Connemara Mining is an Irish based exploration company, manily focused on zinc, lead and gold exploration. An airborne survey has been undertaken on the five licence blocks of its Mine River licences held in the Wicklow/Wexford area to take a fresh look at the gold potential. The firm is in joint venture over these licences with private Canadian company Hendrick Resources (HRI). Below, in a Q&A, Connemara outlines its current activities and plans.
Q: Why gold and why Ireland?
Connemara Mining: We have always been involved in gold exploration. Previously, the group had a number of gold exploration companies, including African Gold, which has since successfully fully listed as Mwana Gold, and, more recently, Swala which has listed on the Toronto Exchange as Concordia.
Gold exploration is in our blood. Ireland has always been known for its potential prospectivity and high gold prices in the 1980s resulted in a significant increase in exploration resulting in up to 130 gold occurrences being identified. The fall in prices in the 1990s led to an exit for many exploration companies. However, recent market dynamics have brought Irish gold into play.
Q: Why specifically the Wicklow/Wexford area?
Connemara: Since the 1790s the Mines River area has been synonymous with gold. A number of finds of alluvial gold in rivers and streams in the area resulted in a ‘Gold Rush’ in the early 1800s.
Significant amounts were extracted over approximately 40 years. In all, an estimated 7-9,000 ounces were recovered. We have always been big believers in ‘closology’, ie, that the best place to find gold is where gold has already been discovered.
Q: Is this a new strategic focus for Connemara Mining?
Connemara: No, as already noted, Connemara Mining’s interests are in zinc/lead and gold exploration. A mixture of market fundamentals and finding the right strategic partner has transpired to make this the ideal time to look at the gold potential of our licences.
Q: A recent agreement has been signed with a Canadian firm. What will this new partnership bring and what are the terms?
Connemara: We are very excited at the new joint venture with Hendricks Resources, which is an extremely well respected player in the industry. This partnership will allow for fresh eyes and new technology to be applied to the ground as the source of the gold has remained a mystery.
The initial terms will see Hendricks Resources invest $500,000 for a 50 per cent stake with a possible increase of 25 per cent to 75 per cent for a further $500,000 investment on four of the licences.
Q: Who are Hendricks Resources?
Dale Hendricks is a legendary figure in the exploration industry. Hendricks has been a director of and administrator of many public companies listed on the Toronto Stock Exchange. His career is marked by successes in resource industry development and corporate finance. He is of the opinion that a world class gold deposit remains to be found in south-east Ireland.
Q: What is the plan going forward for this partnership?
Connemara: The plan going forward is for an initial airborne survey as well as ground geophysics and geochemistry which should be completed around the middle of the year. Depending on these results there will likely be a move to drilling followed by the initial results.
Q: Will this have an effect on Connemara Mining's other licences?
Connemara: No, the agreement is for four of the licences in the Mine River Block. It will not affect our ongoing zinc operations on our blocks and with other partners. We continue to progress in proving up our Stonepark zinc discovery with our partners Teck as well as developing our other blocks.The investment on these gold licences is good news for investors as we push to add value for our shareholders.
Q: What news flow can investors expect from the company in the coming year?
2012 is building up to be an exciting year for Connemara Mining. Our joint venture agreement on the gold will see news flow later in the year. We are continuing drilling on our Stonepark licenses with Teck proving up our zinc discoveries. We are also negotiating joint ventures on some of our other prospective blocks - Oldcastle, Nenagh and Thurles - which will see further work on these blocks.
The fundamental dynamics in both the zinc and gold market remain strong which is good news for our investors.
Connemara at a glance
The company holds 33 Irish licences covering an area of around 1,250 sq km and has some of the most prospective ground in Ireland. A significant zinc discovery was made in 2007 on the Connemara licences at Stonepark in Limerick.
This is a joint venture with Teck, the second biggest zinc producer in the world. The discovery is growing each year.
Connemara has further licences close to the Lisheen zinc mine in Thurles and in Oldcastle with similar geology to Tara Mines 20 kms away. Gold potential exists on five licences in Wicklow/Wexford. Connemara is listed on AIM.