Tag Archives: Sibanye-Stillwater

Appian continues to flex ‘multi-faceted’ skillset in latest mining deals

Private equity firms might not be the most obvious port of call for companies in need of the technical skillsets to transition ‘projects’ to ‘mines’, but, in recent years, Appian Capital Advisory LLP has shown the industry that it has all the credentials to help with this transition.

The firm, headquartered in London but calling on expertise from across the globe, has just completed divestments of the Santa Rita nickel mine and the Serrote copper mine, both in Brazil.

Sibanye-Stillwater, the purchaser, agreed to pay Appian $1 billion, plus a 5% net smelter return (NSR) royalty over potential future underground production at Santa Rita, for the assets, with the private equity firm, in the process, pocketing a pretty profit.

In 2018, Appian acquired Atlantic Nickel (owner of Santa Rita) out of bankruptcy for $68 million and Mineração Vale Verde, the owner of Serrote, for $40 million.

It reoriented the former large-scale open-pit mine into a much more conservative – and profitable – mine able to produce around 20,000-25,000 t/y of contained nickel sulphide equivalent. It also carried out extensive drilling to showcase its underground potential, prolonging its mine life.

The plans at Serrote, meanwhile, were re-evaluated in a DFS. Having completed project construction and commissioning ahead of schedule and under budget, the mine is now ramping up to nameplate capacity of 20,000 t/y of copper equivalent.

These two divestments represent the fourth and fifth portfolio sales the company completed this year. The others included the sale of its 13.2% interest in West Africa-focused gold company Roxgold to Fortuna Silver Mines, the sale of its 0.28% NSR royalty over the large-scale Caserones copper mine in Chile and the repayment of a royalty Appian held over Peak Resources’ Ngualla rare earth project in Tanzania.

The diversity of these asset exits is indicative of how well-versed mining-focused Appian is in the sector’s ‘hot commodities’, but there is more to appreciate here than purely financial gains and well-timed acquisitions and divestments.

“People know that not all money is created equal,” Michael W Scherb, Founder and CEO of Appian (pictured), told IM. “We have a team that is able to solve specific operational challenges – we can call on specialists to solve problems on the process flowsheet side, for instance – while providing financial advice to avoid expensive streams and set assets up for profitability.”

Scherb’s words are backed up by a solid track record: seven of nine investments it has made have resulted in mine builds. Its divestments have also provided healthy returns.

The company has been able to do this by recruiting industry specialists – mining and finance – and educating them on the facets they need to succeed in both the private equity and mining world.

“People that join Appian need to be multi-faceted,” Scherb said. “We get mining folks to think like investors and vice versa,” he said.

This has seen them build a project review team populated with former consultants and an operations team full of mine personnel with operational experience.

“We then get all personnel to cross-train across these teams to avoid any siloed disciplines,” Scherb explained.

Take Santa Rita as an example of where this expertise paid off.

The company carried out a six-month due diligence process on Santa Rita, which led to the development of a more defensive and low-cost mine plan able to see the asset through nickel price peaks and troughs – in stark contrast to the plan former operator Mirabela Nickel had for the asset.

Among the operating changes implemented were the use of a smaller, locally procured equipment fleet of 40 t trucks (Santa Rita previously used Caterpillar 777 90 t and 785 137 t payload trucks), the use of shorter benches and tighter blasting patterns.

This resulted in better grade and fragmentation control, improving the feed to the crusher.

It also defined a significant underground resource base at the mine, which it will still be leveraged to thanks to the NSR royalty.

Such moves were based on exploiting the nickel sulphides at Santa Rita. This reoriented focus aligned with the industry preference for nickel tied to the battery materials space, which eventually paid off with the amount of interest in the asset.

This blend of technical and financial expertise has served the company – and any company it has an interest in – well. Backed by a long-term investment philosophy where its funds are 12 years in duration, the company can make moves aligned with the realities and timelines associated with turning assets into mines.

The next asset on the Appian books likely to move into construction-ready territory is Kalbar Operations’ Fingerboards mineral sands project, which focuses on the Glenaladale deposit, about 20 km northwest of Bairnsdale in Victoria, Australia.

Scherb said this project will be “build-ready” very soon, explaining that it is currently going through the permitting stage.

The project has the potential to be one of the world’s major producers of zircon, ilmenite, rutile and rare earths, and Kalbar is proposing an investment of over A$200 million ($148 million) in the development of a project able to produce around 575,000 t/y of heavy mineral concentrate over 15-20 years.

Scherb said Appian is keen to further pursue commodities associated with the electrification of industry, but he is aware of the premiums that may come with these deals.

“A lot of money has flooded into the battery metals,” he said. “We can be patient and are starting to look earlier stage in some investments.”

“Earlier stage” still has the potential to be producing in four- or five-year’s time, he clarified.

