KingsroseMining (ASX: KRM) is a well-funded exploration company conducting one of Europe's largest greenfield exploration programmes in Norway and Finland in partnership with mining major, BHP.
Alongside this, the Company is also aggressively assessing more advanced development projects to acquire, while it awaits the issue of its exploration licence for the high-grade Penikat PGE-Ni-Cu Project.
BHP Exploration Alliances
In May of this year, Kingsrose signed exploration alliance agreements with BHP, under which BHP will invest A$31 million over 4 years in regional exploration across Kingsrose’s portfolio of projects in Norway and Finland.
In return for this significant investment, BHP will own an option that should a discovery of significance be made, it can then earn up to a 75% interest by investing an additional A$56 million over 7 years.
Finnmark Region, Norway
Initial work under the regional scale exploration alliances has already commenced with an airborne gravity survey, mapping and geochemical sampling over numerous high-priority copper-nickel-PGE targets in the 2,736 km2 of exploration licenses held by Kingsrose in the Finnmark Region of Northern Norway (Figure 1).
Figure 1: Targets in the Finnmark Region
Source: Kingsrose Mining
Ground-based electromagnetic surveys are planned for winter to follow up on target areas generated and explore for conductive anomalies which may represent copper-nickel-PGE massive sulphide bodies.
Central Finland
Alongside the exploration activities in the Finnmark area, exploration across the 993.1 km2 of exploration ground held by Kingsrose in the Kotalahti Nickel-Copper Belt of Central Finland (Figure 2) is also underway.
Figure 2: Targets in Central Finland
Source: Kingsrose Mining
Fourteen high-priority camps have been selected for follow-up exploration, including drone-based and ground magnetic surveys, mapping and geochemical sampling. This work will feed into ground-based electromagnetic surveys are planned to commence before the end of the year.
Penikat PGE-Ni-Cu Project
The Penikat PGE-Ni-Cu Project is considered to be one of the highest-grade PGE projects gloabally, it was previously drilled in the 1980s and has an impressive database that contains 95 historic drill holes (4,157.63 m).
These holes have demonstrated the presence of mineralisation over a massive, 23 km long strike but have only tested down to an average depth of 43 m, while similar-style deposits in other jurisdictions can extend to depths greater than 1 km below the surface.
A JORC exploration target, generated in June 2022, suggested a potential range of deposit sizes from 21 to 32 Mt at an estimated average grade range of between 4.0 to 7.4 g/t 6E (the sum of platinum, palladium, gold, rhodium, iridium, and ruthenium) containing between 2.8 and 7.7 Moz 6E.
Figure 3: The Penikat Exploration Target relative to other PGE Deposits
Source: Kingsrose Mining
Kingsrose has been awaiting the award of an exploration permit for the project, since September 2023. The permit was awarded in July 2024, however was appealed by two non-governmental organisations, and the case will now be heard in the Administrative Court, a process that is expected to be completed towards the end of next year.
Once the exploration license has been awarded Kingsrose plans to commence a drill programme to test priority targets within the exploration target, allowing the company to produce a maiden mineral resource estimate for the project. Subsequent drill programmes will expand the resource as the deposit is drilled out.
Potential Acquisitions
Kingsrose has made no secret of its intention to use its significant cash balance to acquire a more advanced project. The company has assessed over 170 projects globally over 9 months with several opportunities under the next stage of review, including due diligence and site visits.
The company has a dedicated team focused on finding and assessing post-resource stage to operational mines and the company is considering all types of transaction structures.
Finding the right type of deal takes time, and Kingsrose is very much focused on securing the right type of deal, putting a huge amount of effort and resources into finding a project that matches its investment criteria. When the right deal is found, it is likely to be a transformational event for the business.
Undervalued
Kingsrose is clearly undervalued, the company’s market cap of A$27.9 million lies just above parity with its net cash position of A$26.2 million. The net present value of the investment from the BHP exploration alliance is around A$24.6 million.
The value of the exploration alliances and Kingsrose’s net cash position total A$50.8 million, an 82% increase on the current market value.
This is without taking into account the potential value of the very exciting Penikat project, where 4,157.63 m of historic drilling has already defined a significant PGE-Ni-Cu deposit. The acquisition of a more advanced development project could also cause a further re-rate in the company's market value.
