Established 1835 • The mining industry’s weekly newspaper
This Betting on
NEWS
week Zazu
Angst at Oyu Tolgoi undermines
recovering Mongolia
Chris Cann
Contributing editor
Majority Oyu Tolgoi owner
Turquoise Hill Resources Ltd is
not the only combatant in the
Mongolian government’s most
recent stoush over taxes at the
world-class copper-gold
development. An equally
dangerous enemy is time.
Late last month, 66% Oyu
Tolgoi owner Turquoise Hill
(51%-owned by Rio Tinto plc)
filed a notice of dispute with the
Mongolian government over an
audit claiming unpaid taxes,
penalties and disallowed
entitlements worth some
US$130 million.
The company has also delayed
issuing the prefeasibility study on
the underground development,
which is necessary for a US$4
billion financing package to be
executed in September, until this
latest problem is resolved. The
PFS and financing have already
been significantly delayed.
In a seemingly separate
development a fortnight ago, the
Mongolian government
approved changes to the 2006
Minerals Law that are expected
to include the creation of a
national geological survey and
the formation of a policy council
to oversee legal changes in the
mining industry; increase land
available for mining and
exploration to 20% from about
01_09MJ140718.indd 1
Who are my
INSIGHT
peers?
5… 11…
mining-journal.com
A year ago the first copper concentrate was shipped from Oyu Tolgoi
8% by lifting a 2010 moratorium
on new licences; and may also
foreshadow the resolution of 106
licences that were revoked as
part of a corruption investigation.
There are some, namely
Mongolian bureaucrats, who
would say the matters are
unrelated. They suggest that the
investment framework is
improving regardless of the
process through which Oyu
Tolgoi’s development is
protractedly passing.
This is wishful thinking at best:
delusional at worst.
Sam Spring, president and
chief executive of junior
Mongolian-focused explorer
Kincora Copper Ltd, told Mining
Journal that “legislation without
precedent” such as revisions to
the Minerals Act “doesn’t mean
much when you have existing
conflicts that remain unresolved”.
He refers to not only the Oyu
Tolgoi conflict, but an action
July 18, 2014
Don’t be
INSIGHT
afraid of
Greenland:
Golder 13…
against the government worth
US$326 million brought by
Canadian explorer Khan
Resources Inc, due to be decided
this month, and 106 revoked
licences that remain in limbo.
Until these headlining issues
are resolved, OT being central,
investors will still be reluctant to
take a punt on Mongolia.
“Excluding potential future
investment from China and
Russia, FDI simply isn’t coming
back to Mongolia [untill Oyu
Tolgoi] is solved,” BDSec chief
operating officer Nick Cousyn told
Mining Journal. “So the timing of
the tax dispute has further
damaged investor sentiment and
may complicate the process for
Oyu Tolgoi project financing by
the September 30 deadline.
“The new mining policy was a
great headline, but there’s no
timeframe for issuing new
licences and it sounds like more
legislation may be required.”
We’re from
WEST END
government
and here to
help 30…
Focus: East-
Central Europe
Better times to come for
the region’s miners
14…
These views, and those of
others that feel similarly, should
not be taken as slight on
Mongolia as a resource
destination. Most with an
understanding of Mongolia
would point to recent evidence
that the government’s push on
increasing FDI is gaining traction
– Kincora has attracted a major
copper player as a potential
project partner and banks such as
Bank of America Merrill Lynch,
Goldman Sachs, and ING are
reportedly looking to back a US
dollar bond issue by the Trade &
Development Bank of Mongolia.
There is at least mid-to-long-
term optimism.
Rather, these comments are a
reflection of a realty that the
government should not
overlook – Oyu Tolgoi remains
the poster boy for investment.
Looming large for the
government and Turquoise Hill
is the September financing
deadline. Provided nothing else
pops up in the interim and
Mongolian courts can resolve
the tax dispute in the stated two
month period, Turquoise Hill
should be happy to release the
PFS in time to execute financing.
In fact, even if the dates are
pushed back slightly, the
financing syndicate has proved
flexible.
More worrying would be the
fallout should Mongolian courts
Continues on page 9
17/07/2014 16:54
 2 JULY 18, 2014 • mining-journal.com Follow us on @miningonline

Comment

Also in this issue Cyber noughts

NEWS
Terms that have already invaded corporate boardrooms in
• Cauldron projects back on the boil 6 various industries that are coming into much greater focus in
• De Beers market share to rebound 7 mining include anti-corruption (laws) and compliance, and
• Nickel price has room to grow 9 cybercrime. Times have changed, and are changing fast still.
• Walsh part of Rio conundrum 10 The latter is garnering more attention. This week, the
Australia-Africa Mining Industry Group (AAMIG) posted a
INSIGHT
notice for a Cybercrime 101 workshop. “Most people have
• Exploration success will heard the term cybercrime used, but how many actually
decide Miles-Simich ‘race’ 12 know what the word actually means?” AAIMG asked.
At the end of this month, at a meeting that will draw a
FOCUS
decent crowd, experts from McGrathNicol Forensic, ATOS
• Minerals could help revive Serbia 20 Australia and Clayton Utz will help define cybercrime, what the
villains tend to look like, the technology involved, prevention
DATA
and detection, and legal issues surrounding cybercrime.
• Production & markets 26 Recent reports have focused on the cycle of ‘innovation’ in
• Finance 27 the field. “Cybercriminals are developing increasingly
sophisticated malware – including mobile malware – and
TECHNOLOGY
botnet management techniques, alongside fraud-as-a-service
• Miners must do more with less 28 models that make many types of malware much more widely “Recent reports
available,” RSA Research said in one report. “At the same time,
Companies in this issue a lot of criminal and fraudulent activity still relies on relatively have focused
Alrosa OJSC
Anglo American plc
8
4, 8
unsophisticated malware, such as POS malware, and classic on the cycle of
phishing attacks that continue to yield good returns.”
Apollo Minerals
Avebury Nickel Mines Ltd
11
3 Organisations are being challenged on many fronts to ‘innovation’ in
Barrick Gold Corp
BHP Billiton
3, 4
10, 11
protect their data. “More mobile workforces and customer the cybercrime
bases, and extended supply chains, throw into relief the
Botswana Diamonds plc
Bullabulling Gold Ltd
8
3 pivotal role of user authentication, and the resulting need for field”
Cape Lambert Resources Ltd 3 more sophisticated approaches to securing [personal and
Cauldron Energy Ltd 6 corporate proprietary data],” another report said. “The shift
Centaurus Metals Ltd 4
Chinalco 3 towards software-defined networks, cloud infrastructures
Cliffs Natural Resources Inc 29 and BYOD adds further complexity.”
De Beers 7 The London-based business management consultancy Kroll
Dominion Diamond Corp 8
Dundee Precious Metals Inc 17 said cybercriminals had become more organised and adaptive,
Endeavour Mining Corp 3 continuing to develop fraud-as-a-service models that made
Euromax Resources Ltd 18 some of the most innovative and advanced threat and fraud
Fortescue Metals Group Ltd 3
Freeport-McMoRan Inc 3, 19 technologies available to a much wider user base.
Gabriel Resources Ltd 16 “Between the [Edward] Snowden fallout and increased
Genesis Resources Ltd 19 scrutiny by [regulators]… cyber security strategies that were
Hudbay Minerals Inc 3
Intergeo MMC Ltd 4 largely designed from companies that were part of the
Ivanhoe Mines Ltd 4 ‘critical infrastructure’ will become more of an expectation
Kincora Copper Ltd 1 for everyone,” Kroll said in its 2014 Cyber Security Forecast.
Kingsgate Consolidated Ltd 4
Klondex Mines Ltd 4 Richard Roberts,
Kumba Iron Ore Ltd 3 richard.roberts@mining-journal.com Editor-in-chief
Lucapa Diamond Co Ltd 12
Lucara Diamond Corp 8
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02MJ140718.indd 2 17/07/2014 17:07