What’s clear is that the Appian team is gaining widespread recognition, with Scherb saying larger mining companies are starting to approach them with proposals that would see Appian gain operational control of assets, realising the firm has the right blend of “operational skill” and “value principles” to succeed.

Having acknowledged a skills shortage across the sector – one Appian is doing its bit to tackle with internship programs with universities in Canada, the UK and Australia – Scherb was confident the company’s talent would be retained and, ultimately, grow.

“In terms of talent retention, we at Appian offer experience of reviewing many different assets at different times in their lifecycle,” he said. “If you’re in-house at a mining company, you run the ruler over the same assets, stress testing them against different scenarios. We offer our teams variety that they cannot get in many places.

“At the same time, our structure means employees invest directly in companies to ensure they are correctly incentivised. This means they get to share in the profits.”

With plans to make one-to-three investments per year – along with the same number of exits – and expectations of committing its latest $775 million fund within the next two quarters, expect to hear more from Appian into 2022.

Generation Mining readies more ‘aggressive’ Marathon PGM-copper project approach

Generation Mining says it is making headway on the development plan for its Marathon palladium-copper project, in north-western Ontario, Canada, having contracted all the major engineering companies for the study.

The study is expected to take around seven to eight months to conclude, with completion expected in early 2021, it said.

G-Mining Services will carry out the mine plan and mineral reserves, infrastructure scope of work and integration of the costs and economic analysis; Ausenco Engineering Canada is progressing the process facility layout and design based on the metallurgical testing that is currently underway at SGS-Lakefield; and Knight-Piesold is to design the tailings facility and open-pit geotechnical engineering. In support of the feasibility study and environment impact interactions, Stantec and Ecometrix P&E Mining Consultants will be responsible for the mineral resource estimate, the company said.

Jamie Levy, President and Chief Executive Officer of Generation Mining, said: “It is a very impressive team that we have assembled for the feasibility study. I am confident that these firms will optimise the value of the Marathon-PGM property and will continue to de-risk the project.

“Our goal is to maximise the net present value of the project while designing an operation which will minimise environmental impacts and provide economic benefits to the local communities. We see the Marathon project being near shovel-ready and well timed to the buoyant palladium market.”

Generation Mining acquired a 51% interest in the Marathon property from Sibanye Stillwater on July 10, 2019, and can increase its interest to 80% by spending $10 million over a period of four years. As of the March quarter, around $4 million of the $10 million has already been spent.

A preliminary economic assessment on Marathon published earlier this year outlined a 14,000 t/d open-pit operation growing to 22,000 t/d after expansion, with an average palladium output of 107,000 oz/y for 14 years. The open-pit mining would be owner-operated using conventional diesel equipment consisting of 254 mm diameter rotary drills on 10 m high benches, 29 cu.m bucket hydraulic excavators, and 221 t off-highway haul trucks and auxiliary equipment, according to the study.

On the feasibility study, Generation Mining said all groups were “integrating well” through good interactions and frequent communications.

“G-Mining will progress pit designs and sequencing that will prioritise the high-grade palladium values for initial production to bring increased palladium production into the first half of the mine life, and increase copper production in the mine’s later years,” the company said.

“Ausenco’s plant design is expected to update the quality work that was done in prior studies with newer technology, which, in turn, will improve concentrator operability and lower capital costs, while increasing palladium recovery without sacrificing copper recovery. This flowsheet is expected to be validated with the current metallurgical test work that is progressing at SGS-Lakefield.

“Knight-Piesold will be updating the past tailings dam designs to reflect current best available practices and technologies.”

Stantec and Ecometrix are involved in the feasibility study team to help facilitate the update of the Environment Impact Study report addendum and to help inform the critical path regulatory approvals process, the company added.

At this early stage, the work on the feasibility study will consider an optimised processing and mine production rate that is “more aggressive” than outlined in the PEA, the company said, contemplating starting at 5 Mt/y and expanding to 8 Mt/y after five years.

New leadership at remote optimisation consulting company

Orway IQ has named former Sibanye-Stillwater employee Marnu Lombaard as its new Chief Executive Officer.

Lombaard, who was named company chief with effect from May, takes over from Fred Kock who filled the role temporarily during the establishment phase of the business development, the company said. Kock remains a Director and Technical Consultant within the business.

Lombaard joins the company from Sibanye-Stillwater’s gold segment where he held the position of Vice President Metallurgy and Surface operations.

“Marnu brings to the position a wealth of knowledge and an array of experiences in the mining industry on a national and global level,” Orway said. “His expertise in technology, global strategy and leadership combined with his strong operational experience in the mining industry, make him ideally suited to accelerate our remote optimisation consulting solution (MillROC) to the mineral processing industry.”

MillROC, a joint venture project between Orway Mineral Consultants and Process IQ, is focused on delivering a remote optimisation consulting service for the mineral processing industry. The cloud-based system is initially focusing on comminution circuits.

