Transformative outcome at Coglia for Panther Metals
“…Funded for its current round of exploration and with plenty of news on the horizon, is PALM now in value territory…”
Panther Metals plc (LSE:PALM) continues to elaborate the promise of a set of Canadian and Australian assets – prospective for gold, copper, nickel and PGM metals – compiled over two years of intense deal-making.
PALM was one of the best performing small cap mining stocks in 2020 after moving from the NEX Exchange (since renamed the Aquis Stock Exchange) to the LSE Main Market, soaring from 2p in March to over 16p as the company compiled and defined intriguing prospects targeting the Archaean and Paleoproterozoic geological settings from which most of the world’s gold is mined.
On joining the LSE PALM had two assets in Western Australia, the Marrakai and Annaburroo Gold Projects, covering a total area of 160km2 some 70km to the southeast of Darwin, in the region’s Northern Territory. The projects are situated within the Palaeoproterozoic Pine Creek Orogen, which hosts more than 250 gold occurrences and several operating gold mines, including the Rustlers Roost deposit containing 51Mt @ 1.0g/t Au (1.6Moz). Marrakai and Annaburroo contain several gold prospects at Donkey Hill, Johns Reef, Chins Gully and Jasons Rise, some of which have yielded gold nuggets up to 30oz in weight, and high-grade gold samples in the 30-60g/t Au range.
After IPO PALM went on to acquire the Merolia Gold Project, its first post-discovery opportunity in the region, a 145km2 tenement package close to the prolific Granny Smith, Sunrise Dam and Wallaby gold mines, which together have produced nearly 20Moz gold. Merolia is also prospective for nickel-cobalt sulphide mineralisation: a JORC Exploration Target has set a tonnage range of 30-50Mt at 0.6 to 0.8pc nickel and 400 to 600ppm cobalt.
Last year PALM listed the company’s Australian operations as Panther Metals Ltd – to be referred to for everyday purposes as ‘Panther Australia’ – on Australia’s ASX, a move designed to delineate more precisely PALM’s respective operations in Australia and Canada. PALM continues to hold a 36.6pc in the subsidiary.
On going public PALM also had a significant Canadian asset, the Big Bear Gold Project in Ontario, subsequently extended through the acquisition of the Dotted Lake Property, a cluster of 174 contiguous claims close to Barrick Gold’s prolific Hemlo mine, which has produced more than 22Moz of gold over the past 30 years. Located on the northern limb of the Schreiber-Hemlo Greenstone Belt, Dotted Lake covers 7km of the prospective geological contact between the Dotted Lake Batholith plutonic intrusive and mafic volcanic and metavolcanic ‘greenstone’ rocks.
Last year PALM significantly expanded its Canadian portfolio by taking a near exclusive exploration holding over the Obonga Project, also in the Thunder Bay region, prospective for gold, copper, lead, zinc, silver, and PGM deposits. The licence was on the cusp of exploration by mining major BHP some 30 years ago before being abandoned in the wake of the 1990s ‘Windy Craggy’ dispute over the site’s heritage status. The Project covers a total area of around 235km2 and covers 88pc of the Obonga Greenstone Belt, a 32km by 9km wide tract of Archean age metamorphosed volcanic, sedimentary and intrusive rocks prospective for gold, nickel, PGM and base metals.
Progress through 2021 and 2022
Over the past two years PALM has undertaken multiple programmes to define the extent of its resources. An airborne geophysics survey over the Big Bear Project’s Dotted Lake prospect early last year identified 138 geophysical anomalies, paving the way for a diamond drilling programme testing intrusive contact shear-zone hosted gold mineralisation. Analysis published in November indicated several gold anomalies, including a particularly promising 1.3km long shear-related gold feature.
Later in the year PALM also started drilling the Obonga Project’s Wishbone volcanogenic massive sulphide (VMS) prospect, ‘a strong electromagnetic geophysical anomaly’ that could be indicative of copper, lead, zinc, silver and gold. Wishbone is analogous to the nearby Sturgeon Lake geological feature mined extensively from the 1970s to the 1990s.
Elsewhere Panther Australia defined a JORC Exploration Target for nickel and cobalt at the Coglia Project on the southernmost area of the Merolia project tenements, with a tonnage range of 30 to 50Mt at 0.6 to 0.8pc nickel and 400 to 600ppm cobalt.
This January PALM published the first batch of assay results testing the intriguing 1.3km gold anomaly at Dotted Lake, which ‘support the hypothesis that we are dealing with a mineralised system as there appears to be a strong correlation of anomalous gold between the two surveys.’ The samples noted eight separate intervals of gold mineralisation, with four separate gold bearing intervals above 1.0g/t Au intersected between 47m and 158m down hole depth.
The news was followed three months later by PALM’s decision to sell the Big Bear Project to Fulcrum Metals, which is applying for AIM admission, for £200,000. PALM will retain a significant interest through 20pc ownership of Fulcrum’s share capital and a 2pc net smelter return royalty. CEO Darren Hazelwood said ‘we have a huge amount of faith in Big Bear and this deal supplements our existing interests in the Schreiber-Hemlo Greenstone Belt, through a listed structure at no extra capital cost to the business.’ The announcement was accompanied by news that the Project had been issued four new exploration permits ‘facilitating the drilling, trenching and ground geophysics work which is required to make and prove up mineral discoveries.’
