TABLE OF CONTENTS
Caterpillar Inc. (NYSE: CAT), the world's leading manufacturer of construction equipment, recently said it would pay $8.6 billion for Bucyrus International Inc. (Nasdaq: BUCY), a maker of large-scale surface and underground mining machinery.
Caterpillar said in a statement the deal would allow the company to continue its expansion into mining and gain from the "robust long-term outlook for commodities." The company is betting that emerging markets' growth will "push demand" for coal and "everything that comes out of the ground."
Caterpillar will pay $7.6 billion for Bucyrus and assume another $1 billion of its debt.
FLSmidth has won a US $40 million contract from Mauritanian La Société Nationale Industrielle et Minière (SNIM) for a wet concentrator package and a train load out package for the Guelb el Aouj iron ore plant in Mauritania.
The FLSmidth wet concentrator package includes a ball mill, slurry pumps, thickeners for tailings and dust, horizontal belt filters for concentrate and tailings as well as conveyors and wet magnetic separators. The work also covers basic and detailed engineering and procurement of all equipment.
The FLSmifth load out package includes a train load out system and conveyors along with detailed engineering and procurement of all the equipment.
Phil Edmonds' Sable Mining Africa has paid $6 million (£3.1 million) for a company owning extensive iron ore prospects in Guinea.
AIM-quoted Sable is buying Guinea Development Mineral Resources, which has a 1,107 sq km prospecting licence covering three permits in the West African country's mineral-rich Kissidougou area.
The permits lie between mining giant Rio Tinto's major Simandou project and AIM-quoted Bellzone Mining's Kalia project in what Sable describes as 'one of the world's largest underdeveloped iron ore and bauxite provinces'. According to the company, preliminary trenching has produced samples with iron ore grades ranging from 30.86 per cent to 57.78 per cent.
Arguing the Guinean government is encouraging iron ore developments to diversify from the country's traditional bauxite mining, Sable says power supply is available and, crucially, infrastructure is 'improving', with the government and Rio Tinto intending to build a 1,012 km railway from Simandou to the Guinean capital, Conakry. Chief executive officer Andrew Groves enthuses 'this is a potentially fantastic deal for Sable.'
MDM Engineering Group Limited (MDM) has announced that it has been given a Letter of Award (LOA)for the engineering, design, project and construction management (EDPCM) for the Kalagadi Manganese (Pty) Ltd (Kalagadi) Umtu Sinter Plant project at Hotazel, in South Africa.
MDM has been involved with the project since 2007 with the award of the Bankable Feasibility Study (BFS) which was completed in 2008. MDM also completed the Front End Engineering and Design (FEED) for this project in early 2009. This award represents a continuation of that process. The project scope that MDM is responsible for is estimated at a value of some +/-US$ 140 million.
The development of the Kalagadi project started with the injection by Daphne Mashile Nkosi, Executive Chairperson of Kalahari Resources, of R12 million into the project to complete the pre-feasibility study. Kalahari Resources originally owned 80% of Kalagadi Manganese with the balance in the hands of the Industrial Development Corporation of South Africa. In 2008, global steel company Arcelor Mittal purchased a 50% stake for US$432.5 million, leaving Kalahari with 40% and the IDC with 10%.
Kalahari Resources is a majority black-owned company with women occupying leading positions. Its equity is held by nine companies and a number of business personalities and mining and marketing professionals.
Kalahari Resources was formed in 2001 as a result of new mining legislation, which gave historically disadvantaged individuals an opportunity to participate in the main stream economy. It has brought together women-dominated groups and entrepreneurs with broad-based participants and beneficiaries. In the process, a truly South African company, which is committed to transforming society and the future, was created.
Kalahari Resources was established with the intention of gaining access to manganese resources in the Kalahari Manganese Basin. This was achieved in 2005 when the company was granted a license to prospect for manganese in the Kalahari Basin, specifically on the farms Gama, Olivepan and Umtu.
