Gold and Copper – Page 3 – Ying Hui International

Rio Tinto to invest in stronger US copper supply

Major miner Rio Tinto is looking to invest more in its Kennecott operation near Salt Lake City, Utah, in a bid to strengthen its copper supply in the US.

To do so, Rio will increase production from underground mining at the site while also improving the health of key assets.

A total of $US498 million in funding has been approved to deliver the increase in production and is expected to commence in 2024.

Rio said the production will ramp up steadily over two years from 2024 in order to deliver 250,000 tonnes of additional mined copper over the next 10 years.

“We are investing to build a world class underground mine at Kennecott and strengthen our processing facilities, to meet the growing demand for copper in the United States, a key material for domestic manufacturing and the energy transition,” Rio Tinto Copper chief operating officer Clayton Walker said.

“This investment will position Kennecott to continue the strong contribution it has made as part of the Salt Lake Valley community for 120 years, injecting about $1.5 billion annually to the local Utah economy.”

Rio will also invest $300 million for a rebuild of the Kennecott smelter, the largest in the history of the site.

The investment is the latest in a series copper investments, signalling the growing importance of the resource.

Earlier this week, Glencore finalised the sale of its CSA copper mine in NSW to Metals Acquisition Corp (MAC) for $US1.1 billion ($1.64 billion), while Evolution Mining extended its Ernest Henry mine life to 2040.

Regis Resources sees gold

OLIVIA THOMSON

Mid-tier Australian gold producer Regis Resources has released its annual mineral resource and ore reserve update for the 2022 calendar year.

The company said its mineral resources and ore reserves show progress against its long-term strategy, as well as provides a solid platform to launch the next phase of growth.

Highlights from the report include underground reserves outpaced depletion for the second year in a row as new results highlight underground life extensions at the Duketon gold project and the Tropicana joint venture, which Regis Resources chief executive officer Jim Beyer said was pleasing to see.

“We are extremely pleased that our underground mines at both Duketon and Tropicana have outpaced depletion for the second year in a row. We have spent the last two years investing in these mines and it is very satisfying to deliver reserve growth on these investments over this short time horizon,” Beyer said.

“It is still early days in the maturity of these undergrounds and we look forward to the continuing growth potential as we mine deeper. Our long reserve life of eight years and located wholly within Australia provides a strong platform to deliver on our long-term growth objectives and achieve superior returns for our shareholders.”

Other highlights from the report includes group ore reserves of 3.6 million ounces (Moz) and group mineral resources of 7.0Moz, both as of 31 December 2022.

There was an increase in new ore reserves of 210,000 ounces (koz) and an increase in new mineral resources of 400koz, both offset by the 2022 calendar year depletion.

Long term gold price assumptions for the calculation of reserves and resources were updated but remain at moderate levels at a weighted average of $1800 per ounce for reserves and $2430 per ounce for resources.

Additionally, early results from the Garden Well exploration decline at the Duketon project has reinforced the potential for a new production front and growth in ounces per vertical metre. The underground site also established an exploration target.

Glencore closes sale for Cobar copper mine

ALEXANDRA EASTWOOD

After selling its CSA copper mine in Cobar, New South Wales, to Metals Acquisition Corp (MAC) for $US1.1 billion ($1.64 billion) earlier this month, Glencore and MAC have officially closed the sale.

Under the transaction, Glencore has received $US775 million in cash and $US100 million in shares, along with:

$US75 million deferred payment to be paid within 12 months
$US150 million payment contingent upon future copper prices
1.5 per cent life of mine net smelter return royalty

Glencore will offtake 100 per cent of the copper concentrate produced and MAC will assume ownership and the full operation of the mine.

“The acquisition of CSA represents a strong strategic fit for MAC. Our management team’s operational expertise, understanding of regional operations and relationships with local stakeholders uniquely position us to identify and realise the full potential value of the asset,” MAC chief executive officer Mick McMullen said in 2022.

“We believe that copper has favourable fundamentals that will continue to support an elevated copper price.

“Copper is expected to play a key role in the global energy transition ‘megatrend’, with approximately one million tonnes per annum of new supply required from 2024 onwards in order to meet the surging demand forecast.

“With few new projects globally in the pipeline, increasing permitting issues and jurisdictional risk, and declining copper grades across the industry, we believe that there are significant challenges ahead to close the projected supply deficit.”

True North Copper begins ASX trading

OLIVIA THOMSON

Australian near-term copper producer True North Copper will commence trading on the Australian Securities Exchange (ASX) as of today.

The news arrives as Truth North Copper’s (TNC) merger with Duke Exploration was completed June 7 2023, after being first announced February 28 2023.

