The market was relatively nonplussed at the announcement from Connemara Mining PLC (LON:CON and its joint venture partner Group Eleven that the zinc resource at the Stonepark project in Ireland now amounts to more than five million tonnes.
Connemara shares ticked up a fraction after the news and rose again in the following day’s trade to their current price of 3.68p.
So not a negative response by any means, but nothing like the sort of reaction that similar news would have been greeted with during the last commodities boom.
Back then, the delivery of such a solid platform for growth would have attracted droves of investors, not least from the Irish contingent of retailers who were particularly active in those days.
Times have changed though, and while it’s true that sentiment towards miners and commodities has recovered over the past 12 months, that recovery has been no more than patchy when it comes to the junior companies.
But Connemara chief executive Patrick Cullen is only too aware of this.
He took on his role at Connemara at the end of last year, following a quiet period for the company.
His charge was to get things moving again, and that he’s certainly done. If it takes the market a little while to cotton on, then all that really means is that when it does the upward trajectory in the share price will be all the more steep.
To be sure, it’s generally accepted that it takes more than five million tonnes of ore to make a mine in Ireland. But the likelihood is that there is more than five million tonnes at Stonepark. This resource was put together by Group Eleven using only data inherited from Connemara’s previous joint venture partner Teck Resources. The last drilling conducted was 2012.
Teck, as one of the largest mining companies in the world, was after something truly colossal. So, when that possibility appeared to become remote, interest waned. But be that as it may, Group Eleven has established the resource remains open and that there’s likely to be a significant amount of further ore to be delineated.
What’s more, across the tenement line, one of the world’s biggest producers of zinc, Glencore, continues to drill on the Pallas Green property that once upon a time was held by Minco. And if Glencore reaches a point where it’s looking at pressing development buttons then the outlook for Stonepark as a satellite would be assured, never mind the continuing prospect that it could still one day be developed as a standalone mine.
With all that in mind, Patrick Cullen describes the recent resource update as “good progress.” He points out that drilling by Group Eleven is ongoing, and there may be further step-out work depending on the results. Regional targets up to 10 kilometres away will also be investigated.
“Glencore have been drilling at Pallas Green and have recently updated the resource, and now Connemara and Group Eleven are drilling at Stonepark next door, so all’s right with the world as far as drilling is concerned,” says Cullen.
A recent fundraising allows Connemara to continue to support its position at Stonepark, so further upside will continue to accrue according to the joint venture split: 77% to Group Eleven and 23% to Connemara.
Meanwhile, Connemara continues to drill on its 100%-owned gold targets in Wicklow-Wexford. Two targets are being investigated, one of which has already yielded mineralisation grading at over 16 grams per tonne from one drill hole.
“The upside for everybody should be that we make a very significant discovery,” says Cullen.
“We have some very prospective ground and have had early success. The plan is to expand the discoveries we have made and hopefully build on that, develop resources; there’s a clear path ahead as long as we enjoy the support we have had we can succeed further. We’re going to have good newsflow. And, it’s good to be diversified and we’re not tied to one target.”
There’s also some very promising looking ground in Donegal in the company’s portfolio that will also be receiving attention but, in the meantime though, newsflow from Stonepark on zinc, and Wicklow-Wexford on gold will keep coming in. In a depressed market for exploration companies, this may initially fall on deaf ears.
But the rapid progress at Stonepark tells its own story: the pace of exploration work is stepping up in Ireland, and it’s only a matter of time before some investors wake up and start taking notice.