Tim Treadgold: Back to work at Mandilla after the hatchet is buried at Anglo Australian
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A boardroom bust-up put Anglo Australian Resources (ASX:AAR) in the headlines before Christmas for the wrong reason, but a settlement of disagreements has cleared the way for the small gold explorer to pick up where Stockhead left it four months ago; potentially sitting on something big.
It was back on September 25 that the first detailed report on Anglo’s Mandilla discovery near the WA gold capital of Kalgoorlie was aired.
Unfortunately, that story played a part in stirring an already heated situation among the company’s major shareholders, who couldn’t agree on the best way to maximise value in the Mandilla prospect which has revealed thick and moderately rich gold assays.
Some of the intersections from drilling close to a small near-surface (paleochannel) mine worked more than a decade ago were outstanding, including 45m at 4.25 grams per tonne (g/t) of gold from a depth of 103m, and 93m at 3.11g/t from a depth of 49m.
Those results came after Anglo Australian called in an external consultant to re-examine the Mandilla area, located 75km south of Kalgoorlie, with a focus on the Mandilla East structure which was estimated to contain a modest 38,000oz of gold – which is not enough to get excited about.
Good as the news was from field work and desktop studies, it was quickly overpowered by the boardroom stoush which went all the way to an attempt to replace most members of the board at a special meeting of shareholders.
That attempt to “spill” the board was followed by allegations of some shareholders acting together (in concert) without declaring their common links.
By Christmas Eve all was forgiven and the different sides opted for a peace treaty which included the appointment of a refreshed board with a new chairman and managing director, followed this month by a small capital raising and promises to focus more on Mandilla and less on personalities.
Into the chairman’s spot at the top of the table comes seasoned Perth corporate lawyer Leigh Warnick, with the former managing director of Egan Street Resources, Mark Ducler, appointed managing director.
John Jones, the founder of Anglo Australian, remains on the board alongside Peter Stern and David Varcoe. Off the board are Graeme Smith, Andrew Barclay and Matt Hardisty.
All legal action between the warring parties has been dropped and $550,000 raised through a placement of shares at 10.5c each.
The price paid for the new shares is another indication of interest in Mandilla because it was more than the company’s share price at the time of the placement, which is always seen as a vote of confidence in a business.
The new plan for Anglo Australian is much like the old plan before everyone’s eyes were taken off the prize.
The fresh funds will be put to work on a technical review of drilling so far with further assays from pre-Christmas work flowing into that analysis.
Ducler said on Monday that Anglo Australian was starting a new chapter in its history with the aim being to unlock the value in its strategically-located assets.
“Mandilla represents an exciting opportunity for Anglo Australian shareholders, with high grades and wide intersections that are close to the surface and ideally located in the Kalgoorlie/Kambalda region of WA,” Ducler said.
A greater understanding of the geology of the Mandilla project is crucial to the next stage of exploration because the current theory points to the structure being different to better known gold deposits in the Kalgoorlie area.
One pointer to the difference is the thickness of the intersections reported so far in an area better known for its thin but high-grade shear zones formed during periods of major earth movements which release mineralising fluids.
Mandilla does not appear to be have been formed by a shear in the earth’s crust with one alternative suggestion being that it is a gold-hosted intrusion which involves a mineralised rock unit being pushed into older rocks during volcanic activity.
Whatever the cause there is the evidence of those highly encouraging assays of last year which even included one intersection of a whopping 112m, albeit at a relatively low 1.5g/t.
But what makes material assaying little more than 1g/t potentially viable for economic development is the width (there’s an awful lot of material) and the fact that it started just 41m from the surface.
With corporate manoeuvring coming to an end, interest in Anglo Australian will now switch back to its work in the field and the elevation of Mandilla from prospect to project.
On the market, Anglo Australian has been edging up for the past week with a rise from 9.3c to 9.9c.
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