Try as COVID-19 might, this insidious virus has failed to stop the Diggers & Dealers Mining Forum as Kalgoorlie-Boulder prepares for the annual invasion of 2000 miners, explorers, investors, media and supporters.
At the same time as gold, silver and bronze medals are being dished out in Tokyo, there will be an equally tight race to the highlights podium at the Goldfields Arts Centre.
Back to its traditional calendar slot in the first week of August – last year’s October date was a COVID-19 forced postponement – Diggers & Dealers gets underway on Monday against a backdrop of a re-energised battery minerals sector, a stubbornly high iron ore price, an increase in second and third-tier gold sector M&A and an emerging rare earths sector.
The pandemic has had an impact, of course.
Most of the 2000 or more delegates will be from Western Australia though some – including leaders from conference senior sponsor Canaccord Genuity – volunteered a two-week quarantine period to make it to the start line in Kalgoorlie-Boulder.
Probably for the first time in Diggers & Dealers history, the keynote speaker on Monday morning will address delegates via teleconference.
The days of one-time Bank of England governor Mervyn King playing mini-golf behind the Diggers & Dealers marquee with the late John Langford or Hillary Clinton’s ex-economic adviser Gene Sperling heading out to the Kalgoorlie golf course for a selfie with a kangaroo are – because of COVID-19 – a thing of the past for now.
Professor Ian Goldin, the Oxford University professor of globalisation and development and a former World Bank vice-president, will instead beam in his views on the current global economic situation and trends affecting the mining industry.
The Investor Insights team at Cannings Purple, meanwhile, has studied the form guide to come up with some medal-worthy themes that will get a decent talk-out in the marquee, in presentations and in the drinking holes around Kalgoorlie-Boulder over the next few days.
SUSTAINABILITY
Mining is not sustainable – how can it be when the activity depletes a one-off resource. But practices can and should be as sustainable as possible, which is why investors are increasingly demanding to see the gold-plated credentials of companies they invest in.
Podium finish: Hastings Technology Metals (ASX: HAS; booth 51) chief operating officer Andrew Reid will introduce the world-scale Yangibana rare earths project after lunch on Monday. Boasting world-leading grades of NdPr, Yangibana’s development is due to kick off later this quarter.
These sustainability credentials take on myriad forms, from mining being carried out as environmentally responsible as possible, relationships with stakeholders from the top (the communities in which the miners operate) to the bottom (the shareholders) being based on mutual respect and understanding, implementation of clean and responsible supply chains, adherence to the highest ethical and moral standards and acceptance and accountability for the end-of-journey of the product the miners produce.
The larger-cap companies have long included ESG in their presentations. Expect more and more of the up-and-comers to talk up the sustainability boxes that they are ticking.
WORKFORCE
Western Australia is gripped by a skills shortage. The high iron ore price, a continued buoyant gold sector, an abundance of capital markets funding for exploration and the on-off pandemic-enforced border closures that are affecting worker movements are all conspiring to drive up wages and cause HR departments – sorry, the Office of the Chief People Officer – serious headaches.
Already, the iron ore and gold industries have resorted to financial rewards to entice and retain workers. Others are working on upgrading their camps to resort-style facilities.
Podium finish: Gold Road Resources (ASX: GOR; booth 119) managing director Duncan Gibbs takes to the podium on Wednesday morning knowing that the best of the world-class Gruyere gold mine is yet to come. A new mine just two years into production, the operation is starting to hit its straps. And Gold Road is already a dividend payer.
What must be part of this conversation, of course, is the need to ensure working in mining is a safe option for all. The media storm and subsequent political inquiries into the sector’s workplace practices – and fallouts – are justified and, to be honest, worrying. The hope of any inquiry, of course, is that it delivers more and better outcomes than myriad probes into the mental health challenges of the FIFO workforce. Well documented, yes. Fixed, no.
And as we saw during the first great iron ore boom, there comes a time when employees look for perks other than just pay in their preferred employer. Think rosters, workplace accommodation, culture and support – summed up as physical and mental safety and well-being.
BATTERY MINERALS
Lithium has had a few false – or premature – starts. This latest resurgence looks like it could be sustained. And the largest change from the last time capital markets gobbled up everything to do with lithium? The ASX exposure to lithium has been decimated.
At Diggers & Dealers, the number of lithium producers – the boom sector – can be counted on two fingers.
The next Australian cab off the rank in terms of delivering on its promise, Core Lithium (ASX: CXO; not at Diggers & Dealers), has a shovel-ready project on the outskirts of Darwin and is finalising project finance ahead of turning first sods later this year.
