Australia Mining Outlook 2020: Quiet, Confident Optimism

Last year might have been a little disappointing for Australia, but analysts think the Australia mining outlook for 2020 could be brighter.

Click here to read the latest Australia mining outlook.

Last year was one of consolidation and quiet confidence in the Australian resources sector and its ability to keep its head above water amid global economic turmoil. Analysts think those trends are likely to continue heading into 2020.

In 2019, the trade war smothered base and industrial metals and lifted gold to new highs on the back of uncertainty. However, Australia was seemingly in a world of its own as its precious metals sector made gains and its iron ore exports had a roaring start due to a disaster in Brazil.

News over the course of last year was varied as issues came from weather, politics and trade concerns, with all three hammering Australia through the period. Many of those issues — though most predictably the trade concerns — will be present in 2020 as well.

Australia mining outlook 2020: The year(s) ahead

Gold has been highlighted by analysts as the commodity to keep an eye on in Australia for 2020.

That said, David Thurtell, who is manager of resources and energy with the Department of Industry, Innovation and Science for the Australian government, told the Investing News Network (INN) at the International Mining and Resources Conference in November that for 2020 and beyond, strong demand from Asia will hold other doors open too.

“The outlook is still very strong in the long term for resources and energy demand,” said Thurtell.

Owen Hegarty, executive chairman of EMR Capital, said that his optimism for 2020 is based on the stories of 2019 resolving themselves.

“I think we are going to see an uplift in demand next year, because we’re already starting to see the breaking news in regards to the trade and tech war,” he said back in November.

“(In 2020) you’ll have Brexit over with, you’ll have Europe starting to see increased demand, you’ll also see demand coming from India and Indonesia and China … so we’re going to see good, strong demand in 2020,” Hegarty continued.

“I would get invested. We’re looking for projects now, taking the opportunity when things are a little bit down to try and invest in projects and operations to get that set up for 2020 and beyond.”

Hegarty highlighted gold and copper as his (and EMR Capital’s) favoured commodities, adding that the specialty metals like cobalt should be picked over carefully. He also said there is always investment opportunity in iron and coking coal due to Asia’s growth, which he said will underwrite Australia’s own growth through resources.

In an interview with INN, Thurtell was thinking big picture and looking mostly beyond 2020, noting that Australia will be able to play to its already significant strengths in resources in coming years.

“The need for nickel and copper going forward is going to be immense,” he said, pointing out that Australia produces significant quantities of both metals, which are vital for electric vehicles (EVs) and renewable energy uses. “It’s the same with lithium, cobalt and renewable-type commodities … we’ve got significant resources and we’re keen to get those out of the ground and developed to help the world transition to using more renewable power and emitting less carbon.”

Warren Pearce, CEO of the Association of Mining and Exploration Companies, told INN that the next 12 months will likely be better than 2019 given the caution of investors the world over.

“2020 should be a better year, with greater investment likely to return to the industry, as investors seek higher returns and funds return from other industries,” he said.

Paola Rojas, who is the managing director of Synergy Resource Capital, told INN that recent news events in Australia mean that, as a resources economy, it is likely to continue moving away from thermal coal and towards the commodities needed for renewable options and EV infrastructure.

“With our current bushfire season getting so serious this year, I believe there will be a stronger community push for cleaner energy options, and I expect more plants to be shut down,” said Rojas.

She took the opportunity to say that there is plenty of scope for improvement domestically in regards to EVs on top of resources.

“EVs are still less than 2 percent of cars sold in Australia. For a first-world, healthy economy, we are seriously lacking in that department. Synergy is bullish on EVs and battery minerals for the long term once the market stabilises,” said Rojas, although she added that in order for EV adoption to increase, Australia has a long way to go with infrastructure development.

“We are monitoring a couple of interesting firms that may help with that. I expect some progress in this front in 2020,” she noted.

Australia mining outlook 2020: Main issues for (and raised by) investors

When asked about what she thinks the main issues facing the Australian resources industry in 2020 could be, Rojas said that there are ongoing problems with financing and access to capital, as well as communication and environmental, social and governance (ESG) investing.

