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Manuka Resources Limited Investor Kit
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Manuka Resources Limited
Overview
Manuka Resources Limited (ASX:MKR) is an ASX-listed mining company focused on gold and silver-gold projects in the Cobar Basin, one of Australia’s most prolific producers of base and precious metals. The company has 100 percent ownership of two fully permitted precious metals projects in the Cobar Basin - the Mt Boppy gold mine and Wonawinta silver project. In addition, MKR owns the Taranaki VTM iron sands project in New Zealand.
The company revealed a phased strategy focused on delivering maximum value to its shareholders. The first phase focuses on bringing back the Mt Boppy gold mine into production, and has released an optimised production plan for the mine restart. The second phase will involve restarting mining and production at the Wonawinta silver mine, while the third phase will see the development of the Taranaki vanadium titano-magnetite (VTM) project.
The Mt Boppy gold mine was historically one of the richest in NSW, Australia and produced ~500,000oz gold at an average grade of 15 grams per ton (g/t) gold. Accordingly, the company is very excited about its exploration potential.
The current focus is on establishing a processing plant at Mt Boppy and recommence on-site gold production from Q1 2025. The ore from the Mt Boppy mine was previously being processed at the 850,000 to 1 million tpa processing plant at Wonawinta, located nearly 150 kilometres south-west of Mt Boppy. This is about to change as MKR has determined that it could save significantly on transportation costs as well as production efficiencies by building an on-site processing plant at Mt Boppy, which will materially enhance the project economics.
MKR estimates the total cost of building the processing plant to be between AU$10 million and AU$15 million. Compared to this, the annual cost of hauling ore from Mt Boppy to Wonawinta is AU$6 million to AU$7 million (nearly 50 percent of the total capex). MKR anticipates Mt Boppy to deliver total EBITDA of >AU$90 million and cash flow of >AU$80 million over a five-year mine life. It is important to note that the current market capitalization of MKR is just AU$55.1 million, much lower than the anticipated five-year EBITDA and cash flow.
The initial five-year mine plan is largely focused on the screening and processing of gold-bearing waste material above ground on the Mt Boppy mine site. The company has been processing these wastes from June 2023 to December 2023 at its Wonawinta plant and now wants to optimize the process.
The cash flows from the Mt Boppy mine will be used to fund the restart of the Wonawinta silver mine, which is currently under care and maintenance. Wonawinta contains total resources of 38.8 million tons (Mt) at 42 g/t silver for 52.4 million ounces (Moz). Within this, there is a higher-grade component of 4.5 Mt at 97 g/t silver for 14 Moz. Manuka Resources is targeting a mineral resource update for Wonawinta in Q2 2024. The Wonawinta silver project will be the largest primary silver producer in Australia and expected to be back in silver production within 12 months.
The gold and silver market appears to be in an upward trend, with prices for both precious metals hitting their all-time high in 2024, which bodes very positively for MKR.
Company Highlights
- Manuka Resources is an ASX-listed mining company focused on exploring and developing gold and silver assets in the Cobar Basin in New South Wales, Australia.
- The company’s two principal assets – the Mt Boppy Gold Mine and the Wonawinta Silver Mine – are both located in the prolific Cobar Basin. In addition, MKR holds a 100 percent interest in the Taranaki VTM iron sands project, located in New Zealand.
- The primary focus is on bringing the fully permitted Mt Boppy mine back into production by Q1 2025. The company will establish an on-site processing plant at Mt Boppy and in turn free up the Wonawinta processing plant for silver production from the Wonawinta silver mine, which was being used to process Mt Boppy ore.
- The results of the recently completed sonic drill program coupled with an updated mineral resources estimate at Mt Boppy (100 percent increase in indicated gold ounces) improve confidence in the recommencement of gold dore production at Mt Boppy.
- A dedicated processing facility at Mt Boppy will improve the project economics and also allow for an additional revenue stream by freeing up the Wonawinta processing plant to process ore from the Wonawinta silver mine (placed on care and maintenance in February 2024).
- The cash flows from the Mt Boppy mine will be used to fund the planned restart of the Wonawinta silver mine.
- Elevated gold and silver prices should substantially benefit Manuka Resources, resulting in improved profitability and cash flows as it brings both its gold and silver projects into production.
