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viewAlien Metals Ltd

Alien Metals Ltd has a diverse portfolio of commodities to develop

Snapshot

Alien Metals' transformation into a project generator is proceeding apace

Alien Metals Ltd -

Quick facts: Alien Metals Ltd

Price: 0.27 GBX

LSE:UFO
Market: LSE
Market Cap: £6.39 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 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.

How's it doing?

In April 2020 the company released the results of an IP survey completed at Donovan 2 in Mexico, which identified two promient targets. The plan is to undertake a drill programme as soon as feasible. At the same time broker First Equity noted that the company is operating in areas that are still relatively clear of coronavirus.

In May, the company raised £275,000 of new capital so that it can expedite exploration work across projects in Mexico and Australia.

The money will also allow the company to examine strategic opportunities that are being presented to the company in the current market, it added.

The company plans to use the funds to conduct initial scout drilling at the Los Campos project area and sampling at the San Celso silver project.

It will also complete the Elizabeth Hill acquisition, commission data interpretation from the Donovan 2 copper-gold project and finalise planning for fieldwork for iron ore projects in Australia.

In July the company announced further sampling work at its Mexican silver properties.

From the technical director:

"We believe that with careful budgeting, we can deliver high-impact exploration programs across our existing and proposed licences as soon as safe fieldwork becomes possible both in Mexico and Australia,” Bill Brodie Good, Alien Metals technical director said in a statement.

“This placing will also allow us to actively review strategic opportunities that present themselves during the current environment," he added.

Inflexion points

  • Completion of  the Elizabeth Hill deal
  • Plans and timelines for the re-opening of the mine 
  • Further additions to the portfolio 
  • £275,000 fundraising in May 2020 allows for continuation of work programmes

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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