Tag Archives: Mana

Barminco to drive underground exploration plan at Spartan’s Dalgaranga gold project

Perenti Limited says its Barminco business has been awarded a new development contract with Spartan Resources Ltd and extensions to four existing projects.

The scope of the Spartan Resources contract includes the construction of an underground exploration drill drive at the Dalgaranga gold project in the Murchison region of Western Australia. The drive has been designed to run in parallel and adjacent to the mineralised gold zones of Never Never, Pepper, Four Pillars and West Winds, to facilitate underground exploration and subsequently support future production plans.

Construction of the drive is due to start in the current quarter and is expected to take 10 months to complete. It will use a combination of existing capital equipment and an additional A$5 million ($3.3 million) of new growth capital.

The Dalgaranga project includes a fully-developed gold mining operation (currently on care and maintenance) and an extensive exploration landholding with outstanding opportunities for new discoveries, Spartan says. The open-pit mine was initially commissioned in 2018 and comprises a fully established gold mine, circa-2.5 Mt/y carbon-in-leach processing facility, modern camp accommodation and air strip. Dalgaranga produced 71,153 oz of gold for the 2022 financial year before being placed on care and maintenance in November 2022 to facilitate the implementation of a new strategic operating plan and a financial restructure. It was previously mined by NRW Holdings under an arrangement with mine owner Gascoyne Resources.

In February 2022, Spartan announced the details of a new 18-month exploration and strategic plan, underpinned by the Never Never gold deposit, targeting:

  • A -plus-300,000 oz reserve at a grade exceeding 4 g/t at Never Never;
  • A plus-600,000 oz resource at a grade exceeding 5 g/t at Never Never; and
  • The development of a five-year mine plan aimed at delivering 130-150,000 oz/y.

In addition to the Dalgaranga project, Perenti says extensions to contracts have also been signed for the following project:

  •  Siou and Wona underground at the Mana gold mine for Endeavour Mining plc in Burkina Faso;
  • An existing copper and gold underground mining project in Canada;
  • Spotted Quoll nickel mine for IGO Ltd in Australia;
  • Mt Colin copper mine for Aeris Resources Ltd in Australia.

In combination, these projects are expected to contribute approximately A$160 million of revenue to FY25. The project extensions do not require new growth capital, Perenti says.

Mark Norwell, Managing Director & Chief Executive Officer of Perenti said “The greenfield underground at Dalgaranga project is an exciting opportunity. The resource has the potential to grow into a high-grade gold mine
and we look forward to supporting Spartan Resources to achieve their targets during the months ahead.

“In addition, the four contract extensions are another example of the 90%+-plus success rate the Contract Mining division has in extending and renewing contracts. Maintaining client relationships is critical to our long-term success, so we always strive to find ways to deliver value to our clients when possible.”

Gabrielle Iwanow, President of Contract Mining at Perenti, said: “We are pleased to be working with Spartan Resources on the new underground Dalgaranga gold project in Western Australia. Barminco has a long history of working with Western Australian gold producers and we look forward to building an excellent relationship with their team as they advance towards production.

RCT brings ControlMaster automation tech to SEMAFO-owned Siou underground mine

OEM-agnostic autonomous solutions specialist RCT says it has executed a project with Perenti-owned African Underground Mining Services (AUMS) at the Siou underground gold mine, in Burkina Faso.

Earlier this year, RCT commissioned its ControlMaster® Guidance Automation technology on two of Siou’s Caterpillar R2900G underground LHDs and supplied two associated Automation Centres.

Siou, owned by SEMAFO, is a gold deposit some 20 km from the Mana mine. Conversion of Siou open pit into underground mining operations began in the September quarter of 2018 with full underground production expected shortly, according to SEMAFO.

Guidance Automation enables the loaders to operate with minimal intervention by machine operators located in the Automation Centres, either on the surface of the mine or in a secure location in the underground mine, RCT said.

“The automation solution improves safety onsite by relocating mine personnel away from the mine face and reducing unplanned maintenance downtime by eliminating machine operator errors,” RCT said.