Prior to its listing, TNC completed an underwritten capital raising, and a priority offer to existing Duke Exploration shareholders, raising a total of approximately $37.3 million (before costs) at $0.25 per share.

TNC is a copper, cobalt and critical minerals mining company based in Queensland, Australia. Its principal assets include the copper-gold Cloncurry project and the high-grade copper cobalt Mt Oxide project.

The company aims to be Australia’s next copper producer through its Queensland-based portfolio of copper and cobalt assets. TNC managing director Marty Costello described the ASX listing as the latest step towards reaching this goal.

“Our ASX listing is the latest milestone in our transformation into Australia’s next copper producer,” Costello said.

“With funds raised via our offer and our recently completed acquisition of the high-grade Mt Oxide copper-cobalt-silver project, we have all the assets in place to achieve this. This timing is excellent given the current price cycle for copper and expected supply deficit in the next few years.

“We have a large combined indicated, measured and inferred JORC resource base containing 326,000 tonnes of copper as well as significant cobalt, gold and silver and infrastructure including a copper concentrator, solvent extraction plant and copper sulphate crystallisation plant.

“We plan to move into production in the second half of (2023), subject to successful technical studies and further financing if required, while we will continue to explore our projects for opportunities to expand our resource base, with drilling commenced at Mt Oxide’s vero resource underway.”

Glencore sells copper mine for $US1.1 billion

ALEXANDRA EASTWOOD

Image: Glencore CSA Mine

Coal miner Glencore will sell its CSA copper mine in Cobar, New South Wales, to Metals Acquisition Corp (MAC) for $US1.1 billion ($1.64 billion).

CSA is an established, high-grade producing, long-life underground copper mine with an estimated current mine life of over 15 years, and MAC has identified opportunities to further extend it, subject to exploration success.

The sale is the latest indicator of copper’s growing importance, after Evolution Mining extended its Ernest Henry mine life to 2040 earlier this week.

Similarly, South32 is looking to grow its portfolio, identifying a copper mine that could be an M&A fit. The copper outlook continues to be supported by the rising decarbonisation narrative, with the commodity a highly efficient conduit for renewable energy systems such as solar, wind, hydro and thermal energy.

The Glencore/MAC deal has been on the table for some time now, with the companies entering into an agreement back in March 2022.

“We believe that copper has favourable fundamentals that will continue to support an elevated copper price.

“Copper is expected to play a key role in the global energy transition ‘megatrend’, with approximately one million tonnes per annum of new supply required from 2024 onwards in order to meet the surging demand forecast.

MAC will acquire 100 per cent of the issued share capital of Cobar Management from Glencore. Cobar Management owns and operates the mine.

The company has made arrangement for the copper streams with Osisko Gold Royalties in the US.

“CSA is a high-grade, long-life asset, with significant upside that can be unlocked by the MAC management team,” Osisko president and chief executive officer Sandeep Singh said.

“We are pleased to see this important transaction nearing completion, and look forward to having both the silver and copper streams contribute to our near-term cash flows.”

Newcrest gains management of Juri joint venture

OLIVIA THOMSON

Greatland Gold has announced that the management of the Juri joint venture (JV) will transfer to Newcrest, its joint venture partner from July 1.

The Juri JV is an unincorporated joint venture between Greatland Gold and Newcrest. Greatland own 49 per cent of the JV and Newcrest own 51 per cent. The JV was formed in November 2020 to accelerate exploration at the Paterson Range East and Black Hills exploration licences.

Under the terms of the farm-in and joint venture agreement which governs the Juri JV, Newcrest could elect to become the joint venture manager at any time following an initial period.

Newcrest has now exercised its right to do so and will assume this responsibility from the beginning of the 2024 financial year. The transfer of management of the Juri JV to Newcrest does not affect any of Greatland’s other rights as a joint venture participant.

Greatland managing director Shaun Day said the company welcomes Newcrest elevating its engagement and interest in the Juri JV.

“Greatland strongly believes in the prospectivity of the Juri Joint Venture tenure and will continue to be an active participant following the upcoming management transition,” Day said.

“The shift of Juri Joint Venture management to Newcrest provides Greatland’s exploration team the opportunity to put greater focus on our 100 per cent owned portfolio of highly prospective tenure together with our responsibilities as the new manager of the farm-in and joint venture arrangement with Rio Tinto on the Paterson South project.”

Greatland has the intention to continue as an active and supportive joint venture participant given the potential for the discovery of new intrusion-related gold-copper deposits similar to its Havieron gold-copper deposit, Newcrest’s Telfer gold-copper mine and Rio Tinto’s Winu copper-gold deposit.