The mine will be accessed by two vertical shafts. The main shaft will be 9m in diameter and will intersect the ore body at 250m. This shaft will be used for men and machinery access as well as for inlet ventilation and the hoisting of ore. The secondary shaft of 6m diameter will be for return ventilation and will serve as an emergency outlet.
The mine has been designed to produce 3 million tons of run of mine ore per annum. Ore from the shaft will be directed to the run of mine stockpile from where it will be routed to the secondary and tertiary crushing and screening circuits. In the section of the plant the size of the ore will be reduced to minus 6mm, which is the size required for the sinter process.
The need for the sinter plant stems from the fact that the carbonate ore from the Kalahari Manganese Field tends to break up on heating as the carbon dioxide contained in the calcium and magnesium carbonates is driven from the ore. When ore of this type is fed to a conventional furnace there is invariably a build-up of fine material within the furnace chamber which then blocks the path of the escaping gas. The build-up of gas can result in explosions from time to time which can cause damage to equipment above the furnace - and in severe cases even loss of life. In the sintering process, by contrast, the calcination reaction occurs in the fine ore within the sinter bed and the gases are allowed to escape in a controlled manner. The fine ore is also agglomerated by the heat generated by the fuel in the sinter bed. The use of sinter in the furnace results in a far superior operation of these units.
In commenting on the latest award for the MDM Engineering Group, George Bennett, MDM Executive Director said: "This is a significant step forward in the development of the Kalagadi Manganese project. We look forward to assisting Kalagadi with the development of this major project which will be the first BEE (black economic empowerment) grass roots mining project developed and controlled by women in South Africa." It is the third manganese project that MDM has been involved in over the last three years in South Africa and confirms MDM's expertise in designing manganese process plants.
The Kalahari Resources website notes that the sinter plant is due to come on stream in 2012.
Gold American Mining Corp. recently reported that the first two drill holes of the 2,500 meter campaign at its Guadalupe Property (Zacatecas, Mexico) each successfully intersected multiple targets.
Drill hole No. 1 intersected the San Antonio and the La Esperanza veins. The San Antonio vein was intersected for 1.38 meters grading 0.24 g/t gold and 80.2 g/t silver, as well as 0.61% Cu, 1.25% Pb, and 2.5% Zn. The La Esperanza vein was intersected for 0.70 meters grading 60.5 g/t Ag, 0.17% Cu, 2.95% Pb and 2.25% Zn.
Drill hole No. 2 intersected the Santa Rosa and the Marcos de Oro veins, as well as a gold bearing zone associated with an increase in associated quartz/carbonate veinlets. The Santa Rosa vein was intersected for 2.25 meters averaging 0.60 g/t gold and 69.8 g/t silver. The Marcos de Oro vein was intersected for 1.2 meters grading 0.93 g/t gold and 19.3 g/t silver.
These two drill holes are the first to be reported from the approximately 2,500 meter program that is currently underway at Guadalupe.
"We are extremely pleased with the results of the first two drill holes. The intersections reported show that gold and silver mineralization can be traced approximately 300 meters down dip and we are now ever more confident that there is considerable down-dip potential below that level," commented Mr. Johannes Petersen, Gold American's CEO. "If we consider that the largest operator in the area is currently drilling well below the 1,200 meter mark, we believe that further drilling along strike and at deeper levels is warranted," added Mr. Petersen.
Note that at this stage of the exploration, the measurements provided on this press release don't represent true thickness measurements, which still need to be calculated and will be announced once the drilling program is completed and all data is analyzed.
The Guadalupe property contains two historically significant mines and is located in one of Mexico's oldest mining districts, roughly 5 miles north of the Fresnillo (Proano) Mine, the world's richest underground silver mine, operated by Fresnillo plc. Roughly 6.8 miles to the southwest of Silver America's Guadalupe Property is the Juanicipio Joint Venture (JV) between MAG Silver Corp. (MAG) and Fresnillo plc, which is known as one of the world's highest grade undeveloped silver resources.
