Panther Metals: Diversified Jurisdictions in Gold

Proactive Published 03/02/2021

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The long drought in the gold price, stretching from 2012 until 2019, created a landscape almost devoid of new projects. Junior explorers were starved of cash with the survivors devoting scarce funds to survival rather than exploration and there were few new entrants to the listed gold explorer universe, either in Australia or Canada. Thus, the pipeline of new projects had run dry by 2019 when a spark of life was seen again in the gold price but even existing projects had seen little work done in exploration and even less in resource definition or expansion.

It was into this market that the team at Panther launched themselves in late 2019 bringing to market a portfolio of Australian and Canadian exploration assets, to which they have subsequently added extra territory. This opens the way for various outcomes: developing to production, generating value uplift by proving up projects then on-selling or slicing & dicing via listings on either the TSX or ASX or both.

Investment Thesis

With the gold price in a good place, and the exploration pipeline looking thin, Panther brings “fresh meat” to the table. The first twelve months have been the accumulation phase for Panther. Over a fairly short while it has accumulated a promising portfolio of territory that it will now flesh out with exploration work over the next twelve months.

The company has motored along so far on its deal-doing and the generalised higher tide brought about by gold price appreciation. In 2021, the drivers for Panther’s price will be exploration results starting to flow and the evolution of neighbouring plays in the Hemlo and Laverton district. Over and above gold, one should not forget the potential at Laverton for other metals, such as nickel.

Panther is on the prowl, having opened up several fronts, and offers investors exposure to three different districts in two of the world’s major mining players. The coming year will show which project pulls to the front of the pack.

Conclusion

Panther, launched on the market a little more than a year ago, with a portfolio of projects stretching from Ontario’s Hemlo camp to Australia’s Northern Territory
Since then, it has added further territory in the Hemlo-Schreiber camp and pushed into the storied Laverton gold district of Western Australia
Now that the accumulation phase has been achieved, the exploration begins in earnest
Gold is the main target and the metal has enjoyed a stellar 12-months with the perspective of moving still higher in 2021
Positioned in three top tier jurisdictions, Ontario, Northern Territory and Western Australia

Key Takeaways

On Barrick's DoorstepFocussing on Hemlo

It is the Schreiber-Hemlo Greenstone Belt that is the main focus of Panther in North America. It is one of Canada’s most prolific gold mining regions. Despite its long history, the area is perceived as still under-explored as evidenced by active mining and development work being conducted by majors such as Teck Resources Ltd, Newmont Mining Corp and Barrick Gold as well as a number of junior explorers. The trophy of the camp is the Hemlo mine, operated by Barrick, which has produced over 22 million ounces of gold over 30 years from a combination of underground and open pit mining.

Closeology in PracticeHemlo-Schreiber Geology

The Schreiber–Hemlo greenstone belt is located within the Wawa–Abitibi terrane of the Superior Province.

The western Schreiber–Hemlo greenstone belt is a roughly 50 kilometres (km) long belt of supracrustal and intrusive rocks bounded on its north and west sides by Archean granitoid plutonic rocks. It extends southward under Lake Superior and is separated from the eastern Schreiber–Hemlo greenstone belt by the Mesoproterozoic Coldwell Alkalic Intrusive Complex. The greenstone belt is believed to connect to a greenstone belt in the Winston Lake–Big Duck Lake area to the north by a north-trending sliver of greenstone.

The Archean rocks host a variety of base metal and precious metal occurrences that have been the subject of exploration and limited mining activities for over a century. The felsic metavolcanic rocks are correlative with rocks in the nearby Winston Lake and Manitouwadge areas that host past-producing zinc-copper mines. Gold mineralisation is hosted in sheared and altered metavolcanic rocks and in veined and altered granitoid rocks. Proterozoic rocks in the north shore of Lake Superior region are regarded as having the potential to host magmatic sulphide and oxide mineralisation, including a variety of transitional metals and rare earth elements.

Staking Out the Big BearBig Bear Project

The 100% owned Big Bear Project consists of mineral claims covering an area of ~50 km2 over highly prospective and under-explored greenstone stratigraphy.