“The Orway IQ Board feels Marnu’s vision for our company leverages our strong digital foundations, embraces an innovation mindset, builds on our customer-centric culture and invests in the capability of our people,” the company said.

Condra delivers fully automated overhead crane to South Africa PGM operation

Condra says it has developed fully automated overhead crane capability, with the first machine of this type recently delivered to a South Africa platinum group metals operation.

Marc Kleiner, Condra’s Managing Director, said the company was making full use of new developments in sensors, controls and software to offer a very precise positioning capability in automated applications, with the company aware of an industry shift towards more automated operations.

“This is a capability that we will offer to our customers as an option,” Kleiner said. “We will mainly, but not solely, target the copper mines, especially tankhouse and copper-leaching applications where we have extensive experience.”

Condra’s announcement follows the increasing sophistication of its semi-automated installations, which began in 2003 with a grabbing crane installed at a Durban spice company to pick spices and transport them to specific points for release over hoppers, the company said.

At Sibanye Stillwater’s Marikana platinum mine (owned by Lonmin prior to Sibanye-Stillwater’s acquisition of the company), the fully-automated machine recently installed and commissioned is a 16 t, 16 m-span double-girder electric overhead travelling grabbing crane. It features a customer-specified mechanical rope grab in place of the hydraulic alternative to deliver the improved durability of mechanical operation within Marikana’s abrasive operating environment, Condra said.

There are dual hoists in the design; one to raise and lower the load, the other to mechanically close the grab by means of an internal sheave arrangement to overcome the spring-loaded open state.

Variable speed drives are fitted throughout the crane, delivering maximum speeds of 10 m/min on the lift, and 20 m/min and 40 m/min on the cross-travel and long-travel respectively. Four long-travel motors deliver the materials handling equivalent of four-wheel-drive, enabling automated control of all four wheels for precise crane positioning accurate to within 5 mm.

The crane is fully automated with a manual override, according to Condra, and is programmed by an operator from a remotely located control room, where on-screen monitoring is complemented by visual monitoring capability via closed-circuit television.

Condra’s fully automated option applies across the company’s product offering of single girder and double-girder overhead travelling cranes, gantry cranes, bridge cranes and cantilever cranes for markets worldwide, it said.

These machines go up to heavy duty Class 4, with a focus on product quality and reliability to the standards of ISO, GOST and other internationally recognised quality control bodies, Condra said.

Two lines of hoists are manufactured in several standard models suited to most mining, industrial and general applications, from 1 t to 500 t, with motors bought from external suppliers.

Terra Drone lifts off in South Africa with Sibanye-Stillwater underground demonstration

Terra Drone South Africa has shown off its surveying expertise to Sibanye-Stillwater, with one of its drones successfully navigating a 3m x 3 m tunnel at one of the gold and PGM miner’s underground assets.

A simultaneous localisation and mapping-equipped drone was able to realise “stable automatic navigation” under a “non-GPS environment,” Terra Drone said. The result was the generation of a highly accurate 3D model.

Terra Drone said the many injuries caused by fall of rock incidents in Africa could be somewhat alleviated through the use of accurate surveying and inspection.

“We believe that this technology (drone mapping) will improve safety and work efficiency in Africa’s mining industry in the future,” the company said.

Teppei Seki, Terra Drone Chief Operating Officer, said he was delighted to have carried out such a demonstration with Sibanye-Stillwater. He said the company would now focus on volume calculation by “making 3D measurements of stopes, survey and inspection for ore path and vertical shaft with Sibanye-Stillwater”.

The collaboration is expected to be a “giant step” towards opening up the development of more underground mines in Africa in the future, he added.

Terra Drone is a leading commercial drone technology company that is expanding. It has a branch in South Africa along with nine others in the world covering mining, oil & gas and electricity solutions.

DRDGOLD completes WRTRP acquisition, welcomes Sibanye-Stillwater as shareholder

DRDGOLD has completed the acquisition of Sibanye-Stillwater’s West Rand Tailings Retreatment Project (WRTRP) assets in South Africa, over nine months since the deal was initially announced.

Niël Pretorius, DRDGOLD CEO, said the acquisition was key to the company’s growth strategy, increasing its gold reserves by 90% to 5.75 million ounces.

“The way is now clear for us to expedite phase one of our phased plan for the development of WRTRP, to be known going forward as Far West Gold Recoveries,” he said.

“Phase one involves the upgrading of the Driefontein 2 plant to process tailings from the Driefontein 5 dump at a rate of between 400,000 and 600 000 tonnes per month and depositing the residue on the Driefontein 4 tailings dam.”

DRDGOLD has secured a R300 million ($22.6 million) revolving credit facility from a South African financial institution for phase one, and confirmed orders for most of the long-lead items, according to Pretorius. This is all geared towards production in the March quarter of 2019.

Sibanye-Stillwater now holds 38.05% of DRDGOLD and is entitled to exercise – within 24 months – an option for cash to increase its shareholding by up to 50.1%.