The Property contains greater than 20 known workings as well as two historic mines -- Santa Rita and San Antonio. Historic records containing references to the Santa Rita and San Antonio mines suggest that both mines were important and reached their height of production between 1910 and 1920 but were last in production in the 1980s. The property is completely surrounded by land controlled by Penoles.
The world's largest zinc producer, Nyrstar (NYSE Euronext Brussels: NYR), has announced a friendly Cdn$409 million or 80-cents per share all-cash offer to acquire Vancouver's Farallon Mining (TSX: FAN).
Farallon owns the Campo Morado polymetallic mining operation in Guerrero State, Mexico, 160 kilometers south-southwest of Mexico City. The deposit currently being exploited is the G9 Mine which has produced high-grade zinc, copper, lead, gold and silver.
In addition to the G9 Mine, there are four additional deposits including Reforma, El Largo, El Rey and Naranjo.
During the third quarter of this year, the G9 Mine produced 18.9 million pounds of zinc and 2 million pounds of copper at a total cash cost of US$0.35-cents per pound. For the first nine months of this year, Farallon produced 69.21 million pounds of zinc, 11.18 million pounds of copper, 1,327,858 ounces of silver, and 13,970 ounces of gold.
Farallon has targeted annual production of 1,500tpd yielding 1.5 million ounces of silver, 120 million pounds of zinc, 15 million pounds of copper, 14,500 ounces of gold and 6 million pounds of lead.
Nyrstar intends to ramp-up production to a rate of 2,500tpd of ore by the end of 2012, representing annual production of 70,000 tonnes per year of zinc in concentrate, 8,000 tonnes of copper, 7,000 tonnes of lead, 3 million ounces of silver and 35,000 ounces of gold.
Once fully ramped up, the G9 Mine is expected to have a cash cost of less than US$500 per tonne of payable zinc due to significant by-product credits. Nyrstar believes if all deposits are mined, it will support a mine life of more than 10 years.
On Oct. 20, 2010, Farallon announced the discovery of a new zinc-rich polymetallic
Nyrstar CEO Roland Junck said, "Farallon comprises an outstanding set of assets at an early stage of their development that will complement Nyrstar's existing multi-metals business." Nyrstar operates mines in Tennessee, Peru, Finland, and has exploration projects in Australia and Greenland.
He added that the acquisition will increase Nyrstar's zinc metal production capacity by 6 percent to 31 percent.
"Whilst the rapid development of the G9 Mine has meant that Farallon has not yet undertaken a comprehensive exploration program, we believe there exists significant exploration potential," Junck said.
The most recent reserve and resource statement for the G9 Mine estimated 1,950,000 tonnes of proven and probable reserves grading at 10% zinc, 1.34% copper, 211 grams per tonne of silver, and 3.03 grams per tonne of gold. Total resources including reserves are 3,954,000 tonnes with 9.34% zinc, 1.27% copper, 205 grams per tonne of silver and 3.00 grams per tonne of gold.
Nyrstar has also locked up 16.3% of outstanding shares of Farallon belonging to Acuity Investment Management, as well as 2.6% of the shares held by Farallon's board members and officers.
Nyrstar also intends to convene an emergency general meeting on December 14 and asks its shareholders to vote on a proposed rights offering of up to EUR500 million.
Paradigm Capital is acting as financial advisor to Farallon. The junior miner has agreed to pay Nyrstar a break fee of C$12 million, while Nyrstar has agreed to pay a break fee of C$1.5 million. Nyrstar has the right to match any competing bid.
NQ Exploration Inc. recently announced that it has started exploration work on its various properties in the Lac Shortt mining camp near Desmaraisville in northwestern Quebec.
With its recent acquisitions in the mining camp (La Ronciere and Lac Shortt properties; NQ already owned a 100 percent interest in the Gand property, which lies between the two new acquisitions, and the Opawica property farther west), the Company now controls more than 17 km of favourable gold-bearing structures and most of the known gold showings in the mining camp.
