project research teams, says program
leader Dr Christian Dupuis, of Curtin University.
The program is split into four projects. Project 2.1, run by CSIRO’s Dr
Binzhong Zhou, is about developing ‘in front of the bit imaging technology’
- a forward looking drill hole radar that measures variations in electrical
conductivity as well as the radioactivity of the rock mass. It helps
locate drilling ‘near misses’ and potential drilling hazards.
Project 2.2, headed by Dr Craig Smith and Dr Stephen Fraser from
CSIRO, is about data logging while drilling. The technology used is a
gamma neutron activation tool, which ‘irrigates’ a rock bed surrounding
a drill hole with neutrons. The way the neutrons act in the space helps
determine major components of the rock around the hole. Project 2.2 is
also testing an autonomous shuttle that can carry out deviation surveys
and pick up geophysical data down a drill hole.
Project 2.3 aims to integrate geophysical and petrophysical data to
more accurately verify geological models during the exploration and
mining of a deposit. The team is testing a magnetic tensor gradiometer
capable of picking up local magnetic field disturbances that may signal
there is a substantial ore in the vicinity.
Project 2.4 is known as joint inversion of electromagnetic and seismic
data. It combines seismic and electromagnetic data to better model the
deposit around which the drill is operating.
Christian Dupuis explains mining projects can often span several decades
and as such, the geological and geophysical models often undergo
several iterations. As the depth of deposits increase, so does the
drilling cost. It makes sense to make the most of the investment and
gather as much information as possible. The upshot is that the total
number of drill holes required to define a resource will diminish.
“Mining in the future may become more of a data mining exercise than
a drilling exercise,” he says. “We’ll be feeding information into a model
that will inform our decisions about where to go and where not to go.”
58 | Asia Miner | September/October 2013

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Australian Mining Technology
Modelling mine power systems to optimize energy
ISSUES associated with power quality have an increasing effect on mine
operational costs. Weak grid inter-connect or standalone micro grid power
supplies may restrict operational capacity but to what degree is largely unknown.
Challenges associated with electrically isolated mining power systems
include the price of generation, security of energy supply, increased
sensitivity to large loads, especially transient loads and generally increasing
expectations to reduce greenhouse gas emissions.
Reducing energy consumption and costs, including consumption
associated with greenhouse gas emissions, can be achieved by implementing
efficiency measures, local generation of power, and better
interaction of loads and sources. Small-scale modelling of weak grid
and micro grid connected mine environments, with the capacity to include
renewable sources, allows for the study of longer term impacts
of mining operations on supply and associated interoperability issues.
The CRCMining Interoperability Laboratory project based at The University
of Newcastle is specifically designed to model mine power systems. The
project will provide the mining industry with tools and methods to design
and operate electrically isolated power systems with increasing penetration
of renewable energy sources, by examining problems in mine electrical
power systems due to weak and isolated power supplies, and investigating
solutions in a relatively low-cost and low-risk environment.
By interleaving power quality studies, load and voltage stabilization
projects with supply and renewable energy research, balanced and
industry focused solutions for all areas can be achieved without the
limitations of a silo research approach. This philosophy will allow projects
to be initiated at low cost for idea development and then extended
if suitable interest from industry is garnered. Equally, industry ideas or
issues can be investigated at minimal initial cost, with the result of providing
better problem definition and potential solutions.
As the range of equipment and power system topologies used in mines
varies enormously, the project approach is two-fold. Firstly, there are a suite
of very high-end software simulation packages that allow steady state and
dynamic simulation of complete systems right down to individual components.
Secondly, there is experimental aspect to the laboratory. This is a
hybrid system which incorporates a combination of scaled physical equipment
and emulated equipment implemented using highly configurable
power electronic converters and their associated controllers.
The laboratory incorporates ‘real’ components including diesel generator
sets, induction and DC machines, solar cells, passive loads and battery
storage. It is also able to emulate other sources such as wind turbines and fuel
cells as well as a wide range of passive and active loads by the clever use of
high bandwidth control of back to back and unidirectional converters.
Overall control and data acquisition for the system can be performed using
high bandwidth off the shelf National Instruments data acquisition and
control frameworks. By using this approach almost any system could be
investigated from overall power systems right down to individual components
of systems such as electric drives or static compensators.
The unique value of this project to industry is that it can identify areas
of strength and weakness for a mining scenario in a controlled and
measured environment. Both short-term and long-term research goals
can be met. Data can be gathered and assessed to determine the key
elements of mixed energy generation, with a view to optimizing operational
cost, power delivery capacity and power quality, while solutions to
existing and surfacing power issues can be investigated.
The project will enable CRCMining industry members to mitigate
the effects of weak grids on mine productivity through introduction of
researched and understood technologies into brownfield sites with a
minimum of risk. The benefits will be significant: effectively reduction
of energy costs and greenhouse gas emissions; maintaining reliability
of supply; less reliance on utility power supplies; and capacity to run
critical systems such as ventilation fans during power outages.
- From the CRCMining newsletter
CRCMining program aims to automate shovels
AN active research program of CRCMining,
supported by the Australian Coal Association
and JoyGlobal, is working towards automating
large mining shovels. The Shovel Load Assist
Project (SLAP) is developing operator assistance
technologies that will help operators of
electric mining shovels load trucks more efficiently
and safely.
SLAP has developed two technologies:
• TruckShield: A layer-of-protection that
prevents metal-on-metal collisions between
the shovel and truck that might
injure truck drivers or damage the truck
or shovel.
• AutoLoad: A semi-automated swing technology
that automates the swing, dump and
return phases of the shovel loading cycle.
The benefits of SLAP technology span shovel
safety, availability, productivity and maintenance
through faster shovel cycle times, lower
machine duty, improved material distribution
in trucks, fewer impacts between truck and
shovel and lower operator workload.
The project:
• Employs a functional safety lifecycle to iterate
the prototype TruckShield and Auto-
Load systems to achieve tolerable risk of
operation.
• Has developed and proved a fit-for-purpose
truck positioning technology to enable
TruckShield and AutoLoad to establish
the relative position of the shovel and
trucks.
• Has successfully trialled TruckShield in a
production environment with a manned
truck at Bracalba Quarry, demonstrating
the integrity of the system and its component
technologies.
• Conducted a human factors analysis of
shovel operation to identify areas that operators
find difficult, where SLAP technologies
can assist operators, and what gaps
remain.
• Extended the understanding of various
sensing technologies that can be used
to perceive the shovel work area (including
terrain and equipment units).
The project has shown that TruckShield
and AutoLoad have the potential to help
operators by addressing some of the
main avenues for human error in shovel
operation.
The current work of the project is to deploy
the technology at a production mine
site to allow for an evaluation of the benefits
of shovel operator assist technologies.
Ezymine is the CRCMining spin-off company
that owns and earns royalties from
the IP of the SLAP project, and is marketed
through joint venture partner, and CRC-
Mining member, JoyGlobal.
- From the CRCMining newsletter
A CRCMining research program is working towards
automating large mining shovels.
60 | Asia Miner | September/October 2013

