Australia’s mining industry has long been a cornerstone of the national economy, and for investors, the Australian Securities Exchange (ASX) provides direct exposure to the sector’s global reach.
While some mining stocks offer strong dividends and growth potential, commodity markets are cyclical and sensitive to global price fluctuations. Firms such as specialist mining investment company Lion Selection Group (ASX:LSX) diversify their exposure across various resources to balance and manage risk.
Mining.com.au exclusively speaks to Hedley Widdup, Managing Director of Lion Selection Group, about the firm’s portfolio-oriented approach to investing in the high-growth early stage mining development space where specialist knowledge is essential.
Since Lion was founded in 1997, the $127.50 million market capitalisation company has achieved ‘market-beating’ performance and generated returns in excess of 340cps. The ASX-listed company aims to pay sustainable dividends from surplus investment proceeds, while balancing its investment requirements with market conditions and capital growth.
With global demand for raw materials projected to rise, Widdup says the ASX remains a key destination for investors aiming to capitalise on Australia’s resource wealth.
More than 2,000 companies are listed on the ASX and more than a third of those are in the mining sector. The exchange is home to many mid-tier and junior explorers focused on critical minerals such as copper, lithium, and rare earths – commodities vital to the global green energy transition.
Widdup outlines to this news service how Lion invests at an early stage to assist resource companies along the development curve, carefully selecting juniors with real potential to experience a positive value re-rating as they progress from explorer to producer.
This approach requires a long-term investment view, and avoids the risks of speculating on factors that might affect share prices in the short term. This article digs deep into the strategy and rationale behind a handful of Lion Selection Group’s current investments.
Anticipating success
Antipa Minerals (ASX:AZY) is one mining company that meets Lion’s investment criteria. As Widdup explains to Mining.com.au, Lion was initially attracted to a large, clearly well mineralised situation with a well defined resource in one of the clearest cases of having multiple pathways to commercialise the project as a development.
Antipa’s Minyari Gold-Copper Project in Western Australia is less than 50km from Telfer, which was owned at the time Lion first invested by Newmont (ASX:NEM). Telfer had a short mine life on reserves, so Lion felt there was a clear commercial case for Antipa’s ore from Minyari to be processed at Telfer as an alternative to building their own new process plant.
The proximity to Telfer offers up a potential commercialisation angle, as well as developing a new process facility all of Antipa’s own, Widdup notes.
“As it happens, the market has begun to speculate at Antipa being a takeover target for the new owner of Telfer, Greatland Gold (ASX:GGP). This has served to help the market recognise the quality of the asset – if you think it could get taken over there is an implication about the project being worthy,” he says.
“Between this enthusiasm and selling a minority interest in a project to Rio Tinto (ASX:RIO), Antipa has been able to raise enough funding to be very well positioned to conduct their feasibility studies, drill out the orebody and pursue the relevant permits as well as drilling to expand the known resource.”
Antipa Managing Director Roger Mason says the company is consistently adding value to the Minyari project amid a second phase drilling program that got underway in late August. A combination of aircore, reverse circulation, and diamond drilling – comprising 25,000 to 35,000m – is being carried out at Minyari.
Antipa is seeking to expand the existing near-surface 2.4 million ounce Minyari Dome gold resource, as well as test greenfield targets and advance Prefeasibility Study workstreams, as reported.
Widdup says this is already a big project and any growth from here adds life to something that was already at development scale “so exploration risk is reduced”.
“Antipa is in the trough between discovery and cash flow on the Lassonde Curve. Watch for their delivery of studies and news that derisk the project, but also news from their aggressive growth drilling,” he adds.
Drops of Jupiter
Lion invested in Critica (ASX:CRI) after the last rare earths market interest phase and before the current one. The investment firm took a contrarian view that it was a good time to be looking at rare earth plays while few others would. It was against a long term outlook that was very robust for increasing demand due to all the new world applications for REEs like magnets, defence, and robotics.
“We weren’t hell bent on a REE investment, but were looking for one that could be at the front of the queue when REE interest in the world returned, so our criteria were for a project that was well located (safe country with minimal nationalisation risk, and proximal to transport or ideally offtake interest), large, and high grade in the ground,” Widdup explains.
