#Official Mining Thread

[Shahkar]

Thank god some positivity! We need more articles like this published around the country!

[Wayno]

This is neat.

http://www.miningaustralia.com.au/news/ ... -big-thing

Graphite mining could be SA's next big thing

A spate of new graphite discoveries on South Australia's Eyre Peninsula has mining companies upbeat about future prospects for the region.

Among graphite companies operating in the area, Archer Exploration, Monax Mining, and Lincoln Minerals have all reported positive updates this week, with a number of new finds confirmed.

On Monday Monax said it was “excited” by the results of a new round of exploration, and Lincoln said new drilling had seen it confirm a 2.25 million tonne resource for its Kookaburra Gully project.

“Lincoln is very optimistic that drilling planned for Kookaburra Gully Extended this year will define further graphite resources,” it said in a statement.

Along with Monax and Lincoln, Archer released a project update on Monday that confirmed it had uncovered “exceptional graphite concentrates,” some of which were considered “very rare”.

Lincoln managing director John Parker told ABC Rural work was continuing across the Eyre Peninsula, and the region could one day be home to a significant graphite industry.

“When you talk about iron ore, you know in Australia, you talk about the Pilbara up in the north-west, but when you talk about graphite in Australia, you talk about Eyre Peninsula,” he said.

“We're not talking about competition here—we're talking about building up a really strong graphite industry.”

Some related facts:

Graphite is a form of carbon, an excellent conductor of heat and electricity with the highest natural strength and stiffness of any material to extremely high temperatures (36000C)
• It is best known as the “lead” in pencils and as a dry lubricant
• It is commonly used in steelmaking, in electrical equipment and, in particular, in lithium-ion batteries – a growing market
• There are 2 naturally occurring types of graphite: Crystalline flake or vein graphite (flat, plate-like particles ), and Amorphous graphite
• Flake graphite is most valuable with current market prices for high grade 94-97% carbon between US$2,000 and US$3,500 per tonne. Amorphous graphite sells for just under US$1,000
• 75% world graphite is mined in China but resources and exports from China are diminishing
• Extensive resources occur on Eyre Peninsula in South Australia
• Annual graphite demand expected to increase 50% from 1.1 Mt to 1.5 Mt by 2020 based on the steel market alone
•Demand from batteries and high-tech applications including pebble-bed nuclear reactors is projected to be dramatic – Lithium-ion batteries are projected to more than double the demand for graphite to about 2.6 Mt by 2020
•That type of demand growth would require at least 20 new mines at 50,000 tpa
•Industry analysts predict Graphene will be a major new driver of graphite demand
•Most of China’s resources are lower grade amorphous – China is now the biggest importer of graphite and has closed state-owned enterprises this year to preserve its graphite resources. It has imposed a 20% export duty plus a 17% VAT, and instituted an export licensing system to ensure supply to China’s domestic economy.

More about Graphene:

Graphite flakes are like a deck of cards – thin layers stacked one on top of the other with weak bonds holding them together. Delaminating these layers to a one atom thick sheet of carbon with the carbon atoms arranged in a honeycomb pattern forms graphene
•Graphene was first isolated by scientists at the University of Manchester who won the Noble Prize for Physics in 2010 for their efforts.

Graphene is:
•transparent in infra-red and visible light
•flexible and stronger than steel
•conducts heat 10 times faster than copper
•can carry 1,000 times the density of electrical current of copper wire

•Graphene could change the technology of semi conductors and LCD touch screens and monitors, create super small transistors and super dense data storage, increase energy storage and solar cell efficiency
•Many companies, including Intel and IBM, are currently involved in graphene research to build industrial scale, next generation display materials using graphene as a substitute for expensive indium tin oxide(“ITO”)
•Researchers with the U.S. Department of Energy's Lawrence Berkeley National Laboratory have created a graphene and tin nanoscale composite material for high-capacity energy storage in renewable lithium ion batteries for 3 times greater storage capacity for same weight
("Graphene nanocomposite a bridge to better batteries" ScienceDaily, 27 July 2011)

[Reb-L]

Thanks for your informative post Wayno. This kind of news is what still makes me very optimistic - i.e. in the long run - about our state.

[JamesXander]

The disappointing thing about mining in this state is their hasn't been many large scale projects get the go ahead. ODX is still on hold and be only likely large scale mine to go ahead that I can see happening is Carapateena ($2b+ 1500+ jobs) which won't even begin construction till 2017-8.

Hillside was looking likely at $900m+ 900 jobs but recently sentiment has changed and he project looks more than likely not to go ahead.

Prominent Hill has had it's mine life extended but when that runs out we may only have one page scale mine producing around 2018 (Carapateena will take a couple of years to construct)


Many of the other projects are pie in the sky type stuff, the central eyre ion or project needs billions in funding, it's just never going to happen.

I don't know what the outcome of the $1b exploration of the great Australian bight, but that could be our great white hope. Gas and oil projects can be worth tens of billions of dollars and bring in massive royalties.

