Exploring and Expanding Australian Gold Assets
This A.I.S. Resources Ltd. profile is part of a paid investor education campaign.*
A.I.S. Resources Ltd. (TSXV:AIS,OTCQB:AISSF)is a diversified resource company working to be a high-quality producer of precious metals and battery materials, particularly lithium, manganese and gold. To fulfill this goal, the company has assembled a team of highly-qualified professionals with a track record of success in exploration, production, commodity trading and capital markets. A.I.S. Resources is currently focused on developing its pair of gold projects in Australia, the Yalgogrin orogenic gold project and the Toolleen-Fosterville gold project.
The Yalgogrin orogenic gold project is located in the historic West Wyalong gold corridor, which produced 445,700 ounces of gold between 1894 and 1921. A.I.S. Resources has confirmed existing gold assays at Yalgogrin after reviewing 12 drill core samples from the property. The advanced-stage Yalgogrin gold project has seen extensive gold production over the past 100 years, including three major gold prospects that are in operation as of Q3 2020: Cadia Newcrest, the Lake Cowal gold mine and the Northparkes copper-gold mine.
Complementing A.I.S. Resources’ precious metals portfolio is the Toolleen-Fosterville gold project. The project is located only three kilometers from the township of Toolleen and 12 kilometers from the Kirkland Lake Fosterville gold mine, which hosts a resource of 7.58 million ounces of gold.
In addition to its gold projects, A.I.S. Resources is continuing to work towards extracting lithium using an advanced solvent extraction process, EkoSolveTM, that can achieve 95 percent lithium recovery rates. The technology allows producers to build 20,000-tonne plants without spending $550 million to $600 million on installing ponds and waiting 18 months for the brine to produce a four percent lithium concentrate.
A.I.S. Resources is also negotiating agreements to generate near-term cash flow opportunities through the trading of manganese lump. The company commenced shipping manganese oxide from the San Jorge mine in August 2019. A.I.S. Resources is waiting to complete its first Chinese Import Quarantine assessment which provides import credibility for the company to sell lump manganese. Contracts are paid by letter of credit once the ship departs from the port. A.I.S. Resources aims to ship 10,000 tonnes of manganese oxide per month after an initial trial of 5,000 tonnes and has plans to increase its capacity to 40,000 tonnes per month through spot trades, its own mines and joint ventures.
Mines and trading opportunities are being assessed by the geological team for near term production opportunities for delivery in southern Peru, Bolivia, Panama and Namibia.
In October 2019, A.I.S. Resources entered into an agreement to acquire a 51 percent interest in a gold mine in northern Peru. The mine has been worked in trenches and three underground shafts. Two grab samples from the Raw4 concession assayed 27 g/t gold and 466 g/t gold, and approximately 160 ounces of gold have been extracted from the two shafts in the adjacent concession in the last three months. A.I.S. Resources is currently conducting a review of the 5,888-hectare concession areas and plans to focus on developing one area initially.
Contributing to the company’s success is A.I.S. Resources President and CEO Philip Thomas brings his strong technical background in exploration geology, mine production and trading to the development of the company’s manganese and lithium technology assets. He is one of a few executives globally that has built and operated a lithium carbonate plant (in 2007). Thomas is also a certified mineral valuer, appraiser and geologist who has spent more than 15 years trading ores with Chinese corporations. Thomas has recently managed gold mines in Peru and Arizona.
A.I.S. Resources’ Company Highlights
- Signed an agreement to acquire a 60 percent interest of the Yalgogrin gold project for an AU$275,000 cash payment and four million A.I.S. common shares
- The project is being developed in the historic West Wyalong gold corridor of Australia, home to 445,7000 ounces of gold production between 1894 and 1921
- Yalgogrin project hosts three major gold prospects in operation as of Q3 2020: Cadia Newcrest, the Lake Cowal gold mine and the Northparkes copper-gold mine
- Assay results at Yalgogrin have been confirmed by A.I.S. Resources, including 12 drill core samples from EL5891
- Developing the Toolleen-Fosterville gold project in Australia, located only three kilometers from the township of Toolleen and 12 kilometers from the 7.58Moz Kirkland Lake Fosterville gold mine
- Multiple strategies to achieve near-term revenues through manganese trading, lithium process engineering and operating its joint venture gold mine
- Commenced manganese sales in August 2019.
