Fancy Greenroc in Greenland for half the price?
“…The company’s share price has drifted down from its admission price of 10p to around 5.8p at the time of writing, taking the Greenroc market cap to £6.5m from £11.1m…”
Greenland has emerged as one of the world’s most intriguing mining jurisdictions, entangled in a geopolitical battle over its largely unexplored bounty of rare earth metals critical for the energy transition.
Newly listed venture GreenRoc Mining (AIM:GROC) is aiming to take advantage by developing a portfolio of minerals projects on the Arctic island, previously owned by Alba Mineral Resources (AIM:ALBA). Alba retains a 54pc interest in the new company.
GreenRoc’s IPO last September raised £5.12m to fund the exploration and development of four projects primarily prospective for graphite and ilmenite (the source for titanium) but also for a range of other metals. Demand for graphite is forecast to increase by 2,500pc by 2040, and ilmenite prices are at a multi-year high driven by a global feedstock shortage. The European Commission and the US Department of the Interior both include graphite and titanium on their respective shortlists of critical minerals.
Mining for graphite and ilmenite
GreenRoc’s Amitsoq Graphite Project encompasses two graphite deposits, at Amitsoq Island, the site of a former graphite mine, and Kalaaq, which have produced respective samples with average grades of 28.7pc and 25.6pc total graphite content, ‘among the highest grades of any graphite projects in the world’. Test work on Amitsoq graphite samples has confirmed that it can be upgraded to the high-purity spherical graphite suitable for use in lithium-ion batteries and the EV sector.
A 2018 surface drilling campaign at the Thule Black Sands (TBS) Ilmenite Project established a maiden Mineral Resource of 19 Mt with 43.6pc Total Heavy Minerals, with an in-situ ilmenite grade of 8.9pc. The Melville Bay Iron Project is prospective for iron ore proven to be processable to a high-grade 70pc concentrate with low impurities, and the Inglefield Multi-Element Project promises to yield copper, gold, cobalt and nickel.
GreenRoc is aiming ‘to have at least one, if not both of the Amitsoq and TBS Projects firmly established as development projects within 12 months of IPO’. Drilling programmes are expected to lead directly into independent test work and mineral resource estimation work, followed by scoping studies and preliminary economic assessment work. The company also plans environmental and social impact assessments that will pave the way for the application of an exploitation licence at one or more of the projects.
GreenRoc is hoping to follow in the footsteps of other AIM-quoted mineral exploration and development companies focused on Greenland including Bluejay Mining (LON:JAY) (with a market cap of £114m according to GreenRoc’s figures), AEX Gold (LON:AEXG) (£48m), and Greenland Minerals & Energy Limited (ASX:GGG) (£86m). The company is led by Non-Executive Chairman George Frangeskides, who as Executive Chairman of Alba initiated the acquisition of all four projects, and CEO Kirk Adams, a former CEO of Esrey Resources, which built a pilot metal recovery plant in Macedonia, and Stibium Mining, a private Australian natural resources company focused on antimony and gold.
Early drilling at Amitsoq
Drilling campaigns took place last summer aimed at defining a maiden Mineral Resource at the Amitsoq and increasing the existing Mineral Resource at TBS. In November GreenRoc reported assay results from sampling programmes at the Amitsoq Island and Kalaaq deposits ranging from 17.43% to 33.1% C(g), confirming the company’s faith in the Project’s status as ‘an extensive high-grade graphite area’. The findings indicated several potential extensions to the licence. An Upper Graphite Zone identified in 2017 has been extended 360 metres to the south and is open along strike. A Lower Graphite Bed has been extended 300 metres along strike to the north where values of up to 33.1pc C(g) have been recorded. A newly discovered Niels Hede Pedersen (NHP) Zone has extended graphite mineralisation a further 1.3 km and is also open on strike. A potential new area, the New Domain Zone, with a grab sample grade of 32.1pc C(g) has been identified a further 540 metres along strike from a graphite horizon mapped during the 2017 campaign. The update said that this year’s field season may include Airborne Electromagnetic and Radiometric Surveys to further define primary target zones, and perhaps further on-the-ground exploration will be conducted at the NHP and New Domain Zones.