[JamesXander]

Actually just found an article. They are drilling 4 exploration wells right now. Should know of we have a game changer in the next couple of months. Fingers crossed!

[Wayno]

James, don't forget ODX is an existing & very large operational mine, 2nd largest in australia. It's the expansion that's in the news.

SA has approx 20 operating mines bringing about $120m in royalties each year. this is a handy search tool --> http://www.australianminesatlas.gov.au/.

The most significant discovery in SAs history happened just recently - shale oil in the Arckaringa basin. Massive potential without the hassle of being near population centres worried about fracking affecting water tables or damage to natural assets like the Great Barrier Reef. Also the decision to allow mining in the woomera protected area only just occurred, and recent and exciting news about major iron ore discoveries on the eyre peninsula. Not to mention exploration across the state is *today* running at unprecedented levels. Yes it will collectively cost billions to develop these assets but unlike yourself I believe a significant number will materialise. Why spend millions on exploration and not proceed further?

We have 4 active uranium mines with the operators of these mines having pegged out many future tenements. Doubt we'll have more than 6-8 concurrent uranium mines, but unlike traditional resources, uranium mines using in-situ leaching proceed quickly from feasibility to fully operational.

Also don't underestimate the size of the graphite deposits recently found on the eyre peninsula.

Will we get instant financial benefit from all above? Obviously not, but the future looking 3-5 years out is very good. Mining is a long play game and the secret to obtaining investment for large mines is to have many moderate sized mines yielding quality resources and profits. We have that foundation.

[JamesXander]

James, don't forget ODX is an existing & very large operational mine, 2nd largest in australia. It's the expansion that's in the news.

SA has approx 20 operating mines bringing about $120m in royalties each year. this is a handy search tool --> http://www.australianminesatlas.gov.au/.

The most significant discovery in SAs history happened just recently - shale oil in the Arckaringa basin. Massive potential without the hassle of being near population centres worried about fracking affecting water tables or damage to natural assets like the Great Barrier Reef. Also the decision to allow mining in the woomera protected area only just occurred, and recent and exciting news about major iron ore discoveries on the eyre peninsula. Not to mention exploration across the state is *today* running at unprecedented levels. Yes it will collectively cost billions to develop these assets but unlike yourself I believe a significant number will materialise. Why spend millions on exploration and not proceed further?

We have 4 active uranium mines with the operators of these mines having pegged out many future tenements. Doubt we'll have more than 6-8 concurrent uranium mines, but unlike traditional resources, uranium mines using in-situ leaching proceed quickly from feasibility to fully operational.

Also don't underestimate the size of the graphite deposits recently found on the eyre peninsula.

Will we get instant financial benefit from all above? Obviously not, but the future looking 3-5 years out is very good. Mining is a long play game and the secret to obtaining investment for large mines is to have many moderate sized mines yielding quality resources and profits. We have that foundation.

The Olympic dam expansion is going to be shaky if the current copper price continues its slide.

The LNC find near CP is very very speculative at best. As some have pointed out the infrastructure required alone would be huge, to prove it economically viable will take years. The report which causes such a stir was just that, an independent report on the potential of the resource.

The graphite your talking about is owned by archer exploration, and the market currently values their deposit at roughly $8-10m. It has not proven its commercial viability.


I guess the main point I was trying to build was that we have failed to achieve a large scale project in this stage during the resource boom (PH aside?). WA has had huge iron ore projects, gold mines, petroleum & gas fields. If we were to develope just one of those gas fields in SA it would massively boost our economy. Just look at the recent economic data from NT to see an effect of a large scale project on a smaller state/territory

[Wayno]

Just look at the recent economic data from NT to see an effect of a large scale project on a smaller state/territory

No argument there.

[Wayno]

Sounds promising...located near Burra

Shares in Adelaide Resources rose more than threefold today after the copper and gold explorer said its latest drilling results were “exceptional”.

The stock surged 10.3 cents, or 245 per cent, to 14.5 cents at 1523 AEST after Adelaide Resources said exploratory drilling at its Alford West Prospect, about 140 kilometers north, North West of Adelaide, indicates high-grade copper and significant gold deposits.

The company says “high grade mineralisation” exists as deep as 300 meters below the earth’s surface and as shallow as five meters below the surface. The area of exploration, which is known as the copper triangle, has been mined for 150 years.

“These are probably some of the most exciting exploration numbers in Australia this year,” Adelaide Resources managing director Chris Drown told Business Spectator. The potential of the find is such that it may be economic to mine the site even if copper and gold prices were to substantially slide from current levels, he says.

Adelaide Resources 'may have to rattle the tin' for as much as $5 million to fund further exploitation of Alfred West, says Drown.

An ASX company since 1996, Adelaide Resources has traditionally sold stock to fund its exploration and production. At the end of March the company had $2.5 million in cash. It has spent $350,000 on its Alford West drilling and Drown expects another $350,000 will be spent on further drilling at the site.

Copper at US$3 a pound and gold at about US$1,400 a troy ounce represent historically high prices for the commodities, he says. Further price falls will make a resources grade important and that’s why the company’s announcement today is so exciting, says Drown.

