Look out for several developments that could push the Golden Metal Resources share price higher
“…With promising assets and solid operational and commercial progress, GMET may be set to light up a natural resources sector yet to emerge from the small cap market’s prevailing gloom…”
AIM newcomer Golden Metal Resources (AIM:GMET), established to hold the Nevada mining assets of fellow natural resources small cap Power Metal Resources (AIM:POW), has made swift progress in defining the potential of a set of projects prospective for a swathe of precious metals, including a tungsten deposit that may prove of strategic importance to the US.
GMET is focused on tungsten, gold, silver and base metal mineralisation in the metals-rich state of Nevada, which, with more than 25 precious metal mines currently in production, accounts for more than two-thirds of US gold production, .
The company’s portfolio comprises five mining assets all which are located on land managed by the United States Bureau of Land Management. Four are 100pc owned: Pilot Mountain, an advanced exploration and mineral resource definition stage project, and the exploration stage Garfield (copper-gold-silver), Kibby Basin (lithium) and Stonewall projects. GMET has an earn-in option over the Golconda Summit Project (gold), also at exploration stage. All are located within major metallogenic belts containing active precious- and base-metal mining operations, with favourable geology prospective for skarn, carlin, epithermal and porphyry deposit types.
Pilot Mountain, covering an area of 14.80 km2 in Mineral County in western Nevada, is centred around four existing mineral deposits: Garnet; Good Hope; Gunmetal and Desert Scheelite, all of which possess significant skarn-style tungsten-copper-silver-zinc mineralisation. The Project area hosts a tungsten-copper-silver-zinc Mineral Resource Estimate (MRE) including 12.53 Mt at 0.27pc W03 (tungsten tri-oxide) with significant copper-silver-zinc credits, making it, in GMET’s words, ‘the largest known undeveloped tungsten resource in the US’.
Global demand for tungsten is forecast to rise by 3 to 7pc per year, driving a supply crunch worsened by gathering geopolitical tensions. Despite having no primary tungsten producers the US has banned the use of mined tungsten from China, Russia, North Korea and Iran for defence procurement from 2026. The metal has since been added to the country’s critical minerals list (it is already on equivalent lists maintained by the European Commission and the UK).
GMET is working to increase Pilot Mountain’s existing tungsten focused MRE, extending multiple tungsten, copper, silver and zinc-rich zones identified by limited historical drilling, and pursuing non-dilutive grant funding for project exploration and development.
Golconda Summit is an exploration stage gold and silver project located in Nevada’s Humboldt County. Situated at the confluence of several metallogenic trends it consists of 44 lode mining claims, covering 3.22 km2 located 27 km east of Winnemucca. GMET has a right to earn-in to acquire the project from the mineral claim owner pursuant to an option agreement.
The Garfield project is an early exploration stage copper, gold and silver property consisting of 39 lode mining claims covering 3.23 km2 located in the state’s Mineral County, and Stonewall is an exploration stage gold-silver project prospective for epithermal gold-silver mineralisation, consisting of 19 lode mining claims covering 1.59 km2 located on the northern flank of Stonewall Mountain in Nye County, approximately 24 km south-east of the historic gold mining town of Goldfield.
Pilot Mountain: operational and commercial progress
GMET has recorded robust progress at Pilot Mountain, Garfield and Golconda since IPO. Detailed interpretation and inversion modelling of a high-resolution induced polarisation geophysics survey at Pilot Mountain has yielded five significant high-priority undrilled exploration targets ‘illustrating potential for a significantly greater in-ground resource than currently known’ and ‘marking a significant further uplift in Project potential’.
Operational progress has been accompanied by commercial developments boosting the project’s attractiveness as a target for non-dilutive grant funding for exploration and development. In June GMET signed a Letter of Intent with Global Tungsten & Powders, a US-based metal powders manufacturer, for a tungsten concentrate off-take agreement subject to due diligence and GMET’s capacity to fulfil plans for the project’s continued development. Under the proposed terms Global Tungsten & Powders would acquire a minimum of 50,000 metric MTU’s (metric ton unit) of W03 contained in tungsten concentrates, which may be increased to 70,000 MTU’s by mutual agreement.
The prospective partners also intend to discuss and consider cooperation opportunities for the development of a ‘Western World supply chain strategy’ in light of the US commitment to build strategic stockpiles of tungsten and other critical minerals.
The following month GMET signed an intriguing Memorandum of Understanding with Oxford Sigma Limited, a nuclear fusion technology company, outlining potential collaboration for the exploration and development of ‘critical metal supply pathways for tungsten alloy and tungsten containing materials within the fusion industry.’ Tungsten is a key metal for radiation shielding and plasma-facing materials, making it fundamental for the much heralded fusion energy industry, which has the potential to be a near-limitless source of carbon-free energy. Private investors have so far sunk more than $6bn into the nascent fusion sector, but secure tungsten supply pathways, like those envisaged by GMET, will be essential.
