This is simply my own opinion, as always - do your own research - I haven't bought in yet but this looks promising, following is a brief summary of CTM, enjoy.
CTM
SOI: 2,704,982,165
With a further 623,049,575 options expiring on 31/8/19 (1c strike price), 255m unlisted options:
and 90m performance rights issued in October 2016 to Terrativa Minerals SA:
Tranche A – 30,000,000 Performance Rights will be converted into Ordinary Shares if, within a period of 5 years after the date of issue of the Performance Rights, a JORC‐compliant Inferred Resource of 500,000oz of gold or gold equivalent is defined on the Pará Exploration Package Project tenements;
Tranche B – 30,000,000 Performance Rights will be converted into Ordinary Shares if, within a period of 5 years after the date of issue of the Performance Rights, a JORC‐compliant Inferred Resource of 1,000,000oz of gold or gold equivalent is defined on the Pará Exploration Package Project tenements;
Tranche C – 30,000,000 Performance Rights will be converted into Ordinary Shares if, within a period of 5 years after the date of issue of the Performance Rights, a JORC‐compliant Inferred Resource of 1,500,000oz of gold or gold equivalent is defined on the Pará Exploration Package Project tenements.
PROJECTS
CTM are historically an Iron Ore company who made the decision to diversify in 2015 due to the prevalent negative sentiment towards Iron Ore at the time.
1.Jambreiro Iron Ore (and Conquista and Candonga Iron Ore) projects:
Jambreiro is an Iron-ore project in South East Brazil consisting of three mining leases covering 32.7km2.
Shovel-ready and licensed for 3Mpta of wet production.
BFS completed in 2013, currently being reworked to account for market changes since 2013, funded by the recent $2.2m Cap raise.
Supply discussions under way ahead of product being released to market.
Had originally planned for this project to be commissioned in 2013.
Previously owned by Cenibra, a subsidiary of Japan Brazil paper and pulp resources, and formerly owned by Vale(CVRD).
Low processing costs as ore doesn’t require crushing.
Timeframe of project post-BFS:
The 2013 BFS estimated an EBITDA of AU$556m over a 9 year LoM, and a critical payback period of 2.25 years - The resource size was upgraded after this.
In late 2013 they were in discussions for a long-term off-take agreement with a leading Brazilian Iron ore and steel group.
In December 2013 they planned to start with a 1Mtpa low capex strategy to lower initial expenditures to $53m. With this plan production was scheduled for Q1 2015. Extends LoM to 18 years.
Even though they were not required for construction to begin, mining leases were granted in January 2014.
At the beginning of April 2014 they conducted a $5m share placement at 12.5c per share, underpinned by major shareholders Atlas Iron Ltd and Liberty Metals & Mining Holdings, LLC. These funds were designed to keep things running whilst the main funding for Jambreiro was negotiated. At this point debt funding was being looked into.
In June they announced that due to market sentiment any financing would be conditional on an off-take agreement, and this was contingent on the completion of the nearby Sudeste port (at the time expected to be completed before the end of 2014). They acknowledged that they were looking for other opportunities outside of Jambreiro at this time, particularly small-scale DSO operations. At this point the Candonga project became the priority, and would have a feasibility completed by September 2014.
By April 2015 the market sentiment towards iron ore had worsened. As such CTM were unable to obtain funding for Candonga (The project would be sold by the end of summer 2015). However, they had received “an unsolicited expression of interest” in the Jambreiro project and, at this time, were assessing it. It was at this time CTM looked to diversify their interests outside of iron ore due to the sentiment held towards it. During this period staff (45% of the workforce) were laid off, offices were downsized, and key management agreed to take portions of their salary in shares.
On 10/4/17 allowed Ecosinter option over CTM’s Conquista Iron Ore portfolio, located near Jambreiro. Ecosinter paid $85k for a 12 month option during which time they would conduct an exploration program at an estimated cost of $500k. If Ecosinter had elected to take up their option they would have paid CTM $1.25m and a 12% gross production royalty. Ecosinter had the option to extend the 12 month option by a further 6 months at a further cost of $85k.
Ecosinter would take up their option with CTM receiving $185k, with a further $555k due on commencement of production in addition to the 12% production royalty.
During March 2019 CTM announced that they will be reworking the Jambreiro Feasibility study with a number of potential partners expressing interest in the project.
Also have Canavial (10km from Jambreiro) and Guanhaes Iron Ore projects but they are rarely mentioned and have had very little work done on them.
2. Itapitanga Nickel-Cobalt Project
Acquired in February 2018
Located 15km from Anglo American’s Jacare deposit, in the Carajas region.
CTM since entered into a farm-out with The Simulus group.
Simulus currently conducting scoping study, expected to be completed by end of April 2019.
If free-carried to mine then CTM will end up with 20% of the project.
Since drilling commenced they have found multiple medium-grade nickel and economical-grade cobalt hits at very shallow depths, as well as broad Scandium zones.
3. Salobo West Copper-Gold project
IOCG deposit located in Carajas mining district, Carajas state. Tenements host at least 5 Cu-Au prospects. Initial licensing permits were denied in March 2018, however permission to apply for the permits with the completion of a vegetation inventory. This has now been completed.
History of the project
Previously owned by Anglo-American PLC, who only conducted exploratory drilling on one hole, and didn't go deep enough to intersect with the prospective zone. The Anglo American exploration report lodged with the Mines Department (DNPM) describes detailed mapping of fertile host rocks. Anglo American sold to Vale in 2002. Vale were formed in 1993 as a JV vehicle of CVRD and Morro Velho Mining (a subsidiary of Anglo American Brasil Ltda., AABL). So the 2 companies have been inter-linked since Vale's formation.