Australian Mining Technology
Study examines remote control of bulldozers
BULLDOZERS often work in hazardous environments
and tele-operation provides a viable
means for enabling operators to perform work
without being directly exposed to the hazards
of these environments. Tele-operation is of
significant value in situations where equipment
must operate in dangerous environments or
isolated locations.
A particularly hazardous application of bulldozers
is their use on coal stockpiles. Much of
the effort to mitigate fatalities and serious incidents
by bulldozers falling into stockpile voids
has been focused on protecting the operator
in the cab by reinforcing the cab and windows,
along with other safety protocols. The
benefits of utilizing tele-operated bulldozers in
coal stockpile management tasks are compelling,
given the potential to completely eliminate
the risk of operator engulfment.
Bulldozers are prime candidates for tele-operation
in mining applications given their frequent
use in performing many hazardous
tasks. However, removing the operator from
the bulldozer presents many challenges associated
with reduced perception.
A recently completed CRCMining project
has explored the unique perception requirements
for tele-operation of bulldozers. The
motivation for this research was to determine
what factors are critical to achieving high levels
of tele-operation performance and user acceptance
to support the maturation of these
technologies.
This project explored the perception requirements
for tele-operation of bulldozers in nonline-of-sight
conditions. To conduct this investigation,
an enhanced perception cell capable
of high fidelity replication of motion, visual and
aural cues was integrated with an existing bulldozer
tele-operation system. The cell enabled
targeted analysis of the influence of individual
feedback cues on performance and user acceptance.
Experiments were conducted with the enhanced
perception cell for a structured bulldozing
task to better understand operator
requirements. Visual quality was found to be
the dominant factor influencing operator performance.
Motion feedback was found to
improve aspects of performance but no additional
benefit in task completion time beyond
that provided by enhanced visual quality. The
value of task visualization to support accuracy
and planning was also highlighted.
The project has established that with adequate
perceptual feedback, the productivity
of remotely controlled bulldozers can match
the performance of bulldozers with onboard
operators.
The future vision is that tele-operation stations
will provide an environment rich in feedback
information that enables performance
equal to (or better than) that achieved with
an operator on board. However, while some
elements of this vision are a reality, there remain
knowledge gaps to be bridged in both
the technology of remote operation and its
application.
Where an operator has a good line-of-sight
to the bulldozer, performance comparable
to onboard operation can be achieved. This
indicates the technology to convert operator
commands into machine actions is both mature
and fit-for-purpose. However, where the
operator relies on video feeds from cameras
mounted on the bulldozer, performance has
not yet matched the on board operator.
It is hoped that the knowledge presented
in the CRCMining ACARP research report
in March 2013 may support the maturation
of bulldozer tele-operation systems, leading
to wider uptake and utilization in hazardous
circumstances. The project was funded by
CRCMining, ACARP and Caterpillar.
- From the CRCMining newsletter
A CRCMining project has examined tele-operation
of bulldozers.
The future of Coal Seam Gas drainage
CRCMining has developed an advanced
tight radius drilling system (TRD) for extracting
methane gas from coal seams, which
uses water jet drilling to self-propel the drill
into the coal seam directly from a vertical
well. This technology has application on
both surface and underground mine sites,
making coal seams safe to mine and cost
effectively enabling the capture of fugitive
carbon emissions, as well as in the burgeoning
coal seam gas industry.
The steerable water jet drilling technology
can be deployed into vertical wells to install
multiple long (>300 metre) radials on multiple
horizons (coal seams). Rapid and continuous,
flexible and controlled, this step-change technology
boasts vastly superior value to surface
to in-seam techniques, and a controllable,
surveyed alternative to hydraulic fracturing.
CRCMining’s unique patented waterjet
drilling technology creates a quality, gauged
borehole with zero weight on bit. A compact
electronic survey system delivers accurate,
real-time survey information and allows the
tool to be steered to a desired target.
If TRD was used to assist in de-gassing
1% of thermal and metallurgical coal in
Australia then in excess of 200,000 tonnes
of CO2 equivalent gas could be captured
annually and utilized rather than vented to
atmosphere. At a value of $23 per tonne,
this represents an annual saving of $4.6
million.
Environmental benefits of TRD:
• A controllable Stimulation Technique –
steer the tool in seam
• Stay in seam – water-jets prefer to drill coal
• Environmentally sound – no additives
required
• Increased surface spacing of wells (reduced
surface infrastructure)
• Reduced total number of wells required
• Compact well site footprint.
Technical benefits:
• Multiple laterals means redundancy & flexibility
in difficult geology
• Multi-seam stimulation
• +300 metre laterals
• Connect to the reservoir
• Overcome near wellbore effects
• No mud cake skin effect in lateral
• CRCMining’s patented technology drills a
quality, gauged borehole.
Economic benefits:
• Superior connectivity means more gas,
sooner
• Superior coverage means greater cumulative
production
• Independent modelling suggests TRD is
the only technology that can make pre-gas
drainage of open cut coal mines safe economically
• Safe by design – jetting by remote control
• No people inside fence whilst jetting
• 3 Site personnel required to run entire system
• Annular BOP & Diverter used on well head
• Uses clean (bore) water, no chemicals.
- From the CRCMining newsletter
September/October 2013 | Asia Miner | 61

Australian Mining Technology
Chess meets ANSTO’s challenge
The work carried out by Chess Engineering at ANSTO’s Bragg Institute.
CHESS Engineering has been sub-contracted by the PM Design Group
to design, build and install a highly specialized access platform at the
Australian Nuclear Science and Technology Organization’s (ANSTO)
Bragg Institute in Lucas Heights, Sydney. The institute leads Australia
in the use of neutron scattering and X-ray techniques to solve complex
research and industrial problems in many important fields.
The project was to deliver a platform for the ‘EMU back scattering
spectrometer’, one of the state-of-the-art neutron-beam instruments
operating at the Bragg Institute. Importantly, the design had to meet all
ANSTO’s operational and safety requirements, be made of a number
of sub-assemblies to allow ease of dismantling, and be a framework
constructed of non-magnetic materials to enable the instrument to test
samples in a strong magnetic field.
The team at Chess Engineering quickly determined that the construction
would have to be of aluminium to meet these requirements.
Carbon storage facility takes shape
“This was an interesting project for us,” says Chess Engineering project
manager Elham Haddo. “The main challenge was the spiral staircase
leading to the platform which was rolled and fabricated in-house. Being
made of aluminium, this process wasn’t as simple as it seems and is
something we had not done before.”
None of Chess’ suppliers were able to roll the spiral stringer and handrails
for the staircase on their machines using aluminium, so Chess’
sheet metal supervisor designed a fixture to assist in this process and
it was successful. The Chess Engineering team completed the design
and fabrication stage of the project over several months, drawing on
their experience in design, drafting, sheet metal and aluminium welding
expertise.
“By drawing on the experience of the Chess team, and working closely
with the PM Design Group from the early design stages right to the
end, we were able to approach a difficult and
technical job and deliver a quality product that perfectly matched AN-
STO’s requirements,” says Elham Haddo. “It has been very rewarding
for Chess Engineering to deliver a quality, specialized product that will
be part of the Bragg Institute’s research. The client has undertaken
progress inspections, and is very satisfied with the outcome.”
Chess Engineering has the capability to design and manufacture
highly specialized equipment with complete expertise across product
design, manufacture, and installation. Chess Engineering is a division of
Chess Industries, an Australian-owned company, founded in
1967, that provides multi-skilled engineering services to clients in the
food, rail, manufacturing, mining, fabrication, printing and packaging
industries to name a few.
SINCE funding was announced towards the end of 2012, the National
Geosequestration Laboratory (NGL) has made significant steps
towards establishing itself as one of the world’s leading R&D providers
in the field of carbon storage, and geoscience more broadly.
Major equipment upgrades and laboratory enhancements to the
Australian Resources Research Centre (ARRC) and construction of
a new world-class CO 2
research facility at the University of Western
Australia have commenced, adding to the recent installation of a
state-of-the-art micro CT scanner at Curtin University. Both institutions
are NGL partners, along with the CSIRO, and the new facilities
will complement the extensive research expertise offered by the
three organizations.
The progress comes amidst a recent report released by the International
Energy Agency (IEA) which emphasized the increasing
difficulty of limiting a global temperature increase to 2 degrees C,
and the important role to be played by carbon capture and storage
(CCS).
“CCS is part of a portfolio of solutions that will help Australia and
the world achieve large cuts in emissions, while continuing to satisfy
our growing energy needs,” says NGL science director Dr Linda
Stalker.
“There is no single solution, but CCS has potential to significantly
reduce greenhouse gas emissions by removing large quantities of
CO 2
that would normally be released into the atmosphere, and instead
storing it safely deep underground.
“It is a technology that can be safe and effective for our climate,
health and environment. However, as pointed out by the IEA in its
report, Redrawing the Energy-Climate Map, a significant increase
in CCS capacity is required if it is to have a meaningful impact on
global emissions.”
The NGL is already providing initial scientific research behind the
South West CO 2
Geosequestration Hub project, which is funded
through the Federal Government’s Clean Energy Initiative, and examining
the potential for large-scale carbon capture and storage in
the southwest of Western Australia.
The study area has potential to store up to 240 million tonnes of
carbon dioxide in the Lesueur rock formation, and the NGL is working
closely with the Western Australian Government to determine the
feasibility of the site.
“Assessing the suitability of the area has been very much a
stage-gated process, where each individual requirement must be
met before proceeding to the next stage,” Linda Stalker says. “The
area is undergoing a rigorous assessment and so far the signs have
been positive, but it’s still early days in the overall process.”
The NGL is being established through $48.4 million in funding for
the Federal Government’s Education Investment Fund, and builds
on the successes of the Western Australian Energy Research Alliance.
As well as gaining access to world-class equipment and facilities,
organizations that partner with NGL can take advantage of
some of the finest geoscience capability in the country.
62 | Asia Miner | September/October 2013