The Evolution of Ernest Henry

TOM PARKER

The Ernest Henry operation. Image: Evolution

Evolution Mining has doubled the copper and gold reserves and extended the mine life to 2040 since it purchased the Ernest Henry mine outright in January 2022.

The completion of Ernest Henry’s mine-extension pre-feasibility study (PFS) – announced on Monday – has seen the mine’s ore reserve increase 126 per cent from a December 2022 estimate to 77.4 million tonnes, with contained copper increasing 103 per cent to 589,000 tonnes and contained gold jumping 124 per cent to 1.11 million ounces.

The PFS indicates the mine extension could deliver approximately 655,000 ounces of payable gold and 375,000 tonnes of payable copper, delivering an internal rate of return of 28 per cent (based on a base case of $2400 per ounce of gold and $12,000 per tonne of copper). This equates to a net-present value (NPV) of $690 million.

Capital costs would be $450–500 million, with 60 per cent of this supporting development below the 750mRL (metres relative level). Majority of the capital would not be required until the 2026–27 and 2027–28 financial years.

Ever since Evolution acquired 100 per cent of Ernest Henry, the company has been aggressively exploring the project, regularly announcing resource upgrades and increases in the mine’s copper potential.

Evolution has also announced its board has greenlit capital investment for the expansion of its Mungari plant in WA, with a $250 million investment to boost throughput from 2 million tonnes per annum (Mtpa) to 4.2Mtpa.

“Mungari has demonstrated its capacity to consistently and reliably deliver approximately 135,000 ounces per annum in recent years,” Evolution managing director and chief executive officer Lawrie Conway said.

“This plant expansion unlocks the very large regional resource base, reduces all-in-sustaining costs (AISC) by 18 per cent to $1750 per ounce, extends the mine life out to 15 years, and grows production to over 200,000 ounces post commissioning.

“The expansion was always envisaged and formed part of our due diligence when we acquired the Kundana and East Kundana properties in 2021. Having successfully integrated the operations, this is now the next logical phase of making Mungari a cornerstone asset of Evolution.”

Evolution has also announced a restructure of its debt profile which it said will unlock an additional $445 million of liquidity over the next three years. The restructure included a $US200 million ($303 million) US private placement (USPP) and the replacement of existing $590 million term loan facilities with a reduced four-year, $300 million loan.

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Is South32 eyeing another copper mine?

TOM PARKER

As South32 looks to grow its portfolio, the company seems to have identified a copper mine that could be an M&A fit.

According to The Australian Financial Review, South32 has sounded out a potential acquisition of Khoemacau Copper Mining which operates its namesake copper mine in Botswana.

Khoemacau ramped up to full production in February – achieving 3.65 million tonnes per annum (Mtpa) of throughput – and has a nameplate production capacity of 60,000 tonnes per annum of copper, with silver as an added-value product.

Khoemacau has an estimated mine life of 20 years, producing copper at C1 cash costs of $US1.15 per pound. Mining is currently taking place from Zone 5 – an underground mine where three corridors are producing an average of 1.2Mtpa of ore each.

It is understood South32 has engaged RBC Capital Markets as it prepares an indicative bid for Khoemacau Copper Mining, while the AFR also believes the company could come up against opposition, including from Sandfire Resources.

Khoemacau could be seen to complement Sandfire’s Motheo copper mine, which produced first copper concentrate in late May.

South32 chief executive officer Graham Kerr recently suggested copper, zinc and nickel were the three commodities driving the company’s M&A strategy.

The major currently produces copper from its 45 per cent stake in the Sierra Gorda mine in Chile – an asset it acquired in February 2022.

The company also has a series of earn-in agreements with resource companies around the world. This includes two emerging copper exploration projects in Argentina – Chita Valley and Don Julio.

Kerr said Argentina could be a copper jurisdiction to keep an eye on in years to come.

“Argentina’s become an interesting location,” he told reporters at a Melbourne Mining Club luncheon in late April. “When we first started doing some work there, we were probably the only ones. You’ve got BHP there, you’ve got Barrick there, you’ve Glencore there – everyone’s sort of pouring money into that jurisdiction at the moment.

“If you look at where it is, it’s on the other side of the Chile mountains where basically all the copper is. So I think that’s an area that’s going to develop pretty quickly. The challenge around that jurisdiction is it tends to be on average higher levels of arsenic, which typically you blend out, or you look at new technology to remove it.”

Elsewhere, South32’s portfolio is made up of commodities such as alumina, aluminium, zinc, silver, lead, nickel and manganese.