The Big Bear project footprint comprises the following prospects:

Bear Lake, Little Bear Lake & Schreiber Pyramid acquired September 2018.
Little Bear North acquired May 2019.
Big Duck Creek acquired May 2019.
The Worthington Property, the Cook Lake Group, the Worthington Extension Group & the Hays Lake Group acquired September 2019.

In early September 2020, the company announced the strategic staking of a further 28 mining claims directly bordering and supplementing the Big Bear project.

Plan of WorksWork at Big Bear

Over last summer the company undertook a high-resolution airborne electromagnetic (AEM) and magnetics (Mag) geophysics survey on the property. It then processed the data and mapping and a report was received. A total of 253 geophysical anomalies have been identified and classified by the survey, with 39 designated for priority investigation.

The company is awaiting drill permits but does have its target determined already. It is also targeting the northern part of the concession for more work on soil anomalies arising from the surveys mentioned above.

Dotting the "i"sDotted Lake

In mid-July 2020, the company announced the acquisition of the Dotted Lake exploration property consisting of 39 cells that are located about 20 km north-northeast of the Hemlo mine. Two weeks later Panther increased the area by 346% by adding further claims.

Gold prospects on the property include 23.3 grams per tonne (g/t) gold (Au) over 0.3m and 9.02 g/t Au over 0.4m from channel sampling. Reconnaissance rock-chip grades of up to 16.95 g/t Au along a >2 km long sulphidic shear-zone have been recorded, in addition to anomalous geochemistry along this zone for both gold and base-metals.

Panther agreed to pay the vendors a total cash consideration of C$20,000 for the 100% acquisition of the claims that make up the Dotted Lake exploration property. These claims are free of any underlying instruments or royalties.

The new Dotted Lake concessions vis-a-vis other players in the Hemlo camp

Planned Work Programme

The first planned work programme in the autumn of 2020 consisted of soil geochemistry and geophysical data reprocessing. This confirmed grades from historical work.

As a result, the company is planning in the short term to drill a 400m hole as soon as possible to test the potential at depth and get a broader understanding of the stratigraphy. Management plans further soil testing over the summer of 2021.

The Assets Down UnderThe Australian Portfolio

Panther started off at listing with only a focus on the Northern Territory, but since then it has further diversified the portfolio with properties in Western Australia. Founder shareholder (and director) Dr Kerin Sener was instrumental in the targeting of the assets for inclusion.

In the Northern TerritoryMarrakai

The Marrakai Project comprises a single granted licence (EL32121) covering an area of 10.1 km2, located 70 km to the southeast of Darwin, Northern Territory (Figure 1). The project is well-located near infrastructure and the Toms Gully (15 km away) and Rustlers Roost (18 km away) deposits, which are owned by China Hanking Holdings Limited.

Toms Gully is a high-grade underground mine containing 1.1 million tonnes (Mt) @ 8.9 g/t Au (0.3mln oz); operations are expected to recommence in 2020/21. Rustlers Roost contains 51Mt @ 1.0 g/t Au (1.6mln oz) and is one of the largest gold projects in the region. The project is located within the Palaeoproterozoic Pine Creek Orogen, which hosts over 250 gold occurrences and several operating gold mines.

Annaburroo

The Annaburroo Gold Project Exploration Licence (EL32140) covers an area of 149.8 km2 and is located 105 km to the southeast of Darwin. The project is located near infrastructure with operational gold projects located some 18 km away.

Within the vicinity is the high-grade Toms Gully underground mine containing 1.1mln tonnes @ 8.9 g/t Au. Nearby Rustlers Roost is one of the largest gold projects in the region containing 51mn tonnes @ 1.0 g/t Au (1.6 mln oz).

Planned Work

The company intends to fly aeromag surveys on both properties in February of 2021 This should direct future work programmes on the ground in 2021.

Heading Out WestInto Western Australia

In November of 2020, the company announced a number of deals to position itself in the well-known gold district of Laverton. It is one of the most prolific gold producing areas in Western Australia, including several major gold mines, including Granny Smith (3 mln oz), Sunrise Dam (8 mln oz) and Wallaby (8 mn oz), and many significant gold deposits. The area is consequently well-serviced by infrastructure and has a skilled local work-force.

