Chasing the old timers is a tried, tested and often proven exploration narrative in Australia’s fertile WA Goldfields, but the ASX’s newest gold play is also testing that thesis on America’s West Coast.

Codrus Minerals (ASX: CDR) has raised $8 million ahead of its listing today, with a handful of underexplored gold projects spun out of battery metals play Blackstone Minerals (ASX: BSX).

While the vast bulk of its tenure is in the familiar surrounds of the WA outback in the celebrated Goldfields and Pilbara regions, one key point of difference for Codrus is its shared focus in eastern Oregon in the US.

The host for a major but long forgotten gold rush in the 1860s, Codrus is joining the revival of the US state’s gold exploration sector through its Bull Run project in Baker County.


Bull Run a prospector’s dream

Blackstone is passing its option over 11 tenements at Bull Run over to Codrus, an exploration package that has seen shallow narrow-vein mining by prospectors on and off since 1929.

Those tenements are surround by another 79 claims wholly owned by Codrus across 7km2 in the Ironside Mountain Inlier.

Hobbyists currently pull ounce-plus dirt from its shallow gold occurrences every now and then, but that is not where Codrus’ focus lies.

Managing director Shannan Bamforth said Codrus wants to test for deeper, disseminated gold at levels that have never been tested.

“Historically it’s only been looked at in terms of the narrow vein mineralisation and chasing up these narrow veins,” he said.

“The work that Blackstone geos have done over the last 18 months has really shown it’s a lot more than that.

“There are some big diorite dykes that run through it that are mineralised and have never really been explored with any great degree of interest.”

Codrus is not a lone wolf in the region, with Paramount Gold’s nearby Grassy Mountain Gold Mine – which will produce 47,000ozpa of gold and 55,000ozpa of silver over an 8 year mine life – demonstrating the sound permitting pathway for developers in Oregon.

“I think the key thing for us is Eastern Oregon where we are in, Baker City was built on mining,” Bamforth said.

“I think it’s tangible – 60km south of where we are there is the Grassy Mountain gold project.

“That shows there is a pathway to being permitted and able to operate in Oregon, so all those things are ticking boxes for us.”


WA projects also in focus

Alongside Bull Run, Codrus will also have the never before drilled Middle Creek gold project near Nullagine in the Pilbara, as well as the more advanced Silver Swan South and Red Gate projects near Kalgoorlie.

The projects were on the backburner with ASX-listed explorer Blackstone Minerals (ASX: BSX), which is focused on ‘green nickel’ at its Ta Khoa nickel sulphide project in Vietnam.

Blackstone has also retained the Little Gem cobalt-gold project in Canada.

But it is not that long since Blackstone was, in 2018, touting an emerging discovery at the Black Eagle prospect in the Silver Swan South project.

That lies between Northern Star Resources’ (ASX: NST) multi-million ounce Kanowna Belle gold mine and Poseidon Nickel’s (ASX: POS) Silver Swan nickel mine.

On top of that Codrus’ ground is barely a nine-iron from some interesting hits from fellow Kanowna neighbour Metal Hawk (ASX: MHK).

Bamforth said the company has interpreted KB’s Fitzroy Fault to continue through its tenements.

“The main structure that controls gold mineralisation at Kanowna Belle is the Fitzroy Fault, and we can trace the Fitzroy Fault up and into our ground we believe,” he told Stockhead.

“Where we’ve got aircore drilling proximal to the trace of that fault and it’s really shallow aircore drilling, only just getting to the base of the transported (cover), there’s some nice gold there.

“We can see some assay results in there historically like 11m at 2.9g/t to the base of the transported.

“When you see 11m at 3g/t and there’s not a proper drill hole into the fresh rock underneath it you think it’s a pretty solid opportunity for a gold play.

“Then you’ve also got the nickel with the ultramafics and being able to have a close look at that.”

Codrus is planning to have diamond drilling underway by July to test priority targets at Silver Swan South.

A 4000m reverse circulation drilling campaign is also planned 140km north of Kalgoorlie Red Gate, a 145km2 tenement once explored by Sons of Gwalia and just 10km north of the 700,000oz Porphyry gold mine.


Spin-outs find favour in strong capital markets

Codrus is part of a growing cohort of recent spinout explorers to list on the ASX.

The emerging trend has seen companies focused on one commodity tap raging commodity markets to jettison sidelined projects, or their alternate commodity focuses, into new listed vehicles.

Companies and their existing shareholders typically keep a large portion of the stock, enabling them to keep some exposure and spend fresh money on projects that never would have had serious capital allocated to them in the original business.

It’s nothing new, but is happening at an ever-increasing pace as executives eye the opportunity to extract value from assets they say are not accounted for in their share price.

Metals X (ASX: MLX), for instance, has in five years gone from a gold, tin, nickel and copper company to a single asset tin miner after first spinning its gold mines into Westgold Resources (ASX: WGX) before selling the underperforming Nifty copper mine and announcing an IPO this year to repackage its Wingellina nickel-cobalt project in WA.

“I think people really see the opportunity at the moment for some of these projects that are sitting in the back of companies like a Blackstone where they’re just not getting any attention, there’s no shareholder value in them,” Bamforth said.

“Blackstone shareholders get 46% of the shares in Codrus, so they still get great exposure to it, but it gets a life of its own and people who are actually interested in the gold space can trade it.”

Bamforth said Codrus was “heavily oversubscribed” in its IPO, with the brokers tasked with handling the bulk of the raising placing their allotment within a day.

One broker reported bids for $8 million for their $2 million share.

“It was really about how could we scale people back,” Bamforth said.

Codrus will begin trading today after issuing 40 million new shares at 20c each, giving it a market cap of $18.4 million.