Is now the right time to look at the small cap Gold Miners?
“…When war broke out it was gold that surged, not bitcoin, which has lost a third of its value in the past six months. This year’s events indicate that rather than moving independently bitcoin tends to behave somewhat like a speculative tech stock…”
One way to invest in Gold is to simply buy the physical. Another way, of course, is to invest in gold miners directly, which – if chosen wisely – can offer premium returns above the gold price, through dividends and more rapid appreciation than the product they sell. Here are a few small cap gold miners worth checking out:
#CGH #CHF #EEE #GUN #LND #LEX #PALM #POW
As investors are all too well aware there are no safe harbours in today’s market conditions.
Commodities have offered an invaluable diversifier for much of the year, prices surging through the post-pandemic supply crunch and the onset of war in Ukraine. But in the past few weeks their values have whiplashed as fears of a recession of as yet unknown severity have gripped markets. Industrial metal-exposed funds and shares have sold off by up to 20pc in the past month, a decline vividly highlighted by the fall in the price of copper. Trading at record highs of $10,600 a tonne in March, the world’s most important industrial metal has fallen below $7,000 a tonne for the first time since late 2020. The fears of supply shortages that pushed prices up have now been overcome by concerns about future demand generated by tightening monetary policy, a prolonged slowdown in major importer China, and a strong dollar, which makes it more expensive for holders of other currencies to buy commodities.
Gold, however, is a special case, its price tending to move according to its own mercurial logic. The yellow metal has demonstrated its historic capacity to serve as a store of value over the past two years, a portfolio stabiliser for ‘frightened money’. At the outset of the pandemic gold broke through the $2,000 a troy ounce barrier for the first time, and its price touched a record high of $2,074.60 shortly after Russia’s attack on Ukraine.
Infuriatingly, it doesn’t tend to retain that value for long. As the immediate panic that followed Russia’s declaration of war has subsided into resignation that the conflict is likely to be a drawn-out war of attrition, the value of gold too has been dragged down by fears of recession, and, in particular, the prospect of rising interest rates. Historically gold struggles during periods of pronounced monetary tightening by the US Federal Reserve: rising interest rates increase the appeal of cash over gold, which returns no yield. The metal has fallen back to just over $1,700 a troy ounce, spurring withdrawals that have reduced the value of global gold ETF assets by 7pc over the past two months. Further downward pressure has been exerted by stuttering demand in the world’s most important gold jewellery markets, India and China, the former hit by a 5pc increase in the import duty on gold, and the latter by the ongoing impact of Xi Jinping’s draconian zero-Covid policy. Falling prices in derivative trading on the Comex market in New York, an important index for the future value of gold, indicates institutional investors do not expect a near term rally.
But analysts suggest gold will likely pick up again with a change in the economic weather. Further significant deterioration, perhaps towards the abyss of stagflation – a combination of low or no growth and persistently high inflation – would again press the metal into service as a diversifier. On the other hand, if central banks do indeed succeed in managing inflation down through finely judged interest rates rises and quantitative tightening, and thereby engineer a ‘soft landing’ for the global economy, demand for gold would rise along with other commodities as economic prospects brighten. Speaking to the Financial Times Joni Teves, precious metals strategist at UBS, said that ‘Consolidation and recovery for the gold price are likely in the next six to 12 months as the Fed nears the end of its tightening cycle and is then anticipated to shift back to easing in the second half of 2023.’
Cryptocurrencies: a credible alternative?
Though gold’s future path is hard to discern, this year’s turbulence does at least seem to have put to rest speculation that cryptocurrencies might be on the verge of displacing the metal as a preferred store of value. As bitcoin has become more tightly integrated into mainstream asset markets since the financial crisis, a trend supercharged by the pandemic, crypto bulls have made bold claims that digital currencies have similarities with gold that make it an alternative refuge during times of crisis. Both are scarce. The World Gold Council estimates the total stock of gold on the earth’s surface at no more than 200,000 metric tonnes. It is difficult to find, and difficult to mine. Bitcoin’s founding protocol limits its supply to 21 million coins, a guarantee underpinning the capacity of the blockchain framework to serve as a public, decentralised ledger. And like gold, bitcoin’s value is ultimately based on confidence, based less on its intrinsic worth than a sufficiently widespread belief that the coin is indeed valuable.
