All eyes on Antipa ahead of more promising gold results out of the Paterson
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You know investors must be getting excited when a company’s share price goes for a run on no news, and that’s exactly what Antipa’s share price did this week – hitting a new 52-week high.
Antipa Minerals’ (ASX:AZY) shares went on a run at the start of the week, climbing to a new peak of 6.8c. But just what exactly is driving this rally?
It could be any number of factors including a steady stream of high-grade drilling results from Antipa’s 100%-owned Minyari Dome Project, or the fact it is cashed up with no need to tap the market for cash.
Perhaps it’s the significant discoveries the company has made in WA’s Paterson Province – an exploration hotspot and home to several major multi-million-ounce gold deposits within a stone’s throw of Antipa’s ground.
Then again it could be that Antipa has joint ventures with three heavyweights – Rio Tinto (ASX:RIO), Newcrest Mining (ASX:NCM) and IGO (ASX:IGO), which are all basically doing the heavy lifting on the exploration front.
Whatever is driving the share price increase, all signs point to an expectation of further upside as Antipa gears up to release additional drilling results from both the Minyari Dome Project and Citadel JV Project over the next several weeks.
Antipa also anticipates a steady stream of further promising results from its Minyari Dome Project, where the company has been hitting it out of the park with broad intercepts like 362m at 1.4 grams per tonne (g/t) gold and 0.16% copper from 230m, along with high grades of up to 70.5 g/t gold.
Drilling so far has proven that significant zones of very high-grade gold-copper-silver-cobalt mineralisation exist outside the current Minyari resource, with a resource update expected in Q1 2022.
While all this hard work is in progress on Antipa’s wholly owned ground, Rio, Newcrest and IGO are injecting significant sums of cash into exploration on their respective JV and farm-in projects with Antipa.
The recent run back up in the gold price will be helping.
Big Australian gold producers will be raking in the cash as gold prices return to five-month highs of around $US1,870 ($2,542) an ounce and strategists at Credit Suisse bank anticipate the price returning to its recent $US2,075/oz record.
Non-executive chairman Stephen Power told Stockhead the biggest constraining factor in any market was the availability of money, but with the rising gold price that restraint had come off to a large extent.
“Inflation is forecast to increase, and you would expect the gold price will strengthen or at least maintain its strength through the current cycle,” he said.
“The availability of cash to these very large and medium market cap companies enable them to move forward and seek to aggressively expand their portfolios.”
This means a much greater spend on exploration and an increased focus on M&A, particularly in the gold space, as the majors look to supplement production from ageing mines.
That’s exactly what Newcrest is doing at Telfer. Back in August, Australia’s largest gold producer committed $246m to a fifth cutback at Telfer’s West Dome deposit in a bid to extend the life of the ageing ~30-million-ounce gold mine.
The move will add two years to the mine life while Newcrest and Greatland Gold work to bring online the higher grade 3.4Moz Havieron gold-copper project in 2023.
Meanwhile, Newcrest clearly sees growth potential at the Wilki Project it shares with Antipa. Wilki sits within 3km of the Telfer gold-copper-silver mine and processing facility, making it attractive tenure for the discovery of satellite deposits for sustaining production at the mine.
Newcrest is injecting up to $60m into the greenfield project to earn a 75% stake.
Citadel, on the other hand, is a more advanced project with a significant gold-copper-silver resource already. It is located within 45km of Rio’s large Winu copper-gold-silver project.
The project, with a 1.2Moz gold equivalent resource attributable to Antipa, has shown potential to be developed as a Winu satellite deposit or as a standalone operation. Geology and scale suggest substantial growth and development potential, Antipa says.
This was probably behind Rio’s decision earlier this year to again ramp up its exploration spend on the project to $24.5m, from $13.8m, for calendar year 2021.
With over 45,000m of drilling having been completed on Antipa’s Minyari Dome Project this year and still around $20m in the bank, the company isn’t expecting to spend as much on exploration in 2022.
“Our spend rate at Minyari will come down next year because we would’ve completed the expensive drilling component and will now be focusing on the interpretation of those results,” Power said.
“We’ll work in house with our internal geologists and consultants to see exactly what comes out of that in relation to a production opportunity. We should have significant funds to carry us through.”
This article was developed in collaboration with Antipa Minerals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.