 Follow us on
Production and markets
Fortescue Metals Group Ltd
narrowly missed guidance for
the 2013-14 financial year, but
spent less than expected on
expansion of its Pilbara
operations. The world’s fourth-
largest iron-ore producer said it
shipped 124.2Mt of iron ore in
the 12 months to June,
compared to guidance of 127Mt.
It produced 38.7Mt in the June
quarter at an annualised run rate
of 155Mt. It said its US$9.2 billion
expansion to 155Mt/y was now
complete, with capital
expenditure in full-year 2014 to
reach US$1.9 billion – US$200
million below guidance.
Peru’s minister of energy and
mines says the country is on
track to supplant China as the
world’s second-largest copper
producer (Chile is the biggest),
according to Spanish-language
website OutletMinero. During a
visit to Freeport-McMoRan
Copper & Gold Inc’s Cerro Verde
project, Eleodoro Mayorga Alba
said the South American country
would produce 2.8Mt of copper
in 2016, double the amount it
produced in 2013. Peru’s largest
producers are: Cerro Verde,
MMG Ltd’s Las Bambas, Hudbay
Minerals Inc’s Constancia, and
Chinalco’s Toromocho.
Central Europe-focused New
World Resources plc has
reached agreements with its
customers to sell coking coal at
an average €85/t (US$116/t) in
the September quarter, a 1%
increase on the realised price
from the second quarter. This
average coking-coal price is
based on the expectation that
coking-coal sales for the
September quarter will be split
approximately 45% hard coking
coal, 42% semi-soft coking coal
and 13% PCI coking coal, the
company said. NWR continues to
target full-year coal production
and sales of 9-9.5Mt, with
55-60% of coking coal in the
sales mix.
Kumba Iron Ore Ltd has warned
profits will slide by as much as
19% in the first half of 2014, as it
prepares to release results next
week. Headline earnings and
03_04MJ140718.indd 3
Register to receive Mining Journal global news updates at mining-journal.com/newsletter • JULY 18, 2014
PIC OF THE WEEK
The happy gang… Western Australia’s minister of mines and petroleum, Bill Marmion (right) celebrates
with Atlas Iron Ltd’s managing director, Ken Brinsden (left) and chairman David Flanagan (centre) after
opening the Mt Webber iron-ore mine in the Pilbara of Western Australia. Production has started at
3Mt/y rate, before it ramps up to 6Mt/y following the commissioning of the second-phase expansion by
the end of the December quarter
basic earnings for six months to
June 2014 are expected to be
between R6.26 billion
(US$578,000 million) and R6.90
billion, with headline earnings
per share (HEPS) and basic
earnings per share (EPS) to be
between R19.50 and R21.50, it
said. In the first half of 2013,
headline and basic earnings
were R7.75 billion and R7,76
R7.75 billion respectively, and
HEPS and EPS were R24.13 and
R24.16 respectively.
West African gold producer
Endeavour Mining Corp’s
first-half production results
surpassed expectations thanks
to strong output from its
Agbaou and Nzema mines in
Ivory Coast and Ghana,
respectively. The miner
produced 228,429oz in the first
six months of the year, putting it
on course to beat its annual
guidance of 400,000oz-
440,000oz.
Finance
Barrick Gold Corp and Saudi
Arabian Mining Company
(Ma’aden) have agreed to form a
joint venture to operate the
Jabal Sayid copper project.
Ma’aden will acquire its 50%
interest in the project for cash
consideration of US$210 million.
Barrick expected production to
start at Jabal Sayid in late 2015
with output of 100-130Mlb/y
copper in concentrate in the first
five full years of operation. The
mine is expected to operate for
up to 15 years on the basis of
1,400Mlbs of copper in proven
and probable reserves, the
company said.
Bullabulling Gold Ltd is
expected to delist from AIM
following Norton Gold Fields
Ltd’s acquisition of more than
50% of the company. Norton
said it had now reached a
position of control of
Bullabulling with an interest of
50.95%, and an offer for
Bullabulling shares was
subsequently extended by 14
days to July 28.
ASX-listed Cape Lambert
Resources Ltd said it has
reached a settlement with
Metallurgical Corporation of
China Ltd over the final A$82
million (US$77 million) payment
from the sale of the Cape
Lambert magnetite iron-ore
project. The company said both
the arbitrator and escrow agent
have been advised to release
A$30 million to MCC and the
balance of approximately A$51.6
million to Cape Lambert.
Following receipt of the funds,
3
This week
Cape Lambert will have cash,
receivables and listed securities
to the value of A$100 million
(US$94 million), which includes
unrestricted cash of A$70
million. The board will meet in
the next two weeks to finalise a
dividend and/or return of capital
to shareholders.
0.12
0.10
A$
0.08
Cape Lambert Resources Ltd share price (A$)
0.06
June 17, 2014 July 16, 2014
Avebury Nickel Mines Ltd
(ANML), formerly QCG
Resources, has made headway in
its proposed acquisition of MMG
Ltd’s dormant Avebury nickel
mine in Tasmania. It has
appointed GMP Securities as
lead manager for the financing
programme to assess a range of
equity and debt financing
options to fund both the
A$33.25 million (US$31.3
million) needed to complete the
acquisition and future capital
requirements. MMG placed
Avebury on care and
maintenance in February 2009
amid the global financial crisis
and subsequent plunge in the
nickel price.
17/07/2014 16:31
 4 JULY 18, 2014 • mining-journal.com
This week
Northland Resources SA has
filed for corporate
reorganisation with the Luleå
District Court in Sweden for a
second time in two years as it
struggles to deal with paying
suppliers and shipping iron ore.
The owner of the Kaunisvaara
iron-ore mine in Sweden started
an “informal reorganisation”
process on June 30. As part of
June’s savings strategy, the
company said it was temporarily
suspending payments to its
suppliers and creditors. This
move was opposed by one
supplier, prompting Northland
to apply to the court in Sweden
for a formal debt reorganisation
in an attempt to keep the
company afloat. On Monday,
the court approved the
application for a restructure in
Northland Resources and its
subsidiaries.
Vancouver-based Mercator
Minerals Ltd’s shares sunk as
much as 31% this week after
revealing a proposed US$100
million takeover of the company
was unlikely to go ahead. The
company said its suitor Intergeo
MMC Ltd, controlled by Russia’s
Mikhail Prokhorov, did not
expect to request or agree an
extension to the completion
deadline beyond August 1. This
came after the Russian Federal
Anti-Monopoly Services said on
July 2 that it was extending its
review of the deal by two
months. If FAS has not
completed its review by August
1, the proposed transaction will
not go ahead unless the parties
otherwise agree, Mercator said
on Tuesday.
Exploration and
development
The first assays from the
underground diamond drilling
campaign at Ivanhoe Mines
Ltd’s Kipushi copper-zinc-
germanium-lead and precious
metals project in the Democratic
Republic of the Congo have
confirmed high copper and zinc
grades. Three drill holes
returned zinc grades of 40.9%
over 348.5m, 44.8% over 339.4m
and 33.3% over 305.8m, along
with internal zones in the first
two holes of 60.4% Zn over
03_04MJ140718.indd 4
35.1m, 56.3% Zn over 18m and
56.6% Zn over 71m. The third
hole intersected a copper-silver-
germanium rich zone grading
6.1% Cu, 44.5% Zn, 144g/t Ag
and 66.9g/t Ge over 31m from
197m.
Ormonde Mining plc has been
informed by the local
government it needs further
information before a mining
concession for its Barruecopardo
tungsten project in Salamanca,
Spain can be issued. In April,
Ormonde said a legal review
needed to be completed for the
historic mining concessions at
the project prior to a new
concession being issued, which
it was expecting in late June-
July. On Tuesday, Ormonde said
the review had largely been
completed to its knowledge, but
“a final formal request has been
made by the authorities to
obtain comment from the
owners of the historic cancelled
concessions in relation to the
cancellation process, no
response having been received
in relation to its initial request.”
Ormonde advised that a “short
additional time” was required for
this step.
Sirius Resources Ltd’s shares
jumped 15% to A$3.95/share
(US$3.7/share) on Wednesday
after releasing high nickel,
copper, cobalt and PGM hits from
the first reconnaissance drill hole
at the Taipan prospect, part of its
Polar Bear deposit in Western
Australia. Results were 4.10m at
3.8% Ni, 2.45% Cu, 0.08% Co,
0.9g/t Pt and 1.6g/t Pd from
104.4m, including 2.15m at 5.84%
Ni, 3.73% Cu, 0.12% Co, 1.1g/t Pt
and 1.65g/t Pd from 106m. Sirius’
managing director, Mark Bennett,
said: “To get a result like this with
the first hole into a 10km-long
target horizon has exceeded all
our expectations and bodes very
well for the nickel potential at
Polar Bear.”
4.0
3.5
A$
3.0
Sirius Resources share price (A$)
2.5
June 11, 2014
People & appointments
editorial@mining-journal.com
Newcrest changes
Newcrest Mining Ltd’s new
managing director (MD) and chief
executive (CEO) Sandeep Biswas
decided to trim his executive
leadership team as the company
focused on operating discipline
and cash generation. Biswas has
scrapped the chief operating
officer role that he had been
performing for the past six
months, and replaced executive
general manager of people and
communications Debra Stirling
with Jane Thomas, formerly of
renewable energy company AGL
Ltd. Geoff Day, who was
executive general manager of
sustainability and external affairs,
will leave Newcrest this quarter
and become CEO of gold
producer Kingsgate Consolidated
Ltd. His responsibilities will be
distributed among other
managers, Newcrest said.
Additionally Phil Stephenson will
join Newcrest on August 18 to
take up the role of general
manager for health, safety,
environment and security. He
held the same position at
Newmont Mining Corp. At
Kingsgate, Day replaces former
MD and CEO Gavin Thomas, who
passed away in June. Additionally,
Kingsgate’s chief financial officer
Duane Woodbury left the
company in early-July with Ross
Coyle, Kingsgate’s general
manager of finance and
administration replacing him.
Murphy gets technical
Former Anglo American plc
executive Barry Murphy has
been named senior vice
president of technical services at
Yamana Gold Inc, effective
September 3. In his new role,
Murphy will be responsible for
all project development and
construction, and help develop
Yamana’s strategy for
optimisations, expansion and
corporate development,
according to the Canadian gold
miner. He has over 25 years of
mining and mineral processing
experience in Africa and South
America and was most recently
July 16, 2014
vice president of projects for
Anglo’s copper division.
Follow us on @miningonline
Centaurus exodus
Centaurus Metals Ltd has cut its
executive and board roles in a
cost-cutting move as it looks to
attract finance for its Jambreiro
iron-ore project in Brazil.
Operations director Peter Freund
stepped down from an executive
role, but remains a non-executive
board member, while Richard
Hill and Steven Zaninovich left
the board as non-executive
directors. In addition, company
secretary Geoff James left
Centaurus with chief financial
officer John Westdorp assuming
the additional role. Alexandro
Moura, general manager of
Brazilian operations, was made
redundant.
Moves at Mawson
Toronto-listed Mawson West Ltd
has made chief operating officer
Greg Entwistle its new chief
development officer (CDO), after
Alistair Croll came in as his
replacement, effective July 28.
“Entwistle’s transition to CDO
ensures significant focus remains
on delivery from the company’s
high grade Kapulo and Dikulushi
[copper] projects in 2014, in
addition to securing our future
corporate objectives,” managing
director and chief executive,
Bruce McFadzean, said. Croll has
previously held senior roles at
companies in Australia and South
Africa, including stints at St
Barbara Ltd, Consolidated
Minerals Ltd, Anglo American
Platinum Ltd and De Beers.
Klondex hires
Toronto-listed Klondex Mines Ltd
has added Mike Isaak, Henry
Follman and Rosa Whisenand to
its team as it looks to grow its
gold and silver operations in
Nevada, US. Isaak, formerly of
Barrick Gold Corp, was made
mine manager of the Fire Creek
operation. Follman, previously at
Couer Mining Inc, was made Fire
Creek senior geologist and
Whisenand, also previously at
Barrick, was made financial
manager, assuming
responsibilities for information
technology, purchasing,
warehousing and accounting.
17/07/2014 16:31
 Follow us on
Betting on Zazu
Richard Wachman
News editor
For more evidence that zinc is
about to fly, look no further than
Toronto-listed Zazu Metals Corp,
where Lukas Lundin, chairman
of the mining company that
bears his name, holds just under
20%.
Interviewed by Mining Journal,
Zazu president Matt Ford let slip
the company was expecting to
gain clearance to trade its shares
on the US over-the-counter
exchange, OTCQX, in about a
month.
That has come about after
Ford received a barrage of
enquiries from would-be US
investors, eager to gain
exposure to the company and
the strengthening zinc price as
– around the world – old mines
close and too few open to take
their place.
“We have been pursuing
a US listing because, don’t
forget, although we are based
in Vancouver, we are a US-
based zinc property – we’re
in Alaska.”
Rattling off data from a
recently published preliminary
economic assessment (PEA),
Ford claimed Zazu’s Lik property,
Base camp at Lik property, which Zazu claimed was undervalued by the market
05MJ140718.indd 5
Register to receive Mining Journal global news updates at mining-journal.com/newsletter • JULY 18, 2014
half-owned by Teck Resources
Ltd, which operates the adjacent
Red Dog project, could become
one of the world’s largest
producers of zinc concentrate.
Ford said: “We are very
leveraged to a rise in the zinc
price. When you look forward,
anything over US$1/lb to
US$1.10/lb and the project starts
to look fantastic (zinc is currently
trading just shy of US1.05/lb, up
from US$0.83/lb a year ago).
“As a rule of thumb for every
10c on the zinc price, we are
looking at US$80 million on the
NPV (net present value) and
about 8% on the IRR (internal
rate of return) - US$1.50 and we
are away to the races.”
That said, development was
yet to get into full swing and
Ford was waiting for a report,
from the Alaska Industrial
Development Export Authority
(AIDEA), that should outline in
the next few months the extent
to which it is ready to shell out
on nearby port and road
infrastructure to underscore Lik’s
commercial viability.
Ford was optimistic. “The nice
thing here is that AIDEA is
specifically mandated to
undertake regional investment.
They funded and built the road
and port when Red Dog opened.
Teck now operates [the port]
under licence.
“Obviously [AIDEA] want to
see a second user, because they
will be able to extract
[additional] toll fees,” he said.
He said production would not
kick in until the latter part of this
decade and indicated the
permitting process had a way to
go.
“Given the innate complexity,
four or so years is probably a
good guess for permitting and
construction of the mine,” he
said.
“I always remind people that
in the general context of trying
to permit a mine, we’ve got it
fabulous. Mining-friendly
jurisdiction rolling out the red
carpet for miners, established
procedures, adjacent to an
operating mine [Red Dog], all the
data gathered and blessed.
Consequently we’re expecting a
far less bumpy road than is
typically the case.”
When will drilling start? “We
have done some preliminary
drilling and engineering work,
but unlikely to do more this year.
Actually, the deposit is so large
that exploration drilling is of
limited value. We know it’s there
5
News: Americas
and it’s not complicated in any
way.”
Zazu’s share price, it must be
said, is still a long way from the
C$1.75 (US$1.63 it floated at in
2007, trading at around C$0.53.
Ford reckoned the market was
undervaluing the shares. He said
on the basis of financial
yardsticks used in the PEA,
Zazu’s half share in Lik was
worth more than double Zazu’s
market capitalisation of C$25
million.
He added the balance sheet
was strong with no debt and
cash of about US$1 million,
although forecast capital
expenditure of US$352 million
was hardly chicken feed.
Zazu is not rushing to spend
money on a feasibility study, at
least not yet, so what could be in
the offing if the zinc price
continued to rise?
Given Zazu owns Lik with Teck
in a 50-50 venture, with an
option to acquire up to 80% if it
meets certain cap-ex targets,
surely Ford might consider
selling to Teck if the opportunity
arose?
“I can’t say anything on their
behalf, but speaking personally,
that would make perfect sense.”
Make of that what you will.
17/07/2014 16:30
 6 JULY 18, 2014 • mining-journal.com
News: Americas
Cauldron projects back on the boil
Richard Wachman
News editor
At first, plans for a uranium
mine at Cauldron Energy Ltd’s
Rio Colorado project in
Argentina went down like a
lead balloon with the local
community.
“We were a bit Australian
and a bit pushy and we
didn’t stop to allow the
Argentinians time to do it
their way,” said Simon Youds,
Cauldron’s effusive head of
operations.
But an ongoing campaign
by Cauldron to win over the
hearts and minds of residents
living near the project, based in
the Catamarca region, seemed
to be paying off, Youds said
this week.
Pickets and activists at the
forefront of earlier “social
resistance” have melted away
and local government was
supporting Cauldron’s efforts to
establish a dialogue with the
locals.
“We are doing things slowly,
slowly… but there is an
expectation we could be putting
the loaders in by September and
re-establishing access,” said
Youds.
Cauldron has recently secured
US$15 million of financing from
Chinese investors, so Youds was
on a bit of a high.
“Common in the minerals
exploration industry in recent
times, the development of
Cauldron’s major prospects
has suffered through under-
funding throughout 2013,”
said Youds. Now things
seemed to be changing for
the better.
The latest fund-raising
exercise, via a shareholder
placing, would see Chinese
investors emerge with a
significant proportion of
Cauldron’s equity.
Although he was excited by
Argentina (more later), Youds
said about half of the new
money would be pumped into
Bennet Well and the wider
Yanrey uranium project in
Western Australia, thousands of
miles away.
06MJ140718.indd 6
Rio Colorado sandstone sand grain with secondary uranium mineral
sodium zipperite, which has been deposited, possibly displaying an
ideal insitu recovery (ISR) environment
Yanrey was “the premier
and most advanced of the
company’s developments”,
said Youds.
Bennet Well has established
a total inferred and indicated
JORC-compliant resource of
15.7Mlb of U3O8 at 270ppm,
with a 150ppm cut-off.
The project covers 1,930km2 of
mesozoic sediments, suitable for
sandstone-hosted uranium
mineralisation and amenable to
in-situ recovery mining.
“The next thing we need to
do is establish that the material
will leach in situ and we’ll get
a recovery number that allows
us to do our project planning,
and also some design on a
plant, and so on.
“After this, we will be at
pre-feasibility stage, we would
have done our leach trial, and
we’ll have initiated our
approvals to get part of our
mining licence.”
The Yanrey area was viewed
as highly prospective and
Bennett Well would be just
one of several wells as the
company discovered more
resource.
“I can see the day when we’ll
have tankers running up and
down, delivering pregnant
liquor to one central processing
plant,” said Youds.
“Paladin [Resources] has
23Mlbs not far away. We have
an internal target of 30Mlbs,
but in reality we expect it to be
a lot more than that. Our
exploration target size for
Yanrey is 30Mlbs-115Mlbs,
so it’s going to be big.”
Youds is passionate about his
work but said most people
“don’t get uranium”.
“The guys who do get it
realise the Chinese are building
nuclear reactors as fast as they
can, and Chinese investors have
worked out China needs to
secure offtake for that… but
the western world just hasn’t
woken up.”
Suddenly, Youds gets into
his stride. “You just have to
go to Beijing. You can’t see
the city because of the smog
from the coal-fired power
stations, that’s the reality
which escapes westerners.
“You get Germany standing
up and saying we are not
Follow us on @miningonline
using any nuclear, but they
are burning more coal than
they ever have, and they’re
importing half their power
from France, which is 70%
nuclear. It’s just hypocrisy.
“There is only one solution if
you want to stop using fossil
fuels – use nuclear power.
Renewables won’t be there for
50-to-100 years.
“Nuclear is the greenest form
of power. If you have a fast
breeder reactor, there is no
waste, they utilise the whole
thing.”
According to Youds, the
Chinese plan to build 65
nuclear power plants in the
next 15 years to meet at least
20% of their energy needs as
part of government plans to
clean up the polluted
environment.
Argentina was another serious
customer for nuclear and that
brought Youds back to the Rio
Colorado project.
“Look, Argentina has had a
long history of nuclear power,
and they continue to rely on
nuclear power domestically –
the current government, which
is quite a socialist government,
has restated that.
“Rio Colorado is an
outcropping sandstone-
hosted, possibly hydrothermal in
origin, 11m-wide, steeply
dipping feature, and which
outcrops for about 16km. It has
been mined historically for
copper and for silver. But the
rock chips on the surface show it
has got about a 300ppm
uranium grade.
“We’ve done some early
work in terms of metallurgy…
and we estimate below the
leach horizon you are going
to have maybe three to four
times, maybe six times those
grades. So we are very keen
to drill it.
“Actually, we have been keen
to drill it for the last six years. We
have got the approvals to go
and drill it, and we started to
move the drill rig there, but
there was a big NGO
resistance… and has prevented
access. We’ve been negotiating
with them ever since.”
17/07/2014 11:07
 Follow us on
De Beers market share to rebound
Paul Zimnisky
New York, US
De Beers’ share of the rough
diamond market has been in
steady decline since the late
1980s. Still perceived as a
monopoly by many outside of
the industry, for years De Beers
had control of more than 80% of
the world’s rough diamonds in a
ploy to corner the market and
dictate prices.
But a series of events over the
past 25 years has taken De Beers’
market share down from about
80% in 1989 to 35% today.
After the fall of the Soviet
Union in 1991, Russia, the largest
diamond-producing country in
the world, began selling its
diamonds outside of De Beers.
Five years later, perhaps the
most important diamond mine
in the world at the time,
Australia’s Argyle mine,
Reliable partner for
efficient mining life cycles
• Advisory Services
• Research & Development
07_08MJ140718.indd 7
Register to receive Mining Journal global news updates at mining-journal.com/newsletter • JULY 18, 2014
Aerial view of the Snap Lake mine in Canada’s Northwest Territories.
Gahcho Kué is about 90km east of Snap Lake
terminated its supply
relationship with De Beers in a
manoeuvre for independence.
Over the next 10 years, the
emergence of world–class
diamond discoveries in Canada’s
Northwest Territories further
eroded De Beers’ market share.
This new competition,
coinciding with anti-
monopolistic legal action
7
News: EMEA
set to start production in the
second half of 2016 or early
2017.
Gahcho Kué is the world’s
most anticipated new diamond
mine, estimated to produce
about 5Mct/y, which would
Photo: De Beers Group
make it the seventh largest
diamond mine in the world in
terms of value produced, and
11th in the world in terms of
carats produced, using 2014
estimates.
De Beers owns 51% of Gahcho
Kué, and Canadian-based
taken against De Beers in the Mountain Province Diamonds
US and European Union, further Inc (TSX: MPV) holds the other
pressured De Beers to surrender 49%.
its price-fixing scheme, Using current estimates, the
restructure the company, and addition of Gahcho Kué
give up approximately 45% of its production to De Beers’ mine
market share. portfolio would raise De Beers’
For the time being, it appears market share to 40% by 2018.
that De Beers’ market share has Gahcho Kué’s land and water
bottomed out with the advent permits are in the final review
of Canada’s Gahcho Kué mine Continues on page 8
• Engineering & Construction
• Operational Support
Royal IHC
mining@ihcmerwede.com
www.ihcmerwede.com
17/07/2014 11:05
 8 JULY 18, 2014 • mining-journal.com Follow us on @miningonline

News: EMEA

Continues from page 7 This boost in new demand (TSX-V: NAR), prospecting for
stage and are expected to be for diamonds is forecast to economic deposits in Canada’s
approved by the year-end. The outpace new supply. Russia’s arctic, and Botswana Diamonds
project’s mine build cost is Grib mine, which began plc (LSE: BOD), exploring in

Photo: De Beers Group

slated to be C$858 million
(US$800 million), which will
most likely be raised by De Beers
and Mt Province via debt
financing and equity. A
definitive financing plan is
expected in the next six months.
New global demand for
diamonds is primarily coming
out of China where the current
generation is the first to adopt
the Western tradition of giving
diamond engagement rings.
The number of urban Chinese
brides being given a diamond
engagement ring has increased
from less than 1% to greater
than 50% over the last 20 years;
half of China’s population of 1.3
billion is considered urban.
production last month, will
be the first new non-alluvial
diamond mine to produce more
than 1Mct/y since Canada’s
Diavik mine started production
in 2003.
Including Gahcho Kué, there
are only three diamond
development projects in the
world with production profiles
that exceed 1Mct/y.
In addition to Gahcho Kué, the
only other large-scale mines in
development are Russia’s
Botuobinskaya mine, expected
to begin production next year,
and the recently financed
Renard mine, which will be the
Canadian province of Quebec’s
first diamond mine, expected to
Africa with Russian joint-venture
partner Alrosa, are two of the
few commercial diamond
explorers in the world today.
Global diamond production is
Diamond production in 2014 will estimated to be 130.3Mct in
be slightly down on 2013 2014, which would be down
0.7% from 2013. The total value
start operations in 2017. of 2014 production is estimated
Botuobinskaya is owned by to be US$12.9 billion, which
Russia-based Alrosa OJSC (RTS: would be up 2.7% from 2013.
ALRS), and Renard is owned by These figures represent a
Canadian-based Stornoway decrease in global diamond
Diamonds Corp (TSX: SWY). production volume, but an
With little grassroots diamond increase in the price of rough
exploration, it is likely that the diamonds in 2014.
future diamond supply picture is De Beers is 85% owned by
not going to change anytime Anglo American plc (LSE: AAL)
soon. and 15% owned by the
North Arrow Minerals Inc Botswana government.

