After researching Auteco Minerals, I found Thursday’s presentation by Ray Sharrocks (Executive Chairman) at the Brisbane Mining Conference to be very informative, and I am excited. I totally recommend others watch the full presentation a couple of times. Here is my summary of the key points.
Since Auteco acquired the “Pickle Crow” project in Canada over 2 years ago, they have increased the resource to 2.23Moz at 8g/t (Enterprise Value of $123M with an EV/Resource less than $60/oz compared to a global average of $140/oz).
·Historically, Pickle Crow has produced 1.5MOz at a stunning 16g/t between 1935 and 1966 when the mine was stopped because the price of gold hit $35/oz
·AUT inherited 170 Klms of historical Core data which AUT have been able to reorientate the data, to provide walk-up targets wherever they go
·Expanding existing camp from 24 to 50 persons due to extra exploration drilling.
·Another Core Shack being built
·Liked Ray’s comments saying the old mine headframe and Processing Plant “could be useful”, with more information later in the presentation
·Great Balance sheet having recently raised $20M - $27M in Bank
Ray highlights Autecois in a Tier One Location for doing business:
·Great Infrastructure (Hydro power) & close to transport (e.g. 10 minutes to airport)
·In Highly prospective region
·Great Mining Code & relationship with First Nations People (Pro-Mining)
·Great Tax & Financial Incentives (e.g. Flow Through financing with up to 40% premium of current SP)
·High availability of Drilling rigs and quality crews (cost of $140/drill meter compared to global average over $200)
·Assay turnaround is 17 days (Rush is 6 days) from Thunder Bay
·One of the Best Gold addresses globally with pedigree neighbours including:
Ray said he has a Great Management Team & Board, noting the Board is the original Board from Bellevue Gold.Darren Cook (COO) is from Northern Star and provides a “laser like focus” for the team.Ray recognised the importance of his people, stating they will create value from the Asset.
Auteco Ownership - 17% Board & Management (they have skin in the game), 40% Global Institutions with the World Class Fund “Franklin Templeton” recently purchasing 5%.
Ray acknowledged the SP has been travelling sideways since the first maiden inferred resource.He said we are currently in unusual times for Gold, as historically, with high inflation & war, we would have seen the Gold price rise, along with gold equities. Currently, Gold equities have not kept pace with the gold price.Ray said to “Watch This Space” and seemed excited.
Ray went on to say Auteco has 500km2 of tenure.He noted the main Pickle Crow Mine area (with current resource of 2.2MOzs) is in only a small part of the overall 500km2 tenure. More on the Regional prospectivity later.
While Auteco currently owns 70% of the asset, it has the automatic right to take this to 80% for c$3M, anytime they wish.Rather than buy the extra 10% now, Ray said Auteco will use these funds “at the drill bit” to maximise the value to shareholders.He said he can buy the extra 10% later, so assume we will move to 80%.
Ray went on to say the Processing Plant was in great nick (built to do 310 tonne per day).Ausenco (Brisbane based engineering company) have just reviewed the plant to see if this could be increased to 900 tonnes per day and they said yes.Auteco will be focused on expanding theresource first, and doing infill drilling as they move it into the “Indicated”category.
Ray said it was very important to understand Auteco’s actual mineralisation. Typical in this area AUT have narrow vein high grade deposits (bulk of resource in this category), but also have BIF style mineralisation which is close to surface and amenable to bulk mining.The December 2021 resource showed there was 2.5Mt @3.8g/t of BIF style mineralisation for 300koz. Auteco is looking to expand this with their next resource upgrade in July 2022.Therefore, they can do massive world call box cut and then ramp down into the underground and drill from there to further increase the resource (more economical this way).
Auteco have just done 100,000 meters of drilling.Ray has just signed off for another 50,000 meters of further drilling to be done by the end of 2022.They are finding each oz of gold for every $15 spent.While the resource growth has been great as per presentation, the AUT SP has gone in the opposite direction. Ray said he can not explain why, and would welcome others to explain.
Next Steps
-Find thescale of the system to allow selecting the right infrastructure needed.
-Underground exploration from underground to economically drill
-Raysaid Auteco will increase the share price through the Drill Bit.
I recommend people carefully watch the part on the Tyson Discovery, where they have been finding a massive amount of resource which will be seen in the next resource update.Vein extensions are exciting.
With 500km2 of tenure, the Regional areas has enormous and significant potential for low hanging fruit.Rigs now at Springer and Powerhouse (important to watch presentation) – IMP to note 190+ small claims – now consolidated under one umbrella allowing Auteco to see the bigger picture.
In summary, Ray said Auteco has a great asset in a great location, with significant potential for upside in the Asset Base.His team will add value for shareholders.
If there are some important points which I have missed, please share these via a post.
(20min delay)