Category Archives: Exploration

Norway to Map Deep Sea Mineral Deposits

Maritime Executive | 12 August 2018

The Norwegian Petroleum Directorate is readying to map potential deep sea mineral deposits in the Norwegian Sea, with an expedition due to get underway this month.

The Directorate has engaged Swire Seabed, which partners with Ocean Floor Geophysics, to carry out mapping of potential sulfide minerals on the seabed over the Mohns Ridge in the western Norwegian Sea. This is a spreading ridge in the Atlantic Ocean that separates two oceanic plates, where potential valuable minerals have been formed through hot volcanic sources. The focus of the expedition is not the active hydraulic systems such as “black smokers,” but rather non-active extinct systems that are now left as mineral-rich piles of gravel on the seabed.

The mapping will be carried out using an autonomous underwater vehicle, a Kongsberg Hugin AUV, which will map the seabed using a bottom-penetrating echo sounder, multibeam bathymetry, synthetic aperture sonar data, magnetometry and spontaneous potential field data.

After the data is processed on board, mineral samples will be taken from the seabed where the data indicates the presence of deposits. Sampling will be carried out using an underwater remotely operated vehicle with a depth capability of 3,000 meters (9,800 feet).

Earlier studies by the Norwegian Research Council have indicated that the region could contain resources worth as much as $110 billion. Around 6.4 million tons of copper metal in addition to zinc (6.5 million tons), gold (170 tons) and silver (9,901 tons) have been estimated to be present in the region. 

Rising demand for minerals and metals, including for use in new technology, has sparked renewed interest in seabed mining. Since 2001, the International Seabed Authority has issued licenses to approximately 30 government and private organizations to explore 500,000 square miles of the deep sea outside national jurisdiction for minerals. 

This increasing interest in seafloor mining globally has drawn some criticism. Despite the term “mining,” much of the activity would involve extraction of minerals over very wide areas of the sea floor rather than digging down to any great depth, potentially leaving a vast footprint on the deep-sea habitats in which these mineral deposits occur. Earlier this year, a study by the University of Exeter and Greenpeace warned that mining on the ocean floor could do irreversible damage to deep sea ecosystems. The deep sea (depths below 200m) covers about half of the Earth’s surface and is home to a vast range of species. Little is known about these environments, and the researchers say mining could have “long-lasting and unforeseen consequences” not just at mining sites but also across much larger areas. 

Advertisements

1 Comment

Filed under Exploration

Mayur set to drill Feni Island

Field mapping at Matakangkaka Creek

PNG Industry News | 13 August 2018

MAYUR Resources says it is ready to mobilise a team do begin a drill program at its Feni Island copper-gold project in New Ireland Province.

This follows the completion of a detailed field mapping and sampling programme within the Matangkaka Creek area at Feni Islands EL2096.

The company says Matangkaka Creek is an eastern tributary of the Nanum River and is rated as one of the top three gold bearing streams in the Feni Island group. It is also near and upstream from the Kabang structure that hosts a 650,000 ounce gold resource.

“The trip was undertaken by Dr David Lindley, Mayur’s veteran expert geologist who has decades of experience on Feni,” Mayur said.

Mayur has correlated this new information with historical data to finalise a drilling programme of up to 2400m. The programme of up to seven holes is focusing on the gold mineralisation in structures beneath and along strike of the Matangkaka Creek.

Mayur managing director Paul Mulder said the company was essentially ready to mobilise and execute the drilling programme at Feni.

“This is particularly exciting as Feni Island sits between Lihir, one of the largest gold mines in the world, and Bougainville, one of the world’s great copper-deposits. You could not ask for a more prospective postcode location of the Feni prospect being the situated island between these two world-class giants.

“This, coupled with historic attractive copper and gold mineralisation from near surface (continuing at depth), provides an attractive backdrop to conduct a drilling campaign, which will be the first in many years on the island,” Mulder said.