At the time of writing the author held a long position in Stornoway Diamond, North Arrow Minerals, Lucara Diamond Corp, and a short position in
Dominion Diamond Corp. This article originally appeared on PaulZimnisky.com. Paul Zimnisky has worked in the financial industry for over 10 years as an
arbitrage trader, equity analyst, and exchange-traded fund creator and developer. He closely follows the global financial markets, gold, diamonds, and the
US energy industry. He graduated from the University of Maryland’s Robert H Smith School of Business with a BS in Finance

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 Follow us on
Nickel price can grow
Chris Cann
Contributing editor
Nickel, the so called ‘wild beast’
of metal markets, is likely to run
further northwards with the help
of speculative steam but will not
approach levels seen when the
stainless steel ingredient last
caught the imagination of metal
traders in 2006.
The nickel price was up by
some US$5,300/t or 38% to
US$19,275/t last week compared
to levels in early January before
Indonesia shocked metal
markets by enacting its
proposed ban on concentrate
exports.
Adding fuel to the fire were
tensions in Eastern Europe as
Russia – one of the world’s other
major nickel producers –
annexed Crimea and brought
down a raft of soft sanctions on
itself, which led to speculation of
more serious action, potentially
affecting metal exports.
The last time nickel enjoyed
such a run was back in 2006
during the pomp of the boom,
when a serious run-down in
stocks and backwardation
(forcing physical delivery)
combined with rampant
speculation in what is a relatively
small market to drive the price
past US$50,000/t.
Back then, the emergence of
nickel pig iron out of Indonesia
dragged prices back to around
US$30,000/t before the crash in
2008 completely pulled the floor
out from under nickel demand.
The price then spent an
uncomfortable period below
US$10,000/t.
The pig-iron industry has been
refined further over the past
eight years and processing has
become more efficient to the
point where it makes up 50% of
the stainless steel market – 65-
70% of nickel demand – and so
has kept the nickel price at bay.
Until this year.
With pig iron essentially
removed from the market
through the ban on exports from
Indonesia, there is an argument
that we could be in for a repeat of
2006. For starters, most of the
stated LME stocks – which are
01_09MJ140718.indd 9
Register to receive Mining Journal global news updates at mining-journal.com/newsletter • JULY 18, 2014
Lock in… nickel’s price is likely to rise
ample and the realisation of
which has forced the price down
from more than US$21,000/t in
May – are tied up in financing
arrangements and so are actually
not available supplies of metal.
Secondly, and more
importantly, with pig iron
production out of the equation
mine supply levels are actually
below those back in 2006. This
will eat into stocks and any
disruption to production in
major nickel centres such as
Sudbury, Canada, or Norilsk,
Russia, could prove seriously
disruptive to nickel markets.
SP Angel analyst John Meyer
told Mining Journal he had
previously expected a surplus
this year followed by a small
deficit next year but was revising
his numbers.
“Taking out Indonesian
production, which was 16% of
mine supply in 2013 and was
expected to be similar this year,
the market should be in quite a
severe deficit this year,” he said.
On the demand side, stainless
steel nickel consumption is
forecast to continue expanding
by around 3-5% annually.
And then there it the great
unknown – speculative demand.
The smaller market that is nickel
has proved itself extremely
vulnerable to speculation, which
could take the nickel price by
the collar if the fundamental
drivers mentioned take hold.
One European metal trader
contacted by Mining Journal
suggested fundamentals did not
point to further rises in the
nickel price but the “politics and
speculation” around Indonesia
could push the price in either
direction.
The Philippines, another
pig-iron producer, is also
considering a similar ban on
exports. Whether this goes
ahead or not is another point on
News: Australia and Asia
which to speculate.
Numis Securities analyst Cailey
Barker told Mining Journal price
swings of US$500/t over a
matter of days, mostly up,
indicated that speculators had a
heavy presence in the nickel
market. He said the market was
in a “drunken euphoria” with
traders taking active positions,
including shorts, though the
“momentum trade” for nickel
was certainly on the upside.
Holding nickel back are
existing LME nickel stocks, which
stand at 305,000t and contrast
against the 2006 low of 2,982t.
The net result is a nickel price
that is likely to continue to rise,
but will probably lack the steam
to reach the heights of 2006.
Standard Bank commodities
strategist Leon Westgate told
Mining Journal he expected
nickel to trade sideways in the
near-term and then seasonally
lower toward the back of
summer before picking up
heading into the New Year and
moving higher.
He said nickel was roughly
where he would expect it to be,
with his figures predicting an
average price for the quarter of
US$18,700/t.
Patricia Mohr, from
Scotiabank, predicted nickel
supply will fall by 20% this year,
which has seen her firm’s
forecasts shift materially upward.
Scotiabank sees nickel trading at
US$18,290/t this year,
US$23,693/t in 2015 and
US$27,550/t in 2016, provided a
status quo on Indonesian policy.
These predictions are based
on basic supply-demand
dynamics and do not take into
account the speculative driver,
which is that much more
significant for nickel. On that
basis, nickel could move back
past US$30,000/t within the next
few years.
9
Angst at
Oyu Tolgoi
Continued from page 1
not provide a resolution and the
matter be sent for international
arbitration. This would likely
push resolution of the whole
matter into 2015, at which point
it may begin to encroach on the
election cycle.
Parliamentary elections are
due in mid-2016 and presidential
elections follow a year later. This
may seem a long way off, but it is
not so far when dealing with the
lengthening development
schedule at Oyu Tolgoi.
Last time the Mongolian
political train got up a head of
steam, a series of anti-investment
legislation was passed, mining
licences were revoked and, of
course, the debate between the
government and its partners at
Oyu Tolgoi intensified. FDI fell as
a result and was down 52% last
year.
The fact that FDI was down by
64% in the first half of this year is
partly a reflection on a falling
coal price, but also a
commentary on the importance
of Oyu Tolgoi and relative
irrelevance of the government’s
suite of investment reforms.
Neil Ashdown, from the
Mongolia desk at international
risk consultancy IHS, told
Mining Journal the delay that
has resulted from the latest
dispute at Oyu Tolgoi is as
much of an issue as the dispute
itself.
“You have to remember that
Mongolia is a small country (by
population) with a small number
of political elite [that has] a lot of
overlap with the business
community,” he said.
“So once you get into the
election cycle – probably toward
the end of 2015, but definitely
early in 2016 – the bandwidth in
terms of the capacity to resolve
issues to do with mining
becomes much reduced.”
Regardless of whether
Turquoise Hill has a case to
answer or not in regards to its
tax contribution, the Mongolian
government must prioritise a
swift resolution if it is to send a
message that resonates with
investors and stands a chance of
reversing its ailing FDI.
17/07/2014 16:55
 10 JULY 18, 2014 • mining-journal.com
News: Australia and Asia
Walsh part of Rio conundrum
It is cheap, has good
fundamentals and is delivering
its major production expansion
ahead of time and under
budget. So it is no surprise pretty
much every analyst under the
sun has a BUY recommendation
for Rio Tinto.
But as the saying goes, ‘if it
seems too good to be true, it
probably is’. While Rio released
solid production results this week,
there are a few doubters with
longer-term worries.
The near-term future looks
bright though, according to Paul
Gait of Sandford C Bernstein Ltd.
This week Gait offered 10
reasons people should buy the
stock and, at least on a short-
term horizon, his reasoning
would seem sound.
“97.4% of the growth in
iron-ore prices happens in the
second half of the year. In six out
of the last eight years iron-ore
prices in H2 have been stronger
than H1,” he said. He went on to
take a look at the inventory
situation in the Chinese steel
industry and explained that it was
now far cheaper for Chinese mills
to buy seaborne iron ore than the
domestic stuff. All of this was a
positive for Rio in the near-term
as it looked to beat its iron-ore
shipping record – set in the first
six months of this year – in this
July to December period, in
accordance with its expansion
plans.
The company’s capital
expenditure discipline and
decreasing gearing ratios made
for another ‘buy’ credential,
according to Gait. This could
increase the potential and size of
dividends in the future, he said.
“Rio’s iron-ore business will
never be cash negative,” another
slide read, showing that Rio’s
average cost into China was
below US$50/t, a level that Gait
didn’t see as a possibility. Still on
the iron-ore front, Rio was
blessed with the highest levels
of reserves and resources (R&Rs)
out of its peers, displayed in a
graph showing more than
18,000Mt of R&Rs. So it had
plenty of future potential in the
bank.
Its cost cutting programme
10MJ140718.indd 10
Rio is busy with its 360Mt/y iron-ore expansion plan, but what lies
ahead of this?
was also another positive, with
chief executive (CEO) Sam Walsh
having taken a lot of slack out of
the business since his arrival. Rio’s
Mine of the Future programme
also had the potential to reduce
labour costs further at some of its
more established mines, while
bringing the company closer to
its zero fatalities aim, according
to Gait.
The last reason was aluminium,
which was surprising given the
metal’s weakness over the past
few years. “It would not take
much in the way of margin
expansion for Rio’s very
significant aluminium volumes to
deliver a significant contribution
to EBITDA [earnings before
interest, depreciation and
amortisation],” Gait said.
Just two days earlier, prior to
Rio’s June quarter numbers
coming out, HSBC published a
paper of its own titled, ‘The
strategic holding pattern’, which
looked at Rio slightly differently.
While admitting Rio was one
of its top picks, the bank’s
analysts discussed why Rio’s
shares had retained such a
discount – it was trading at 73%
of the market multiple, nine
percentage points below its
long-run average of 82% – to
peers trading at three to six
percentage points above their
relative long-run multiples.
“There could be two,
interlinked reasons,” the analysts
said. “Perhaps without any clear
evidence that iron-ore prices have
found a fundamental floor,
investors continue to be wary of
stepping in front of the historical
Rio/iron ore correlation. Despite
the significant amount of analysis
of the potential floor in iron ore
(some of it by us), the market has
been so tight since spot pricing
became dominant four years ago
it is yet to be proved that the
industry will not simply push out
high-cost iron ore and cause
prices to fall further. We think
reality is far messier than the
simple oversupply/cost-reversion
theory, but only time will prove
this.”
The second reason consisted
of three challenges, according to
HSBC. An over-reliance on iron
ore came up again (iron ore
accounted for 76% of
operational EBITDA in 2013,
more than double the 31-33%
seen in 2005-07). A strong
balance sheet was also
mentioned – not often thought
of as a challenge – which could
mean Rio would have to return
more money to shareholders or
plump for growth post-2015.
The last was a CEO succession at
the end of 2015: HSBC said when
Sam Walsh was hired in January
2013 it was pretty obvious that it
was a three-year appointment,
so an internal candidate or
someone from the outside
might be coming in trying to put
his/her stamp on the business.
The bank’s analysts delved
into the options Rio had to
confront the challenges.
For starters, it could carry out a
“part listing” of its iron-ore assets.
“Rio Tinto’s iron-ore business
represents a significant pool of
value that could be used to
transform other parts of Rio – a
listing of 30% over time could
raise US$25 billion-US$30 billion;
Follow us on @miningonline
more than sufficient to fund more
diversity. An independently listed
iron-ore business with an explicit
dividend policy could dilute and
isolate the issue surrounding the
sustainability of dividends. Rio
could sell down IOC (Iron Ore
Company of Canada), plus some
assets (or a share of assets) in the
Pilbara, listing an entity that may
attract a premium valuation if it
were to be considered more
annuity-like in its dividend,” HSBC
said.
It could pursue growth
options in copper.
“Rio needs additional growth
options in copper beyond its
current portfolio, as its
greenfield options are long-
dated. This could be via the
partnering model that has been
talked about in the industry,
without any real progress (we
think even BHP Billiton’s
Olympic Dam resource could be
a candidate here, although
perhaps rethought for a lower
capital intensity). Rio has backed
away from Pebble on
environmental grounds, but
does not seem to have replaced
it with other prospective
deposits. Even boosting
greenfield exploitation, long out
of fashion among the majors,
could be an option,” HSBC said.
Or carry out a “more radical
restructuring” of Rio Tinto Alcan.
“An IPO [initial public offering] of
RTA [Rio Tinto Alcan] would
generate less cash than the
iron-ore option and not
immediately fix the diversification
issue, although it may bring
benefits in terms of transparency
(RTA is surprisingly opaque),
independence and urgency
(which are all interlinked)… The
aluminium business at the
moment is… a great set of assets,
although it appears to be focused
on incremental improvements
funded through additional cash
whilst waiting for a turn in the
market.”
While HSBC admitted these
were good problems to have, it
seems Sam Walsh, or his
successor, has some work to do
beyond the simple cost cutting
and expansion focus Rio is
pursuing. – Staff reporter
17/07/2014 16:27
 Follow us on
Who are my peers?
Company pay schemes continue to present a range of problematic questions
John Robertson
Melbourne, Victoria
T
he choice of peer companies for remu-
neration schemes should be as free from
subjective judgements as possible to
mirror the choices confronting investors.
How to turn salaried employees into capi-
talists is not as straightforward as it might
seem at first blush. Having access to equity
alone does not do the job.
As long as equity is granted without any
capital contribution, undeserving executives
get a free ride when external events drive
share prices higher. Without any capital contri-
bution there is no capital loss in the event of a
share price downturn. Some executives even
get another bite at the cherry at a lower price.
Executives’ risks differ materially from those of
shareholders who have committed capital.
The concept of a peer group of supposedly
equivalent companies against which to
measure share price performance before any
rewards are conferred is designed to help
mitigate the potential for underserved out-
comes. Apollo Minerals Ltd is one company
going down this route.
Last November, Apollo shareholders
approved an offer of three million ordinary
shares to the company’s executive chairman
in the event that the Apollo share price beat
those of its peers by at least 20%, as long as
the company also attracted a strategic invest-
ment of more than A$2 million (US$1.9 mil-
lion) and the chairman achieved the KPIs set
by the board for the performance period.
Under the approved formula, rewards
could be higher with a better relative share
price outcome. Five million shares would be
available if the Apollo share price outper-
formed the selected peer stocks by more
than 60%, for example.
At face value, the Apollo formula neatly
connects executive pay with the primary
sources of investor wealth, although not all
the features of the Apollo scheme are as com-
mendable. Contrary to recommended gov-
ernance practices, non-executive Apollo
directors are given access to the same
scheme as company executives, potentially
hobbling board independence.
In choosing peers for its scheme, Apollo
would have had to confront the choice faced
by all ASX resources companies wanting to
define a peer group for inclusion in an execu-
tive remuneration plan. There is no obvious
independent benchmark for the 1,000 or so
John Robertson is a director of EIM Capital Managers, an Australian-based funds management group. He has worked as a policy economist, business strate-
gist and investment market professional for nearly 30 years after starting his career as a federal treasury economist in Canberra, Australia
11MJ140718.indd 11
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Insight: From the capital
On track… a peer group of supposedly
equivalent companies against which to
measure share-price performance before any
rewards are conferred is meant to help mitigate
the potential for underserved outcomes
resources stocks making up nearly half the
companies listed on the ASX.
The S&P/ASX 200 resources index corre-
sponds most closely to the key S&P/ASX 200
equity benchmark tracked by investors in the
Australian market. However, the index is
dominated by BHP Billiton, which has a 40%
weighting. Combined with Rio Tinto and
Woodside Petroleum, the largest three
account for 61%.
The vast bulk of Australia’s listed miners
would not see this group as peers in any
operational or strategic sense, although an
investor might see things differently. An
investor should be able to expect a better
return from an early stage mine developer
than from the market leaders to compensate
for risk.
There are times, however, when macro
forces unconnected with company activities
will produce prolonged and large disparities
in returns between the market leaders and
the rest of the sector, reducing the usefulness
of the largest stocks as a performance bench-
mark.
The small-resources share price index is the
most logical alternative candidate for a place
in the remuneration schemes of the bulk of