Australian Mining Technology
Success for DNi test plant
DIRECT Nickel Limited’s (DNi) test plant at the Australian Minerals Research
Centre in Perth, Western Australia, has produced its first marketable
nickel/cobalt concentrate in the form of a Mixed Hydroxide Product
(MHP). Stage 2 of the test plant has been constructed and successfully
commissioned, which completes the full DNi Process flowsheet for the
operations now under way at the plant.
DNi’s CEO Russell Debney says this is another significant milestone and
the test plant technical program is on track to deliver on targets set for
2013. These targets include the generation of engineering and economic
data for design of a first DNi commercial plant, commencing in 2014.
The recently completed 10-day campaign used an Indonesian laterite
feed supplied by PT ANTAM, Indonesia’s largest nickel miner, under its
agreement with DNi. During the campaign, the circuit demonstrated
high extraction of nickel and cobalt from a mixed feed of 25% limonite
and 75% saprolite ore.
In addition to producing MHP, the circuit is recovering nitric acid for
recycling within the process and also recovering magnesium oxide from
its waste streams, demonstrating the key elements which distinguish
the DNi Process from existing laterite treatment technologies.
Russell Debney says first production of marketable nickel concentrate
at the plant is the culmination of several years’ work, with more than $40
million having already been invested in the company and its technology.
“Direct Nickel is now well positioned in its plans to introduce a revolutionary
extractive technology to unlock the potential of the world’s extensive
nickel laterite resources and provide a competitive supply solution
to the global nickel and stainless steel industries among others.”
Project manager and technical director Graham Brock leads a team at
the Australian Minerals Research Centre which includes personnel from
CSIRO, Teck Resources and RMDSTEM. He says, “The production of
nickel concentrate in the form of MHP so quickly after having the Stage
2 equipment commissioned was an excellent result.
”Over the past few weeks we have successfully processed laterite
samples from Indonesia and Brazil through the plant. The ability to
change seamlessly from one sample to the other highlights how robust
the technology is.”
With 12 of 19 campaigns completed and the flow sheet fully commissioned,
the test plant program will now move into optimizing the
process in continuous operation.
PT ANTAM and DNi recently signed an agreement to cooperate in the
development of nickel laterite deposits and processing plants using the
DNi Process in Indonesia. Under the agreement ANTAM and DNi will
continue to cooperate in the test plant operations and to share technical
results from the plant. Subject to positive results from the plant and
selection of an Indonesian plant location, ANTAM and DNi aim to execute
definitive agreements to develop the first nickel laterite processing
plant in Indonesia using the DNi Process.
Azimuth Aligner saves time … and money
AT a time when the resource sector is slashing costs to stay alive, West
Australian-based Downhole Surveys has developed technology that it
says can annually save the mining industry millions of dollars. By simply
reducing the process time spent aligning a drilling rig from 1.5 hours to
just 5 minutes, every drilling and mining company globally could benefit.
Downhole Surveys’ managing director Mike Ayris says the reduction in
process time is a permanent change, resulting in ongoing cost reductions
by way of improved productivity. “The mining sector is full of complicated
processes and often the time taken to complete a particular task is not
taken into consideration in the overall process. By simply reviewing every
step and making small changes, improved efficiency will result.”
The process time reduction identified relates to a unique gyro device
called the Azimuth Aligner, which displays direction and dip, and attaches
to the drill rig at time of setup, reducing the need for land surveyors
to align the drill rig and conduct numerous checks. It is operated by
the driller without any further supervision required. “With the knowledge
that the hole is being drilled in the correct direction, productivity is vastly
improved,” Mike Ayris says.
The number of annual per drill rig alignment errors is estimated at two,
he says, with an average downtime of 24 hours per setup error. “With
approximately 7500 drill rigs globally, the annual cost of drilling in the wrong
direction is estimated at $126 million. Drill rigs are generally charged out at
$350 per hour and by applying the 1.4 hour saving created by the Azimuth
Aligner, this makes for annual global industry saving of $300 million.
At the emergency access drilling project for the Port of Miami Tunnel
Project in USA the Azimuth Aligner is aligning a drill rig on each of the
100 freeze grout holes, ensuring each hole is set up precisely parallel. If
any of the freeze grout holes are not parallel they must be removed and
redrilled at the contractors cost. “The Azimuth Aligner is now regarded
as a ‘must have’ instrument on future civil engineering projects where
accurate drill hole alignment is important,” Mike Ayris says.
In the mining sector underground drill rigs are being aligned accurately
by the Azimuth Aligner at a number of underground mines in Western
Australia.
Downhole Surveys is an innovative West Australian-based company
with 23 years’ experience and a global reach, providing precision rental
equipment and directional surveying services to the civil engineering,
mining, exploration and drilling industries. Through constant research
and field testing the company has become recognized as a leader in
bringing innovative technology to the industry.
The Azimuth Aligner is being used in tunnel and underground mining applications
around the world.
September/October 2013 | Asia Miner | 63

Australian Mining Technology
New MVM for box hole excavation
By Davin Frankel
INCREASINGLY technology and innovation are playing a vital role in improving
mine efficiency and productivity with the main goal of reducing production
costs. Paramount to that is, of course, safety. Mancala, an Australian
company formed in 1990 to provide specialized mining services, considers
safety, productivity and innovation as three of five core values which
form the foundation of its operating model. The result of this pursuit has
been development of technologies that have come about through consultation
and working to address client needs or gaps in the market.
Mancala’s commitment to being a leader in mining engineering and
technology is evident through a new box hole excavation technique,
the mechanized vertical miner (MVM), which has been developed in
conjunction with specialist manufacturer Herrenknecht of Germany.
Mancala has long recognized the need for an efficient and safe method
of box hole excavation. The MVM1100 has the capacity to drill
vertical up holes of 1.1 metre in diameter up to 35 metres in length.
Applications include boring of box holes, slot raises and other vertical
mine development. The unit is remotely controlled and self-propelled.
High productivity is paramount in modern mines - a feature demonstrated
by the MVM’s ability to excavate a 1.0 metre diameter boxhole,
20 metres in length in under 30 hour period. Narrow vein mining has
also been identified as an opportunity to utilize the MVM where high
value deposits can be exploited safely with minimal dilution particularly
where the surrounding rock is weak and blasting may create high dilution
and potential safety risks.
The machine uses field proven pipe jacking techniques to create a
new approach to box hole drilling. This innovative use of existing technology
increases both work safety and production rates, resulting in
very significant time savings compared to conventional drill and blast
operations or other existing raise drilling methods.
Another area where Mancala has demonstrated an ability to identify a
need and create a solution is through development of a 350kw flameproof
power pack. The first of its type, the power pack was built by
UGM to power Mancala’s raise drills and permit them to be used safely
in underground coal mines. The main applications are drilling of staple
shafts and coal surge bins. Drilling staple shafts between coal seams in
a multiple seam deposit using raise boring techniques enables linking
to the existing vent system, thereby reducing infrastructure costs. The
power pack combines a quick detach system which enables ease of
mobility and minimizes transport disruptions.
- Davin Frankel is Mankala’s marketing and business development manager
The mechanized vertical miner (MVM) developed by Australian company Mancala.
ATC Williams forms rheology and slurry group
AUSTRALIAN engineering consultancy ATC Williams has appointed
specialist Dr Paul Slatter to head a new dedicated rheology and slurry
engineering group charged with applying the latest research to a growing
need to move valuable resources and waste products via slurries.
ATC Williams’ CEO Trevor Osborne says optimizing slurry pumping
has become increasingly important to mining and manufacturing companies
all over the world “as water becomes more valuable, mine and
plant sites become more remote and economic and environmental
pressures force companies to cut costs and increase efficiencies”.
ATC Williams has serviced clients in eight countries, adapting new technologies
to traditional processes to help optimize existing systems and
save millions of dollars. “New technology and research skills are critical to
better understand a product’s rheology, particularly when working towards
lower water content,” Trevor Osborne says. “We have, therefore, also
expanded our geotechnical and tailings testing laboratory with specialist
rheology testing facilities, including one of the few pipe-loops in Australia.”
The laboratory will be invaluable in helping Paul Slatter and the rheology
and slurry engineering group provide expert assessment, strategy
and execution for a variety of mining, and industrial organizations.
Until recently, Paul Slatter was Professor of Rheology and Fluid Engineering,
and director of the Rheology and Materials Processing Centre,
at RMIT in Melbourne. He will be working with his previous PhD
graduates who are also members of the new group at ATC Williams.
“Water and energy resources management is progressively becoming
a key issue for mining, industrial and commercial industries, including
pharmaceutical, manufacturing, food processing, utility, and water and
waste water treatment industries,” Paul Slatter says.
“Across a range of industries and particularly in mining, we design
and troubleshoot slurry transport and pumping systems, conduct specialist
laboratory testing for characterization of slurries, optimize slurry
systems for greater solids throughput, analyse pipe, open channel and
free surface slurry flow and characterize wear rates. These services are
becoming more important because operations are being increasingly
scrutinized by owners, investors, government and employees, forcing
companies to seek new ways to improve the bottom line and work with
environmentally sustainable practices.
“The solutions aren’t easy. Transporting liquid and semi liquid matter
is complex, unique to each situation and involves significant cost and
environmental considerations,” he says. “The issues we see vary - we
have areas in Western Australia where companies may pump slurries
hundreds of kilometres, and want to do this at low water content with
higher concentration to reduce overall water losses and, therefore
costs of make-up water.
“In contrast, in wetter areas in Queensland, a risk exists of temporary
closure due to excess water and flooding to the environment, in which
case there is less imperative for high concentration slurries. However
higher water content slurries will impact capital and operational costs
and an optimum balance needs to be found. Companies are ardent
about finding solutions, and our rheology and slurry team are resolute in
providing them,” he adds.
64 | Asia Miner | September/October 2013