This spring PALM extended its presence at Obonga through the acquisition of 13 new mining claims at the Project’s Awkward Prospect, where historical exploration work indicates ‘highly anomalous platinum and palladium samples at surface combined with very positive geophysical plate modelling of the possible conduit system.’ The purchase was supported by a £360,000 placing. PALM has submitted an Exploration Permit application for an additional three drill prospects at Obonga, increasing the number of high prospectivity targets to five.
PALM has also gained access to a third Ontario greenstone belt through an agreement to buy the Shear Gold Project encompassing the West Limb and Glass Reef gold properties on the Eagle-Manitou Lakes Greenstone Belt. The Project, which covers some 98km2, is located within the gold endowed Kenora Mining District, 300km east of Thunder Bay and between the towns of Fort Frances and Dryden in north-western Ontario. PALM, which said the region’s gold potential had been on its ‘radar for some time’, noted the recent sale of an immediately adjacent project by Manitou Gold Inc for CAN$7m to the private company Dryden Gold.
Meanwhile, Panther Australia has completed a 38 hole, 2,500 RC drilling programme at the Eight Foot Well Gold Prospect at the Merolia Gold Project, designed to provide infill and test potential strike extensions for a historic gold trend outlined in the mid-1990s. The potential for defining a Maiden Mineral Resource Estimate (MRE) at Eight Foot Well will be assessed once the assay results have been received. The drill rig has now relocated to the Burtville East Gold Prospect located, where RC drilling ‘is expected to commence immediately’. Burtville contains a peak historic drill intercept of 5m at 23g/t (including 1m at 110g/t) and a peak mineralised stockpile grab sample of 38.45g/t.
Final assay results for the Coglia Nickel/Cobalt Project, published in May, reported ‘the highest-grade intercepts of Nickel and Cobalt in the entire Coglia drill programme’, including 1m at 3.97pc nickel and 1m at 7,900ppm cobalt. And just last week PALM published a maiden MRE for Coglia that ‘exceeded all our expectations’: 70.6Mt @ 0.7% nickel and 460ppm cobalt (Inferred Resources) for 476kt nickel and 32.2kt cobalt, across a 5km long resource area. The MRE exceeds the 50Mt upper limit of the former Coglia JORC Exploration Target by 20Mt, a 40pc uplift over the expected tonnage, and ‘establishes Coglia as a new standalone nickel-cobalt project in the Laverton region of Western Australia.’ It also defined a new ‘Southern’ exploration area ranging between 34Mt and 62Mt @ 0.40-0.65pc Ni & 400-600ppm Co for 136kt-400kt Ni and 14-37kt Co, featuring two new drill targets. Panter Metals will now begin a review to plan further drilling to infill the South Coglia domain and test the new exploration targets.
Outlook
PALM’s sale of its Australian assets last year raised around AUD$5m, allowing the company to fund exploration on multiple fronts. Its most recent annual results, for the year to 31 December, reported the company had raised £940,000 in the year ended 31 December 2021 through a combination of new share issues and warrant conversions. Its loss for the year after taxation was £126,269 (2020: £668,198), and at corporate level £190,748 (2020: £611,688). The company ‘will need additional financial resources if it wishes to commercially exploit any mineral resource discovered because of its exploration activity’ but ‘has sufficient financial resources to conduct its planned exploration activities, meet its committed licence obligations and cover its general operating costs and overheads for at least 12 months’.
PALM continues to operate against the background of turbulent market conditions supporting the value of gold. The precious metal has not reached the record heights scaled at the peak of the pandemic but is hovering just below the $2,000 mark, and it has consistently traded above $1,800 over the past two years. Speaking to Investors’ Chronicle, George Milling Stanley, chief gold strategist at State Street, said that ‘in previous years where inflation was over 5pc … in the US, equities had dropped 1pc, US treasuries 2.4pc, and gold increased 12pc.’
As a small cap start-up PALM has been and will continue to be dependent for the time being on placings to sustain momentum, opening the share price to periodic dilution, but Mr Hazelwood has told TMS the company is keen to avoid the classic natural resources small cap trap of undercapitalisation and over extension. PALM is seeking to calibrate its risk/reward profile through the careful accumulation of promising assets likely to yield near term revenue generating discoveries.
PALM has maintained its momentum on the ground this year, extending its Ontario presence and continuing to define the extent of its VMS targets. Panther Australia continues to push forward at Merolia on the other side of the world, recording an impressive maiden MRE at Coglia. The company is funded for its current round of exploration. Its share price has subsided somewhat over the past few months, from around 11.5p in May to just over 7p at the time of writing, and just last year its stock was riding at around 12p to 14p. So with plenty of news on the horizon, is PALM now in value territory? Whether that may be, we continue to recommend keeping an eye on the fast-moving story of one of the LSE’s most energetic natural resource small caps.