Stripping and channel sampling were carried out on the Gand and La Ronciere properties in the fall. This work was aimed at exposing favourable structures within the Opawica-Guercheville deformation corridor (host of the Lac Shortt and Joe Mann mines farther east). Stripping on the Gand property revealed a wide, intensely-altered shear zone (iron carbonates, fuchsite, chlorite, and local silica and sericite) locally mineralized in fine pyrite. Injections of quartz and carbonate are developed locally along the more intensely sheared zones. On the La Ronciere property, stripping took place on the Track showing, a gold occurrence discovered over 50 years ago that has returned very interesting drill results, including 50.5 g/t Au over 2.1 metres (Hole W-GF-83-3). The goal of the stripping work was to expose the gold-bearing quartz vein and a cross-section some one hundred metres long to better understand the geological setting and intercept any other mineralized structures. The channel sampling results will be reported as they are received and compiled.
NQ Exploration's strategy in this area is to compile the historical data on the many gold showings and generate new drill targets in the short term to supplement its previously-identified targets. It should be noted that earlier operators (primarily Metall Mining Corporation) confirmed the presence of low-grade gold mineralization by drilling on the La Ronciere property. Most of the past work was done on the Mariposite showing. Metall mentions a historical resource of 0.7 million tonnes grading 2 g/t Au and another block of over 2 million tonnes at 1 g/t Au (GM 52755, 1993). The Company has not verified this resource, and does not consider it to be a mineral resource as defined by NI 43-101. It is only mentioned as an indication of the presence of significant gold mineralization, but should not be relied upon in its present form. Grab samples were taken early in the fall to provide a better understanding of the setting of the Mariposite showing. They returned multiple significant results of up to 6.6 g/t Au, as well as a value of 73.3 g/t Au associated with a strongly-silicified segment mineralized in fine pyrite.
The La Ronciere property is held by NQ Exploration in joint venture with SOQUEM Inc. Once NQ has earned its 50 percent interest in the property, the two partners will fund the exploration expenses equally.
SOQUEM is a wholly-owned subsidiary of Societe generale de financement du Quebec ("SGF"). SGF, is the Quebec government's main industrial and financial development corporation.
NQ Exploration Inc. is a mining exploration company with a solid portfolio of 15 mining properties in the James Bay and Abitibi regions of Quebec.
Norsemont Mining Inc. (TSX: NOM, BVL: NOM) recently announced the results of ongoing exploration drilling at the Company's Chilloroya South and the Pampacancha discoveries, located approx. 5 kilometres south and 2.5 kilometres south east, respectively, of the Constancia Project's planned first mine development ("Phase 1 Mine").
Commenting, Norsemont President and COO Mr. Robert Baxter said: "Our exploration program at Pampacancha is reaching a new level as we continue to intercept high grade copper-gold mineralisation in areas that have previously demonstrated no significant geophysical anomalies. In addition, below the high grade copper-gold skarn intercepts in hole PO-10-035 we have encountered high grade molybdenum in vein structures in conjunction with chalcopyrite and magnetite veins indicating proximity to a potassic centre. We have also discovered a new zone of gold and silver mineralisation located approximately 1km NNE of the Pampacancha main body. Mineralisation at this new discovery is located within re-crystallized limestones. We had previously detected gold in stream sediments draining these limestones up to 3 km NW and 1 km to the SE of this hole location. We are only beginning to understand the potential in the third dimension and expect that the upcoming Titan 24 program will generate further exciting drill targets".
Norsemont is also pleased to announce that SRK Vancouver has been engaged to conduct a scoping study on the Pampacancha resource where we expect to be able to exploit the high grade copper-gold and molybdenum mineralisation by open-pit and underground methods. It is anticipated that the scoping study will be completed by Q2 2011.
Norsemont is also pleased to announce that further drilling is currently underway at the bonanza gold Chilloroya South "Skarn Target 1" and the Chilloroya South "Target 3". Drilling at Chilloroya South has previously confirmed the potential for a very large porphyry-style copper-gold system. The Titan 24 geophysical program is expected to provide additional drill targets as the Company continues to define the mineralisation at Chilloroya South.