Australian Mining Technology
Remote Control Technologies does ‘whatever it takes’
A dozer being operated remotely with technology from Perth-based Remote
Control Technologies.
ON April 10 this year, the largest man-made excavation in the world
experienced a massive landslide. “Whatever it takes!” were the words
Remote Control Technologies’ (RCT) managing director Bob Muirhead
used to get the company to reduce its normal deployment lead time
from 10 to just 3 weeks, to deliver a remote control solution to the
disaster struck mine.
The mine knew it was coming and prepared accordingly. However,
while the clearing of the 97 million cubic metres of rock and dirt was
an unprecedented challenge for the mine, fortunately, it was achievable
through the clever technology developed by RCT and installed on their
Cat dozers supplied by Wheeler Machinery.
What really emphasizes the significance of the RCT achievement,
however, was that the project was on the other side of the world, in
Utah, USA, from Western Australian-based RCT. It seems incomprehensible
that the WA company was faster to react than some local
suppliers, but according to Wheeler, who provided the remote dozers
CODES research lab extended
for the mining project, RCT was faster to react and had superior technical
support.
The safety of employees was of utmost importance and dozer operators
could not safely work in the disaster area. Remote control of dozers
was the logical option. RCT was able to design and manufacture three
dozer remote interfaces and four remote kits to suit the Caterpillar D8T
dozers used at the site together with spare remotes and support parts,
prepare the necessary documentation and ship the equipment, all in a
very small time frame.
“This is what we do,” said senior business development manager Phil
Goode, “we help our clients. Whether it is to solve a particular problem
or to improve safety and efficiencies generally, we are quick to react
with the right solution.”
Once on site, installation, commissioning and training were completed
in three weeks by the two-man RCT team. The purpose of the training
was to equip Wheeler and the mining company’s dozer operators
with the skills to clear the landslide in the safest manner possible so
they could resume normal operations.
“It was easy to work with the RCT team, the implementation went
seamlessly and they were keen to share their knowledge and experience
during the training, making us feel confident with operation of the
equipment,” said Wheeler Construction and Mining Technology general
manager Greg Evans.
For the Perth-based company, this demonstrates that specific client
requirements can be met effectively with the right technology and
quickly implemented anywhere in the world. For the client, the use of
innovative technology adapted to their machines and work needs limited
down time.
RCT is a developer of automation and control solutions for the mining
and, industrial industries. They have assisted companies in more than
60 countries globally to achieve higher productivity and safety levels,
THE global mining industry will benefit from an Aus$3 million, state-ofthe-art
extension to a minerals research laboratory based at the University
of Tasmania in Australia, which was officially opened this week.
Newcrest Mining, one of the world’s largest gold producers, has provided
$2.5 million for the new development at the Australian Research
Council (ARC) Centre of Excellence in Ore Deposits (CODES), with the
balance from the University of Tasmania and the ARC.
“This is a major extension to the existing laser analytical facility, which
is already considered one of the best in the world,” University of Tasmania
vice-chancellor Professor Peter Rathjen says. “CODES is leading
the world in the application of laser ablation analysis to sulphide ores
and mineral exploration targeting.
“There are very few facilities as well equipped as the Newcrest Laser
Analytical Facility to undertake this type of highly advanced and technological
research,” Peter Rathjen says.
CODES director Professor Bruce Gemmell says the new facility represents
“a major vote of confidence” in CODES by Newcrest. He says
more than 30 companies are using technology developed by the centre.
“These include companies operating in the great Witwatersrand
Basin in South Africa, the Canadian Yukon, Peru and here in Tasmania,
Western Australia and South Australia.”
Apart from Newcrest, companies supporting and benefitting from
CODES research include BHP Billiton, Rio Tinto, MMG, Bendigo Mining,
Sandfire Resources, AngloGold Ashanti, Newmont, Barrick Gold,
Teck, Vale, Gold Fields, Freeport and Anglo American.
The facility’s manager, UTAS Distinguished Professor Ross Large,
says the extension has the potential to build on a number of CODESled
breakthroughs that are helping to answer major fundamental
questions in earth science. “For example, a CODES team is using
the laser technique to track trace element concentrations of gold,
nickel, copper, arsenic and other metals in the oceans over the past
3 billion years.
“A significant breakthrough has also been made in developing a
new theory about four of the major mass extinction events on earth over
the past 500 million years,” Ross Large says.
Formed in 1989 and located at the University of Tasmania’s Sandy
Bay (Hobart) campus, CODES has grown substantially over the years
and is now widely regarded as a global leader in ore deposit research.
It is home to 40 highly qualified research scientists and nearly 90 postgraduate
students, further cementing its position as the largest university-based
team of ore deposit researchers in the world. It currently has
46 major research projects in 29 countries.
September/October 2013 | Asia Miner | 65

