Amaroq, Arc & Guardian...
Here's the latest.
Good Afternoon Team.
After a dearth of RNS’s to avoid the US election information black hole, it seems that this week we’re being treated to a plethora. Let’s dive in.
Starting with Amaroq’s Q3 results:
Financial Health
Group liquidity of $26 million as of 30 September 2024. Gold business working capital at $37.9 million including $17.8 million in prepaid contractors for Nalunaq.
Gardaq Joint Venture liquidity of $8.3 million as of 30 September 2024.
In July 2024, Amaroq agreed on $35 million in new Revolving Credit Facilities with Landsbankinn, pending final documentation.
On 4 October 2024, Amaroq converted $22.4 million in convertible notes to common shares, reducing interest costs and simplifying the capital structure.
Operational Highlights
Permitting: Working with stakeholders to finalize Impact Benefit Agreement by year-end.
Amaroq advances in Servicing and Hydro to support local procurement and clean energy transition.
Contracting and Procurement: All critical path items procured and on-site.
Engineering: Process plant design and engineering 98% complete.
Construction: Nalunaq plant pad, structural steel, and 98% of cladding complete; crushing circuit installation 68% complete.
Mining: Optimising development in Mountain Block; ramp to 742 level completed and stations commissioned
Exploration Activities Overview
2024 programme completed with over 8,600 meters drilled; results pending in Q4 2024 and Q1 2025.
Nalunaq: 2,895 meters drilled at Target Block Extension; awaiting assay results.
Nalunaq Satellite Targets: Sampling programme at Eagle’s Nest completed
Nanoq: 130-meter scout drilling completed to guide 2025 objectives.
Stendalen: 4,733 meters drilled; environmental baseline data gathering underway.
Copper Belt: 212-meter and 501-meter scout drilling at copper skarn and epithermal copper/gold targets.
CEO Eldur Olafsson enthuses:
‘We are now on the cusp of achieving first gold at Nalunaq, a major milestone which will start initial cash flow ahead of a ramp-up to commercial production.
Over the third quarter we made significant headway at Nalunaq. Many of the major components of the processing plant were installed successfully and the development within the mine in the ‘Mountain Block’ enabled the first ore to be stockpiled for first gold production due this quarter. Our exploration programme at Nalunaq has furthered our understanding of the high-grade deposit with a drilling campaign on the ‘Target Block’ expansion and the 75 Vein. Results on this and the first ore drives in Mountain Block are expected soon. We believe these results, also incorporating the last two years’ drill results, will provide for an updated Mineral Resource Estimate (MRE4) for Nalunaq early next year.
The exploration season was in full swing in Q3 and I’m very proud of what our exploration team has achieved this year. In addition to our on-going work at Nalunaq, we drilled the first two holes at Nanoq in our Gold portfolio, and across our strategic minerals portfolio we drilled [two] holes in Target North at Sava, undertook a three-drill rig campaign at Stendalen and drilled two scout holes at the historical Josva copper mine. We expect results from all of these campaigns over the next few months. This has laid a solid foundation for further Gold, Copper and Nickel exploration activities next year as we continue to unlock the full value of our portfolio in Greenland.’
I’ve been covering Amaroq for a couple of years now - this remains, in my view, one of the highest quality stocks on the market. With first gold on the verge of landing, and the MRE update to come post-Christmas, the only way for the share price is north.
From Q2 as the company ramps up production, the money printer will be in full swing - and remember, while the gold sell-off may feel like poor timing, $2,500 gold is still near record highs and massively profitable for the vast majority of viable projects.
In historical terms, this dip is barely even visible.
Arc Minerals: jam tomorrow?
ARCM investing can be an emotional rollercoaster; the investor call (in my view, though I may be biased given the host) gave us some decent insight - but the market needs hard data. And what we have had so far, is soft data.
Let’s quickly talk the Anglo visit, and its implications:
‘The Zambian government and our competitors out there are very well aware that what we’re sitting on is one of the best, most exciting, you like, copper deposits in the world.’
And Anglo knows it. We’ve already had information on the soil sampling and new priority target - but it has been confirmed that David Wood was ‘really impressed by what he was seeing.’
Anglo started drilling on 7 August and news of this new priority target came back exactly three months later. What are the chances they would hit a possible jackpot target so early into the campaign?
But beyond this, as I already mentioned, the Zambian Ministry of Mines has created an SPV which will allow operators to take on more prospective licenses, but with the Zambian state owning a percentage from the onset.
Given that there are two licenses adjacent to the ARCM-ANGLO JV, and that Zambia’s President is ‘glad to note the renewed interest by Anglo American Corporation, to invest in our mining sector, after close of 20 years of their exit,’ the hope is that these two licenses will be taken on by Anglo.
It’s worth noting that Anglo may also get involved in a producing mine - I have speculated Konkola in the past - but there are others. Anglo did not send their CEO and top lawyer out for no reason.
