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Jan 2010 - Gryphon Minerals

Gryphon Minerals Limited (GRY) –Moving its Banfora Gold Project in Burkina Faso towards a Scoping Study and BFS during 2010.

  • Gryphon Minerals’ (GRY’s) current main focus is on its Banfora Gold project in Burkina Faso. GRY has reviewed prospects in and adjacent to Burkina Faso with a view to keeping GRY as a West African gold company, while possibly undertaking an IPO of its WA gold and nickel projects
  • Burkina Faso is a stable West African country located north and adjacent to the Ivory Coast and Ghana. Its current government has enhanced its infrastructure, inflation is negligible, roads are good and radiate from the capital of Ougadougou, while traffic is significantly less congested than Dakar in Senegal. There is a main railway link to Abdijan in the Ivory Coast, and the main crops are cotton and rice.
  • GRY’s ~35km x 35km Banfora Gold Project is located in SW Burkina Faso on the Tongon/Senoufo greenstone belt (one of the many major greenstone belts that pass N/S through the country), above the river border with the Ivory Coast.
  • It is an area that contains a number of significant gold mines, such as Randgold’s 4 to 5 moz Tongon mine (in the Ivory Coast) on strike to the south, Resolute’s Syama (5moz mined, 6.5moz resource) to the NW (on strike from Perseus and Etruscan). Further NW is Anglogold/Randgold’s Morila (>5moz).
  • GRY have already established a >1moz resource to a depth of ~100m, mostly at Nogbele and are currently infilling/upgrading the resource targeting towards 2moz or higher with a view to completing a scoping study that leads into a BFS during 2010. Additional resource progress is being made at nearby Fourkoura, although there are historic artisanal gold workings in a number of areas of the property.
  • While there are a number of historic and new artisanal workings (following the drill rigs / exploration progress), the artisanal workers have moved on and the old workings bulldozed (partly due to reducing the spread of malaria). However, it could be seen that the artisans were mostly focusing solely on the near surface gold-in-quartz mineralisation, under the laterite cover down ~7m to 10m to the water table, and usually missing the halo alteration.

Feb 2010 - Catalpa Resources

Catalpa Resources Limited (CAH) –Cracow could achieve >100,000ozpa for ~10yrs as a Significant Asset for Catalpa

  • Catalpa’s merger with Lion has resulted in a far simpler share structure and a 30% holding in the Cracow gold mine in QLD. Cracow appears to have a market perception of only being a 3 to 5 year life mine at ~100,000ozpa. However, that vastly underestimates its potential with exploration alone having added at least the 100,000ozpa mined for the past 5 years, maintaining resources ~1moz at ~8g/t.
  • The Cracow plant has already gradually crept up to 42,000tpm (500,000tpa) following the replacement of the secondary crusher and some cyclones. With possible further modifications, production ~550,000tpa may be achievable.
  • The original NCM target at Cracow was a deep porphyry copper (and it is still a target), but the mine switched its focus to the historic higher grade veins following the successes at the nearby Pajingo mine, and since then has made a number of discoveries, including the recent apparently higher grade Phoenix ore shoot.
  • The size of the ore shoots at Cracow has been significant, typically ~300m to 400m long by 150m to 250m high as in Crown at 680,000oz, with Sovereign and Kilkenny both initially at 200,000oz. The intersection of Phoenix in the decline infers that it also could be ~300m to 350m long. Royal was high at ~350m for its ~500,000oz.
  • Construction of the plant at Edna May, appeared to be well ahead of schedule, and looks impressive considering it is the second hand Big Bell plant. Its only sign of age being some of the belt idlers. The pit was also taking shape, looking neat.
  • CAH has already had two unexpected “wins” at Edna May, being the ~30,000t soft backfill in the previous open-cut available to dry commission the plant at 0.8g/t to 1.0g/t, and the original hard rock bund wall (around the edge of the open-cut) available to wet commission the plant at >1g/t. The plan was to use lower grade (ideally <0.8g/t) to wet commission, but this ore is readily available at little cost.