companies needing a benchmark measure-
ment. In many ways, the index is the most
representative of the available measures of
resource-sector performance in the Austral-
ian market. Even this, however, comes with
some warts.
The construction methodology of the
small-resources index allows for constituent
stocks to be deleted from the index if their
performance falls short of non-resource,
11
industrial-sector share price movements. As a
result, the small resources share price index
now comprises just 50 stocks compared to 99
at the end of 2010. Thirty-seven stocks dis-
carded in the past year because industrial
stocks were performing better had a median
share price fall in the June quarter of 17%,
compared to the headline index gain of 1.6%.
The choice of only the most strongly per-
forming stocks to make up the index biases
the outcome and undermines its suitability
as a peer indicator.
One reaction to the absence of an indepen-
dently compiled market measure with suffi-
cient credibility is the route followed by
Apollo Minerals. It made up its own list of
peers. Directors chose 10 iron-ore explorers
and developers in a similar position to Apollo
and facing the same challenges and needing
to complete similar tasks.
The narrower the base, the more subjec-
tive the choice inevitably becomes and the
greater the chance of outliers influencing
outcomes. The Apollo choice also implies
directors were rather selfishly looking at the
benchmark choice from their own perspec-
tive rather than that of investors. Investors
looking for the best returns irrespective of
commodity exposure could reasonably
expect executives to have a similarly broad
perspective when judging the suitability of
investment outcomes.
As it happens, the Apollo example itself
illustrates why investors should not support
schemes with such narrowly defined peer
groups. Since last year, Apollo has given up
on its iron-ore aspirations and wants to
become a copper miner. This leaves the
directors of the company with outcomes
partly tagged to an irrelevant group of stocks
and a shareholder approval based on an erro-
neous assumption about future activities.
The best solution for companies and for
investors is to look at the sector as a whole,
without picking and choosing to suit director
or executive prejudices about how they
should be judged.
Among the nearly 1,000 listed stocks mak-
ing up the Australian resources sector, the
median return over the 12 months to June
has been minus 14%. The upper quartile cuts
in at plus 25%. The top decile hits at 99%.
Executives beating these latter two objective
benchmarks could be confident they were
adding value for investors looking for the
best of what the sector had to offer. They
could justifiably get something extra in their
pay packets.
17/07/2014 11:03
 12 JULY 18, 2014 • mining-journal.com
Insight: Miner’s right
Exploration will decide winner
Miles between them still, but the race is on between the tortoise and hare
Tim Treadgold
Perth, Western Australia
Revenge, so they say, is a dish best served
cold, a maxim which is especially apt in the
case of two of Australia’s best known mining
entrepreneurs, Miles Kennedy and Karl
Simich, who famously ended their decades-
long association with a punch-up in a Perth
restaurant five years ago.
Who said what to whom, and who landed
the first blow, has been in dispute since
Simich left the table at Julio’s in West Perth
with a bloodied nose, an event which led to
the resignation three weeks later of Kennedy
from the chairman’s job at the company the
two had founded, Sandfire Resources Ltd.
After that unfortunate lunch-table tiff,
Simich led Sandfire and its Doolgunna cop-
per discovery to the status of a top-200 com-
pany on the Australian Securities Exchange,
and 17th biggest in its home state of Western
Australia, with a market capitalisation of
A$980 million (US$921 million).
Kennedy, after the Julio’s showdown, had a
lower profile, busying himself with re-building
a corporate structure based on exploring for
gold in New Zealand and copper in Botswana
via a company called MOD Resources Ltd, and
diamonds in Angola via Lonrho Mining, since
re-named Lucapa Diamond Company Ltd.
With his MOD and Lucapa projects off and
running in a difficult market for small explorers,
it was probably only a matter of time before
someone compared the post-Julio’s fortunes
of two men.
Until recently Simich was the clear leader
– the hare in a race against a tortoise with
Sandfire’s success down to its high-grade
copper mineralisation, near-seamless opera-
tions, and strong cash flows.
Kennedy has been the tortoise, but, as with
the fable, there are signs of the gap narrowing
thanks to the hare appearing to have peaked
and the tortoise picking up speed thanks to
success in the diamond fields of Angola.
As Kennedy once did at the Ellendale dia-
mond discovery in Australia, while working
with Simich, and later tried to do at the Nam-
akwa sands project in South Africa, the search
for diamonds at the Lulo project in northern
Angola has been a painstaking process that
started with sifting through thousands of
tonnes of gravel left by ancient rivers. In the-
ory, the river gravels of northern Angola con-
tain gems washed off diamond-bearing
kimberlite pipes and by tracking the gravels
upstream the exploration teams should,
eventually, find the kimberlite source.
That, so it seems, is precisely what Lucapa
12MJ140718.indd 12
Inching ahead … Miles Kennedy’s Lucapa Diamond Company continues to achieve
encouraging exploration results at Lulo, which is close to the heart of one of the world’s biggest
has done with news from the remote explo-
ration site steadily building in terms of
reported diamond discoveries in river gravels
culminating with the announcement inves-
tors had been hoping for: the discovery of
kimberlite mineralisation followed by news
that the kimberlites contained diamonds.
On the ASX, the game-changer for Lucapa
came on June 13 when the company
announced that the Se251 kimberlite at Lulo
was diamond-bearing with four small gems
recovered from surface sampling. That news
triggered a stock-market rush and Lucapa
shares doubled in two days, from A24c to A48c.
Last week, more good news came from
Lulo, including confirmation that some of the
diamonds found at Se251 were premium
grade type 2A gems, further boosting inter-
est in Lucapa, which saw its share price hit an
all-time high of A$0.615 last Thursday, before
easing to close the week at A$0.525.
Much more testing, including extensive
bulk sampling, is required before Lucapa can
claim to have made a commercially-viable
diamond discovery. However, the Lulo pro-
ject is close to the heart of one of the world’s
biggest diamond-producing provinces, and
relatively close to the giant Catoca diamond
mine, the world’s fourth-biggest source of
gems, so the chances of Lulo eventually
becoming a mine are rising by the day.
Kennedy is understandably pleased with
what has been achieved so far, but he has been
around long enough to not over-promote
Lulo, acknowledging in an interview with
Bloomberg late last month that there is “a long
scientific game” to be played before Lucapa
Follow us on @miningonline
diamond-producing provinces
knows whether it has a mine.
Timing in the case of Lucapa, and the
revival of Kennedy’s fortunes, is everything.
Diamond prices are rising, which means
whatever Lucapa discovers today will be
worth more tomorrow.
Lucapa’s share price is also performing well
for Kennedy, though with a very modest
shareholding in the company it will be a long
time before he can match the fortune assem-
bled by his former partner at Sandfire.
According to the latest filings at the ASX,
Simich holds slightly more than six million
Sandfire shares, which are currently valued
on the market at close to A$38 million.
Kennedy’s stake in Lucapa was reported in
a rights issue prospectus released last week
to total 1.28 million Lucapa shares plus an
entitlement to 642,501 new options being
issued as part of the rights issue.
Given Lucapa’s recent share price, that
appears to indicate that the value of Kennedy’s
holding in Lucapa is worth somewhere around
A$2 million, well short of Simich’s A$38 million.
If the competition between the two men
was to be judged today then Simich would
be declared the winner. But, that is before
looking at the share-price trends. Sandfire’s
share price since June 1 has risen by about
5% thanks to an improving copper price.
Lucapa’s share price is up by 150%.
There is a long way to go, but if exploration
continues to deliver strong results and gem
prices continue to rise the diamond-bearing
Kennedy tortoise might eventually catch the
copper-plated Simich hare – but even if he
does not, the race will be fun to watch.
17/07/2014 11:02
 Follow us on
Golder says investors need
not be afraid of Greenland
When it comes to getting project approval, the Arctic country is quick and straightforward
Nadav Shemer
Assistant editor
I
nvestors are more afraid of Greenland’s nascent
mining industry than they should be, in the view
of Golder Associates’ arctic expert Hans Christian
Krarup.
The global consultancy has been involved in the
Arctic for four decades, and recently added marine
biologist Lars Brunner to an Arctic services team that
includes Denmark country manager Krarup, ice and
ocean specialist Marc O Hansen, and Norway-based
project director Vidar Ellefsen.
Brunner was previously chief advisor for a consul-
tancy in Greenland, a jurisdiction where Golder is cur-
rently advising three companies and which Krarup
said was more straightforward than anywhere else in
the Arctic.
“In the Western world, Greenland would definitely
be one of the quickest places to get permits through,”
Krarup said.
“In Sweden, it can often take 18 months to get an
approval process, but it could take 36 months. Like-
wise in Canada you can have this hearing process
back and forth between the public, regulators and
aboriginal groups.
“Greenland is pretty straightforward, so if you have
a good plan, some good investors, and you do a
proper job on the permitting, the environmental
parts and so on, then there’s basically nothing to hold
you back.”
Krarup nominated northern Norway as the other
place with potential for the mining industry, saying
his consultancy was starting to see openings of inter-
est in the traditionally oil and gas-focussed country.
Ultimately, commodity prices would be the main
driver for investors, Krarup said, adding that all eyes
were on London Mining’s Issua iron-ore project, “and
that one just needs huge investments” in order to
obtain exploitation rights.
Golder has been involved in mining in “basically
all” of the eight Arctic jurisdictions, each of them with
their own idiosyncrasies that require companies to
seek local expertise, according to Krarup.
“Perception of risk and effects is highly based on
perspectives. Popularly speaking in Canada you can
do anything onshore, [but] when you go offshore
people get a little concerned. In Norway you can do
anything offshore, but when you go onshore they get
a bit concerned. Neither approach is more correct
than the other, but it does illustrate how industries
have to understand the local content and concerns.”
Over the years Krarup has seen a lot of projects,
and the most common mistake he has seen is from
junior exploration companies that are too price-
focused.
“Newcomers to frontier development [regions] like
13MJ140718.indd 13
Register to receive Mining Journal global news updates at mining-journal.com/newsletter • JULY 18, 2014 13
Insight: Services
Greenland will most likely not have previous experi- Greenland is an easy
ence from similar projects and especially not in a new place for companies to
area like Greenland. get regulatory approvals,
“They’ll probably only have one project, a project Golder’s Hans Christian
that isn’t fully developed and they would therefore Krarup says
need guidance and experience from companies that
have the local and technical knowledge to guide
them through the process.
“Unfortunately, we’ve had to get projects back on
track after other companies who obviously didn’t
have either the technical knowledge or the local
insight. It’s a waste of money, you have to go twice,
your investors start asking questions and so on, so
that part is tricky. Choosing the right people to guide
you is crucial to ensure that your project develops on
time and to the desired state.”
But he emphasised that the challenges were noth-
ing new – given that mining had been conducted
beyond the Arctic Circle for at least a century. “It’s not
a new business,” he said, but the companies of today
were far more aware of their social and environmen-
tal responsibilities than they were in the past. “You
hear some NGOs – they are a very strong voice – say
no one wants industry up there. This is not true at all.
Of course they [residents of Arctic communities] want
people to behave responsibly, in how they conduct
their business, but ultimately having responsible
businesses getting involved will be one of the ways
to secure the lifestyle that they want for their people.
“Take into consideration that in harsh winters you
can’t always get supplies to those areas… if they get
more buying power, rather than borrowing or trad-
ing or selling some of the things they catch or kill
from hunting, it gives them different options.
“Many people in local societies are welcoming this
being done in a proper way - [through] engagement.”
17/07/2014 11:01
 14 JULY 18, 2014 • mining-journal.com
Focus: East-Central Europe
Better times to come
Although the potential is there, legislative and economic hurdles remain in East-Central Europe
T
he European Union (EU) remains highly de-
pendent on imports of raw materials, essen-
tial not only for the European industrial re-
naissance but also for the region’s overall economic
and social development.
If it is to remain competitive in the global market
and meet society’s needs, it urgently needs to
reduce its dependency on imports of raw materials,
promote production and exports and bring Europe
to the forefront in the raw materials sector.
The Athens Declaration on sustainable access to
resources, which promotes best practices in miner-
als policy and legal framework, land-use planning
and permitting, was adopted in June 2014 to
encourage EU member states to establish adequate
regulatory frameworks to secure mineral deposits
that facilitate investments, while ensuring that min-
eral property rights are sufficiently protected.
At the same time, member states have been
tasked with establishing national mineral policies,
linking them in an efficient way to the country’s
industrial policy and increasing their compatibility
with other relevant policies.
Unfortunately, despite the growing need for raw
materials, several countries in East-Central Europe
with great mining potential still lack the appropri-
ate policies to secure sustainable access to their
domestic mineral resources. If they are able to
change this, then this could position the EU as an
important mining player in the global marketplace.
Romania
Romania’s economy grew by 3.8% in the March
quarter of 2014 and in March alone industrial pro-
duction increased 10.7% compared with the previ-
ous year. Given the positive economic results and
the country’s progress in improving its external bal-
ances, in May 2014, Standard & Poor’s upgraded
Romania’s credit rating from BB+ to BBB-.
In July last year, the Romanian government
adopted a national plan for strategic investment
and job creation aimed at taking all necessary
measures to boost the country’s economic and
social development. The strategic plan set out key
targets for 2013, including securing investment
commitments into Romania of €10 billion (US$14
billion) and the creation of over 50,000 jobs in five
strategic investment fields, including the mining
sector.
The government identified seven projects in the
mineral resources sector that it hopes will enable
the country to achieve these targets. Certej and
Rosia Montana, the largest known undeveloped
gold projects in the country, were included in this
list.
Romania is known worldwide as a country with
significant mineral resource potential, especially
rich in oil, natural gas, salt, gold, silver and non-fer-
rous metals. In fact, unexploited mineral reserves in
Romania are estimated to total some 20,000Mt –
14, 16_19MJ140718.indd 14
Rosia Montana, in Romania, is
one of the largest undeveloped
gold deposits in Europe
Fast facts: Romania
Capital: Bucharest
Population: 20 million
Real GDP growth:
3.5% (2013 est)
Currency: Romanian leu
Follow us on @ miningonline
Photo: Christian Bortes
including both ferrous and non-ferrous ores and
salt, sand, gravel or decorative rocks – according to
the most recent data from the Romanian National
Agency for Mineral Resources (ANRM).
If these deposits were exploited, Romania could
produce around 20Mt/y of ore, equivalent to
around 15% of the EU’s total mineral resource
needs, so says think-tank Romania Energy Center.
If Romania’s national and local authorities were
to take all the necessary steps to modernise the
mining sector and open up access to investors on
the capital markets, the country could continue to
improve its macroeconomic situation – not only
through the creation of tens of thousands of jobs,
but also by increasing its GDP.
Under the current mining code, the rights to all
mineral resources located in Romania are owned by
the state and these mineral rights are acquired only
through prospecting and exploitation concessions
granted by the National Agency for Mineral
Resources (ANRM).
The latter recently issued a request for tender for
24 new exploration permits, the first such tender
process for a number of years.
In January 2013, the government published an
ordinance imposing special taxation measures for
companies deriving income from exploiting min-
eral resources apart from natural gas. The law
imposed a 0.5% tax rate on the revenues derived
from extraction and exploitation of natural
resources in the period February 1, 2013, until
December 31, 2014.
Slow reform
In September 2013, the government introduced a
new mining bill aimed at modifying the existing
mining code. The bill was intended to increase
transparency and facilitate the development of all
mining activities across Romania by providing:
Continues on page 16
17/07/2014 11:00
 Company profile Macedonia Au / Cu