At Pampacancha, accumulated meterage from 2008 to date totals 17,550.45m, with only 10,324.25m (40 holes) targeting the Main Body. The Main Body covers an area of approximately 1,000m NS-NW direction and 300-400m wide. Drilling in Sector 1, at the southern part of the Main Body, continues to report high-grade Cu-Mo-Au intercepts. Selected results:
•Hole PO-10-035, located 150m SW of hole PR-08-008, returned 99.25m (from 10m to 109.25m depth) averaging 0.88% Cu, 455ppm Mo and 0.40g/t Au (1.43% Cu-Eq).
•Hole PO-10-031, drilled north from the same platform as hole PO-10-035, intercepted 33m (from 70m to 103m) with 0.86% Cu, 137ppm Mo and 0.41g/t Au (1.25% Cu-Eq).
•Hole PO-10-034, located 180m NE from hole PO-10-031, intercepted 22.05m (from 50m to 72.05m) averaging 0.79% Cu, 147ppm Mo and 0.33g/t Au (1.12% Cu-Eq). This hole ended in mineralization.
Drilling in Sector 2, also reported significant intercepts. Hole PO-10-033, located 230m NE from hole PR-08-008 returned 30.30m (from 22m to 52.30m) averaging 1.02% Cu, 147ppm Mo and 0.28g/t Au (1.34 Cu-Eq).
An additional 2,500m of diamond drilling is planned to be completed during 2010, especially in the central and northern sectors of the Pampacancha Main Body (Sectors 2 and 3).
Hole PR-10-027, was drilled about 1km NNE from the northern edge of the Main Body and targeted a gold-silver bearing, manto-type replacement in limestones, where surface sampling returned up to 33 g/t Au and 1,208g/t Ag. This prospective area defines roughly a NS-oriented corridor of about 1.4km and about 400m wide, where surficial evidence of gold-silver mineralisation is widespread in the limestones. Assays reported the first 7m averaging 9.77g/t Ag and 1.74 g/t Au, with a 3m vein intercepted from 106m to 109m reporting 8.34 g/t Au. These anomalous results indicate the presence of precious metal mineralization at depth. Additional exploratory drilling will resume once the necessary drill permits are obtained.
At Chiloroya South, three additional diamond holes, currently totalling 695.30m, have been completed at the Skarn Target 1, including a twin of hole SR-10-013, which reported 3m with 242.5g/t Au (September 2010 News Release). Assay results from these holes are pending.
Drilling at the Chilloroya South porphyry "Target 3" resumed this month, with one UDR rig that has the capacity to drill to depths of 1 kilometre.
Mr. Baxter commented further: "Based on the encouraging results obtained at Pampacancha and Chiloroya South, we have decided to increase drilling in these two areas, bringing to site three additional diamond rigs that will start operations before the end of November. This brings the total number of diamond drill rigs on site to six".
Constancia Phase 1 Mine Permitting
Progress on the approval of the Environmental and Social Impact Assessment (ESIA) continues with no further observations identified by the Ministry of Energy and Mines Peru. Final approval of the ESIA is expected during the current quarter.
Constancia Mine Optimisation Study
The Phase 1 Mine pit optimization study has been completed showing positive results projecting a substantial increase in minable ore. The revised mine schedule, based on the new 70,000 tonne per day grinding circuit design, has also been completed. The focus is now on finalising the capital and operating costs associated with the increased throughput and redesigned grinding circuit. The final 43-101 updated feasibility study report is expected by Q1 2011.
In preparation for the development of the Constancia project, which will be initiated in early 2011, all off-site requirements, including detailed design activities and permitting requirements for power, the access road and port, have been initiated.
