Malachite Resources NL

Published : September 30th, 2015

Project and Corporate Update

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Project and Corporate Update


ASX Announcement ASX Code: MAR 30 September 2015


Malachite Resources Limited (ASX Code: MAR) ('Malachite' or the 'Company') is pleased to announce the following update in respect of its flagship Lorena Gold Project, exploration at the Lady Mary Prospect, the sale of the Conrad Silver Project and extension of the maturity date for existing Convertible Notes.

Lorena Gold Project

As previously announced in July 2015, Malachite executed a Letter of Offer with MKS Switzerland (SA) ('MKS') that would have allowed Malachite to proceed with the development of the Lorena Gold Project in its own right using the plant and equipment partially constructed by BCD Resources NL (BCD) under a previous agreement with BCD which was terminated in May 2015. MKS is the ultimate secured lender to BCD and appointed Receivers and Managers to BCD in January 2015.

The financing offered by MKS was subject to certain conditions precedent, one of which was a Project Development Plan ('PDP') to be prepared by Malachite including a cost estimate to complete the project development. In late July, Malachite engaged Ore Processing Services Pty Ltd ('OPS') to carry out the PDP. OPS, in conjunction with Malachite, recently completed the PDP and one of the main conclusions was that the cost to complete the Lorena project was more than that determined by BCD and assumed by MKS. In September 2015, MKS and Malachite agreed that without further financing from MKS and without a change in financing and concentrate purchase terms as stated in the Letter of Offer, the MKS financing offer could not be provided nor accepted. MKS has now withdrawn its financing offer.

Malachite and the Receivers to BCD are currently negotiating terms to settle ownership of the partly constructed Lorena concentrate plant to provide Malachite with unfettered access to the plant.

As part of the PDP, Malachite and OPS, carried out a development scenario which incorporated building a cyanide plant ('CIL') on the back of the concentrate plant at Lorena so that gold dore could be produced on site. The benefits of this scenario compared to producing a gold concentrate and transporting the concentrate to BCD's plant at Beaconsfield are compelling and include:

  1. An integrated processing flow sheet at Lorena which does not require a concentrate to be produced or stored;

  2. No costs for the transporting of concentrate to Beaconsfield which have a significant impact on operating cost;

  3. Reduced overall operating costs because only running one processing site;

  4. Less working capital required since there is no transport and processing of a concentrate;

    Malachite Resources Limited ABN 86 075 613 268

    Suite 2, Level 10, 8-10 Loftus Street, Sydney NSW 2000 P O Box R1295, Royal Exchange NSW 1225

    Tel: (02) 9251 0032 Fax: (02) 9475 0439

  5. The ability to mine a lower cut-off grade because of the lower operating costs which results in more ounces processed and a six to nine month longer mine life;

  6. Less mining risk since lower grade material can be mined and processed rather than stockpiled on site as previously contemplated;

  7. Better economics of treating any additional resources delineated at Lorena and in particular from a potential underground operation; and

  8. The ability to treat other ores in the region, both sulphides and oxides.

Whilst transporting of concentrate to Beaconsfield remains a viable option, the Company believes that it is appropriate to consider other development options, particularly as the cost to build a CIL plant at Lorena is roughly the same as the anticipated transport costs and capital treatment charges to treat a concentrate at BCD's Beaconsfield plant. Malachite and OPS are currently in discussions, subject to financing, to complete the concentrate plant at Lorena with OPS to build and supply a CIL plant to produce gold dore on site at Lorena. It is proposed that the CIL plant will be mobile so that it can be constructed off-site and be transported to Lorena by truck in modules.

Malachite has carried out a review of the timing to construct and get approvals for a CIL plant and believes that it will only take some three months longer than it would take to finish off the concentrate plant, complete site works and carry out pre-stripping for the scenario of producing a concentrate for shipment to Beaconsfield.

Malachite has determined that its funding requirements (including project working capital) to have Lorena in development are around $8 million.

Malachite is currently in discussions with a number of parties who are interested in funding the development of the project.

Subject to financing and negotiations with BCD's receivers in relation to the concentrate plant, it is now expected that an open cut operation at Lorena should commence in 2016.