“Critica is all of those things – we invested in something that has the optionality to be a very large, strategic scale asset in the REE space which itself has a high strategic interest level.”
“We invested in something that has the optionality to be a very large, strategic scale asset in the REE space which itself has a high strategic interest level”
Often with exploration stage companies the focus is growth, and adding more tonnes to a resource. Widdup says Critica’s Jupiter Rare Earths Project in Western Australia is already billions of tonnes, and has several targets of a similar nature.
“I would expect those to be down the track rather than near term,” he says.
Jupiter has a global inferred resource of 1.8 billion tonnes at 1,700ppm, including 520 million tonnes at 2,200 ppm total rare earth oxides.
The Centre for Science and Technology of Mineral and Environment (GAVAQ) in Hanoi will design, construct, and operate a pilot-scale plant for mixed rare earth carbonate (MREC) from Critica’s Jupiter Rare Earths Project in Western Australia, as reported by Mining.com.au.
The plant will process a 3,000kg run-of-mine bulk sample sourced from Jupiter using a magnetic separation and floatation flowsheet, producing rare earth concentrate ahead of Critica’s plans for downstream testwork and a Scoping Study.
Critica CEO Jacob Deysel says the company is targeting a smaller leach plant with a lower reagent intensity to streamline the company towards MREC production. This is welcome news for investor Lion, which notes Critica is playing catch up on some of the more advanced plays in rare earths.
Lion has seen market interest build around REE hopefuls in recent months yet Widdup notes that Critica hasn’t seen much of that.
“They have begun work to show they can produce a mixed rare earth carbonate, which is the ticket to be admitted into the world of potential developer credibility,” he tells this news service.
“That isn’t far away, in fact it is expected later in 2025, and will spell out a bit about the process pathway.”
More Enmore targets hit
Lion’s investment in Koonenberry (ASX:KNB) was originally premised on being able to get an investment in the company very cheaply where it had a “huge number of targets” and therefore chances at some sort of success. This outlook has changed a bit as Koonenberry has increased in market value, and Widdup says that is because “they have gotten their teeth into a project that the market has recognised”.
“So the premise of ‘lots of targets / lots of chances for success’ has played out well,” Widdup adds.
Koonenberry’s recent focus, which feeds into the reasoning behind the most recent investment by Lion, is the Enmore Gold Project located in the New England Fold Belt in northeast New South Wales 20km south of the Hillgrove gold-antimony mine (1.7Moz gold).
Enmore has been drilled before and has a history of historical workings (early 1900s era) so there is known mineralisation. Widdup says most modern explorers before Koonenberry targeted gold mineralisation in sedimentary rocks, which are generally regarded as being a “good” target host, but the historical results were pretty underwhelming.
“So Koonenberry took a different view and drilled for gold in granitic rocks – granite is not classically regarded as a ‘great’ host for gold, so this possibly preserved the opportunity,” Lion’s Managing Director continues.
“And where there are historical gold workings at Enmore, they are in granite. Koonenberry has hit thick gold mineralisation, which has some locally quite high grades in their first drilling which excited the market.
“It’s been an unusually wet winter in that part of New South Wales, which has inhibited work but they have produced some soil sampling work that highlights new undrilled areas (which look like they are in granite rock).
“So in my eyes they now have proven mineralisation (it exists, it is economic thickness and grade) and now we need to know how much of it there is. I still like the huge inventory of other targets in the company too, which makes them a bit unique compared to the other explorers of similar market cap.”
Lion Selection Group, which has more than a 9% shareholding in Koonenberry, is now watching for the next drilling at Enmore, which Widdup imagines might happen later this year. Further work across Koonenberry’s broader portfolio is also being monitored.
On 22 May, Koonenberry announced it completed a capital raise of $5 million in order to fast track the 10,000m drilling program at Enmore, as well as to fund its ongoing exploration activities at its Lachlan projects.
“Enmore is now a discovery but is only based on 10 holes, with extensions and new targets for more of the same to test. Then, there are targets within the company that are ‘pre-discovery’ as well,” Widdup adds.
