L1M acquires new Australian gold & copper projects and raises $2M for drilling
Our early stage exploration Investment, Lightning Minerals (ASX: L1M) just acquired a portfolio of new Australian based exploration projects looking for two main commodities…
Gold and copper.
Given the interest that has flowed into gold and copper projects, particularly into explorers recently, we think this is the right move given the state of the lithium market right now.
(we still like L1M’s lithium exploration ground in Brazil, but don’t like how the market will give company if it continues to allocate resources to the project)
Especially with gold and copper both trading at or near all time highs:
L1M also completed a $2M capital raise at 4c per share with 1:3 7.5c options - which we participated in.
As part of the deal, L1M is acquiring six new projects in a “lolly bag style” exploration play.
These types of investments can be high-risk, high-reward, as the company drills out each project to hopefully deliver a “company-making” drill results that indicates which project it can develop in the next few years.
In the short term the most interesting project is the Mt Turner project in Queensland where L1M will be going for both gold and copper.
Project 1: Testing the 14km fault for gold
This first project sits along a 14km fault, where there have been 5 shallow pits that have been mined for gold.
Between the cluster of 5 and the single lonely pit out to the west there is an area of 4.5km for L1M to drill test.
That area combined is mapped over ~14km and the historical drill results scattered across the project are definitely interesting with intercepts up to 16m thick and gold grades up to ~6.5g/t:
Initially L1M will be targeting near/underneath the existing pit workings, while surface works will be a focus along the fault to gain a greater understanding of the geology.
No permitting is required to be obtained to allow for exploration drilling here, so L1M can get straight to business.
L1M expects to be drilling here within the next 8 weeks.
Project 2: Testing the Porphyry targets
On the copper side, adjacent to the fault, are three big porphyry targets.
This system potentially covers 16km^2 and a geophysics program conducted by the previous owners highlighted three drill ready shallow targets.
Project 3: Lachlan Fold Belt in NSW
As part of the acquisition L1M was able to secure three NSW and one Victorian Lachlan Fold Belt projects.
The Lachlan Fold Belt is known for its porphyry discoveries, discoveries that contain high tonnage gold and copper.
While these projects are in an incredibly early stage, we think that they provide optionality to L1M when it comes to exploration.
The three NSW projects are sandwiched between Newmont’s Cadia Valley mine (one of the largest gold mines in the country) and the Northparkes mine which just 18 months ago Evolution took an 80% interest in:
15 months ago Fortescue Metals farmed-in to Magmatic Resources Myall project located just 50km north of the Northparkes mine.
The deal was for Fortescue to earn up to 75% of the project through $14M spending over 6 years plus they became a 19.9% holder in MAG at a 10% premium.
The “bet” with these types of projects with large porphyry potential projects is that they become multi-million ounce projects that are worth billions over a long, long period of time.
What’s next for L1M?
Deal completion 🔄
Next we want to see L1M satisfy all the conditions precedent on today’s deal and complete it’s acquisition.
Most of the conditions are relatively administrative, but we will be looking out for the completion of the following over the next few weeks:
(Source)
Drilling at Mt Turner (QLD Gold project) 🔄
Following the capital raise and acquisition, the company will be able to jump straight into action at Mt Turner, there is no permitting required to begin ground work and drilling.
Initial drilling is scheduled for August.
Follow up works later in the year will involve more drilling and continued ground works to define high priority drill targets along the fault.
