Latest news with #BarryFitzGerald
News.com.au
13 hours ago
- Business
- News.com.au
Barry FitzGerald: Magmatic adding serious value with WA gold deal
'Garimpeiro' columnist Barry FitzGerald has covered the resources industry for 35 years. Now he's sharing the benefits of his experience with Stockhead readers. One of Garimpeiro's pet peeves is coming across a junior explorer banging away at a single project rather than leveraging off their standing costs as an ASX-listed company by adding a second project to the portfolio. That is particularly so when there has been a tectonic shift in markets like there is now, with gold racing to more than $5200 an ounce in Aussie dollars – up a staggering 44% on 2024's average. So keep the flagship project bubbling along but use the downtime between drilling campaigns to add a gold project to the company's story because the reality is that there has never been a better time to be looking for the yellow stuff. That's just what a well-known explorer for potential tier-1 epithermal/porphyry style deposits in NSW's prolific East Lachlan region, Magmatic Resources (ASX:MAG), has done via the acquisition of the Weebo project on the Yandal greenstone belt in Western Australia. The East Lachlan hunt continues, including a joint venture at the Myall copper/gold project with Andrew Forrest's Fortescue (ASX:FMG), also the company's biggest shareholder. Myall and other prospects in the East Lachlan could well deliver a big discovery in time, and there has been plenty of encouragement on that front. But for pure gold exposure at a time when the market is in a mood to reward gold discoveries handsomely, Magmatic has rolled up its sleeves and added WA gold to its story, powering up its newsflow in the process. Magmatic was trading mid-week at 4.2c a share for a market cap of $18.1 million on issued capital, increased by the share consideration component of the Weebo acquisition. It was a 3.9c stock before the Weebo pick up, so it can be said that the added element of WA gold has attracted the market's interest. But remembering the market cap is still not challenging. Given the quality of the East Lachan interests, it could be suggested that at Wednesday's share price of 4.2c, Weebo comes at this stage comes for free. Value added That's despite Weebo having all the hallmarks of becoming a quick value-add for Magmatic. Located 30km southeast of Leinster, the Weebo ground covers about 50km of the southern Yandal greenstone belt. The ground includes two near surface prospects – Ockerburry and Scone Stone – where previous drilling has yielded some nice hits by a previous owner. They stand as advanced drill prospects and there are a bunch of less advanced prospects. Magmatic has put a local exploration team in place and expects that its maiden drilling program at Weebo will kick off in the September quarter. It is exciting stuff for a company with an $18.1m market cap. What makes Weebo particularly exciting is its location, smack bang in the middle of five gold mines with treatment plants – Vault Minerals' (ASX:VAU) Darlot, Gold Fields' Agnew-Lawlers, Bellevue Gold's (ASX:BGL) namesake operation, Northern Star Resources' (ASX:NST) Bronzewing and Northern Star's Thunderbox. While the hope would be that exploration success at Weebo delivers a standalone operation, the proximity of the regional treatment capacity lends itself to toll treatment opportunities, joint venture development and/or outright sale of ounces that Magmatic pulls together in a mineral resource estimate. Ounces in the ground In a $5200/oz environment ounces-in-the-ground are commanding a high value when there is a clear pathway to the ounces being whacked through a standalone treatment plant or one owned by a third party. By way of example only, Northern Star last year paid $12.5 million for the 177,000 inferred resource ($70 an ounce) at the Hobbes gold project – owned 80% by Solstice Minerals (ASX:SLS) and 20% by a private minority – to feed through its Carosue Dam operation. The year before NST paid Strickland Metals (ASX:STK) $61m in cash and shares for the 346,000oz Millrose deposit near the Jundee gold mine ($176/oz). Gold prices have moved substantially higher still, so smallish deposits have become even more valuable. Where Weebo ends up in terms of its scale remains to be seen. But it certainly delivers exploration excitement when the gold market is running hot. And who knows? That hunt for a tier-1 discovery in NSW could well come up trumps. That's particularly so when Mt York gets juiced up by the additional ounces expected to come from the big exploration push now underway. The views, information, or opinions expressed in this article are solely those of the columnist and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article. At Stockhead, we tell it like it is. While Magmatic Resources is a Stockhead advertiser, it did not sponsor this article.