RCT says its Africa-based staff has provided comprehensive training to machine operators and will continue to provide ongoing after-sales support to AUMS.

Endeavour looks to consolidate West Africa gold sector with SEMAFO acquisition

Endeavour Mining is to acquire fellow West Africa-focused gold producer SEMAFO in a friendly, all-share deal that, Endeavour says, will create a top 15 global gold producer and the largest yellow metal miner in West Africa.

The deal, which both sets of Board of Directors have unanimously approved, values SEMAFO at C$1 billion ($694 million) and comes with a 27.2% premium based on the 20-day volume weighted average price of both companies for the period ended March 20, 2020. It would see existing Endeavour and SEMAFO shareholders hold around 70% and 30%, respectively, of the combined company on a “fully-diluted in-the-money basis”.

Such a transaction comes less than six months since SEMAFO suspended operations at its Boungou open-pit mine, in Burkina Faso, following a deadly attack on a public road in the Est region. This led to a seven-week suspension of the mine in 2019. This incident followed on the heels of a pit wall failure at its Mana mine, also in Burkina Faso, in August, that led to a 10-week suspension.

Endeavour, meanwhile, had its hopes of merging with fellow Africa gold producer, Centamin, dashed earlier this year after Endeavour President & CEO, Sebastien de Montessus, said the quality of information received during the accelerated due diligence process had been insufficient to allow the company to be confident in proceeding with a “firm offer” for Centamin.

On a pro-forma basis, a combined Endeavour and SEMAFO would have more than 1 Moz of gold production in 2020 (based on current company guidance), placing it among the top 15 gold producers globally, while all-in sustaining costs (AISC) would be below $900/oz, placing it within the bottom third of the industry cost curve, the companies said.

Assets would include the Ity, Houndé, Agbaou and Karma mines from Endeavour (which produced 651,000 oz at an AISC of $818/oz in 2019) and the Boungou and Mana mines from SEMAFO (which produced 340,900 oz at an AISC of $724/oz in 2019).

Endeavour-SEMAFO would also have 10.5 Moz of reserves and 20.7 Moz of measure and indicated resources (inclusive of reserves), plus an additional 6.3 Moz of inferred resources.

It would be strategically positioned as the largest gold producer in both Cote d’Ivoire and Burkina Faso, which account for two-thirds of the highly prospective West African Birimian Greenstone Belt, they said.

It would also consolidate the Houndé belt in Burkina Faso to create a “world-class mining district with two mines, exploration upside and strong future development potential”, they said.

Endeavour said influential investor La Mancha will continue to be a highly supportive cornerstone shareholder, committing to invest $100 million, although decreasing its overall stake from around 31% in Endeavour to about 25% in the combined entity (calculated on a pro-forma basis using current share prices), to “provide for a larger free float and greater stock liquidity”.

These M&A discussions have been going on for some time, according to Endeavour.

In early 2019, both companies engaged in a mutual dialogue in order to evaluate the merits of a business combination. The dialogue included extensive mutual due diligence as well as discussion of potential terms of a transaction, with a final proposal in May 2019. At that time, it was not possible to agree on terms which appropriately shared the risks and rewards of a combination.

In early 2020, discussions between Endeavour and SEMAFO recommenced. Endeavour’s management team completed on-site due diligence at SEMAFO’s operations in Burkina Faso during February 2020, including a comprehensive assessment of security, operations and exploration.

Both companies also re-opened data rooms for mutual confirmatory due diligence, including visits and, following collaborative discussions, confirmed their shared strategic vision and desire to complete a combination subject to negotiation of agreeable terms, they said. Negotiations proceeded, culminating in agreement on the terms of the transaction announced today.

For Endeavour, pursuant to the rules of the TSX, the transaction will require approval by a simple majority of the votes cast by its shareholders. In addition, shareholders of Endeavour will be asked to approve the issuance of Endeavour ordinary shares to La Mancha. For SEMAFO, meanwhile, the transaction will require the approval of 66.6% of votes cast by its shareholders.

It is anticipated that both shareholder meetings and the closing of the transaction will take place in the June quarter of 2020.