Golden insights abound at Perth investor event
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Renewed fortunes, strong prospects and an underlying sense of optimism were the key themes at Northbridge Brewing Company in Perth on Wednesday, when a number of the ASX’s most exciting gold mining plays came together for M+C Partners’ second Gold ‘n Brews Investment Seminar.
The forum, organised in conjunction with Vertical Events and sponsored by ABC Bullion, shone a light on gold – from those companies in exploration and development to those currently producing and looking to expand.
Stories were told of redemption, acquisition and growth, to a captive audience of investors basking in Perth’s spring weather and enjoying a beverage or two along the way.
If the crowd was any indication, the market’s appetite for gold remains strong and shows no sign of waning any time soon.
First to speak on the day was TNT Mines (ASX:TIN) executive director Brett Mitchell, who highlighted the “company making potential” of the company’s recent deal to acquire the company holding the historic Eureka and Warriedar gold projects in WA.
The addition of Warriedar Mining, run by the same team which made Spectrum Metals an exploration success last year before its ultimate acquisition by Ramelius Resources, is one which looms as a company-maker, according to Mr Mitchell.
“We’re in a very fortunate position,” he said.
“Luck is of your own making and timing, as you all know, but we’re about to formally complete the deal for Warriedar with TIN shareholder approval next month.
“We believe this is an outstanding investment opportunity – it’s not just the Warriedar assets, but it’s the team that had a lot of success with Spectrum in the last 18 months, and also have corporate backing behind them.
“We believe this has company-making potential – underexplored gold projects in both Warriedar and Eureka. Both projects feature historic high-grade production and are close to infrastructure including operating gold mills.”
A drilling program is expected to begin ahead of schedule at Eureka this month, where an initial 43,000-ounce resource is already defined. One to watch.
Next on the bill was Alto Metals (ASX:AME) managing director Matthew Bowles, whose company survived three hostile takeover bids in the last 18 months to emerge positioned to capitalise on its highly prospective Sandstone gold project – spanning almost an entire greenstone belt in the East Murchison.
The project is home to a number of former open pits, prospects and gold occurrences, including the Lord Nelson and Lord Henry mines previously owned by Troy Resources.
“It’s pretty amazing to have a major, untested greenstone belt in Western Australia – it’s a project we’re really excited about,” he said.
“Lord Nelson and Lord Henry sit in a three-kilometre corridor in the southwest corner of the 800km2 project – it really highlights how big this entire package is.
“We’ve had the comments before that you could carve this up into four separate companies, you could list each of them, and they’d probably each have a similar market capitalisation to us – we think the opportunity is amazing.”
The project currently has a mineral resource of 6.2 million tonnes at 1.7 grams per tonne gold for 331,000 ounces. Free from the restraints of takeover attention, Alto is now pursuing a drilling campaign in the Lords corridor.
Another tale of redemption is that of Gascoyne Resources (ASX:GCY), which was recapitalised earlier in the year to sit cashflow positive and ready to make the most of its revitalised Dalgaranga mine in the Murchison.
Managing director and CEO Richard Hay said the company was out of administration and into action at Dalgaranga, where operational output has improved on the back of mining fresh rock in the Gilbey’s main zone.
The company is in the process of exploring beneath the current pit at Gilbey’s, with a rig on site.
Most importantly for a company which has emerged through difficult times, Mr Hay highlighted the fact Gascoyne had predictability on its side.
“You need to have predictability in mining – anyone in mining knows the more predictable you are the more levers you can pull,” he told Gold ‘n Brews.
“We’ve got four levers we can pull at and around Dalgaranga.”
Mr Hay identified these levers as resource drilling, brownfields exploration, greenfields exploration and the potential of stranded regional deposits to the west of Dalgaranga.
Ora Banda Mining (ASX:OBM) shared an equally compelling redemption story, from administration 18 months ago to its current position as Australia’s next gold producer.
The sole owner of the Davyhurst gold project in the Eastern Goldfields, the company is on track to produce first gold in January, with operations at the Riverina open pit ramping up and underground mining scheduled to begin at the Golden Eagle deposit in November.
“There are six different areas we’re targeting from the mining point of view – Riverina and Golden Eagle first, followed by Missouri, Sand King, Waihi and Callion,” managing director David Quinlivan said.
Mr Quinlivan hailed the presence of existing infrastructure at Davyhurst, which has helped keep capital costs low and enabled a rapid restart.
Saving the largest producer for last, ASX200 gold miner Ramelius Resources (ASX:RMS) rounded out the formalities at Gold ‘n Brews, with Chief Financial Officer Tim Manners highlighting the importance of balance in the growth strategy of the company.
Ramelius, which took home the prestigious Digger of the Year award at Diggers & Dealers this year, has pursued a multi-pronged growth strategy of M&A and exploration with great success.
“Despite a great year in FY20, the question is what makes Ramelius still a good investment option,” Mr Manners said.
“I guess in short, we have excellent organic growth opportunities, we’ve got a balance sheet which is very strong in terms of financial capacity to execute any sensible M&A opportunities that come before us, we’ve got a solid pipeline of projects already in place, and we have a commitment to exploration.
“All of this will lead to sustainable growth, cashflow generation, and a sustainable dividend policy that’s now in place and up and running.”
Ramelius, which has made four project acquisitions over the past three years and is undertaking significant exploration at its existing projects, saw 176% share price appreciation in FY20 – the kind of growth all presenting companies will be looking to achieve as they navigate the months and years to come.
TIN, AME, GCY, OBM, RMS share price charts