- Aims to ship 5,000 tonnes of magnesium ore per month initially and intends to ramp-up its operations to 10,000 tonnes to 20,000 tonnes.
- Senior management is highly-skilled in exploration, geochemistry and lithium production techniques and have more than 17 years of experience working in Argentina in the lithium industry.
A.I.S. Resources’ Yalgogrin Gold Project
In October 2020, A.I.S. Resources signed an agreement, upon approval from the TSX Venture Exchange, to acquire a 60 percent interest in the Yalgogrin project in exchange for an AU$275,000 cash payment (roughly C$261,250) and four million A.I.S. common shares.
Over the course of the 12 months following the agreement, the company will have to spend AU$750,000, or C$712,500, on exploration costs. Additionally, A.I.S. Resources will have to issue its common shares with a valuation of AU$600,00 at the 20-day volume weighted average price immediately preceding that date in order to acquire the remaining 40 percent of the project.
The advanced-stage Yalgogrin gold project has seen significant gold production over the past 100 years and hosts three major gold prospects that are in operation as of Q3 2020: Cadia Newcrest, the Lake Cowal gold mine and the Northparkes copper-gold mine. As of 2020, the Cadia Newcrest project is producing approximately 900,000 ounces of gold per year, while the Northparkes copper-gold mine has produced 1.464 million ounces of gold and 1.168 million tonnes of copper over 25 years of production. The Lake Cowal gold mine, which is located only 40 kilometers from the Yalgogrin project, was purchased by Evolution Mining in 2015 for US$550 million.
The Yalgogrin gold project includes two exploration licenses, the 2.8 square kilometer EL5891 tenement and the 56 square kilometer EL6030 license. The primary exploration targets at EL5891 are low-tonnage with medium-to-low-grade deposits that are potentially amenable to open-pit mining. The secondary exploration targets at EL5891 are high-grade resources amenable to underground mining, which A.I.S. Resources believes is highly-prospective due to the extensive gold mineralization found in soil, high-grade rock chips found on the property and additional mineralization discovered during drilling.
In July 2020, A.I.S. Resources announced it had commenced due diligence on the Yalgogrin orogenic gold project including a detailed review of RC and air core drilling sample trays and surface samples. After reviewing the existing data on the project, A.I.S. identified six reefs in the Asia Wyalong – Sheehans historic mine area of the project. In total, six parallel reef lines within a 60-meter wide strip run parallel to the cleavage and include a number of smaller cross cutting veins. Following a three-day project inspection of the historic mines and geology on ELA6030 and EL5891, A.I.S Resources announced it had verified the assay results at Yalgogrin, including 12 drill core samples from EL5891 that were verified as correct and showed a strong correlation.
A.I.S. Resources’ Toolleen-Fosterville Gold Project
A.I.S. Resources entered into a binding letter of inter in August 2020 to acquire the Toolleen-Fosterville gold project. The project is located only three kilometers from the township of Toolleen and 12 kilometers from the 7.58Moz Kirkland Lake Fosterville gold mine.
The project area is located within the Bendigo-Ballarat zone of the Palaeozoic Lachlan Fold Belt of eastern Australia, with gravity surveys showing highly-prospective areas. The Toolleen Gold Zone was mined via an underground operation up until 1957, producing a reported 7,000 tonnes at 10 g/t gold from the top 60 meters. A.I.S. Resources believes the shallow gold mineralization could be indicative of high-grade shoots amenable to underground mining methods. The Toolleen-Fosterville project is located on freehold land and has no native title claim.
Northern Peru Gold Project
A.I.S. Resources can earn an initial 51 percent interest in a gold mine in northern Peru that can produce up to five kilograms of gold per day, and recently has had an average revenue of US$75,000 per month. The company has been granted a 90-day due diligence period and hopes to discover that the property contains over 300,000 ounces of winnable gold through numerous vein systems evident on the surface. To date, two grab samples have been recovered from the Jaw4 concession that graded 27 g/t gold and 466 g/t gold.