Apr 2010 - Vantage Goldfields

Vantage Goldfields Limited (VGO) –Increasing Production to ~50,000ozpa

  • In April/May 2010, Vantage Goldfields Ltd (VGO) expects to raise A$30m in an IPO (led by Shaw Corporate) for its wholly owned subsidiary, Eastern Goldfields SA, resulting in 224m shares on issue at a nominal price of A$0.40c for a market cap of A$89m.
  • VGO’s main assets are all in the Barberton region of Eastern South Africa, and comprise of the operating Lily underground gold mine (that is undergoing a mill expansion to ~400,000tpa), recommissioning the Barbrook mine and plant complex, and exploration over ~165sq km of the Barberton Greenstone belt (including the old Worcester gold mine).
  • The Barberton Greenstone Belt is comparable to the typical greenstone gold mine deposits of WA, yet it has not been subjected to standard Australian geological exploration techniques. For example, although it supported ~350 mines in its heyday and produced >10moz, no one has ever flown aeromag there, which is 101 basic geology in Australia. VGO intends to fly helicopter aeromag in JQ 2010.
  • VGO initially mined Lily as an open-cut at ~2.2g/t and ~10,000ozpa for ~5 years, before declining underground in June 2007 and switching to full underground production in January 2009. Recognising the need to upgrade the plant, Barbrook was acquired providing greater production potential to ~50,000ozpa.
  • VGO had intended to expand earlier, but were caught in the GFC limiting the ability to raise finance, until now. During that period VGO undertook studies and examined the capability of bringing Barbrook back into production, while exploration found depth extensions to the old Worcester gold mine (NW of Barberton, on a classic NW/SE structure).
  • There appears to be significant upside potential for VGO in the Barberton Greenstone Belt of South Africa.

May 2010 - Mundo Minerals

Mundo Minerals Limited (MUN) – Aiming to Increase Production to 100,000ozpa by 2012/13

  • Mundo Minerals Ltd (MUN) currently has two operating gold mines in South America, being Engenho near Belo Horizonte in SE Brazil and Torrecillas near Chala in Southern Peru. There are also two advanced exploration properties in Brazil being Jacqueira and Tocantins in northern and central Brazil respectively.
  • Engenho has settled down to produce ~25,000ozpa from its ~22,000tpm plant based on recovered underground grades ~ 3g/t from its namesake Engenho orebody, and has established 3 other orebodies which it intends to bring into production, being Crista, Olhos and Mazoca, stepping up to ~50,000ozpa.
  • The Engenho plant capacity is being almost doubled through adding a duplicate ball mill and two tanks, for treating the higher grade ~ 4g/t to 5g/t apparently simpler Crista mineralisation, initially as an open-cut in late 2010 and later underground. The current plan is to bring in Olhos as Crista goes underground.
  • Torrecillas has increased production to ~8,000oz to 9,000ozpa from toll treatment of its namesake Torrecillas underground mine’s vein being ~ 12,000tpa at ~20g/t. Two other veins (5th November and Torrechico) are under evaluation to establish their strike lengths and average grades, for completion of a BFS and possible plant construction near Chala, which may be delayed by cashflows to ~2012.
  • Depending on lode thicknesses, strike length continuity and better ground conditions than the Torrecillas orebody, Torrecillas’ production could gradually increase to 30,000ozpa and later 50,000ozpa with a conceptual eventual target of 100,000ozpa. When combined with Engenho, this takes MUN’s potential production up to >100,000ozpa by 2012/2013.
  • MUN is also progressing with exploration at Jacqueira to establish a minimum specified resource during 2010, while also making progress at Ampar in its Tocantins tenements.

Jun 2010 - Kingsgate Cons

Kingsgate Consolidated Limited (KCN) –Receiving renewed BOI incentives for the new Chatree North Plant, paves the way to a very profitable future Kingsgate

