Colt Resources is on Course to Revive Portugals Gold and Tungsten Mining
Colt Resources has already invested €60 million in its plan to begin gold and tungsten mining at two sites in Portugal which once under construction will deliver hundreds of jobs for local people, thus helping to boost the country’s economic recovery.
The exploration expert expects to spend another €100-130 million to get both projects off the ground which will ultimately require 150 permanent staff when production is underway.
Once the flagship exploration projects at Boa Fé and Tabuaço are in production, the incoming cash flow will allow Colt to upscale activity at other Portuguese gold and tungsten sites, as well as abroad.
Business Development Manager Luis Martins said: “I want to have both of our mines producing so we can then generate cash flow and invest in our other projects. We want to spread our activities through Europe and the Middle East, and other locations all over the world.”
This includes a venture in Pakistan currently being explored by Colt Middle East, where copper mining could also bring in money to boost funds for the projects in Portugal.
Founded in Canada in 2007, Colt quickly moved to the Iberian nation on receipt of data from previous operators and the Portuguese government, with whom it shares a highly constructive relationship and vision to turn around economic fortunes.
Boa Fé and Tabuaço
The open-pit gold resources at Boa Fé, 95 kilometres east of Lisbon, and underground tungsten supplies at Tabuaço, in the north, represent the springboard for Colt Resources to emerge as a key mining player both in Portugal and elsewhere.
Boa Fé hosts several gold deposits such as Banhos, Casas Novas, Chaminé, Ligeiro and Braços, and according to preliminary economic assessments contains reported indicated resources of 340,310oz and inferred resources of 84,200oz of gold. It has an estimated 11 kilometres of gold mineralisation.
Initial metallurgical test work has demonstrated that the gold at Boa Fé is readily recoverable using a combination of conventional methods such as gravity, flotation and cyanide technologies, with Colt looking to start production by the end of 2015.
The Tabuaço Experimental Mining Licence (EML) in North-Eastern Portugal covers a total area of 45.13 square kilometres. Since 2007 Colt has carried out extensive outcrop sampling work, and then embarked on an exploration and evaluation diamond drilling program which to date involved in excess of 100 drill holes, totalling more than 11,400 metres.
Martins outlined the importance of impending bankable feasibility studies to the progress of both projects. “We are looking to conclude this by early next year,” he said.
“We are developing a resource estimation update and are pretty sure there is huge potential, the bank feasibility study will prove this and encourage investment. The strategy is to start production as soon as possible and generate some cash flow.”
“We are open to many avenues of construction and production and for example have had conversations with potential German and Chinese partners about mining at Tabuaço.”
Investing in Portugal
Several factors combine to explain Colt’s decision to develop the gold and tungsten mining sectors in Portugal.
The country has a mining legacy stretching 2,000 years back to Roman times and Martins points to a continuing enthusiasm and acknowledgement of the industry’s importance to the nation’s economic recovery.
“In 2012 the government published a new strategy about mineral resources that gives clear political support to the mining sector,” he said. “We have a great relationship with them, and also have a beautiful infrastructure, a very good motorway network and our properties are nearby along with ports and prime rail connections.”
Colt has also been able to draw vital investment from a number of Portuguese sources, part of a batch of investors including a Canadian pension fund and several institutions and individuals from Germany, Switzerland, China and Hong Kong.
Construction company Teixeira Duarte is a key partner. “They are a big construction group working not only here but in Brazil and Angola,” Martins added.
“They have a mining division which is developing several works for Portugal’s main copper mine Neves-Corvo and can help us to develop our projects. All our investors share our view and strategy and feel that they will see a good reward on their investment.”
So far investment into the two projects has exceeded €60 million with Martins predicting another €100-130 million be needed before both sites become operational, making the banking feasibility studies of utmost importance in order to secure the remaining funds and deliver new jobs for locals.
Colt’s current 25 staff and 50 sub-contracted exploration workers benefit from the years of expertise in the company through internal training. It also has fruitful relations with several Portuguese universities such as the University if Lisbon and University of Évora and Aveiro located near Boa Fé and Tabuaço.
“This is about building local partnerships in an academic and vocational point of view as well,” Martins said. “We are already conceptualising the hiring of more people for the construction and production with our subcontractors.”
Into the Middle East
Away from Boa Fé and Tabuaço Colt has several other promising exploration works progressing both in Portugal and in Pakistan.
In Portugal, the company is exploring for gold at Santo António, Montemor, Cercal and Cedovim, while finding reserves of gold and copper in a joint venture with junior British company Star Mining at Borba in the east.