Herald Sun
a day ago
- Business
- Herald Sun
Explorers Podcast: ACM
Stockhead's 'Garimpeiro' columnist Barry FitzGerald is back in the studio for another instalment of The Explorers Podcast. In this edition, Barry catches up with Australian Critical Minerals (ASX:ACM) managing director Dean de Largie, a company which he thinks has a lot of leverage and multiple re-rating events coming on the horizon. Recent news has been the company's acquisition of advanced Peruvian assets which it considered just too good to pass up, and there are other irons in the ACM fire to keep an eye on as the company gets ready over drill-ready targets it believes have exceptional scope for discovery. This podcast was developed in collaboration with Australian Critical Minerals, a Stockhead advertiser at the time of publishing. The interviews and discussions in this podcast are opinions only and not financial or investment advice. Listeners should obtain independent advice based on their own circumstances before making any financial decisions. Originally published as Explorers Podcast: Australian Critical Minerals readies for Peruvian polymetallic perforation
Herald Sun
4 days ago
- Business
- Herald Sun
Explorers Podcast: Redcastle sets sights on shallow gold and early cashflow
Don't miss out on the headlines from Stockhead. Followed categories will be added to My News. Stockhead's 'Garimpeiro' columnist Barry FitzGerald is back in the studio for another instalment of The Explorers Podcast. In this edition, Barry chats with Ron Miller, director of Redcastle Resources (ASX:RC1), about the company's progress across its gold projects in WA's Eastern Goldfields. With promising hits at the Queen Alexandra prospect and a focus on shallow, high-grade mineralisation, Redcastle is working toward an updated resource and potential early-stage production. The company's strategy includes toll treating and targeting rapid, low-cost development across a historically rich goldfield. Listen in as Ron outlines how Redcastle plans to unlock value from its portfolio and set a clear path to cashflow. This podcast was developed in collaboration with Redcastle Resources, a Stockhead advertiser at the time of publishing. The interviews and discussions in this podcast are opinions only and not financial or investment advice. Listeners should obtain independent advice based on their own circumstances before making any financial decisions. Originally published as Explorers Podcast: Redcastle sets sights on shallow gold and early cashflow
News.com.au
13-06-2025
- Business
- News.com.au
Barry FitzGerald: Kairos picks right time to ramp up Pilbara gold exploration
'Garimpeiro' columnist Barry FitzGerald has covered the resources industry for 35 years. Now he's sharing the benefits of his experience with Stockhead readers. Garimpeiro's memory is a bit fuzzy on the exact date he had a coffee with Simon Lill in Melbourne's Bank Place. But it was likely early 2019 and Garimpeiro remembers being a bit grumpy that the catch-up with the then executive chairman of De Grey Mining wasn't scheduled for the PM rather than the AM so it could have taken place in the Mitre Tavern just down the alley. Thanks to the cleat head though, Garimpeiro remembers De Grey was trading at less than 10c share for a market cap of about $40 million and that Lill was enthusiastic about growing the company's gold resource at its Mallina gold project in the Pilbara. His enthusiasm proved well placed. Late in 2019, De Grey made the intrusion-related Hemi discovery which has grown to more than 11 million ounces, making Mallina 13.5Moz all up after the pre-Hemi shear-hosted gold resource is included. Northern Star Resources (ASX:NST) has just made De Grey and its Pilbara gold riches its own with an agreed $5 billion scrip takeover bid which ended up being a $6 billion takeout due to rising gold prices pushing Northern Star scrip higher. Lill was there all the way through De Grey's journey from an overlooked junior gold explorer in the then unfashionable Pilbara – for gold at any rate – through to the last day when De Grey shareholders voted through the Northern Star takeover in April. Any way it is sliced, the De Grey journey over the last six years has been one of the biggest single valuation creation exercises in the ASX gold space. It wasn't a 10-bagger. It was a 150-bagger, if you don't mind. Lill is the first to say it was a team effort. And it was. Coming from a stockbroking and capital markets background, his main contribution was bringing in the small licks of capital to keep the lights on during the hungry years, and then the big licks needed to advance the Hemi discovery to the point where Northern Star had to buy it. Back in black Garimpeiro would be content after an achievement like Lill's at De Grey to hold court at the front bar at the Mitre and not do much else. But that's not for Lill. He is back as a chairman guiding another Pilbara gold stock – Kairos Minerals (ASX:KAI). For a couple of years, when the Pilbara conglomerate gold story was running hot, and another couple of years when lithium was the thing, Kairos took its eye off its Mt York gold project. Those distractions left the stock with few followers. But starting in May 2022 when veteran geologist Peter Turner became manager director, Mt York is now getting the attention it deserves. And now with Lill as non-executive chairman, Kairos is likely on a re-rating pathway. Mt York deserves attention all right. It stands as a 1.4 million ounce resource in a single pit shell (43Mt grading 1g/t). The mineralisation is of the banded iron formation (BIF) style which makes it different to Hemi, 55km to the north-west. But as experienced miners will tell you, the style doesn't matter as long as there is plenty of gold to be had. Geological comparisons for Mt York include Karlawinda in the Pilbara and Mt Gibson in the Murchison, the two gold deposits that underpin Capricorn Metals (ASX:CMM) $4 billion market cap. Major exploration program Mt York is better grade than both of those but it has a long way to go to catch them in terms of resource ounces. The biggest exploration program ever undertaken by Kairos is now underway, with a likely first target being to grow Mt York to something more than 2Moz. Helping the cause is pending access for Kairos to a 1500m extension of the mineralisation as it trends into its neighbour's ground – Pilbara Minerals, and its Pilgangoora lithium operation. An earlier deal between Kairos and Pilbara involved Pilbara agreeing to a $20 million payment for some non-core Kairos tenements. The first $10m instalment is helping fund the record exploration effort at Mt York. The exploration effort will likely lead to an increased mineral resource estimate update later this year – a sure fire re-rating event. Kairos could certainly do with a re-rating event. At its mid-week price of 2.8c a share it is has a market cap of $73.6 million. Based on the existing 1.4Moz resource estimate, it has one of the lowest enterprise value-to-resource ounce metrics in its ASX peer group. That is despite a scoping study in November last year outlining a $276 million project producing 115,000oz annually at an all-in sustaining cost of $2205/oz. Using a conservative $3500/oz gold price, the pre-tax net present value (NPV) was put at $410 million and capital payback was put at 2.7 years. Gold is now $5100/oz or thereabouts. Plug that into the financial model and Garimpeiro estimates a NPV of around $1 billion and a payback period well short of two years. That makes Kairos' current market look to be on the mean side of things. That's particularly so when Mt York gets juiced up by the additional ounces expected to come from the big exploration push now underway.
