This article is a sponsored feature from Mining.com.au partner Krakatoa Resources. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Krakatoa Resources (ASX:KTA) has its eye on a resource estimate this year at the brownfields Zopkhito Antimony-Gold Project in Georgia, just as demand for the vital defence metal is surging globally.
Antimony is used as a hardening agent in ammunition and alloys, holding flame-retardant properties that are crucial for military purposes.
Around 90% of global antimony production comes from China, Russia, and Tajikistan, while the US’s domestic supply remains virtually non-existent, making the metal in high demand since China cut off supply for many critical minerals in 2024.
This means stable jurisdictions are also in high demand — and Krakatoa CEO Mark Major says Georgia is one of them.
“If people can get past the history of Georgia, then they will see that this is a real project and Georgia’s ranking by the World Bank was actually very high.”
That history is the country’s past as part of the Soviet Union (which collapsed almost 40 years ago in 1989), and the ranking he’s referring to is number seven globally for ease of doing business.
The World Bank also ranked Georgia as second in starting a business, number 12 in enforcing contracts, and number one in budget transparency.
The country also offers duty-free access to a market of approximately 2.8 billion people through its network of free trade agreements (FTAs) and preferential trade regimes, including a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU, FTAs with China, India, Israel, Türkiye, CIS countries, EFTA nations, and Hong Kong, and GSP agreements with the US, Canada, and Japan.
Don’t let the Soviet history scare you, Major says, Georgia is actually an extremely investor-friendly nation with a government that’s supportive of mineral and resource developments.
It’s also in a very strategic location on the Black Sea, with access to the Poti port and both European and Asian markets.
Speaking of those markets, demand is forecast to grow across Europe, North America, and Japan as Western countries look to shore up supply chains.
In March the NASDAQ reported that the global antimony market was valued at around US$2.4–2.6 billion ($3.45–3.74 billion) and could almost double to US$4.1–4.4 billion by 2034–35.
That’s a growth rate of about 5–6% over the next decade.
Supply chokeholds are also a bonus for antimony prices which soared after China cut supply by a whopping 2,600% — and it hasn’t dropped much since, currently sitting at US$16,903 per tonne.
The tricky point in most jurisdictions — like in Europe — is the lack of downstream processing which is also something mostly controlled by China.
“Europe’s screaming out for it,” Major says. “They want it, but they don’t have their downstream processing facilities to use it.”
“Europeans want this but it’s really likely to head more towards the Middle East.
“I don’t think Europe’s going to be able to realistically build these facilities before we get into production.”
Maiden drilling confirmed ‘high-grade’ gold and antimony
The first cab off the rank for the company last year at Zopkhito was surface and underground drill testing of the historical antimony adits and a gold alteration system.
Grades reported included up to a whopping 38.5g/t gold and 23.4g/t antimony.
It’s a strong validation of the historical work which includes about 27km of underground workings, a database of more than 15,000 samples, and a foreign resource estimate of 225,000 tonnes at 11.6% antimony for a contained 26,000 tonnes of antimony and 7.1Mt @ 3.7g/t for 815,119 ounces of gold.
The plan now, Major says, is to shore up that resource and bring it up to JORC standard.
“It’s a very advanced project, it’s got a lot of exploration drives or adits already in place so, we’re right on the ore body,” he says.
“You’re not starting from scratch — it’s more of a brownfields scenario.
“It’s now just a matter of being able to access the ore body and convert it from a foreign resource into a JORC-compliant resource.”
Plus, the gold component hasn’t really been explored by the Soviets.
“It was only more recently, from 2006 onwards, that it was revealed that there’s a gold halo around this antinomy vein,” Major says.
This means the company could produce antimony concentrate with added gold recoveries as well in the future.
Major says the project is very advanced compared to other antimony plays, positioning the company well ahead of the pack.
“There’s a lot of groups that have had historical scratchings, a little bit of production out of them from surface but they don’t have the same network of adits or development,” Major says.
“In the 1970s the Soviets were looking to actually put this into production, so they did start to do some exploration development drives where they were going to start feeding the ore through, but obviously with the demise of the Soviet Union that came to a screeching halt, it was never really touched from then on.
“Given that the resource is high grade, it’s well studied and well understood, and we can access the ore body straight away, I think that’s where we stand apart from a lot of the US players.”
The challenge remains, however, for Krakatoa to explain the benefits to potential investors who just see the Soviet history.
“I think that’s the biggest hurdle for us, is people understanding that Georgia isn’t Russia, it’s not Ukraine,” Major says.
“From our perspective, we see ourselves probably a bit like Adriatic who had the Bosnian project and then went up onto the AIM and got a lot more reward for its shareholders than it did out of Australia for a few years.
“I think we’re in the same boat. I think we’re going to have to go into the European markets and dig deep into there.”
Major notes a potential AIM listing will likely be looked at later in the year — once he’s got a resource under his belt.
Resource estimate is the big value-add this year
“This year is really the value-add year for us,” Major says.
“We are doing a lot of study work as well as a lot of drilling and in situ sampling within the adits as well, so soon we’ll be in a position to convert this across to a JORC resource estimate and then from that we’ll have mining studies and metallurgical studies.
“Then we’ll get into a preliminary economic assessment.”
The plan is to integrate the Soviet-era data with the new drilling results, targeting the gaps between historical adits and replicating the Soviet sampling techniques.
Krakatoa is checking out the extent of the gold mineralisation too, along with satellite prospects of antimony, tungsten, copper, and other base metals identified from historical databases.
“We’re going to drill between the adits, and we’ll also be taking bulk samples or footwall samples trying to replicate what the Soviets did,” Major says.
“Then we can use all the Soviet data into the JORC resource if we can replicate what they did.”
Underground drilling for resource definition has begun this week and there’s also a strong foundation for future exploration, with only 17 veins explored out of a known 60 identified at surface.
And with an exclusive option to acquire up to an 80% stake in the project, which is held under a valid exploration-mining licence until March 2042, Krakatoa’s goal of positioning itself as a potential major antimony supplier is well in sight.
Write to Emma Davies at Mining.com.au
Images: Krakatoa Resources & NWR Communications