The company has also elaborated its strategy to secure funding opportunities available through the US Government to accelerate Pilot Mountain’s exploration and development, notably by engaging the services of a Strategic United States Government Advisor to help the company identify and apply for relevant grant programmes. GMET will update on funding progress as soon as the process allows, CEO Oliver Friesen commenting that while the targeting of non-dilutive funding is a critical focus ‘minimal updates will be given for the time being … as such disclosure may interfere with our ongoing endeavours in this regard’. But ‘while this key part of the business ticks away in the background, we will continue pushing forward exploration and development across the portfolio at pace.’
GMET further expanded its funding strategy by securing approval last month to trade on the US OTCQB Venture Market (under the symbol GMTLF). As the company puts it, trading on the OTCQB ‘offers enhanced investor benefits in the form of easier trading access for investors located in the US and potentially greater liquidity due to a broader geographic pool of potential investors.’ Full trading on the OTCQB is expected to commence ‘in the coming weeks’.
Progress at Garfield and Golconda Summit
Progress has also been made to define the potential of the Garfield and Golconda Summit assets.
Exploration work at Garfield ‘has confirmed the potential for large scale porphyry and skarn type copper mineralised bodies’ through examination of two zones where historical rock sampling results returned up to 5.53pc copper. Work revealed an area open for expansion highlighting the potential for a skarn deposit, and evidence of a buried mineral system with potential for porphyry, designated as ‘a high priority for follow up exploration’.
Samples are en route to the laboratory where they will undergo multi-element analysis, the results of which will be made available to the market after receipt and compilation, ‘anticipated to be within the next 4-6 weeks’. The skarn-type zone was ‘observed to extend across many sample sites and is coincident with an abundance of historical trenches, adits and prospect digs indicating historical mining related activities’. The findings show geological similarities with large scale copper deposits elsewhere within the Walker Lane mineral belt including Lahontan Gold’s Sante Fe deposit, Kennecot Mine’s New York Canyon deposit and Fortitude Gold Corp’s Golden Mile deposit.
At Golconda Summit rock sampling has demonstrated continued strong arsenic anomalism along the Project’s main thrust fault, validating the presence of a ‘feeder zone’ and the potential for Carlin-Type gold mineralisation at depth: arsenic anomalism is a lead indicator for Carlin-type gold systems. GMET said the discovery was ‘highly encouraging given the known presence of multiple large gold deposits in the Getchell Trend and the Battle Mountain-Eureka Trend, at the confluence of which the Golconda Project is located’. Previous exploration during the 1980s encountered significant gold mineralisation, including mechanised trenching sample assay results of 7.6m @ 19.7 g/t and 15.2m @ 7.1 g/t. GMET has secured a permit for trenching and drilling designed to test for the presence of a significant Carlin-type gold system.
Lithium exploration
GMET opened a new exploration front in July, staking claims over a significant footprint within the Kibby Basin, prospective for lithium mineralisation, located within a few kilometres of the Pilot Mountain Project. Covering a total area of 54 km2 the Basin is situated less than 60 km north of the prolific Clayton Valley Basin hosting the Silver Peak Lithium Mine owned and operated by Albemarle Corp. 47 placer claims have been staked, covering the rights for any and all lithium brine enrichment found within claim boundaries. A 2021 magnetotelluric geophysical survey over the Basin identified a notable 34 km2 conductive anomaly, with subsequent drilling confirming a 169 metre zone of lithium brine mineralisation open in all directions. Lithium, like tungsten, is included in the latest US Geological Survey Critical Minerals List.
In September a full historical data compilation review of the Kibby properties ‘showed the presence of a large and sizeable conductor’ known to be caused by significant lithium-brine mineralisation elsewhere in the survey area, located directly in the centre of the Kibby South licence. GMET has undertaken a detailed examination of a 2018 magnetotelluric geophysics survey covering the majority of the Kibby Valley Basin that highlighted a distinct 10 km2 conductive brine aquifer linked anomaly, of which approximately 3.1 km2 is now covered by the lithium properties. The company believes the anomaly is ‘coincident with significant lithium brine mineralisation’ including intervals containing up to 924 ppm lithium.
Outlook
GMET raised just under £2m at IPO, with 61pc of its stock held by Power Metal Resources. Speaking to TMS earlier this month Mr Friesen described the arrangement as ‘one of the better capital structures in the sector’, reducing ‘overhang while benefitting from the hands-off and symbiotic support Power Metals gives.’
The company’s share price is slightly up on its IPO value, standing at 8.25p at the time of writing, with a market cap of £7m. Prospective investors should look out for several developments that could push that price higher. Exploration progress has been made in defining the potential of Pilot Mountain, Garfield and Golconda Summit. Commercial deals have already been lined up in anticipation of Pilot Mountain’s development, and tungsten’s status as a critical metal leaves GMET well positioned to benefit from non-dilutive grant funding. The Kibby Basin lithium project gives the company an interest in another key transition mineral. With promising assets and solid operational and commercial progress, GMET may be set to light up a natural resources sector yet to emerge from the small cap market’s prevailing gloom.
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