Amaroq Minerals: the investment case in 10 points
Short and snappy!
Good morning everybody.
While the entire world is hyper-focused on Greatland Gold, I think it’s worth taking a few minutes to consider Amaroq Minerals - and 10 reasons why it should at the very least be on your watchlist - and potentially within your portfolio.
After all, it’s up 74% in five years.
But as ever, this is not financial advice.
1. Record Gold Price
Gold has once again hit a record high, and Goldman Sachs forecasts it will rise to as much as $2,700 per troy ounce early next year. The investment bank considers key tailwinds to be: concerns over US financial sanctions and sovereign debt, central bank buying, Federal Reserve rate cuts, and gold’s attractiveness as a hedge against the many current geopolitical shocks.
Several analysts think $3,000 gold is just over the horizon - and Amaroq was already highly profitable before the precious metal went on its tear.
2. Nalunaq MRE Upgrade
The flagship, Nalunaq in Greenland, boasts a Total Inferred Mineral Resource of 355.0Kt @ 28.0g/t Au for 320Koz gold.
This estimate was prepared by SRK Consulting according to Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards on Mineral Resources and Mineral Reserves (May 2014) as required by NI 43-101.
Accordingly, the asset enjoys one of the highest gold grades globally - and it’s also just 30 km northeast of Nanortalik, Greenland’s 10th largest town. Nalunaq also benefits from access to ice-free deep-water fjords and is served by Narsarsuaq international airport 100km to the north, with connections to Copenhagen and Reykjavik.
Historically, the mine yielded approximately 350,000 ounces of gold (average 15 g/t) between 2004 and 2013, which demonstrates its very low cost production potential.
And best of all, a significant MRE increase is expected to land in Q1 - or before.
3. First Gold This Quarter
Amaroq expects to achieve its first gold pour in Q4 2024, with the feasibility study indicating that plant recoveries are on track to reach between 90-94% by the end of 2025, supported by planned investments.
Initial mining rates are ranging between 40-60 tonnes per day (t/d), scaling up to 130-150 t/d at each block by the latter half of 2025.
By this time next year, free cash should be flowing.
4. Exceptional Management
CEO Eldur Ólafsson founded Amaroq Minerals in 2017, having previously worked for over seven years on integrated mining projects in Greenland.
He boasts an extensive and well-known career in the geothermal and mining industries, during which he built the largest geothermal district heating company in the world alongside SinopacGroup.
At one point, Eldur was the Technical Director of Enex, a 100% owned subsidiary of Geysir, where he grew the business from its inception to a position where it was operating within three Chinese provinces.
The rest of the team are equally qualified.
5. Critical Minerals
While Nalunaq is the revenue driver, Amaroq enjoys the largest exploratory landholding in Greenland, perfectly positioned between the US and European markets.
The critical factor to understand is that the company believes that the mineralisation hosted within its exploratory portfolio:
‘demonstrates geodynamic association between the Sava and Gardar areas and the Voisey's Bay province in Canada, which host significant magmatic sulphide and REE deposits.’
Voisey’s Bay mine just across the Labrador Sea is owned by Vale, which bought the deposit for CAD$3.1 billion in the early 2000s.
Amaroq is looking for a similar payday.
6. Greenland Strategic Power
As Amaroq has such a vast volume of expertise, strategic landholdings, capital and drilling equipment, it can drill assets held by other companies in the country cheaper than they can do it themselves.
This will make Amaroq a mining superpower in Greenland, which remains very friendly to mining - as it can effectively sign win-win JVs with any explorer with a hint of interesting surface results.
7. Nalunaq Mine Build
Here’s what has been accomplished thus far at Nalunaq:
1,535m3 of material used in road construction
3,000 tons of cargo comprising 400+ 20ft containers delivered by ship
7,575 tons of material mined so far
>100 tons of explosives delivered
11,500 tons of overburden removed
170,000 tons of material moved to create the new process pad
32,000+ metres of drillingÂ
And it’s all still on schedule - which is practically unheard of in the mining world.
8. Substantial Gold Exploration
Going beyond the expected MRE update, all the additional 75 vein sampling from the historical core has been completed and submitted to ALS for assaying. Meanwhile, drill crews and equipment for surface exploration drilling, to enlarge the mineralised zone at the Target Block, have mobilised to site.
Following completion of the underground rehabilitation, exploration will now be conducted from underground as well as surface. The 2024 exploration programme aims to provide additional information and data on the Mountain Block and Target Block extensions to the Main Vein as well as assessing continuity and form of the 75 Vein.Â
Underground drilling locations have been designed and a rig has been mobilised for operations in Q4 2024. Amaroq also intends to continue its target generation programmes in the regions near to Nalunaq and Vagar licences.
9. Growth Potential
Centamin has been bought. Greatland is now embarking on its own adventure as sole owner of Telfer and Havieron. The market will need the next gold story to fill the void left behind - and this is Amaroq.
The market cap currently stands at circa £230 million, and for anyone handy with a calculator and able to plug in the numbers, this is cheap as chips.
10. Financial Backers
Research all the names for yourself - but Amaroq is financially underpinned by some of the biggest names around. And these people do not back losers.
Beyond this, while the world seems to be focused on AI and big tech, AMRQ investors know they can benefit from a combination of the critical metals supply gap, driven by AI demand alongside global electrification - while also enjoying the gold income in an increasingly volatile world.
This is especially beneficial as gold tends to rise when base metals fall, so there is a natural hedge built into the investment, which you rarely get elsewhere with a junior.
Amaroq Minerals - it’s the next big thing.