Read more: http://www.businessspectator.com.au/art ... z2RwBG7arF

[rhino]

Sounds promising...located near Burra

Not really Wayno - Alford is north-northeast of Kadina, and the Copper Triangle is Kadina-Wallaroo-Moonta, so this find is just north of the Yorke Peninsula, and, co-incidentally, not that far from where Rex Minerals has discovered it's huge Hillside deposit of the same minerals.

There is a huge section on South Australia's current mining scene in the current issue of Paydirt magazine, for those who are interested.

[Wayno]

i stand corrected. thanks for keeping me honest

[JamesXander]

I can only pray that Hillside goes ahead, but with Rex having a MC of $60m and $30m in the bank, the market currently values Hillside at $30m. They have spent $200m developing it. A real disppointment. This isn't going to go ahead unless they find a partner or get taken over( * I hold Rex minerals shares!)


It should also be noted that Oz Minerals are currently losing money at Prominent Hill, that's right one of the two big mines in SA is currently losing money. Oz also needs cash to develope Carapateena which is going to be the billions. Of they have a bad run they won't be able to develope it. OZ's shareprice has more than halved in 12 months. Currently trading at all time lows.

The Terramin mine out near strath is closing in October. Hillgrove continues to lose money.


I just cannot shake the feeling that we are going to miss the train. Olympic Dam isn't going to see a sizable expansion if copper & gold continue to slide.

[Shahkar]

WPG abandons Giffen Well iron ore project development in central South Australia after failed negotiations with owner

PLANS for a new $1.5 billion iron ore mining project in central South Australia, estimated to employ 550 people for as long as 30 years, have been abandoned due to the high risk profile of the project.

WPG Resources wanted to develop the Giffen Well asset, located within the Green Zone of the Woomera Prohibited Area and held by Maosen Australia Pty Ltd, by taking a 25 per cent interest.

WPG had completed a $3 million pre-feasibility study into the project, but decided against spending $5 million more to acquire a stake in the project, which was 50 per cent more than the value the market would likely have attributed to the resource post transaction, WPG said.

"The current market uncertainties meant that the risk profile for the project was too high unless the asset could be acquired on more attractive terms," WPG said in a statement.

"That had not been forthcoming despite extensive negotiations with the owner."

Shares in WPG were trading 32 per cent lower at 4.7 cents.

The Giffen Well project involved plans for an open-pit mine producing 5 million tonnes of iron ore concentrate, a magnetite ore concentrator, an open-pit coal mine at Penrhyn, just south of Coober Pedy, and a power station.

It also included building a rail spur as well as storage and loading facilities on land owned by WPG at Port Pirie.

WPG chairman Bob Duffin said he was disappointed a sensible outcome could not be negotiated.

"The mining sector is adjusting to a capital constrained environment now," he said.

"There is a very limited pool of investors willing to fund the estimated $40 million required to complete the project's BFS (bankable feasiblity study), let alone those willing to fund the $1.5 billion capital expenditure required to bring the project into production."

WPG had a cash balance of $11 million at the end of March 2013, sufficient to fund the exercise of the option, but would have needed to raise funds for the next stage.

"I am mindful of the dilutionary impact of share issues at a time of low share prices," he said.

WPG also said the Giffen Well project, in isolation, is unlikely to be developed within any reasonable time frame.

Stock market analysis has also shown that undeveloped magnetite iron ore asset values have fallen by 30 per cent in the last three months and by more than 60 per cent since the option agreement was negotiated a little over a year ago, WPG said.

WPG is now reviewing new project investment opportunities.

[Wayno]

Disappointing how the owner of the Giffen Well tenement, Maosen Australia P/L, are holding out for top dollar payment by WPG Resources - basically creating a lose-lose situation. sigh. Surely negotiations could have reached a compromise. disappointing.

[JamesXander]

WPG are a smart mob, they developed the iron ore project that arrium eventually bought out a few years ago. Made their shareholders a nice quid! However the iron ore market has changed, no big take overs or developments are occurring because the outlook on IO is below $100 a tonne. Most of these new projects when including financing costs have an average cost of around $90+ a tonne. WPG knew they wouldn't get interest from a buyer to take over the project.


As I have seen to be the bearer of bad news, ill dish some more out. OZ minerals had a landslide at PH which has cut production and hit them with a large one off costs. They are now projected to make losses for the next few years.
Analysts currently value Carapateena at nothing despite OZ heading towards $500m spend on the project.


Rex Minerals trading closer to cash value, in other words the market values hillside at close to $0. I think I should make a take over bid. A sad day. Here hopes for yorkes sake & this states sake that the Ceres wind farm goes ahead, otherwise the brain & youth drain will continue on the yorke.

Good news- BP has sold a 30% stake in the bight exploration JV. Now we have two of the worlds biggest oil companies committing nearly $2b to exploration over 5 years. From reading the reports won't actually know the results for a few years. Fingers crossed they hit the mother load.