Leave a comment

Filed under Exploration, Papua New Guinea

Te Atiawa and Taranaki Iwi fundamentally opposed to seabed mining activity

In addition to endangered Māui dolphins, other marine mammals, including fur seals, common dolphins, and orcas (killer whales) can be found in the Marine Park boundaries.

Te Atiawi iwi | 13 July 2018

Te Kotahitanga o Te Atiawa Trust and Te Kāhui o Taranaki Trust are fundamentally opposed to seabed mining activities within their tribal rohe.

Te Kotahitanga o Te Atiawa Trust and Te Kāhui o Taranaki Trust were notified of the exploration permit application by Ironsands Offshore Mining Ltd in 2016 and each iwi made a submission opposing the application back in September 2016.

Both Iwi organisations were informed of the granting of the permit on 8 June 2018, a month after the permit had been granted by New Zealand Petroleum and Minerals on 8 May 2018.

Te Kotahitanga o Te Atiawa Trust Chairperson Liana Poutu is concerned that the permit area includes a Marine Mammal Sanctuary.

“The permit has been granted inside a Marine Mammal Sanctuary which is administered and managed by the Department of Conservation.

“We find it difficult to understand how one arm of government, New Zealand Petroleum and Minerals, can cut across another arm of government and make these kinds of decisions without engagement on the issue.

“The permit area also sits inside a mineral mining exclusion zone, so although it’s only exploration at this stage the implication is that if exploration is successful there is an expectation that a mining permit will be granted in an area that excludes this activity.

“Fundamentally, the iwi and hapū of Te Atiawa are opposed to this activity,” she says.

Te Kāhui o Taranaki Trust Chairperson Leanne Horo says that the protection of our environment is a focus for Taranaki Iwi.

“Taranaki Iwi’s focus is on protecting, enhancing and sustaining the mouri of Tangaroa ki Tai.

“The Ngā Motu/Sugar Loaf Island Marine Protected Area and Tapuae Marine Reserve sit within the Te Atiawa tribal rohe and our Taranaki Iwi tribal rohe so it’s concerning to us that the permit has been granted in close proximity to these areas.

“We are launching our environmental management plan, Taiao Taiora, in the coming week which outlines our position on environmental issues.

“Taranaki Iwi is fundamentally opposed to any new mining or prospecting activity taking place within our rohe,” she says.

The permit area at its closest is 2.8km from shore, and sits almost entirely in the West Coast North Island Marine Mammal Sanctuary established in 2008. The permit area at its closest is 0.45km from the Ngā Motu/Sugar Loaf Island Marine Protected Area and at its closest is 1km from the Tapuae Marine Reserve. The permit area overlaps the Mineral Mining Exclusion Zone in two places.

Leave a comment

Filed under Environmental impact, Exploration, Mine construction, New Zealand

China looking under the sea for opportunities in the Pacific

Denghua Zhang* | East Asia Forum | 30 June 2018

China has hunted globally for land-based mineral deposits to fuel its economic development since the 1990s. Now, Beijing is devoting growing attention to seabed mining. As China’s Five-Year Plan on Mineral Resources (2016–2020) states, ‘China will actively participate in international surveys on deep sea mining and accelerate the exploration and development of ocean minerals’.

In the Pacific islands region, most countries are small in land area but have huge maritime exclusive economic zones (EEZs). Chinese enterprises have invested in seven land-based mining projects in Papua New Guinea (PNG), Fiji, New Caledonia and the Solomon Islands and have been interested in mining the Pacific’s seabed minerals since 2001.

China’s engagement with the Pacific on seabed mining started with research activities that have mainly been carried out by the China Ocean Mineral Resources Research and Development Association (COMRA). COMRA is affiliated with the former State Oceanic Administration, which was absorbed into the new Ministry of Natural Resources in March 2018.