Supplier News
Konecranes gives Hexindo a lift
KONECRANES has delivered the highest levels of efficiency and safety
to Hexindo Adiperkasa Tbk, Indonesia’s leading company for excavator
remanufacturing, through the installation of overhead cranes at Hexindo’s
new facility. Hexindo is a division of Hitachi Construction Machinery
Co, a global leader in hydraulic excavators with more than 20,000
employees worldwide, and deals mostly with the remanufacturing and
assembly of excavators, dump-trucks and loaders.
“We used a couple of Konecranes units at our old facility and the reliability
was so good that we installed eight units for consistency at our
new facility,” says Hexindo’s division head of the remanufacturing facility
in Balikpapan, Mr Muklas.
The eight overhead cranes, with CXT wire rope hoists, in 5, 10 and
20 tonne lifting capacities, were installed with the construction of the
new Balikpapan facility in 2008-2009. They are used to lift a range of
excavator component parts, including engines, motors, transmissions,
spindles and smaller parts.
“One thing we like about using Konecranes is their maintenance. They
have a very fast response time, which means we can operate with less
downtime. That’s why they do all our servicing,” Mr Muklas says.
Hexindo’s Balikpapan facility upgrades the component parts of excavators,
to extend their lifetime and to save their customers from having
to purchase a whole new machine, which would be much more expensive.
“Our number one priority is safety, but it’s also important to
operate as efficiently as possible and with Konecranes we get both,”
says Mr Muklas.
66 | Asia Miner | September/October 2013
A Konecranes 20 tonne crane with CXT hoist lifting a component part.
CXT wire rope hoists utilize the latest advanced technology from the
Konecranes group to extend hoist operation cycles, safety and durability.
The versatile hoist can be adapted to a huge variety of applications
and ensures reliably operation, regardless of the conditions.
The compact dimensions allow the CXT to utilize smaller spaces more
efficiently, and different trolley configurations maximize the lifting height
potential. To further optimize the efficiency of the crane, the empty hook
can be driven with up to 50% higher speeds compared with the loaded
hook, allowing the operator to choose the most efficient way to operate
the hoist.
“CXT hoists also come with a range of optional features for customers
who are looking to further increase their efficiency and performance,”
says Konecranes Indonesia operations manager Ir Ferry Sutaryadi.
The latest CXT wire rope hoists are available with smart features including:
• Adaptive Speed Range (ASR) – this allows very slow speeds, which
are important in moment of load lift-off and lowering. It also has the
ability to lift up to 50% faster than traditional hoisting control. ASR is
typically used in light to medium lifting.
• Extended Speed Range (ESR) – this is an extension of the ASR that
allows even slower speeds. ESR is typically used in heavy to very
heavy lifting.
• Load control – designed to make the operator’s work safer and
more productive
• Positioning and area control – designed to assist the operator in
positioning the load more efficiently and accurately. It also allows the
crane’s working area to be adapted to the varying physical layout of
individual facilities and production lines.
Konecranes is a world-leading group of Lifting Businesses offering
lifting equipment and service that improve productivity in a wide variety
of industries. With more 12,000 employees spanning nearly 50 countries
and more than 600 locations, it has the resources, technology and
determination to deliver on the promise of Lifting Business. Products
of the Konecranes group, which has more than 420,000 cranes of all
brands under service contracts worldwide, are used by industries including
automotive production, energy and resources, manufacturing,
metal and mineral processing, primary product and paper processing
and ports and infrastructure projects globally.

Supplier News
X-ray ore sorting installation success
WOLFRAM Camp in North Queensland was first discovered in 1894, and
has operated intermittently under a number of owners producing tungsten,
molybdenum and bismuth concentrates. In 2008, Open Cut Mining and
Ore Processing through a new concentrator commenced operation, however
the plant operated for less than three months when technical difficulties
coupled with a shortage of working capital, further compounded by the
global financial crisis, resulted in a suspension of operations.
Wolfram Camp Mining was acquired by the current owners in 2011 and
embarked on a plant modification and expansion program.
The process plant was designed to treat ore from an open pit mine at an
annual rate of 150,000 tonnes, through a process comprising two-stage
crushing; ball mill grinding in closed circuit with a screen; bulk sulphide
flotation, followed by selective flotation of molybdenite into a concentrate;
and flotation tailings treated in a gravity circuit comprising centrifugal jigs,
and shaking tables producing a + 60% Wolframite concentrate.
The plant modification program comprised improvement to ball mill
screening, cycloning to remove slimes, the addition of spirals, shaking tables,
removal of centrifugal jigs, drying, magnetic and electrostatic separation.
Limited test work had been carried out by the previous owners
into x-ray ore sorting and indications were that a high proportion
of barren material could be rejected with minimum loss of valuable
minerals. This offered a process route to increase annual tonnage
treatment by rejecting a significant amount of waste ahead of the
grinding and downstream process plant.
Pilot ore sorting was carried out at site which confirmed earlier
findings, then an arrangement was entered into with Steinert Australia
to lease a commercial capacity Steinert XSS-T ore sorter
for on-site trials which further confirmed the amenability to X-ray
ore sorting and culminated in acquisition of a new unit which was
commissioned in March 2013 and incorporated into the Wolfram
Camp process.
This meant that ‘below cut-off grade’ ROM material could be upgraded
to economic grades. With all the improvements implemented
successfully, the plant now operates at 300,000 tonnes per annum
with a feed material particle size of +15-45mm, head grade of 0.08%
tungsten and bulk reduction of 86%.
Simulating underground soft rock mining
THOROUGHTEC has led the way into simulation for underground soft
rock mining by developing and customizing technology in accordance
to BHP Billiton specifications. Adapting ThoroughTec’s tried and tested
software architecture for the soft rock underground environment has
challenged the development team, despite extensive experience in
simulating underground mining equipment and mining operations.
The primary development will feature six different machine types making
up the whole range of underground equipment used in the soft rock underground
coal mining environment, including a Joy continuous miner and
shuttle car, a Fletcher bolter, a Sandvik LHD and two utility-type vehicles.
“The BHP Billiton project has been a significant challenge, both in
terms of complexity and scale,” says ThoroughTec’s executive vice
president - R&D Dr John Waltham. “Firstly, in developing the underground
world and the artificially intelligent electric vehicles that operate
in it, we had to model the electric cables that power them. They had
to roll and unroll correctly, fall realistically, and also not get in the way of
other vehicles.”
“The ventilation system used in underground soft rock mining was
another element of this project that took some time to solve, but the
standout challenge was accurate modelling of the breakout of rock
as the continuous miner, a hugely complex machine, cut away at the
rock face. I can’t reveal exactly how we accomplished this, but what
we achieved is incredibly realistic replication of the continuous mining
process.”
ThoroughTec has been a world leader in underground mining simulation
for more than 15 years, so it was a logical next step to utilize
this expertise to expand into the area of underground soft rock mining.
“The CYBERMINE range of simulators has been extremely successful
in realizing productivity gains and safety improvements in both the hard
rock underground mining environment and in surface coal mining operations,
so it was a rational progression for us to apply these proven
training technologies and techniques to the underground soft rock environment”,”
says John Waltham.
ThoroughTec has been designing and manufacturing simulators for
more than 20 years and is the leading simulator system supplier to the
South African military. It is also the largest global supplier of both surface
and underground simulators in the mining and construction industries,
with more than 500 simulator units deployed worldwide.
September/October 2013 | Asia Miner | 67

