Wednesday, December 6th 2023

Mining Review

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Mining Round-Up For 2019 Moving Towards 2020 featuring: Rockfire Resources, Asiamet Resources, Great Western Mining Corporation, and Jangada Mines.

As the year-ends, the research houses publish their stocking filler advisories, and the business consultancies the sectoral trends that could dictate or reinforce company strategies in 2020.

The risks influencing the mining and metals sectors over the coming 12 months are diverse, but not dissimilar to those that commandeered 2019. Multinational professional services firm EY highlights licence to operate, future of the workforce, digital and data optimisation, reducing carbon footprint, high impact risks, maximising portfolio returns, cyber, replacement of production, innovation and rising costs.

Finding the solutions to these risks that are shaping and defining the industry will determine success and growth.  Solutions incorporate access to capital, the acquisition of existing projects or mines and the ramping up of innovation to both find new resources and extract more value from current resources.

Four companies that fall within these categories and have proactively implemented some of these solutions to present greater shareholder opportunities are Rockfire Resources (ROCK.L) Asiamet Resources (ARS.L) Great Western Mining Corporation (GWMO.L ) and Jangada Mines (JAN.L).  

Rockfire Resources

Exploring for gold, silver, zinc, and copper in Australia’s northeastern state of Queensland where the mining industry was worth almost $40 billion in 2017-18.  The capital of Brisbane is flanked by the beaches of the Gold and Sunshine Coasts.

And gold has become the main focus for the company that has three medium-grade, near-surface gold prospects, positioned amongst multi-million-ounce deposits. All the prospects lie within 50km of operating gold processing plants which provide an opportunity for toll treatment of any future resources.

For those unfamiliar with toll treatment, it’s basically trucking ore to process at a neighbour’s plant. It makes good economic sense to process ore at another company’s mill. 

Rockfire’s prospects are yielding results and potential partnerships are actively being explored.  

The company communication was vigorous over December with five operational announcements.  The week before Christmas investors learned high-grade gold has been intersected in the final two drill holes to test at its 100%-owned Plateau Gold Deposit in Queensland.

The bullet points in the accompanying RNS were concise and compelling. These intersections extend the mineralisation at depth and are expected to expand the current resource estimate of 41,000 ounces of gold; all drill holes in the October 2019 drilling program hit potentially economic gold grades and potentially mineable widths and further geophysics is planned to extend the survey completed in November 2019.

Rockfire continues to assess opportunities ‘to acquire outstanding mineral projects worldwide’ and 2020 is anticipated to have plenty of news flow.

In the last quarter of 2019, the stock experienced both its 52-week low of 0.26 and its year high of 2.32.

The shareholder base is well supported including the Value Generation Fund of Paul Johnson aka ‘Mr. Mineral’ and his wife who own 3.79% and CEO David Price with his 2.46%.

On Christmas Eve, Price reiterated, “Over the next twelve months, Rockfire intends to initially expand the JORC resource estimate and to then initiate preliminary scoping studies into open cut mine extraction at Plateau.”

Asiamet Resources (ARS.L)

The stock of copper producer Asiamet Resources has been recovering from its 52-week low after December 9th’s decline. That sell-off prompted the issue of an RNS summarising the key operational highlights in 2019 for the company’s copper-gold and polymetallic deposits portfolio in Indonesia.

There’s the 80% owned Beutong copper-gold project located on the island of Sumatra, and the flagship 100% owned BKM Copper Project located northwest of Palangkaraya, the regional capital of Central Kalimantan.

The milestones have been significant in the company’s quest to build Indonesia’s next copper mine in time to service a copper market projected to be supply-constrained in the early 2020s. 

The highlights, unashamedly extracted from the RNS, include a comprehensive drilling programme at BKM demonstrated good copper results that further strengthened the Resource and Delivery of a robust Feasibility Study for the BKM Copper project with the following key metrics of an initial nine-year life of mine producing 25,000 tonnes of copper cathode per annum; life of mine revenue of $1.27 billion and EBITDA of $563.3 million. 

There’s planned exploration work on four strategic targets in close proximity to the BKM Copper project which will add further life through satellite discoveries, and Executive chairman and 3% shareholder Tony Manini has told investors there is enough money for drilling.

With a market cap of almost 19 million pounds, some investors have already joined Manini in his determination for Asiamet to grow into a billion-dollar-plus company. 

Great Western Mining Corporation.  The new Aminex?

While some commentators have dubbed Great Western Mining Corporation “the new Aminex,” the commonality lies in management only. Brian Hall, the executive chairman of Great Western was the founder and chairman of upstream oil and gas company Aminex until August 2018.  He’s been joined by Aminex’s former CFO Max Williams. 

Together they took part in Great Western’s most recent raise showing commitment to the business which is refocusing after a consensual boardroom reshuffle.

Exploration is embedded in Hall’s DNA and its apparent in his commitment to finding gold in the tough terrain of Nevada’s Excelsior Mountains range.

Gold is just one of the targets in Great Western’s portfolio there, and in addition to recent soil sampling for the yellow metal, the company has long been committed to finding a partner for its copper projects.

The company is leanly managed with available capital now focused on the near term, realistic discoveries on a low exploration budget.

Hall has a Shackletonesque approach to discovery. In December investors were told about the gathering of soil samples for laboratory analysis completed by a three-man team despatched from the UK and Ireland, “working against the clock just before the snowfall season.” 

The samples have been delivered for analysis to a laboratory in Nevada and results are widely anticipated to be released at the beginning of 2020 when investors will find out if the ‘Mineral Jackpot’ property lives up to its promissory name.

Overall Great Western has six concession areas with the potential, it believes, for exploiting short term gold and silver deposits and in the longer term what data suggests are world-class copper deposits.

The company owns 100% of its assets, and with a just over one million pound market cap, lean management, the experience of Hall and Williams and the imminent soil sample results, investors are joining Hall and following where he put his own money.

Jangada Mines, a decade of discovery

There are similarities between Great Western and Jangada Mines with management putting their own money into the companies, and the bosses respected exploration veterans. 

A Jangada is a traditional fishing boat used in the northern region of Brazil and the captain or jangadeiro at the helm of Jangada Mines (JAN.L) is Brian McMaster.

In November he announced the company had entered a truly exciting stage 

He was updating investors on the ongoing exploration programme at the 100% owned Pitombeiras vanadium, titanium and iron project located in the state of Ceará, Brazil.

The highlights of that update were compelling.  A new target zone identified at the Pitombeiras Vanadium project, eight magnetic anomaly targets to follow up, a renewed exploration licence for three years and confirmation about the commencement of a fully funded 2500m drilling campaign set for January 2020.

The company is developing South America’s largest and most advanced platinum group metals project and through its 25% ownership of ValOre Metals Corp, Jangada also has an interest in the Pedra Branca PGM project. 

In December ValOre highlighted PGM and gold mineralisation in all rock samples at a new exploration target at Pedra Branca. Communication was positive with ‘treasure trove of previous data’ and ‘target-rich environment’ some of the descriptions in the communique.

The fusion of the data historical and contemporary is being scrutinised by Jangada Mines and its shareholders.

Like the Jangada, which anecdotally was Ulysses’ vessel in The Odyssey, Jangada Mines is having its own epic journey. 2020 heralds a new decade, McMaster is confident he is steering his company to becoming a world-class, continuous high-grade vanadium, titanium and iron grades asset.

We look forward to seeing you soon for the next TMS investor event in 2020.

The author was remunerated but does not hold shares in the company