Lots of small stocks are talking about their potential in a market where finding spodumene is less of a challenge than producing it at a profit.
Podium finish: Aeris Resources (ASX: AIS; booth 40) executive chairman Andre Labuschagne wanted to be in Kalgoorlie-Boulder but will instead present via video from Brisbane. With the Cracow gold mine performing nicely, the newly debt-free Aeris will be keen to showcase some phenomenal exploration success at its Tritton copper mine. And check out the booth for the remote-controlled car.
Nickel is the other stand-out battery mineral and no doubt Eddy Haegel would be expecting a question on BHP’s surprise bid for Canadian nickel stock Noront Resources – if the long-time BHP Nickel West boss takes to the podium on Tuesday.
As BHP announced to some surprise last Tuesday, Haegel will be replaced as Nickel West boss by Jessica Farrell from Monday. So will it be a farewell Diggers & Dealers presentation from Haegel on Tuesday, or the introduction of the new Nickel West head, or a joint effort?
St George Mining (ASX: SGQ – booth 65), meanwhile, is kicking serious goals at its high-grade Mt Alexander nickel-copper sulphide project, a solid javelin throw from the Nickel West Leinster complex, to cement its position as the leader in the hunt for new nickel resources. More newsflow is expected.
And for a second year, Greatland Gold (LON: GGP; booth 26) will be telling Diggers & Dealers how its stunning Havieron copper-gold find, 50km from the Telfer colossus run by Greatland’s Havieron JV partner Newcrest Mining (ASX: NCM), is progressing. Havieron’s portal – named Karlajartu – is open for business as work heads south towards the 415m-deep orebody. Watching closely will be shareholders of Artemis Resources (ASX: ARV), which is drilling a shot put away on the other side of the Havieron tenement boundary.
PRECIOUS METAL
Last year’s Diggers & Dealers edition was a Super Pit celebration spearheaded by Northern Star Resources’ (ASX: NST) takeover of Saracen Mineral Holdings. The pre-takeover leaders of both companies have since moved into other events though Northern Star remains a gold powerhouse and managing director Stuart Tonkin’s presentation on Tuesday a must-watch.
Podium finish: Rox Resources (ASX: RXL; booth 88) managing director Alex Passmore is getting the Youanmi project in the Murchison ready for a restart – it was last mined in 1997. The resource is getting bigger – 1.7Moz and a head grade of 2.85gpt – and the pieces of the development domino are falling into place for Rox. Get out the starting blocks.
The themes around gold will likely be twofold, particularly coming just after what has been – in general – a disappointing June quarterly season and with a tick-up in corporate activity. The fact that there has been so little greenfields exploration success is a recurring theme – can you think of more than three world-class greenfields discoveries in Australia since the turn of the century? Gold Road’s Gruyere is one.
Not surprisingly, more and more companies are buying their growth to either keep hungry mills full or add a second, third or merely replacement asset to their portfolio.
One story that remains low-profile on these shores because of its Toronto listing is Karora Resources (TSE: KRR; booth 4). But the production profile of its Goldfields operations – mines led by Beta Hunt and the Higginsville plant – is rising fast. Just one month ago Karora talked up plans to boost production to up to 205,000ozpa by 2024.
SUGAR HIT
No one does a sugar hit better than the gold medal-worthy chocolate bars being dished out by conference awards sponsor The Perth Mint (booth 78). Underlying the sugar hit, of course, is the fact the Mint refines much of the gold dore produced by Diggers & Dealers delegates – and then helps to promote and sell highest-quality precious metals products around the world.
A sugar hit may be required early on Tuesday morning, with Newcrest a late-ish addition to the presenter’s list with an 8.10am kick-off. As one major joins, another – Rio Tinto – has pulled out after being in the original line-up for Wednesday morning.
One of the emerging commodities stories in Western Australia – potash – promises much though the value delivery is yet to happen. Salt Lake Potash (ASX: SO4) is a last-minute withdrawal from its Tuesday post-lunch presentation slot. The troubled company is trying to sort out its cash needs to enable the completion and proper start-up of the Lake Way project near Wiluna.
Benefiting from Salt Lake’s exit is Panoramic Resources (ASX: PAN), which takes over the 1.05pm presenter slot and will talk about efforts to restart the Savannah nickel mine in the Kimberley.
Maybe a delegate will ask whether there is any logic in a corporate or asset tie-up including Panoramic, Western Areas and IGO.
After all, Diggers & Dealers is not just about digging.
