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