The Qingdao Institute of Marine Geology has conducted many of COMRA’s research projects in the Pacific. Between 2001 and 2010, the Institute completed two research projects on China’s bilateral cooperation in ocean resources exploration and on seabed mineral resources in the South Pacific. Their research categorised marine areas as prospective sources of polymetallic nodules, cobalt nodules and hydrothermal sulphide deposits, and also compiled a seabed mining resources map of the Pacific. The research team suggested that China should incorporate seabed mining into its aid plans for Pacific states and use concessional loans to support exploration projects.

Based on these research activities, Chinese government agencies have directly reached out to their Pacific counterparts. In April 2013, a joint delegation comprised of officials from COMRA and Chinese mining institutions visited the Cook Islands, Fiji and Samoa and expressed their strong interest in exploring seabed mining in the three countries. In August 2014, Chen Lianzeng, Deputy Director of the China State Oceanic Administration, visited Vanuatu and Fiji and proposed that China and the two countries should strengthen cooperation on maritime resources exploration and development. Vanuatu’s then-prime minister Joe Natuman and Naipote Katonitabua, the acting permanent secretary of Fiji’s Office of the Prime Minister, responded positively to China’s suggestions.

China’s state-owned enterprises (SOEs) are also involved in seabed mining. Mawei Shipbuilding Limited, a Chinese SOE located in Fujian Province, is building a US$18 million seafloor production support vessel for Toronto-based Nautilus Minerals. The vessel was launched in March 2018, with approximately 75 per cent of it completed. It will be used for the Solwara 1 project — the world’s first seabed mining project, located in the Bismarck Sea off PNG.

The three seafloor production tools to be used in the Solwara 1 project were designed and built by the UK-based Soil Machine Dynamics Ltd. In April 2015, Soil Machine Dynamics Ltd was sold to Zhuzhou CRRC Times Electric Co, Ltd, which is an SOE ultimately owned by the State Council of China. The products from Solwara 1 will be processed by Tongling Nonferrous Metals Group — another Chinese SOE. In May 2017, China Minmetals Corporation and the International Seabed Authority (ISA) signed a 15-year contract that allows China to search for polymetallic nodules in the 72,745 square kilometres of the Clarion–Clipperton Fracture Zone in the Pacific Ocean.

Seabed mining in the Pacific is attracting interest from other foreign players. For example, Japan and Russia have brokered ISA contracts to explore cobalt-rich crust resources in sites close to the EEZs of the Marshall Islands and the Federated States of Micronesia.

Seabed mining is both an emerging field and one that is in a considerable state of flux. As shown by the proposed Solwara 1 Project, this new industry faces unprecedented financialenvironmental and social challenges. There are also notable gaps in the international and national laws that govern seabed mining. The International Seabed Authority is still in the process of developing a ‘Mining Code’ to regulate the prospecting, exploration and exploitation of seabed minerals. As of late 2015, only four of the 14 Pacific states (Palau, Tonga, Tuvalu and Nauru) have legislation that covers seabed mining issues. The PNG government is still developing a draft offshore mining policy.

Greater China–Pacific engagement on seabed mining has upsides and downsides. Pacific states have flagged seabed mining as a new potential driving force of economic growth. PNG, Fiji, Tonga and the Solomon Islands are among the first countries in the world to issue exploration licenses for seabed mining in their EEZs, and Pacific states might be able to seek more financial and technical assistance from China to develop this new industry. But any such project needs to consider the environmental and social impacts of seabed mining and must fully comply with international and national laws.

Looking into the future, China is expected to engage actively with Pacific states on seabed mining and focus on exploration and establishing official contacts. But China is unlikely to commit substantial resources to seabed mining projects before the industry becomes more commercially and environmentally viable.

*Denghua Zhang is a Research Fellow at the Department of Pacific Affairs, The Australian National University.

