This company was mentioned in a release put out by another exploration company last week, namely White Rock Minerals (WRM 'Company Update', released 04/10/23).
Some elements of the above announcement grabbed my attention. I'll paste the extracts of interest, below, and therafter go on to explain why I feel these might be of relevance to shareholders in this company.
...The directors of White Rock Minerals Limited (“WRM” or “the Company”) would like to advise the market that they have appointed Liam Bellamy and Trajan John Kukulovski of RRI Advisory, Melbourne as Joint Administrators of their 100% owned subsidiary White Rock (MTC) Pty Ltd, effective 28 September 2023.
White Rock (MTC) Pty Ltd (“MTC”) held the Mining Licences and an Exploration Licence that comprised the Mt Carrington Project in New South Wales.
As advised in ASX Announcement on 20 July 2023; Mining, Exploration and Geoscience, Department of Regional NSW (“MEG”) denied MTC’s application to extend the payment date for an instalment of $591,346 in relation to Rehabilitation Bonds that had increased in 2021 from $968,000 to $6,881,466.The current security in place in relation to Rehabilitation Bonds is $968,000.
Also, it was advised in the ASX Announcement on 20 July 2023 that Thomson Resources Ltd (ASX:TMZ) had withdrawn from the Joint Venture over the Mt Carrington project. The increase in the Rehabilitation Bonds prevented MTC from attracting another partner to the Project. Without the means to pay the instalment and no other partner being found, the Mining Leases were surrendered. It has been advised that the surrender of the Mining Licences is in assessment phase....
So, it looks like there is going to be one less silver stock on the local bourse.
White Rock first listed back in September of 2010, so it is a sad end for shareholders in that company, particularly the patient ones, some of who might have been holding on hopefully for a decade or more.
Of course, this new release would surely not have been a surprise to the Thomson management: As was related above, Thomson had been in a joint venture with White Rock to develop the Mt Carrington silver project, which they withdrew from earlier this year (The above announcement states July, but I think this might be a typo, as TMZ released an announcement stating that they were withdrawing from this joint venture back in March).
White Rock first announced that they were surrendering their mining tenements at Mt Carrington back on the 20th of July. It appears that they had one keen buyer waiting in the wings, namely, a certain freshly minted ASX-listed exploration stock by the name of Legacy Minerals, who announced the acquisition on the very same day, the 20th of July this year.
Here is the extract from the relevant Legacy release pertaining to this acquisition:
...Legacy Minerals Holdings Limited (ASX: LGM) (“Legacy Minerals” or “the Company) is pleased to announce the acquisition of the Mt Carrington exploration license (EL6273) for $200k from White Rock Minerals (WRM). EL6273 excludes any mining licences (ML), is unencumbered, and has no liabilities.
Located in the New England Fold Belt of northern NSW, EL6273 and the pegging of a surrounding exploration application ELA6640, will cover 350 km2and will be called the Drake Copper-Gold Project...
So basically, they've bought the exploration license. But note what is stated in the second line: ... EL6273 excludes any mining licences (ML).
I dug up the tenement schedule that was listed in last annual report put out by White Rock, back in 2022, and pasted the relevant section below:
Note the numerous mining licences, 'MLs', listed above: These were excluded from the Legacy purchase of EL6273.
So, why didn't Legacy buy these, along with the exploration license? Well, that WRM announcement up above offers up a telling clue. The acquisition of these assets requires the payment of a hefty environmental bond, $6,881,466 in total.
I'll now explain why I think this might be of interest to Thomson shareholders (and, perhaps more to the point, why it might be of interest to the management of this company).
Back on the 24th of October last year, Thomson released an announcement in relation to Mt Carrington ('High Grade Copper Target At Mt Carrington', 24/10/22).
That announcement starts with a bullet point stating '...High-grade copper target identified near the Kylo gold-zinc resource at the Mt Carrington Project...'What is the 'Kylo' referred to here? It is a name to identify the deposit: the notes at the end of the above announcement provides more information:
'...The Kylo, Strauss and Gladstone deposits are wholly situated on ML1147...' If you look at the WRM tenement schedule, above, you'll see that one is listed there. It is one of the mining licenses that Legacy didn't acquire.
Now, bear in mind that WRM surrendered all of these assets on the 20th of July. Just three weeks later, on the 11th of August, Micheal Povey was appointed as a director of the company.
Now, putting two and two together, could it be possible that Thomson might be cooking up a plan to acquire some or all of those Mt Carrington tenements that Legacy didn't acquire? If so, that would presumeably require payment of the $6.8 million environmental bond.
That's a big ask for a company with a market cap just shy of the $5 million mark.
However, this might just be viable if the company were to receive the balance of the $3.5 million that Warwick owes them for the purchase of the Texas project, and the article that was posted here by Kippax the other day about the sale of that mansion might indicate that those funds are on the way.
On top of that, however, Thomson would need to raise capital. And if they were planning to do so at the price of the placement, 0.001, they'd need to give away billions of shares away to raise enough cash for the purchase of the Mt Carrington tenements.
If so, such a move would seem to accord with the antics of another silver focused exploration company, Silvermines, who, in the middle of last decade, issued billions of shares to buy a top-tier silver asset, the Bowdens project, when the share price of that company was at rock-bottom.
The Thomson management are of course well-acquainted with Silvermines, having struck a deal with that company back in 2020, picking up the Webbs and Conrad projects in exchange for $50k in cash and a large pile of TMZ shares.
So, the question is, is it possible that the Thomson management see Mt Carrington as being akin to the next Bowdens?
Well, if so, the recent acquisitions by Thomson should offer pause for thought. Both the purchase of Webbs and Conrad and the subsequent purchase of the Texas project proved to be missteps by this company. In the first instance, it turned out that Silvermines were taking them for a ride, and thereafter Texas proved to be too hot to handle.
As such, the primary hurdle faced by the management of Thomson is one of trust. Given the rueful outcome of the last two major acquisitions, it is hard to believe that a new major asset purchase is not going to evoke some scepticism on the part of shareholders, current and prospective.
It is also worth bearing in mind, that there are many troubled companies in the mining space at current: White Rock is a case in point. Undoubtably, there will be numerous interesting mining projects up for grabs in the months ahead, and it is likely that many of these will be better value for money than the Mt Carrington tenements. I believe that it would be possible for the company to pick up a solid project for around a million dollars in the current environment. Keep in mind, at the start of the year Thomson disposed for their Bygoo project - arguably the best tin project in Australia- for just $600,000.
As such, in the current environment, it doesn't make sense for this company (or any other) to fixate on one project. The wisest course of action may well be to sit back and wait for a while. They might find that something just falls into their lap.
Finally, in light of recent event, there may be one other good reason as to why it might be wise for the company to hold their horses for a while.
The unfolding developments in the Middle East evoke memories of events in that region half a century ago: the Arab-Israeli war in October 1973, and the Arab Oil embargo that the war set into train.
This of course triggered a surge in the oil price, which tripled in a matter of months. Perhaps less well known is that the silver price nearly doubled in the months following the outbreak of the 1973 war.
This prompts the question: Could we see another, similar surge in the silver price in the near future?
It's a live question, of course. However, such a scenario would have to be considered a realistic possibility at this point in time, and if this were indeed to play out in the months ahead, there would surely be no good reason for the company to upend the structure of the company through the issue of vast numbers of shares at 0.001c.
Indeed, against such a backdrop, you might reasonably anticipate that TMZ might be set to jump as soon as the suspension ends.
(20min delay)