Time for a Golden Summer for Landore Resources ?
“…Over the past few weeks the Landore share price has settled around 33p with a drilling programme that has yielded strong results so far still underway. We think it’s worth considering taking advantage of that price now…”
It has only been a couple of months since TMS last covered gold, nickel, copper and PGE miner Landore Resources (AIM:LND). But with the company maintaining a busy news flow including reports of bonanza grade gold discoveries at its flagship BAM Gold Deposit, we thought it time to look at the Guernsey-based firm again.
To recap, Landore’s primary focus is its 100pc owned Junior Lake Property, which together with the contiguous Lamaune Iron property (90.2pc owned), covers 30,507 hectares in the province of Ontario, Canada, with good links to Thunder Bay, the main supply hub for the region’s miners. The Property is prospective for a variety of minerals, encompassing sites including the BAM Gold Deposit, the B4-7 Nickel-Copper-Cobalt-Platinum-Palladium-Gold Deposit, the VW Nickel-Copper-Cobalt Deposit, the Lamaune Gold Prospect, and the Lamaune Iron Prospect. (Landore also owns or has the mineral rights to a further eight properties with 99 claims in Nevada.)
The Junior Lake Property’s known mineral resources and prospects are located within an Archean-age greenstone belt some 0.5 to 1.5 kilometres wide and 31 kilometres long. The BAM Gold Deposit, situated within a 2.7 kilometre geophysical anomaly midway along the belt, was discovered little more than five years ago, but Landore has elaborated its potential through several exploration programmes and studies.
The most recent Mineral Resource Estimate (MRE) for the Property, published last January, reported a resource of 31,083,000 tonnes at 1.02 grams/tonne (g/t) for 1,015,000 ounces of gold, including 21,930,000 tonnes at 1.06g/t for 747,000 ounces gold in the Indicated category. Target areas adjacent to the current delineated deposits offer a possible 14,761,000 tonnes at 0.93g/t ounces gold, and a further 441,000 ounces gold in the ‘Unclassified’ material category. The Deposit remains open in several directions, with metallurgical test work indicating that gold recoveries may run between 97pc and 99pc, which would facilitate efficient operating conditions.
Strong progress at the BAM Gold Deposit
Landore raised £2.8m last July and a further £3.5m this February to cover its current drilling programme, which began last October with the aim of extending the Property’s defined resource of 1,015,000 ounces of gold, and testing the depth potential of its mineralisation. The programme, scheduled for completion by August, will pave the way for an updated Mineral Resource Estimate (MRE) and Preliminary Economic Assessment (PEA), which the company hopes will advance the resource’s Inferred mineralisation to Indicated status.
The company’s drilling updates note good progress so far. In April it reported ‘bonanza grade gold’ of 432.0 grams/tonne gold over 0.32 metres had been intersected in drill hole 0421-785, in the footwall below the currently defined East pit of the BAM Gold Deposit. (Bonanza grade is an industry term for the discovery of more than 34 grams of gold per tonne or one troy ounce of gold per tonne.) Another bonanza grade intersection, of 37.40 grams per tonne gold (g/t Au) over one metre, was recorded four years ago in drill hole 0417-579, some 200 metres from the latest discovery, and in the same deformation zone. Landore believes that there is ‘a high possibility of continuity’ between the two occurrences. The company is waiting for assays on six other holes drilled in the footwall zone.
There has been further progress over the past few weeks. Last month the company reported that 20 holes covering 4,700 metres drilled to test for potential strike extension to the west of the Deposit had intersected ‘typical BAM Gold Deposit lithology and mineralisation’.
Another update earlier this month reported 19 holes drilling a total of 4,938 metres had been completed to test for depth and length extension of the East defined pit from 2000E to 3000E. Again, all the holes had intersected typical BAM Gold Deposit lithology and mineralisation, some with visible gold. Highlights included drill hole 0421-789, which intersected 53.37 metres at 1.35 grams per tonne gold, including 13.14 metres at 2.99 grams per tonne gold. Assay results are pending for five additional drill holes completed at 25 metre centres to test the zone around the bonanza gold intercept on line 2850E. To date the programme, which remains on course for completion in August, has drilled a total of 17,070 metres through 73 drill holes.
