Here’s why Carnavale could be a serious force in the battery metals space
Mining & Resources
Bulgarian Sevdalin Marinov on his way to winning a gold medal at the 1988 Seoul Olympics. Pic: Getty
Special Report: Carnavale Resources is setting itself up to be a serious contender in the hot battery metals space with an experienced team and promising projects.
The junior (ASX:CAV) is led by Ron Gajewski who has two decades of experience in the resources sector and has been involved in a number of ASX-listed African explorers that have been snapped up by bigger players in lucrative deals.
Mr Gajewski is one of a team of respected resource industry executives that are part of privately owned consultancy Corporate & Resource Consultants.
Corporate & Resource Consultants was formed in 1996 to help finance and manage emerging companies in the resources sector. Clients past and present have include Moto Gold Mines Ltd, Tawana Resources NL, AVZ Minerals Ltd and De Grey Mining Ltd
Mr Gajewski is supported by technical director Andrew Beckwith, who is also a director of successful Pilbara gold explorer De Grey Mining (ASX:DEG).
Mr Beckwith has over 20 years of experience and has worked for well-known miners like AngloGold Ashanti, BP Minerals, Acacia Resources and Westgold Resources.
Following a change in strategy, Carnavale has picked itself up some promising projects that are highly prospective for nickel, cobalt and tin – repositioning it as a battery metals player.
Carnavale has focused on acquiring advanced exploration and near term development projects where high impact programs can achieve above average returns for shareholders .The company’s approach has been to focus on high technical merit projects where earn-in agreements and cost is dominantly designed around “value add drilling programmes” as part of the equity earn-in phase rather than high upfront purchase costs
“We identified initially a project about 90km east of Kalgoorlie, called Grey Dam, which was historically drilled for both nickel laterite and nickel sulphides and it had a non-JORC 2012 resource,” Mr Gajewski told Stockhead.
“But what was really interesting for us was that fairly close to the surface there was also an enriched cobalt section that really hadn’t been paid much attention.”
JORC refers to the mining industry’s official code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee.
Explorers are required to convert historic or foreign resources to JORC-compliance by undertaking their own exploration to verify historic data before a project can be classified as having a resource.
Carnavale has completed 5000m of its own drilling over the past month and is very close to receiving the results.
“That will give us confidence that the historical resource is in fact what it is and we can maybe even upgrade it with the additional holes that we’ve drilled,” Mr Gajewski explained.
“The cobalt is in the top 15 to 30m from surface and it’s an enriched zone rich zone.
“We’re looking to add to that, and then subject to the results look at whether this enriched zone can be easily mined and metallurgically processed so that would give us a fairly quick cash flow.”
Carnavale also struck a deal earlier this year to earn up to a 70 per cent stake in a Uganda tin project called “Isingiro”.
Heavyweight Rio Tinto (ASX:RIO) pointed out recently that tin edged out the favoured lithium and cobalt battery metals as the metal most likely to be impacted by new technology.
The technologies that are expected to impact tin demand include autonomous and electric vehicles, advanced robotics, renewable energy, and advanced computing and IT.
Additionally, research is showing tin provides cheaper and improved capacity to many alternative battery designs.
Isingiro is one of the largest projects worked by artisanal miners in Uganda and it is located close to critical infrastructure, but it has never seen any modern-day exploration.
“The tin project has basically been worked for about 50-70 years by both artisanals and also the British during their reign there, but to the company’s knowledge it has never had any modern-day drilling.
“Our view is that we have this big system that’s in excess of 2.5km long by up to 250m wide in places.”
Carnavale plans to undertake a 2000m drilling program in the next three to four weeks, which will give it an initial 51 per cent stake in the project.
Carnavale has a share price of just 0.8c at the moment giving it a market value of about $5.2 million, making it a good entry point for investors.
The company picked up its Grey Dam project quite cheaply from a company that fell into financial hardship.
“If the metallurgical test work can be completed and we can find a way to extract the nickel and cobalt separately then that adds significant value,” Mr Gajewski said.