Panther Metals: The Value of the Parts
Panther was launched onto London's AIM exchange in late 2019, bringing to market a portfolio of Australian and Canadian exploration assets, to which they have subsequently added extra territory. At the time we noted that this opened 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.
One of our predictions has come to pass with the company announcing the spin-out of its Australian assets into a separately listed vehicle.
Key Takeaways
- Panther, launched on the market eighteen months ago, is already looking to divide its portfolio of projects stretching from Ontario’s Hemlo camp to Australia’s Northern Territory and the storied Laverton gold district of Western Australia
- The company intends to spin out its Australian assets on the ASX with a listing to raise A$5mln
- The new entity will be called Panther Metals Ltd
- The announcement of the Coglia nickel-cobalt exploration target of 30mln tonnes (Mt) — 50Mt of laterite mineralisation, grading at between 0.6% — 0.8% nickel and 400 — 600ppm cobalt potentially makes Panther a player in the battery metals space
Investment Thesis
We are fans of the spinning out of assets because frequently one plus one can add up to three with the liberated assets ending up higher-rated when separated than within the one structure.
Over a fairly short time Panther has added to its portfolio of territory at both the Australian and Canadian ends of its empire. Now it will start fleshing out the potential with exploration work as the strictures imposed by the pandemic start to recede.
Gold has been the main target thus far, but the potential at Laverton for other metals, such as nickel-cobalt is now becoming evident.
The Australian assets have grown in number and extent, and it is time for them to "fly the nest". With strong mining equities demand on the ASX, a spin-out will boost funds for work while not diluting equity holders at the UK-listed entity.
In April of 2021, Panther made the not unsurprising announcement that its Australian and Canadian divisions would pursue their own distinct futures via a listing of the Australian assets in a distinct vehicle quoted on the Australian Stock Exchange. As this event moves closer we take a look at the rationale and what the new creature will look like.
Going their Separate Ways
When it listed, Panther's focus was on the Northern Territory, but since then it has further diversified the portfolio with properties in Western Australia.
The Australian Portfolio
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).
Laverton is one of the most prolific gold producing areas in Western Australia, including several major gold mines, including Granny Smith (3mln oz), Sunrise Dam (8 mln oz) and Wallaby (8mln oz), and many significant gold deposits. The area is consequently well-serviced by infrastructure and has a skilled local workforce.
The Merolia project comprises a series of contiguous exploration licences (E38/2552, E28/2693, E38/2847) located 35 kilometres (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.
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.
Heading Out West: Merolia/Laverton
Merolia Tenements (owned in red - optioned in blue)
Into Battery Metals?Coglia to the Forefront
We mentioned in our initiation of coverage that one should not discount the potential on the Merolia concessions for nickel discoveries, as both White Cliff and a previous holder, Red River Resources, had made promising nickel encounters during exploration work.
In recent months Panther has been reviewing historic work undertaken on the Coglia tenements. These included the drill holes and mag data shown on the following two graphics.
Auralia Mining Consulting (Auralia) was engaged by Panther Metals to estimate an exploration target for the Coglia Nickel Laterite Project.
The outcome of this project was an exploration target of 30-50 million tonnes, grading at 0.6-0.8% nickel and 400-600 parts per million (ppm) of cobalt.
In light of the revived excitement in market (and political) circles with regard to the provision of battery metals, this addition of nickel-cobalt exposure to the Panther portfolio is most timely and exciting.
Map showing Coglia historic drillholes
Complex Geology at Coglia
The Coglia Project covers the eastern side of a significant greenstone belt splaying off the major Erlistoun Syncline. The belt is up to 10kms wide but narrows to 3kms wide. The belt consists of a layered sequence of mafic and ultramafic rocks. In the central area and to the east isolated outcrops of amphibolite (mafic hornfels) and foliated biotite granite are located on the granite/greenstone contact. Minor thin inter-layered gabbro units also occur throughout the tenement. Minor banded iron formation (BIF) units also occur in the northern part of the tenement area, folded within a structurally complex sequence of highly magnetic (N-S trending) mafics and ultramafics that surround an internal granitoid.