Euromax Resources

Project name: Ilovitza

Skopje
Project location: Macedonia
MACEDONIA
Commodity / resources: Gold, Copper
Ilovitza

Company summary
Euromax Resources Ltd. (TSX-V: EOX) is developing the Ilovitza copper-gold porphyry
project located in south-east Macedonia. With an EIS already approved, the benefit of
excellent regional infrastructure, impressive local support and a comprehensive financing and development plan in place, the
company is uniquely positioned to build what will be the first greenfield project in the Balkans for over 30 years.

Ilovitza PFS is Investment highlights

announced – NPV of
> European gold investment opportunity
> Copper and gold production within four years

$675m and IRR 19%

> Management track record of financing and developing mines
globally
> Significant capex/opex optimisation expected through full feasibility
Project information > Achievable debt financing plan while minimising shareholder
Euromax Resources recently dilution
announced the results from a > Macedonian government strongly supportive of developing its
natural resources
Pre-Feasibility Study (PFS)
> Anticipated distribution of free cash flow to back to shareholders
for its flagship Ilovitza by dividend
copper-gold project in
south-east Macedonia. The Situated in the heart of the Balkans, local and regional project
PFS results demonstrate a benefits include considerable existing infrastructure including
10mtpa bulk tonnage roads, power and water, a well-educated and immediately
open-pit operation that will Euromax Resources’ available workforce and also a very favourable business climate
produce an average of environmental monitoring and fiscal regime.
95,000oz gold and 16,000t programmes including water
copper each year over a and air quality monitoring Balkan catalyst
mine life of 23 years. The Euromax will grow over the next four years into a significant
excellent continuity of grade in the main mineralised areas of European gold producer and the company has the right skill set
the deposit will also allow mining to be carried out at a low strip to deliver on this plan. Once Ilovitza is up and running, it is
ratio of 0.7:1. intended that the majority of the free cash flow generated by the
With the PFS results announced, the company is now project will be distributed back to the company’s shareholders by
working to finalise an asset-based financing package to see it way of a regular dividend.
through to the start of construction at Ilovitza in 2016. The Developed to IFC guidelines and Equator Principles III, it is
company is also planning on using an export credit-based debt expected that Ilovitza will be a catalyst for regional new mine
facility to fund the majority of the capex, driven by the fact that development, which the Euromax team will be well positioned to
Euromax plans to ship concentrates to Pirdop – the German- execute. From a corporate perspective, Euromax also intends to
owned smelter in Bulgaria. widen its European
shareholder base
Timeline through an
> Q3 2014 – Completion of asset-based financing anticipated London
> Q3 2014 – Contracts for Feasibility Study (FS) and Front End listing and also plans
Engineering Design (FEED); Engage finance banks to upgrade to the
> 2015 – Complete FS and environmental and social baseline; TSX main board.
Progress to FEED
> Q4 2015 – Commitments for project finance
Field geologists
> 2016 – Complete FEED; Drawdown finance; Commence mine
construction at work during the
> H2 2017 – Commissioning geotechnical drilling
> 2018 – Steady state production programme

Contact
Euromax Resources Ltd
Karen Coke,
Investor Relations Manager,
Euromax Resources,
12 Berkeley St, London W1J 8DT, UK
E-mail: kcoke@euromaxresources.co.uk

www.euromaxresources.com

1p_Euromax_profile_MJ_July18.indd 2 17/07/2014 10:56

 16 JULY 18, 2014 • mining-journal.com
Focus: East-Central Europe
Continues from page 14
Greater clarity surrounding the relationship
between certain endorsements required under
zonal planning laws;
Reassurance to mining companies that an exploi-
tation concession licence would be insulated
throughout its term from any subsequent modifica-
tions of the applicable legal framework; and,
A simplified procedure to acquire surface rights
and clarify the legal framework concerning urban-
ism certificates and their relationship with other
permits and approval processes.
The bill was debated in the Romanian parlia-
ment, the Senate and the Chamber of Deputies, but
failed to receive a majority vote.
In January 2014, the government stated its inten-
tion to continue modifying the existing mining law
and establish a proper sustainable mining sector,
ensuring resource efficiency, a stable and predicta-
ble legal and regulatory structure, transparency
and integrity. However, to date, no legislation has
been presented to parliament on this matter.
Moreover, in November 2013, the government
issued an emergency ordinance to amend the fiscal
code and provide a new set of royalties applicable
to mineral resources to be applied from 2014 upon
either the conclusion of a licence or the issuance of
a mining permit.
For noble metals, including gold, a royalty of 6%
of mining production value is to be applied under
the government’s new emergency ordinance. How-
ever, until parliament approves the emergency
ordinance, the existing royalty rate of 4% will con-
tinue to apply.
Political support
While the legislative framework is still waiting for a
major facelift, a number of large mining projects
are also waiting for firm political decisions to ena-
ble them to get off the ground once and for all. The
most-talked about project by far is Rosia Montana,
one of the largest undeveloped gold deposits in
Europe, currently in its 10th year of assessment.
The project is operated by Rosia Montana Gold
Corporation (RMGC), owned 80.69% by Canada’s
14, 16_19MJ140718.indd 16
Construction and commissioning
of underground crusher
and conveyor system at the
Chelopech mine in Bulgaria
“If these deposits
were exploited,
Romania could
produce around
20Mt/y of ore,
equivalent to
around 15% of the
EU’s total mineral
resource needs”
Romanian prime minister Victor
Ponta says that the natural
resources industry in the country
needs “clear political support”
Follow us on @ miningonline
Gabriel Resources Ltd and 19.31% by the Romanian
government. Despite progress by RMGC, having
successfully worked with all decision-makers to ful-
fil the environmental and socio-economic assess-
ment, the permitting process for Rosia Montana is
still awaiting government approval.
Even in such a difficult context, which caused the
company to adopt retrenchment measures in the
first half of 2014, it remained “fully committed to
identify, prevent and mitigate any unfavourable
impacts this process would have on the local com-
munities’ and properly manage the impact of such
decisions toward all affected stakeholders, beyond
basic legal requirements”.
According to an official company statement,
despite being forced to lay off 80% of its workforce,
“it remains willing to invest significant financial
resources to build the first modern gold and silver
mine in Romania and hopes that the current
restructuring process represents just a temporary
measure until such time as the government
approves the mining project”.
In the meantime, other mining investors are
probably keeping an eye on Romania to see how
this long story turns out. Historically, mining has
always been an important job generator, bringing
in about 1 million direct and indirect jobs before
1990. This number has drastically decreased in the
past 25 years, with just a little over 2,500 people
working in the metals and mining sectors in 2012,
according to the country’s national institute of sta-
tistics.
From the most recent political declarations, it is
clear that mining is recognised as an important
industrial sector. Economics minister Constantin
Nita stated during a visit in Alba County at the end
of May 2014, that “some mines could be reopened”.
Meanwhile, the prime minister, Victor Ponta also
added to the debate, saying “it would be better for
Romania to exploit all natural resources, including
gold, if all environmental requirements are met, but
this process needs clear political support”.
Right now, Romania is waiting to close the gap
between political declarations, clear decisions and
updated legislation. Until then, the re-launch of
Romania’s mining sector remains just an aspiration.
17/07/2014 11:00
 Follow us on Register to receive Mining Journal global news updates at mining-journal.com/newsletter • JULY 18, 2014 17

Focus: East-Central Europe

Bulgaria Construction of a mine

The mineral resources industry is an important stra- wastewater treatment facility
tegic sector for Bulgaria’s economy, forming the at the Ellatzite mine, Bulgaria’s
basis of other industries and contributing to the largest copper mine
country’s economic stability and energy independ-
ence. Bulgaria occupies a leading position in the
European mining industry, ranking second in terms
of gold production and third in copper production.
The main raw materials mined in the country
include lignite coal, lead, zinc, copper and polyme-
tallic ores, gypsum, limestone, bentonite, quartz
sands and marble.
The number of identified deposits stands at 595,
which includes 206 of metallic minerals; 115 of
non-metallic minerals; three of oil and natural gas;
51 of natural stone; 151 of construction materials;
Fast facts: Bulgaria
and 69 of solid fuel. 80% of mining activities in the
country are carried out at surface mines.
Despite these resources, Bulgaria’s continued
heavy reliance on imports highlights the great
unexploited potential of the mining sector. Thank-
fully, this is slowly starting to change: preliminary
data reveals that, of all the industries in Bulgaria,
mining makes the greatest contribution, adding
some 10% or US$2.8 billion to the country’s total Capital: Sofia
exports in 2012. Population: 7.3 million
Annually, the industry contributes around 4% to Real GDP growth:
the country’s GDP and produces almost US$300 0.5% (2012 est)
million in exports. Although 24,171 people were Currency: Bulgarian lev
employed in the country’s mining industry in 2013,
446 less than in 2012, the average annual salary of
www.mining-journal.com

employees increased 23%.

Total mineral production decreased slightly in
2013, slipping 0.5% to 82,500t. However, several
projects are expected to come on stream in 2014.
These are set to not only increase mining, but stim-
ulate economic growth in areas that are below the
poverty line and create more than 1,000 jobs in
areas of high unemployment.

Breaking
The Gorubso-Madan lead and zinc mine, oper-
ated by local company Varba-Batantsi AD, is one
mine that is due to come on stream. After a difficult
few years when operations at the mine were sus-
pended due to financial debts by the previous Boundaries!
owners and labour disputes over unpaid wages,
Varba-Batantsi acquired a 90% stake in the mine in > World's leading geochemical analysis group
March 2012 and paid miners their wage arrears,
> Industry leading turnaround time
totalling some US$800,000.
Then early last year Bulgaria’s anti-trust watch- > Unrivalled consistency of accuracy and precision
dog finally gave Varba-Batantsi the green light to
acquire the remaining 10% stake in the operations > ISO 9001:2008 and 17025:2005 Accredited
and the mine is set to start producing by the end of Analysis
July. > Expert Mine Site Laboratory Services, Metallurgy
and Mine-related Environmental Analyses
Copper country
Although not a new mine, the Ellatzite copper
mine, owned by Ellatzite-Med AD, which is part of Eastern Europe is served by
construction group Geotechmin OOD, continues to ALS Minerals labs in Romania,
ramp up production and generated around 48Mt Get the Serbia, Sweden and Finland.
of copper last year. latest
Elsewhere, Dundee Precious Metals Inc contin- in news
ues apace at the Chelopech mine, which produces and Contact us to discuss cost-effective solutions:
copper concentrate containing gold and silver.
analysis E: Europe.NorthAfrica@alsglobal.com
Following an extensive mine and mill expansion
project in 2013, the underground mine processed
on our W: www.alsglobal.com

