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Fresh off the slow-burn success of their Bankan gold discovery in Guinea, the team who helped build Predictive Discovery into one of the ASX’s most exciting gold stocks are back with the listing today of their new float DeSoto Resources.
Founded by key figures from the Predictive Mineral Discovery Cooperative Research Center (CSIRO), Predictive Discovery (ASX:PDI) was led by founder and managing director Paul Roberts for 14 years culminating in the discovery of the 4.2Moz Bankan deposit in Guinea.
Known as a prospect generator which leveraged novel exploration technology and methods, that spirit will live on in Desoto Resources which lists today after a $10 million float and is targeting Battery and Precious Metals in the Northern Territory and manganese in the tropics.
It boasts Roberts as Executive Chair, former PDI Corporate Development Officer Chris Swallow as Managing Director and former PDI chief geologist Dr Barry Murphy as Non-Executive Director.
“If you look at the Predictive story after they commercialised their public research cooperative technology, what their approach showed is that when applied correctly, they made discoveries all over West Africa”, Swallow said.
“They made a discovery in Burkina Faso, they made a couple in Cote d’Ivoire, and then finally, the one that everyone knows about, which is the one in Guinea, Bankan, which is currently 4.2 million ounces and I think when all is said and done will be the better part of 10-15 million ounces.
“So that approach is really differentiated and it’s something that the team has brought over to DeSoto and it’s pretty unusual for a junior exploration company to have that level of technical expertise driving the company.”
DeSoto’s flagship asset is the Pine Creek gold and lithium project in the Northern Territory, where Swallow, Roberts and Murphy along with exploration manager Bianca Manzi are aiming to leverage their expertise to make a major discovery.
It boasts 1,887km2 of land in the Pine Creek gold and pegmatite province 150km south of Darwin across the Fenton and Fenix tenements, including six granted licences over 1,467km2 and three licence applications covering 420km2.
More than 17 million ounces of gold has been found in the Pine Creek Orogen since it was discovered in a hole dug to construct the overland telegraph line in the 1870s.
It is now a hotbed of gold exploration and development, hosting a high-grade underground project at Toms Gully and the 9Moz Mount Todd project near Katherine.
Located close to the Cosmo Howley mine and in the same high grade geological setting, historical scout drilling by Homestake, one of the world’s largest gold miners before its merger with Barrick, returned 20m at 1.74g/t from 423m and 8m at 1.39g/t from 610m.
Even more interesting, perhaps, was the reason Homestake was enchanted by Pine Creek in the first place.
“They ran a mine in South Dakota called the Lead Deposit, it was actually the biggest gold mine in the USA. It’s 40 million ounces at about eight grams per tonne and (Homestake) were doing a global search for an analogue and the place they settled on was the Northern Territory,” Swallow said.
“They put those holes in about 30 years ago, the gold price changed, they packed up, they went home, they didn’t follow up on it.
“But what they left there was a good trail of the outlines of a discovery. And in fact their geologist in control of the program thought they had basically sniffed the sides of what was a big gold system.”
Swallow admits he was nervous initially showing the project to Roberts and Murphy but felt a sense of relief when Roberts came back from due diligence “with a big smile on his face.”
“He said, ‘this is really good’”
“This is a really good opportunity to plan the discovery that’s been hiding in plain sight for a long time.”
Then there is the project’s abundant pegmatite potential, which Swallow hopes could lead to a lithium discovery to follow up the nearby Finniss Lithium Mine, where Core Lithium (ASX:CXO) will become the NT’s first spodumene producer next year.
Core recently acquired ground adjacent to DeSoto’s, which has never been previously explored for the battery metal, up over 400% in price over the past year due to a major ramp up in global EV adoption.
“It’s a project they’ve called Shoobridge and they’ve picked it up because of the tin and tantalum potential there, which is the same reason why we’re where we are as well,” Swallow said.
“What’s really interesting is that they’ve got a few little mineral occurrences on that project, and they’ve started working on it.”
The abundance of tin mineralisation on the eastern side of the Pine Creek leases is also a source of encouragement.
“On the east side of our project there’s an old tin mine called Mount Wells, and the history of mineral exploration in the Northern Territory is wherever you find tin and tantalum, there’s usually been a lithium discovery made as well,” Swallow said.
“We’ve got tin all over our leases and the old Tin mine just sits right off our eastern boundary.
“What we see is an opportunity to hopefully make a Core style discovery, that kind of opportunity is right there in front of the company.
“The initial work’s basically been mapping the pegmatites, looking for spodumene and things like that, and then with Core landing right in the middle of us, it was pretty good validation that we were on the right path.”
Don’t think Roberts, Murray and Swallow have in any way abandoned their ‘prospect generator’ roots.
With Pine Creek’s gold and lithium prospects looming as walk-up targets to address immediately, none of the sense of adventure that was a trademark of their work with PDI has been thrown out the window.
The same creative impulses and innovative exploration methods will be contributed not just to Pine Creek but also to generate targets for manganese.
A ‘forgotten battery metal’, manganese is a core element of the NCM battery commonly deployed in long-range electric vehicles.
At the moment just 2% of manganese raw materials are converted into high purity manganese sulphate for batteries, with over 90% of global consumption in the steel industry.
But demand for manganese sulphate is expected to see an exponential increase.
Assisted by Roberts and Murphy and a group of associated manganese experts, DES plans to scour the tropics of North-East South America and West Africa, where lateritic weathering is known to produce very high-grade manganese deposits.
The company’s aim is to use its strength in terrane-scale targeting to search for high grade DSO manganese that can supply both steel and battery markets.
“We’ve got some projects that have come with the company that we’re excited about,” Swallow said.
“But we’ve also basically given the team the opportunity to take that technology and put it into new ideas and a new idea they’ve come up with – which is our project generation idea – is high-grade manganese in the tropics.
“So we’ve started a fair bit of work on that using this technological and methodical approach and, as well as the projects in the NT, we should have some really exciting manganese projects to talk about in the next 6-12 months.”
DeSoto is expected to list at 1.30pm AEDT today, with a market cap of $17.8m and EV of $7.8m.
This article was developed in collaboration with DeSoto Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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