Magmatic Resources Ltd (ASX:MAG) is very well funded as it advances its gold-copper targets in the prolific Lachlan Fold Belt of New South Wales during the 2022 financial year.
During the year, the company remained active across its East Lachlan portfolio, with acquisitions and the demerger of its Moorefield Project into Australian Gold and Copper Ltd (ASX:AGC).
This move provided investment exposure to Central Lachlan discovery opportunities and allowed the company to focus its activities on the three 100%-owned advanced gold/copper projects in the East Lachlan - the Myall, Wellington North and Parkes projects.
The renewed focus on Magmatic’s East Lachlan strategy was further enhanced through the full six‐year renewal of the entire tenure portfolio in this region.
Gold-copper ‘hotspots’
Company chairman David Richardson said in the annual report: “The Lachlan Fold Belt, NSW is one of the world’s gold and copper ‘hotspots’ with a long history of high-grade gold production and recently attracting many of the world’s leading gold and copper companies.
“Magmatic recognised the region's potential, acquiring four exploration projects from Gold Fields Limited (the world's seventh-largest gold miner), and have always described Magmatic as a junior explorer with a ‘major’s’ portfolio, with three of the projects in the East Lachlan.
“The East Lachlan is a globally significant gold-copper province with an endowment of more than 80 million ounces of gold and 13 million tonnes of copper (Phillips 2017).
"It is most famous for Newcrest Mining Ltd’s world-class gold-copper porphyry cluster at the Cadia Valley mines."
Strategic positions
Magmatic’s three projects represent strategic positions with advanced target portfolios adjacent to major mining operations and recent discoveries in the East Lachlan.
Significant work was carried out by its exploration team in Orange, NSW, during the year.
Multiple aircore (AC), reverse circulation (RC) and diamond core drilling (DD) programs were completed at its Wellington North and Myall projects.
The company’s exploration activity was recognised with the entire East Lachlan tenure portfolio receiving full six-year renewal.
Its Wellington North Project has a dominant tenure position and target portfolio essentially surrounding the Boda gold-copper discovery by Alkane Resources Limited (ASX:ALK).
The Myall Project's ongoing exploration activity indicates strong similarities with the Northparkes Mining District, 60 kilometres south owned by the China Molybdenum Company Limited and Sumitomo Group joint venture.
The company also holds a strategic position in the Parkes Fault Zone (Parkes Project), immediately south from Alkane’s Tomingley Gold Operations and recent Roswell and San Antonio discoveries.
The Parkes Project comprises two exploration licences.
Magmatic also surrendered its non-core West Australian Yamarna and Mt Venn Project exploration licences (E38/2961 E38/3351, E38/2918, E38/3312 and E38/3327) during the period.
Moorefield Project transferred
During the year, Magmatic transferred its Moorefield Orogenic Gold Project, which consisted of two exploration licences (EL7675 and EL8669), to its wholly-owned subsidiary, AGC in December 2020.
AGC was then listed as a separate listed entity on the ASX in January 2021.
Magmatic shareholders received an in-specie distribution of 24,362,406 new AGC shares, representing 24.36% of AGC’s recapitalised capital structure, with Magmatic retaining 5,637,594 AGC shares or 5.64% of AGC’s issued capital as at June 30, 2021.
This gave shareholders exposure to both MAG and AGC shares and further upside of two new gold projects acquired by AGC.
Magmatic recognised a $6 million profit on the AGC demerger.
Funding raised
During the year, Magmatic raised $5 million through the issue of 44,166,670 new shares anda further $415,900 from option holders, who had exercised 2,377,120 options.
In the first quarter of FY22, the group raised a further $2,514,561 from option holders, who exercised 34,827,710 options.