But if Anglo do take on these two additional licenses, it would be very good news for Arc. Consider:
They would be swallowed into the JV - and Zambia is unlikely to let Anglo take on new licenses without additional exploration spend commitment. Beyond this, there has been minimal spend this year, and as $24 million must be spent in the first three years, you would expect significantly more activity after the rainy season concludes.
For Anglo, BHP are able to make a renewed bid from 29 November, so one hopes that if the defensive play is Zambia, an announcement will come before then.
Now to Botswana: consider the IC - ‘Any third parties reached out to you on Botswana? The answer to that is yes.’
While today’s RNS was scant on detail, the most important takeaways are this:
Copper-Silver mineralisation has been intersected.
There is evidence of Geological, Stratigraphic and Structural setting similar to MMG's Zone 5 operating underground mine.
Consider the Chairman’s words from May:
‘Khoemacau (now part of MMG through the $1.9b acquisition) have made discoveries on either side of out PL135/2017 license with the geology passing through our license linking the two discoveries (Zone 9 and Mowana Fold).
If the mineralisation they encountered on either side of our license carries on into our license area and links their two discoveries, we would then be sitting with the guts of the deposit and with Khoemacau's stated aim of doubling production, this license could become a priority target for them.
Alternatively, if we do hit the mother lode and MMG are quiet, we could approach them to do a deal on their discoveries and consolidate the deposit under one license and then try and develop it.’
And now, his comments from today:
‘I am very pleased to report that assay results from the first phase of drilling at our Botswana project identified good copper mineralisation and similar geological settings to neighbouring MMG's Zone 5. These results confirm our view that we have economic grades of copper mineralisation especially in the context of increasing interest by majors in our license. We will continue our drill programme to target the inner copper zone, presenting what we believe to be a further 5km strike along which to drill.’
ARC completed eight holes; seven intersected mineralisation - and one hole intersected 3m @ 1.29% CuEq within a broader 6m @ 0.82% CuEq.
For context, MMG has reported 4.3m @ 1.65% CuEq and 6.10m @ 2.56% CuEq were reported in holes HA-1393-D and HA-1394-D (above).
Is this result exceptional? No.
But it’s good enough.
It’s definitely enough to warrant further exploration:
‘Further review of the assay data and drill core suggests that the first phase drill programme intersected mineralisation laterally on the fringe of the copper zone, in the iron rich zone, the interpreted outer halo of the main mineralised zone.
All the data is currently being assessed and planning put in place for a second phase drill programme, that will vector away from the iron rich zone, targeting the interpreted inner copper sulphide zone.’
In other words, we’re likely on the edge of what we’re looking for. The hope is that MMG would be interested in an earn-in (before an offer) at this stage to explore the inner zone.
Remember, we’re still drilling - and can continue through the rainy season.
MMG is pumping $1.9 billion into the purchase and upgrade of Khoemacau, and this small license which may form the ‘guts of the deposit’ is likely a snack they will want to eat up.
But it is, once again, jam tomorrow.
Guardian Metal Resources: found it!
While I am happy that CEO Oliver Friesen is finally trenching Golconda, the real GMET mystery has remained who was behind the strategic North American financing back on 15 August.
I think we have an answer.
As a reminder, GMET raised $2.75 million at 27p per share, and issued 3,989,027 new warrants with an exercise price of 40p and will expiration date of two years.
The Q3 13F’s have finally been filed, and while it took a while to go through it all, I now know which US fund bought GMET.
Goehring & Rozencwajg, GRHIX:
To check for yourself, go to their fund page. Then head to here:
They also have a Twitter page. We need an interview on why the two founders took the position - they have been investing in natural resource for 30 years and Leigh Goehring and Adam Rozencwajg are household names for mining sector companies in the States.
In their latest research note:
They make clear being early to the bull run is the right idea. These are serious guys, and here’s the kicker: try to find another minnow in that list of holdings.
There is only one pure-play tungsten operator in the US. And it’s going to get bigger.
I will keep looking as there is another $1 million of the strategic financing to locate - and will let you know if I find it.
But having these chaps on board is extremely good news. Now for that pesky grant funding, Chinese tungsten export ban, and more news on the new asset…
And fresh new highs may be closer than you think.
For perspective, you can now buy GMET for cheaper than the price paid by the fund.
To finish off with…
Two final thoughts: Asiamet’s RNS today effectively tells you all is on track. At a share price of circa 0.7p, but fully cashed up until Q3 2025 - it’s possibly exceptional value.
ARS is aiming for project level financing in H2 2025, and there should be a significant re-rate upon success.
I also want to touch on the RNSs out by Cornish Metals and First Tin - as a tin bull, I’m deep into Rome, but clearly the market is waking up to the wider tin supply gap.
All three companies warrant deeper write-ups next week.