Timing is sweet as Manuka begins production and moves on IPO
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Special Report: Australia’s newest precious metals producer, Manuka Resources, expects to list on the ASX in mid-July after it completes an initial public offering managed by Bell Potter to raise up to $7 million.
Manuka, which recently poured first gold at its Mt Boppy project near Cobar in central New South Wales, lodged the prospectus for its IPO last Friday.
According to the timetable in the document, the offer will open in the second week of June. A date of July 14 has been given for Manuka shares to commence trading on the ASX.
Along with Mt Boppy, Manuka owns 100% of the Wonawinta silver project about 150km away, which includes an 850,000 tonne per annum mill that together with associated infrastructure cost more than $120 million to build in 2012.
The company began processing stockpiled ore from Mt Boppy through the Wonawinta mill in April and anticipates producing 22,000-24,000 ounces from stockpiles and mined ore over the next 12 months.
Ore reserves at Mt Boppy are 320,000 tonnes at a grade of 3.0 g/t for 31,000 ounces.
Proceeds from the sale of this gold are expected to allow Manuka to extinguish its current debt of $24.5 million within that 12-month timeframe.
Similar to Mt Boppy, Wonawinta contains a significant amount of silver in stockpiles that the company intends to start processing in the June quarter next year.
The third phase of activity, planned to start in the March quarter 2022, would be mining and processing of the shallow (<60m) oxide resource at Wonawinta.
Including the stockpiles and the shallow oxide resource, total JORC compliant resources at Wonawinta amount to 38.8 million tonnes at 42 g/t silver for 52.4 million ounces.
This includes a higher grade component of 4.5 million tonnes at 97 g/t silver for 14 million ounces.
Manuka also holds a tenement package of more than 1,126km2 in the prolific Cobar Basin that contains huge exploration potential.
Within the first 12 months of listing, the company intends to drill a number of high conviction targets not only at and around Mt Boppy and Wonawinta but within the broader tenement package.
Mt Boppy has produced around 500,000 ounces at an average grade of 15 g/t since 1895 but very little drilling has been done below a depth of 120 metres.
Again there is little evidence of drilling undertaken at Wonawinta below 100 metres.
Manuka will conduct an infill drilling program on the shallow oxide resource at Wonawinta to re-establish a reserve and extend the mineralisation.
Importantly, the company notes that all the oxide resources end in sulphide mineralisation and deeper drilling will target the discovery of a sulphide deposit.
Deposits in the Cobar region are renowned for mineralisation that improves at, or continues to, significant depth. Glencore’s CSA copper mine, for example, is currently at a depth of 1.7km.
Manuka was formed and is majority owned by resources industry financier Rescap Investments.
Rescap founders Dennis Karp and Haydn Lynch fill important roles at Manuka, with the former executive chairman and the latter chief operating officer.
The Manuka board is completed by experienced geologist and mining executive Dr Nick Lindsay and engineer Anthony McPaul, who was most recently the general manager of Newcrest Mining’s Cadia Valley Operations in NSW.
Should Manuka raise the maximum amount through the IPO, Rescap’s interest in the company would reduce to 36.2%.
A number of convertible notes Manuka has on issue will also convert to ordinary shares in the company through the IPO process.