Key Projects
Mt Boppy Gold Project
The Mt Boppy gold project comprises three mining leases, four gold leases and one exploration license, spanning an area of more than 210 sq km in the prolific Cobar Basin in New South Wales, Australia. The project was acquired by Manuka in 2019 and has a current mineral resource of 4.3 Mt at 1.19 g/t gold. This includes a combination of oxidized and transitional/fresh mineralization in the ground, as well as mineralized rock dumps and tailings.
Historically, Manuka Resources has processed its stockpiles and gold mineralized waste products through its Wonawinta processing plant. However, inefficiencies associated with trucking and processing ore at the distant Wonawinta plant has led the company to revise its strategy. It is now looking to construct a processing plant at Mt Boppy so that ore from the mine can be processed on-site. Mt Boppy has excellent infrastructure including a 48-person mine camp and is fully permitted for the proposed processing plant and on-site production.
As a precursor to the commencement of on-site production, Manuka Resources undertook a sonic drilling program at Mt Boppy to improve confidence in the mineral resource base. A 26-borehole, 506-meter sonic drilling evaluation program over the Mt Boppy rock dumps and dry tailings was completed in December 2023. The program led to a 100 percent increase in indicated resources compared to the previous estimate.
The updated mineral resource comprises 4.28 Mt at 1.19 g/t gold for 163 koz of contained gold, of which 82 percent is in the measured and indicated categories. A further high-grade subset of the resource (including open pit, rock dumps and tailings) comprising 1.8 Mt at 1.74 g/t containing 102 koz gold has been identified as a basis for future mine planning.
Following the results of the sonic drill program, MKR determined to establish a 200,000 tpa processing plant at Mt Boppy. The company estimates a five-year mine life and a total gold dore production of >48,000 oz over the initial mine life. The mine plan is fairly low in capex requirements with a total planned capital cost of AU$10 million to AU$15 million. Notably, the annual cost of ore haulage from Mt Boppy to Wonawinta plant is AU$6 million to AU$7 million. Thus, the on-site plant will offer significant cost savings and improve the project economics.
Manuka Resources anticipates Mt Boppy to deliver total EBITDA of >AU$90 million and cash flow of >AU$80 million over a five-year mine life.
Wonawinta Silver Mine Project
The Wonawinta silver mine project comprises one mining lease and seven exploration licenses spanning a total area of 920 sq. km. The Wonawinta project hosts a resource of 38.8 Mt @ 42.0 g/t silver, equating to 52.4 Moz contained silver. Within this there is a higher-grade component of 4.5 Mt at 97 g/t silver for 14 Moz silver.
The Wonawinta plant
The Wonawinta project is fully permitted with all the necessary infrastructure, including an 850,000 to 1 million tpa processing plant. The plant has been used for processing ore from Mt Boppy. The Wonawinta silver mine is currently under care and maintenance. The company is considering the possibility of resuming operations at Wonawinta, leveraging the improved silver price environment. Manuka is targeting a mineral resource update for Wonawinta by October 2024 and production in 2025.
Taranaki VTM Project
The Taranaki VTM project is located within New Zealand's exclusive economic zone, approximately 22 to 36 kilometres offshore, outside the 12 nautical mile boundary from the coastline. The project boasts a JORC resource of 3.2 billion tons at 10.17 percent iron oxide, 1.03 percent titanium dioxide and 0.05 percent vanadium oxide. It holds a mining license allowing initial extraction of 50 million tons annually, resulting in 5 million tons of VTM concentrate per year for 20 years (concentrate grade of 56 to 57 percent iron, 8.5 percent titanium dioxide and 0.5 percent vanadium pentoxide). At this extraction rate, the JORC resource provides approximately 60 years of potential mining inventory.
The project is anticipated to sit in the lowest quartile of the iron ore production cost curve. The next step for Manuka is to complete a bankable feasibility study on the project.
Management Team
Dennis Karp – Executive Chairman
Dennis Karp is a former commodities trader with nearly four decades of corporate experience. He started his career in 1983 and worked in HSBC until 1997 before moving to Tennant, one of Australia’s largest physical commodities trading companies with operations in Asia and Europe. He was a principal shareholder of Tennant Metals until 2010 and a managing director until December 2014. He founded ResCap in December 2014. Since then, he has participated in diverse resource projects and investment opportunities across base metals and bulk commodities. He holds a Bachelor of Commerce from the University of Cape Town.
Alan Eggers – Executive Director
Alan Eggers has over 40 years of experience in the mining sector. He is a geologist and was the founder of Summit Resources, which became an ASX top 200 company and was acquired by Paladin Energy in 2007 for AU$1.2 billion. Throughout his career, he has held director positions at numerous companies. He holds a Bachelor of Science, Honours, and Master of Science degrees from Victoria University of Wellington. He is recognized as a fellow of the Society of Economic Geologists and holds memberships in AusIMM and the Australian Institute of Geoscientists.
