Modern-day Drake discovery points to lasting gold-silver Legacy

It was just on a year ago that Legacy Minerals’ (ASX:LGM) boss Chris Byrne found the need to contain his excitement about the NSW-focussed explorer’s pick-up of the Drake project,100km west of Lismore.

The project was acquired for an absolute song in a cash deal with the administrator of the failed White Rock Minerals (WRM), rounded off by Legacy picking up exploration licences previously held by WRM.

Byrne is a decent guy so he did not want to gloat about how cheap a deal the pick-up was given the known mineralisation at Drake that WRM and a bunch of previous owners/explorers had worked up across a number of prospects/deposits.

He was worried about the sensitivities of those left behind in WRM’s administration process, so best to play it cool for a while. Besides there was a mountain of data to work through to get a real fix on just what Drake could shape up as.

But here we are a year on and Byrne has put previous sensitivities behind him to reveal an 80% increase in Drake’s resource base across four deposits in open-cut positions to 800,000oz of gold equivalent (from the gold-rich deposits) and 35Moz of silver equivalent (from the silver-rich deposits), or 1.2Moz of gold equivalent all up.

The resource update prompted a 13% share price gain in Thursday’s market for Legacy to 17c for a market cap of $21 million, which is not a lot when the Drake epithermal (low sulphidation) resource is compared to those owned by Mithril (ASX:MTH) with its $55m market, and that of Andean Silver (ASX:ASL) with its $157m market cap.

As it is, Legacy is already a rated explorer thanks to a bagful of potential high impact exploration programs elsewhere in NSW, either in joint venture with the likes of Newmont (Bauloora), S2 Resources (Glenlogan) and Earth AI (Fontenoy), or as 100% owned projects.

So it could be argued that there is still nothing in Legacy’s market cap for Drake or vice versa for its other NSW projects.

Byrne said the ability to deliver the big resource estimate increase at Drake in a such a short time from its acquisition “highlights the quality of the project and team’s ability to leverage historical datasets and capitalise on the project’s significant previous exploration expenditure”.

He said the next round of exploration would aim to deliver substantial extensions to existing mineralisation areas and new standalone discoveries that will be targeted after the completion of geophysical and geochemical work programs.

The early coyness on the Drake pick-up is well and truly a thing of the past.

Energy Transition Metals (ETM):

The Greenland election has come and gone and the outcome could not have been better for last week’s stock mention, Energy Transition Minerals (ASX:ETM).

The left and anti-mining leaning ruling government has been turfed out and will be replaced by a new government in the Arctic nation by one led by the pro-business Democratic Party.

As mentioned last week when ETM was a 7.5c stock for a market cap of $115m, Greenland has become the focus of international attention following President Trump’s comments that he wants to buy the country, and that he will get it one way or another.

None of the parties contesting the election are keen on that idea but they were all on board with the idea that Greenland should start a move to become independent of Denmark, which has held sway for near on 300 years.

More important for ETM was the swing to the centre right in the election, and what it might mean for the company’s stalled Kvanefjeld rare earths project near the town of Narsaq in south-west Greenland.

The Aussie market has taken the view that the election result is a good thing for the company’s Kvanefjeld ambitions. Its shares popped 22% higher in Thursday’s market to 8.7c for a market cap of $133m.

Kvanefjeld is stalled because the outgoing leftish-anti-nuclear government pulled a swifty back in 2021 when it passed legislation banning mine developments involving projects where the uranium content was more than 100ppm.

Kvanefjeld is one of the world’s biggest deposits of rare earth oxides, as well as coming with uranium at a count of 300ppm. ETM pulled uranium from its production plans but the outgoing government made clear it would not be clearing the way for the project’s development anyway.

ETM started legal action on the basis it was an act of appropriation but it has got to be wondered if that will fall away in light of a more pro-mining power block arriving in Greenland’s parliament. Who knows, maybe uranium could be back on the agenda at Kvanefjeld as well.

Then there is the overlay of a pro-mining, pro-rare earths, pro-uranium President Trump having ownership of Greenland in his sights. Interesting time for ETM, that’s for sure.

Centaurus (CTM):

The nickel price has come up from four-year lows to reach $US7.55/lb, the lower level of a price range at which the ever-volatile steelmaking and battery metal starts to get interesting again.

News of potential royalty increases in the Chinese-controlled Indonesian nickel industry and potential export bans on laterite ores out of the Philippines have been cited as reasons for the recent price increase.

A more fundamental explanation comes from China’s MMG which has just picked up Anglo America’s 40,000tpa ferronickel business in Brazil for $US350m, plus another $150m in contingent payments linked to nickel prices and new project approvals.

MMG loves a bargain as much as any other miner. That it has been able to take advantage of the low in nickel prices, and Anglo’s fire-sale of assets as it reshapes itself following BHP’s failed takeover bid, are not the only reasons for it striking the Brazilian deal.

It likes the outlook for nickel, which is something BHP will have to consider before deciding whether Nickel West will make a return.

In an investor call on its pick-up from Anglo, MMG said consensus points to nickel prices rising 25% over the net 3-5 years. It cited nickel demand growth of 6% between now and 2030 which is actually one the best growth outlooks for any metal, and also mentioned a supply deficit is on the cards post 2030.

All of that is encouraging stuff for today’s interest, Centaurus (ASX:CTM) which last traded at 38.5c for a market cap of $191m.

It owns the big Jaguar sulphide nickel project in Brazil which is ready to go in a $US371m development that would produce 18,700tpa of contained nickel at first quartile costs of $US3.57/lb.

Financing the development is the last hurdle to be cleared. On that score, a data room is open for a strategic partnering process.

Interestingly, a Chinese group like MMG is investing in nickel outside of Indonesia where profits would be squeezed and upside constrained if price-linked royalty increases become a fact. Is Brazil the new go to destination for long-term nickel supplies?