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Ramelius provide golden operations update

OLIVIA THOMSON

Ramelius Resources has provided an exploration update on its Penny mine and other exploration projects within its portfolio of gold assets in Western Australia.

The Penny gold mine is located approximately 150 kilometres south-east of the Mt Magnet operations and 550 kilometres north-east of Perth in WA.

Ramelius has reported that the Penny gold mine received its final ore haulage approvals on May 11, and its haulage schedule is in place to clear site stockpile by June 30. The operation has seen underground diamond drilling commence with visible gold seen in core outside southern boundary of Penny North’s mine plan.

Ramelius’ Bartus East site also saw diamond drilling continuing with results from shallow-angle holes including 60 metres at 7.82 grams per tonne (g/t) Au from 448 metres, with an estimated true width of approximately 45 metres.

The Mt Finnerty joint venture (JV) Ramelius shares with Westar Resources saw ongoing surface diamond drilling yielding recorded an excellent follow-up result of 8.70 metres at 13.4g/t Au from 173.5 metres.

Adjacent to the previously reported 13 metres at 4.37g/t Au and eight metres at 4.87g/t Au, Ramelius said further drilling is planned at the JV once structural interpretation is confirmed.

Ramelius managing director Mark Zeptner said the progress made on its various gold projects was satisfying.

“It is pleasing to have finally obtained the full ore haulage approvals for our high-grade Penny mine, which should see us clear the site stockpiles and mine production, in what promises to be our best Quarter for the financial year,” Zeptner said.

“In addition, our exploration and resource development teams continue to hit high grade material at Bartus East, which confirms similar wide, high-grade intercepts to those received late last year.

“Our Mt Finnerty JV with Westar Resources is also looking more and more interesting with additional high-grade hits and the geologists beginning to understand the controls to the mineralisation.”

The strong results seen from Ramelius’s gold portfolio comes as the company progresses towards a compulsory acquisition of Breaker Resources‘ remaining shares.

What does the Newmont takeover mean for the Aussie gold industry?

TIMOTHY BOND

newmont, gold, newcrest, industry, mining

With the Newmont takeover of Australian gold miner Newcrest now given the green light by the board, Australia’s gold landscape is set to change forever.

Newcrest has a strong portfolio of assets which the US gold giant is evidently keen to get its hands on, such as the Brucejack gold and silver mine in Canada, the Lihir gold mine in PNG, Cadia Hill in NSW, and the Telfer mine in WA – both among Australia’s largest gold mining operations.

Newmont already owns the Boddington mine in WA and the Tanami mine in the NT, so the takeover will put the company in control of four out of six of Australia’s largest gold mines.

But industry experts from the Australian Financial Review (AFR) are speculating that not all of Newcrest’s assets will make the cut, and will be divested before the dust settles.

Newmont chief executive officer Tom Palmer told AFR that he considers only two of Newcrest’s assets “tier one”, which are Cadia Hill and Lihir.

“Those assets are tier one, world-class by any measure. So, they are firmly in the portfolio,” he told AFR.

When the ink dries, this will give Newmont a portfolio of ten tier one assets.

Palmer also showed a keen interest in Newcrest’s Canadian assets, Brucejack and Red Chris, which are located nearby its own Saddle North project. Palmer called this combination of gold assets a “golden triangle”.

“I would call the golden triangle a tier one district,” he said.

That’s not to say that all everything else faces divestment, but it seems that Newmont will be considering its new assets very carefully.

“We are certainly looking for value over volume,” he said.

“So as we work our way through understanding the portfolio, we will be making judgements about what our go-forward portfolio is.”

newcrest, cadia hill, mine — Newcrest’s Cadia Hill is the second largest gold mine in the country.

If shareholders vote in favour of the Newmont takeover, foreign ownership of Australian gold assets will rise above the 50 per cent line, industry analysts from Surbiton Associates have revealed.

“In the early 2000s, the control of the Australian gold industry stood at 80 per cent,” Surbiton managing director Sandra Close said.

“It dropped to just under 30 per cent Australian control as overseas gold companies bought up Australian operations, and it was when the Aussie dollar was down around 50 (US) cents, so it was pretty cheap for them to buy the operations.

“Over time a lot of those operations were sold, so we’re currently looking at 60 per cent Australian control in the gold industry.

“But the recent announcement with Newmont and Newcrest, and we’ll be watching that closely, if that did go ahead it would mean Australian control would fall just below 50 per cent again.

“Whether we’d see yet another round of acquisitions as we did in the early 2000s is a pretty interesting question.”

The spot price of gold is currently trading at US$2015.60 per ounce.