Exploring her themes for 2020, Rojas said that a major aspect of access to capital has to do with generational renewal in the resources industry.

“Everyone keeps targeting basically the same group of people, and they are Baby Boomers and older. … To reach younger generations, you need to change the way you communicate, you need to be transparent and be where your prospective investors are,” she explained.

“Many firms still believe they can avoid social media and marketing; they may be okay in the short term, but eventually life will catch up with them.”

“On top of this, many institutional investors are putting their foot down and demanding more ESG investing options … so places like (the Democratic Republic of) Congo will have a tougher time attracting capital, but the industry will need to continue improving its relationship with the environment, etc., as society demands it — not an easy task.”

Australia mining outlook 2020: Commodities to watch

Willem Middelkoop, who is the founder of the Commodity Discovery Fund, told INN that he believes the trend to watch out for in Australian resources in 2020 will likely be a continued recovery in gold stocks.

“We think gold will do very well again, because (quantitative easing) will come back in many parts of the world,” said Middelkoop.

When asked about issues that investors should watch out for in 2020, Middelkoop said that the abundance of economic uncertainty is the main concern. “And don’t forget the US elections,” he added.

An issue that will likely carry over from previous years is the lack of new discoveries, said Middelkoop, who said it will be a huge problem further down the line.

Speaking about what she thinks will be the commodity to watch in 2020, Rojas said that, because of all the uncertainty in the markets, it has to be gold.

“I think gold will remain strong because the global turmoil is not ceasing anytime soon, and obviously gold is a flight-to-safety commodity — and Australia has plenty.”

Same as Hegarty, Rojas also highlighted copper’s future in the near term. “I think copper will become stronger, as its role in the electrification revolution is becoming more mainstream and understood. And under them, all commodities with presence in batteries will start to improve, maybe by the end of the year or into 2021.”

Rojas said that 2020 will be an important year to set the tone for the next few years.

“I think it will be a year that will teach us a whole lot about what’s coming over the next decade.”

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Winsome Resources CEO Chris Evans said, “Canada and the US are working feverishly to develop an internal battery materials supply chain and we think we're going to play a critical role in that.”

Winsome Resources CEO Chris Evans: Sustainable Hardrock Lithium Opportunities in Quebec youtu.be


Winsome Resources (ASX:WR1) CEO Chris Evans joined the Investing News Network to discuss the company and its Cancet lithium project in Quebec, Canada.

"We listed on the ASX on November 30, 2021," he explained. "We're lithium focused but based in Canada, and we've been pretty successful in the last six months — our share price has done well. I think I've been putting this down to the success factors which we possess as a company, including the fact that we're into lithium at a moment with high demand. Any mining company that's associated with lithium has tended to do well.

“Our assets are in Quebec, a fantastic mining jurisdiction for all sorts of reasons. Also, being listed on the ASX — Australian investors tend to like early stage plays a bit better. They've certainly woken up to the electric vehicle and lithium revolution that's occurring in the world. And it's a pleasure having the assets in Canada.”


Next, Evans got into specifics about the company's flagship project. “The Cancet project is our flagship, in the James Bay region of Quebec. All our projects are hard-rock lithium; that's digging the rocks out of the ground and concentrating the lithium in them. Then it gets converted into the final product, which is lithium carbonate or hydroxide, that then goes into electric vehicle batteries,” he explained.

“Cancet’s had about 5,500 metres of drilling done on it historically, so we know that there's a great deposit of lithium at fantastic grades. It outcrops on the surface, the lithium-containing spodumene from the pegmatite rock, where we have 3.7 percent lithium oxide over a 17 metre interval from the surface at our most successful drill hole. We just completed 2,000 metres of drilling ourselves, increasing our knowledge of the orebody that's there, and also looking for extensions to the orebody. We've got 395 claims, and our drilling and exploration is only over about 15 of the claims. So we've got a lot further to look here and a lot more to develop.”