But those lofty claims have been rather blown out of the water by crypto’s performance this year. When war broke out it was gold that surged, not bitcoin, which has lost a third of its value in the past six months. This year’s events indicate that rather than moving independently bitcoin tends to behave somewhat like a speculative tech stock, surging through the easy monetary environment of 2020 and 2021 and falling back as policy has tightened. An acute blog post by the IMF indicates that bitcoin’s correlation with stocks is rather higher than that between stocks and other assets such as gold, investment grade bonds and major currencies, undermining claims it can serve as an effective diversifier. Veteran commentator John Plender suggests that for all its unpredictability gold has a cultural significance bitcoin simply does not have. Yes, gold has little intrinsic value, ‘a bubble with only a small fundamental value based on its use as jewellery and a handful of industrial applications’, but ‘it is a 6,000 year-plus bubble going back to ancient Egyptian goldsmiths. It is probably the only mania in financial history to have attracted a near-infinite supply of greater fools.’ Blockchain has undeniable potential, cryptocurrencies are here to stay, but on this year’s evidence gold retains its historic status as the pre-eminent hedge against extreme volatility.
So, if the time-honoured advice that investors should diversify by holding some gold does indeed hold good, what is the best way of doing so? One option is to purchase a gold ETF, which holds gold through a stake in other securities, or an ETC, which holds the physical metal – the Invesco Physical Gold ETC (UK: SGLP; US: SGLD) for instance, which is linked to gold held in JPMorgan’s bank vaults, or iShares Physical Gold ETC (IE00B4ND3602). Another way, of course, is to invest in gold miners directly, which – if chosen wisely – can offer premium returns above the gold price, through dividends and more rapid appreciation than the product they sell. Here are a few small cap gold miners worth checking out:
Chaarat Gold Holdings
Chaarat Gold Holdings (AIM:CGH) has two development assets set in the spectacular mountain ranges of the Kyrgyz Republic in central Asia, and a producing gold, silver, copper and zinc mine in southern Armenia.
The company says its wholly owned interests in the Republic’s Tulkubash oxide and Kyzyltash sulphide deposits together have the potential to produce 300,000 to 400,000 ounces of gold per annum for at least five years. Its Armenian mine has produced copper and zinc concentrate for nearly 20 years, and is expected to produce at least 50,000 ounces of gold per year over the next decade.
CGH is working to develop its Oxide Gold Project at Tulkubash into an open-pit mining heap leach operation. Earlier this summer the company announced a revised Mineral Resource Estimate (MRE) for Tulkubash, based on a drilling programme undertaken last year. Proven and Probable Reserves increased by 11pc from 20.9 Mt to 23.1 Mt, with a slightly increased grade of 0.87 g/t, and contained gold ounces in the Ore Reserves were revised up by 13pc to 647 thousand ounces (koz). Contained gold in the Measured and Indicated Resources is 789 koz, and gold grade increased by 14pc from 0.86 g/t to 0.98 g/t. The 2021 campaign identified several additional new target areas. To date, some 5 km of a prospective 24 km trend have been systematically drilled. CGH needs $115m to fund the mine’s construction. The company raised the $30m equity portion of the funds last year, and is ‘in advanced discussions with financing counterparties who are completing their due diligence requirements and financing documentation’ regarding the $80m debt finance element of the project.
CGH’s other Kyrgyz project, the Kyzyltash sulphide deposit, is a more speculative venture. The company estimates that Kyzyltash, with the potential to produce 200,000 to 300,000 ounces of gold per annum, could one day overshadow Tulkubash, but would only be viable as a more expensive refractory extraction operation.
Exploration and resource development company Chesterfield Resources (AIM:CHF) continues to work towards elaborating the full promise of two prospective copper and gold projects in Canada and Cyprus.
CHF acquired the Adeline Copper Project in the Labrador region of eastern Canada last May. Located within the western half of the 260 km long Central Mineral Belt, the Project comprises five contiguous mineral licenses totalling 29,725 hectares (297.3 km2), covering the full extent of the Seal Lake basin, a geological structure approximately 40 km long by 10 km wide containing some 250 copper prospects. The project is close to the regional service hub of Goose Bay.