Norsemont is a mineral exploration and development company advancing the extensive Constancia Copper-Gold project in Southern Peru. A September 2009 independent definitive feasibility study indicates that the Phase 1 Mine development at the Constancia Project has a NPV (8%) of $931.8M and an IRR of 26.9% (based on $2.75/Lb Cu) and can support a 15-year mine producing an annual average of approx. 150 million pounds of copper, 1,180 tonnes of molybdenum and 1.5 million ounces of silver. Constancia's Phase 1 Mine has a proven and probable reserve of 277.4 million tonnes grading at 0.43% Cu, 0.012% Mo, 3.69 g/t Ag. Exploration drilling at Constancia's satellite Pampacancha and Chilloroya South discoveries are expected to add significant tonnage to the global resource. The company's shares are traded on the Toronto Stock Exchange under the symbol NOM, and on the Bolsa de Valores, Lima (BVL) also under the symbol NOM.
Canada's Infinito Gold Ltd said recently its Crucitas gold mine has been set back 23 months by legal challenges in Costa Rica and is now aiming for production in the first quarter of 2012.
Costa Rica's Supreme Court ruled in April the gold mine project could move forward, but work was immediately stalled by an appeal lodged by environmental groups who claim the open-pit mine would damage the delicate ecosystem near the site.
A tribunal will decide on Dec. 6 whether to lift the measures that have closed down the mine, which has indicated resource of 1.2 million ounces.
"(If the court allows), the next day we will be starting construction. In the best case scenario, our first ounce will be processed in February or March of 2012," Crucitas spokesman Juan Carlos Obando said.
"It's going to take a year to 14 months to finish the construction process," he said.
Infinito has already sunk $127 million into the project, largely on exploration and infrastructure including improved electricity and roads for the region, he said.
The company's debt holders have stood by the project in the face of default in the hope the legal issues will be resolved.
"In Canada, (the debt holders) are convinced that this discussion over Crucitas will allow the company to develop a green model for mining," Obando said.
But further court appeals of the decision in December could drag the legal hurdles out for months, he told reporters.
Costa Rica prides itself on its lush forests that attract tourists, and Congress approved a bill this week, which President Laura Chinchilla is expected to sign into law, to prohibit all new open-pit metallic mines in the country.
The law is not retroactive and would not apply to Crucitas but Obando said it would negatively affect Infinito's future expansion in Costa Rica. Infinito also has concessions in neighboring Nicaragua.
India’s domestic steelmaker Adhunik Metaliks recently said one of its arm has begun mining at three manganese mines in Orissa even as it awaits regulatory nod to start development of an iron ore deposit in the state.
"Adhunik Metaliks has informed...That Orissa Manganese and Minerals, the wholly-owned subsidiary of Adhunik Metaliks, has started the mining operations in non-forest areas of three of its manganese ore mines.
"Further the Central Empower Committee (CEC) has approved the mining operations in Suleipat Iron Ore Mines over non- forest area of about 370 acres (150 hectares). ...The Company is now awaiting the state approval for commencement of mining," the firm said in a filing to Bombay Stock Exchange.
The subsidiary Orissa Manganese & Minerals (OMML) has commenced mining operations at its three manganese ore mines—Tentulidihi, Sanpatholi and Kusunidihi—in the state.
The company has paid the initial sum-, the Net Present Value, for the three manganese mines during the last quarter.
Further, the company said it has got initial approval from the Central Empower Committee to mine iron ore from Suleipat iron ore deposits in the state for which it has already paid, but certain regulatory approvals are required to start the developmental work.
OMML is involved in the exploration, development, mining and processing of mineral assets.
It has six manganese ore mines in Orissa and one iron ore mine in Jharkhand. It is currently operating in Ghatkuri iron ore mines in Jharkhand (near Gua) and three manganese ore mines in Koira, Orissa. However, the Company's major operations are undertaken in Ghatkuri iron ore mines and Patmunda manganese ore mines.
Vallar, the publicly traded investment vehicle set up by Nathaniel Rothschild, says it intends to spend $3 billion purchasing 25 percent of the shares of Bumi Resources, and 75 percent of Berau Coal Energy, Indonesia’s largest and fifth-largest coal producers respectively.
Vallar stated recently that its aim with the proposed deal was to create an Indonesian “resource champion,” which would be the only major company from the country listed on the London Stock Exchange.
