Flynn Gold: making changes not changing direction

Flynn Gold (ASX:FG1) is making a change without changing direction.

Neil Marston, with his 30-plus years of experience in the mining and minerals exploration sector, was appointed Chief Executive Officer in August 2022 and then Managing Director in May 2023.

When Mining.com.au sat down with the mining stalwart for part two of this series to talk about Flynn Gold’s recent foray into lithium he was as measured and assured about the company’s direction as any executive can be.

From the outset, Marston was quick to allay any potential concerns some shareholders may have that Flynn Gold is “dropping our gold to spend more time on the lithium”.

“It’s a matter of being in a really hot exploration area for lithium discoveries – and the market still rewards new discoveries of lithium. In Western Australia, our ground is close to majors that includes Wesfarmers (ASX:WES), IGO (ASX:IGO), Mineral Resources (ASX:MIN) and now Rio Tinto (ASX:RIO). They’re all big players so from a corporate strategy perspective if we find something on our ground, then that just opens up opportunities for us from a mine development and value perspective.”

In Western Australia, our ground is close to majors that includes Wesfarmers (ASX:WES), IGO (ASX:IGO), Mineral Resources (ASX:MIN) and now Rio Tinto (ASX:RIO). They’re all big players so from a corporate strategy perspective if we find something on our ground, then that just opens up opportunities for us from a mine development and value perspective

In part one of this feature series, Mining.com.au reported that when Flynn listed on the Australian Securities Exchange (ASX) in June 2021, it saw an opportunity in Tasmania that other explorers didn’t.

Northeast Tasmania is interpreted to be part of the Western Lachlan Orogen – a geological extension of the Victorian Goldfields. This part of Tasmania has significant historic high-grade gold production, including the Beaconsfield Gold Mine, which was a dominant producer of some 2Moz @ 15g/t Au. Additionally, Tasmania has established infrastructure such as rail and ports and a skilled workforce, with a stable political and regulatory environment.

As the MD/CEO explains in part two, Flynn once again is seeking out opportunities others seem to be missing.

Options and opportunities

Earlier this month, Flynn entered into a binding option agreement to purchase two exploration licences covering 42km-square of ground considered highly prospective for lithium in the Forrestania-Southern Cross greenstone belt in Western Australia.

The licences are located 50km north of the Mt Holland lithium mine and 20km northeast of the Rio lithium deposit held by Zenith Minerals (ASX:ZNC). The licences overlie a structurally complex granite-greenstone package, flanking the north-eastern perimeter of the north-westerly elongated ‘ovoid shaped’ gneissic Parker Dome.

As part of the acquisition and pivot to capitalise on its exposure to lithium – which is a highly sought after battery metal important for the global transition towards decarbonisation – Flynn is undertaking a small equity raise and share purchase plan (SPP). The SPP is expected to close on 22 January 2024.

Henslow and Taylor Collison have been appointed as joint lead managers to the capital raising.

Marston tells this news service increasing the company’s exposure to lithium in a ‘highly prospective’ tier-one jurisdiction opens up plenty of opportunities for the junior. Down the line this may include potential joint venture partnerships with larger companies with ground in close proximity.

“For the fact we’ve got an option over it, and we can go and spend money on the ground to test its lithium potential ahead of committing funds for the acquisition, as far as the existing shareholders are concerned is a positive. Our assets in the Pilbara and growing tenure at Lake Johnston, Forrestania and now Parker Dome collectively are projects which, if they were sitting in another junior company’s portfolio, would be enough for them to be listed. So, we’ve got the gold discoveries we making in Tassie and then we’ve got this whole other value proposition with lithium in WA now.”

Pegmatites and potential

On 15 December, a soil sampling program was launched at Parker Dome, designed to provide first-pass geochemical coverage over the western and eastern pegmatite trends, delivering the first systematic lithium and associated pathfinder assays for the project.

A program of some 700 soil samples will be taken in the current phase of work with assay results expected early in Q1 2024. It is hoped that the results of the soil sampling program will generate new targets for drill testing and will complement targets generated from the historic exploration drilling.

Historical Rotary Air Blast (RAB) drilling on these licences have recorded pegmatite in the bottom of multiple holes over an extensive area with thicknesses of up to 12 metres. Significantly, these drill holes were not assayed for lithium as they had been targeted for gold mineralisation.

“At Parker Dome we’ve got pegmatites logged in shallow drilling buried in historic exploration reports we researched. There’s no pegmatite outcrops that we’ve mapped from the site visits done to date or from previous mapping done by others. The drilling intersected pegmatites over a number of kilometres strike and we’ve confirmed on the ground that one of those lines has hit pegmatites in every drill hole over a distance of about 500m across strike at depths of just 20 to 40m.