If this is the case, A.I.S. Resources intends to expand the mine’s operations to 24 tonnes a day with the initial installation of a ball mill, wilfley table and ancillary processing equipment, worth US$500,000. At a later date, A.I.S. Resources plans to install a much larger line of equipment with CIL gold production capacity. The company also plans to offer its mine management experience and mine engineering capabilities.
Manganese has a variety of applications, including steel production, in particular, rebar for reinforcing concrete, aluminum and copper alloys, chemical applications and batteries. The metal is an integral component in the electric vehicle (EV)-battery space and demand is likely to increase as more countries push forward green initiatives and legislation. The nickel-manganese-cobalt (NMC) formula is expected to be replaced by higher manganese content. Under BASF’s proposed new move, it will start manufacturing NMC cathode material to comprise 70 percent manganese, while nickel will be cut to 20 percent and cobalt to a maximum of five percent.
As green initiatives gain prominence, EV sales are expected to reach 140 million in 2030 (source BloombergNEF) and 508 million by 2040. Solar panels are following a similar curve at around 50 percent growth each year. By incorporating manganese into an all-inorganic perovskite solar cell, scientists have increased its efficiency and stability while keeping manufacturing costs low. This surge in demand is expected to translate into increased demand for high-quality manganese as battery makers and end-users look for alternatives to using cobalt.
A.I.S. Resources is focused on providing its shareholders with near-term cash flow opportunities. To this aim, the company expects to trade up to 10,000 tonnes of manganese oxide per month in 2020 after initial shipments are completed.
The estimated cost of production and shipping 44 percent manganese oxide is competitive with global producers. The company has already seen significant price reductions in line with the recent reduction in the price of manganese lump.
A.I.S. Resources intends to ramp up its manganese trading operations to 20,000 tonnes of manganese ore per month once it has established larger joint venture operations. The company is in negotiations with several other interested parties and end-users for the supply of manganese ore.
The global lithium market is expected to grow at a compounded annual growth rate (CAGR) of 13 percent between 2018 and 2022, according to a report by Research and Markets. The growth in the lithium market is anticipated to grow with the rise in EV sales. However, many analysts are concerned that the supply of battery materials cannot keep up with the demand. According to Albemarle, the demand for lithium-ion batteries from the EV industry is expected to grow at an annual rate of 20 to 30 percent through 2024.
There are more than five explorers with feasibility studies completed in Argentina and Chile getting ready to quote on the construction of plants.
Lithium Solvent Extraction Technology
A.I.S. Resources has signed a 120-day option agreement with Ekos Research to invest US$1 million for a 15 percent equity stake in Ekos Research’s SOLVEKOS solvent extraction process. The SOLVEKOS process is capable of achieving over 95 percent lithium extraction rate from raw brines with high magnesium and is able to produce a lithium product with a 99.2 percent purity without the use of traditional pond evaporation methods. The process is also able to recover over 90 percent of the solvents used and has a 98.5 percent efficiency in removing significant ions such as magnesium, calcium, potassium and boron.
The US$1 million investment made by A.I.S. Resources is to go towards the construction of a pilot plant. The plant will be built in Melbourne, Australia before being shipped to Salta, Argentina to demonstrate its commercial viability. Once payment is received, the pilot plant construction is expected to be completed in nine months. A combined capital raising and issue of convertible notes is expected to fund the project.
A.I.S. Resources’ Management Team
Martyn Element — Chairman of the Board and Director
Martyn Element is the founder and President of Element and Associates, which is primarily focused on sourcing and pursuing new business ventures globally. The group has a proven track record of successfully advising and marketing new business ventures. Element has cultivated an extensive global network and developed strong working relationships with specialized funds and other related parties in conjunction with the various aspects required to market these opportunities. He developed his experience in the public financial markets in Canada, prior to forming Element and Associates in 1989. Before entering the financial markets, he was involved in the food and beverage industry in Canada and the UK. Element brings a genuine personal interest to each project and a skill set of identifying needs and developing strategic plans as well as providing an extensive network of contacts.
