Finally managed to pick up a few today. Not cheap for an explorer, however the targets are second to none. Expecting some nice results over the next 2 months, that should excite the market, given the liquidity it wont take much to rally. Shades of RXM (quality prospects, tightly held, strong institutional support)
Goldminex keen to see drills working Michael Quinn, 10 August 2009
THERE may be some sensationally mineralised rocks and prospects on the ground that Goldminex holds in the rugged Owen Stanley Ranges of Papua New Guinea, but all the market wants to know, as always, is what are the drill results showing?
The answer to that from three or so of the company’s more advanced prospects – Gossan Hill, Awari and Kemani – will start to be known over the rest of 2009, with drilling, subject to weather, about to get underway.
The weather caveat isn’t to be dismissed, with the company’s exploration severely cursed by the conditions in 2008 and the 2009 field season already dampened. By way of example, a geophysical program (VTEM) supposed to take three weeks in 2008 took three months. When the country is as rugged as is typically the case in PNG, bad weather becomes an exponential issue.
Two rigs were being mobilised early this month, and a third, smaller unit the company has used before was also being considered.
Managing director Basil Tambanis conceded some of Goldminex’s shareholders were getting extremely keen to see some drill results – he point blank refused to name names, though the likes of the Talbot Group (which evidently holds some 21% including shares held by Dennis Wood), wouldn’t be a genius guess – with an initial 2500m to 3000m anticipated.
In actual fact the company is hopeful of doing more than that, but Tambanis is conscious of not over promising and under delivering, especially after the weather woes of 2008 and thus far in 2009.
Of the three prospects being targeted, Gossan Hill and Kemani are shear hosted gold copper vein systems, while Awari, 45km from Porgera, features a “major gold mineralised structure" and locals mining both alluvial and hard rock mineralisation.
The cashed-up Goldminex ($A22.5 million at the start of the current quarter) spends about $A10 million per field season (April through to December) in the Owen Stanley Ranges, with everything from toilet rolls to drill rods needing to be choppered in. The “horrendous” burn rate means the company is trying to assess as much of its nearly 10,000sq.km of ground as possible, essentially to amortise the fixed cost over as many prospects as it can generate.
And generating prospects is not difficult on ground where float rock grading up to 23% nickel can be picked up. (On its nickel hunt, Tambanis said arsenic was considered a strong pathfinder for mineralisation, with areas of significant indications awaiting further assessment).
Goldminex has some 14 geologists on its books, plus 15-16 fieldies, a dozen other support staff and 100 or so labourers assisting with trenching and other such work. Tambanis said one of the big benefits of the pricking of the boom last year for Goldminex was that it allowed the company to hire high quality geologists.
However, more than anything, it’s the drilling crews that Tambanis and Goldminex’s shareholders are most keen to see in action at the moment.
Goldminex closed the week capitalised at about $A57 million. The company floated back in late 2007.
Something out of the ordinary Michael Quinn, 4 August 2008
AMIDST the market carnage, Papua New Guinea-focused greenfields explorer Goldminex Resources stands out like an absolute beacon. Earlier this month the company’s shares hit a new high, as interest in its outstanding early stage exploration play continued to grow.
After raising more than $A22 million late last year in an IPO that priced shares at 75c, the stock started this week at $1.80 (before being sold back to $1.60 on low volume), capitalising the company at $A60-70 million.
Those that own the stock are in the main not selling, as early exploration points to something out of the ordinary in the rugged Owen Stanley Ranges where Goldminex holds some 9500sq.km of ground.
According to Goldminex managing director Basil Tambanis, the company’s share register has a strong institutional presence, well versed in the cut and thrust of exploration, and all too aware of the opportunity on offer.
“We’re a junior company with a major company play,” Tambanis told HighGrade from his office in Melbourne. “A project that has never had a drill hole put into it with the surface mineralisation like we’re seeing is just incredible.”
While gold and copper remain key foci for Goldminex, recent highlights have emphasised the ground’s nickel prospectivity. A 20km nickel sulphide corridor has been identified, with outcrop returning grades as high as 43.5% nickel and float rock up to 49% nickel.
Tambanis agrees “absolutely” that many will be awaiting drill results before getting overly excited, and notes that current members of the Goldminex’s board such as chairman Adrian Fleming and company consultants such as world renowned nickel guru Dr Jon Hronsky showed early reservations.
“A lot of people said this sounds too good to be true, it must be crap,” Tambanis said. “And when they came to do their due diligence, whether it was the guys now on the board or some of our consultants, their eyes lit up.
“I think for the savvy investors [the question is], ‘where else in the world do we see this concentration of gold, copper and nickel?’. When you go to site and you jump in a helicopter and drop into multiple prospects and see the mineralisation, you get a real appreciation that there’s potentially very large systems driving this.”
And there is, according to Tambanis, a simple reason why this ground has been overlooked previously.
“If you look at all the discoveries and mines from Grasberg through to Misima, there is a huge concentration of metal along that belt of which we’re [also] on,” he said. “But it’s not just geology by nearology. BMR mapped the whole of PNG in the 1960s at a high level. When they found large deposits in the Highlands, like the Porgeras, all the exploration went to covering-off on other intrustives. ‘This is the model, it’s intrusive-driven, let’s find the intrusives’.
“There are very few intrusives mapped in our area, and that’s because it was fairly poorly mapped. And where we are finding our mineralisation at surface, we’re finding intrusives.
“So that’s why people are saying ‘you’ve got surface mineralisation, you’ve got good tenor, how are you going to match the tenor with the tonnes?’. But when you go in there and see the size of the alteration and the fact that it is not just a single prospect project, and you can see intrusive units at a lot of the prospects, then you know that this is being driven by potentially some sort of porphyry, or some intrusive style engine. So you’ve got a good chance of finding something that is your traditional, Pacific Rim-style copper-gold target … but on top of that you’ve got the nickel.
“Where we’ve seen this outcropping nickel mineralisation is essentially where the drainages have cut through and exposed the structures. So we’ve only seen where some creeks have run through structures, we haven’t even seen under the cover or foliage of all of that licence area. We’ll do some EM, see if we can pick up some low hanging fruit and to see if we can use it as a tool for further work … and generate drill targets.”
The helicopter-borne EM survey is due to kick-off mid month, with results anticipated in September. Drilling has been previously mooted for the December quarter, though Tambanis is keen to see EM results before the initial drill campaign is set in stone.
Analyst Cathy Moises of Melbourne-based Evans & Partners is a fan.
“Goldminex is our number one exploration play,” she said in a recent note. “We stress it is high risk, with no drilling to date… but given the “noise” through sampling to date, we rate the chance of a significant discovery within their tenements as very high.”
The company has also had analyst coverage by the likes of RBC Capital Markets (which, with Bell Potter, was involved in the IPO), and Credit Suisse. The latter noted that the mineralogy of Goldminex’s nickel (pentlandite-millerite-healewoodite) suggests that were a concentrate to be produced it would be very high grade.
“The absence of other metals in assay to date also would suggest that the concentrate would be very clean and therefore attractive to smelters,” Credit Suisse said.
Tambanis wouldn’t be drawn on whether rumours of third party interest in Goldminex were credible other than to acknowledge generally that the shortage of smelter feed and the big emergence of Chinese companies scouring the resources world were now impacting factors in the strategy of majors.
GMX Price at posting:
82.3¢ Sentiment: Buy Disclosure: Held