2Mt of ore, a 12% increase on the previous year. In website

14, 16_19MJ140718.indd 17 17/07/2014 11:00

 18 JULY 18, 2014 • mining-journal.com
Focus: East-Central Europe
March the company also updated its mineral
resources for the mine, citing proven and probable
reserves of 23.9Mt at 3.26g/t Au, 7.37g/t Ag and
0.99g/t Cu, and a measured and indicated resource
of 28.7Mt grading at 2.71g/t Au, 11.22g/t Ag and
0.92g/t Cu.
Dundee completed construction of a pyrite
recovery project in 2013 and entered into a three-
year agreement to sell up to 200,000t/y of pyrite
concentrate to Xiangguang Copper Company Ltd.
It commissioned the pyrite recovery circuit in the
March quarter and the company said it has already
completed its first shipment of pyrite concentrate.
Further south, the company is advancing the
development of its Krumovgrad gold-silver project,
which comprises an open-pit mine and plant
designed to treat as much as 840,000t/y of ore over
an eight-year mine life.
Sustainable development
In recognition of the mining industry’s increasingly
significant role in developing Bulgaria’s economy,
in 2012 the Bulgarian Chamber of Mining and Geol-
ogy created the first voluntary sustainable mining
standard.
The main objective of the standard is to contrib-
ute to the sustainable development and prosperity
of the mining industry in Bulgaria. It also aims to:
Improve energy and resource efficiency;
Minimise environmental impacts;
Provide maximum socio-economic benefits;
Establish long-term, dynamic and effective rela-
tionships with stakeholders; and,
Strength the sector’s reputation.
Several companies have already successfully
introduced the standard and the first results will be
reported during the forthcoming European mining
business forum, held on September 29-30 in Plov-
div.
14, 16_19MJ140718.indd 18
Follow us on @ miningonline
Macedonia
After a dismal 2012, when economic growth in the
Former Yugoslav Republic of Macedonia came to a
screeching halt, the country’s economy seemed to
be back on track in 2013 as GDP grew 3.1%.
One problem still weighing heavily on the coun-
try, though, is its woeful unemployment rate, which
“Bulgaria occupies hovered just below the 29% mark last year. Follow-
a leading position ing snap elections in April, re-elected prime minis-
ter Nikola Gruevski pledged to boost the economy
in the European and create around 64,000 jobs.
mining industry, Lofty ambitions these may seem, but mining may
be something that will help Macedonia’s economy
ranking second turn a corner. Mining and quarrying already made
in terms of gold up 11.8% of the country’s overall volume of indus-
trial production in 2013, according to Macedonia’s
production and state statistical office.
third in copper What is more, the total number of employees in
the country’s mining and quarrying sector
production” increased by 0.7% in 2013. This was particularly
encouraging given the context of recent mining
activities in Macedonia, which more or less came to
a standstill following the break-up of Yugoslavia
and Macedonia declaring itself an independent
country in 1991.
The country is home to deposits containing cop-
Fast facts: Macedonia per, iron, lead and zinc, as well as precious metals
such as silver and gold. And following recent changes
to ownership conditions and legislation governing
public-private partnerships, it has never been easier
for foreign companies to invest in the country.
Macedonia has already attracted the attention of a
number of miners, including Canadian-based explo-
Capital: Skopje ration company Euromax Resources Ltd, which is
Population: 2.1 million developing its flagship Ilovitza gold-copper por-
Real GDP growth: phyry project, in the southeast of the country.
3.1% (2013 est) At the beginning of June, Euromax released the
Currency: results of a prefeasibility study (PFS) for Ilovitza. The
Macedonian denar results revealed a much bigger deposit than the
company originally expected when it acquired the
17/07/2014 11:01
 Follow us on
project in 2008 from what was then Phelps Dodge
Exploration Corp (now Freeport-McMoRan Copper
& Gold Inc), indicating a maiden total probable
reserve of 225Mt containing 2.45Moz of gold and
905Mlb of copper.
Off the back of the PFS, Euromax is now envisag-
ing a 10Mt/y open-pit mining operation producing
95,000oz/y of gold and 16,000t/y of copper for 23
years.
Euromax’s president and chief executive Steve
Sharpe said the results highlighted the “exception-
ally robust economics” at Ilovitza. “This is a mas-
sively important project for Macedonia, and as one
of the few permitted mining projects in Europe, will
dramatically enhance the economic profile of the
country,” he said.
“The overwhelming local, national, and indeed
supranational support for the project places us in
the enviable position of certainty of development.”
All-in costs at Ilovitza are expected to be US$334/
oz of gold net of a copper by-product with a hefty
capital expenditure figure of US$502 million,
reflecting the scale of the operation.
Pat Forward, chief operating officer of Euromax,
said that the company was now in a good position
“to build and operate the first major modern mine in
Macedonia.”
Members from Euromines, the recognised representative of the European metals and minerals mining industry, contributed to this article. Ivan Andreev,
executive director of the Bulgarian Chamber of Mining and Geology, contributed to the Bulgarian section
Photo: Euromax Resources
14, 16_19MJ140718.indd 19
Register to receive Mining Journal global news updates at mining-journal.com/newsletter • JULY 18, 2014 19
Focus: East-Central Europe
Left: Bulgaria’s heavy reliance Boosting foreign investment
on imports highlights the great Although it may not be too much longer before we
unexploited potential of the see other Canadian miners eyeing up what Mace-
mining sector donia has to offer. In November last year, Canadian
foreign affairs minister John Bair announced that
Below, left to right: drill cores the two countries had begun negotiations towards
from Euromax Resources’ brokering a foreign investment promotion and pro-
Ilovitza gold-copper deposit, the tection agreement (FIPA), identifying mining as
Plavica mine in Macedonia, FENI one of the primary sectors ripe for Canadian invest-
Industries ferro-nickel plant in ment.
Kavardaci And as Macedonia remains one of only a handful
of countries in Europe to maintain a 10% corporate
tax rate (payable on distribution) throughout the
recession years, this is clearly a factor that will only
serve to sweeten any future deals.
Australian explorer Genesis Resources Ltd
already recognised Macedonia’s potential when it
inked a deal over four years ago to develop the
Plavica gold-copper-silver project with local joint-
venture (JV) partner RIK Sileks AD Kratovo (Sileks).
The JV soon secured seven concession licences
for the area, which was previously explored by Rio
Tinto and what was then European Minerals Corp
(now Orsu Metals Corp), and has continued to forge
ahead with exploration.
In October last year, the company took out a
US$2 million loan, which it said was partly to help
progress its drilling programme. Although harsh
weather conditions forced drilling to be suspended
towards the end of the March quarter, recent posi-
tive results include 54m at 3.51g/t Au, 2.79% Cu
and 72m at 1.47g/t Au.
Clearly Plavica’s potential has not gone
“Off the back of unnoticed. As Mining Journal reported in January,
the PFS, Euromax Singapore-listed Blumont Group Ltd identified
Genesis as the latest in an increasingly long line of
is now envisaging investment targets – it has since announced a
a 10Mt/y open-pit takeover bid for fellow Australian miner Merlin
Diamonds Ltd – in the energy and natural resources
mining operation sector.
producing Genesis has already met one key condition of the
95,000oz/y of gold takeover bid, having completed the first part of a
final feasibility study (FFS) for the first of its seven
and 16,000t/y concessions at Plavica.
of copper for 23 Local joint-venture partner RIK Sileks AD Kratovo
(Sileks) has since lodged the FFS with the Macedo-
years” nian government for approval.
Once granted, Plavica’s tenement will be
converted from a four-year exploration licence into
a 30-year exploitation licence and Genesis will then
have the right to acquire a 62% interest of the
project.
–Staff reporter
17/07/2014 11:01
 20 JULY 18, 2014 • mining-journal.com Follow us on @ miningonline

Focus: East-Central Europe

Minerals could get

Serbia moving again
EU candidate attracts exploration companies with low taxes, promise of unexplored terrain
Nadav Shemer decades-long absence, according to Reservoir pres-
Assistant editor
ident and chief executive Simon Ingram – one must
understand the country’s troubled recent history.

C
ash-strapped Serbia is looking to its long-
dormant mining industry to help it avoid be-
coming the next Greece by paving the way
for a cavalcade of foreign companies to conduct
mineral exploration activities.
Leading the charge is Canada-listed firm Reser-
voir Minerals Inc, with a dozen exploration projects
covering base and precious metals. Most of this
activity is in the copper- and gold-rich Timok Mag-
matic Complex in eastern Serbia, an area encom-
passing the century-old Bor mining and smelting
complex where the state is constructing a new flash
smelter with partial funding by Export Develop-
ment Canada.
To understand the state of Serbia’s mining indus-
try – it was only in the 2000s that modern explora-
tion techniques were reintroduced after a
The state is building a new
smelter at Bor
Fast Facts Serbia
Capital: Belgrade
Population: 7.2 million
Real GDP growth:
2% (2012 est)
Currency: Serbian dinar
Once the central component of the Socialist Fed-
eral Republic of Yugoslavia, Serbia is yet to fully
recover from the federation’s breakup and subse-
quent ethnic wars, NATO bombing campaign and
territorial dismemberment. Alexsandar Vucic, who
was sworn in as prime minister in April, has warned
Serbia could go bankrupt within a year. He has
reportedly approached former British Labour min-
ister Lord Mandelson to act as an advisor for the
country’s EU bid, because Tony Blair was consid-
ered “too expensive”.
With gross domestic product of US$42.5 billion in
2013 and 30% unemployment, it is no wonder Ser-
bia is seeking to attract mining companies. There
are no restrictions on foreign ownership, the corpo-
rate tax rate is 15%, and copper-gold production is
Continues on page 23

After the boom … Australia’s exploration and mining Next issue’s feature
investment prospects after the country’s biggest ever
investment boom

mining-journal.com/reports Media

20, 22_23MJ140718.indd 20 17/07/2014 16:15

 Company profile Serbia Cu / Au

Reservoir Minerals
Where
RMC will
Project name(s): Cukaru Peki / be drilling
Leskovo / Nikolicevo its own
ground
Project location: Serbia, Europe
Commodity / resources: Copper, gold

Company summary
Canadian-listed Reservoir Minerals (TSX-V:RMC) is a
well-funded mineral exploration company with properties in southeast Europe and central West Africa. The company’s main
focus is on the highly prospective Timok belt in eastern Serbia, where Reservoir in joint venture with Freeport-McMoran made
the world-class Cukaru Peki copper-gold discovery in 2012. Reservoir is now preparing to drill its 100%-owned Timok permits
this summer, including the Nikolicevo permit adjacent to the Cukaru Peki discovery and is considered by Reservoir to be highly
prospective for the discovery of copper-gold mineralisation.

Huge potential in second-largest Cu belt

Project history
Reservoir’s Timok projects are located along a geological belt
known as the Tethyan Arc, which stretches from Romania to
Pakistan. It is the second-most prolific copper-mineralised
metallogenic belt in the world, after the Andean belt in the
Americas, and hosts a number of world-class orebodies.
The Cukaru Peki deposit, a blind discovery, is preserved under
400m of cover rocks. The mineralisation delineated so far
indicates high-grade copper-gold mineralisation in a high-
sulphidation epithermal system located above deeper porphyry-
style copper-gold mineralisation, and is very similar to the
state-owned RTB Bor complex only 7km north which has been
operated continuously for over 100 years. Consequently, a
wealth of infrastructure, experienced labour and utilities exist
nearby, and along with strong government support for the mining
industry, there are few better places to develop a new mine.
In January, an independent NI 43-101-compliant initial
resource estimate for the High Sulphidation Epithermal (HSE)
zone of mineralisation within the Cukaru Peki deposit was
announced as 65.3Mt at an average grade of 2.6% Cu and
1.5g/t Au or 3.5% copper equivalent (CuEq - CuEq% = Cu% +
(Au g/t x 0.6)), containing 1.7Mt (3,800Mlb) Cu and 3.1Moz Au.
This resource includes the high-grade massive sulphide domain
containing an estimated 6.8Mt at an average grade of 9.6% Cu
and 5.9 g/t Au (13.1% CuEq) at a 1% CuEq cut-off. The resource
hosts some very high-grade mineralisation (>15% Cu), which
makes mining a Direct Shipping Ore a viable consideration.
The underlying porphyry-type mineralisation has not been
included in the resource estimate at this time owing to a lack
of drill data, but is a key target for further Cu-Au mineralisation
that may be amenable to block cave mining methods. Drill
intersections through the porphyry mineralisation include 699m
@ 0.89% CuEq (0.75% Cu and 0.23 g/t Au).
Deal with Freeport
Freeport holds a 55% interest and Reservoir a 45% interest in
the Timok project. Freeport exercised its option to raise its
interest to 75% by sole-funding the full cost (including
Reservoir’s share of expenditures) of the project to completion
and delivery to Reservoir of a feasibility study. Freeport has the
right to cease such sole funding at any time in which case RMC
will retain 45% of the project and co-fund.
Investment highlights
> In Europe: supportive government – pro foreign investment
and pro mining
> Favourable fiscal/legal jurisdiction, 15% corporate tax rate.
> Significant local and regional infrastructure in place: power,
road, rail, smelter etc.
> Municipality with experienced and available labour force
> Strong JV partner
> Quality and quantity of resource
> Huge exploration upside
> Strong treasury of C$44m
Above: mined-out Bor open pit (200Mt @1.5% Cu and 0.8g/t
Au), looking south to the upgraded smelter and 7.5km from the
Cukaru Peki discovery. Above right: drilling 1km-plus holes into
the porphyry mineralisation at Cukaru Peki
the grade being mined at RTB Bor’s open-pit mines.
With Freeport now the operator of the Timok project,
Reservoir’s geologists are freed up to explore the company’s
100%-owned licences in the eastern Timok that have the
potential for discoveries of similar mineralisation along trend.
There is no history of any exploration in these areas despite
being close to existing mining operations. Reservoir has begun a
geophysics programme on its 100%-owned properties to the
east and south of Cukaru Peki and over the summer will be
initiating a $5 million drilling programme on defined targets.
FMTC 1213 drillcore specimen. 508-509m 36.51% Cu,
8.50 g/t Au. 41.61% CuEq

Other exploration potential Contact

Initial drilling on the Leskovo permit to the north of the belt Christopher MacIntyre
(also in JV with Freeport) is very encouraging with results Vice President, Corporate Development
announced in June that included 244m from surface at E-mail: chris@reservoirminerals.com
0.38% CuEq (0.19% Cu and 0.30 g/t Au), which is similar to Tel: +1 (416) 703-0010

www.reservoirminerals.com

1p_ReservoirMinerals_July18MJ.indd 2 17/07/2014 10:57

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Focus: East-Central Europe

Continues from page 20 tonic Alpine-Balkan-Carpathian-Dinaride metallo-

charged a 5% net smelter return royalty.
Reservoir has announced it is budgeting up to
C$5 million (US$4.7 million) on systematic geo-
chemical sampling, ground geophysics, trenching
and drilling at its four fully owned gold-copper per-
mits at Timok. The three remaining Timok permits,
part of a joint venture with Freeport-McMoRan
Exploration Corp, are its most advanced. Freeport
has exercised its option to solely fund all explora-
tion work, and can increase its interest from 55% to
75% by completing a bankable feasibility study
(BFS). The partners are two-and-a-half years
through the minimum seven-year exploration
period mandated by Serbian law, after which they
can use their BFS to apply for a mining licence.
This and two additional joint ventures with AIM-
listed Orogen Gold plc and TSX Venture-listed Mid-
lands Minerals Corp have allowed Reservoir to
explore opportunities all over Serbia without dilut-
ing their original shareholders, according to Ingram.
“We tend to dilute our projects in return for fund-
ing, so we can do more projects, which gives you
more opportunity for success,” he said.
He said it is a bit like portfolio management: if
you buy more shares in more companies, you are
lowering your risk profile.
Ingram has plenty of reason to want to explore as
much of Serbia as possible: the European Union-
membership candidate has seen mining since
Roman times, yet there have been a number of sig-
nificant discoveries in the past seven years – namely
Rio Tinto’s pre-feasibility stage Jadar borate-lith-
ium project in western Serbia, and Canadian
explorer Avala Resources Ltd’s Timok gold project.
Jadar made a name for itself – literally – in 2004
when Rio Tinto geologists discovered a new min-
eral and called it Jadarite.
As Stephen McIntosh, Rio Tinto’s global head of
exploration, said in a recent interview with Mining
Journal’s sister publication Mining Magazine: “Nor-
mally, when you find a new mineral, you find a tiny
genic-geodynamic province. The belt and adjacent
segments are known for hosting significant por-
phyry copper-gold deposits and related high-sul-
phidation copper-gold mineralisation.
Cukaru Peki, the prospect owned by Freeport and
Reservoir, has 65.3Mt of NI43-101 compliant inferred
copper and gold resources, at 3.5% copper-equiva-
lent grade. This includes 6.8Mt of what Ingram called
“Congo-like” grades of 13.1% copper-equivalent,
consisting of 9.6% Cu and 5.9 g/t Au.
High grades like these can be sent directly to the
smelter as direct-shipping ore, Ingram said, mean-
ing production can start quickly and ensure share-
holders get a quick return on their investment.
Such news will be welcomed at the state-owned
smelter, which is being used for toll-treating – mean-
Freeport and Reservoir continue ing concentrate is imported from as far away as South
to explore Timok American to make up for the local shortfall.
For first-movers such as Ingram, an industry vet-
eran who has advised Petropavlovsk plc, Anglo
American Zambia, and Rio Tinto Technical Services,
Serbia is a great opportunity: a “pro-mining” Euro-
pean country with infrastructure in place.
“Finding something in Europe is really good,” he
said. “We have a rail network running right next
door, we have the power lines, water, we’ve got a
mining town… it’s right in an area where they’re
very supportive of mining, and they understand
what they’re getting into.”
“Normally, when
you find a new
mineral, you find a
tiny little grain – it’s
pretty unusual in
the 21st century to
S ERBIA
MININ
ALL ABOUT MINING
FROM GEOLOGY
G
discover a couple EXPLORATION

little grain – it’s pretty unusual in the 21st century of hundred million GREENFIELD MINE DESIGN
ENGINEERING
to discover a couple of hundred million tonnes of a
mineral never described before.” tonnes of a mineral TO MINE CONSALTING
GREENFIELD
The world’s second-largest miner has reported never described CLOSURE BROWNFIELD
positive results from tests at its pilot plant in Cali-
fornia. It reported producing high-quality boric
before”
acid and lithium carbonate from bulk samples
taken from Jadar, and said the processing of these
and other Jadarite by-products within Serbia could
position the country to supply regional demand for
these resources that are used in energy-efficient
construction materials, the hi-tech industry, and in
electric vehicles.
Avala’s deposit is the other significant discovery
in Timok, a region where the Serbian government
initiated geological mapping in 1933, and where Terragold&co specialty is conducting of permitting process
for geological exploration and start of exploitation at
geophysical and geochemical surveys were under- G re e n f i e l d a n d B ro w n f i e l d m i n e s i n S e r b i a .
taken over various periods until 1985. The Timok
Mobile: +38164 220 8624
gold project, located immediately to the west of
TERRAGOLD