Historic trenching and channel sampling at Seal Lake has established the presence of laterally continuous high-grade copper beds, but drill testing has so far been limited. Copper grades of around 10pc to 30pc have been recorded in areas of concentrated sulphide mineralisation rich in the principal copper minerals, chalcocite and bornite. CHF says there are ‘distinct similarities to many of the world’s great sediment-hosted copper deposits’ – including Zambia, Michigan and Siberia – ‘with belts including very rich copper ore mineralogy, efficient metal traps needed to form economic copper-silver deposits, and km-scale strike extents of prospective geology with hundreds of copper showings that allow for multiple camp-scale discoveries.’ CHF has published a selection of historic trenching results it believes demonstrate the continuity of resource-quality thicknesses and grades of rich copper sulphide mineralisation – and the potential for silver – along exposed strike lengths.
In addition to moving forward with Seal Lake CHF continues to define the potential of its portfolio of fully owned licences running across Cyprus’s Troodos Mountain range. The company is seeking to bring modern technology to historic mines first entered by the ancient Greeks, and reignite a Cyprian mining industry mothballed since the Turkish invasion nearly 50 years ago. Gold was found on the island during the Cyprus mining industry’s heyday in the 1960s and 70s, but with its price pegged 50 times lower than today’s value, the discoveries were never commercialised.
Diamond drilling last year encountered what seemed to be ‘a highly encouraging strike on a gold/silver system’, confirmed by the publication of assay results in February which reported that drilling had ‘significantly enhanced the prospectivity at three target areas, Orchard, Evlim and Evlim South’ and ‘established a 12 km geological trend … now considered key to controlling several mineralised systems, with the potential for further discoveries along the structure’. A ‘Westline Trend’ that is the focus of this year’s forthcoming exploration campaign has yielded gold equivalent grades ranging from 1.63 g/t to 8.04 g/t, and copper equivalent grades from 1.00pc to 4.94pc. CHF believes the results indicate that the gold zones so far encountered indicate the presence of copper rich deposits nearby: copper rich zones in Cyprus VMS systems tend to be smaller and more highly concentrated, while the gold zones have a much broader footprint, and more readily apparent.
CHF’s positioning to take advantage of the copper boom won significant backing in 2020 from Russia-focused mining giant Polymetal International (LON:POLY), which invested £2.1m to take a 22.5pc strategic stake in the company to increase its exposure to the metal. The deal supercharged CHF’s share price at the time, but now risks being seen as a liability in light of POLY’s Russian commitments. During an interview with TMS at the outset of the war in Ukraine Executive Chairman Martin French said CHF did not see the relationship with POLY as a risk. The terms of the agreement do not allow POLY to sell its shares or increase its position by more than 1pc for at least three years. Nor can POLY control or influence the running of CHF.
Gold exploration and development company Empire Metals (AIM:EEE) continues to consolidate its presence in Western Australia, having pivoted over the past two years from a long-time focus on mines in the Caucasus. The company also holds a portfolio of three precious metals projects in central-southern Austria, to be developed contingent on progress in Australia.
EEE has a 75pc interest in the Eclipse Gold Project, a historic mine located 55 km north-east of Kalgoorlie, which has recorded historic production of 954 tonnes at 24.6 g/t gold. A 2014 drilling programme identified high-grade mineralisation within a 30 metre zone either side of the main Eclipse shaft, and soil surveys indicated elevated gold concentrations in portions of the Project’s mineralised system. EEE also has rights to explore, develop and mine within a granted area on Maher’s Gindalbie Gold Project, located near the historic gold mining town of Gindalbie, adjacent to the Eclipse project. Gindalbie was an active gold mining centre around the turn of the last century producing through the periods 1887 to 1913 and the late 1930s to the early 1940s.
The company has embarked on an initial drilling campaign at Gindalbie, in conjunction with a new phase of exploratory drilling at Eclipse. The Eclipse programme is designed to gather further geological and structural information around the Project’s Eclipse and Jack’s Dream shafts, and test for both high grade gold mineralisation at depth and continuity of the mineralisation between the previous high grade drilling intercepts. Drilling at Gindalbie aims to extend the mineralised trend a further two kilometres to the southeast of Eclipse and to understand the extent and origin of what the company believes to be ‘a much larger gold system’. EEE hopes that by building a better understanding of the structural geology at Eclipse, and targets along the mineralised trends traversing the Gindalbie project area, the company will be able to develop ‘a comprehensive and targeted exploration plan for both the Eclipse and Gindalbie projects with a view to moving rapidly to a development phase’.
