BHP’s spurned $8.3 billion takeover bid for OZ Minerals with its Prominent Hill and Carrapateena copper mines in South Australia says a lot about where the Big Australian thinks copper prices are headed.

So there is no surprise that the BHP approach has heightened investor interest in SA’s copper explorers.

And at the same time, SA has emerged as something as an exploration hotspot for rare earths hosted in Chinese-type ionic clays.

If both SA copper and rare earths were housed inside a lightly capitalised explorer with a technically proficient exploration team running the show, Garimpeiro for one would sit up and take notice.

He did just that this week when he heard the Adelaide-based Petratherm (ASX:PTR) had been road showing its copper-rare earths combo to investors and brokers in Sydney and Melbourne.

As its name hints at, Petratherm once made a big splash in the geothermal space, drilling deep in to SA’s hot rocks in an effort to work up a green energy source.

It was a technical success but the rise of solar/wind power, and a couple of equity market shakedowns at the time, saw the geothermal effort parked up.

Spun out of Minotaur Resources in 2004, Petratherm ended up being something of a listed shell until the decision was made to build a portfolio of SA copper exploration assets, with some of the same tenements being shown earlier this year to have exciting rare earths potential.

The Minotaur connection is important as it is the same Minotaur that discovered the Prominent Hill deposit in 2001 when it was the operator of a joint venture in which BHP, incidentally, held a 51% interest.

Minotaur was taken over by Oxiana (now OZ Minerals) in 2005 after BHP had left the joint venture, with the spin out of Minotaur Exploration – recently acquired by SA kaolin developer Andromeda Metals (AND) – part of the deal.

Lots of history there. But the point is that Petratherm is populated by the same gang that found Prominent Hill. And while Petratherm was once all about SA’s hot rocks, it is now all about copper and rare earths exploration.

So it is two steak knives story, something Garimpeiro always like to see. The stock has been trading at around 7c for a market cap of $15.5m or an enterprise value of around $10.5m after cash at hand is counted.

As might be expected given its Minotaur-Prominent Hill DNA, Petratherm’s copper exploration portfolio is first rate and covers Olympic Dam/Prominent Hill-style IOCG breccia targets, stratabound IOCG targets, and stratabound copper-gold-cobalt targets in overlying cover rocks.

Drilling of the first of the targets is planned for the second quarter next year and there will interest enough in the program to justify the current market cap. It is high-risk-high reward sort of stuff as Minotaur found out way back in 2001.

And it wouldn’t surprise Garimpeiro to see Petratherm approached by bigger companies with joint venture proposals to help fund the drilling program, such is the elevated interest in copper as the 2025 supply crunch approaches.

But watch out for the company’s SA rare earths projects to be the near-term value driver, as it has been for a bunch of other juniors in SA, and Western Australia, that are specialising in the ionic clay style of deposits.

Rare earths was added to Petratherm’s story earlier this year when it encountered laterally extensive high grade mineralisation in the northern reaches of the Gawler Craton in weathered clays sitting above fresh basement rocks which could also have rare earths potential at depth (the Prominent Hill deposit comes with elevated rare earth readings).

The intersections were thick and at shallow depths which should allow Petratherm to work up an initial resource estimate over coming months at low cost. Something around 15Mt of high-grade mineralisation for a start would not surprise.

That in itself would be a major re-rating event.

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