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“ Be careful what you wish for.”

That was the message from West Australian Minister for “Don’t forget, WA exports $97 billion and we import $6 billion
Mines and Petroleum, Hon Bill Johnston MLA, when asked of manufactured goods, so we have a massive trade surplus
why Australia was not striving to retain more downstream with China.”
beneficiation, particularly in the iron ore sector. Johnston did point out it was a different story when it comes
“There is 300mt of excess capacity in steel manufacturing to downstream opportunities in the battery materials space,
globally, so the margins for turning iron ore into steel are particularly in light of IGO Ltd taking a 49% minority stake in
tiny,” Johnston said after opening the final Paydirt Unlocked the Greenbushes lithium mine and Kwinana refinery.
for 2020. “The future demand for battery materials will be many times
“The gross margins for the three major iron ore exporters larger than it is today and that is all new capacity,” he said.
are like 80%, so actually the value in steelmaking is not in “If you were to build an iron ore steelworks, you’re competing
making steel, it’s in exporting iron ore. So just be careful what against existing steel producers. The good news in the
you wish for. We’ve got 55,000 high paid jobs in the iron ore battery space – and in the rare earths space – is that’s new
sector. demand and that manufacturing is not currently occurring.
“Australia is the 14th largest economy in the world. We “We’re not chasing the low value part of the value chain,
apparently now have wealth per capita that exceeds which is the assembly of the batteries themselves; we’re
Switzerland. We are a dramatically successful country in chasing the high value bit which is the chemical processing.
creating wealth for our community, and that should be the We’re really pleased there are two lithium hydroxide plants
Government’s objective. under construction and a third one being planned.”

ble year for WA-based junior explorers with ounces in the ground to justify a large stan- Azure recently raised $30 million to con-
a string of impressive drill results at its An- dalone operation in the years to come. tinue the momentum it has been generat-
dover nickel project. “We really have only touched the surface ing at Andover in the Pilbara, with Rovira
“Those discoveries are being made of our province at Mallina,” he said. “Hemi, insisting the company was not looking any
because more people are thinking more relatively speaking, is quite a small foot- further than the current drilling campaign.
clearly about what they want to find,” Azure print. So while there are expectations on “The reason we raised money was to be
managing director Tony Rovira said. us around new discoveries and resource able to go and spend it, not to provide us
“In addition to that, probably for the last growth, I’m comfortable we’ve got the pack- with insulation so we can survive for anoth-
6-8 months, the capital markets have been age to go and find more discoveries. er decade,” Rovira said.
very favourable for raising a lot more cash “We’ve already said that we want to dem- “We’re already out there spending money
and so therefore you can put a lot more drill onstrate a Tier 1 scale at Hemi which we to make sure that we meet the expectations
holes in the ground and there are now more define as 300,000 ozpa for 10 years, that’s the investors have for what we raised the
discoveries being made. the minimum scale we want to get to. We money for. We’ll continue to spend, to ex-
“The bottom line is WA, as a major mining felt that was achievable but also took us plore, to find and hopefully develop.
and exploration centre around the world, is into a fairly rare group of people. We would “I hope we are so successful in the
still in some ways vastly untouched, under- obviously like to see ourselves as a bigger months to come that we can follow Glenn
explored and there is a lot more to be found. producer than that when we kick off. and go from a $30 million raise to a $100
It just requires perseverance, good thinking “In terms of bringing in a partner, we’ve million raise so we can push forward and
and some capital.” had a look at a lot of case studies, we’ve develop that project towards mining.”
Having captured the market’s attention done our own internal modelling and, in Zeptner said the run of exploration suc-
since unearthing Hemi, De Grey is now a terms of the current shareholder base, the cess in 2020 had piqued the interests of
$1.3 billion company and recently put away maximum value for that group of sharehold- many existing producers, including Rame-
$100 million to embark on what is shaping ers is for us to retain control of the asset and lius, which has a history of acquiring pro-
as the most expensive single-asset explo- go into production. And that’s our strategy.” jects which can be mined and processed
ration programme in Australian gold history. Rovira, who was behind the Cosmos as a satellite deposit to an established op-
De Grey managing director Glenn Jar- nickel discovery in WA more than two eration.
dine acknowledged there were high ex- decades ago, said it was important for the However, with explorers being rewarded
pectations on what the company did next current wave of successful explorers not handsomely for a discovery, Zeptner con-
with its Mallina project, which hosts Hemi, to panic if the heat in the sector suddenly ceded that meant miners were having to
but he remains confident there are enough dissipated. pay full value for high-grade projects such
as Penny, which Ramelius pounced on in
early 2020.
“I can’t buy a Vivien project for $10 mil-
lion anymore, I have to pay $200 million
for something twice the grade and half the
distance, but fair enough too, that’s what 10
years of bolt-on appreciation has done,” he
said.
Klein added: “I think most of the oppor-
tunity was probably generated a couple
of years ago when it was harder to raise
money.”
– Michael Washbourne

De Grey’s Glenn Jardine, Ramelius managing director Mark Zeptner, Azure’s Tony Rovira
and Evolution chairman Jake Klein joined the Paydirt Unlocked panel in December aUSTRaLIa’S PaYDIRT FeBRUaRY 2021 Page 13