Golden Medallion
Lion invested in Medallion Metals (ASX:MM8) shortly after it announced a “very clever deal” to get access to a mothballed nickel process facility to repurpose to process its gold and copper ore. The firm had watched the company for years having been investors in the same project under a different name many years ago.
“So we knew the gold endowment was real and attractive – the challenge that Medallion had was a large capital investment required to build everything they needed for a new process facility and mine development and the market just didn’t believe the company was big enough to embark on that,” Widdup tells this news service.
In mid-2024, Medallion announced a deal to acquire an old nickel plant which needs some work but is otherwise a fast track to production, as reported by Mining.com.au.
Widdup notes this deal simultaneously reduces the funding Medallion needed to raise, shortens the pathway to production, and reduces the permits needed to get there.
“We felt at the time that the gold market was improving, and that a company that could fast track itself to being exposed to gold prices as a producer would be rewarded by the market – that has proven to be the case,” Widdup explains.
Often companies at mine development stage are ex-growth, or at least experience a growth hiatus. In acquiring the former nickel plant, Widdup notes Medallion has acquired a large land package that is all the right rocks for gold, and has been well explored for over three decades but only for nickel so there is loads of data – but never assessed for gold potential.
He believes Medallion, which has a market capitalisation of $235.52 million, is trading well below the valuations similar peer producers are trading at. For example, Meeka Metals’ (ASX:MEK) market capitalisation is $539.98 million – more than double.
This discounting is common and makes good sense because prospective developers need to raise money to get themselves into production and this usually means issuing new shares, which dilutes the value across a larger number of shares, Widdup says.
“Typically a gold company’s biggest equity raising would be to part fund development. In the case of Medallion, they have told the market that they are experiencing interest in the copper concentrate they will produce along with their gold, and prospective offtake partners are offering to lend some money to Medallion as part of the offtake arrangements.
“We don’t know what this will add up to yet, but between the modest expected capital to become a producer and debt being offered by offtakers, an equity raising might not need to be very large for Medallion to take the final step to becoming a producer.”
This low dilution risk outlook to production is what underpinned Lion’s most recent investment in Medallion.
In Lion’s view, Medallion has potential to become a producer in a shortened timeframe as a result of the ‘clever deal’ to acquire an old nickel process plant reduces the normal development risks, shortens the timeframe, and reduces the funding and dilution risk.
“That is a unique offering in the gold market,” Widdup adds.
Medallion is moving up the last stage of the Lassonde Curve to become a producer, with the possibility of “discovery stage” growth overlain on it, if the new ground position can be brought to bear.
Lion is watching for finalisation of the project size and shape (Final Feasibility Study), offtake, and decision to develop which are all in the near term.
Deep beneath the surface
Plutonic is an unlisted explorer focused on gold and base metals across Queensland and the Northern Territory and its major shareholder is Lion Selection Group, which holds over 40% of the company.
The exploration company is committed to advancing high-potential projects in proven mineral belts, including Georgetown Project in Queensland and Champion Project in Simpson Desert.
Plutonic has pegged a large area in the NT right up against the Queensland border, which has seen very little historic exploration work. At surface, Widdup says there are large and unexplained quartz veins – usually these are evidence of some sort of large scale fluid flow which is how metal orebodies are formed.
The project area sits above the intersection of two continent crossing structures, which Widdup notes is intriguing all on its own – other large, world class deposits in Australia are associated with similar intersection points.
Plutonic has found copper and gold anomalism in surface rocks but also broad scale anomalism for trace elements that are often a “footprint” of large metal systems.
The investment case for Lion in Plutonic was, and remains, access to two, district scale exploration projects.
“These aren’t projects where you drill a handful of holes to see if there is a deposit – there are two key projects, one in the NT and the other in northern Queensland, and in each case large land holdings,” Widdup tells this news service.
“If they prove fertile, there could be several deposits – hence the sense of exploring for new districts. These carry high risk for how early stage they are, but if the ground is shown to be fertile then there could be hundreds rather than even just tens of targets to test.
