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Alien Metals boosted by DSO potential at iron ore properties

Snapshot

Alien Metals' transformation into a project generator is proceeding apace

Alien Metals Ltd -

Quick facts: Alien Metals Ltd

Price: 0.205 GBX

LSE:UFO
Market: LSE
Market Cap: £2.77 m
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  • Junior with silver interests in Mexico and Australia
  • Also potential DSO iron ore assets

  • The company intends further deals to build portfolio

What does the company do?

Alien Metals Ltd (LON:UFO) is a mining project generator, which plans to create value for shareholders by identifying and acquiring assets in the base and precious metals space and then adding value and selling them on or joint venturing them out.

What does the company own?

The portfolio includes significant legacy assets from the company’s former life, in the days when it was known as Arian Silver. The assets in Mexico have significant potential, high grade, and are located in well-known mining districts adjacent to some major names in silver mining.

The company also has an interest in two iron ore projects in Australia, which look highly prospective for DSO.

Mining industry professionals will know that DSO can be at a premium in the iron ore space, especially for juniors, since it means rock can be mined and shipped directly without any processing, thus saving on potentially huge investment in processing plant and equipment.

Grades taken in sampling as part of an ongoing due diligence process at Alien’s Brockman and Hancock Ranges projects have returned higher than 60% in several cases, and higher than 65% in one case.

It’s all the more significant because of the location of these projects in Australia, right in the heart of a prolific mining district, and not too far away from the famous mining export hub of Port Hedland.

In December, Alien Metals agreed to acquire the former producing silver mine, Elizabeth Hill.

One of the very few native silver mines in Australia, Elizabeth Hill is in the Pilbara region of Western Australia,

Inflexion points

  • Completion of  the Elizabeth Hill deal
  • Plans and timelines for the re-opening of the mine 
  • Further additions to the portfolio 

What the market says

Pilbara-based silver mine Elizabeth Hill is an exciting addition to an expanding portfolio of mining interests says research house First Equity.

The formerly-producing mine complements the group’s Mexican silver assets and follows the recent addition of Western Australia iron-ore projects at Hancock Range and Brockman.

Due diligence work is currently underway at Elizabeth Hill, which will involve analysis of drilling data collected by current owner Karratha Metals.

“Elizabeth Hill was previously in production between 1998 and 2000, with production of 1,170,000 ounces of silver, with a high head grade averaging 70 oz/t.

“It was mined during a period when silver prices were in a 10-year slump, trading in the region of US$4.5 to US$6.6 p/oz, compared to today’s much-improved price environment of US$16.7 p/oz.” 

Exploration upside potential exists at depths below the known mineralisation and outside of the mine area to the east and west of Elizabeth Hill., says the research group.

The mine was noted for its high-grade nugget finds, including one of the largest silver nuggets ever found in Australia.

That giant weighed 180kg and was discovered in 2000.

Elizabeth Hill is also situated in an established mining district with full infrastructure and a port 25km away.

If completed, the acquisition will represent Alien Metal’s most advanced project says First Equity, which has a ‘buy’ recommendation on the shares.

 

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Watch

Alien Metals to acquire formerly producing Western Australia silver mine

Alien Metals Ltd's (LON:UFO) technical director Bill Brodie Good caught up with Proactive London's Andrew Scott to discuss their decision to acquire a formerly producing Western Australia silver mine in a low-cost, all-share deal. The group is acquiring the Elizabeth Hill Silver Project from...

on 4/12/19

3 min read