The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region
Issue link: https://asiaminer.epubxp.com/i/632337
4 | ASIA Miner | Volume 13 • Issue 1 | 2016 Road to Success "It had been in the back of my mind for some time to approach contractors to see if we could work out an affordable arrangement to proceed with Portia, which is not the typical gold deposit mined from the top with cash fow from the outset. To access Portia's gold 70-75 metres down, you have to remove the overburden at a cost of about $25 million under a conventional contracting arrangement with no income, and we certainly could not afford it. "As Steve was leaving, I told him we had an interesting project not far from Broken Hill and had been investigating various options, including seeking Chinese investors, but would need a contractor. I said there was probably not enough in it for three parties – an in- vestor, Havilah and a contractor – so if we could do without the third party, perhaps we could work together. He said he would consider this as he knew about Portia and its history." CMC 'takes a punt' "Steve did his homework and told us it looked like a good opportuni- ty, particularly considering that he would have a set of equipment free with one other job winding back," Chris Giles says. "Rather than having a 250-tonne excavator and set of dump trucks sit- ting around and having to lay-off people, he said he would rather be doing something with the gear and keep people employed. "He said although it was a big commitment he was prepared to take the punt. We negotiated the fner details and in January signed an agreement. They were quickly on site preparing and there was plenty to do, including the road to the site. There were 13 fences to go through and after removing the narrow gates, CMC replaced them with grids and bypass gates. They mobil- ised their gear and set up a camp in weeks, enabling removal of overburden to start on March 30. "CMC has been digging steadily since then and accelerating their work with the half-way point of 3.5 million cubic metres reached at the end of November. As the pit gets deeper, atten- tion to geotechnical issues such as faults, joints and small slips becomes more critical to maintain a safe mining environment." Steve Radford says, "After Havilah advised they were looking for a contractor to assist them, we did six months of due dili- gence. We considered the history, the large amount of drilling Havilah had done and the real understanding its experienced geologists had of the deposit. They were also looking for some- one to bankroll it as, like other junior exploration companies, they were having diffculty getting fnance. "Havilah's business is like ours – it runs on the smell of an oily rag, operates on positives and its people are at the coal face with a can-do, hands-on approach. Being the fourth generation of the Radford family involved in this line of work and having taken over from my father Gary in 2001, we continue to grow. Today we have 520 people, about 900 pieces of equipment and continue to seek opportunities. My passion for this business and its ongoing suc- cess is all about the people and the community of Broken Hill. My great grandfather Les Radford, his sons, my father and I have all had a passion for the community and what we can do for it. "I saw this venture as an opportunity. After the due diligence and taking on board some advice, it was a decision I had to make but in doing so I've had to gamble the farm, albeit a hedged gamble. I'm very comfortable with what I've learnt, our company's ability and its 'can-do' attitude, and we will make it work. "I was always taught that you should buy when people are selling and sell when they are buying, so now represents a good time to be doing business. If you are prepared to take a calculated punt, then why not – there have been a lot of successful people in this country who have taken that punt," Steve Radford adds. The arrangement is a great deal, according to Chris Giles. "It is a win-win for CMC and Havilah, doesn't dilute existing shareholdings and allows us to mine Portia, otherwise we would still be sitting around wondering what to do. Steve is astute, he worked out what needed to be done and how, so that he could achieve a better than normal a return in the end. He knows that by doing a good job and establishing a good relationship, there is every possibility of more work as our other deposits come on line in the future. "I know it's a Radford family tradition, but when Steve shook my hand, the deal was done and he's done everything he promised since with no issues. It's great to have a dependable and capable partner. They have all the gear and the people - you know they will get the job done. "To my knowledge, no one else has done it like this before, at least not at this scale. However, you have to fnd a contractor with the ability to do it and the capability of funding the digging, labour, fuel and main- tenance for at least 12 months before getting a return. It's a unique combination of circumstances that has enabled this to happen." Broken Hill contractor Consolidated Mining and Civil (CMC) has two Hitachi 250-tonne excavators at Portia. Havilah's managing director Chris Giles at the Portia project.