This article is a sponsored feature from Mining.com.au partner Astro Resources Ltd. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Freshly on the other side of what might reasonably be described as a transformative year, Astro Resources (ASX:ARO) is a company rapt with the promises of a new dawn.
In June 2022, the Sydney-based explorer signed a deal with Greenvale Energy (ASX:GRV) — then Greenvale Mining — to acquire an 80% stake in the Georgina Basin IOCG Project in the Northern Territory.
That transaction, finalised in November 2022, added a promising new asset to Astro’s existing portfolio, which includes the Governor Broome Mineral Sands Project in south-west WA, the Smoke Creek Diamond Project west of Lake Argyle in WA, and the Needles Gold Project in Nevada, USA.
In March 2023, the company further added to its resource base, staking two new lithium projects — Polaris and Altair — in Nevada’s highly prospective Montezuma Valley.
But what is a junior explorer to do with a portfolio that spans copper, gold, diamonds, lithium, mineral sands, and two continents?
“One of the things we wanted to do was gain some clarity coming into Astro,” says Matt Healy, Astro’s General Manager of Exploration and former Greenvale CEO. “There’s a lot of assets, right?”
“Our focus moving forward is, really, we’re a critical minerals business”
“So, Smoke Creek, we’re looking to divest. Needles Gold, we’re still holding the claims for that, but it’s taken a back seat. Look, there’s probably some value there. How we extract it is a good question, but we’re just parking it for now.
“Our focus moving forward is, really, we’re a critical minerals business. Lithium is our number one, lithium claystones in Nevada, and copper-gold in the Northern Territory — that’s our principal focus. Then you’ve got the one I haven’t spoken about, which is Governor Broome.”
Governor Broome stamping its authority
The Governor Broome Project, located 90km south of Busselton, has been part of Astro’s portfolio since 2014. Until the company assumed full ownership in October 2021, the eastern part of the project had been held under a joint venture with Iluka Resources (ASX:ILU).
By Healy’s own admission, mineral sands themselves are “not very sexy”. They do not seem to have the same ring of ascendancy that rare earths, for example, command. But that’s only until you look at the numbers.
By way of comparison, Healy looks to Strandline Resources (ASX:STA). With a market capitalisation well above $300 million, Strandline owns the Coburn Mineral Sands Project in Western Australia.
“The thing about mineral sands is that the operating cost to produce a heavy mineral concentrate is only a few bucks per tonne — that’s what Strandline’s is,” he says.
“I have a feeling it’s less than $4 a tonne, but if you’ve got, for example, $13 or $14 per tonne of heavy minerals in there, well, that’s quite a margin.”
A small wet concentration plant might set you back $30 million or $40 million, but as long as the project can achieve a net present value (NPV) in excess of $80 million, once again, “those are good numbers”.
“So, that’s kind of the way we looked at it,” Healy adds.
“We did our analysis and went, this thing’s worth something. But because there hasn’t been a Scoping Study put out for it, no one can see that”
“We did our analysis and went, this thing’s worth something. But because there hasn’t been a Scoping Study put out for it, no one can see that.”
When it does come out next year, the Scoping Study is likely to be an interesting one. According to an updated DFS for Coburn released in June 2020, the project hosts 1.6 billion tonnes of ore at 1.2% total heavy minerals (THM). Governor Broome, on the other hand, has a 126-million-tonne resource at a grade of 4.3% THM.
“They’ve got more than 12 times the heavy mineral sands, but because our heavy minerals grade is 3.5 times what they’ve got, a 10-million-tonnes-per-year operation could — on an aspirational basis — potentially produce more heavy mineral concentrate than Coburn,” Healy says.
“And that’s a $705 million NPV project. Now, it’s more complicated than that because the mineralogy is different. But it does demonstrate that we’re in the same ballpark.”
Either way, Healy believes Governor Broome’s underlying value has not been priced into that of Astro’s. But that’s not likely to be the case for long.
As the company barrels towards the publication of its Scoping Study, part of the effort has involved bulk sample test work. Using ore from the western part of Governor Broome’s high-grade Jack Track deposit, Astro was able to produce a zircon product of premium ceramic classification, making it suitable not only for ceramics manufacturing but also high-tolerance casting and foundry applications.
“Which is great, because people have recently been selling zircon for US$2,000 a tonne. It’s high value,” Healy explains.
But though the focus at Governor Broome is largely on getting the scoping study published, Healy is not without a longer-term plan.
“We need to put it out there so the market can understand what we’ve got. And, yeah, we may have people knocking on our door”
“Now, we’re not miners. We’re not going to go mining this thing,” he says.
“We might joint venture with someone who could progress it and mine it. Or we could consider a sale and roll the proceeds into exploration in Nevada or the Northern Territory. There are a few options, but ultimately we need to get our Scoping Study. We need to see what it looks like. We need to put it out there so the market can understand what we’ve got. And, yeah, we may have people knocking on our door.”
‘IOCGs are massive, they’re complete company-makers’
Though it’s sweepingly non-specific, that plan is part of Astro’s intention to hone in on lithium and copper-gold — a transformation marked with the acquisition of Georgina Basin last year.