As previously advised the Lorena gold project has potential for resource extensions at depth. Proving up these additional resources will require confirmation by drilling which Malachite proposes to undertake at the earliest opportunity subject to sufficient funding being available.

The Company believes that there are considerable regional opportunities which it will be able to pursue once the plant is operating at Lorena.

Lady Mary Prospect

The Company has successfully negotiated an access agreement with the landowner of part of EPM18908 in order to carry out exploration drilling on the Lady Mary prospect. The Company is in the process of arranging an aboriginal cultural clearance of the Lady Mary prospect in preparation for a 9 hole, 500 metres in total, reverse circulation drilling program. This clearance is expected to be carried out next week with the drilling program commencing as soon as practicable.

The Lady Mary prospect is within a short trucking distance of the Lorena gold mine.

Conrad Silver Project

In May 2015, the Company entered into an agreement with Silver Mines Limited ('SVL'), an ASX listed company with code SVL, to sell the Conrad Silver Project (Conrad) for $450,000 in cash,

$125,000 in SVL shares and a 1% net smelter return. To date, SVL has paid Malachite $175,000 with

the balance of the cash $275,000 due at the earlier of 31 October 2015 or the completion of SVL's fully underwritten rights issue, which is expected is to be finalised mid-October 2015.

Extension of Existing Convertible Notes

Malachite has Convertible Notes (Notes) with a face value of $2,150,000 on issue to existing Convertible Noteholders (including six Notes that, subject to shareholder approval at the upcoming annual general meeting of the Company, will be issued to Directors or their associates). Malachite has successfully negotiated with the Noteholders to extend the maturity date of these Notes by 7 months to 5 May 2016. The Company will pay each Convertible Noteholder a Rollover Fee of 1.75% of the Notes Issue Price. In order to preserve cash the Rollover fee will be paid by the issue of Ordinary Shares at a 20% discount to the 30 day VWAP to 5 October 2015.

For further information, please contact Malachite Resources Limited on (02) 9251 0032 or by email at [email protected] or visit the company's website at

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Malachite Resources NL

ISIN : AU000000MAR2
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Malachite Res. is a tin and lead exploration company based in Australia.

Malachite Res. holds various exploration projects in Australia.

Its main exploration properties are ELSMORE, MT LIDSTER, RIVERTREE, TOOLOOM, VOLGA, ABINGTON, CONRAD SILVER and DELUNGRA in Australia.

