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Mining weekly news summary - Greatland Gold, Aureus Mining, Anglo Asian Mining

Published: 03:27 15 Oct 2016 EDT

BHP-Billiton-Newman_opt

Greatland Gold plc (LON:GGP) revealed this week it had started drilling at the Ernest Giles gold project in Western Australia and expects the programme to  take six weeks with assays to follow.

It is hoped the work - 6,000 metres of wide-spaced drilling -  will provide targets for follow up exploration.

Executive director Callum Baxter said: "We would remind investors that the larger greenstone belts in Western Australia host a significant proportion of the multiple million ounce gold deposits found to date in Western Australia.

It was one of a flurry of stories from the diggers this week.

Sticking with Australia, in big cap world, BHP Billiton (LON:BLT) was accused of evading billions of dollars in taxes in Australia for over a decade.

Former deputy prime minister from 2010 to 2013 Wayne Swan told Parliament he believed  the  mining titan had been playing the system and smuggling profits out of mineral - rich Australia for years, including during the long running Australian tax debate, which ran for four years to 2014.

Official data has revealed, Swan said, that between 2005 and 2014, BHP sold Australian minerals to its Singapore marketing hub to avoid paying taxes on profits of $5.7bn

Elsewhere, Aureus Mining’s (LON:AUE TSX:AUE) majority shareholder is to refinance the Liberia—based gold miner through a substantial share issue with a name change to Avesoro Resources also planned.

Turkish conglomerate MNG will subscribe US$60mln in new equity at 1.5p per share with up to a further US$12mln to come from a placing with institutional investors.

MNG’s stake will rise from 55% currently to at least 69.3% dependent on the take-up of the institutional offer.

The money will be used to equip Aureus’s on site team at the New Liberty mine as it switches to an owner-operator model and also to ease some of the financial constraints on the miner.

To Namibia and copper miner Weatherly International plc (LON:WTI) posted a loss  as it continues to try and optimise its Tschudi open pit mine and garner vale from its other assets in Namibia at a highly challenging time for copper prices.

The mine produced first copper in February 2015 but quickly faced operational issues during commissioning.

"We started from a situation with cash-generative underground mines and a copper price environment of above US$7,500/t when the Tschudi feasibility study was prepared, and copper prices remaining at around US$7,000 per tonne during Tschudi funding and construction," said chairman John Bryant in the group's final results covering the period to June 30.

The period saw Tschudi ramp-up to nameplate production but this coincided with a fall in price by over 30% to below US$4,700 for the second half.

Lower prices has hit revenues and therefore severely impacted profit margins, the firm said.

This was partially mitigated with the assistance of main lender and shareholder Orion, which placed short term hedges on Tschudi offtake achieving an average price of US$4,780 per tonne compared to an average spot price of US$4720 per tonne, which helped to provide US$0.7mln of profit.

Strong demand for paint pigment meant strong sales prices of ilmenite and rutile for minerals sands firm Base Resources Ltd (LON:BSE, ASX:BSE) in its September quarter, it revealed this week.

Prices for its ilmenite increased by around 50% between May and September and it has now contracted all ilmenite production to November and secured further step price increases for these forward sales.

On rutile, higher than expected offtake by major consumers during 2016 has rebalanced supply and demand and Base expects prices to begin moving upwards late in the December quarter or early in the March quarter 2017.

Elsewhere, a delay to the commissioning of a second mill hit Azerbaijan-focused gold miner Anglo Asian Mining Plc's (LON:AAZ) production in the third quarter but it repeated its full year gold production target.

Gold output in the period was down at 16,497 ounces compared to 19,375 ounces in the second quarter, while copper production came in at 485 tonnes, compared to 497 tonnes in the second quarter

The firm produced 33,899 ounces of silver compared to 52,214 ounces the previous quarter.

But chief executive Reza Vaziri said the miner, which continues to reduce costs, continued to make "solid progress".

Coal-fired power station developer Kibo Mining (LON:KIBO) has agreed a rebate of US$5.5mln from its contractor for work undertaken so far on the Mbeya project in Tanzania.

The sum is part of an August agreement between Kibo and SEPCO III to give the Chinese firm exclusive bidding rights over the construction contract for the new power plant at Mbeya.

In return for the right to be the sole bidder, SEPCO III agreed to refund Kibo 50% of the development costs it had incurred so far. The two parties settled on a figure US$10.94mln.

Meanwhile, Macarthur Minerals (CVE:MMS), in which Rare Earth Minerals plc (LON:REM) owns a 15.5% stake, has completed the acquisition of the Yalgoo lithium project in Western Australia.

Macarthur secured exclusive rights over 191 square kilometres in Western Australia’s Yalgoo region, in an area close to the explorer’s existing Edah Hill project, in a deal announced in August.

Macarthur said assays from recent rock chip sampling at Yalgoo were highly encouraging, and indicated that Yalgoo has excellent potential to host additional lithium-bearing pegmatites.

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