“Lion typically doesn’t seek such early stage exposure, so where we do take it on the upside needs to be huge and that’s exactly what Plutonic offers”
“Lion typically doesn’t seek such early stage exposure, so where we do take it on the upside needs to be huge and that’s exactly what Plutonic offers.”
In Queensland, near Georgetown, Plutonic has developed targets from existing data while adding some of its own. Widdup says there is known gold anomalism – there is a trend in surface sampling that is over 7km long.
Plutonic’s model is for a gold system driven by large intrusive rocks, and are just finishing five drill holes to get an orientation in fresh rocks essentially testing for the right kind of rocks, the right kind of alteration, and the right pattern of trace elements – plus, maybe, some gold.
Widdup says the near term milestones for Plutonic will be the assays from the Georgetown drilling later in 2025, and first drilling in the NT in 2026.
Orbiting Saturn
Lion invested in Saturn Metals (ASX:STN) for a story the market had missed, and was a genuine re-rate opportunity that already contained a lot of ounces of gold.
Saturn’s Apollo Hill orebody is “fat, thick, and close to surface” and so while it is low grade (and missed by anyone that thinks ‘grade is king’), the metal inventory is dense – something like 6,000 to 7,000 ounces per vertical metre of the orebody, which is a high density endowment, according to Widdup.
“People who use rules of thumb often point to circa 1,000 ounces per vertical metre being the density required to underpin a successful commercial development,” Lion’s Managing Director says.
“Most gold orebodies need to be mined carefully and selectively because the shapes of the ore are typically quite skinny, and the shape of Apollo Hill is a reasonably unique quality which enables large scale bulk mining – which is much cheaper on a per tonne basis than most other gold mines.
“The rock mass itself is suitable for crushing to a gravel, rather than grinding to a fine powder, to extract gold on a heap leach which is a massive free kick. Around 40% of gold produced in the world comes from heap leaching, but there isn’t much of it in WA where Saturn is based.
“So I think the local market has taken some time to come to terms with the significance of these features of the orebody – in the studies they have published the low cost mining and processing produce wonderful project economics.”
Saturn has pushed its gold resource over 2Moz now, all from that one ‘fat’ open pit orebody. A Feasibility Study is due later in 2025, building on the Scoping Studies, and Lion expects a large and long life project.
Lion’s investment case has been as much about re-rating following the recognition of a very attractive orebody as it has about growth, and on that front Saturn has been finding zones of high-grade gold within or just on the edges of the known mineralisation, says Widdup.
Saturn is in the “value trough” of the Lassonde Curve, between the higher values of “peak euphoria” that follows a discovery and the valuations that are underpinned by cash flows of a producer.
Basking in Sunshine
Lion has known Sunshine Metals (ASX:SHN) Managing Director Damien Keys for a long time, and seen how his work resulted in the discovery of Penny West for Spectrum Metals (ASX:SPX) (30x return discovery to takeover) so has high regard for him.
The firm first invested in Sunshine after it acquired the Liontown project in 2023, which had a lot of information but was poorly understood and open in all directions. As Widdup explains to Mining.com.au, Sunshine has gone on to unravel the geology at Liontown and that led to intersections like 17m at 22g/t gold in a feeder zone.
“Fast forward to now, and we have made our largest investment in the latest round and our focus recently has been the assessment of a small scale gold mining proposition of that feeder zone at Liontown, and their high grade gold exploration project at Sybil – which is new to the company and loaded with high grade gold at surface so looks incredibly promising,” Lion’s Managing Director says.
“Value can be built very rapidly from new mineral discovery, especially in a company that starts off with a small market capitalisation.”
Widdup says Sunshine has several shots at exploration discovery, with excellent geological indications to improve the chances of a find.
At Liontown, drilling is in a location that is a lookalike for the mineralisation already drilled. At Sybil, drilling under samples taken at surface that grade in the 10s or even 100s grams per tonne of gold – “very high grade”.
Sunshine has begun a 14-hole for 1,135m diamond drilling program at the group’s Sybil site, part of the broader Ravenswood Consolidated Project in Queensland, as reported.
Write to Adam Orlando at Mining.com.au
Images: Koonenberry, Lion, Medallion & Saturn Metals