Earlier this summer EEE commenced a further phase of drilling at the Eclipse-Gindalbie project, consisting of over 3,290m of drilling across 26 drill holes. The campaign will focus on prospective targets that have previously delivered high-grade intercepts, including 5m @ 8.99 g/t Au from 31m downhole, including 1m at 40.90 g/t Au, 3m @ 8.96 g/t Au from 98m downhole, including 2m at 13.28 g/t Au, and 3m @ 9.88 g/t Au from 46m downhole, including 1m at 26.20 g/t Au.
EEE has also begun exploring the 615 km2 Pitfield Copper-Gold Project in Western Australia, which is hosted by Neoproterozoic rocks coinciding with a globally important copper mineralisation era known for major copper- gold deposits such as Newcrest Mining Ltd’s Telfer Mine, Rio Tinto’s Winu Project and the Havieron project (a joint venture between Newcrest Mining Ltd and Greatland Gold). Multiple proximal historic copper mines and prospects at Pitfield include the historic Baxters copper mine at Arrino, which lies along strike, which produced 106 tonnes of copper at a grade between 20-30pc. The favourable geology of the basin has previously attracted major mining companies, including Kennecott, Carpentaria (MIM), BHP and CRA.
Gunsynd Plc (AIM:GUN), which offers seed capital, convertible loans, equity and IPO services to promising first movers, has confirmed its track record of investing in early stage nickel projects by taking a £1m stake in new venture Metals One, pursuing a nickel-zinc-copper-cobalt project close by and analogous to Talvivaara, one of the largest nickel mines in Europe.
Earlier this summer GUN signed binding heads of terms with Metals One Plc, a battery metals start-up applying for AIM admission, to farm into the Black Schist Projects focused on the Kainuu Schist Belt of eastern Finland, which contains existing inferred resources of 28.1 Mt nickel-zinc-copper-cobalt (Ni-Zn-Cu-Co). The deposit is analogous to the nearby Talvivaara Ni-Zn-Cu-Co resource, one of the largest nickel mines in Europe, and a supplier to the Renault Group. GUN will invest £1m in the project, for which it will be issued shares equivalent to 25pc of the voting rights in Finnaust Mining Northern OY. GUN’s investment will part fund an 18-month work programme targeting resource expansion, scheduled – subject to Metals One’s admission to AIM – a process expected to be underway in or around Q3 2022.
GUN’s new stake in Metals One followed news that another strategic metals holding, Pacific Nickel Mines (ASX:PNM), has entered into a non-binding indicative term sheet with Glencore for a three-year, $22m Pre-Export Finance Facility, and an offtake arrangement for its Kolosori Project to extend for at least four years. Pacific Nickel has 80pc interests in two nickel projects at Kolosori Project and Jejevo – both located on Isabel Island in the Solomon Islands – with a collective JORC MRE of 21.7 million tonnes at 1.35pc nickel. The company raised AUD$5.25m last October to advance both projects, and commenced second phase infill drilling at Kolosori in September, drilling 90 infill holes to confirm the prospect’s existing MRE of 5.89 Mt at 1.55pc nickel at 1.2pc cut off, recording positive assay results.
GUN has several other holdings encompassing gold, silver, copper, tin as well nickel, most of which are engaged in or on the cusp of drilling programmes, notably a 17pc stake in Rincon Resources (ASX:RCR), a gold and copper exploration company which listed on the Australian Stock Exchange (ASX) late last year, raising AUD$6m to drill three wholly-owned prospects in Western Australia. The largest, South Telfer, consists of six exploration licences and two prospecting licences covering approximately 540 km2 with a prospective 40 km strike geology. A maiden drilling programme got underway last year at South Telfer’s Hasties Prospect, just 10 km south of Newcrest Mining’s Telfer Gold Mine, which has produced 27 million ounces of gold over the past 45 years.
GUN also has diversified interests in markets extending well beyond the natural resources sector, including gaming platform Low6, premium spirits and wines new start Rogue Baron, medical cannabis, and treatments for mental health.
Landore Resources (AIM:LND) continues to make solid progress this year in delineating the extent of its flagship gold resource at Junior Lake, which is also prospective for nickel, copper, cobalt and other battery metals.