As for supply location, and the company's relationship with the international market, Evans said, “We think it's fantastic for us, and our shareholders, that we have assets in Quebec. Roughly 50 percent of the world's hard-rock lithium comes from Australia, where it’s mined and concentrated. The problem is that final conversion into lithium carbonate or hydroxide all occurs at the moment in China ... lithium is on the critical minerals list in Canada, the US and Australia, and Canada and the US are working feverishly to develop an internal battery materials supply chain. We think we're going to play a critical role in that.”

Elaborating on the sustainability industry that drives the battery revolution, he said, “(Nearly) all power in Quebec is generated by hydroelectricity and renewable forms of electricity. That’s very important, because the mining and concentration process for lithium products traditionally produces a large carbon footprint, because it's energy intensive. The EU, from 2024, has mandated that all batteries are labeled with the carbon footprint of all the materials that are contained within them. Then, by about 2026, there's specific targets that batteries have to meet in order to be sold in the EU. If you don't have a renewable source of energy to produce your lithium products that go into those batteries, it's going to severely restrict your markets — and that's another bonus for us being in Quebec.”

Evans said that Winsome Resources’ approach is to develop a mine itself, rather than selling or partnering. “We will approach this as if we are going to be developing the Cancet project, and producing lithium ourselves, in four or so years. And I think that'll best serve our shareholders.” With regards to other ways the company could benefit investors, Evans said, “Being listed on the ASX, and having access to a lot of capital, I think there's a great opportunity for us to acquire other projects in Canada. We're about to start our summer exploration. And we're on the lookout for a new project. So I think the good news is really to come.”

Watch the full interview of Winsome Resources CEO Chris Evans above.

Disclaimer: This interview is sponsored by Winsome Resources (ASX:WR1). This interview provides information that was sourced by the Investing News Network (INN) and approved by Winsome Resources in order to help investors learn more about the company. Winsome Resources is a client of INN. The company’s campaign fees pay for INN to create and update this interview.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Winsome Resources and seek advice from a qualified investment advisor.

This interview may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, receipt of property titles, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The issuer relies upon litigation protection for forward-looking statements. Investing in companies comes with uncertainties as market values can fluctuate.

WR1:AU

Where are the silver mines in Australia? You might be surprised to learn that the country is home to one of the world’s top primary silver producers.

Mining is a big part of Australia’s history, and it continues to shape the country’s economy and position in the world today. The nation is one of the world’s top producers and exporters of resources, with coal, uranium, copper and gold being some of its best-known commodities.

Australia is also a key producer of silver — it was the world’s fifth-largest producer of the metal in 2021, tied with Russia, putting out 1,300 MT. Interestingly, most of Australia's silver is produced from silver-bearing galena, but some is also produced from copper and gold mining.

Refined silver comes mainly from the Port Pirie lead smelter and refinery in South Australia, though silver is also refined at gold refineries in Perth, Kalgoorlie and Melbourne.


But where are the silver mines in Australia, exactly? While it’s interesting to know what types of deposits the precious metal is found in, many investors want to know what companies are producing silver and where their mines are located geographically. Read on to find the answers to those questions.

Where are the silver mines in Australia?

Silver has played a role in Australia since the mid-1800s — Wheal Gawler, Australia’s first metal mine, was a silver-lead mine developed in South Australia in the 1840s. And that’s not Australia’s only early silver-mining operation — the Broken Hill deposit in New South Wales and the Mount Isa deposit in Queensland are two other early Australian silver discoveries.

Broken Hill, a lead-zinc-silver deposit, was discovered in 1883 by German immigrant Charles Rasp, and the Broken Hill Proprietary Company was born in 1885; it ultimately merged in 2001 with another mining giant, Billiton, to form BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT). BHP Billiton is no longer involved with Broken Hill, but ore is still being extracted there today. Perilya now runs the southern and northern operations.

For its part, Mount Isa was discovered in 1923 by John Campbell Miles, and like Broken Hill is still producing today. It was acquired by Glencore (LSE:GLEN) in 2013 and in addition to silver is also a producer of zinc.

