Industry intelligence
PLATREEF SECURES WATER SUPPLY An agreement between Canadian platinum mining company Ivanhoe and the Mogalakwena Local Municipality, will ensure that Ivanhoe’ s subsidiary, Ivanplats’ Platreef Mine, is supplied with enough water during the first phase of production. Platreef is close to the town of Mokopane in the Limpopo province of South Africa.
According to Lars-Eric Johansson, CEO of Ivanhoe, the agreement will provide Platreef with five million litres of local, treated water per day for the next 32 years. However, a smaller amount of water will be provided when the plant starts up later this year for the first phase of production.
Further treatment will be conducted at the Platreef Mine’ s on-site filtration plant to ensure compliance with Ivanplats’ quality standards. The initial supply will be used in Platreef’ s ongoing underground mine development, including drilling and surface infrastructure construction.
Dearth of new gold discoveries a concern
A lack of new gold discoveries over the past decade could result in less gold projects coming online in 15 – 20 years. This is according to Kevin Murphy, senior research analyst at Metals & Mining Research at S & P Global Market Intelligence.
“ We have shown in previous research into lead times for gold assets, that it takes about 20 years for an asset to advance from first exploration( discovery) to production. Unless discovery rates begin an upswing in the near future, there could be a lack of quality assets available for development in the longer term. The declining discovery rate shows the importance of continuing exploration and funding companies responsible for exploration to maintain a healthy future pipeline of assets available for development,” says Murphy.
Although gold exploration budgets have fallen from a 10-year peak in 2012, spending on finding new gold ounces remains at historically high levels, with the USD54.3-billion allocated to gold exploration over the past decade being almost 60 % higher than the USD32.2-billion spent over the preceding 18-year period. However, the increase in dollars spent has not yet resulted in more new discoveries or discovered ounces compared with the previous period: only 215.5 million ounces( Moz) of gold has been defined in 41 discoveries over the most recent 10 years, compared with 1 726Moz in 222 discoveries in the preceding 18 years.
“ Even after adjusting for more recently identified deposits that might eventually surpass our threshold for a major discovery, and for major discoveries with potential to expand, we forecast that the gold in major discoveries might only increase to about 363Moz over the next decade. Although we believe the sharp decline is indeed reflective of the lack of
Upswing to benefit mines
Recovering commodity prices, renewed optimism in the mining sector, and diversified ownership of tier one mining companies are providing opportunities for emerging and junior miners to enter the industry.
According to Denver Dreyer, CEO of WorleyParsons RSA, the biggest challenge that junior miners face is access to funding.“ Mining is emerging from a recession into a cautiously optimistic incline. Against this backdrop, investors are more likely to back reputable companies and projects in known ore bodies,” says Dreyer.“ As the market starts turning on the back of tier one projects
The lack of new gold discoveries is a major concern.
new significant deposits being found, a portion of the shortfall is a natural situation in which the additional exploration required to expand the known endowment of recently found deposits beyond our major discovery threshold has not yet been conducted,” says Murphy.
Of the 215.5Moz contained in the 41 discoveries made over the past 10 years, almost half( 105.8Moz) is contained in the 10 largest deposits— the biggest is Zhaojin Mining Industry’ s Haiyu gold project in China’ s Shandong province. While there is clearly a decline in discovered deposits and ounces, this will not affect the short-term project pipeline.“ As covered in our quarterly gold supply series, there are many quality assets being developed that will come online over the next several years, and far more in the pipeline that will be moving towards production within the next decade,” Murphy concludes.
and investors, tier two and tier three miners will benefit from the upswing as market confidence returns. These companies will require solid feasibility studies to make sure their projects are bankable and attract the right level of investment,” he adds.
Furthermore, Dreyer says that it is important to get the concept, pre-feasibility, and feasibility studies right from the start of a project.“ If the study phase is not done correctly, the cost of changing it at the execution phase of a project is high and could have profound consequences along the line,” says Dreyer.
Leon Louw
[ 4 ] MINING MIRROR JULY 2018