  • Kingsgate should score a double-premium for having no RSPT payments (because its operations are not in Australia) and receiving the BOI investment incentives (the same as before : 8 yrs’ tax-free, then 5 yrs at 15% tax, as Thailand moves ahead in encouraging mining investment). Receipt of the BOI, means that production from the second train of the Chatree plant could occur during SQ2011.
  • KCN’s Chatree gold mine in Thailand was a hive of activity in April 2010, initially aiming to increase gold production by ~50% to >200,000ozpa, and then using satellites and underground to reach ~300,000ozpa. Kingsgate is still exploring for possible stand-alone operations; following up epithermals that it has identified; and using its extensive database to find orebodies in other parts of Thailand.
  • Chatree was examining increasing the mine’s life by : deepening the pits using US$950/oz or US$1150/oz pit shells (compared to the existing US$750/oz pit shell of June 2009), extending Chatree on strike NNW or SSE, and delineating higher grade epithermal lodes that can be economically mined underground.
  • KCN intends to capitalise on its perception as an established, proven developing Asian gold producer while it leads the emerging mid-tier Australian listed gold producers into the A$1bn to A$2bn market cap category (following the takeover of Lihir by Newcrest).
  • The Thailand IPO float of 51% of Chatree under Akara Mining Ltd (the preference shares are redeemed for common stock in one movement) is expected to occur during DQ2010/MQ2011, and could raise ~A$400m to A$500m (being ~50% of Kingsgate’s current market cap, plus some capital for ~50% of the mill expansion plus ~50% of the exploration). (It should be noted that Akara may receive an Asian trading multiple and have a higher market cap than Kingsgate).
  • Kingsgate effectively retains mine management control with regional and near mine exploration under KCN’s Issara Mining (exploration) company. KCN/Akara’s Chatree controls an area of ~7kmN x 5kmE including the Chatree mine and MLs, while KCN’s Issara has the rest of the SPLs and SPLAs . Should Issara make a discovery, Akara Mining has first right of refusal in acquiring it for Chatree.

Jun 2010 - Silver Lake Res

Silver Lake Resources Limited (SLR) –Establishing Daisy East as the next Daisy MilanoLode to take Production beyond 100,000ozpa for 5 to 10 years, while evaluating its Murchison Project

  • Silver Lake Resources (SLR) has established that its flagship Daisy Milano orebody at Mt Monger extends to at least 800m below surface and has been partly missed by previous operators at higher levels, and hence appears capable of producing 50,000ozpa to 60,000ozpa for at least the next 10 years.
  • SLR’s second 50,000ozpa to 70,000ozpa orebody appears to be Daisy East (or variations of it) located ~ 30m to 40m into the hangingwall of Daisy Milano. At this stage, SLR’s third 30,000ozpa to 60,000ozpa unit at Mt Monger may come from a combination of sources such as open-cuts followed by underground at Costello and Magic, and the numerous other possible lodes within the Mt Monger goldfield.
  • SLR’s evaluation of its second gold mining operation in the Murchison near Cue along the Tuckabianna to Moyagee line of strike appears to be initially focusing on the Caustons and Lena areas delineating a number of new orebodies adjacent to older open-cuts at both of those prospects.
  • Caustons appears to consist of a clump of at least 5 separate orebodies being the 3 old Caustons pits and SLR’s new discoveries of Genesis and Exodus immediately adjacent and up to ~200m east of Caustons. The Caustons mineralisation consists of a series of east dipping lodes, and hence may pass under the old camp, mill and ROM pad – all of which have yet to be drilled.
  • When combined with a number of historic parallel lodes at Lena, and SLR’s nearby new discoveries there, SLR is working towards re-establishing a 1.2mtpa operation near the old Tuckabianna plant area at Caustons within about 2 years. The aim is to produce ~100,000ozpa from open-cuts grading ~3g/t from DH 2012 at all inclusive capex of ~A$30m to A$50m (which can be financed from cashflow).
  • SLR appears to be evolving into one of those rare companies that is successful in exploration and yet has the capability to efficiently mine what they find, with a track record so far of achieving more than what they say they expect to do.

Jul 2010 - Panoramic Res

Panoramic Resources Limited (PAN) – Settling into a Production Range ~19,000tpaNi

  • Accepting that production in FY2010 was lower than expected, and having given guidance for FY2011 of 18,000t to 19,000tNi, Panoramic appears to be settling into a nickel production range of ~18,500tpaNi to 19,500tpaNi or ~19,000tpaNi as shown in our/ERA production scenario forecast.
  • Lanfranchi could produce more tonnage (given it was producing at ~80,000tpm on the day of our visit, applying a revised sub-level stoping method), and grades could be higher as the mine moves into the higher grade keel zone of Deacon, while Savannah’s grades may also be higher.
  • Although Deacon remains open at depth, as do the other orebodies of Schmitz and the namesake Lanfranchi, PAN’s Lanfranchi mine continues to search for another significant orebody. A new approach has shown that the nickel mineralisation at Lanfranchi appears to be controlled both N/S and NNW/SSE, which has resulted in a number of new targets, along with the Lanfranchi West extension.
  • The intersection of 2.9m @ 3.0%Ni in drillhole KUD 810 and EM plate into the deeps below the 900 fault at Savannah opens up another extension to Savannah’s life. A drill drive is planned to be developed in the coming FY to June 2011 to further delineate the upside depth potential at Savannah.
  • Panoramic intends to have a significant exploration programme during the coming year of 2010/2011, undertaking deep drilling at Lanfranchi plus drill drives to probe the extensions of the known lava channels. While at Savannah, aside from the drilling beyond the 900 fault, a number of new near mine and regional targets are to be tested following results from the recent higher resolution gravity survey.

