Are Thomson's assets really worthless, Timmasbd? I know that this suggestion gets mooted here from time to time by frustrated shareholders, however, I think the suggestion is probably a little wide of the mark. My personal view is that Thomson's assets probably have got more going for them then is sometimes implied on this forum.
Are we able to pin some kind of number on the value of any of Thomson's projects? I think we might be able to do so for the signature assets of the company, at least to some extent.
I don't think there would be any disagreement from anyone here if I were to suggest that the Webbs and Conrad silver projects are the most promising assets controlled by this company at current.
The first of these assets, Webbs, had a longstanding association with Silvermines, who brought the asset to the ASX in their market debut in January, 2007.In fact, Webbs was pretty much the only asset that the company controlled at the time.
The Silvermines share price at the time of listing was 0.200, with some 26 million shares outstanding, equating to a market cap of around 5.2 million dollars, which curiously enough, is not far from the current market cap of Thomson.
Of course, $5 million would buy you an awful lot more cheeseburgers in 2007 than in 2023, and it is always problematic comparing the asset valuations of yesteryear with those more current.
However, we can pin a more recent and more concrete number on Webb's sibling project, Conrad.
Silvemines purchased the Conrad silver project from Malachite Resources in June 2015. They paid $350,000 in cash, and also gave them $125,000 worth of Silvermines shares. ('Malachite proceeding with Sale of Conrad Silver Project, SVL announcement, 17/06/2015')
So, essentially, in mid-2015, the Conrad project was purchased by Silvermines for $475,000.
We can be sure the project would be worth more today, and not just on account of inflation. Bear in mind, that at the time Silvermines sealed the deal, the USD silver price was $16 an ounce, whereas today, the price is some 50% higher, almost at $24.
The difference is still greater when we consider the comparative now-and-then silver price in Australian dollars. In terms of Australian dollars, the silver price has risen some 75% since the middle of 2015.
Based on the description on the Thomson website, the two projects seem to be roughly comparable: ...The Webbs project is Thomson’s fifth MRE reported in accordance with JORC 2012 for a total of 14.2 Moz AgEq at 205 g/t AgEq...
Whereas the description for Conrad notes: The Company’s Mineral Resource Estimate for the silver polymetallic project is currently 3.33 Mt at 193 g/t AgEq for a contained 20.72 Moz AgEq....
We can therefore assume, that back in 2015, the twin silver projects would have been worth nearly a million dollars, and this at a time when the silver price was much lower, and when a dollar had more purchasing power.
I am not going to speculate as to how much the Webbs/Conrad projects would be worth today, but as argued above, it isn't reasonable to suggest that they are completely without value. In my view, while the twin silver projects aren't top-tier silver assets, they are decent assets in their own right.
Webbs and Conrad are the most notable assets held by Thomson. But let's consider the other projects the company is sitting on for a moment. Is there any value there?
At least one geologist seems to think so. I'll highlight below something that I noticed on social media earlier this month.
The following extract is from a post by John Anderson, a Mineral Exploration Consultant. The name might be familar to shareholders with an interest in silver- focused stocks, as Anderson was previously a Managing Director of Investigator Resources.
....Discoveries in Data: The Lillyfields Ni Cu target.
Throughout my career I have endeavoured to knock the "Pre-" off ......Competitive Data as quickly as possible to gain an advantage over other mineral explorers. Now I have a more generous aim of raising Australia's discovery rate to break through the limitations of investment cycles, diverse corporate agendas and tenement systems.
The 2022 partial release of the Heavy Mineral Map of Australia drew my attention to the headwaters of the Darling River system. With the full release of the HMMA data this month, the region shows national anomalism in a range of minerals offering multiple metal targets. This may be due to a young revitalised geomorphic landscape that previously obscured and now highlights discovery opportunities.
One standout is a catchment sample highly anomalous in Ni Cu and Zn sulphide observations (A & B) indicative of a proximal metals system. This coincides with the mafic and possibly ultramafic Warraweena Volcanics intersected under thin cover regionally along strike (C & E) by tin and porphyry copper explorers. The Volcanics are dated around 504Ma and are tectonically situated between the Lachlan and Thomson Orogens...
The apple in Anderson's eye is a location in the north of NSW, somewhere near to where the Barwon and Culgoo rivers interect. He included a map in his post, which pinpoints the general location:
It struck me that two of Thomson's projects are situated very close to the region that Anderson highlighted in his post.The map below is from the most recent TMZ quarerly, released on 31/10/23. You can see that two of the projects shown on this map lie near the intersection between the Thomson and Lachlan orogens. The 'standout' area in NSW in the map above straddles the line between these two geological belts.
Of the Thomson projects shown above, Wilgaroon is situated in close proximity to the area of interest in northern NSW that stands out on the HMMA heavy mineral map. And it looks to me as if Wilga Downs, just to the north-east, falls squarely in this promising zone.
If the name Wilga Downs doesn't ring a bell, that is no surprise, as the name hasn't cropped up once on this forum in the past 12 months. In fact, the project is only deemed worthy of a two-line mention on the Thomson website:
...Thomson has a earn-in Agreement over the Wilga Downs Gold-Base Metal Project. DevEx has earned an 80% interest with further exploration proceeding by the parties to the JV....
The Thomson website hasn't been updated for ages, and circumstances have changed.
Less than a month ago, on the 25th of October, DevEx Resources announced that they had sold off all of their copper-gold assets in the Lachlan Ford belt, reflecting a shift in focus by the management of that company towards their uranium projects in northern Australia ('DevEx Completes Sale of NSW copper-gold Portfolio')
So where does that leave Thomson? Well, looking at the tenement schedule in the most recent quarterly update, Thomson is currently back to 100% ownership of the Wilga Downs project. I also checked the tenement schedule on the DevEx Annual report on the 21st of September, and the Wilga Downs tenement was nowhere to be seen.
The deal with DevEx was struck back in 2021, and under the terms of the agreement, that company was required to fork out $290,000 each year for the next four years to gain the 80% interest that was noted on the Thomson website. I'm not sure what happened, but I'm guessing that DevEx just gave up on the project, in their scramble to chase the uranium bandwagon.
Did DevEx make a blunder? Hard to say. But that post by John Anderson might suggest that some of the minor Thomson projects have more going for them than the market (and quite possibly even the management of the company) might truly appreciate.
My own feeling is that the present market cap of Thomson isn't really reflective of the inherent value of the company's projects. The low share price today is primarily a consequence of some poor managerial decisions over the last few years, most notably the deal that was struck with Lind last year and the 2021 acquisition of the Texas asset, which in the end almost floored the company.
These issues are, to some extent, now in the rear-view mirror. At the very least, Thomson now looks on track to continue as a going concern, and I think over the longer term, there could possibly be quite some upside for the share price, assuming that the shares don't end up being excessively diluted by a low-bar capital raising.
(20min delay)