Anthony McPaul – Non-executive Director
Anthony McPaul possesses over 40 years of expertise in mining and mineral processing. He has overseen a diverse array of operational projects, spanning from base to precious metals, in both surface and underground mining operations. He has directly managed all facets of production and scheduling. He served in senior leadership roles at various companies, including CRA, Denehurst, MIM and, more recently, Newcrest. McPaul is currently the chairman of the NSW Minerals Council Board and Executive Committee, and he is also a member of the newly established Mineral Industry Advisory Council.
John Seton – Non-executive Director
John Seton is a lawyer with extensive experience in the mineral resources sector. He has served as director in several ASX and NZX listed companies. He holds a Bachelor of Laws from Victoria University, Wellington, and a Master of Law (Honours) from the University of Auckland and is a chartered fellow of the New Zealand Institute of Directors.
Haydn Lynch – Chief Operating Officer
Haydn Lynch has over 25 years of experience in M&A, capital markets and private equity. He has been involved in executing several domestic and cross-border transactions in various sectors including metals and mining, and industrials. He has held leadership roles in global investment banks, including Bankers Trust Australia, Investec Bank, RBC Capital Markets and Southern Cross Equities. He has undergraduate degrees in mechanical engineering and economics from the University of Queensland and a Master in Commerce from the University of New South Wales.
Rod Griffith – Mining and Technical Consultant
Rod Griffith has over 30 years of experience in the mining industry, both in Australia and internationally, working in senior management roles, including as chief operating officer and general manager. He has significant Central Western NSW experience with KBL Mining, Silver City Minerals, Girilambone Copper and Cobalt Blue, across a number of commodity groups and mining styles. He earned a Bachelor of Civil Engineering and Surveying from the University of Newcastle, along with a postgraduate diploma in mining engineering from the University of Ballarat.
Phil Bentley – Chief Geologist
Phil Bentley has over 40 years of experience in the mining industry across New Zealand, South Africa, and Australia, holding senior geological roles as well as senior management and director positions. He has worked as a Chief Geologist at Randgold Resources and Randgold & Exploration, Global Head of Exploration at Trafigura Mining Services, and Principal Geologist Africa at CSA Global South Africa. He is a Qualified person under NI 43-101 (Canadia) and JORC (Australia) and is a Fellow of the South African Geological Society. He holds a Bachelor of Science (Honours) in Geology at Victoria University of Wellington. He also has a Masters of Science in Economic Geology at Victoria University of Wellington and a Master’s of Science in Mineral Exploration from Rhodes University, Grahamstown South Africa.
New Murchison Gold Limited
Investor Insight
For investors with an eye on mining stocks, New Murchison Gold (ASX:NMG) presents a unique opportunity. The company's shallow, high-grade Crown Prince gold deposit, significant land package in the prolific Murchison goldfields, and strategic alliance with established Australian gold producer Westgold Resources position it as a noteworthy contender in the Western Australian gold exploration space. As NMG continues to navigate the path to production, its journey is one that astute investors will watch with keen interest.
Overview
Within the heart of Australia's Murchison gold district, a region host to more than 35 Moz gold endowment (historic production and current resources), stands New Murchison Gold, a forward-thinking gold explorer with a clear strategy to maximise shareholder value driven by a highly experienced management team. The company’s value proposition centres on growing and de-risking its shallow, high-grade Crown Prince gold deposit (part of the company’s Garden Gully gold project) and a strategic alliance with established Australian gold producer Westgold Resources (ASX:WGX), offering a clear pathway to production and cash flow generation.
The Westgold alliance has resulted in a binding ore purchase agreement with Big Bell Gold Operations, a wholly owned operating subsidiary of Westgold Resources. The agreement will underpin production from NMG’s Crown Prince deposit in 2025, and will see the company delivering 30 kt to 50 kt of ore to Westgold per month.Key Project
Garden Gully
New Murchison Gold's flagship Garden Gully gold project is located 20 km northwest of Meekatharra, Western Australia. The project boasts a 677 sq km tenement package that covers the Abbotts Greenstone Belt. The project includes granted mining leases and Native Title agreements in place over the Crown Prince, Abbotts and Lydia prospects. Garden Gully is in close proximity to a number of operating gold mines and existing gold processing facilities.