The Merolia ProjectAccumulating Ground at Merolia

In mid-November 2020, the company announced the acquisition of 100% of the Merolia Gold project, near Laverton, from White Cliff Minerals Limited (ASX: WCN).

The Merolia project comprises a series of contiguous exploration licences (E38/2552, E28/2693, E38/2847) located 35 km to the southeast of the town of Laverton, and one licence (E39/1585) located 23 km to the west of the town (population: 340) in the Eastern Goldfields Province of Western Australia. The Merolia project contains several gold prospects and substantial gold anomalous zones that have been tested with only limited drilling to date.

The Deal

The deal consisted of a cash payment of A$112,500 to be made to WCN on the successful completion of a due diligence period. There was also a share-based payment of 734,470 ordinary shares to be issued to WCN with 50% of the shares subject to a six-month lock-in, and the remaining 50% subject to a 12-month lock-in.

An additional payment of A$1.25 per ounce of gold will be made to WCN in the event that a JORC Resource is defined. The purchase closed in mid-December 2020.

Further Bolt-ons

Concurrent with the aforementioned Merolia purchase, the company announced that it had optioned several other licences in the immediate vicinity of the Merolia project. These were tenements E38/3384, E38/3527, E38/3526, E38/3553, and E38/3555, which are to be integrated into the Merolia project, with which they are largely contiguous.

The consideration was a cash payment of A$25,000 to be made to Bonanza Resources Pty Ltd and Bluebrook Nominees Pty Ltd with the option agreement expiring on the 31st of July 2021.

Merolia Tenements (owned in blue - optioned in white)

Geology

The Archaean greenstone belts in the Laverton region are dominantly basaltic in composition, containing ultramafic intercalations, which were subsequently intruded by dolerite dykes in places and which are particularly prospective for gold mineralisation. The areas under licence are partly obscured by a veneer of transported cover and exploration in the area has consequently been limited.

Within the eastern part of Merolia are a series of gold prospects, notably Burtville East, Comet Well and Ironstone. Regional magnetic data over this part of the project identifies several NW-SE trending shear systems that have the potential to host substantial gold mineralisation. This potential has been confirmed by surface geochemical sampling along the Comet Well gold trend, which has identified significant coherent linear soil gold anomalies at Comet South, Comet North, Comet West and at Ironstone.

The Comet Well gold trend extends northwest (NW) over at least 15 km from the Comet Well area in the south to the Burtville East area in the north. In a broader context, the Comet Well gold trend and associated sub-parallel structures extend at least 30 kilometres north to the Bright Star (106,000 ounce) gold deposit owned by Stone Resources Australia Limited (ASX: SHK). Much of the Comet Well gold trend and the known gold prospects in this area are covered by the Merolia project licences.

Significant Past Work DonePast Exploration

Previous drilling by WCN across these prospect areas includes 8m at 6.7 g/t Au at Burtville East and 9m at 46.5 g/t Au at Ironstone. In addition, historic drilling at Burtville East includes 5m at 27.8 g/t Au and 24m at 8.6g/t gold at Ironstone. The Comet Well area has not been drilled to date but contains a series of distinct sub-parallel 1.25 to 2.5 km long NW-trending gold anomalous zones (gold in soils reaching a peak of 2.6 g/t Au), which have yielded substantial quantities of angular gold nuggets through surface prospecting. The angular nature of the gold nuggets suggests a proximal gold source, which will become the focus of further work in this area.

The western part of Merolia contains the Red Flag gold prospect. Previous exploration in the area around Red Flag identified a WNW-trending gold anomalous zone coinciding with a distinct magnetic low. The geology of the area is dominated by mafic volcanic rocks intruded by dolerite dykes, displaying sheared gold mineralised margins in places. This area was drilled, yielding a best near-surface intercept of 2m at 9.2 g/t Au.

One should also not discount the potential here for nickel discoveries here as both White Cliff and a previous holder, Red River Resources, had made promising Nickel encounters during exploration work.

Work at Merolia going forward

While work has been done on these tenements by various parties, the targets were varied and thus so were the methodology and goals.

The technical team at Panther intend to bring a different interpretation to the geology here. The company will be flying a drone mag over the property in February 2021. It will be conducting a comprehensive auger drilling campaign to hopefully extend known gold in soils.

