When St Barbara revealed its $556 million bid for Allied Gold on Friday, it wasn’t exactly breaking new ground.
Rather, it became the latest in a long line of Australian gold miners opting to pursue growth in overseas countries, where the risks may be higher but so too are the rewards.
It is no secret WA’s gold mining industry has its fair share of recent challenges, some of which stem from a lack of new discoveries and the difficulties that come with trying to make ageing operations turn a profit.
In contrast, regions like West Africa and, in the case of Allied, Papua New Guinea and the Solomon Islands, are regarded as frontiers where it is still possible to find elephants. Still, the potential rewards come with greater risks and there are those who prefer to chase bullion in a country like Australia where at least the prospect of a military coup is, it’s fair to say, fairly remote.
Enter Mutiny Gold, which put its shares into a trading halt late last week and is expected to take the wrappers of its Deflector gold-copper project, 190km east of Geraldton, early this week with the release of its bankable feasibility study.
Having picked Deflector up in 2010 from Red Hill Resources (at the time ATW Gold Corp) Mutiny already has a scoping study under its belt that supports its belief the mine can make money.
The scoping study envisaged a 50,000-ounces-a-year operation, with a $52 million build and cash costs of $524/oz.
It is safe to guess the figures for both capex and cash costs are likely to rise, although it is thought forecast costs will stay under the $700/oz mark, which would still place the operation firmly at the lower end of WA’s cost curve.
Still, it’s one thing to come up with good looking forecasts, quite another to deliver on them: that will be Mutiny’s real challenge.
Speaking of feasibility studies, South Boulder Mines has released preliminary findings from its study of the Colluli potash project in Eritrea, which it hopes will lay the groundwork for talks with strategic partners.
The issue for South Boulder isn’t the quality of the Colluli resource — it’s big and very close to surface — but rather the risks associated with doing business in Eritrea. Still, Friday’s study did suggest scope for a bigger-than-planned output at the mine, which South Boulder has previously talked about as a likely 1mtpa start-up.
That might sweeten the pot for prospective investors. South Boulder is looking for a partner not at the project level but to take a cornerstone stake in the group and help it shoulder the risk — and financial burden — of what could be a nice little earner.
The new-look Syndicated Metals is set for its first drilling campaign since a restructure in March when Andrew Munckton, David Morgan and Peter Langworthy came aboard the Queensland-focused explorer.
All going to plan, Syndicated will start drilling this month at its Yamamilla prospect in the northern hub of its Mt Isa-Cloncurry tenements — the first step in a significant drilling campaign between now and the end of the year.
The group has earmarked up to five targets, and ultimately hopes to come up with a 20 million tonne to 25mt tonne resource at up to 2 per cent copper.