The project, held via Astro’s 80% stake in Knox Resources, consists of three broad tenement areas covering more than 4,500km-square between Tennant Creek in the Northern Territory and Mt Isa, Queensland.
In June 2023, the Northern Territory Government granted Astro co-funding grants — worth a total of $261,106 — for two work programs: a geophysical survey in the middle of the project and a diamond hole at the Ranken prospect.
The Ambient Noise Tomography (ANT) survey will be carried out at the EL33375 tenement, where a diamond hole drilled last year identified copper anomalism, as well as elevated bismuth, silver and uranium mineralisation indicative of large-scale iron oxide copper-gold (IOCG) deposits.
“It’s a kind of seismic survey. You basically put these little geophone things in the ground and they detect waves bouncing off structures under the earth,” Healy says.
“What you end up with is a 3D picture of under the earth. They’ve been using it down in South Australia to do exploration at 700m. It’s amazing stuff. They can see structures and they can see density changes in the rock.”
The Ranken prospect, however, is a little different. Representing the eastern portion of Georgina Basin, the target is prospective not so much for IOCGs as it is for sediment-hosted deposits, like Sibanye-Stillwater’s (JSE:SSW) Century or Glencore’s (LSE:GLEN) George Fisher and Mt Isa mines.
“Mount Isa has just ticked over its 100-year anniversary. It’s one of the largest base metal deposits in the world,” Healy adds.
“So, those rocks we interpret to be under our Ranken project, and we’re going to put a hole down there and have a look. We need to confirm those rocks are there as our first step. The government’s also very interested in that. We’re going to be drilling a hole there in the second half of the year, probably October.”
The theory, previously investigated by Geoscience Australia and the NT Geological Survey, is that there’s a continuous tectonic zone between Tennant Creek and Mt Isa — a whole IOCG province that’s yet to be uncovered. Should Astro hit what it’s hoping it will, the pay off could be significant.
“We need to confirm those rocks are there as our first step. The government’s also very interested in that”
Evolution Mining’s (ASX:EVN) Ernest Henry operation, for example — an IOCG project in north-west Queensland — has been an underground mine for the last 13 years. Before that, it was an open-cut mine for 19 years. Evolution spent $1 billion to acquire the mine from Glencore at the start of 2022 and, according to an announcement released in August, it still holds a resource measuring 88.3 million tonnes at 1.28% copper and 0.73 grams per tonne (g/t) gold.
“Imagine that — you’ve got 30 something years of mining behind you, and it’s still worth $1 billion. These things are massive, the scale is hard to imagine,” Healy says.
“I mean, Olympic Dam” — owned by mining giant BHP (ASX:BHP) — “is the world’s third-largest copper deposit. It’s one of the world’s largest gold deposits. It’s low-grade gold, but because it’s so freaking big, it’s one of the world’s largest gold deposits. And it also produces uranium. These IOCGs are massive, they’re complete company-makers.
The sediment-hosted deposits are no different. Like I said, Mt Isa’s got a mining history that goes back 100 years. Century, it’s got 13 million tonnes of zinc metal in it. These are massive deposits. The size of the prize is a really significant part of Georgina.”
Enter Astute Metals
Indeed, the Georgina Basin deal was a good one, but not simply for its geological potential.
With the project came a band of corporate talent. Not only did Astro manage to nab Greenvale’s CEO, Healy, but it likewise brought on Greenvale’s Chair, Tony Leibowitz, who now acts as Chair of Astro. From June 2013 to June 2016, Leibowitz was the founding Chair of lithium behemoth Pilbara Minerals (ASX:PLS) where he delivered strong and steady shareholder gains.
Though he didn’t come from Greenvale, Astro appointed John Young — another former Pilbara Minerals director — at roughly the same time.
All joined executive director and interim CEO Vince Fayad, an accountant by trade with a long history in public entity leadership.
“Between the board and management, we’ve got really good commercial, we’ve got really good technical,” Healy says.
“And having all that experience in getting a world class project like Pilgangoora up and running, we couldn’t really ask for a better board.”
With the company transformation more or less complete, Astro has proposed rounding out its new composition and direction by changing its name to Astute Metals. Healy notes that the company is seeking shareholder approval to change its name in a general meeting being held on 17 July 2023.
“Changing the name to Astute Metals represents a further important step in reinvigorating the company in terms of its assets, board and management and, in our view, more accurately reflects its mission and purpose”
“Changing the name to Astute Metals represents a further important step in reinvigorating the company in terms of its assets, board and management and, in our view, more accurately reflects its mission and purpose — which, at the end of day, is based on employing astute business practices to create value for shareholders,” Leibowitz said in a June 2023 announcement.
Yes, Astro Resources does indeed seem to have come out of the dark and into the light — it has a sound portfolio with no shortage of opportunities, and some corporate heavyweights on board to make things happen.
In part two of this feature series, we take a look at the company’s new operations in Nevada, where the right kind of work and a little sideways thinking could unveil a whole new frontier for lithium.
Write to Oliver Gray at Mining.com.au
Images: Astro Resources Ltd