Miners operating in areas from West Africa to the North Basin near Perth and out to the Goldfields discussed their operations and looked to the future in the WA Mining Club’s Miners on the Move livestreamed panel event last month.
With interests in gold, potash, nickel, and mineral sands, the executives speaking at the late May event all gave the State and Federal Government plaudits for their handling of the COVID-19 pandemic and were optimistic in their forecasts for mining post-COVID-19 and into next year.
West African Resources Chief Executive Officer and Executive Chairman Richard Hyde; Australian Potash Managing Director and Chief Executive Officer Matt Shackleton; Mincor Resources Managing Director David Southam; and Image Resources Managing Director Patrick Mutz where affected in varying degrees by the COVID-related restrictions.
Mr Hyde said the onset of the pandemic came at a tricky time for West African Resources’ operations in Burkina Faso.
“We were right in the middle of commissioning in early March, and I was on site with our senior team and we had word that the borders were closing,” he said.
“We brought forward our gold pour and we managed to get out of there before the borders were closed.
“By the time I got back to Australia things had deteriorated to the point where international flights had been cancelled, gold shipments — we weren’t quite ready at that point but were close by the end of March — weren’t going out, there was no real prospect in the short term of getting people offsite or rotating people.
“It was a real challenge, but we managed to get through that. It was really cause for concern, but we got it done.”
At the other extreme, Image Resources operations, just 80km north of Perth with a drive-in, drive-out workforce, was affected minimally, with Mr Mutz saying one of the positives of COVID-19 was the extra attention on cleanliness including disinfecting areas which he said may assist in reducing cases of influenza.
Mr Shackleton said that Australian Potash was able to navigate through COVID and received continued funding for its projects.
“It’s pleasing to see that support for the junior end of the market continues but it perhaps points to something that’s slightly more concerning.
“The equity markets are quite buoyant at the moment and there appears to be potentially some sort of disconnect between what the equity markets are doing and what is happening in other parts of the economy.
“And I think that probably in our case that that’s giving us a clear message that resilience is certainly one of the key qualities that you need, and we are gearing up to ensure our team is resilient.
“We don’t know precisely how it’s going to unfold over the next six months; we don’t know if there will be a second wave and we don’t know what’s going happen through to 2021.
“Those companies who are gearing up to continue to be resilient to withstand any shocks and surprises that can come at us, potentially will come out the other end in better shape.”
Mr Mutz said he was “an absolute optimist”. “From the Australian perspective, we are so well positioned to come through this very quickly and very strongly,” he said.
Mr Southam said from an equity market perspective, there was a perception that the debt markets may have closed during COVID 19.
“That’s not actually the case,” he said. “As a general rule, good projects will attract funding.
“We effectively came out with our definitive feasibility study right in the heart of COVID. It wasn’t the timing that we had envisaged but we met our promise.”
Mr Shackleton said most of his relatively small team was able to continue its desk top work and work from home.
On the issue of exploration, he said the fundamentals of exploration still applied.
“We appear to still face the same drill rig shortages.
“We haven’t really noticed a great deal of difference in the availability of rigs; there’s still a lot of work going on and some of the majors have still got their rigs on site albeit that they might not be turning.
“Really the only thing we’re seeing is, if anything, a decrease in price (of consumables).
“Potentially, what might impact our exploration efforts over the next 12 months or so is access to people.
“As we all know, drill contractors drag their people from all sorts of places, from New Zealand, Queensland, from some of the Pacific Islands, and those people are obviously not going to be available unless they are here and they stayed here during COVID.”
Mr Mutz said Image Resources had maintained its exploration at the same pace as before COVID-19.
“Again though, this is due partly to the fact that we are located close to a major city and in our particular case close enough to our driller’s yard.
“I think looking forward we clearly have a full, strong budget to continue to do exactly that; to prove up some more reserves and resources to expand the mine life.
“I expect our spend on exploration… will continue for the rest of this year, and well in the 2020s.”
On his outlook for the rest of 2020 and into 2021, Mr Mutz said it was a “no brainer” that gold would continue to be a bullish metal.
“Beyond that, the ones that I’m seeing will get some additional pressures will be battery metals and probably rare earths.”
Declaring an interest, Mr Southam said one of the interesting effects of COVID-19 was the reduction in air pollution.
“It’s amazing to see how air pollution quickly disappeared around cities with people not in combustible engine vehicles,” he said.
“That encouragement about moving towards a cleaner, greener, high-nickel content battery electric vehicle is a positive for our industry so I’m certainly looking to see battery metals (demand increase).”
Mr Hyde agreed on the outlook for gold.
“Unashamed self-promotion here: The market for gold or the outlook for gold was very strong before COVID and it’s only stronger now. One of the projects to watch is ours.”
Mr Shackleton said food security would be an issue.
“Those companies that are associated with the fertilizer chain are probably the ones to watch… and we are developing this nascent sector in WA.
“Those projects that are going to be successful and attract the funding are those that are going about the methodical, rigorous process of building those blocks that underpin all good projects and clearly that’s resource and strength of resource; it’s understanding the approvals pathway and navigating your way through that.
“We’re in the fortunate position with Lake Wells that the product we produce has always been in a supply constrained environment so the demand for Sulphate of Potash is very strong.
“This is a new sector for Western Australia. There is some significant difference in valuations across the peer group but I think it does provide an interesting opportunity for some genuine creation of value in a new mining sub-sector in in this overall mining industry that we have going on in WA.”