Panther Metals PLC

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 Exploration across several prospects for Panther

 

“…Earlier this month Panther significantly extended the company’s Canadian portfolio by taking a near exclusive exploration holding over the Obonga Greenstone Belt. The licence was on the cusp of exploration by mining major BHP some 30 years ago…”

 

Panther Metals (LON:PALM), as TMS Reach readers and podcast listeners will know, has been one of the most popular small cap mining stocks over past 18 months.

After moving from the NEX Exchange (since renamed the Aquis Stock Exchange) to the LSE Main Market last January, Panther’s share price soared through the darkest days of the pandemic, rising from 6p to over 16p by year end as the company reported robust progress on its assembly and assessment of a set of prospective assets in Western Australia and Canada.

Panther’s portfolio

 

Panther joined the LSE with the Marrakai and Annaburroo Gold Projects in Western Australia’s Northern Territory already secured. Marrakai, covering an area of 10.1 km2, is near the Rustlers Roost project, one of the largest gold mines in the region, and Annaburroo is a largely unexplored 149.8 km2 licence, where high grades of gold mineralisation have been identified at four potential exploration targets. Panther went on to acquire the Merolia Gold Project – its first post-discovery opportunity in the region – last November, a 145 km2 tenement package close to the the Granny Smith, Sunrise Dam and Wallaby gold mines, which together have produced nearly 20 millions of ounces of gold (MoZ).

Panther’s flagship Canadian asset at the time of its IPO was the Big Bear Gold Project in Ontario, a 46 km2 licence which as been subsequently extended from 69 to 171 mining claims. The asset was expanded further last summer through the acquisition of the Dotted Lake Property, approximately 20 km from Barrick Gold’s Hemlo Gold Mine, which has produced more 21 Moz over the past 30 years. Extensive geological surveying and rock sampling work has been undertaken in preparation for diamond drill testing with a view to publishing a formal Mineral Resource Estimate.

Earlier this month Panther significantly extended the company’s Canadian portfolio by taking a near exclusive exploration holding over the Obonga Greenstone Belt, located some 80 km from the Lac Des Iles Mine in the Thunder Bay region, prospective for gold, copper, lead, zinc, silver, and nickel-copper-platinum group metal (PGM) deposits. The licence was on the cusp of exploration by mining major BHP some 30 years ago before being abandoned after Canada’s 1990s ‘Windy Craggy’ controversy, in which the government controversially expropriated a proposed mine site to create a wilderness park. The prospect comes with 1,128 claims across a 32 km by 9 km tract of Archean age metamorphosed volcanic, sedimentary and intrusive rocks, identified by the licence’s previous owner, Broken Rock Resources.

Panther continues to refine its acquisitions strategy, which is guided by a focus on orogenic gold systems in Archaean and Paleoproterozoic geological settings that occur across ancient continental crusts, and which account for most of all gold mined globally. The company is led by Chairman Kerim Sener, whose ventures include the discovery of more than 3.8 Moz of gold in Eastern Europe and the development of Ariana Resources’ active gold mine in Turkey; CEO Darren Hazelwood, who accumulated extensive experience in the natural resource sector as a private investor before becoming a mining entrepreneur himself; and COO Mitchell Smith, who is also CEO of Canadian-listed Global Energy Metals Corp.

Another busy summer

 

Panther has continued to produce a steady news flow since it was last covered by TMS Reach in March. The results of its first auger drilling programme at the Merolia Gold Project, published in May, identified several gold anomalies that analysis may indicate justifies a reverse circulation drilling programme. The following month the company commissioned an independent consultancy to set out a JORC 2012 Code compliant Exploration Target for the Project’s Coglia Nickel-Cobalt prospect. The report proposed a promising exploration target for 30 million tonnes (Mt) to 50 Mt of nickel-cobalt laterite mineralisation, grading at between 0.6 to 0.8pc nickel and 400 to 600 ppm cobalt, over an interpreted strike of approximately 5.5 km. Panther will set out ‘planned next steps to advance the Coglia Nickel-Cobalt Project to the market shortly.’

Other announcements this summer included the completion of the company’s airborne geophysical programmes in Western Australia, and the commissioning of a soil geochemical survey over the Dotted Lake Exploration Permit area that will seek to delineate strike extensions to the high-grade gold mineralisation intersected by historical trenching, and to provide surface coverage to prospective structures indicated by the geophysics surveys. A tender process for diamond drilling at Dotted Lake has been completed.

