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Posts tagged ‘Ivanhoe Mines Ltd (IVN)’

South of Voisey’s Bay

March 25th, 2015

New developments put Equitas Resources in search of a nearby nickel discovery

by Greg Klein

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The greatest find of Canada’s first diamond rush failed to locate a single gemstone. Instead Robert Friedland’s Diamond Fields Resources stumbled onto nickel with cobalt and copper—much more prosaic stuff but in such magnificent quantities that, just three years after its 1993 discovery, Voisey’s Bay sold for $4.3 billion. Yet the Labrador region remains under-explored. Now, with the advantages of new technology plus single ownership of a recently compiled land package, Equitas Resources TSXV:EQT puts new impetus into the search for a second deposit.

Just 30 kilometres south of Voisey’s, the company’s 25,050-hectare Garland project came together after two years of research by Dahrouge Geological Consulting. According to Equitas VP of exploration Everett Makela, this puts the “most prospective area outside of the Vale mine property” under a single operator for the first time, a significant advantage for effective exploration.

New developments put Equitas Resources in search of a nearby nickel discovery

Despite its proximity to Voisey’s, patchwork ownership
and outdated methods left the region under-explored.

This, in an area where deposits could come in clusters. That’s the case for major nickel camps like Sudbury, Norilsk, Thompson and Raglan, Makela emphasizes. Therefore “the likelihood of discovering more Voisey’s Bay-type deposits in the region is high.” But if that’s so, why has the area been neglected?

“The reality is that, after 20 years of exploration by scores of companies combing the surface, the remaining prospective environments are buried,” he explains. “In the case of the Garland project, that is most likely under younger cover rocks. Voisey’s Bay itself was exposed by a fortunate erosional history. It takes a strong commitment to advance the next stage. Commitment to exploring the deeper sub-surface requires insight into critical elements of the mineralizing process and employment of state-of-the-art geophysical methods.”

State-of-the-art exploration is already underway at Garland, where a VTEM-plus survey began in February. Previously some 10 separate companies explored relatively small pieces of the current Garland project with now-outdated electromagnetic surveys that penetrated only to about 75 metres. Equitas’ regional-scale geophysics can reach a maximum 10 times that depth, all the better to detect large, highly conductive nickel sulphide deposits.

As for insight, Makela brings Equitas solid expertise. The Sudbury native began his career in 1981 as a geological assistant with pre-Vale Inco. By the time he retired in 2012, Makela was Vale’s principal geologist for North America. “I’ve worked alongside some of the leading experts in nickel exploration and benefited greatly from access to the resources of leading global nickel companies,” he says. “My experience spans the gamut from target generation through to resource definition.”

He’s worked in the U.S., Mexico, Greenland, South Africa and Brazil, along with “years of focus on Sudbury and Voisey’s Bay that gave me a strong background in world-class mineralized systems and the business of building mines.” In fact Makela served on the Inco team that conducted initial due diligence prior to the multi-billion-dollar Voisey’s acquisition.

So what does he see at Garland? Well, enough of what he saw at Voisey’s to stoke his enthusiasm.

“Aside from having the same favourable address, along an Archean-Proterozoic boundary, Garland and Voisey’s share a remarkable number of geological signatures,” he points out. “Both are located at the intersection of a regional-scale east-west corridor of faults with a northeast-trending fault set. The combined movement is likely to have caused the open space that allowed emplacement of the Voisey’s Bay ores. That’s the same style of structural offset that we believe we have on our own property. Magnetic signatures and interpreted structural deformation are very similar.

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Eastern Promise

November 21st, 2011

Centerra Seeks Gold From Turkey to Mongolia

By Greg Klein

Gold has long lured adventurers to uncharted territories. But while the trades are full of stories about Africa, Centerra Gold Inc TSX:CG demonstrates the potential of Asia. In the Kyrgyz Republic on China’s western border, the company’s Kumtor Mine prepares to add an underground operation to its open-pit gold producer. Its Mongolian operations include a mill working its way through years of stockpiled ore and a new gold mine waiting for final approval. Then there are the JVs spread as far afield as Turkey, China and eastern Russia and even Nevada.