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Corporate Presentations of Malachite Resources NL
5/28/2008Lonsec Research Report- Resources Update (includes on Malach...
Annual reports of Malachite Resources NL
2008 Annual report
Project news of Malachite Resources NL
2/18/2011(Conrad Silver)ASX Announcement - Conrad Silver Project Update
2/11/2011Acquisition of Lorena Gold Project Completed
2/28/2010(Conrad Silver)New Work Extends Silver Mineralisation at Conrad
2/25/2010(Tooloom)Boardroom Radio Interview - Dr. Garry Lowder: Encouraging Ne...
1/11/2010(Tooloom)Drilling at Tooloom Gold Project Resumes after Bushfi
12/10/2009(Tooloom)Drilling at Tooloom Suspended due to Bushfires
10/20/2009(Tooloom)Drilling commenced at Tooloom Gold Project
9/7/2009(Delungra)Drilling to commence at Delungra
11/18/2008(Conrad Silver)ASX Announcement - Conrad Silver Project - Update
8/11/2008(Conrad Silver)Major Resource Upgrade for the Conrad Silver Project
8/4/2008(Conrad Silver)Conrad Silver Project - New Drilling Results Continue to Bui...
5/9/2008(Conrad Silver)Conrad Silver Project - Good Results continue
4/1/2008(Elsmore)New Tin Discovery at Elsmore Project
1/16/2008(Conrad Silver)Exciting Regional Potential at Conrad Silver Project
11/5/2007(Conrad Silver) Estimate over 10Moz of Silver Equivalent
10/8/2007(Conrad Silver)Spectacular New Results at Conrad Silver Project
8/13/2007(Conrad Silver)Resource Drilling at King Conrad Extended
6/3/2007(Conrad Silver)Conrad Silver Drilling Report #3
4/27/2006Silver drilling at Conrad highly successful: exciting…
Corporate news of Malachite Resources NL
7/14/2016Quarterly Activities and Cashflow Reports - June 2016
5/25/2016Shareholder Approval - Convertible Notes
5/24/2016Response to ASX Appendix 5B Query
12/16/2015Assays received from Lady Mary Prospect
12/4/2015Change of Director's Interest Notice - Andrew McMillan
12/4/2015Change of Director's Interest Notice - Terry Cuthbertson
12/4/2015Change of Director's Interest Notice - James Dean
11/30/2015Results of Meeting - AGM
11/26/2015Drilling Completed at Lady Mary Prospect
11/2/2015Quarterly Activities and Cash Flow Report
10/29/2015Notice of Annual General Meeting/Proxy Form
10/19/2015Appendix 3B - Convertible Note Rollover Fee Shares
10/1/2015AGM to be held 30 November 2015
9/30/2015Full Year Statutory Accounts - Year Ended 30 June 2015
9/30/2015Project and Corporate Update
9/2/2015Revised Terms Agreed re Sale of Conrad Silver Project
7/31/2015Quarterly Activities and Cashflow Report - June 15 Qtr
7/15/2015Proceeding with the Development of Lorena Gold Project
4/27/2015Share Purchase Plan Closing Date Extended
4/16/2015Share Purchase Plan Letter and Application Form
3/31/2015Trading Halt
3/16/2015Half Yearly Report and Accounts
3/2/2015MAROA Options Expire 31 March 2015
1/30/2015Quarterly Activities and Cash Flow Report - Dec 14 Qtr
1/22/2015Malachite Reviewing Position at Lorena Gold Project
1/21/2015Lorena Gold Project Update
1/21/2015Reinstatement to Official Quotation
1/21/2015Suspension from Official Quotation
1/15/2015Trading Halt
12/3/2014Appendix 3B - AGM approved Shares and Convertible Note
12/1/2014AGM Presentation
11/2/2014Convertible Notes
3/4/2011ASX Announcement - Placement Completed Raising $517,500
7/19/2010Quarterly Activities Report
5/26/2010Results of Meeting and Exploration Update
5/18/2010From Successful Explorer to Emerging Miner
4/29/2010Boardroom Radio Broadcast
1/28/2010Quarterly Activities Report
12/8/2009Completes $300k Placement
10/20/2009Boardroom Radio interview with Dr. Garry Lowder
10/15/2009form strategic alliance with Chinese Investor Group
9/4/2009Share Purchase Plan successfully raises $933,295
7/6/2009Tin Mining Plans Boosted by Results of Dry Processing Test W...
5/28/2009ASX Announcement - Placement Raises $312,140
3/11/2009(Audio) Audio Broadcast - 1.30 pm Today
2/17/2009(Audio) Interview with Dr. Garry Lowder - Exploration Update...
12/18/2008Interview with Dr. Garry Lowder - Upgraded Resource at Conra...
11/28/2008ASX Announcement - Directors Options to be Amended - Exercis...
11/7/2008Interviews with Dr. Garry Lowder
11/5/2008Tin Strategy
9/22/2008AGM to be held Tuesday 25 November 2008
9/17/2008Interview with Dr. Garry Lowder
8/20/2008ASX Announcement - Exploration Update
8/3/2008Silver Lining From Commodity Resurgence
7/24/2008June 08 Quarter Activities Report
7/2/2008Finance News Network - Interview with Dr. Garry Lowder
5/30/2008Lonsec Resources Update - Malachite Resources NL
4/23/2008(Video) Finance News Network Interview
2/11/2008Malachite Resources NL: ASX Announcement - Exploration Updat...
1/21/2008Quarterly Activities Report
12/18/2007Volga Drilling Further Update
12/14/2007Placement Raises $5.7m
11/21/2007Chairman's Address to the Annual General Meeting
11/19/2007Volga Project Update
11/16/2007 Placement of up to 20m Shares
9/17/2007Robust Mining Project Emerging
5/1/2007Exploration Update on Conrad Silver, Tooloom Gold and ISA re...
3/28/2007Conrad Drilling Update
2/28/2007Corporate Insights Interview
4/20/2006quaterly report ending 31 march 2006
1/26/2006More gold at Phoenix: deeper drilling enhances mine potentia...
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