New Murchison Gold has a strong pipeline of exploration and development prospects at Garden Gully, with the most advanced being Crown Prince.
Crown Prince deposit
The Crown Prince deposit has an updated mineral resource estimate of 2.2 Mt at 3.9 g/t gold for 279 koz, which includes an indicated resource estimate of 226 koz at 4.6 g/t Au. (81 percent of the total MRE). The total also includes the maiden resource for the Southeastern Zone (SEZ) of 1 Mt at 5.2 g/t gold for 164 koz (discovered in late 2022).
The resource is shallow, delineated from surface, remains open at depth and along strike, and located within a 300 m x 200 m area demonstrating strong open pit mining potential. There is significant resource growth potential at new mineralised zones at the northeastern end of SEZ and Crown Prince East (350 m from SEZ).
New Murchison Gold also published strong metallurgical performance from advanced test work at Crown Prince with high recovery of gold through gravity and cyanide leach test work, reporting overall gold recovery rates ranging from 98.2 to 99.8 percent.
Recent high-grade gold intersections at SEZ
Westgold Strategic Alliance
New Murchison Gold announced a strategic alliance and $6 million placement with Australian gold producer Westgold Resources.
The Westgold transaction provides a clear pathway to commercialising Crown Prince in a strong gold price environment, validates the quality of the deposit and enables New Murchison Gold to leverage Westgold’s internal resources, intellectual property and infrastructure to accelerate development.
The primary aim of the strategic alliance is to fast track the development of New Murchison Gold’s Crown Prince deposit into production. As part of the strategic alliance, New Murchison Gold and Westgold has entered into a binding ore purchase agreement (OPA) with Westgold subsidiary Big Bell Gold Operations, for gold produced at Crown Prince. Under the agreement, NMG will deliver 30 kt to 50 kt of ore to Westgold per month with no fixed term. Crown Prince is located only 33 km from Westgold’s 1.6 – 1.8 Mtpa Bluebird Mill.
In addition to the OPA, the strategic alliance may also encompass other strategic collaboration initiatives such as access to Westgold’s expertise and infrastructure. Upon completion of the strategic placement, Westgold will be an 18.7-percent shareholder (undiluted basis) and have the right, but not the obligation to a New Murchison Gold board seat and an equity participation right.
Proceeds from the strategic placement and current cash will allow New Murchison Gold to fast track further resource development, project development and mining proposal workstreams at Crown Prince and continue systematic regional exploration across Ora’s commanding 677 sq km tenure.
Major players are increasingly partnering with junior explorers to secure access to high-grade, quality gold resources. New Murchison Gold's collaboration with Westgold epitomises this movement, setting a blueprint for mutual success in the industry.
Key Focus
The near-term focus for New Murchison Gold will be further resource growth and rapidly advancing project development and mining proposal workstreams at Crown Prince:
- Crown Prince Drilling: Further delineating new high-grade mineralised zones at the north-eastern end of SEZ and Crown Prince East (350 metres from SEZ) and resource definition drilling along strike and below 100 metre vertical depth
- Crown Prince Resource: Updated Mineral Resource Estimate expected in September of 2024.
- Crown Prince Development: progress detailed technical programs, preliminary project development and mining proposal workstreams and agree on an ore purchase agreement and other strategic collaboration initiatives with Westgold
- Regional: Continue systematic regional exploration programs across Ora’s commanding 677 sq km tenure package
Management Team
New Murchison Gold is led by a team of experienced professionals with a diverse set of skills and expertise. At the helm of the company's operations is CEO Alex Passmore, a qualified geologist with extensive corporate finance experience to guide New Murchison Gold's strategic plan. The board is chaired by Rick Crabb, with extensive experience in the legal and mining sectors providing invaluable governance and oversight.
Supporting the company's governance structure, Malcolm Randall serves as a non-executive director, bringing a wealth of knowledge from his tenure in the resource sector, including 25 years at Rio Tinto. Frank DeMarte, director and company secretary, contributes over 39 years of mining industry experience in areas of financial management governance and secretarial practice.
The collective experience of New Murchison Gold's board and management is a cornerstone of the company's success, positioning it to capitalise on the opportunities within the Garden Gully project and beyond.
For further information on New Murchison Gold's strategic initiatives and investment opportunities, sign up for a free investor kit.
Manuka Resources Limited Investor Kit
- Corporate info
- Insights
- Growth strategies
- Upcoming projects