“It is a very exciting time to be a mining company in Indonesia,” said Ari Hudaya, who would be the chief executive of the resulting company. “The fundamentals of the metals and mining sector are compelling, given the strength of demand from China and India, and we are ideally located to capitalize on that growing demand.”
Vallar said its intention was to push capital into the two mining companies so that they might expand on current operations while recruiting more top-flight personnel with experience in the industry to work in important management positions. It said the proposed acquisitions represented a follow up on the firm’s promise made to investors at the time of its July initial public offering, when it said it would build a business with significant operations in the global metals, mining and resources sector.
Mr. Rothschild expressed Vallar’s delight with the strategy, adding that the “structure that we established through the I.P.O. has enabled us to act quickly to secure these high quality assets, which we believe will create value for our shareholders.”
International engineering and project management company, AMEC, has been commissioned by Oyu Tolgoi LLC to undertake the feasibility study for Lift 1 of the underground Hugo North block cave operation of the huge copper and gold mining project in Mongolia. Oyu Tolgoi is being developed by Canada's Ivanhoe Mines in conjunction with Rio Tinto - the Mongolian Government has a 34 percent interest in the hug project. Initial production will come from an open pit, but the underground development will be key to the longer term production programme for the mine.
Oyu Tolgoi is reckoned to be one of the world's largest undeveloped copper-gold projects, if not the largest, and is located in the South Gobi region of Mongolia, approximately 80 kilometres north of the Mongolia-China border. When Oyu Tolgoi moves into full production, it will be one of the world's top three copper-gold mines. Construction is reported to be ahead of schedule and first production is currently expected in late 2012 from the initial pit.
The value of AMEC's contract has not been announced.
Ivanhoe Mines and Rio Tinto signed a long-term, comprehensive Investment Agreement with the Government of Mongolia for the construction and operation of the Oyu Tolgoi copper-gold mining complex. The agreement created a partnership between the Mongolian Government and Ivanhoe Mines, which will retain a controlling 66 percent interest in Oyu Tolgoi. Global miner Rio Tinto, which joined Ivanhoe Mines as a strategic partner four years ago, presently holds a 29.6 percent interest in Ivanhoe Mines and has options to increase this to up to 43.1 per cent of Ivanhoe's shares under fixed price options, with a right to further increase that interest to 46.65 per cent through on-market purchases, although this has been the subject of some contention between the two companies of late.
Based on Ivanhoe Mines' discoveries at Oyu Tolgoi during the past nine years, independently verified estimates indicate that Oyu Tolgoi contains approximately 81 billion pounds of copper and 46 million ounces of gold in measured, indicated and inferred resources.
Late last year, Ivanhoe announced that the joint Ivanhoe Mines-Rio Tinto Oyu Tolgoi Technical Committee approved a US$758 million budget for 2010 to begin full-scale construction of the copper-gold mining complex in southern Mongolia.
"The approval of the 2010 construction budget represents the next big step toward bringing this project into production," Ivanhoe CEO John Macken said. "Ivanhoe is considering a schedule that could see construction of the initial open-pit mine completed in 2012 and commercial production begin in 2013."
The 2010 budget provides for an early start on a site-wide development program.
Work in 2010 was planned to include:
•Resumption of the sinking of the 10-metre-diameter Shaft #2, which will be used to hoist ore to the surface from the deep, underground, copper-gold-rich Hugo Dummett Deposit.
•Construction of a 97-metre-tall (approximately 31 storeys), reinforced-concrete headframe for Shaft #2.
•Pouring the concrete foundation for the 100,000-tonne-per-day concentrator and deliveries of building materials for the concentrator and infrastructure.
•Installation of a 20-megawatt power station and 35-kilovolt distribution system.
•Initial earthworks for the open-pit mine at the Southern Oyu deposits.
•Continuation of lateral underground development off Shaft #1 at the Hugo Dummett Deposit.
•Construction of a 105-kilometre highway link to the Mongolia-China border, which will be fully paved by the time production begins.