Brightening prospects for gold
Landore’s promising progress comes as the outlook for gold continues to brighten. Gold prices have risen 10pc since the beginning of March to $1,880 a troy ounce at the time of writing – the price has touched $1,900 in recent weeks – as investors buy the metal to hedge against the prospect of rising inflation driven by higher raw material prices and a recovery in global demand. The NYSE Arca Gold Bugs index, which tracks shares of gold miners, has risen nearly a third over the same period. Earlier this month Russian gold miner Nordgold became the latest to announce plans to list in London to take advantage of a rebound in the gold price. Canada’s Yamana Gold listed in London last year, and Endeavour Mining is set to join.
Landore’s transition metals
It is worth noting that although the company is currently focused on gold, Landore has a long standing interest in other metals. Junior Lake is also prospective for nickel, copper, cobalt, lithium and PGE metals, which the company was working to bring to pre-feasibility level before to the 2012 commodities price crash, and the full promise of the BAM Gold Deposit became apparent. But earlier this year Landore said that in light of the increasing demand for nickel, cobalt and lithium driven by the energy transition ‘the Board considers these projects to be viable once again’.
A series of drilling campaigns from 2005 to 2015 at the B4-7 Nickel-Copper-Cobalt-PGE Deposit and Alpha Zone, some 600 metres southwest of the BAM Gold Deposit, found magmatic sulphide hosted, polymetallic nickel-copper-cobalt-platinum-palladium-gold mineralisation, the resource estimate putting 3,292,000 tonnes at 1.20pc Nickel Equivalent (NiEq) in the Indicated category and 568,000 tonnes at 1.26pc NiEq in the Inferred category, a total of 46,661 tonnes of contained metal.
The Alpha Zone has been intersected at depth returning high metal values up to 1.54g/t Pd and 0.64g/t Pt over 20.15 metres in one drill-hole. The open pit component of the B4-7 Deposit is 1,772,000 tonnes at 1.20% NiEq in the Indicated category for 21,264 tonnes of contained metal. Another exploration target has been identified down dip from the B4-7 resource which may contain a potential 1.5 Mt to 2.0 Mt of sulphide mineralisation of similar grade range to that which has been outlined to-date, a potential 18,000 to 24,000 tonnes of contained metal.
The VW Nickel-Copper-Cobalt Deposit, discovered in 2005, is a nickel-copper-cobalt-gold-bearing prospect possibly also with PGE metals. A 2018 resource estimate put 1,084,000 tonnes at 0.71%NiEq in the indicated category and 180,000 tonnes at 0.68%NiEq in the inferred category for a total of 8,920 tonnes of contained metal. Junior Lake has several other polymetallic prospects, including three known lithium occurrences, encouraging results from past drilling including 1.12% Li2O over 3.1m and 1.14% Li2O over 8.8 metres from one drill-hole.
The global surge in demand for battery-critical metals continues to gather pace as record numbers of EVs are sold in Europe and China. An unprecedented 1.3 million electric cars were sold in China last year, and sales of electric cars in Europe more than doubled as tougher new emissions targets for new cars began to be introduced. And demand for lithium continues to increase, the price of lithium carbonate rising 126pc since the end of July to almost $13,000 per tonne. Though an abundant resource, it cannot be easily refined for battery manufacturing – a new lithium mine can take up to 10 years to build. But the spike in demand for nickel has been yet more striking, as manufacturers scramble to use more of the metal in batteries to cut down on cobalt, which costs twice as much.
A golden summer ahead?
Landore’s share price tells the story of its progress over the past few months. After hovering around the 20 to 30p region the price began to take off late last year as the company’s drilling programme gained momentum, at times touching 40p after the bonanza announcement. Over the past few weeks it has settled around 33p with a drilling programme that has yielded strong results so far still underway, we think it’s worth considering taking advantage of that price now.
