viewAlba Mineral Resources PLC

Alba reveals maiden resource for Greenland project

The company has brought the project from a 'standing start' to maiden resource after only one full field season.

Alba's Thule Black Sand project
The Thule Black Sand project is now among Alba's more advanced assets

Alba Mineral Resources plc (LON:ALBA) announced a maiden resource for the Thule Black Sands (TBS) project in north-west Greenland.

An independent mineral sands specialist, IHC Robbins, detailed a 19mln tonne inferred resource comprising 43.6% ‘total heavy minerals’.

It also noted an in-situ Ilmenite grade of 8.9%, giving 1.7mln tonnes of contained ilmenite.

Alba said that potential exists to increase the resource tonnage, by drilling through permafrost and by expanding drilling activity into less explored areas. Additionally, it noted that offshore mineralisation present an opportunity to increase the overall size of the deposit.

READ: Alba’s diversified portfolio has serious production potential

George Frangeskides, executive chairman, highlighted that the TBS maiden resource has been delivered within two years from a ‘standing start’ at the project.

"To achieve a maiden resource at TBS after just one full field season is a phenomenal result. An Inferred Resource of 19 million tonnes is a huge step forward for this high-grade ilmenite project.  For a 3 million tonnes per annum mining operation, this would already mean a mine life of more than six years."

He added: “Alba now has two projects - TBS and Melville Bay - with JORC-compliant resources. We are due to start drilling at our Limerick Base Metals project imminently, followed in June and July by drilling at Amitsoq, our graphite project with world-leading graphite grades. 

“And this is without mentioning the ongoing work to re-open the Clogau Gold Mine in Wales, and the ongoing exploration of the 30km stretch of the Dolgellau Gold Belt, under exclusive licence to Alba, which has already seen some very exciting results."

"With all these developments in train, Alba is extremely well-placed to make a huge step forward this year."

Analyst thinks Alba undervalued

Jason Robertson, analyst at First Equity, highlighted that the ilmenite part of the project is ‘consistent in size and grade’ to the maiden resource declared by neighbour Bluejay Mining (in April 2017 it announced 23.6mln tonnes at an 8.8% grade).

“The value comparison equation between Alba and Bluejay is very clear, considering that when Bluejay announced its maiden resource, the market cap of the company was around £90mln, compared to the current market cap of Alba, that represents around 10% of this at £9mln, assuming for simplicity purposes that other Alba projects are ignored,” the analyst said in a note.

He added: “With the progress now being made by Alba in Greenland, and considering the valuation gap between Alba and Bluejay, we continue to rate the shares as a ‘Buy’ and believe significant share price uplift lies ahead in the near term, as the valuation gulf is closed with Bluejay and Alba’s TBS project moves ahead.”

Robertson also noted a number of other potential catalysts for Alba including drilling in Ireland at the Limerick metals project, drilling at the Amitsoq graphite project in Greenland, and ongoing work at the Clogau gold mine in Wales.

At the same time, the investments in oil and gas projects - Horse Hill and Brockham - would also provide newflow, he added.

 -- Adds analyst comment --

Quick facts: Alba Mineral Resources PLC

Price: 0.087 GBX

Market: AIM
Market Cap: £4.11 m

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