Herald Sun
06-06-2025
- Business
- Herald Sun
Barry FitzGerald: Katanning ticks all the boxes for an Ausgold re-rate
'Garimpeiro' columnist Barry FitzGerald has covered the resources industry for 35 years. Now he's sharing the benefits of his experience with Stockhead readers. After its dramatic rise in the opening months of the year to record levels, the Aussie gold price has settled into a bit of a groove around the $5,200/oz level. Nothing wrong with that. It's a fantastic price and delivers fat margins to even our highest cost gold mines. And it is not to suggest that gold can't take off again and set new highs or fall significantly for that matter. The observation is that for the last six weeks or so the Aussie price has been as steady as it could be in these turbulent times. It means that share prices of ASX-listed gold producers and developers have also gone into a sideways trading pattern. Need to differentiate So more than has been the case in recent times when gold took off to record levels, the producers and developers now need to differentiate themselves from the pack with strong newsflow of the re-rating inducing type. It means that if the gold price continues to trade sideways, the stock involved has a reason to go higher. Alternatively, if the gold price heads south, the damage to the stock could be more limited than it would have been otherwise. Taking all that on board, Garimpeiro had a look at his calendar during the week to find which of the gold producers/developers have re-rating event(s) on the horizon. Ausgold stands out Ausgold (ASX:AUC) stood out for the pending release this month of a definitive feasibility study (DFS) into the development of its Katanning gold project, a three-hour drive from Perth in WA's southwest Yilgarn region. Katanning is one of the biggest undeveloped gold deposits in the country at 3.04 million ounces and has previously been scoped as having the potential to produce 136,000 ounces annually from open-cut ore sources for more than 10 years. All-in sustaining costs were put at $A1,549 and preproduction capital costs weighed in at just under $300m. But those are 2023 figures and things will have changed, including the reserve component of the resource thanks to infill drilling work. Gold prices have increased dramatically since those 2023 figures but so have construction costs. Having said that, the expectation is that the DFS will confirm Katanning as a very robust project with a super quick capex payback capability. Take that and the scale of the project – production in the early years will be higher still because initial higher grade ores - and Ausgold's $240 million market cap at 67c share looks to be on the mean side of things. The company has the lowest resource ounce valuation metric of its peer group for no apparent reason, except perhaps the project has been in the works since 2010 under Ausgold ownership. So the story of the resource growth since, and the pending release of the DFS leading into a development decision by year end, has been overlooked to a large degree by the market on a fatigue basis alone. Katanning momentum Momentum for Katanning is now the order of the day under John Dorward, Ausgold's executive chairman who arrived on the scene in May last year. A can-do sort of guy, Dorward was the former president and CEO of TSX-listed Roxgold, a West African gold group acquired by fellow Canadian Fortuna Silver Mines in an all-scrip deal worth $US884 million in 2021. Two weeks in the job at Ausgold and Dorward put Katanning on the development pathway by pulling in $38 million in equity, including $1m from his own pocket. That is being spent getting to the DFS stage and on a three-pronged strategy of establishing a bigger mining reserve component in the mineral resource estimate, extending the scale of the resource and making regional gold discoveries. Morgans' 94c target Morgans' veteran analyst Chris Brown has a 12-month price target on the stock of 94c. 'Our expectation is that delivery of a DFS broadly confirming or improving on the preliminary feasibility study, and employing a higher gold price, should prove positive for the share price,' Brown said. He also flagged that a final investment decision on a project development – expected by the end of the year - should also prove positive depending on the terms of the project's financing package. ''Our valuation will likely lift with the delivery of the DFS, and again when the final investment decision is taken,'' Brown said. The views, information, or opinions expressed in this article are solely those of the columnist and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article. Originally published as Barry FitzGerald: Katanning ticks all the boxes for an Ausgold re-rate