Assay results from drilling and channel sampling at the Amitsoq Island deposit were published the following month. High-grade graphite mineralisation was confirmed and increasing true widths observed down dip on both the upper and lower graphite layers, ‘supporting the potential for a sizeable JORC Resource’. Lower Graphite Layer drilling intercepted grades up to 23.01pc C(g) and channel sample grades up to 30.35pc C(g). Upper Graphite Layer returned intercepts grading up to 19.83pc C(g) and channel samples grading up to 27.40pc C(g). Low-grade uranium content was also found. The results will form a key component of the CPR mineral resource estimation assessment. Discussions have been held with potential contractors for phase 2 drilling.
An October site visit facilitated the planning of drill pads for the next phase of drilling at Amitsoq Island. Phase 2 drilling will target the completion of the outstanding drill holes from the first phase plan and step out to the island’s western side, with an exploration target between 1.7 and 4.5 Mt of ore grading between 24-36pc contained graphite. Outcrops at the Kalaaq deposit, expected to be the target of this year’s drilling, were also inspected: the average grade in the Kalaaq area from channel sampling to date is 25.6pc contained graphite. The exploration target for Kalaaq is currently 4.0-7.0 Mt grading 23-39pc contained graphite. GreenRoc plans to drill Kalaaq and Amitsoq concurrently.
Greenland’s strategic importance
GreenRoc has arrived at a pivotal time for Greenland’s emerging mining industry. Rod McIllree, Executive Chairman of Bluejay Mining, summed it up nicely, telling the Financial Times that the ‘opportunity in Greenland is the race for what’s left in the world.’ The island, which is becoming newly accessible as warming temperatures open sea lanes and reduce ice cover, is studded with metals and minerals ranging from gold, iron ore and zinc, to rare earths and uranium.
Both China and US see Greenland as pivotal in the struggle to secure access to the strategic metals that will drive new green infrastructures. Donald Trump – notoriously – proposed to buy the island on behalf of the US in 2019. The EU is also interested in Greenland’s potential to reduce its dependence on Asian imports: China supplies 47pc of the EU’s natural graphite and 45pc of its titanium. Bluejay and GreenRoc’s ilmenite deposits are close to the American air base at Thule.
Most exploration to date has been by smaller companies: the mining giants have been waiting for proof of concept that Greenland is profitable before committing. And so far Greenland’s tiny 56,000 population has given somewhat mixed signals about opening up the island to exploration. Last April’s general election was won by Inuit Ataqatigiit, a left-green party opposed to the mining of uranium at Kvanefjeld in the south of the island, owned by Australia’s Greenland Minerals.
GreenRoc insists that the uranium deposits at Amitsoq will pose ‘no problems for future development under new Greenlandic legislation’. And the bigger picture seems to be encouraging. The government, like its predecessors, is keen to encourage exploration and development to foster greater independence from Denmark: the island achieved home rule in 1979. In 2019 the Greenland legislated to make it easier for the holder of an exploration licence to upgrade to an exploitation licence, and in 2020 and 2021 licensees’ exploration commitments were relaxed in response to the pandemic. During their site visit last autumn GreenRoc’s directors met with supportive local officials and community leaders who believed the ‘development would have a meaningful impact in creating job opportunities’. Discussions have opened with the developers of a hydro-electric plant close to Amitsoq, which has the potential to supply 6 MW of continuous power for future operations.
Fully funded for its current work, GreenRoc seems set for an interesting year. Phase 2 drilling is planned at its two graphite sites at Amitsoq, and at the Thule ilmenite deposit. Time will tell whether it can move one or more of these into development by the end of the year. The company’s share price has drifted down from its admission price of 10p to around 5.8p at the time of writing, taking its market cap to £6.5m from £11.1m. At this price it might fit into a diversified portfolio for small natural resource investors interested in taking a longer term stake in the strategic metals sector. It’s early days, but GreenRoc Mining may be one to watch this year.