Phillip Thomas, B.Sc. (Geology), M.Bus.Marketing., MAIG, MAIMVA (CMV) — President and CEO
Phillip Thomas has degrees in Geology and Business Marketing and is a certified mineral valuer. He specializes in lithium, Manganese, Gold and Copper mineralisation, and is experienced in finance and capital raising, management of mining companies, and planning, development and management of mining projects. He has established a number of significant exploration projects in Mexico, US, Chile, Argentina, Arizona and Australia. Previously, he was actively engaged in developing two major lithium projects in Argentina with Dr. Sorentino. Mr Thomas has specialized in the exploration, development, financing and sales of lithium deposits within public company structures.
He has extensive knowledge of the lithium carbonate markets in Japan, Korea, China and Taiwan. From 2003 to 2008, he was CEO of Admiralty Resources, where he developed the Rincon Salar project in Argentina and commenced production. He and his team constructed a laboratory, pilot plant and developed a process to evaporate the brines in half the usual time. Phil has been active in three lithium projects in the last 16 years. Phillip holds an M.Bus.Marketing degree with high distinction from Monash University, a Bachelor of Science (Geology) degree and a Diploma in Finance. He is a member of the Australian Institute of Geoscientists and a Certified Mineral Valuer with the Australasian Institute of Mineral Valuers and Appraisers. He is both a qualified and competent person for NI43-101 and JORC ASX reporting in styles of mineralization for lithium brines, manganese, copper, gold and iron ore.
Kiki Smith — CFO and Director
With over 20 years of experience, Kiki Smith has been assisting private and public companies in the role of accountant, corporate controller and chief financial officer in mining, oil and gas, real estate, high technology, food production and investment fund management. She currently provides consulting services in mergers and acquisitions, financial reporting and regulatory compliance to several public and private companies in the resource, food production and investment sectors. She graduated from the University of British Columbia in 1989 with a Bachelor of Arts degree in economics. She is a member of the Chartered Professional Accountants of British Columbia.
Denis M. Walsh—Chief Geologist
Denis’s substantial experience includes 20 years at Yalgogrin EL5891, and the last 18 months focused at Kirkland Lake Gold’s Fosterville operation. His recent role included identification, assessment and communication of targets and programs to support formulation of significant forward-looking budgets and assist delivery of existing budget programs. Work also involved drill tender preparations, prospect reviews, targeting criteria and budget data for tenement applications. Typical duties also included targeting drillholes, planning and interpretation of deep (1km depth) drilling program under 100m Murray Basin sediments utilizing partial leach soil geochemistry, geophysics datasets including gravity, magnetics, IP, AEM and downhole geophysics. Assessment of programs involved structural logging, stratigraphic interpretation/section reconstruction and multielement alteration data review followed by integration of all geological, geochemical and geophysical datasets.
Denis graduated from RMIT University, Melbourne with a Bachelor of Applied Science in Applied Geology in 1993. He is a member of the Australian Institute of Geoscientists. Denis has deep experience exploring in the Lachlan Fold Belt Victoria and NSW (gold, silver, copper, platinum, nickel/cobalt/scandium), New England NSW (Diamonds), Central goldfields WA Norseman area (gold, nickel/copper/platinum/palladium), Gawler Craton in SA (gold), Gippsland and Otway basins in Victoria (geothermal), Cooper Basin and Gawler Craton in South Australia (geothermal), and Victoria and Tasmania (environmental assessments).
Anthony Balme, FCA — Director
Anthony Balme is an active participant in a number of public and private resource ventures. In the private sector, he is Chairman of Carter Capital Ltd., Lymington Underwriting (insurance) and Alton Resource Corporation. In the public sector, he is Chairman of Forum Energy Metals, listed on the TSX, and formerly of Ortac Resources, listed on the AIM market. One of his focuses is identifying early stage opportunities in the resource sector and arranging financings to advance projects to the public markets in both the UK and Canada.
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