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Briefcase: Business snippets from around South Australia

Business

In this week’s briefcase, Qantas chief Alan Joyce jets in to announce the airline will build a new base at Adelaide Airport, the state government opens the next $800,000 round of export grants to support small business and strong drilling results edges Hillgrove Resources closer to resuming copper mining in the Adelaide Hills.

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Boss eyes uranium production

The Perth company pushing to re-open the mothballed Honeymoon uranium mine in South Australia’s north-east says it has all of the required permits to restart mining operations.

Last week’s Boss Energy announcement to the ASX comes after the company conducted a comprehensive permit review for federal and state approvals to mine, process, store, transport and export uranium from Honeymoon in the state’s north-east.

Boss said the permits included the ion exchange columns, which aimed to reduce costs.

It said the announcement placed the company one step closer to producing uranium at the dormant mine, which was closed in 2013 because it was too expensive to run.

“We will now complete the Enhanced Feasibility Study in the coming weeks, paving the way for binding offtake contracts and a clear pathway for the re-start of production, thereby capitalising on Boss’ first-mover advantage in the uranium cycle,” Managing Director Duncan Craib said.

“Combined with a significant uranium stockpile locked in at attractive prices and all the required approvals and permits for near term production in place, Boss is well on track to be Australia’s next uranium producer.”

Leigh Creek Energy project edges closer

Leigh Creek Energy has struck an agreement with a South Korean engineering and construction company for a hefty portion of work at its proposed urea manufacturing facility and power plant in the state’s north.

The publicly-listed company plans to use syngas sourced from the former coal mine site to produce an initial one million tonnes of nitrogen-based fertiliser a year to supply Australian agriculture.

Under the heads of agreement, Leigh Creek Energy will negotiate with South Korean giant DL E&C Co to become the commissioning contractor for the engineering, procurement and construction of the flagship project.

The company was granted a petroleum production licence to commence commercial syngas production by the SA Government in November.

It followed a pre-feasibility study by the company published this month showing a total capital cost of the project, which includes an onsite 100MW power plant, to be about $2.6 billion.

Managing Director Phil Staveley labelled the heads of agreement a “major milestone” for the company.

“We have chosen DL E&C from a pool of contenders as we are confident that they can deliver a first-class urea production facility which will employ the latest innovation technology and that they will be a reliable partner,” he said.

“Construction of the LCEP plant will create thousands of South Australian jobs during construction, commissioning and operation.”

Leigh Creek Energy reached a Final Investment Decision (FID) to push ahead with Stage 1 of the project in March.
Stage 1 includes the drilling of gas wells and construction of a 5MW power plant, which will use syngas from Leigh Creek to generate electricity to be sold to the national grid.

The larger Stage 2 part of the $2.6 billion project involves increasing gas production, a large-scale power plant and the construction of the processing plant to convert syngas into urea fertiliser.

If negotiations are successful, DL E&C Co will oversee the project’s feasibility and front-end engineering and design stages.

Online export grants up for grabs

South Australian exporters have one more week to apply for a grant to grow their online international sales as part of a second round of the state government’s eCommerce Accelerator Program (eCAP).

The two-week application window for the $800,000 round two opened on May 3 with grants up to the value of $100,000 available under three funding categories, including; New to eCommerce, eCommerce Accelerator and Cluster Projects.

Businesses with export-ready services or goods that are made in South Australia will be able to use the grants to establish their eCommerce presence, implement ways to drive online sales, or undertake training to assist in developing their online business model.

Grant funding is also available for commissioning digital marketing plans, placement of online advertising, or conducting email marketing campaigns.

The program’s first round was launched last year after COVID-19 worldwide restrictions saw consumers embracing online platforms to purchase goods, awarding funds to 95 successful applicants.

Applications close 5pm Monday, May 17. For more information on eligibility, or to view the guidelines, visit: dti.sa.gov.au/ecap

Qantas to establish Adelaide Airport base

Qantas will establish a base for its Embraer E190s aircraft at Adelaide Airport to help expand its regional footprint.

The base is expected to create up to 200 jobs when fully operational.

Qantas CEO Alan Joyce, who was at Adelaide Airport with South Australian Premier Steven Marshall and Alliance Airlines Managing Scott McMillan for Friday’s announcement, said the E190s were well suited to linking capital cities and regional centres.

“Basing these aircraft in Adelaide means we can service South Australia better and help bring more visitors to the state,” he said.

“The E190 is a great aircraft for the Adelaide market, with its size, range and economics opening up a number of new destinations that wouldn’t be viable with the larger 737 aircraft.

“Instead of one or two flights a day with a larger aircraft, we can offer three or four flights a day on the E190, which gives customers a lot more choice about when they travel.”

Adelaide Airport Managing Director Mark Young said the move would drive an additional 750,000 passengers through the airport each year.

“These aircraft are perfectly suited for the economics of emerging markets and off-peak services,” he said.

“Basing them in Adelaide gives us more capacity and greater flexibility including the option to work with Qantas to open up new short to medium-haul destinations, which ultimately benefits all South Australian travellers.”

Kanmantoo underground revival progresses

SA miner Hillgrove Resources says the latest drilling results at its Kanmantoo mine and forecasts of continued strong copper prices is edging it closer to resuming production in the Adelaide Hills.

Hillgrove ceased large-scale mining at the open pit copper-gold mine about 55km east of Adelaide in May 2019 and completed processing ore stockpiles there in March last year.

It entered an agreement with energy retailer AGL in April 2019 to sell the right to develop, own and operate a pumped hydro energy storage project at the site but that deal was terminated in February 2020 after conditions could not be agreed to by both parties.

The Kanmantoo site was then mothballed to preserve the processing assets, and a small core group retained to focus on growth through the advancement of the Kavanagh underground studies and the continuation of a measured exploration and development program.

Publicly-listed Hillgrove told the Australian Securities Exchange last week that recent drilling results underneath the former open-cut mine were showing great promise.

The site is fully permitted and has an operational processing plant and tailings storage facility, which would allow for a low capital intensity restart.

Hillgrove Resources chairman Derek Carter told shareholders at the company’s AGM last week that the board was focused on creating value for them through the development of the Kanmantoo Underground.

“As such, the core priority of the business will be to re-establish cashflow through the development of an underground mine underneath the existing open pits,” he said.

Magnetite Mines in $7 million capital raise

Publicly listed company Magnetite Mines is set to push forward with its Razorback iron ore project, in South Australia’s Braemar Region, following the announcement of a $7 million capital raise.

In a statement to shareholders, the company said shares would be issued on May 14 at .058 cents each, a 2 per cent premium to the five-day volume weighted average price.

It said funds raised would be used to progress studies for the Razorback project and for general working capital.

The company is working on a pre-feasibility study, which is expected to be complete before July.

Executive chairman Peter Schubert said the placement would provide a “firm financial foundation” for the company as it completed the study.

“We welcome two new institutions, both with substantial expertise in the resource sector, to the register who, through this investment, have demonstrated their confidence in the company and its project,” he said.

“It brings sophisticated and institutional investors on to our register, which is a positive development as we move the Razorback iron ore project forward, it underpins the financial position of the business and it increases the funds available for the Company’s exciting development program.”

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