It was an opportunity we have been assessing for some time and one that was too good to miss, and which I believe will add value to our entire portfolio of assets in Australia

This is very encouraging for us from the point of view of the scale of the pegmatites that has been intersected to date and the geological setting is perfect. It fits into the “Goldilocks” zone, just off the margins of the granites into the greenstones. And the fact it hasn’t been assayed for lithium, really was a pretty compelling argument for us to try and secure it. We have not forked out a lot of money for the option fee, which gives us a 12-month period to really have a good look at it.

It was an opportunity we have been assessing for some time and one that was too good to miss, and which I believe will add value to our entire portfolio of assets in Australia.”

In addition to the acquisition of the licences under the Parker Dome option agreement, Flynn has also increased its land position closer to the Mt Holland Lithium Project with four new uncontested exploration licence applications (E77/3139 – E77/3142) covering some 20km-square.

In like Flynn

The CEO says this foray into battery metals may appear to be somewhat of a change but it’s certainly not a change in strategic direction. When Flynn listed in 2021 the company already had the Mt Dove Au-Li Project in the Pilbara within its portfolio.

“We’ve always had a bit of exposure in Western Australia. Even at that time, the intention was stated that the company would try and acquire additional gold and lithium projects in Western Australia. Obviously, Western Australia is very rich in respect to gold and lithium, and geologically, it’s not uncommon to find a gold deposit right next door to a lithium deposit, which is what you’re seeing at the nearby Mount Holland mine.

So, the company has always had this strategy of building its exposure here (in Western Australia) but obviously, most of the funds raised to date has been for Tasmanian gold exploration.

So, the company has always had this strategy of building its exposure here (in Western Australia) but obviously, most of the funds raised to date has been for Tasmanian gold exploration

I think with the timing of the discovery of lithium at Lake Johnston, which is not too far away from where we are in the Forrestania-Southern Cross greenstone belt, really was the catalyst for us to try and to close out this latest transaction. We’ve always been trying to get hold of tenure which is right on the greenstone belts rather than on the periphery of the greenstone belts, or where the granite is. So, this acquisition gave us that opportunity.”

Companies with exposure to lithium in the region have this year experienced a valuation re-rating off successful results. TG Metals (ASX:TG6) is one which saw a huge surge in its share price within days of announcing what is believed to be Australia’s first totally blind pegmatite discovery at its Burmeister asset in the same region at Lake Johnston. Burmeister is just a few short kilometres from Flynn’s Lake Johnston project.

Marston says Flynn Gold’s newly acquired Parker Dome has ‘very similar magnetics’ to that of Burmeister discovery, and importantly, has excellent road access via the Mt Day Road.

Heading in right direction

Marston tells Mining.com.au that the recent acquisition is certainly maintaining a step in the right direction. He notes that in the lithium space generally, companies that have made discoveries in recent times have seen market values sometimes increase tenfold or more and often, quite quickly.

Flynn Gold believes there’s a similar opportunity to derive value and potentially enjoy a rerating should it achieve drilling success with results due in 2024.

“Exploration success should allow us not only to advance our lithium projects, but it also allows us to access future capital at a more attractive and less dilutive rate for existing shareholders. In turn this would enable us to go and do some more work on our Tasmanian gold and critical metal projects.”

While Flynn is raising funds at the moment, Marston points out that the allocation is still weighted towards Tasmania on a proportional basis. He reiterates the company’s pivot towards lithium is not at the expense of its gold strategy.

“So, all those things are very much still part of the strategy. But certainly, from our point of view, getting a good landholding in Western Australia on the greenstone belt, which is prospective for lithium, has always been a stated aim, and I think we’ve achieved it with this acquisition. I think it’s a win for the company, and it will be really interesting to see what drilling reveals in 2024

“Don’t think for a moment that we’re dropping the strategy there. We’ve been drilling at our Firetower project and we’ll have more news to come out with the results of drilling at Warrentinna and Firetower. Plus, of course, we’ve got plans to go back and do some drilling at our exciting Golden Ridge project in 2024.

So, all those things are very much still part of the strategy. But certainly, from our point of view, getting a good landholding in Western Australia on the greenstone belt, which is prospective for lithium, has always been a stated aim, and I think we’ve achieved it with this acquisition. I think it’s a win for the company, and it will be really interesting to see what drilling reveals in 2024.”

Write to Adam Orlando at Mining.com.au

Images: Flynn Gold
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Written By Adam Orlando
Mining.com.au Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.