A major strike parallel shear zone trending NNW-SSE is the main feature in the central tenement area, together with several smaller parallel shears. This main lineament is cut by NNE to NE trending faults.
The southern areas of the tenement are blanketed in most parts with thick alluvial cover; however, the area between Karara Well and Comet Well is a well-dissected laterite profile with both in-situ and transported laterite remnants.
Previous Work
In 2001-03 Heron Resources drilled 20 reverse circulation (RC) holes for 1,562 metres (m) and delineated a horizon of nickel laterite mineralisation. Drilling was somewhat difficult with transported alluvial sediments covering the area to a depth of up to 15m.
In 2018 White Cliff Mineral drilled 48 air-core holes totalling 2,866m. This drilling also intersected a layer of nickel enrichment in the weathered, lateritic material at a depth of between 40m to 70m.
The most important drill intercepts are shown in the table that follows.
Of particular note is the relative proximity to the surface implying the deposit may open-pittable.
Selected Results of Drilling at Coglia
Coglia - To Keep in Mind
The consultants that prepared the exploration target estimate stated that there is excellent potential to upgrade this exploration target into a mineral resource. Infill drilling on an initial 250m NS line spacing and 50m spacing EW will enable — assuming successful sample results — the estimation of a Mineral Resource.
As far as viability is concerned nickel laterites are being processed by Glencore at the Murrin Murrin mine some 70km from the Coglia project location, providing evidence that the Eastern Goldfields can generate commercial production from this deposit type.
It’s also important to highlight two further points; this project is open at depth and along strike and also some deeper holes have encountered sulphides below the laterite horizon in the underlying ultramafic rocks. These factors have the potential to add to this developing story; further investigation is required.
Merolia 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 15km 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.
Soil Geochem at Merolia
Extensive Past Work
Previous drilling by WCN across these prospect areas includes 8m at 6.7 grams per tonne (g/t) gold (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.
Works on the Gold Targets
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 flew a drone mag over the property in early 2021.
In late May the company announced some results from its recently completed auger drill geochemistry programme within tenement E38/3384, which is in the central part of the Merolia Gold Project. This programme covered a large part of the south-eastern extension of the Comet Well gold trend from which significant gold anomalism in soil was previously identified over at least 2.5km of strike. The Comet Well Trend has also yielded over 40 ounces of gold nuggets by prospectors in recent times, yet remains undrilled.
Sampling comprised of 827 auger soils holes, with samples analysed by ALS Ionic Leach for gold and 60 other elements. One anomalous gold target in the central area (40-Mile Camp) and one open gold target defined in the north (near Comet Well) were defined. Elements associated with alteration support the gold anomaly with other elements showing a negative response, representing a zone of iron depletion.
The auger assay results for gold are considered anomalous and follow-up auger infill drilling is required on the 40-Mile Camp anomaly to refine these gold anomalies and to help establish reverse circulation drill targets. The target on the northern boundary requires infill bedrock testing by auger drilling.
In the Northern TerritoryMarakai
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.
Near NeighbourAnnaburroo
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 51mln tonnes @ 1.0 g/t Au (1.6 mln oz).
Financing the Split
In early May 2021 the spin-out company announced that it had completed a pre-IPO seed financing raising A$300,000. As a result of the financing, the interest of Panther in its subsidiary, Panther Metals Ltd, has reduced from 100% to 89.3%.
Conclusion
Panther is left with a delectable dilemma. It made the sensible move to spin out its Australian assets as a way of capitalising on the strength of the ASX recently but also to focus the parent company on the Canadian potential. Then out of left field comes the possibility that (part of) the Merolia tenements in Western Australia may be prospective for a sizeable nickel-cobalt resource, though only an exploration target at this phase. The canniness of the Panther team is evident in having staked out Coglia as the drill results from previous holders showed the clear potential for such a discovery at this location.
So which way does Panther leap now? Spin out the gold and battery metals down under? Or just spin out the gold? How to maximise value from these interesting opportunities is the challenge. The coming months will hopefully give us a sign.