Panther is also working through a significant internal restructuring process, through which the company’s Australian operations will be listed as Panther Australia on the Australian Securities Exchange (the ASX), a move designed to more clearly distinguish the company’s Australian and Canadian operations with a view to improving organisational efficiency and allowing investors to channel their investments more precisely. In May Panther raised AU$300,000 towards the listing’s financing.

Fluctuating commodities

 

The company’s operational and organisational progress comes against the background of a fast-moving and often confusing commodities market. As a gold miner, Panther’s value is inescapably entangled with the yellow metal’s price, which continues to twist and turn according to investor expectations regarding the prospects for a world economy still struggling to move out of the pandemic’s shadow. Gold has fallen back from the record highs of above $2,000 reached last summer, and a year-high of $1,916 a troy ounce recorded in May, to hover just over or below $1,800. A new study by the World Gold Council reported a 10pc drop in demand in the first half of 2021 as investors have moved to equities and other commodities in expectation of accelerating economic growth. Gold’s appeal has also been dulled by the strength of the dollar, which makes the metal more expensive to international buyers, and higher bond yields: unlike bonds gold offers no income streams. The big US-listed gold miners have shed one-fifth of their market value this year as the New York Stock Exchange Gold Bugs index has fallen 20pc since the end of last year, falling well behind the 11pc gain made by the MSCI All-World share index

But there are more positive indicators. Consumer demand for gold in the form of jewellery, gold bars and coins has recovered strongly this year after falling through the floor when the pandemic took hold last year. And central banks are still buying, purchasing a net total of 333.2 tonnes of gold in the first half of the year – 39pc above the five-year average for the period. Diverging views between US and European and Asian investors have emerged regarding inflation, the global economy and future direction of the precious metal. European funds have attracted net inflows of $999m this year, equivalent to 17.1 tonnes of gold, while ETFs domiciled in North America, led by large US funds, have seen net outflows of $402m or 7.3 tonnes. The mercurial metal rallied this week, surging as the US dollar weakened amid speculation that the US Federal Reserve is to start scaling Covid support measures back.

The long-term outlook is more robust for the other metals Panther is targeting. As we discussed in depth earlier this summer, prospects for industrial metals are strong. The price of copper, fundamental for green transition technologies – an electric vehicle for example contains five times more copper than a car fitted with an internal combustion engine – has almost doubled in the past year, hitting a record high of $10,460 a tonne in May. The International Energy Agency estimates that copper’s market share will have to grow almost sevenfold between 2020 and 2030 if net zero emissions are going to be achieved by 2050. China, for example, which consumes half of the world’s copper, has imported nearly 10pc more of the metal than the previous year. Prices are being forced up further by supply pressures. Just as demand is surging the copper market is close to peak supply, with big miners curtailing investment in new projects. The industry has dramatically scaled back spending since the last commodity boom, when too many indulged in overpriced deals and over ambitious projects that brought them close to financial ruin.

The price of nickel has also surged this year. Electric vehicle manufacturers continue to act on concerns about the stability of its supply. Tesla has just signed a nickel-supply deal with BHP, the third nickel contract it has entered into in the past eight months. The metal is a key material for Tesla’s longer-range cars that require more powerful batteries. Concerned by the industry’s dependence on China and Indonesia for nickel supply Elon Musk said last July that he would offer a ‘giant contract for a long period of time’ to companies that could mine nickel ‘efficiently and in an environmentally sensitive way’.

There is also strong demand for cobalt, the International Energy Agency estimating that the metal’s supply would have to increase more than twentyfold by 2040 to fulfil Paris climate agreement targets: carmakers also need metals such as lithium and cobalt for batteries. The price of lithium carbonate has risen 65pc this year and cobalt sulphate prices are up 24pc.

Panther’s progress

 

Panther, meanwhile, continues to report solid progress on what it can control: the construction of a set of prospective assets and the laying of the groundwork for their exploration. As a mining small cap the company has been dependent on placings to sustain momentum. It raised £1.37m through 2020, reporting year end total cash reserves of £241,194, up from £6,328 in 2019. Its decision to demarcate its Canadian and Australian operations seems sensible, streamlining the company’s administrative burden and allowing investors to direct their funds more precisely. Panther is keen to avoid the classic natural resources small cap trap of undercapitalisation and over extension.

The company’s share price has drifted down to just under 12p this summer. As it moves to the exploration stage across several of its prospects that price could well be due to resume its upwards trend. We continue to recommend Panther Metals as a company well worth watching.

 

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