Aug 2010 - Avoca Resources

Avoca Resources Limited (AVO) – Becoming a >$1bn Mid-Tier Gold Company at >350,000ozpa gold with a life of >10 years

  • The recent intersections of ~50m @ 3.5g/t and 29m @ 5.0g/t in Apollo-style mineralisation ~200m north of the Trident orebody on the ~400RL have a significant impact on AVO’s life at Higginsville, inferring a life (when combined with Chalice and regional orebodies) of 180,000ozpa to ~200,000zpa for >10years.
  • At this stage, Chalice appears likely to commence production in 2H2011, following completion of the dewatering of the pit (by end 2010), and then declining down to the Olympus mineralisation. Timed to come into production as Trident moves deeper, Chalice provides increased production flexibility in the 1.3mtpa plant.
  • Following its acquisition of Dioro, Avoca announced in July 2010, that it is starting a feasibility study aimed at doubling South Kal’s Jubilee plant to ~2.4mtpa through cutting back the HBJ (Hampton Boulder – Jubilee) pit and using satellite open-cut/underground sources such as the Mt Marion (West lode) and Barbara-Surprise/Noble areas, resulting in production of >90,000ozpa for at least 10 years (Note : based on 2mtpa at 1.5g/t & 92% recovery, although grades could be higher, and also note 0.4mtpa is for treating AVO’s 49% of Frog’s Leg).
  • Avoca acquired 49% of Frog’s Leg as part of the Dioro acquisition, and Frog’s Leg appears to have a life of at least 10 years, treating ~800,000tpa (or possibly higher) at ~5.0g/t to 5.5g/t for attributable gold production of >60,000ozpa.
  • AVO is gradually working its way through the recently acquired vast South Kal assets which extend arc-like south around Kalgoorlie from the defunct Golden Ridge mine in the SE through HBJ, Mt Marion and Barbara in the SW, and which appear to contain significant upside potential.

Sep 2010 - Focus Minerals

Focus Minerals Ltd (FML) – Targeting Gold Production of >120,000ozpa for >10years

  • Focus Minerals (FML) appears to have an achievable production target of >120,000ozpa for >10 years, based on an expected 60% to 70% conversion of its 2moz resource (for 1.2moz to 1.4moz). Yet this excludes ~ 1.5mt of surface stockpiles of >1g/t (ranging up to Brilliant’s low grade stocks in SQ10 at ~2.1g/t).
  • Current ore sources are FML’s Coolgardie goldfield, the Mount, & surface stocks for FML’s recently upgraded ~1.2mtpa 3-Mile plant (operating since January 2010). With ~200,000tpa to 400,000tpa from surface stocks at >1g/t, and an expected 250,000tpa to 350,000tpa at >5g/t from the Mount for at least 10 years, the remaining 500,000tpa to 700,000tpa should be capable of being sourced from the Coolgardie goldfield (at 3.5g/t to 5.0g/t for ~120,000ozpa and an ~92% recovery).
  • FML is expected to still be in transition through to ~March 2011, as it still has a parcel of La Mancha ore to toll treat by early September 2010, and it needs to slype (enlarge) the decline at the Mount by ~MQ 2010, in order to use larger trucks. (Following its discovery that the Mount has significant upside potential for a >250,000tpa mine at possibly ~7g/t to 9g/t or so for probably >10years).
  • FML owns most of the Coolgardie goldfield, which can be subdivided into 5 areas being the two main historic areas of the TMC (Tindals Mining Centre) and the LMC (Lindsays Mining Centre) separated by the Brilliant Block, and Regional north and south. Of which current production is mostly from the underground TMC mines.
  • The TMC itself consists of an underground centre of 5 orebodies, the old Dreadnought area to the south and old workings to the east. Of which the main production area is Perseverance (discovered by FML in 2004/5), followed by Countess and Empress. Perseverance contains the relatively new “Link” structure that is expected to average ~10g/t to 20g/t (but can range up to ~60g/t).