Stewart R. Wallace — 1919–2009 - Society of Economic Geologists

JULY 2009 No 78 SEG NEWSLETTER 39
reconnaissance permit and prospecting
license applications to RBG Mineral
Industries, a company majority owned
by Binani Zinc, with Rajasthan and
Gujarat government-owned companies
holding minority interests. The prospects
surround Vedanta’s Rajpura Dariba
and Sindesar Khurd zinc-lead mines.
Historic resource estimates on the India-
RBG prospects are 95 to 135 Mt @ 2.2 to
4.5% Zn and 0.7 to 1.8% Pb.
Environmental clearance for production:
Geomysore has applied for a
400,000 tpy mine and concentrator
mine on its Jonnagiri gold prospect in
Andhra Pradesh, and Ramgad, a subsidiary
of iron ore miner MSPL, for a
300,000 tpy mine and mill on its Sangli
gold deposit in Karnataka. Neither company
has released resource estimates.
Pebble Creek obtained environmental
clearance for production at its Askot
VMS deposit in Uttarakhand.
In order to have the best of both
worlds, here is our ongoing catalog of
Western services firms that have offices
in India or business associations with
Indian firms. These include exploration,
drilling, geochemical analysis and
assaying, engineering, metallurgy, feasibility
studies and mine and mill construction:
Alcock McPhar, AMC, Atlas
Copco, Ausenco/Sandwell, CRU, Elliott
Geophysics, Environmental Quality
Management Systems (EQMS), Golder,
Hatch, Met-Chem, Mitchell Drilling,
Moonlake, Pinnacle Drilling, Salva,
SGS, Shiva Analyticals, SRK, Tech know,
Transnational Drilling and Mining
Associates (TDMA), Wardrop and
Versadril. Please send any omissions or
corrections to us at nevin@pebcreek.com.
The Geological Survey of India’s
mandate has been far broader of late
than most geological surveys and it has
been overtaken by changing times. The
Ministry of Mines’ “High Powered
Committee” (yes, that’s its name!)
released its comprehensive report on the
GSI, noting its glorious 158-year history,
continuing with some current dysfunctions,
and concluding with astute recommendations.
See http://mines.nic.in,
Geological Survey of India tab, then the
tab GSI Portal.
By now the new Congress Party-led
government is old news. We hope it
exercises its strong mandate for reform
as initiated and promoted by Prime
Minister Dr. Manmohan Singh throughout
his long career in public service.
LAOS
Amanta Resources granted Japan Oil,
Gas, and Metals National Corp (“JOG-
MEC”) an option to earn a 51% interest
in the Luang Namtha Cu project in
northern Laos by investing US$3M prior
to end Mar 2012.
Exploration drilling by Oz Minerals
at Thengkham South (Sepon Copper)
cut new copper skarn to the north of
previously identified mineralization.
Better results include 30 m at 1.3% Cu
and 0.4 g/t Au (155 m downhole) and
20 m at 2.7% Cu and 0.3 g/t Au (38 m
downhole). A small drilling program at
Sepon Gold was completed at Nalou
South, returning only low-grade values
(up to 6 m at 0.7 g/t Au).
China Minmetals Non-Ferrous
Metals Co., Ltd. (“Minmetals”) offered
US$1,206M to financially troubled
miner OZ Minerals for its miningexploration
assets, including Sepon
Copper and Sepon Gold—see above.
Excluded from the sale are the
Prominent Hill Cu-Au mine (S
Australia), the Martabe Au project
(Indonesia) (to be sold to another
Chinese group), certain exploration
assets in Cambodia and Thailand, and
equity holdings in listed companies.
PanAust announced an updated
reserve/resource for its flagship Phu
Kham Cu-Au operation. Proven and
probable resources sum to 146 Mt @
0.66% Cu, 0.26 g/t Au, and 2.1 g/t Ag
whereas measured, indicated, and
inferred resources amount to 194 Mt @
0.65% Cu, 0.25 g/t Au, and 2.0 g/t Ag
(0.3% Cu cutoff). Taken together, Phu
Kham contains 4.89 B lbs Cu, 2.76 Moz
Au, and 22.2 Moz Ag.
The appetite for resource companies
by the Chinese wasn’t sated by OZ
Minerals and Rio Tinto—wholly stateowned
Guangdong Rising Assets
Management will invest A$180M
(~US$141M) to acquire a 19.9% interest
in PanAust. Guangdong operates a
number of Pb-Zn-Ag, Fe ore, W, V-Ti,
and REE mines in Guangdong and
Guangxi provinces, S China.
MONGOLIA
Unionized employees of Centerra
Gold’s Boroo mine initiated a work
stoppage over wage demands. As a
result, mining and milling at Boroo
have been temporarily suspended.
Ivanhoe Mines and Rio Tinto continue
to await the approval for the Oyu
Tolgoi Cu-Au investment agreement.
Some analysts believe that the May 25 th
election victory of President Ts.
Elbegdorj, a member of the opposition
Democratic party, may complicate matters
for the miners because of his populist,
antiforeign inclinations.
Khan Resources released the feasibility
study results for its Dornod U
project showing an IRR (after tax) of
29.1% and NPV (10% discount) of
US$276M. Study employed a long-term
U price of US$65/lb U3O8 and throughput
of 3,500 mtpd over a 15-yr mine
life, generating 3.0 M lb U3O8/yr at a
cash cost of US$23.22/lb U3O8.
Peabody Energy completed the ac -
quisition of a 50% interest in Peabody-
Polo Resources B.V., a joint venture
that holds Polo Resources’ Mongolian
coal interests. Peabody has committed
to an investment of US$23M.
The prefeasibility study for Red Hill
Energy’s 100%-owned Ulaan Ovoo
thermal coal project calculated an aftertax
NPV (10% discount) of US$250M
and a DCF-IRR of 19% based on an
assumed coal price of US$76/Mt (fob,
Port of Nadhodka). Initial capex costs
are estimated to be US$337M to build a
5.9 Mtpa saleable coal operation.
SouthGobi Resources retracted the
resource estimate announced last July
for the West Field portion of its Ovoot
Tolgoi coalfield after learning of errors
made by The Americas Group
(Lakewood, CO) which led to an overestimation
of the resource. The current
mining plan and operations will not be
impacted as they are based on an earlier
resource estimate.
Western Prospector Group and
CNNC International Ltd (“CNNC
Intl”) announced a definitive agreement
whereby CNNC Intl will offer to
acquire all of the common shares of
Western for C$0.56 per share in cash,
valuing Western’s equity at ~C$31 M.
As luck would have it, soon after the
Mineral Resources Authority of
Mongolia suspended Western’s exploration
licenses for its Gurvanbulag U
deposit, citing violations. Later CNNC
Intl extended the offer beyond the initial
closing date to June 29 th.
PHILIPPINES
Indophil Resources signed a MOU with
Anvil Mining to assume Anvil’s position
in an exploration and development
agreement with Itogon Suyoc Resources
regarding the Itogon Au project in the
Baguio district in northern Luzon.
Intex reported a substantial 64%
increase in size of its Lower Kisluyan
portion of the Mindoro Ni laterite
deposit. The new measured & indicated
laterite resources contain 92,359,000
DMT (dry metric tonnes) grading 0.92%
Ni (0.7% Ni cutoff) in addition to
3,834,000 DMT of inferred resources.
Two of the first three holes drilled by
Medusa Mining at
the Lingig Copper
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Discovery yielded
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