Supplier News
ABB electrical package for Mongolia
Mongolyn Alt Corporation’s Tsagaan Suvarga Copper-Molybdenum
Project in the eastern Gobi Desert in Mongolia.
POWER and automation technology
group ABB has won an order for a major
electrical equipment package from
Mongolyn Alt Corporation (MAK) for its
greenfield copper and molybdenum
project Tsagaan Suvarga. The site is in
the eastern Gobi Desert in Mongolia,
about 560km south of Ulaanbaatar.
Integrated into pre-fabricated containerized
E-houses, ABB s scope of
supply includes 22/6.6 kV switchgears,
DC power supply, uninterrupted power
supply, transformers, 400 V motor
control centres, variable-speed drives,
variable-speed multi drives as well as
a power management system based on the state-of-the-art process
control System 800xA and IEC 61850.
The incorporation of the equipment into pre-fabricated E-houses reduces
the erection work on site and thus optimizes the overall time
schedule. Furthermore, the solutions are proven for stable operation
under extreme variations in temperatures from -35 to +40 degrees C.
ABB s electrification solutions will allow Mongolyn Alt Corporation
to achieve optimal operational conditions to reach highest production
at lowest energy costs, says ABB
s mining business head Giuseppe di
Marco. “Our well established relationship
with the customer, early involvement
in basic engineering and the
ability to provide first-class equipment
for use under extreme climatic
conditions were major factors for winning
this order.”
Deliveries are scheduled to take
place from December 2013 to May
2014 and first plant start-up is planned
for September 2014.
Established in 1993, Mongolyn Alt
Corporation is one of Mongolia’s largest
national mining companies with three open-pit coal mines in operation.
With a targeted production volume of 40,000 tonnes of copper,
Tsagaan Suvarga is expected to become the third largest copper mine
in Mongolia.
ABB is a leader in power and automation technologies that enable
utility and industry customers to improve their performance while lowering
environmental impact. The ABB Group of companies operates in
around 100 countries and employs about 145,000 people.
Weir acquires centrifuge manufacturer
WEIR Minerals has expanded its range of coal processing solutions with
the acquisition of coal centrifuge manufacturer Aspir. The Aspir brand is
renowned in the coal processing industry for products that utilize the latest
technology available in coal preparation and de-watering applications.
Aspir business unit manager Wayne Trench says, “We’ve got many,
many decades of collective experience in doing things in the coal
space. We offer an innovative, high quality line of supply for coal processing
products that we understand and do well.”
The Aspir acquisition means Weir Minerals is able to provide increased
minerals classification solutions and a more complete range of
coal processing solutions. This expanded offer will continue to reinforce
Weir Minerals’ commitment to best practice.
Keys on the list of products are Aspir coarse and fine coal centrifuges.
Aspir centrifuges combine high-quality components with one of the
most advanced drive mechanisms in the industry to maximize service
life with minimal maintenance costs.
The product range also includes wedge wire screens and flat panels,
tile lined dense medium cyclones, sieve bends and underpans, Wear-
Stop ceramic repair compound as well as other complementary wear
products. Weir Minerals now offers centrifuge spare parts as well as on-site
inspections, and servicing along with high quality centrifuge rebuilds.
Under the Weir Minerals banner, the Aspir brand will be retained. “We
don’t want to lose what we’re buying,” says Weir Minerals regional managing
director Asia Pacific Rob Brown.
“The strong reputation in the Aspir brand means that its inclusion
amongst the other brands of Weir Minerals further bolsters our reputation
as a leading manufacturer of all types of high quality minerals
processing equipment.”
With Weir Minerals’ financial resources behind it, the R&D program
for Aspir products will be accelerated, driving new innovations to
market sooner, with a focus on improving industry standards and
positively changing the future of coal and minerals processing.
Existing Aspir customers will continue to enjoy the same levels of
personal service they have come to expect, with the added bonus
of being able to access Weir Minerals’ extensive network of service
and support.
The acquisition integrates the Aspir business into a much bigger organization,
resulting in a stronger aftermarket presence. Wayne Trench
says, “I honestly believe that now our customers are going to get an
even better experience when dealing with us in the future.”
Weir Minerals has service
centres conveniently located
close to the coalfields of
New South Wales,
Queensland, Victoria
and Indonesia. These
now also offer
aftermarket coal
industry expertise that
comes with the
acquisition of the Aspir
business.
An Aspir centrifuge. This equipment
is used in the coal industry.
68 | Asia Miner | September/October 2013

Supplier News
Asia an important market for Dassault Systèmes
ASIA is an important and growing market for
Dassault Systèmes and is generating the
global company’s best results. Dassault has
a strong presence throughout the Asia Pacific
and is enjoying strong growth in China and
South Korea. It expects this to continue, particularly
in China, Korea, Japan and ASEAN
countries like Indonesia, Malaysia, Vietnam,
Thailand, as well as Australia.
The acquisition last year of Gemcom has had a
global impact on Dassault as it has added to the
evolution of Dassault’s 3DEXPERIENCE strategy
through its emphasis on mineral resources and
its strength in many resource-rich countries. One
of the 12 industries in which Dassault’s 3DEXPE-
RIENCE is being implemented is natural resources
and Gemcom, now GEOVIA, plays a major
role in this sector and in future growth.
Dassault Systèmes executive vice president
Global Affairs and Communities Philippe
Forestier says the Gemcom acquisition was
triggered by the evolution of 3DEXPERIENCE
which sees Dassault striving to serve business
and people; to harmonize product, nature and
life. “Many did not understand why we were
acquiring Gemcom but we wanted to create a
natural resources industry branch to our experiences
and Gemcom, now GEOVIA, was an
obvious partner.
“We will continue to grow and develop new
solutions to serve the natural resources industry.
This will be done step-by-step and
GEOVIA is the first step in this strategy. We
want to serve businesses and serve people
in society by centring activity on the consumer
and, thereby provide value to consumers within
their individual environments.
“Natural resources play an important role in
this experience and, like the other industries,
we want to serve this by not only focusing on
the product but also on all other aspects impacting
on consumers and the resources they
require. We have done a similar thing in life sciences,
including health care, in order to protect
people and enhance their lives,” Philippe
Forestier says.
Dassault Systèmes vice president Energy,
Process and Utilities Stephane Declee says
resources are not infinite and it is becoming increasingly
important to manage all resources in
a more sustainable way. GEOVIA focuses very
well on mineral resources but over time we want
to increase our focus to all natural resources.
He says growth is creating strong demand
throughout Asia for energy. “There will be growth
of 60% in energy demand by 2040 for developing
economies of Asia, which also means
increased demand for other mineral resources,
such as iron ore and copper, as well as many
other natural resources. These countries today
are achieving urbanization and industrial growth
in much less than the 60-100 years it has taken
other countries and are on a fast track to learning.
“Dassault has a strong presence in China and
is involved in a number of projects aimed at helping
cater for the strong energy demand. As well
as the traditional power sources of coal and hydro,
we are helping China develop nuclear power
facilities and wind energy. Not many people
realize China is the world’s number one producer
of energy from wind with plans to grow this
further. Dassault has a good footprint in these
areas, as well as oil and gas, which will help China
meet the demand. China is looking closely
at green energy and the majority of people are
keen to move forward in this regard, to help create
a better China,” Stephane Declee adds.
Dassault started in the aerospace industry
in 1981 but, Philippe Forestier says most
avenues for growth today are coming from
other industries, including automotive and life
sciences. “Our present growth focus is set
firmly on the 3DEXPERIENCE, which was defined
in 2011 as our new 10-year strategy. We
don’t build a strategy like this in a minute to be
achieved right now, it takes time. It is a new
era for Dassault – a new series of steps for the
future and we have only just embarked on the
journey. We envision that in 2021 the world will
be a 3DEXPERIENCE – a revolution in society
that will see business focused on the needs
of consumers.
“We have a strategy focusing on 12 industries
that will enable us to achieve the 3DEXPERI-
ENCE aims. We have defined between 15 and
30 experiences and our aim is to address any
interaction with potential customers around experiences
and the value created by them.
“We will try to provide solutions and experiences
to help create a better world and this is
exciting as it involves the use of new technologies
as well as technologies and experiences
we have developed in the past. Embracing
this will help the world solve problems of urbanization,
food supply, resource management,
energy provision and security, upgraded
education, and skills shortages,” he adds.
September/October 2013 | Asia Miner | 69