Phone/Fax: +38111 3474 806

the Timok Magmatic Complex, has 2.48Moz indi-
e-mail: office@serbiamining.rs
cated resources at a cut-off grade of 0.3g/t Au,
www.serbiamining.rs
according to a preliminary economic assessment
and updated mineral resource published this week. & co Brand of Terragold&co ltd Belgrade

The magmatic complex is part of the larger tec-

20, 22_23MJ140718.indd 23 17/07/2014 16:16

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 26 JULY 18, 2014 • mining-journal.com Follow us on at miningonline

Market update

LME metal stocks and prices Precious metals

6000000 2200
July 3 US$/oz % change % change
Stocks (t) Three-months price US$/t (rhs) on week on year
5000000 Stocks2080
(t) Three-months price US$/t (rhs) Gold (pm fix) 1327 0.7 5.9
Silver (spot) 21 -0.2 6.6
4000000 Platinum (last fix) 1506 3.2 10.6
3000000
1960
LME prices Platinum (J Matthey) 1504
856
2.6
3.4
9.6
25.5
July 3 US$/t % change % change Palladium (last fix)
2000000
1840
on week on year Palladium (J Matthey) 865 2.7 25.7
Aluminium Cash 1890 1.8 6.5 Osmium (free market indication) 400 0.0 0.0
1000000 1720
3 months 1918 1.4 5.6 Iridium (J Matthey) 620 3.3 -33.0

0
Aluminium 1600
Aluminium-alloy Cash 1995 0.5 10.5 Rhodium (J Matthey)
Ruthenium (J Matthey)
1125
68
0.9
-2.9
12.5
-20.0
July 2013 July 2014 3 months 2000 0.7 8.7
Copper Cash 7121 2.7 2.9
800000 3 months 7118 3.0 2.9 Shipping rates
700000
Copper 8800
Lead Cash 2160 0.9 5.0 Representative dry cargo single voyage rates (June 18)
8360 3 months 2192 1.1 5.9 Route/Size (’000 dwt) % change % change
600000 19790 6.3 43.4 Coal US$/t on week on year
Nickel Cash
500000 7920
3 months 19848 6.0 43.1 Richards Bay-ARA (100-150) 8.4 -1.8 6.9
Tin Cash 22825 1.9 13.7 E Aus-South Korea (120-160) 11.7 0.4 9.3
400000 7480
3 months 22863 2.0 13.8 E Aus-ARA (100-150) 20.6 -8.2 71.4
300000
7040 Zinc Cash 2230 2.3 20.4 Hay Pt-China (100-150) 10.5 7.7 7.1
200000 3 months 2234 2.2 19.1 Iron ore
6600 Source: Bloomberg, LME Narvik-ARA (100-150) 4.9 1.0 25.6
100000
Brazil-ARA (100-150) 8.6 1.7 -8.8
0
July 2013 July 2014
6160 LME official averages Brazil-China (100-150) 22.0 2.8 16.5
June 1-30 (US$/t) W Aus-China (120-160) 7.8 -4.1 -1.8
Settlement Cash 3-mths W Aus-ARA (120-160) 11.1 1.4 3.7
350000 25000
Aluminium 1834.4 1834.15 1868.55 Saldanha Bay-China (100-150) 15.5 8.8 17.9
300000 Alum-alloy 1973.05 1969.94 1982.04 Source: Drewry Shipping Consultants Ltd
Copper 6806.1 6805.8 6777.36
250000
20000 Lead 2103.31 2102.92 2129.1 Bulk minerals
200000 Nickel 18573.57 18568.22 18650 US$/t % change
150000 Tin 22773.81 22767.62 22764.64 on year
Zinc 2126.79 2126.47 2130.96 Rutile Aus export fob (April 2014)+ 925 -26.0
15000
100000 Settlement £/US$ US$/¥ €/US$ Ilmenite export fob (April 2014)+ 149 -37.9
50000
exchange rates 1.6904 102.05 1.3592 Zircon export fob (April 2014)+ 1075 -12.2
Nick
Nickel Settlement is the average of the cash sellers’ price. Cash and
three-months are the average of the buyers’ and sellers’ price.
globalCOAL RB™ Index (May 2014)‡ 75.84 -7.5
0 10000 globalCOAL NEWC™ Index (May 2014)‡ 73.88 -15.4
July 2013 July 2014 Source: LME
Source: † monthly from TZ Minerals International Ltd
1200000 2250 Exchange stocks ‡ Global Coal Ltd (www.globalcoal.com)

1000000 July 3 t % change % change

on week on year Other metals
2100
800000 LME aluminium 5058325 0.0 -7.5 July 3 Price % change % change
LME aluminium-alloy 36260 0.0 -46.8 on week on year
600000 1950 Antimony US$/t cif ** 9550 0.00 1.3
LME copper 157050 0.7 -76.2 Arsenic (Rotterdam 99%) US$/lb cif ** 0.75 0.00 0.0
400000 Comex copper 17866.1 1.2 -72.5 Bismuth US$/lb cif ** 10.5 0.00 25.0
1800 Total copper 174916.1 0.7 -75.9 Cadmium (99.99%) US$ c/lb cif ** 90 0.00 8.9
200000
(99.95%) US$ c/lb cif ** 80 0.00 8.3
0
Zinc 1650
LME lead 213600 11.3 8.0 Indium US$/kg ** 705 0.71 28.2
July 2013 July 2014 LME nickel 304938 -0.2 60.0 Mercury (99.99%) US$/ flask ** 2550 0.00 -27.1
LME tin 11715 4.7 -17.7 Selenium US$ c/lb cif ** 25 0.00 -15.3
LME zinc 665600 -0.3 -36.2 Uranium U3O8 $/lb* (July 14) 28.35 0.00 -28.2
1500
Gold * Assuming 0.75t per Comex aluminium piece
Source: Bloomberg, LME, Comex
Iron ore 62% fines
Iron ore 58% fines
96.5
79.1
1.26
2.46
-16.3
-25.5
*Source: Ux Consulting; **Source: Bloomberg, Metal Bulletin
Comex copper prices
July 3 (US$ c/lb)
July 325.25
August 325.95 40 Uranium 40
1300 September 326.50
Source: Bloomberg, Comex

Leading indicators 35 35
July 3 Last % change % change
US$/lb

on week on year
1100 Dow Jones
July 2013 July 2014 Industrial Average 17046.85 1.19 13.73
Nikkei 225 15348.29 0.26 9.20
Source: Ux Consulting

30 30
1600
Platinum Hang Seng
HSBC Global Mining
23531.44
436.49
2.91
3.11
16.80
23.66
FTSE Gold Mines 1496.80 3.54 22.78
FTSE/JSE Africa Gold 1607.22 2.61 11.98
S&P/ASX 300 Resources
S&P/TSX Diversified 4168.45 1.96 17.52 25 July 2014
25
July 2013
Metals/Mining 6780.31 6.40 28.66

3500 1900

1300 3000
July 2013 July 2014

26 Silv
Silver 2500
US$/t

US$/t

24 1800
2000
22

1500
20 10 years /
ALUMINIUM 2 months
1700
18 1000 July 2004 April 30, 2014 July 3, 2014 July 2014
July 2013 July 2014

26_27MJ140718.indd 26 17/07/2014 16:13

 Follow us on Register to receive Mining Journal global news updates at mining-journal.com/newsletter • JULY 18, 2014 27

Finance

HSBC indexes Share prices

All five of the indexes graphed below commenced in July 3 Local Change Local Mkt cap July 3 Local Change Local Mkt cap
December 1985. The market capitalisations below are for 5-day % hi-lo % US$m 5-day % hi-lo % US$m
end-October 2010. Diversified Copper
Mining: This index comprises 202 companies with a total Anglo American (£) 15.15 6.1 66 36,274 Antofagasta (£) 8.12 6.4 31 13,724
market capitalisation of over US$1,300 billion, half of this African Rainbow Minerals (R) 191.60 3.0 50 3,846 First Quantum Minerals (C$) 23.55 6.6 99 13,033
being in ten companies. The index is split 49% diversified, 21% BHP Billiton Ltd (A$)* 37.23 2.0 72 183,260 Freeport-Mc. C& G (US$) 38.19 7.0 100 39,668
gold, 14% base metals, 8% coal and 8% other metals. BHP Billiton plc (£)* 19.78 4.1 89 183,243 Grupo México (MP) 44.62 4.7 79 26,686
Diversified mining: This index comprises 29 companies, with Glencore Xstrata (£) 3.42 5.3 56 77,832 Jiangxi Copper (Yu) 12.92 4.7 17 6,704
a combined market capitalisation of some US$660 billion, Industrias Peñoles (MP) 334.90 3.3 18 10,226 Kazakhmys (£) 3.14 2.9 93 2,402
with the top four companies accounting for 56% of the total.
Rio Tinto Ltd (A$)* 62.45 4.3 26 104,953 KGHM (Zt) 127.10 2.2 86 8,358
Base metals: An index of 48 companies (some US$190 billion), 32.82 4.7 65 104,943 32.23 8.5 94 26,862
with Freeport McMoRan Copper & Gold representing 24% of
Rio Tinto plc (£)* Southern Copper (US$)
the total market capitalisation. Grupo Mexico and Alcoa Inc Teck Resources (C$) 25.49 7.9 43 13,768 Sumitomo Met. Min. (¥) 1,698.00 2.4 96 9,660
account for a combined further 15%. Vale (BR) 30.85 5.1 27 71,091 Turquoise Hill Res (C$) 3.68 -0.3 33 6,936
Gold: This index of 50 companies has a market capitalisation Vedanta Resources (£) 11.38 1.0 72 5,212
of US$280 billion. The top three companies account for 39% Nickel
of the total. Gold/Silver Aneka Tambang (Rp) 1,135.00 4.1 30 908
Coal mining: The 36 companies have a market capitalisation African Barrick (£) 2.27 9.3 58 1,596 Norilsk Nickel (Rb) 6,995.00 4.1 97 32,217
of some US$100 billion. Peabody Energy and China Shenhua Agnico-Eagle (C$) 40.26 0.3 91 7,892 Sherritt Intl (C$) 4.68 9.4 89 1,303
account for a combined 26% of the total. AngloGold Ashanti (R) 181.50 2.7 71 6,807
Barrick Gold (C$) 19.34 1.4 54 21,098 Zinc / Lead / Tin
Global mining Buenaventura (PS)
Eldorado Gold (C$)
31.70
8.00
0.0
5.8
25
52
3,131
5,364
Boliden (Sk)
Hindustan Zinc (Rs)
106.00
167.70
10.5
1.5
98 4,238
82 11,861
600 Fresnillo (£) 9.24 7.3 40 11,673 Lundin Mining (C$) 6.08 9.6 98 3,336
Gold Fields (R) 40.10 3.2 25 2,878 Minsur (PS) 1.76 0.0 85 1,818
544 Goldcorp (C$) 29.14 -0.7 61 22,196
Harmony Gold (R) 33.22 6.4 49 1,341 Ferrous
Iamgold (C$) 4.25 -0.5 24 1,500 African Minerals (£) 0.79 14.5 7 449
488 Independence Group (A$) 4.48 -0.4 98 976 Assore (R) 355.60 -1.1 30 4,598
Kinross Gold (C$) 4.47 0.2 20 4,792 Cliffs Natural Resources (US$) 15.99 6.5 16 2,450
432 Minera Frisco (MP) 26.00 -0.3 30 5,084 Ferrexpo (£) 1.36 5.2 18 1,376
New Gold (C$) 6.57 -3.4 45 3,101 Fortescue Metals (A$) 4.63 3.6 50 13,460
Newcrest Mining (A$) 11.03 3.2 56 7,893 Kumba Iron Ore (R) 346.27 0.6 14 10,330
376 Newmont Mining (US$) 25.02 -0.2 31 12,473 NMDC (Rs) 1.85 2.4 90 12,297
Pan American Silver (C$) 16.01 0.0 81 2,271
320 Polymetal (£) 5.90 2.7 36 3,936 Energy Minerals
July 2013 July 2014 Polyus Gold (£) 1.92 2.8 41 9,994 Alpha Natural Resources (US$) 3.64 -2.7 10 805
Randgold Resources (£) 49.40 2.3 73 7,850 Arch Coal (US$) 3.58 -2.3 19 759
Global diversified mining Tahoe Resources (C$) 27.34 -0.6 94 3,770 Banpu (Bt) 29.25 1.7 61 2,330
1000 Yamana Gold (C$) 8.66 -2.6 19 7,141 Bumi Resources (Rp) 183.00 22.0 13 319
Zijin Mining (H$) 1.80 3.4 61 7,017 Cameco (C$) 21.17 2.8 30 7,848
China Coal Energy (H$) 4.14 2.0 27 8,189
Platinum Group Metals China Shenhua Energy (H$) 21.85 -0.9 41 48,546
Anglo American Platinum (R) 489.60 7.1 84 12,229 Coal India (Rs) 396.10 2.0 85 41,878
ed 800
Impala Platinum (R)
Lonmin (£)
112.02
2.47
2.8
2.8
50 6,559
16 2,415
Consol Energy (US$)
Exxaro (R)
45.37
137.15
-2.2
-2.0
87 10,431
5 4,549
Northam Platinum (R) 45.68 1.3 81 1,682 Peabody Energy (US$) 16.42 -0.5 30 4,455
Stillwater Mining (US$) 18.43 9.0 97 2,208 Yanzhou Coal (Yu) 7.00 0.7 19 4,828

Aluminium Industrial Minerals & Others

Alcoa (US$) 14.90 -0.3 96 17,461 Eramet (€) 88.63 -1.9 65 3,201
Aluminum Corp of China (H$) 2.86 2.9 61 6,251 Iluka (A$) 8.61 1.9 14 3,366
600 Hindalco (Rs) 173.75 5.1 93 6,005 Israel Chemicals (US$) 8.44 -0.9 60 10,741
July 2013 July 2014
Norsk Hydro (NK) 34.04 2.8 96 11,334 K+S (€) 24.71 3.9 72 6,433
Global base metals Rusal (Rb) 158.75 2.1 77 7,020 Mosaic Company (US$) 49.01 -1.9 54 18,803
Potash Corp (C$) 40.41 -0.9 90 31,717
600
Diamonds Uralkali (Rb) 159.07 2.6 24 13,593
Alrosa (Rb) 44.72 5.2 98 9,586
Dominion Diamond Corp (C$) 15.41 0.1 69 1,229
Petra Diamonds (£) 2.00 3.5 96 1,755
500 * Dual-listed companies, with effective cross-holdings