“There are a couple of other, small-scale operations in the Kyrgyz Republic, but we’re probably 95% of the gold production in that country and about 45% to 50% of the country’s industrial output,” says Centerra President/CEO Steve Lang. “There, like Mongolia, we’re 100% owners. When we step out into Russia, Turkey and China, we move into joint ventures. Overall, there’s a lot of gold in Asia but not much competition.”

Centerra Seeks Gold From Turkey to Mongolia

To support his point, Kumtor shows proven and probable reserves of 6.28 million gold ounces, measured and indicated resources of 4.13 million ounces and an inferred resource of 2.75 million ounces. The mine produced 567,802 ounces last year, with about 600,000 projected for 2011. Cash costs per ounce are now $474.

“Over the last 12 months our drilling added about four years of operation, raised the average life-of-mine grade and lowered the strip ratio,” Lang says. “We’ve got quite a bit of unexplored ground still on our licence, and we’re picking up additional packages immediately adjacent to the Kumtor package.”

The underground operation, scheduled to start in 2013, is expected to result in a 35% to 40% production increase.

Mongolia has also proved bountiful, if challenging. Centerra’s Boroo Mine produced around 1.5 million gold ounces from 2004 to November 2010, when it closed. The plan was to immediately start a new open-pit gold mine at Gatsuurt, 55 kilometres away. At that point, however, the company hit an obstacle—the 2009 Water and Forest Law, which now blocks the project. The government had approved Gatsuurt’s feasibility study in March 2008.

As VP Investor Relations John Pearson says, “The site is completely prepared. We have the admin buildings on site; the trucks fleet has been purchased; the road connecting the Gatsuurt mine site to the Boroo mill is complete. Everything is ready to go.” He adds, however, “Until the government and parliament resolve the issues with that particular piece of legislation, Gatsuurt is currently on hold waiting the final approval.”

Other mining companies have also run afoul of the Mongolian government. The most recent was Ivanhoe Mines TSX:IVN, 49% owned by Rio Tinto, which is building Ivanhoe’s Oyu Tolgoi Mine in Mongolia. Last September, the government demanded an increase in its 34% interest, despite an agreement preventing it from doing so until 2039. The miners stood their ground. In early October, the government appeared to relent in a public statement reaffirming support for the project.

Meanwhile, Centerra’s Boroo mill keeps busy processing a stockpile built up before its adjacent mine closed. Even without Gatsuurt, the mill will process an estimated 50,000 to 60,000 ounces in 2011, with an incremental gain next year. “At the current gold price, our stockpiles will probably last two or three more years,” says Pearson.

In northeastern Mongolia, some 800 kilometres from Boroo, Centerra drills its Altan Tsagaan Ovoo Prospect. Assays announced July 11 include

  • 3.91 grams per tonne gold, 10.81 g/t silver, 0.87% lead and 1.08% zinc over 113.5 metres
  • 2.89 g/t gold, 6.52 g/t silver, 1.04% lead and 1.1% zinc over 147 metres
  • 2.09 g/t gold, 8.32 g/t silver, 0.81% lead and 1.58% zinc over 196 metres
  • 2.15 g/t gold, 12.95 g/t silver, 0.32% lead and 0.52% zinc over 183.4 metres

“We’ll have a resource estimate on that at year-end,” Lang says. “It’s still fairly early stage but an exciting project.”

We’re trying to spend something close to $60 million a year. If we can do that consistently over a period of time, that should lead to a million and a half ounces of annual production —Steve Lang

The company’s other Mongolia project is the Sumber Joint Venture with Altairgold LLC, in which Centerra may earn up to a 75% interest in the former gold mine.