The company’s 100pc owned Junior Lake Property – together with the contiguous Lamaune Iron Prospect (90.2pc owned) – covers a 30,507 hectare site in the Canadian province of Ontario, with ready access to Thunder Bay, the main supply hub for the region’s miners. The 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.
LND’s current drilling programme is focused on the Property’s key asset, the BAM Gold Deposit, situated within a 2.7 kilometre geophysical anomaly midway along the belt. Earlier this month LND published an upgraded NI 43-101 compliant Mineral Resource Estimate (MRE) for the Deposit, which increased its In-Situ resource to 49,231,000 tonnes at 1.0 g/t for 1,496,000 ounces of gold, an increase of 481,000 ounces of gold (47pc) compared with the 2019 MRE of 1,015,000 ounces of gold. The updated MRE includes 30,965,000 tonnes at 1.0 g/t for 1,029,000 ounces gold in the Indicated Category and 18,266,000 tonnes at 0.8 g/t for 467,000 ounces of gold in the Inferred Category.
The upgrade, which ‘further support[s] L’NDs belief that the highly prospective Junior Lake Property has the potential to host multi-million ounce gold resources’, was based on results from LND’s 2020-21 infill and step out campaigns, which drilled of 102 holes for a total of 24,171 metres. A total of 353 diamond drill holes for approximately 69,857 metres have now been completed at the Deposit: a total of 309 holes for a total of 62,719 metres were used in the MRE. The Project now extends for 4,300 metres and remains open down dip and along strike to the east and the west. Soil sampling has identified widespread gold mineralisation along strike to the west for a further seven kilometres.
LND is currently completing planning and preparation requirements for the continued expansion of the Deposit, including deeper drilling on several potential underground mining targets, together with infill and extension drilling. Drilling will re-commence ‘in early Q2’ on further delineation of the newly discovered western extension shoot together with commencement of drilling on ‘the highly prospective Felix area along strike and to the west of the BAM Gold Deposit’. The company is also planning to commence Pre-Feasibility studies in H2 2022 on the Project.
But though, as its name indicates, the Deposit is best known for its gold prospects, Junior Lake has always been prospective for other metals. Historic drilling at the Property’s B4-7 Nickel-Copper-Cobalt-PGE Deposit and Alpha Zone, some 600 metres southwest of the Deposit, has found polymetallic nickel-copper-cobalt-platinum-palladium-gold mineralisation, the most recent resource estimate stating 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 for a total of 46,661 tonnes of contained metal. The VW Nickel-Copper-Cobalt Deposit is estimated to offer 1,084,000 tonnes at 0.71pc NiEq in the Indicated category, and 180,000 tonnes at 0.68pc NiEq in the Inferred category for a total of 8,920 tonnes of contained metal. An 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.
Earlier this month LND confirmed its 2022 drilling programme at Junior Lake’s Felix-Lamaune areas was underway. Drilling will target previously identified gold and battery metals mineralisation over a distance of 12 km to the West along strike from the BAM Gold and B4-7 Nickel-Copper-Cobalt-Palladium-Platinum deposits (Ni-Cu-Co-PGEs). The company is also opening its Canadian assets to potential partners. The strategic review is ongoing, with mining companies ‘currently being solicited to provide expressions of interest and participate in the initial due diligence period’, which is scheduled for completion by the end of September. The remaining participants at that time will be invited to advance to the next stage of the process.
Lexington Gold (AIM:LEX) continues to make steady progress towards defining the potential of the four gold projects across a 1,675 acre slice of the Carolina Super Terrane geological feature running through North and South Carolina. The company has a 51pc interest in each project, with an option to take an 80pc stake should venture partner Uwharrie Resources drop out.
LEX wants to open up some of the historic mines of the US gold rush with cutting edge drilling technology. The 179.66 acre JKL Project combines the Jones-Keystone and Loﬂin Properties mined by small prospectors until the outbreak of the Civil War, and then again up to the Great Depression. Pits, trenches, shafts and glory holes at several workings offered evidence of widespread gold mineralisation, with historic grades ranging between 0.5 and 2.5 g/t. The Carolina Belle Project, in Montgomery County, just north of Candor, North Carolina, has rarely been mined since it was discovered at the turn of the last century, when it produced 50,000 ounces of gold until a 1916 dispute between the neighbouring mines ended further exploration and production. The Jennings-Pioneer Project, part of the Barite Hill Gold district in South Carolina, offers several greenﬁeld exploration prospects with well-articulated and potentially continuous zones of gold and base metal mineralisation already identiﬁed from historic mines and surface workings. The Argo Project in the northwest corner of Nash County, north of Nashville, was last mined in 1894. LEX is seeking to follow in the footsteps of fellow Carolina Super Terrane explorer Romarco Minerals, which was aquired by ASX-listed OceanaGold after delineating a resource estimate of 4.5 Moz @ 1.8 g/t.