400 Ernst & Young Mining Eye Index HSBC indices

July 3 Change Hi-Lo 52wk 52wk
1200
100 on 31.12.88 on week (%) (%) max low
300 Global Mining 436 3.1% 100 436 349
July 2013 July 2014 Global Diversified Mining 821 3.4% 95 830 636
Global Base Metals 518 3.6% 100 518 391
Global gold 1000 North American Base Metal† 870 4.1% 100 870 610
150 Global Gold Index 125 2.5% 67 138 98
Global Gold Ex South Africa 160 2.4% 63 179 127
North American Gold 162 2.3% 63 183 127
800 Global Coal Mining† 666 1.0% 65 709 586
Mining EYe Other Metals/Minerals† 663 2.6% 62 712 583
120 FTSE Mining (rebased) Latin American Mining* 2,099 3.7% 53 2,342 1,825
Latin American (Ex Vale)* 1,590 4.4% 67 1,716 1,336
600 * 100 on 31.12.89 † 100 on 31.12.85
July 15, 2013 July 15, 2014
Mining EYe represents the weighted average market This week’s main movers
capitalisation of the top 20 mining companies on London’s July 3 Price Change %
90 AIM market. Top 6 risers
July 2013 July 2014
Source: Thomson Financial Datastream 1 Bumi Resources 183.00 22.00
Global coal mining 2 African Minerals
3 Boliden
0.79
106.00
14.49
10.53
800 Mining Journal’s share constituents are reviewed on a 4 Lundin Mining 6.08 9.55
quarterly basis. 5 Sherritt Intl 4.68 9.35
The companies in the gold section comprise the leading 6 African Barrick 2.27 9.29
stocks by market capitalisation.
700 The constituent companies in all other commodity Top 6 losers
sections are chosen on a subjective basis to include the 1 New Gold 6.57 -3.38
major producers, and are allocated to sections based on 2 Alpha Natural Resources 3.64 -2.73
revenue. 3 Yamana Gold 8.66 -2.59
600 Fast-track entry into the share table will apply in the 4 Arch Coal 3.58 -2.32
case of significant flotations or company-transforming 5 Consol Energy 45.37 -2.20
mergers. 6 Exxaro 137.15 -2.03

500
July 2013 July 2014 All data on this page sourced from Bloomberg unless otherwise stated

26_27MJ140718.indd 27 17/07/2014 16:13

 28 JULY 18, 2014 • mining-journal.com Follow us on @miningonline

Technology

Running on empty
The mining industry can turn, ‘do more with less’ from an empty slogan into a sound business strategy
Shawn Lyndon “The mining industry is facing a confidence crisis,”
ABB
PwC global mining leader Tim Goldsmith has said.
What is happening right now in mining “is not a pen-

M
ining has been synonymous with riches
since the beginning of recorded history.
That reputation certainly held true during
the first decade of the 21st century, when the indus-
try soared. But today, mining is just the latest of once-
impregnable industries to be shaken by the realities
of doing business in a globalised, connected world.
Costs of extraction, production and transportation
are up, prices are soft, demand is fickle and stock val-
ues have swooned. As The Wall Street Journal said in a
recent report on an erstwhile Australian boom town
wilting in a coal-mining bust, “the party is starting to
end”.
Industry analysts see the challenges as structural,
not just cyclical.
dulum swing, it’s a seismic shift”, said Deloitte in its
Tracking the Trends 2014 report.
Most industry experts agree the time-honoured
historic solution – hurriedly finding more stuff to
mine – will not work anymore. As with most indus-
tries, today in mining it is all about increasing the pro-
ductivity of existing assets and boosting efficiency to
reduce operating costs: the dreaded ‘do more with
less’ imperative.
This once-chilling maxim is actually good news.
Being forced to do more with less offers mining an
opportunity to leap into a new age of innovation that
promises even richer levels of success and prosperity.
Leveraging existing and emerging technologies, there
is a way to turn ‘do more with less’ from an empty –

MOMS to ease pains

One of the architects of South
African engineering group
DRA’s emerging MOMS
operations management software,
developed over the past 18 months, says
the product will be pitched to start-up
miners and mid-tier miners where arguably
the best opportunities exist to introduce a
wave of “best practices and management
fundamentals”.
DRA’s Johan de Villiers believes MOMS
could “revolutionise the future of
automated plant control in the mining
industry” (Mining Journal, July 11, 2014).
“It is essentially an architecture that DRA
has developed to integrate the various
systems on a mine in order to circumvent
the silos of information that exists in the
mining supply chain,” he said.
The two main software components of
MOMS are the OSIsoft-developed PI
operational real-time data and events
management software, and Sage X3 ERP
platform. De Villiers said the former provided
the highly-scalable and secure infrastructure
required by the system.
“The fundamental difference between
MOMS and the other mining systems is that
we integrate across the mining value chain,
from exploration right through to dispatch,”
de Villiers said.
“The main function of MOMS is to ensure
that the mine asset performs to specification,
the operational costs are under control and
the individual assets in the main are
conditioned to perform for the life of mine.
“The majority of the systems in the market
currently are developed by IT companies
who do not have the process and production
knowledge required to maximise the impact
that systems have in the mining space.”
DRA is preparing for a formal MOMS
launch.
“From the response we have received
from various mining companies to whom
we gave demonstrations, we believe we are
on the right track to the management,
control and execution of a modern mine,”
de Villiers said. “We believe that a lot of the
pains regarding visibility, quality and
validation are addressed in MOMS.”

Where MOMS
EPR system
fits in the mine-
management
software
hierarchy Document control Scheduling and optimisation Maintenance

MOMS Down-time analysis Performance analysis Process monitoring

Reporting
layer and maintenance support portal
Material balance Short-term
Grade control and tracking consumables control
Laboratory information system

Drill control Load, haul Plant-control system

Exploration Strategic Short-term Stock-pile
system mine planner scheduler management

Charge Load Crushing Plant Stacking

Exploration Planning Survey Drilling and blast and haul Stacking and processing and
conveying dispatch

28_29MJ140718a.indd 28 17/07/2014 16:49

 Follow us on Register to receive Mining Journal Breaking News three times a week at mining-journal.com/newsletter • JULY 18, 2014
and dispiriting slogan – into a real-world strategy.
Let’s start with the industry’s biggest cost, mainte-
nance, which accounts for 30-to-50% of total operating
expenses, according to Global Mining. But mainte-
nance run as high as 70% of total operating costs.
How do the vast majority of mining companies try
to hold down the cost of maintenance? By using a
time-honoured array of disparate, siloed operational
systems that generate tons of data that is rarely inte-
grated, analysed and refined into actionable intelli-
gence to answer Maintenance Question No.1: What’s
the business cost/benefit of fixing or replacing an
asset now, or waiting until later?
That question is getting potentially easier to answer
as more and more data flows from connected devices
reporting to operational systems in real time – the
Internet of Things. The potential to answer becomes
the answer by combining data from these operational
systems with information technology’s business intel-
ligence, analytics and financial information.
Take a haul truck: combining operational technol-
ogy (OT) data beaming from that truck’s connected
sensors, with information technology (IT), can answer
such fundamental, business-critical questions as:
“What’s the economic impact of one cylinder on that
truck not working?” Or: “Would it cost more to fix it or
replace it?” “Should we fix or replace now, or wait?”
“What does this flow of information say about our
entire maintenance strategy?”
Experienced mining hands may snort at the
concept of integrating OT with IT. In many compa-
nies, the operations folks and the IT folks do not
even like each other because they are in a constant
struggle for ownership, which is obviously self-
destructive.
One sterling exception is Cliffs Natural Resources
Inc, the international mining company, that has a
staff position called ‘senior director of IT/OT’.
Cliffs is piloting integrated IT/OT for predictive
maintenance on its haul trucks, with hopes of extend-
ing the solution to such other key assets as conveyers,
shovels, drills, crushers and SAG mills.
“Commodity prices are going down and expenses
are going up. The only way we can remain successful
and competitive is by bringing together, in real time,
vast amounts of analysed, asset-related data to
reduce our operational and maintenance costs,” says
John Tish, Cliffs IT/OT guru
With the rise of the Internet of Things, IT/OT inte-
gration is moving swiftly ahead in many industries as
a way to, yes, do more with less. Will mining embrace
it as well? That’s a crucial question, since mining has
historically been a late mover.
As Mark Cutifani, chief executive of Anglo Ameri-
can plc, told The Australian newspaper not long ago:
“[Mining] is some 20-to-30 years behind other more
progressive sectors in terms of business practices.”
But mining does not have a choice: it has to catch up.
The industry must evolve from a focus on getting
more out of the ground to a focus on efficiency, ROI
and maximising the health and productivity of exist-
ing assets. Miners that do not embrace the benefits of
IT/OT integration may not be around very long.
Shawn Lyndon is senior vice president and general
manager of asset health solutions at Ventyx, part of ABB
28_29MJ140718a.indd 29
Africa growth channel for Microsoft
South African Microsoft agent AccTech
Systems has formed a venture with the
software giant, deploying its Dynamics
NAV and GP products and services
through the newly formed Dynamics
Africa Services.
AccTech said it had signed an
independent software vendor (ISV)
agreement with Microsoft. Dynamics
Africa Services is headed by AccTech’s
former chief marketing officer, Nick
Botha. “One of our main objectives of
signing up Dynamics Africa is to help us
grow our already substantial GP and
NAV base, not only in South Africa, but
also in Africa,” Microsoft South Africa
Dynamics director Kethan Parbhoo said.
The products are among the core
components of Microsoft’s Dynamics
customer relationship management
(CRM) and enterprise resource planning
(ERP) business-management software
grouping.
AccTech Systems chief executive
Tertius Zitzke said Dynamics Africa
Services would aim to develop and grow
deployment of the Microsoft product
lines in Africa through the developer’s
existing partner channel and through
the acquisition of new partners.
“The depth of our knowledge of
technology in the markets we serve has
established credibility and respect. We
know our customers’ business needs,
the trends impacting their industries
and the processes required to achieve
results,” he said.
Founded in 1994, AccTech services a
range of African markets, from
agriculture, government and financial
services, to mining and manufacturing.
Survey productivity boost
Maptek’s I-Site Studio 5.0
Australian mining software leader
Maptek’s focus on workflow and
productivity improvement around the
use of its main products has yielded
I-Site Studio 5.0, new software to
support its advanced mine laser
scanning technology.
“Automating processes helps
surveyors generate timely and accurate
survey reports for planning and
production, with positive impacts on
site productivity,” Maptek manager of
29
Technology
ICT NOTEBOOK
laser imaging systems, Athy Kalatzis,
said.
I-Site software handles huge data
sets from detailed laser imaging, with
the Studio 5.0 product featuring a
‘Level of Detail’ tool that automatically
allows a manageable amount of data to
be loaded and viewed. The new
Workflow Manager saves a series of
transactions that are then shared and
adapted within survey teams, according
to the developer.
“This enables standard work
processes to be implemented across an
organisation – driving productivity,
efficiency and accuracy. Workflows can
be launched from custom toolbars, and
the status of the current process is
conveniently highlighted.
“The result is efficient handover
between crews for routine site
applications,” Maptek said.
Kalatzis said as well as being a valuable
training tool, standardised workflows
improved the quality of results.
IES on schedule
A powerful “next-generation” mine
planning and management simulator
developed by Australia’s CRC ORE – a
research body sponsored by a number
of large mining houses – is on track for
commercialisation next year, according
to its designers.
The Integrated Extraction Simulator
(IES) is set to offer a single software
platform to be used daily by mine
planners to understand long-, medium-
and short-term effects of evolving ore
mining and processing patterns and
schedules, they say in CRC ORE’s latest
newsletter.
“[This]… will transform the way in
which mineral resources are evaluated
and extracted,” the group said.
“IES is a result of a substantial
commitment by CRC ORE to produce a
next-generation mining simulator that
integrates all mining and mineral
processing activities starting from drill
and blast, and proceeding through the
entire mining value chain to the end of
the concentration process.
“[It] overcomes challenges that have
previously made fast, reliable and
accurate simulation of mineral
processing challenging and time
consuming,” CRC ORE said.
17/07/2014 16:49
 30 JULY 18, 2014 • mining-journal.com
View from the West End
We’re here to help
“The best argument against democracy is a five minute
conversation with the average voter.”
– Winston Churchill
W
ith all of the angst and hand wringing we
go through at the antics of our dear leaders,
one does wonder where it all began.
I suppose we do need to begin from the premise
that government is a good thing, despite our misgiv-
ings. Yes a bit of anarchy might seem a splendid
notion when we are full to the back teeth with beer
and bad manners, but when morning comes we give
thanks there is someone out there doing all the
unpleasant jobs that would be all the more unpleas-
ant if they were not done. The lights work, the water
flows, the sewerage is taken away, the hospital
patches us up, the train arrives on time and the bad-
dies are kept in check.
In ancient times, selection of the government was a
“I then make reasonably straight forward affair. The biggest,
the point that strongest and nastiest would proclaim himself the
in almost every boss and cut the nuts off anyone who dared suggest
otherwise. Perhaps this did not always throw up the
jurisdiction best candidate, but was a damn sight cheaper than
where mining holding an election.
And so while on balance we are probably better off,
takes place, I consider that perhaps their reach has extended some-
government what beyond what we, the governed, originally
intended. We should, I suppose, not be surprised at
is now seen this – most of us I imagine would view the ideal gov-
as a barrier to ernment as being one that does all the nasty smelly
jobs but then sods off and leaves us alone to enjoy life.
be overcome This is good in theory, but the obvious problem is
and risk to be that this does not sound fun, and so the government
people, in payment for doing all the wet work, insist
managed” on also being allowed to have a go at some of the fun
stuff as well, like jetting about in Airforce One and
invading Iraq. Alas, Governments just attract the
wrong sort of people who take a mile when an inch is
offered and before you know it, there is all manner of
strange stuff being done that one really does suspect
is not really essential.
I was taken the other week by a piece in the Aus-
tralian press that breathlessly quoted a just-released
Bureau of Statistics report suggesting that mineral
exploration in Australia had slumped to record lows.
I suppose I shouldn’t be too critical. As a bunch (not
sure of the collective noun – a ‘distribution’ perhaps),
statisticians are hardly what of we think of when the
phrase ‘earth shattering’ comes to mind.
It’s a horrid job, and so full marks to them for get-
ting it right, but minus a few million marks for timeli-
ness. I haven’t the faintest idea how much work is
involved in a study of this sort.
I can imagine the authors being quite chuffed with
themselves, the quality of their work and the extraor-
dinary insights they had uncovered, but completely
oblivious to the fact that the report was an utter
waste of time, effort and money in that it simply told
us something we all knew 18 months ago, and did
not even pretend to provide any solutions, which is
what we would have liked to have seen.
About 10 years ago, the USGS told us there was
30MJ140718.indd 30
Follow us on @miningonline
US$1 trillion of mineral wealth to be found in Afghan-
istan. Amazing stuff, although I do recall at the time
being a mite sceptical at how they knew this, given I
can’t imagine too many of their geos volunteering to
pop out for a look.
The report was also slightly lacking in advice on
how we might extract this wealth without getting our
bits shot off.
A few months ago, the USGS again told us with a
very straight face that there remains 3,500Mt of cop-
per still to be found out there in the wider world,
some six times greater than all the copper mined
through history.
Oh well, that’s alright then, and here I was thinking
we were running short. Now where did you say we
should drill again?
There does seem a bit of disconnect between what
governments think is important and where we would
prefer to see them direct their efforts. There seems to
be a focus on collecting information that we really
don’t need, making rules nobody wants and coming
up with forecasts that have no basis in fact and were
clearly just made up to impress the minister.
The list of countries where there are legions of gov-
ernment staff assessing technical stuff and making
decisions on a company’s future and its rights, despite
having no technical or commercial experience, is a
long one. We are, it seems, the most monitored
industry on the planet.
Britain is not a great mining country any longer and
so my government chums at the Club don’t pester
me with questions, but when, perchance, in my trav-
els I do get asked by someone eager to help what
they should do, invariably I reply to please just leave
us alone.
Provide secure tenure, provide the underlying base
data, provide a clear path to production with all the
requisite environmental and social checks and bal-
ances and provide a stable taxation base. In other
words, set the rules and we will follow, but please
don’t try to be involved.
I then make the point that in almost every jurisdic-
tion where mining takes place, government is now
seen as a barrier to be overcome and risk to be man-
aged.
Less is more it seems is not a mantra that wins
votes.
17/07/2014 10:55
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