FMG has its fingers scattered in exploration plays all over the world
The company also has interests in projects held by different companies
Most of these are in the critical minerals space such as lithium and nickel
While the old trope of junior explorers following in the footsteps of their larger, more established compatriots is very much a thing, the reverse is also true.
Often, small-cap players are the trailblazers into the frontier, chasing up a hunch or following up on previous exploration that was abandoned because it wasn’t lucrative enough or because the operator had bigger fish to fry.
What this means is that it is not unusual at all for a major miner to dip its fingers into a new pool after the juniors have picked up some interesting nibbles.
And when the major in question is Fortescue (ASX:FMG), a veritable giant in the resources sector, one can’t help but sit up and take notice when they make moves.
Being Andrew Forrest
While we aren’t getting into the literal mind of a famous Hollywood actor, getting into the mindset of Andrew Forrest or rather that of the company that he’s the executive chairman of, could be significantly more valuable.
After all, figuring out which areas the company is investing and what common threads bind them together would provide a valuable insight into what the $77bn market cap thinks is important in the years to come – particularly as the world continues to transition towards net zero emissions.
FMG’s investments come in two forms – direct acquisition of ground in the desired location and acquiring stakes in smaller companies.
Examining either type of investment serves our purpose of dissecting the company’s areas of focus, though the latter will need a little more effort to discern.
Going to ground
So just what are some of the on-ground investments that FMG has made?
For one, the company has been aggressively pegging ground throughout Canada’s Northwest Territories.
Much of this appears to be focused to the north and south of Trinex Minerals’ (ASX:TX3) MAC lithium project and close to its Halo Yuri lithium project.
TX3 is currently gearing up for work over its lithium projects during the Canadian summer. Its managing director Will Dix told Stockhead that it was exciting that a major company was taking a large landholding in an area it believed strongly in.
“At the very least, it will bring a larger investment audience to the region which can only be a good thing for junior companies working there,” he added.
Trinex Minerals’ lithium projects in the Northwest Territories. Pic: Trinex Minerals
Other places that Fortescue is known to be exploring for lithium include the vastly under-explored Canadian province of Manitoba and WA’s Ravensthorpe region.
The former includes ground held by Zinc of Ireland (ASX:ZMI), which consists of seven mining claims, six mineral exploration licences (MEL) and four MELs currently under application that cover a total area of 1792ha.
ZMI’s ground is about 40km west of the world-class Tanco lithium-caesium-tantalum mine that has been operating for more than 50 years.
Manitoba features geology similar to the busy James Bay of Quebec and Electric Avenue over in Ontario while possessing ready-built infrastructure and a long history of mining for gold, copper and nickel.
Over in Ravensthorpe, the company joins active explorers such as NickelSearch (ASX:NIS), St George Mining (ASX:SGQ) and Woomera Mining (ASX:WML) as well as the spodumene-producing Mt Cattlin mine owned by Arcadium Lithium (ASX:LTM) .
Highlighting the interest in this region, SGQ had moved to about double its Myuna Rocks project to 546km2 and covering more than 50km of the major structural corridor that hosts Mt Cattlin and extends north to IGO’s Forrestania nickel complex.
The company has also identified new lithium targets along this structural corridor that it plans to drill test during Q2 and Q3 this year.
Beyond lithium
It is not just lithium on FMG’s menu. The iron ore titan has also been exploring for copper for some time now.
Amongst the places where it is looking for the red metal is in Queensland’s prolific Mt Isa region, where it joins a whole bevy of companies such as 29Metals (ASX:29M), Austral Resources (ASX:AR1) and Paladin Energy (ASX:PDN) that are also on the hunt for the prize.
And it is not just listed plays who are exploring in this region. Capella Metals – which is gearing up to launch its IPO – holds a commanding 2020km2 of ground adjoining Glencore’s Mt Isa operation that it plans to explore for copper, base metals and uranium.
Capella will initially focus on the Surprise copper-gold project that was historically mined to depths of only 40m and is similar in geology to Evolution Mining’s (ASX:EVN) Ernest Henry, Carnaby Resources’ (ASX:CNB) Greater Duchess and Hammer Metals’ (ASX:HMX) Kalman mines and projects.
Fortescue lining up joint ventures
FMG isn’t content to just snap up acreage in prime locations though.
It is just as keen to take up stakes in promising projects such as Strategic Energy Resources’ (ASX:SER) Canobie project in northwest Queensland.
The first field season completed by the major, which is spending up to $8m over six years to earn up to 80% in the project, returned encouraging results that are guiding planning for the coming field season.
This will include geophysical surveys to advance the next round of prospects towards drill ready status.
The Canobie JV between Fortescue and Strategic Energy Resources. Pic: SER
More recently – just last month in fact – Fortescue executed a farm-in to the Myall copper-gold project in central west NSW that has a similar geological setting to the Northparkes copper-gold mine 50km to the south and took up a 19.9% cornerstone investment in its owner Magmatic Resources (ASX:MAG).
The mining giant can earn up to 75% in Myall by spending up to $14m over six years. Previous exploration has focused on the Corvette and Kingswood prospects that collectively host resources of 110Mt at 0.33% copper equivalent containing 293,000t of copper, 237,000oz gold and 2.8Moz of silver.
And taking a little bit of a detour away from Fortescue, Twiggy himself isn’t shy about investing in non-ASX companies. His private company Wyloo Metals had in 2022 committed to investing up to $120m in London-listed Greatland Gold, which has a 30% stake in the Newcrest-operated Havieron copper-gold project in WA’s Paterson Province.
Wyloo also acquired Mincor Resources in 2023, giving it the latter’s producing Kambalda nickel operations.
Tying the threads together
Looking at all the areas that FMG – and Forrest through Wyloo Metals – has invested in, it is not hard to see which areas the mining giant is focusing on outside of its core iron ore operations.
Rather, it is simple to deduce that the company is looking to meet future demand for critical minerals needed for lithium-ion batteries and electrification.
Nor is it shy about counting out the pennies, shelling out US$121m in exploration and studies – admittedly not all on critical minerals given the lack of a detailed breakdown – during 1H FY2024, up from the US$110m it spent during the same period in FY2023.
This is a clear sign that Fortescue is serious about its hunt for critical minerals and that you can reasonably count on it to continue doing so.
At Stockhead we tell it like it is. While Strategic Energy Resources, Trinex Minerals and Zinc of Ireland are Stockhead advertisers, they did not sponsor this article.
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