Mining and Exploration

Discipline is a great virtue in the challenging price environment the gold mining industry finds itself in today: the players who can keep operating through the lean times will be the ones best place to take advantage of anticipated price rises. But though these struggled upward to the tune of some $60 over the course of January – and western economies are showing signs of growth allied to greater confidence – prospects for 2014 remain uncertain. Investors know that, and they continue to set a premium on discipline.

When we last spoke to President and CEO of DNI Metals Shahe Sabag towards the end of 2011 his company had just achieved a significant milestone in its history, identifying the first mineral resource from one of its six mineral systems located within the 2,720 square kilometre property the company holds in the Birch Mountains, north of Fort McMurray adjacent to the oilsands deposits of northern Alberta, Canada.

The company has announced C$4.3 million deal that will see it issue 21.65 million new shares in exchange for the entire issued share capital of St Vincent Minerals (SVM), whose assets include the Gabbs property in Nye County, Nevada.

The deal represents a departure for Galileo, whose portfolio until now had included three projects and nine exploration sites across South Africa, Zambia and Mozambique.

The National Development Corporation of Tanzania owes its existence to one of the most significant figures in the story of Tanzania’s journey towards independence. The man who was later to found and lead NDC, Sir George Kahama was appointed Minister of Commerce and Industries in President Nyerere’s first cabinet, and one of his priorities in the two years he spent in the job was to draft the legislation that established NDC. It is worth quoting Joseph Kahama’s account of the original vision in his biography of his father.

The news is a stark contrast to that of this time last year when the company was still reeling from the effects of strike action in South Africa’s mining sector, where much of the company’s iron ore and platinum activities occur.

“As is typical of First Quantum, the project is doing very well and is progressing on-time and to budget.” Those were the words of John Gladston, Trident Resource Optimisation Manager, when we spoke during the summer of last year. The project he was referring to was of course the Trident project, the largest single project investment in Zambian history.

Doña Inés de Collahuasi, a Chilean mining company, operates the world's fourth largest copper mine. The operation comprises two principal porphyry copper deposits, Ujina and Rosario, as well as a smaller deposit called Huinquintipa that contains only sulphide mineralisation and copper oxides. It is a joint venture owned by two mining majors, Swiss-based Xstrata and London-based Anglo American, with 44 percent of the shares apiece.

ATS started life in 1996 by plugging a hole in the market. A Canadian minerals company working in Ghana and other African countries found it impossible to get the support it needed at its remote sites – like an army, an exploration company marches on its stomach. It hired an experienced facilities manager Jez Simms to meet its immediate needs, with such success that the unit quickly grew into an entity in its own right, taking its first outside contract in 1997.

Approximately 65 kilometres away from Santiago, in the Metropolitan Region, and 3,500 metres above sea level, one will find the Los Bronces division of Anglo American. Managed by a team of executives, the head of which is General Manager, Christian Thiele, the Los Bronces division boasts a workforce of more than 1,700 people, including company employees and operation and project contractors. Collectively they are responsible for implementing the Los Bronces Development Project, the objective of which is to boost the mine's production capacity.

From an investment perspective, are there particular global trends, the high level of demand for gold in the Middle East and Asia at present for example, that give you encouragement for future growth in Africa’s mining sector?
The thing about gold that you have to remember is that there is actually very little physical gold around the world today. That is why in India, for example, gold is currently trading for around $1,600 an ounce.