Leave a comment

Filed under Exploration, Financial returns, Pacific region

China extends gas interests in Papua New Guinea

Once again Papua New Guinea’s rights and resources traded internationally with no government oversight or landowner consent… 

Repsol sells permits in Papua New Guinea

Rick Wilkinson | Oil and Gas Journal | 21 June 2018

Spanish firm Repsol SA will sell its exploration and development permits in Papua New Guinea to Chinese company Balang International. Repsol has not disclosed the transaction amount.

The nine permits—four exploration and five development—have been in Repsol’s portfolio since 2015.

They include 25% of offshore retention license PRL 38, which contains the Pandora gas fields in the Gulf of Papua, along with 35.1% in the Elevala-Ketu gas-condensate fields in retention license PRL 21, and the Stanley gas fields in nearby development license PDL 10.

Repsol acquired the assets as part of the package when it bought Talisman Energy Inc. for $13 billion in late 2014.

Repsol said the business in Papua New Guinea will continue to be operated by Repsol until the transaction is completed during this year’s fourth quarter.

Balang is part of the China Changcheng Natural Gas Power Group, which has investments in natural gas and power across China and the Asia Pacific region.

Balang Chairman Dai Ying Xiang said his company is committed to the development of the discovered resources within the permits which have the potential to foster and supply a new Papua New Guinea LNG project.

Development could include contributing gas to the proposed 1.5 million-tonne/year Western LNG project, which involves a processing facility near Daru Island on the coast near the mouth of the Fly River.

Leave a comment

Filed under Exploration, Financial returns, Papua New Guinea

The Next Gold Mine in Tropical Paradise Obtains $40 Million Financing

Lion One Drill Pad, Tuvatu

Two projects on a mining-friendly tropical island are moving forward, one in the final ramp-up to production and one at a very early stage.

Streetwise Reports  | 12 June 2018

Thoughts of Fiji conjure up the tropics, beaches and sunshine, but the island nation is also noted for its mineral production. The Vatukoula mine, in operation for over 80 years, has produced more than seven million ounces of gold.

Vying to join its ranks on the politically stable and mining friendly island are Lion One Metals Limited  and Thunderstruck Resources Ltd., two companies at opposite ends of the spectrum.

Thunderstruck Resources is an early stage exploration company with an extensive portfolio of properties on Viti Levu, the main island of Fiji. The company is conducting exploration activities at its large land package—covering 4% of Viti Levu—of “100% owned high grade zinc, copper and gold assets,” it reported in mid-May. According to Thunderstuck, it is “building on extensive prior results that point to the potential for large mineralized systems.”

At the end of May, Thunderstruck closed an oversubscribed private placement, raising over $200,000, selling 2.2 million units at $0.09 each. Each unit contained one common share and one share purchase warrant, with the option to buy a common share for $0.15 until May 2021.

Lion One’s 100%-owned Tuvatu project is at a much more advanced stage and is on track to put into production Fiji’s next mine. The company just announced a US$40 million debt financing package to develop the mine and build a processing plant for its fully permitted project. The financing is with Sinosteel Equipment & Engineering Co. Ltd. and Baiyin International Investment Inc. Sinosteel will be the EPC (Engineering, Procurement and Construction) contractor for the project, and Baiyin will be the gold doré offtaker.

The agreement is for a five-year term at a 7.5% interest rate. There will be a principal holiday and capitalized interest for either the earlier of two years from first draw, or three months after achieving commercial production. There also will be a Net Smelter Return (NSR) royalty of 2.25% on the first 350,000 ounces of gold produced. There is also an option to increase the financing by US$10 million.

Analyst Derek Macpherson of Red Cloud Klondike Strike Inc. noted on June 4 that with the debt financing in place, Tuvatu construction is expected to ramp up and views this as “very positive.”

Macpherson also noted that the “PEA (2015) outlines initial capital investment (excluding working capital) for Tuvatu at US$48.6M. With exploitation permits in-hand and C$21.6M (US$16.6M) in cash, the company is well positioned to continue on the path to construction and production.”

