Special Report: “The right rocks, the right locations and the right people”.
Those were the imperatives experienced geologists and founders Karl Jupp, Nathan Cammerman, Nat Cull and Andrew Jones had in mind four years ago when the seeds were first planted for the formation of West Australian gold explorer Westar Resources.
Now, as they prepare for the Company’s initial public offering and listing on the ASX, Jupp believes they have all three in place and is looking forward to seeing them translate into significant exploration success and reward for investors that have backed them.
After lodging a prospectus last week, Westar opened its IPO on Monday seeking to raise $5 million through the issue of 25 million shares at $0.20 each with Discovery Capital acting as Lead Manager and Corporate Advisor. The company is expected to list in early-mid December.
Funds raised through the offer will primarily be used for exploration on the Company’s portfolio of assets in some of Western Australia’s premier gold districts including Sandstone, Mt Magnet, Southern Cross and the Pilbara.
This is the “right rocks, right locations” part of the equation.
The main priority for Westar is its Sandstone projects, Gidgee South and Gidgee North. These were acquired from Europe and North American focused explorer Rafaella Resources in an all-scrip deal earlier this year.
Jupp, who heads up Westar as Managing Director and CEO, describes Gidgee South being about as good as it gets from a geologist’s point of view. “Gidgee South has historical workings, dry blower heaps and a whopping big soil anomaly along a granite/greenstone contact that has never been drilled.”
Westar plans to fly geophysics over Gidgee South before the end of the year to help in refining drill targets before commencing aircore drilling in the first quarter of next year.
At Mt Magnet, Westar owns two projects, Winjangoo and Coolaloo, both of which have been subject to minimal drilling and are in close proximity to producing gold mines including Ramelius Resources’ Mt Magnet Operations and Westgold Resources’ Cue Operations.
Winjangoo is the most advanced of the two projects and will be the focus of geophysics, soil sampling and mapping before drilling gets underway in the first quarter of 2021.
At Southern Cross, Ramelius is farming into Westar’s Mt Finnerty and Parker Dome projects by spending $2 million across both to earn a 75% interest in each and initiate the joint venture.
Ramelius, which is mining at Marda in the area and trucking ore to the Edna May mill at Westonia, is expected to start drilling at Mt Finnerty in the coming months.
Jupp says bringing the bigger company in as a joint venture partner at Southern Cross “largely de-risks the projects for shareholders, as we are free-carried to a decision to mine” and even a small deposit could warrant development.
“It’s worth noting that the ore reserves of individual pits at Marda range from 6,000 ounces to 22,000 ounces so any discoveries at Mt Finnerty don’t necessarily need to be huge to be developed,” he says.
The final asset in the Westar portfolio is the Opaline Well gold project in the Pilbara Craton, which Jupp admits didn’t really fit in with the company’s strategy initially, but after completing due diligence it was clearly it was too good an opportunity to walk away from.
Westar sees the potential for shear-hosted gold discoveries as well as volcanic-hosted massive sulphide mineralisation at Opaline Well and points to the fact that AIM-listed Greatland Gold, which holds three surrounding leases and has been very active in the area.
Historic rock chip samples from the Triberton Creek workings in the Opaline Well Project have returned assays of up to 200 g/t Au, but again there has been limited drilling on the tenement.
From a “right people” perspective, Westar has long had a strong mix of technical expertise through Jupp, Cammerman (Non-Executive Director) and Jones (Head of Exploration).
Jupp has worked in leadership and management roles for companies including Mineral Resources, Consolidated Minerals and Normandy Mining; Cammerman is involved with several private resource companies with projects at feasibility stage; Jones started his career with Aberfoyle Resources and has worked for the likes of Mines and Resources Australia, CopperCo and Gallery Gold.
More recently, the trio has been joined by Simon Eley, a Founding Director of West Australian gold developer Egan Street Resources, which was taken over by Silver Lake Resources for an implied value of $79 million in early 2020..
Eley was also an Executive Director of Aragon Resources, which owned the Central Murchison gold project and was acquired by Westgold for $76 million in 2011.
Westar will commence trading on the ASX with a market capitalisation of $10 million and an enterprise value of approximately $5 million, which looks modest given the selection of assets and their exploration potential.
“We think there should be high demand for the stock given the strategic location of our projects, highly prospective drill-ready targets and the strong pipeline of newsflow that will commence from listing onwards,” Jupp says.
This story was developed in collaboration with Westar Resources, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.