Predator and Prey: Will Antares Metals be the next QLD copper consolidation story?

Mergers and acquisitions can be a huge value creator for shareholders, especially for those invested in the target firm.

Predator and Prey takes a close look at ASX explorers in the early stages of their journey and why they could be hunted by a larger player.

Mining stocks may have temporarily borne the brunt of the market’s fury as Donald Trump’s 10% tariffs on Chinese products added to concerns about commodity demand.

But with cash bursting out of their pockets from the last boom, that does not mean dealmaking has been thrown out the window.

Despite the turbulence, there’s no doubt mining giants are keeping an eye out on potential takeover targets, watching and waiting for the right time to pounce.

For this edition of Predator and Prey, we’re shining a light on one acquisition candidate in one of the world’s largest mining complexes, Queensland’s well-endowed Mt Isa Region.

Nickel and lithium stock NickelSearch recently rebranded to Antares Metals (ASX:AM5), with a transformation in leadership and a shift in focus from its Carlingup nickel asset in WA to the Mt Isa North copper and uranium project in Queensland.

Officially acquired last year before the company underwent its name change, the project covers more than 2000km2 and adjoins Glencore’s Mt Isa operations with neighbours including 29Metals (ASX:29M), Fortescue (ASX:FMG), and Paladin Energy (ASX:PDN).

Although the land position holds proven prospectivity for significant copper, zinc, silver, lead, gold and uranium deposits – along with historical mines and prospects – major structures have only been superficially explored between the 1950s and 2010s.

In that time, very limited drilling was carried out by previous explorers.

Drilling results from the 1970s returned some impressive intersections at the historical Surprise mine such as 23.77m at 4.67% copper from 51m and 12.80m at 7.77% copper, while three airborne VTEM anomalies identified in the area in 2015 remain untested.

‘Already a great target’

AM5 CEO Johan Lambrechts believes Antares has what it takes to be a potential takeover target, but says it depends on the acquisition strategy of the company looking make the acquisition.

“Right at this minute, we don’t have a mineable resource, which means if there’s somebody looking to acquire a going concern then we won’t be a target,” he said.

“If they are looking for future potential, I think as we are, we are already a great target because there is immense potential in our portfolio.

“We’re in a world-renowned copper jurisdiction, that’s for sure, and it’s got both high-grade and scale,” Lambrechts added.

“The fact that our project area spans the three most major structures (the Mount Isa, Paroo and Hero Faults) in the region with many copper occurrences on our landholding, showing us there is copper in the system, excites me.”

Upcoming resource this year

AM5 intends to use modern exploration methods to progress its 2003km2 Mt Isa copper-uranium project in northwest QLD to a maiden resource estimate this year.

A 1500m RC drilling campaign kicked off last year to validate and extend existing mineralisation at the Surprise prospect.

“We need to what is necessary to identify the economic proportions of the endowment that we have and we will start with the lowest hanging fruit, which is Surprise,” Lambrechts said.

“The old timers have already found and mined some very high-grade copper there, so we will expand on that and turn it into something that is a future resource for us.

“That is why we flew the Conglomerate Creek geophysics because we believe there might be a hidden, large-scale target there and if that is true, then that would be a real bulls eye.”

‘Very bullish uranium season coming’

But copper isn’t the only notch in AM5’s belt.

Prospects within the company’s tenure are also extremely prospective for uranium with rock chip results at Queens Gift returning up to 2.86% uranium.

The Mt Isa North project also surrounds Paladin’s Valhalla asset, the third largest uranium project in Australia after Olympic Dam and Jabiluka.

“It would be foolish of us to focus on uranium, despite believing we have exceptional prospectivity – the Queensland government is prohibiting the mining of it so it wouldn’t be a good value add right now,” he said.

“Having said that, we are still looking at starting uranium exploration in the area to set the company up for when the tide eventually turns (politically and economically) and for what I expect to be a very bullish uranium season coming.

“When that does happen, we want to be ready to launch and add fast, good value to our prospects and shareholders.”

While market fundamentals for both commodities have started the year on shaky ground, Lambrechts sees prices increasing in the near-term.

“Both uranium and copper are connected directly to population growth which is not slowing down,” he said.

“With every human being that is born there is a new hand that needs a cellphone, a new person that needs a lightbulb and electricity to feed it, which needs copper.”

At Stockhead we tell it like it is. While Antares Metals is a Stockhead advertiser, it did not sponsor this article.