Kangaroo won't jump until it produces Published Mar 10 2008)
A JUNIOR explorer that does not plan to trail its coat past brokers until it has got a discovery to talk about believes that employing PR people to spin is a waste of shareholders' money and refuses to raise further money because it would dilute existing shareholder values. Now that's something you don't see every day.
And that is why Kangaroo Metals is still largely below the radar for many investors. Even by the standards of the junior sector, Kangaroo's exposure in the business and mining media has been sparse - almost non-existent. One analyst who focuses on the sector had never heard of the company until we mentioned it to him.
The company floated last year on the basis of ground in northern Queensland picked up from Conquest Mining, which was shedding some of the 22,000sqkm it had acquired in order to concentrate on its Mt Carlton gold-silver-copper project near Charters Towers, where there have been some fairly impressive intersections.
Brett Teale, who runs Kangaroo, has one rule: the company will start small to get cashflow, then use that cashflow to finance other projects. Placements are a no-no. Revenue not raisings is his slogan.
He also baulked at spending $1 million on geophysical work. So Kangaroo bought its own equipment and has now forged a joint venture with a helicopter company, doing its own work and seeking other explorers as clients.
Drilling has now begun at three targets - at Reward for antimony and at Stannary East and Silver Valley for tin and tungsten. The plan is to mine alluvial tin and then use that revenue to go after the hard rock metal.
Tin is still fetching more than $US19,000 a tonne and Teale believes the metals markets will stay strong until at least 2010. So he wants to start selling into those markets before the boom tapers off.
Meanwhile, the hunt for tin at the Ewen project has turned up a surprise. During Kangaroo's field surveys of the alluvial tin potential, old mines were found to be rich in copper. Rock chip samples returned copper values averaging 4 per cent, lead 19.3 per cent and silver values averaging 272 grams/tonne.
KML Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
