John Forwood is liking the look of NSW explorers. Pic: Supplied/Stockhead
Ten Bagger: Why New South Wales remains a land of gold and copper opportunity
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Welcome to Ten Bagger, where Lowell Resources Fund chief investment officer John Forwood gives us his take on a sector of the ASX resources market full of value.
This month, John tells us about why New South Wales remains a hotspot for Australian explorers chasing the next major mineral discovery.
The New South Wales mining development landscape has faced all sorts of challenges in recent months, most notably the effective scotching of approvals that sent the Bowdens silver and McPhillamys gold projects back to the drawing board.
McPhillamys was particularly controversial, given it involved an Aboriginal heritage protection order over the site of the Regis Resources (ASX:RRL)-owned project’s proposed tailings dam from Federal Environment Minister Tanya Plibersek issued after the mine had already been approved by both Federal and State regulators.
Setting aside the merits of the case, on which Regis are still exploring legal options, Lowell Resources Fund (ASX:LRT) CIO John Forwood thinks a couple of factors made McPhillamys vulnerable to intervention.
Notably, he told Stockhead, its status as a gold rather than critical minerals project could have been a factor that made it an easier target, while proximity to towns and communities is also a factor.
But elsewhere in New South Wales, small caps expert Forwood says there remain opportunities for investors.
“New South Wales is a significant mining state,” he said.
“Obviously it’s got Cadia, one of the biggest gold mines in Australia and one of the biggest copper mines in Australia.
“It’s got a number of other significant operations, such as Northparkes (copper) and Lake Cowal (gold).
“If you want to have more confidence in a permitting route here in New South Wales, you probably want to be further from Sydney, further from population density, and you probably want to be looking to permit a critical mineral, for example copper or something in the battery minerals space.”
Cobar to Cadia
While the permitting news around Regis has dominated headlines in the lead up to an election year, less well known is the extraordinary amount of investment global majors and mid-tiers are throwing at mining in New South Wales.
Metals Acquisition’s (ASX:MAC) $1bn-plus purchase of Glencore’s CSA copper mine in Cobar is one example.
As much as $300 million has also been committed in JV and farm-in deals for majors like AngloGold Ashanti, Gold Fields and Newmont to explore in the state as well, even before Newmont’s US$15bn merger with Newcrest – primary target the Cadia mine – is taken into account.
Gold is the MO of most of these companies, but they’re also keen to find the massive porphyry copper deposits like Cadia that will be so important to develop as the energy transition and global trends toward urbanisation and electrification progress.
“I think there’s a recognition that this is elephant country, particularly the Lachlan Fold Belt and it’s bringing in quite a bit of investment,” Forwood said.
Explorers on the move
Lowell looks for value at the smaller end of the spectrum and its latest interests in NSW have been in companies seeking copper, gold and base metals particularly in the Lachlan Fold Belt.
One it recently entered is Koonenberry Gold (ASX:KNB), joining in a recent $4.5 million placement that coincided with its acquisition of the Enmore gold project from uranium explorer Global Uranium and Enrichment (ASX:GUE) and Lachlan project from private Gilmore Metals.
Alongside Enmore, KNB also holds projects at Lachlan and Koonenberry in the north-west corner of NSW.
Lachlan include the Junee and Fairholme JVs, where Newmont could spend upwards of $15m on drilling to take an 80% stake.
“They’ve got at least half a dozen other exploration licences with good-looking prospectivity for copper and gold porphyries,” Forwood said.
“Enmore in New England is more a Hillgrove style of gold project with some high-grade, thick intersections.”
The Lake Cargelligo area where Australian Gold and Copper (ASX:AGC) this year made the intriguing Achilles polymetallic discovery is also drawing attention from the market.
“We’ve put some exploration dollars into a company called Strategic Energy Resources, which is exploring the Achilles geochem anomaly near Australian Gold and Copper’s discovery, which is also one of the Achilles anomalies,” Forwood said.
“That’s next to Brown’s Reef at Lake Cargelligo.
“There are a number of areas in New South Wales that are highly mineralised and probably haven’t received the exploration attention that, say, the Kalgoorlie region in the WA Goldfields has received.”
At Stockhead we tell it like it is. While Koonenberry Gold is a Stockhead advertiser it did not sponsor this article.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.