It has also established Colt Middle East, for which it owns a majority share of 38 percent. This is a unit dedicated to exploring copper potential in Pakistan near the world-renowned supply at Reko Diq, one of the biggest porphyry copper deposits in the world.
Colt Middle East has entered an agreement with Australian-based company Lake Resources, and is working closely with local communities and the government of Balochistan to develop what it hopes will become a world class asset in the Chagai Hills copper and gold district.
Martins said: “If successful this could completely change the dimension of the company and could provide important funding for our projects in Portugal.
“There are political and social issues but still we are working with the local communities to obtain the social license and I think the people will take care of us and we will return a safe and secure investment.”
With promising signs to be seen both in Portugal and in Pakistan, Martins believes the company can look further afield in the future. “We can bring benefits to our shareholders and the people in the areas we look to operate in,” he concluded.
Mining Profile: Mike Henry, CEO, BHP
Mike Henry has over 30 years’ experience in the resources industry, working across the globe in Australia, Asia, North America, and Europe; he joined BHP in 2003. A member of the executive leadership team since 2011, Henry has held roles spanning operational, commercial, and technical.
Mike Henry graduated from the University of British Colombia with a Bachelor of Science degree in Chemistry. He began his career in the resources industry working for Japanese tech giant Mitsubishi. Henry’s first contact with BHP came in Australia in 1999 when he helped set up the company’s coal joint venture, the BHP Mitsubishi Alliance (BMA). By 2001, Henry had risen to Vice President of Business Development for the BMA before joining BHP’s energy coal business full time.
During his time at BHP prior roles have included President HSE, Marketing & Technology 2013-14 and President of the company’s coal business from 2015-16. Prior to succeeding Andrew McKenzie as CEO in January 2020, Henry served as President for Operations, Minerals Australia focusing on iron ore, copper, coal and nickel. Henry led 40,000 people across six assets, with revenues of $29bn, EBITDA of $16bn and a capital spend of $3bn
Under Henry’s leadership, BHP’s Minerals Australia business reduced the frequency of high potential injuries by 60% and, for the first time, became the world’s lowest-cost major iron ore producer.
Mike Henry’s exposure to the company’s global marketing efforts between 2010 and 2015 saw him earmarked for the top job at BHP, developing crucial relationships with the mining giant’s customers in China and Japan.
“His operational experience, his commercial experience, his strategic skill, his global experience … that makes him a great candidate to be the next CEO of BHP,” said outgoing CEO Andrew MacKenzie of Henry’s appointment to the role last year.
Inclusion & Diversity
Growing up in a biracial family with a mother of Japanese heritage who worked as a nurse in emergency services, Henry witnessed and experienced both ends of the inclusion spectrum.
“[Inclusion & Diversity] is quite personal for me.. I am absolutely convinced that having an inclusive culture and diverse workforce is mission critical for BHP,” he says. “Inclusive, diverse teams perform better – because they promote safety, productivity and wellbeing. Getting this right will be a serious competitive advantage for BHP. It will help us secure and motivate the best people, we’ll be more creative, and we’ll make better decisions.”
Henry spent the first half of his career in an environment where he was not from the mainstream, but where people went the extra mile to ensure he felt wholly included. “Without exception, it’s been in high-inclusion environments that I’ve thrived,” he recalls. “Where I’ve felt most fulfilled as a person. When I’ve been most committed and motivated, and where I’ve made my most significant contribution. On the rare occasion when I’ve been in an environment I experienced as less inclusive, I haven’t been at my best – a lost opportunity for both me and those around me. I have two adult daughters and my aspiration for them is that they are able to realise their dreams and potential, unconstrained by gender, or race. I need to demonstrate the values and leadership that reflect where I’ve come from and the world that I hope for and believe is possible.”
Having lead teams globally, across cultures and disciplines, Henry’s experience has been that the teams that have unlocked exceptional outcomes have been those that are highly inclusive. “There’s been an excitement and enthusiasm in those teams that sees people challenge themselves, reach higher, and be more creative,” he notes.
“Those teams are the ones that everyone wants to be part of, and the ones that truly innovate and push the organisation to new frontiers. Being part of those teams and leading them has been one of the most fulfilling aspects of my career. I am passionate about seeing people stretch themselves, learn that they’re capable of more than they perhaps thought and experience the joy of realising great outcomes.”
What does the future hold? "BHP is a company that is steeped in history,” said Henry on his appointment last year. “The one constant for the whole of BHP’s 153-year history had been great people. If you’ve got the right people you can do amazing things."