The rejuvenated Gold Valley Group is proving greater than the sum of its parts, with the vertically integrated miner poised to deliver more pit to port solutions.

The group, founded by Perth-based businessman Yuzheng Xie, spans a variety of resources interests but two key acquisitions about 12 months ago have become integral to its delivery focus as it eyes more partnership opportunities.

The first was acquiring a controlling stake in mining services contractor, Pilbara Resource Group, in April 2022.

"It positioned Gold Valley where it could deliver a project into production when it said it would," CEO and general counsel Scott Meacock explained.

"A big advantage of vertical integration is we can walk down the hall and have a frank chat about operational issues with the mining services and logistics teams - it removes the friction between mine owners and contractors and we have more time to focus on solutions."

The second was group member Gold Valley Iron Ore acquiring the mining rights in July 2022 for GWR Group's high-grade C4 iron ore deposit near Wiluna, which has a 21.6 million tonne resource grading 60.7% iron.

The direct shipping ore operation, via the Geraldton port, is underway and ramping up towards 1.5Mt per annum and beyond, demonstrating Gold Valley's mining, marketing and logistics competencies.

"We're a vertically integrated junior miner," Meacock said.

"We can deliver pit to port solutions on our own mines and we can do that for others as well.

"The key point is we deliver - if we start a project, we see it through."

The ace up Gold Valley's sleeve is Xie's trading experience and support for C4 from a global commodities and trading giant.

Trading the secret to success

"One of our points of difference is the trading background that Yuzheng has, that means that he's very comfortable making decisions on the futures markets, which is where we have to operate," Meacock said.

Xie, who was born in China and moved to Australia about 20 years ago, began trading minerals from India to China from his Perth base after realising the industrial rise of his home country would far exceed expectations.

Gold Valley has since grown to include iron ore and copper-gold assets in Western Australia and the Northern Territory, a stake in ASX-listed explorer CuFe Ltd, as well as interests in energy and agriculture.

Its C4 mine has high grade but is a "blip on the radar" in terms of scale when compared with the giant iron ore mines in the Pilbara operated by mining majors including BHP and Rio Tinto.

Xie's trading experience is proving integral to derisking operations.

"Our model is to have a very significant hedge book, so that we can have that confidence to follow through with what we say we will do," Meacock said.

"We do that through our key hedging partner, a prominent international commodities trader.

"We have derivative protections in place for everything that we do.

"We're protected for six to 12 months ahead of ourselves for production so we can effectively guarantee that it doesn't matter what happens to the market, we will be operating for that period.

"We'll have funds to pay everyone and keep operations going and ride the waves of volatility in the iron ore markets.  

"In a junior mining sense, that's the magic: to be able to get through the cycle to weather the storm, to enjoy the sunshine afterwards."

He said the major trader's support for C4 "speaks volumes" about the quality of the Gold Valley business and should give confidence to potential business partners.

Cycles and the 5 pillars

Commodity price cycles are just some of the issues facing the junior mining sector, along with the current inflationary environment, legacy interests and financial pressures.

Meacock acknowledged some of the companies linked to Gold Valley had insolvency events in recent years but said the company was now focused on achievable growth and delivery.

He was previously external counsel to Gold Valley, "working with Yuzheng through probably some of the hardest times of his business life," before accepting the opportunity to join the company as it re-entered a growth phase.

"It's certainly been a steep and enjoyable learning curve to understand how to actually get iron ore on a boat," Meacock said.

The company was focused on being a hard-working solution service while upholding environmental, social and governance (ESG) ideals.

Gold Valley has established five pillars to be reflected in project execution and operation strategies, namely: respect and safeguard people, manage resources, protect the environment, stakeholder engagement and community benefit.

"You can't deliver anything if you're not looking after people, looking after the environment and engaging stakeholders," Meacock said.

"All of those things feed into that mentality of project delivery and being bankable on that side of the business."

Removing roadblocks

Gold Valley is on the lookout for new partnerships and expansion opportunities so its unique skillset can help other juniors into production - particularly east of Geraldton where a lack of rail access means an "eye-watering" haulage cost for smaller DSO players.

Meacock said C4 was one of the most expensive mines to operate in WA given the 830km trucking distance to port but he believed Gold Valley's vertical integration reduced costs by $15-$20/t.

"I think there's lots of assets like those in Wiluna, where a lot of work has been done on them … and they're all sitting there ready to go," Meacock said.

"But that decision to mine - you can't take that lightly - and for a junior mining company they're in a pretty difficult position where they effectively need to have a significant amount of cash upfront to be able to make that decision.

"In the junior space, it's no easy task.

"So what we see as our role is to come in and basically de-risk those projects and take them on with a strategic partnership."

He pointed out margins were tight for the junior iron ore sector, with the commodity worth about US$100 per tonne.

This created a tough hurdle for junior players who had to find a mining services provider, find a logistics provider to match production curves and strike up a relationship with a trading house "where each of those steps adds a relationship and layer of risk and cost to manage".

"We're happy to bring what we can into the picture," Meacock said.

"That can be through deploying our hedging policies, providing some working capital to get things moving, bringing our own people and our own equipment to a project to keep costs down as much as we can.

"So effectively removing the roadblocks at the start of projects.

"Once projects are up and running it's a lot easier, but it takes a lot of energy to get the ball rolling in the first place."

Gold Valley has a small but effective leadership team, led by Xie, Meacock and Aric Song, general manager of sales, marketing and logistics.

"We're pretty proud of what we can do," Meacock said.

"We're good operators, we can bring a project into production, and we're not afraid of joint ventures or profit share arrangements.

"We can offer one solution, with one margin and one point of contact to de-risking."