In the Russian republic of Tyva, bordering northwestern Mongolia, Centerra holds a 50% interest, with an option to earn a further 20%, in the Kara Beldyr Gold Project, where drilling is underway.

In Turkey, Centerra’s JV with Eurasian Minerals TSXV:EMX allows up to a 70% interest in the Akarca, Samli and Emali projects.

Another Turkey JV, with Stratex International, offers Centerra up to 70% of the Oksut Project, which has an Australian JORC (non-43-101) resource estimate of 163,849 gold ounces indicated and 153,407 inferred.

In Nevada, the company acts as project operator for the Tonopah Divide Gold Project, in which it holds a 60% interest under an option with Tonogold Resources. Centerra may also earn a 75% interest in another Nevada JV, the Oasis Gold Project, with Redstar Gold TSXV:RGC.

Finally, Centerra has signed a letter of intent for another JV, the Laogouxi Gold Project in northeastern China.

“We want to keep expanding our exploration,” Lang says. “This year we’re at about $40 million. We’re trying to spend something close to $60 million a year. If we can do that consistently over a period of time, that should lead to a million and a half ounces of annual production. To do that, we need to continue adding projects in the early exploration level.”

Earlier this month, Centerra posted revenue of $772.4 million for the first three quarters of 2011, up 46% over the same period last year. Net earnings for that period were $291.5 million, $1.23 per share, while 3Q net earnings were $83.5 million, $0.35 per share. Third quarter gold production was 154,936 ounces at $556 per ounce. The company’s cash and equivalents were $271.7 million.

At press time, Centerra had 236.3 million shares trading at $20.59 for a market cap of $4.87 billion.

The Golden East

October 19th, 2011

Olympus Pacific Expands in SE Asia

By Greg Klein

Update: Olympus Pacific changed its name to Besra Gold Inc. On November 23, 2012, Besra began trading under a new symbol, TSX:BEZ.

It was 1996. While struggling to revive an inactive Vancouver Stock Exchange-listed company, David Seton encountered two formidable forces—legendary mining promoter Robert Friedland and the Vietnamese government. Now Friedland is the billionaire CEO of Ivanhoe TSX:IVN, Vietnam has two additional gold mines, and the once-inactive company, Olympus Pacific Minerals Inc TSX:OYM, runs those mines as it advances another Southeast Asian project to feasibility.

“We bought the first property in central Vietnam from Robert Friedland when he was Indochina Goldfields,” says James Hamilton, VP of Investor Relations for Olympus Pacific. “When we took over, we didn’t realize what he’d been telling the Vietnamese. We walked in there and only had a small resource. But they expected a full gold factory to be built right away. We said, ‘You can’t do that, you have to do all this drilling and go into feasibility.’ They said, ‘We don’t care, Friedland told us we’re going to get a gold-processing plant.’ We were kind of coerced into building a plant. It was very premature to what we’d planned to do. But it did pay off because we got access to a second property where we’ve just commissioned a state-of-the-art facility. It’s a fairly high-grade deposit and it’s a real cracker of a plant. It’s been in commission since July and we’re already over 90% recoveries.”

Olympus Pacific Expands in SE Asia

With initial production of 500 tonnes a day, the Phuoc Son Gold Plant can be expanded to 1,000 tpd to accommodate ore from both the Phuoc Son and nearby Bong Mieu gold mines. The latter, an open pit/underground operation currently using the “kind of coerced” plant, has measured and indicated resources of 175,876 ounces and an inferred resource of 212,930 ounces.

The Phuoc Son underground mine has measured and indicated resources of 179,719 ounces and an inferred resource of 478,744 ounces. Exploration continues on both properties.

Olympus holds an 80% interest in Bong Mieu while the national and local governments each hold 10%. The company holds 85% of Phuoc Son, with a local partner holding the rest. Together, the two mines are forecast to produce 40,000 to 45,000 gold ounces this year, a 45% increase over 2010.