•Construction of a regional airport, with a concrete runway to accommodate Boeing 737-sized aircraft.
Over the next 25 months, AMEC will work with Oyu Tolgoi's engineering team to develop designs, specifications, cost estimates and a construction schedule for an 85,000 tonnes-per-day underground block cave operation.
Global miner Xstrata, the world's fourth largest nickel miner, will reactivate its Sinclair nickel mine in Australia after suspending operations due to the global financial crisis, a top official said.
"Sinclair will restart very shortly," Shaun Usmar, Xstrata's Chief Financial Officer for nickel operations told Reuters on the side of a nickel industry conference.
Xstrata restarted its Falcondo nickel mine in the Dominican Republic in October 2010 at a 50 percent production rate.
The company is also on track to start production from its 60,000-tonnes-per-year Koniambo mine in New Caledonia in mid-2012, Usmar said.
Brazilian miner Vale plans to expand its Goro mining and smelting project in New Caledonia by 15,000 tonnes a year, a senior Vale executive said recently.
"We are looking for a staged expansion, increasing the project by 15,000 tonnes per year," Peter Poppinga, Vale's executive vice president for base metals, told an industry gathering in New Caledonia.
West Perth-based Scandinavian Resources Ltd (ASX: SCR) has dramatically increased its iron ore profile in Sweden by acquiring the Rakkuri project in the heartland of an iron ore mining region.
The Rakkuri project is about 3 kilometres from Europe's largest iron mine, the 2 billion tonne Kiirunavaara mine owned by LKAB and it contains an inferred resource of 87.7 million tonnes of magnetite ore grading 33.2% Fe.
The company said the exploration target on the Rakkuri concession was for a further 25-35Mt @ 25-36% Fe.
The licence contains an exploitation concession application covering the Rakkurijarvi IOCG deposit.
Included in the sale package is an exclusive licence to use Anglo American's exploration data base for Sweden.
The acquisition is through Scandinavian Resources's already established subsidiary Kiruna Iron AB which already has significant iron ore-magnetite and copper-gold prospects in the Kiruna district of northern Sweden.
Scandinavian Minerals director Damian Hicks said Kiruna Iron's strategy is to aggregate sufficient iron projects through acquisition and joint venture to consider iron mining scenarios.
Most of the iron portfolio has had minimal exploration since the 1970s.
Hicks said the expectation is that exploration drilling to commence late in December should continue throughout the European winter.
"Kiruna Iron AB has a corporate goal of establishing 500 Mt of iron resources within the medium term," the company said.
The established prospects are within 30 km of the modern town of Kiruna and an open access railway that leads to a deep water port at Narvik in Norway.
Australian and Swedish executives of the company have had discussions with both the Narvik port authority and Swedish rail authorities who have made it clear that there was open access for rail use -- unlike the rail infrastructure in the Pilbara region of Western Australia.
Options are being assessed to increase the capacity of the railway network to allow for multi-user access including iron ore companies LKAB, Northland Resources and "potentially Kiruna Iron."
Kiruna Iron director Mr Olof Forslund said the Rakkuri project was a major milestone and was also well known in Sweden as a copper-gold project discovered by Anglo American and Rio Tinto.
The mineralisation is hosted in magnetite -- typical of an IOCG deposit and district such as Kiruna.
Forslund described the exclusive licence to utilise Anglo American's exploration data base for Sweden.
"I am very aware of how active Anglo American has been in exploring Sweden for the last 10 years so there is a huge amount of highly valuable data to work through. They have always completed high quality work but they are also looking for world-class deposits.
"There may be deposits lying somewhere in the data that would represent significant value for shareholders of Scandinavian Resources."
The combined purchase price for the two separate agreements -- the Rakkuri project and the Anglo American data agreement is US$7 million. The first payment of US$1 million has been made and, with the staged payments, the last $US3 M in 12 months time can be paid half in shares and cash or all in cash.
Northfield, IL 60093-2743
Tel: 847-784-0012; Fax: 847-784-0061
Web site: www.mcilvainecompany.com