Product News
Cat adds 6020B to hydraulic mining shovel line-up
The new Caterpillar 6020B Hydraulic Mining Shovel on display at bauma 2013
in Munich, Germany.
THE Cat® 6020B Hydraulic Mining Shovel is a new model in the extensive
line of Cat hydraulic mining shovels. The clean-sheet design features a
22-tonne payload and 220-tonne operating weight and teams with the Cat
777G Off-Highway Truck for optimized loading and hauling
Designed for simplicity and reliability without compromising safety, the
6020B features a new, state-of-the-art cab and operator station with
class-leading visibility provided by the large floor window and expansive
windshield and side windows. Unrestricted lines of sight to the crawler
tracks and pit floor aid the operator when repositioning the shovel and
when loading trucks. The innovative cab design also includes two additional
seats for a trainer and an observer. The 6020B three-seat cab
design is the first in this size class of shovels.
Modular construction with a walk-through power module enables easy
access to components and superior serviceability. Additionally, modular
design facilitates shipping and field assembly. The single-engine configuration
also simplifies maintenance. The 778-kW Cat engine powers
advanced hydraulics, which deliver industry-leading system efficiency.
The new 6020B in backhoe configuration made a preview appearance
at bauma 2013 and will be commercially available in the fourth
quarter this year.
The newly designed cab and operator station is the product of a
multi-year collaboration with mining companies and hydraulic shovel
operators from across the globe. Cat says the result is a productivityand
safety-enhancing design through unmatched visibility, increased
comfort, and easier training while operating.
The operator station offers a wide range of adjustability to enable operators
to adapt the machine to suit personal preferences. The seat
suspension and armrests adjust to fit an extended range of body sizes,
and the display screen adjusts for brightness and contrast to suit the
operator and to adjust for ambient conditions. The climate control system
automatically maintains the operator’s selected temperature.
The isolator-mounted cab effectively reduces fatigue-causing vibration,
and the cab floor features a no-step design that reduces tripping
hazards. The cab configuration also places an additional emergency
stop button within reach of the trainer and observer seats.
The trainer seat positioned adjacent to the operator seat provides
an optimal view of the working face and facilitates communication
during training. The elevated observer’s work station is positioned
behind the operator seat and provides space for a laptop computer
as well as an unobstructed view of the operator station and the
digging environment.
BEUMER fillpac R fills all types of bags
INTRALOGISTICS professional BEUMER Group has expanded its
product portfolio with the rotating filling machine BEUMER fillpac R. This
machine, designed for hourly capacities of 300 to 6000 bags, can fill all
types of valve bags. The complementary bag placing technology for all
common bag types rounds out the product portfolio. The weight accuracy
of the bags is guaranteed by a calibratable weighing unit.
Airborne & Ground Geophysics
AEROMAGNETICS
RADIOMETRICS
X-TEM HELI TDEM
Greg Reudavey or Katherine McKenna
T +61 8 9477 5111 F +61 8 9477 5211
info@gpxsurveys.com.au
Together with a special bag placer, the BEUMER fillpac R can fill even
woven polypropylene bags. The three-position cylinder that regulates the
coarse and fine flow is protected from dust, because it is positioned vertically
and outside of the dirty area. The cylinder for bag discharging is also
located in the dust-free zone above the filling spout. This solution minimizes
wear and tear on both cylinders and therefore ensures longer service life.
Beumer has also equipped the optimized filling machine with an automatic
bag weight correcting device. This device automatically adjusts
the weight of subsequent bags.
Almost all built-in components of the BEUMER fillpac R are freely
available commercially. This reduces delivery times for spare parts and
lowers capital costs for the user. Also, the system is designed so that it
is easily accessible for maintenance. The generously dimensioned filling
impeller reduces fill times and therefore increases throughput without
impairing weight accuracy. The BEUMER system is also equipped with
an ergonomic control panel. The improved human-machine interface
concept makes work simple and intuitive.
BEUMER Group is an international manufacturing leader in intralogistics
in the fields of conveying, loading, palletizing, packaging, sortation
and distribution technology. Together with Crisplant a/s and Enexco
Teknologies India Ltd, BEUMER Group employs about 3200 people
and achieves an annual turnover of about 500 million Euros.
70 | Asia Miner | September/October 2013

Tenova Pyromet cold commissions furnaces
Product News
The SARDA Metals and Alloys (SMAL) furnace near Vishakhapatnam in India.
TENOVA Pyromet, part of Tenova Mining & Minerals, has completed
cold commissioning of two 33 MVA ferro-manganese/silico-manganese
furnaces for SARDA Metals and Alloys (SMAL) in India. Awarded
in 2010, the contract from SMAL covered supply of the full electrode
columns and automatic furnace controller (AutoFurn), as well as the
full basic plant design.
This greenfield development includes its own 80MW captive power
plant and the generated capacity will be distributed between the two
furnaces and the local power grid. Plans for the world-class plant include
an extensive greenery project and a rain water harvesting dam,
which will reduce the plant’s overall carbon footprint, making it one of
the most environmentally friendly plants in India.
In carrying out the project, Tenova Pyromet drew on its operational
plant experience as well as its state-of-the-art software tools, including
the latest 3D CAD, FEA and CFD software, to take full account of
the characteristics of the client’s raw material in the development of
the critical furnace dimensions.
Mass and energy balance models enabled the study of the effects
that input changes, such as different raw materials, would have on
the process. The process design was complicated by the need to
blend the lower manganese-content Indian ores with other higher
grade manganese ore from South Africa or Australia, in a two-step
process route required to produce 78 % high carbon ferro-manganese
and silico-manganese with 65% manganese.
Tenova Pyromet’s understanding of the different mineralogies of
the South African, Australian and Indian ores enabled an optimized
process to be designed, in conjunction with use of Tenova Pyromet’s
submerged arc furnaces and furnace controllers. Optimization
included not only the process but, as the mass and energy balance
models are directly linked to financial models, also the project NPVs,
IRRs, break even and cash flows, in conjunction with changes in input
costs, assumptions, input raw materials and process parameters.
These models were used ‘live’ to be able to find the best solution for
the client’s specific situation.
The Tenova Pyromet
electrode columns designed
and supplied to
SMAL offer exceptional
operational availability and
power efficiency, with features
including a robust
lower electrode system
with protection for key
equipment, and a modular
arrangement for easy
maintenance. The slipping
device, a market leader in
electrode control, has a
clamping shoe configuration
that is able to exert
adequate pressures on the
electrode casings, reducing
the risk of casing buckling/damage.
Tenova Pyromet’s AutoFurn is used to automate the furnace, controlling
electrode movement and the transformer. By prioritizing the alarming
convention, it is possible to operate these large plants with a lean
workforce.
The raw material handling systems to feed the furnaces make use
of a recent Tenova Pyromet development, the rotary conveyor, which
feeds the furnace charging feedbins. By being able to rotate both clockwise
and anti-clockwise, the rotary conveyor reduces lag time between
charging of each bin.
“The advantage of Tenova Pyromet’s extensive capability and wealth of
operational plant experience is clearly demonstrated by the fact that all
our furnace designs exceed contracted performance guarantees, and
comply in all safety and environmental aspects,” says Tenova Pyromet
project manager Sachin Arjun.
Tenova Pyromet has worked with both the private and state sector ferroalloy
industry in India since 2004, when it was contracted by Nava
Bharat Ferro Alloys to design and supply the electrode column and electrode
seals for its 24 MVA silico-manganese furnace. It has also worked
for a number of other companies, including Steel Authority of India Ltd,
Indian Metal & Ferro Alloys Limited, Visa Steel and Visa Bao.
September/October 2013 | Asia Miner | 71