Soil geochem at Merolia

Looking Forward on FundingFinancing

It is first worth mentioning that Panther came to the London market via the reverse takeover of a former palm oil producer (hence the current ticker). In early December the company placed 3,000,000 ordinary shares at a price of 10 pence share, raising gross proceeds of about £300,000. The shares being issued represented around 5.54% of Panther's issued ordinary share capital prior to the placing.

The Merolia deal closed in mid-December with the consideration being A $112,500 cash and 734,470 Panther ordinary shares issued credited as fully paid at a price of 12.65p per share (of which 50% of the consideration shares will be subject to a six-month lock-up from the date of issue and other 50% will be subject to a 12-month lock-up from the date of issue). At the current time, the total issued share capital consists of 57,862,419 ordinary shares.

How financing evolves in the current year depends on both the gold price and the exploration results.

Mix of Geological & Market VeteransDirectors & Team

Darren Hazelwood, the chief executive officer (CEO), is an entrepreneur with over 15 years’ experience of building private companies and managing teams focused on value creation. He has extensive experience in the natural resource sector as a private investor.

Dr Kerim Sener, the non-executive chairman, has over 21 years in the mining and mineral exploration industry. He has been responsible for the discovery of over 3.8mn oz of gold in Eastern Europe and has been instrumental in the development of Ariana Resources' active gold mine in Turkey.

He is a Fellow of The Geological Society of London, Member of The Institute of Materials, Minerals and Mining, Member of the Chamber of Geological Engineers in Turkey and a member of the Society of Economic Geologists.

Mitchell Smith, the chief operating officer, is currently CEO of Global Energy Metals Corp (TSX. V:GEMC), a company deeply involved in the battery metals space. He has long experience in developing and executing corporate strategies, marketing relationships and maximising business opportunities in the natural resource sector.

Nick O’Reilly, a non-executive director, is principal geologist and a director of Mining Analyst Consulting Ltd. He has over 14 years’ experience in mining, exploration and development across all major commodities. As a qualified geologist, he can act as a competent person for JORC Code and AIM rules.

Simon Rothschild, a non-executive director, has been active for over 30 years in financial public and investor relations. He currently heads Capital Market Consultants and is also a non-executive director of Aranjin Resources (TSX-v:STAR), Rothschild Dragon Limited and Quartz Investment Management Limited. His experience spans both financial reporting for clients listed on AIM and the main market of the London Stock Exchange, as well as support for flotations, company reconstructions and acquisitions.

Kate Asling, a non-executive director, is a fellow member of the Association of Chartered Certified Accountants. Asling began her career as an auditor of small and medium enterprises before moving into corporate finance in 2006. Since then she has worked on over 30 transactions as reporting accountant or as a due diligence provider across a number of different sectors including natural resources.

Things to ConsiderRisks

The risks are narrowed at Panther by the almost total absence of political risk in the jurisdictions in which it operates. This leaves us with the following considerations:

Gold price weakness
Financing markets deteriorate
Failure to prove up sufficient resources/reserves

The main risk currently is that the gold price might move unfavourably, but that holds for all gold miners. Our outlook is for gold to break through US$2000 per oz in 2021 but not to advance significantly beyond that. In our view, anything over US$1600 is highly prospective for encouraging investment and exploration in the gold space. If a project does not work at US$1600 it should not be in consideration.

Financing waves come and they go. At the moment the mining space, in general, is attracting significant attention from dedicated and non-dedicated investors, with the latter group, in particular, seeking to rotate out of other more overvalued sectors in the broader markets. The perspectives look good for funds to continue to be dedicated to precious metals for at least the next two years.

The risk of non-discovery or inadequate resources being defined is a perennial in the exploration space. This risk is best mitigated by the prospectivity of the ground being explored and the quality of the team involved. Panther appears to have addressed these two issues.

Exploration to the ForeConclusion

The company has motored along so far on its deal-doing and the generalised higher tide brought on by gold price appreciation. In 2021, the drivers for Panther’s price will be exploration results starting to flow and the evolution of neighbouring plays in the Hemlo and Laverton district. Over and above gold, one should forget the potential at Laverton for other metals, such as nickel.