“We’ll move that up to 70,000 ounces next year and 100,000 in 2013,” says Hamilton. “Vietnam produces operating cash that we can re-invest in our other areas. Bau in Malaysia, we feel, is much bigger and much more attractive.”

The Bau Gold Field currently shows a resource of 563,900 gold ounces indicated and 1.89 million gold ounces inferred. Olympus holds 80.53% of the project with an option to increase that to 93.55% by 2012.

Bau drill results released October 4 include

  • 4.53 grams per tonne gold over 47.4 metres
    (including 21.5 g/t over 3 metres)
  • 4.79 g/t over 40 metres
    (including 16.51 g/t over 2.2 metres)
  • 24.07 g/t over 8.6 metres
    (including 48.47 g/t over 3.9 metres)
  • 7.35 g/t over 15.9 metres
    (including 18.16 g/t over 5 metres)
  • 8.56 g/t over 6 metres
    (including 21.69 g/t over 2.3 metres)

“We expect to have a five-million-ounce-plus resource in the next year-and-a-half to two years,” Hamilton adds. “There was large, historic mining but it was very shallow, less than 100 metres. In every historic pit we’ve identified fairly large anomalies at 300 to 700 metres depth. Cameco TSX:CCO [the last project operator] probably couldn’t see this with the software that was available in the 1980s. The property is unique in that we’ve identified six different types of mineralization. We’re about 30 kilometres from Kuching, which is the capital of Sarawak, and we have all the infrastructure in place—roads, an English-speaking population, 0% royalties on gold, low corporate income tax for the first five years of production. We’re pretty excited about this property, and we think that’s where our future is.”

We expect to have a five-million-ounce-plus resource in the next year-and-a-half to two years —James Hamilton

Bau’s timeline projects an updated resource estimate late this year or early next, feasibility completed by late 2012 and an annual 100,000 ounces of gold production in the Jugan sector alone by 2014.

But enthusiasm for Malaysia didn’t preclude expansion to the Philippines. The Capcapo Discovery is the object of a four-part JV signed last September, in which Olympus may earn a 60% interest. Olympus conducted due-diligence drilling in June 2007 and plans a new drill campaign once work has completed with a government agency that represents indigenous peoples.

“The geology on this property is fabulous,” Hamilton says. “It’s large copper-gold-type porphyry and epithermal systems. It’s about 100 kilometres north of the Baguio-Mankayan Gold Fields, which have production, historic and current resources totalling over 60 million ounces. We’re pretty excited about this one as well, but it’s early stage.”

At press time the company had 380.67 million shares trading at $0.30 for a $114.2 million market cap.

“We’re probably in the best shape we’ve ever been in our corporate history,” Hamilton says. “We’ve diversified out of Vietnam; we’ve got about 20 million cash and gold [as of October 5]; we’re expanding production; we’re in feasibility in Bau. If the market ever wakes up, I think we’re going to be re-rated.”

Ivanhoe, BHP report Mongolia Copper Assays up to 0.94% copper over 19m

March 14th, 2011

Ivanhoe Mines Ltd TSX:IVN in joint venture with BHP Billiton Ltd announced assays from the the Ulaan Khud North Discovery of the Oyu Tolgoi copper-gold mining complex in southern Mongolia. Results include 0.94% copper over 19 metres, 1.4% over 9.9 metres, 1.09% over 6 metres, 1.36% over 3.3 metres, 2.43% over 9.6 metres, 1.16% over 4 metres and 2.24% over 7.7 metres. Gold results included 0.25 g/t gold over 9.9 metres and 0.2 g/t over 7.7 metres. BHP Billiton has earned a 50% interest in the joint venture.

Ivanhoe CEO Robert Friedland said, “The Ulaan Khud North discovery reinforces our longstanding belief that with continued exploration there is excellent potential to discover new porphyry deposits, rich in copper and gold, which are associated with the world-class Oyu Tolgoi mineralized trend.”

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by Ted Niles