After acquiring the four projects two years ago LEX spent a busy 2021 working to define their potential, beginning with a 207.3 line-kilometre VTEM geophysical survey over the Jennings-Pioneer Project to identify conductors associated with volcanic massive sulphide (VMS) style mineralisation. The survey identified two potential anomalies for further investigation through soil sampling, trenching and potential drilling. A Phase 1 JKL Project campaign drilled six diamond drill holes for a total of 562 metres at Loflin with a view to enabling a maiden JORC resource estimate. Assay results indicated the continuation of broad zones of shallow gold mineralisation and demonstrated good correlation to historic drilling, all six holes encountering intervals of gold mineralisation of more than 1 g/t Au above 100m depth. The estimate was published in the autumn, stating a resource of approximately two million tonnes at 1 g/t gold for 65,000 oz of contained gold, and highlighting the potential for additional discoveries. LEX also carried out the Carolina Belle Project’s first known systematic surface sampling programme, results indicating the presence of a new gold anomaly not associated with the known gold mineralisation in the project area. Rock chip and grab samples from the newly identified mineralised zone returned 10 samples with gold grades over 1 g/t including 17 g/t; 5.1 g/t; 3.5 g/t, 3.2 g/t; 2.7 g/t; and 2.2 g/t.
Following a fixed-wing airborne geophysical survey, a 5,000 metre reverse circulation (RC) drilling programme commenced at both Carolina Belle and JKL. Results have been coming in this year. In March LEX reported that the final assay results of RC drilling at Carolina Belle had ‘exceeded our expectations’, two targets, McMaster and Martha Washington South, recording multiple intersections of 1g/t Au or more close to surface, including 3m @ 3.68g/t Au from 64m and 4m @ 1.8g/t Au from 28m. Drilling data and assay results will enable the design of a Phase II drill campaign to further target, define and expand the intersected gold mineralisation from the various targets so far identified .
Two months later LEX reported the remaining assay results for the JKL Project’s current programme, which found ‘signficant shallow level intersections’ outside of the known north-eastern boundary of the main Loflin resource, and indicated the main Loflin deposit remains open to the north-east and also to the south and south-east, with a potential link to Loflin South. Highlights included 24m @ 1.07 g/t Au and 2.76 g/t Ag from 4m to 28m for Hole LFRC-018, and 16m @ 1.27 g/t Au and 3.79 g/t Ag from 16m to 32m at Hole LFRC-009.
Earlier this month LEX reported positive assay results for the Project’s Jones-Keystone prospect, recording multiple intersections of 24m width and over and grades of between 1.37 g/t and 1.69 g/t gold. All the intersections start above 100m depth and ‘represent commercial grades and mineable widths’. The results should support and facilitate the production of a maiden JORC resource estimation for Jones-Keystone to be added to the existing resource for Loflin. LEX is now planning further drilling at JKL to further define the extent of the resource. The Jones-Keystone deposit remains open in all directions, both along strike and down dip, and the Loflin deposit remains open along strike to the north-east, down-dip as well as to the south.
LEX has now received results for 1m re-splits taken from the reverse circulation drill hole 4m composite samples across its combined Loflin and Loflin South Project. Re-sampling of the 4m composites has confirmed shallow, high-grade intercepts of up to 10 g/t Au, results which will be incorporated into the company’s existing geological model. A JORC Resource estimate for the combined JKL Project is currently expected to be received by the end of July 2022
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 the past two years through a blizzard of deal-making.
On joining the LSE PALM had two prospects in Western Australia, the Marrakai and Annaburroo Gold Projects, covering a total area of 160 km2 some 70 km 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 51 Mt @ 1.0 g/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 30-60 g/t Au range.
