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Gold to add lustre to Ireland’s busy mining scene

Published: 11:00 15 Jul 2015 BST

Ireland,_aerial
Irish gold is famous the world over and can command a premium.

If you think there’s not much mining in the British Isles – or the Atlantic Isles as some academics are wont to call them – you’d be wrong.

It’s true there’s nothing much on mainland Britain, save the slowly decaying carcass of the old British coal industry and one or two small-time privately-held enterprises.

But across the Irish Sea it’s a different story.

Ireland became established as a major global player in zinc mining more than 20 years ago, with the discovery and construction of world-class projects at Lisheen in County Tipperary, Tara in Navan, and Galmoy in County Kilkenny.

And with those discoveries, major players in world mining arrived.

Indian giant Vedanta (LON:VED) now controls Lisheen, Scandinavian champion Boliden (OMX:BOL) controls Tara, while Canadian heavyweight Lundin (TSX:LUN) took the reins at Galmoy until the last economic ore was extracted in 2009. 

And there are others waiting in the wings.

Glencore (LON:GLEN) acquired full ownership of the Pallas Green zinc property from Minco (LON:MIO) back in 2011, while Connemara Mining (LON:CON) is clinging on by its fingernails to its stake in the Stonepark property in the face of heavy dilutionary pressure from Canadian major Teck Resources (NYSE:TCK).

It all points to a lively exploration and development scene on a scale unlike anything the English, Welsh or Scots are able to muster.

And there’s plenty more on the way.

Back in 2011 Lundin also took out Belmore Resources, a small shoestring company that held 11 prospecting licences in County Clare.

And although Lundin doesn’t mention the Belmore properties with any great frequency in its quarterly exploration update, the betting has to be that if there’s any serious uptick in zinc it will get down to some serious development work pronto.

Lundin isn’t the only one with projects in its back pocket. Numerous private groups hold ground across both Eire and Northern Ireland with a view to developing base metals, in particular zinc and lead.

Many industry watchers expect that zinc prices will rise sharply over the next couple of years, notwithstanding the recent China-related correction, as major existing mines close and supply dwindles.

If that happens, there could be an upsurge of activity in Irish zinc exploration of the type that we saw in the middle part of the last decade, with companies like Connemara set to reap the benefits of first mover advantage.

In the meantime though, much of the action is likely to centre around that commodity for all seasons: gold.

Irish gold is famous the world over and can command a premium over other, chemically identical gold produced elsewhere.

But unlike in zinc, Ireland has been slower in getting its gold industry up and running - at this stage the idea that its gold industry is ever likely to attain the global significance of Irish zinc looks far-fetched.

But there is still money to be made and three companies in particular are pushing ahead with plans for production.

The first, Galantas (LON:GAL), has been in production before at its Omagh mine in Northern Ireland.

But when open pit mining came to an end some time ago, capital constraints, planning requirements and tough markets all added up to a lengthy delay before a move underground could take place.

It’s happening now though, supported notably by Ross Beaty, the famous Canadian mining investor, who has just subscribed for the majority of a C$2.4mln placement to take a 14.9% stake in the company.

If Ross Beaty is moving into Irish gold, that’s a sure fire sign that the sector’s about to come alive.

Also active in the space is Conroy Gold (LON:CGNR), the current vehicle of a man with long experience in Irish resources exploration and extraction, Professor Richard Conroy.

Professor Conroy was a key player in the discovery and construction of the zinc mine at Galmoy and he plans to be a key player in the renaissance of Irish gold too.

Conroy Gold holds extensive land straddling the border between north and south and has plans in hand for the development of a small scale starter mine at Clonibret.

“Ireland is one of the most attractive areas in which to mine,” he says. “It rates very highly in the Fraser Institute ratings. It’s a politically stable environment. There are very clear environmental and financial regulations and you have got support both in Republic and in Northern Ireland.”

Against that background the largest gold-focused player, Dalradian Resources (TSX:DNA), chose to add an Aim listing to its Canadian listing at the end of last year in order to raise the profile of its Curraghinalt project with UK and European investors.

Curraghinalt looks set to be the biggest of the lot, likely to produce upwards of 162,000 ounces per year over an 18 year mine life.

Broker Whitman Howard also reckons it might make a predatory move on Galantas, although Galantas’s Roland Phelps is sceptical. 

Certainly with the backing of Ross Beaty he doesn’t need Dalradian right now, but Ross Beaty’s also put money into Dalradian.

Could it be that the legendary investor is spreading his bets across what he views as an emerging area play? 

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