Barry FitzGerald: Tolga Kumova throws the right stuff at Aston Minerals’ Boomerang nickel project
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The recent spate of capital cost blowouts and asset impairments in the ASX mining space has once again highlighted that experience in building things, and then operating them profitably, counts bigtime.
The ever bustling mining investor Tolga Kumova is a fan of that maxim. When a junior explorer he is involved in has made a discovery with serious potential, he steps back from executive duties and brings in an experienced development and operating crew.
He did way back with Syrah Resources -SYR (ASX:) (graphite in Mozambique), and more recently with Patriot Battery Metals (ASX:PMT) (lithium in Canada) and Meteoric Resources (ASX:MEI) (rare earths in Brazil).
Now, he has added his 9.6% owned Aston Minerals (ASX:ASO) (nickel and gold in Canada) to the list.
Along with just about all other juniors, Aston’s ASO share price was being buffeted something shocking this week. At its 5c close mid-week, its market had a market cap of $64 million.
That’s not a lot for a company that in quick succession early this year announced a 1.5m-ounce gold resource, and a separate 2.8Mt nickel resource, on its Edleston project ground in Ontario.
The gold is interesting but does not sit in the potential game-changer category as the nickel resource –which, because of its shape and its Aussie connections, goes by the name of Boomerang. It is a seriously big sulphide deposit, albeit low grade (0.27% nickel and 0.011% cobalt).
It is just the type of deposit the world will have to increasingly turn to if there is any chance of meeting demand for the key battery material. That it is in Canada, where funding is available for “critical metals” and where there is an abundance of green power, adds to its development potential.
Still, investors used to the bumper nickel grades of sulphide deposits in WA will say, “okay, but it is low grade”.
But what is important with these bulk tonnage low-grade disseminated orebodies is whether or not their mineralogy gives them the ability to produce a concentrate of 10% or more that can be moved to smelters around the world. Early indications are that Boomerang fits the bill on that score.
That gives it credentials to possibly become a major development project, say one costing more than $1 billion but one with a 50-year production horizon pumping out 35,000tpa of contained nickel with units costs of production in the first quartile.
But before any of that potential starts to open up, an “A-Team” of development and operating professionals needs to get to work. Kumova knew that from the day the monster resource estimate at Boomerang was announced to the ASX.
That’s why he headed off to Canada’s PDAC conference in March for a meeting with Russell Bradford.
Bradford is now Aston’s managing director, so the meeting went well.
Kumova, in the meantime, has stepped back from being Aston’s chair to a non-executive director role. The new chairman is Peter Breese.
Bradford and Breese are part of a multi-disciplinary management team which have been building and operating mines together for more than 30 years. Others that have been part of that journey are also part of the management team.
It has been some journey. The team has led listed companies, completed feasibility studies, designed, project managed, financed, constructed, commissioned, operated, and sold on more than 10 mining projects globally.
The team’s major successes include the 85,000tpa nickel producer LionOre, which was acquired by Russia’s Norilsk in 2007 for $US6.4 billion (the nickel price was more than double what it is now), and the African uranium developer Mantra Resources which was acquired by Russia’s Rosatom for $A1.02bn in 2011.
Aston investors will be hoping for a repeat performance at Boomerang. Reflecting his years of experience in growing a discovery into a development project, and eventually a mine, Bradford is not promising the world just yet.
“We are builders. We are operators, We can’t spruik. We have just not been trained that way,’’ Bradford told Garimpeiro during the week.
“If we just stick to our knitting and do what we’ve done in previous projects, we will produce good quality work, which will be announced and people can see.
“And I know that we are in a space that is going to create the future for the world, to be honest with you.’’
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