There's been a lot of exploration on the Mt Gunson tenement, most recently by JV with Xstrata subdivision Noranda spending several million dollars earning majority stake which they then relinquished (so we've effectively sold it twice). I gave up some time ago on the idea of finding a whale of a deposit a la Carrapateena which is not all that far away. If there's one there it's lurking very deep and not giving very good signals. The tenement does seem likely to produce more pods of copper similar to the ones Torrens has been working on. So from my point of view there's a good chance that Mt Gunson will generate nice cash flow for a small cap for some years to come.
In that sense STA may be selling off a useful revenue stream. However to get there they would first have to have participated in rounds of capital raising to meet their half. With the bloated share base we have now and the low price, I think the board has had to make a decision about focus. Mt Gunson represents a solid asset with potential due to Torrens expertise but the Tanzanian assets show more signs of delivering higher class assets than the Mt Gunson terrain and sands are simpler to get up and going once you've found something decent albeit less glamorous/lucrative.
For me the strategy is sensible. Get some cash in now, retain some exposure through a holding in Torrens and potentially get more cash down the track if it comes off plus whatever gains the shareholding in Torrens makes. It's low reward really but it's also low risk and non dilutive. Others disagree with me and I understand and sympathise with their positions.
Your other questions:
Coburn (WA Sands). Forget about it. We couldn't get it up when sands prices were on fire. It's primarily a zircon project so we'll be competing for funding with the giant Thunderbird zircon deposit in WA (SFX) which is going through Feasibility studies now. It's a tough ask and the market has marked the asset down to zero, as pretty much have the company in the books now. Consider it a wonderful surprise if it gets up. Most likely it will be sold or heavily farmed out.
Only African sands? Almost but not quite. We also have the very interesting exploration play at Fowlers Bay in SA with WSA exploring for nickel (and I suspect gold to based on what DRM are doing with ILU very near by). Also Tom Eadie has clearly signalled an interest in low level exploration for other mineral assets in Tanzania including lithium - current buzz mineral so may be a smart move if they can find high grade and volume.
However yes, we are now essentially a play on the mineral sands assets in Tanzania for now. I think there is good potential in this story as they've stitched up pretty much all of the countries known sand areas in the prime locations. With large scale sand deposits both north and south of Tanzania the odds seem good to me of proving up commercial deposits but I have to be up front and see that my sentiment is currently neutral to negative, basically neutral.
I'm frustrated by the actions of Mike Folwell, former director/chair. Quitting and putting his entire holding on at 0.9 cents is a bad look for the company and potentially a bad outcome for shareholders. It's a serious brake on progress that the price was just starting to make. It will take some strong news just to clear that line, let along push to new heights before they need to raise more capital. At this stage I'd say he's almost guaranteeing another placement will be around the 0.5 cents mark with more dilution for existing shareholders who will probably miss out on participating as per the last placement. I'm still in but I've lightened my trading portion to fund another holding that has better near term momentum. I still have my long term stake. Open to bringing the trading portion back though depending on Tom Eadie's next move.
STA Price at posting:
0.7¢ Sentiment: Hold Disclosure: Held
(20min delay)