After IPO PALM went on to acquire the Merolia Gold Project, its first post-discovery opportunity in the region, a 145 km2 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 sets a tonnage range of 30-50 Mt at 0.6 to 0.8pc nickel and 400 to 600 ppm 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.
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 32 km by 9 km wide tract of Archean age metamorphosed volcanic, sedimentary and intrusive rocks prospective for gold, nickel, PGM and base metals. PALM has secured an Exploration Permit for three Obonga drill prospects.
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 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. Earlier this summer PALM published a Maiden MRE for Coglia of 70.6 Mt @ 0.7% Nickel & 460 ppm Cobalt (Inferred Resources).
Power Metal Resources
Metals exploration companyPower Metal Resources (AIM:POW) is has oriented itself towards the uranium market lately, another commodity entangled in the energy crisis with global supply dependent on a handful of key players.
POW has long focused on precious, base and strategic metal exploration in North America, Africa and Australia, with interests encompassing projects at greenfield and drilling stages. The company develops prospects internally or through joint ventures until ready for disposal through outright sale or IPO. POW’s extensive portfolio covers gold, silver, nickel, copper, rare earths and base-metals: the company’s latest interim results offer a useful overview of its current holdings – prospective investors should also make sure to follow POW’s fast moving news stream for details.
But the company’s current focus is on extending its growing cluster of uranium interests. Demand for ‘yellow cake’ is being driven by renewed interest in nuclear as a source of clean energy, and supply issues supercharged this year by political unrest in Kazakhstan, which supplies two-fifths of the world’s uranium, a nation under the shadow of Putin’s Russia. Last September POW began building a wholly-owned set of uranium prospects around the Athabasca Basin in Saskatchewan, Canada. By November the company held seven properties covering more than 400 km2, and had launched an inaugural exploration sampling programme across three of them. The results, published late last year, confirmed high-grade uranium in rock samples with highlight results up to 3.86pc U308, or 38,600 ppm (parts per million).
Early this year POW opened data so far compiled to third parties interested in the properties, and commissioned a National Instrument 43-101 technical report to assist the commercialisation process. A June update reported that the company was ‘currently finalising next stage exploration plans’ across all of its Athabasca properties, and expects to release the findings from the technical report ‘in the near term’.
POW has two further uranium interests. A review of the rare-earth element and uranium potential at the Selta Project in Australia’s Northern Territory, acquired last November, confirmed multiple targets. Historical geological, geophysical and geochemical datasets identified four high-priority areas with potential for uranium mineralisation, and three with promise for rare earth element mineralisation. The review also identified the potential for lithium, gold, and base-metal mineralisation as well as the possibility of tin-tantalum-tungsten-rich pegmatites: hard rock pegmatite fields elsewhere in Australia have proved to yield significant lithium. Further work is underway to evaluate the findings and plan further exploration.
POW has also taken its first steps to explore Africa’s uranium potential, commissioning specialist geologists to oversee the evaluation, acquisition and exploration of uranium prospects in Togo. The company said ‘existing project targets have been established’, and is working with the team onsite to plan next stages of exploration as well as to secure new opportunities as soon as possible.
POW’s most recent interims offer a useful summary of its other natural resource projects. Significant developments include promising indications of gold and nickel at its wholly owned Tati Greenstone Project in Botswana. A drilling programme last autumn identified several gold anomalies, including 5.17 g/t gold over a three to nine metre intersection downhole, spurring the acquisition of additional prospecting licences over ground covering the historical Cherished Hope Gold Mine, increasing the Project’s total footprint to 140 km2.
POW has a 50pc interest in another Botswana prospect, the Kanye Resources Joint Venture, which includes prospecting licences over 4,257 km2 of ground within the Kalahari Copper Belt, and the Ditau Camp Project, prospective for rare-earth element and base-metal mineralisation. Drilling at Ditau has so far identified several targets prospective for nickel, copper, and platinum group element mineralisation, and demonstrated highly elevated magnetic susceptibility readings between 293 and 321 metres, with extracted core sent for rush assay.
The company also has a 49.9pc stake in the Victoria Goldfields Joint Venture in Australia, where nine exploration licences were granted late last year, subsequently increased to 14, covering a total area of 1,832 km2. The licences cover the historical Ajax gold mine which historically produced 312,789oz Au at an average grade of 14.8g/t Au in the 1920s. Drilling so far has demonstrated high-grade gold at two prospects.