Between 1998-2000 Rio Doce Geologia e Mineração SA carried out exploration work in the region, they were an exploration company working on behalf of Vale.
Salobo exploration history, full PDF link page 60.
Vale have their Salobo mine 12-15km along strike (varies depending on which CTM ann you read, they have said both 15km, in a recent presentation, and 12km “multiple new copper gold geophysical…” and in the most recent annual report) from CTM’s Salobo West project.
Vale initiated projects in Salobo in 2012 and 2014. 4km long, 100-600m wide deposit, to a depth of upto 750m. Vale's Salobo mine produced 43.7 ('000 metric tonnes) in the 1st quarter this year, down from 53.0 in Q4 2017, but up from 42.6 in Q1 of 2017. It has a post-processing grade of 36-40%. Produced 317k ounces of gold in 2016. Proven/probable copper and gold reserves + grades as of December 31st, 2016. Mine life is estimated until 2066.
Roughly 20km from the Igarapé Bahia Mine, which was discontinued in 2002 after extracting 3,119,000 troy ounces of gold.
CTM are currently awaiting environmental licensing ahead of commencing a 35 hole drill program. In their most recent investor presentation they stated that they expected to receive the licensing at the end of April 2019. They have also said that they have received “a number of proactive approaches from large third‐party mining groups to potentially joint venture into the Salobo West Project”which they are currently evaluating.
TOP 20 / DIRECTORS
Darren Gordon (MD):
Former MD at Glengarry Resources (formerly-GGY) when they took over CTM in 2009. Had previously been the secretary and then CFO at Gindalbie Metals.
Was the majority shareholder at Glengarry.
According to the most recent Top 20 he owns 65.78m shares (2.85% of the company), also holds 18.77m listed options (5th largest options holder).
Purchased a further 9m shares since 1st Jan 2018.
Had owned 52.36m GGY shares at the start of 2010 when the takeover happened.
Seem to be keen to bring in people with specialised knowledge in the field they’re prioritising. In 2017 they did this when they appointed Steve Parsons to the board. He was bought in due to his record in the gold sector. When he left to focus on BGL he was replaced by Chris Banasik; a founding director of SLR (gold), as well as having extensive experience with nickel.
Also use very well respected specialists in the field. Used Alan King -- former Chief Geophysicist for Global exploration at Vale -- in reviewing the available data at the Salobo project before commencing their initial surveys.
The use of Alan King isn’t the only time CTM have seemingly dipped their pen in ink that had belonged to Vale. Seeing as how the Salobo and Jambreiro projects were both previously owned by (either directly or through related entities) Vale. The CTM Brazil country manager & executive director Bruno Scarpelli was the former environmental co-ordinator at Vale’s Carajas Iron Ore operations, so likely had an inside track in acquiring these projects and knowing where to look. Behind Darren Gordon, Scarpelli is the best paid director at CTM.
In 2018 both Gordon and Scarpelli received an increase in salary whilst receiving less in options. Prior to 1/1/18 Scarpelli held no heads but acquired 1m over the course of 2018.
Other directors holdings: Didier Murcia (Non-executive chairman) 13.08m - acquired 2.09m during 2018, Mark Hancock (non-executive chairman) 4.62m - acquired 943k over 2018.
The top 20 of CTM hold 27.75% of the company.
CTM’s #1 shareholder is Bradley Bolin (owns 4.23%), he is also the largest options* holder (11.24%). He accumulated approximately 7m shares during 2018. Had also been a top 20 holder at Genesis minerals where Darren Gordon had served as a non-executive director. Genesis have former-CTM and current Strandline director Richard Hill as Chairman - Didier Murcia is chairman of Strandline.
The 5th largest holder is CTM’s exploration manager Roger Fitzhardinge, employed since 2010 (https://twitter.com/rogfitz77?lang=en). He accumulated 6m shares during 2018, and holds 15m options*.
*Refers to CTMOB expiring 31/8/19, 1c strike price.
FINANCE
At the end of 2018 there was only 60k cash on hand with $1.34m available in short term deposits. Since then a $2.2m placement has been undertaken.
In 2018 CTM made a $4.2m loss. During this time over 525m shares were issued; 295k during a placement at $0.009 (raising approx. $2.65m), and 227m from conversion of shares at 1c (raising $2.27m).
Whilst lacking an income, if Simulus can bring the Itapitanga project into production that would provide a cash injection and a revenue due to the terms of the farm-out deal.
PRICE MOVEMENTS AND CATALYSTS
Salobo Licenses - expected imminently.
Itapitanga Scoping Study - expected imminently.
Re-worked Jambreiro Feasibility study - planning underway and finance for the study secured.
The Vale disaster created a gap in the market:
The Brazilian government moved to ban all upstream mines.
Other producers can’t fill the gap left by Vale.
Will have a direct effect on Chinese Steel mills.
Vale’s plight could also see them cut back on staff and possibly relinquish projects as they will likely have very large payouts to make (The Wall Street Journal claim Vale may be facing a $7bn payout). With CTM possibly having Vale connections this could leave them in an opportune position for either staff or project acquisition.
If CTM can get CTMOB to be worth converting (1c strike) by the end of August this year, this could be worth an extra $6.2m to them.
CTM Price at posting:
0.7¢ Sentiment: None Disclosure: Not Held
(20min delay)