Product News
BMT payload monitoring systems for Teck
BMT WBM, a subsidiary of BMT Group, an international design, engineering
and risk management consultancy, is set to deliver two new
Pulse TerraMetrix RS systems to Teck Resources, Canada’s largest,
diversified resource company. Machine health, production and payload
measurement will be managed by the PULSE TerraMetrix System on
the shovel fleet at Teck’s Greenhills operation, near Elkford, in southeast
British Columbia. This includes one P&H4100 XPB and two P&H4100
XPC machines, one of which is being assembled.
Following the final implementation of the Pulse TerraMetrix RS system
on the P&H 4100 XPB in 2012, Teck staff recognized the benefits of
this innovative payload monitoring system together with its interactive
server database, allowing personnel to easily analyze health, production
and payload data.
BMT WBM Canada director Charles Constancon says, “Unlike other
payload monitoring systems which apply electrical parameter estimation
techniques to approximate the payload, the Pulse TerraMetrix RS
system employs a loadcell based device and directly measures the
inertial and dynamic loads applied to the dipper. As a result, more accurate
payload measurement is maintained, even under severe dynamic
loading conditions.
“Our system has now become the system of choice at Teck’s Greenhills
operation and by delivering added value benefits to the customer
we hope it will become the reference for other Teck operations,” he says.
Kobelco 50-tonne excavator arrives
Configured to communicate with any third party truck dispatch system,
the Pulse TerraMetrix RS system can be applied to different models
of electric rope shovels including P&H4100 and CAT 7495 machines.
Recent developments of the system have included a comprehensive
machine health monitoring capability using strain sensing transducers
placed on the A-frame and boom structures.
These transducers allow the system to track boom jacking and adverse
swing events, identify alarm events and quantify the mechanical damage
per swing cycle. Productivity indicators provide meaningful online feedback
to the operator including average bucket/truck payload, overall shift production,
swing cycle time and operating and delay times.
The system developed for Teck is configured to communicate through
the mine wireless mesh to a server located in the mine’s administration
offices. Data is saved in a SQL database and is accessible through an
advanced server analysis program located on the mine’s intranet. This
enables maintenance, training and production staff to easily access,
process and analyse the data on a shift basis, to identify where production
shortfalls arise and where further operator training is required.
BMT WBM is a leading edge consultancy in mechanical, water and environmental
engineering and hydraulics. It employs about 160 staff, consisting
of highly qualified engineers, biologists, ecologists, scientists, and field
and office technicians. Initially based in Brisbane, Australia, BMT WBM has
expanded to include offices across Australia and North America.
THE latest addition to Kobelco’s excavator line up, the SK500LC-9, has
reached Australian shores, bringing with it increased power, enhanced
fuel efficiency and a larger, safer cab.
Kobelco Australia general manager Doug McQuinn says the new
50-tonne excavator model is attracting interest. “The first two units arrived
in Australia in June and are available for sale through our dealer
network. We are fielding enquiries from customers and we expect early
orders.”
The new model features a Hino P11C-VC six-cylinder common rail
engine that delivers 10% more productivity and better fuel efficiency
than the previous model, the SK480LC-8.
“The Tier 4A Hino engine in the SK500LC-9 uses an EGR cooler
which helps combustion and the inclusion of a DPR filter results in reduced
emissions into the environment,” Doug McQuinn says. “Meanwhile,
more engine torque and ‘intelligent’ hydraulics give you faster
cycle times to get more work done.”
The new machines feature Kobelco’s familiar H-mode and S-mode
options for heavy-duty and standard work, along with a new ECO
mode. “ECO mode delivers fuel savings of up to 13% and increases
the work volume per litre of fuel by 8%. Compared with earlier models,
the latest unit also gives 5.4% higher engine power output and a maximum
torque increase of 5%.”
He says that in addition to the improved productivity, the new model
offers enhanced safety and comfort. “The new cab has rollover protection
and is certified to 56,000kg to cater for large front attachments.
The cab has falling object protection (FOPS) and its roomy dimensions
make it comfortable for operators as well as offering plenty of storage
space. The cab is designed for minimal vibration and is pressurized to
72 | Asia Miner | September/October 2013
eliminate dust. You get excellent rear visibility thanks to the low engine
cover and a wide-angle rear view camera that comes standard.
“Kobelco’s Intelligent Control System recognizes the operator’s
moves and assists by providing power when and where it is needed.
Cushioned transitions between functions reduce jerkiness during high
speed movements.”
The new model features a seven inch colour monitor with easy-toread
controls and a sophisticated attachment mode that allows the
operator to program 10 different flow and pressure settings to accommodate
a wide variety of attachments.
The SK500LC-9 is a robust excavator with an operating weight of
almost 50,000kg – significantly heavier than earlier models. “The long,
beefy X-frame provides excellent stability and balance,” Doug McQuinn
says. “The model also
features a high capacity
hydraulic system that
can be adjusted from
inside the cab and
two auxiliary
hydraulic modes
that let you
switch between
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September/October 2013 | Asia Miner | 75

Exploration
Great expectations for Mt Adrah Hobbs
SOVEREIGN Gold continues to increase the potential of its Mt Adrah
Hobbs gold deposit in southern New South Wales as estimates over the
length of Pipe 1 increase. Results released in mid-August confirm that the
width of the pipe at a depth of 942 metres is about 110 metres wide.
The results include 514 metres from 336 metres @ 1.2 grams/tonne gold
within a broader zone of 606 metres @ 1.1 grams/tonne. Higher grade intersections
include 72 metres from 488 metres @ 1.3 grams/tonne, 54
metres from 618 metres @ 1.4 grams/tonne and 66 metres from 774
metres @ 1.4 grams/tonne. These grades are similar to a previous hole
vertically above which returned 400 metres @ 1.4 grams/tonne.
The deposit sits on the same geo-structural system as Newcrest
Mining’s Cadia Ridgeway gold mine, which hosts 60 million ounces of
gold equivalent and Rio Tinto’s Northparkes gold mine, which hosts 8
million gold equivalent ounces. It is 60km southeast of the regional city
of Wagga Wagga.
Gossan Hill Gold CEO Kris Butera says, “To have both the depth and
width potential of the system validated by grades as good as, if not better
than, most of the large bulk grade systems, even on an equivalency
basis, of the Lachlan Fold Belt, really does highlight the potential for the
Mount Adrah deposit to host a world-class gold system.” Gossan Hill
gold is a subsidiary of Sovereign Gold.
The next deep drill holes are designed to determine the strike length
of the pipe, now estimated to be 250-300 metres, which is an increase
from initial estimates of 200 metres. The company was due to start
drilling another hole on August 20 which aims to test the strike extent
of the Hobbs 1 Pipe to the ESE. A subsequent hole will test the strike
length toward the WNW.
Planning also continues for the undertaking of a large-scale induced
polarization survey to aid in the targeting of additional pipes or exten-
Visible mineralization in core from the Hobbs Pipe 1 deposit for Sovereign Gold’s
Mt Adrah Hobbs project.
sions to the current mineralization. The scoping study under way for the
Hobbs Pipe 1 deposit, with guidance from a team of highly respected
consultants and mine developers, is initially focused on optimizing gold
recovery, options for low-cost bulk mining, sulphide concentrate offtake
options and potential revenue generation for the project.
Results continue to support Sovereign’s conceptual exploration target
of up to 4 million ounces of contained gold within Pipe 1. The first hole
at the target struck continuous mineralization that is longer than the
world’s tallest building. That hole was drilled to a depth of 1030 metres,
beyond the initial 1000 metre target, with a continuous intersection
observed from surface to a depth of 886 metres. In comparison the
world’s tallest man-made structure, the Burj Khalifa in Dubai, stands at
829.8 metres.
Encouraging Tuvatu drilling results
LION One Metals continues to advance its Tuvatu Gold Project in Fiji
towards the permitting phase. Ongoing resource expansion drilling is
expected to lead to an updated resource estimate to include the Murau
vein system while the company is also planning additional underground
work and diamond drilling as well as further geotechnical studies and
economic analysis.
Lion One holds five special prospect licences covering 38,000 hectares
on the Fijian islands of Viti Levu and Vanua Levu. The islands are on
the boundary of the Indo-Australian and Pacific tectonic plates, which
host many major gold and base metal deposits in the South Pacific.
Tuvatu is one of several epithermal gold systems situated along Fiji’s
corridor of mineralized volcanic centres and is in Navilawa Caldera, a
volcanic intrusive complex 50km southwest of the Tavua Caldera that
hosts Vatukoula, one of the first major gold deposits identified in the
Southwest Pacific. Vatukoula’s historic production exceeds 7 million
ounces of gold over its 75 years of operations.
Gold mineralization at Tuvatu is hosted in a series of low-sulphidation
epithermal gold-silver vein systems at the periphery of the intrusive
stock of Navilawa Caldera. Gold mineralization is typified by native gold
as well as gold-silver tellurides within banded quartz veins and stockwork
zones. Two major vein corridors have been extensively drilled to
date, however, a number of other known prospects have yet to be drill
tested on the extensive property position. A total of 637 drill holes have
been completed on the property to date, as well as 1600 metres of
underground workings.
The most recent drilling phase has included 37 step-out and infill
diamond drill holes for a total of 8063 metres. Significant results to
date include 2.32 metres from 148.54 metres @ 62.81 grams/tonne
gold; 3.78 metres from 121.99 metres @ 16.15 grams/tonne; 7.49
metres from 155.05 metres @ 23.03 grams/tonne; 7.83 metres from
130.92 metres @ 17.69 grams/tonne; 2.25 metres from 78.99 metres
@ 25.53 grams/tonne and 3.66 metres from 142 metres in the same
hole @ 15.68 grams/tonne; and 14.99 metres from 185.69 metres @
14.28 grams/tonne and 1.63 metres from 203.68 metres in the same
hole @ 38.38 grams/tonne.
This phase has targeted 560 metres of strike extent of the east-west
trending Murau structural corridor. Multiple sub-parallel near-surface,
high-grade veins have been encountered. The system remains open
for expansion along strike and down-dip.
Murau corridor is west of the north-south trending UR structural corridor
and current resource. The UR area hosts an indicated mineral resource
of 172,000 ounces and an inferred mineral resource of 480,000 ounces.
76 | Asia Miner | September/October 2013

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