Analyst Mike Niehuser of Scarsdale Equities wrote on June 6, “The PEA assumed modest capital costs and efficient mining of high-grade gold resources, resulting in significant cash flow, which may rapidly repay capital and fund mine development and additional exploration of prospective gold targets.”

Niehuser also stated, “We expect that Lion One will announce an updated capital cost budget that should be within expected variances of the PEA. It appears that the facility should be adequate to cover the construction and capital costs with cash on hand. The terms appear to be competitive and do not include hedging or prepayment fees. Lion One continues exploration activities for which we believe could be a long-lived mine.”

Scarsdale Equities maintains a Buy rating and a target price of CA$1.40 on Lion One, which is currently trading at around CA$0.63.

While Lion One has been securing financing for the project, it also has continued exploration activities. Following the release of an off-the-charts surface sample of 502 g/t gold over 0.70 meters in February, on June 7, the company announced that follow-up work has mapped “more than 20 previously undefined mineralized structures at the Jomaki-Ura Creek prospect areas and identified potential geological extensions on the main mineralized zones inside the Tuvatu Mining Lease.”

Stephen Mann, Lion One’s managing director, stated, “In the Tuvatu resource area, approximately half of the 40 veins identified to date have sufficient sample data from drilling to merit inclusion in a resource estimate. We’ve now identified more than 20 mineralized veins at surface in the Jomaki-Ura Creek area where strong multi-element anomalism suggests potential scale and signature comparable and possibly larger than the main resource area at Tuvatu.”

Lion One has about 102 million shares outstanding, 109 million fully diluted. Management owns 22% of the shares and Donald Smith & Co owns 14%, Franklin Precious Metals Fund 9.99% and JP Morgan Asset Management UK 6%.

Leave a comment

Filed under Exploration, Fiji, Mine construction

Nautilus tests new rig but no money for further exploration

‘Once the trials are completed, Nautilus will deploy the rig on its South Pacific tenements subject to securing additional funding

Nautilus Minerals begins wet testing of new diamond drill rig

Mining Technology | 8 June 2018

Canada-based underwater resource exploration company Nautilus Minerals has started wet testing of its new seafloor diamond drill rig, which has been developed to relieve the drilling requirements of its future exploration programmes.

The move comes after the rig, which is nicknamed the Hobbit, was subjected to a series of land-based trials, focused on rod handling, functional drilling, and landing stability tests.

To be carried out over a period of two weeks, the wet test programme will expand the testing parameters to include submerged operations and mechanical endurance.

Nautilus Minerals CEO Mike Johnston said:

“According to our recently released preliminary economic assessment for Solwara 1, a single quarter’s production at steady state mining rates (around 3,200t/d) and at average Solwara deposit grades, adds around $110m in earnings before interest, taxes, depreciation, and amortisation (EBITDA).

Solwara 1 is the company’s copper-gold project, which is under development in the territorial waters of Papua New Guinea.

Johnston added:

“Hence forward exploration is a pivotal part of our business. Our pioneering teams are overcoming traditional functional limitations and high fees in seafloor drilling, with our new ‘Hobbit’ scout rig.”

During the testing period, the company will assess the operational functionality of the drill rig’s control systems, landing capability, hydraulic functions, video survey systems, and drilling cycle time versus performance, in a submerged environment.

Additionally, the testing will evaluate the system’s ability to sustain simulated offshore operations at optimal productivity levels.

The company’s personnel will be trained on all aspects of the equipment and operations.

The rig is designed to offer improved landing and drill cycle capabilities, as well as simplified control systems and launch and recovery requirements, which will allow deployment from cheaper vessels.

Once the trials are completed, Nautilus will deploy the rig on its South Pacific tenements subject to securing additional funding.

The company is focused on commercial-scale exploration of the seafloor for massive sulphide systems, which could potentially contain high grade copper, gold, zinc and silver.

Leave a comment

Filed under Exploration, Pacific region, Papua New Guinea