These major early Australian silver discoveries are not the country’s only sources of silver. Other silver mines in Australia include Cannington, one of the world’s top primary silver producers. It’s a fly-in, fly-out mining and processing operation that is owned by South32 (ASX:S32,LSE:S32), a diversified resource company spun out from BHP Billiton in 2015. Cannington also produces lead and zinc.

Australia holds the McArthur River mine as well, which opened in 1995 and is owned by Glencore subsidiary McArthur River Mining. The mine is one of the world’s largest zinc-lead-silver mines, and is located in Australia’s Northern Territory.

Glencore’s 2021 annual report claims total silver production reached 31.519 million ounces for the year, representing a 4 percent drop from 2020. That includes 625,000 ounces from McArthur River.

The Century mine, which previously belonged to MMG (HKEX:1208), shut its doors at the end of 2015, but was a major producer of zinc (and silver) until that time. It was reopened in mid-2018 by New Century Resources (ASX:NCZ) and the company says it now has an estimated annual production capacity of 264,000 tonnes of zinc and 3 million ounces of silver.

Independence Group (ASX:IGO) also produces silver, along with copper and zinc, at its Jaguar operation in Western Australia. Gold producer Silver Lake Resources (ASX:SLR) owns some projects with silver reserves as well. As you can see, there are and have been many silver mines in Australia.

Future silver mines in Australia?

In addition to being home to a slew of large silver mines, Australia also plays host to many companies that are exploring and developing silver projects. Below are a few that have made recent progress.

Please let us know in the comments if we’ve forgotten to mention any Australia-focused silver companies. All companies listed had market caps of at least AU$5 million on May 19, 2022.

Argent Minerals (ASX:ARD) — Argent Minerals’ main asset is its 100-percent-owned Kempfield polymetallic project in New South Wales. In May 2018, the company announced an updated resource estimate for the asset — its silver equivalent contained metal now stands at an estimated 100 million silver equivalent ounces at 120 g/t silver equivalent; that’s approximately double the previous estimate.

In total the company has three projects, with all of them being in New South Wales.

Investigator Resources (ASX:IVR) — Investigator Resources is advancing silver, copper and gold deposits in South Australia. Currently its properties include the Peterlumbo/Paris silver project, the Eyre Peninsula and Stuart Shelf projects and the Northern Yorke Peninsula projects.

The total resource for Paris stands at an estimated 18.8 million tonnes at 88 g/t silver and 0.52 percent lead for 53.1 million ounces of contained silver and 97,600 tonnes of contained lead (at a cut off of 30 g/t silver). The indicated component is 12.7 million tonnes of silver (95 g/t) and represents 73 percent of the total estimated resource ounces.

Horizon Minerals (ASX:HRZ) — Horizon Minerals owns the Nimbus silver-zinc project in Western Australia. Nimbus has a high-grade silver-zinc resource estimate of 255,898 tonnes at 773 g/t silver and 13 percent zinc; the total Nimbus resource stands at 1.21 million tonnes at 52 g/t silver, 0.9 percent zinc and 0.2 g/t gold.

Silver Mines (ASX:SVL) bills itself as a leading Australian silver exploration company, and has spent a considerable amount of time acquiring Australian silver projects. Those include Malachite Resources’ (ASX:MAR) Conrad project and Kingsgate Consolidated’s (ASX:KCN) Bowdens silver project.

While the company’s main focus has been on the Webbs silver project in New South Wales, the Bowdens project represents the largest undeveloped silver project in Australia, and Silver Mines is working to get the project through the feasibility, environmental impact statement and permitting stages.

In a 2018 report, the feasibility study demonstrated an average silver production of 3.4 million tonnes per annum for the project, with 5.4 million during the first three years of operation. Estimations also included 6,900 tonnes of zinc and 5,100 tonnes of lead.

This is an updated version of an article first published by the Investing News Network in 2018.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Ryan Sero, hold no direct investment interest in any company mentioned in this article.

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