{"id":4125,"date":"2024-01-08T18:22:29","date_gmt":"2024-01-08T18:22:29","guid":{"rendered":"https:\/\/economicherald.net\/?p=4125"},"modified":"2024-01-08T18:22:29","modified_gmt":"2024-01-08T18:22:29","slug":"this-formidable-team-of-bellevue-alumni-has-its-sights-set-on-the-copper-mid-tier","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=4125","title":{"rendered":"This formidable team of Bellevue alumni has its sights set on the copper mid tier"},"content":{"rendered":"

The talent-stacked team which transformed Bellevue (ASX:BGL)<\/a> into one of Australia\u2019s biggest, highest grade gold miners now has its sights set on the copper mid-tier.<\/p>\n

Since January 2017, BGL\u2019s share price has rocketed from 2.5c to ~$1.52c per share as it fast tracks one of Australia\u2019s highest grade gold mines back into production.<\/p>\n

Central to its success were execs Steve Parsons, Ray Shorrocks, Michael Naylor, and Kevin Tomlinson, who are now looking for a Bellevue-like payday via their new explorer Firefly Metals (ASX:FFM)<\/strong>.<\/p>\n

Their company maker is a Canadian copper-gold project called Green Bay.<\/p>\n

Green Bay includes the Ming mine, little Deer deposit and Nugget Pond mill in Newfoundland & Labrador, Canada. Pic: Firefly<\/p>\n

Green Bay was acquired late 2023 for $65m in cash and shares after previous owner Rambler Metals and Mining went bankrupt.<\/p>\n

It comes with a ~40Mt resource grading 2.1%\u00a0copper\u00a0(plus gold credits) for 811\u00a0999t of\u00a0copper\u00a0equivalent, mostly at the Ming mine, and $250m worth of infrastructure.<\/p>\n

On location in Green Bay. Pic: Firefly.<\/p>\n

There\u2019s always a healthy scepticism amongst investors when a mining project is acquired out of bankruptcy. Is it a dud? Are we throwing good money after bad?<\/p>\n

Not at all, says Steve Parsons, who says his team of BGL and Northern Star alumni continue to live by the mantra \u201cgeology first\u201d.<\/p>\n

\u201cThis is one of the best projects I have ever seen geologically, ever<\/em>, in my whole history of working in the industry,\u201d he told Stockhead<\/em>.<\/p>\n

\u201cThere were several reasons [Rambler] went under. It is a bit like that TV show Air Crash Investigation, which I really like because it makes you realise how difficult it is for a plane to crash.\u201d<\/p>\n

Like a plane crash, there is never any one reason why a mine fails, Parsons says. There were several things that went very bad for Rambler all at the same time.<\/p>\n

\u201cOne of those is that they took on way too much debt,\u201d he says.<\/p>\n

\u201cThey also had this massive, 40Mt orebody and a very small processing plant \u2013 they were squeezing something potentially world class into a tiny jam jar. That made it a higher cost operation.<\/p>\n

\u201cThe processing plant was also located 40km away from the site, which made it a high-cost trucking exercise.\u201d<\/p>\n

Firefly also says there was a lack of investment in drilling prior to mining, which led to poor extraction and reactionary mine planning & decision making.<\/p>\n

But the mine was still profitable, even at low copper prices. What tipped Rambler over the edge was its unsustainable debt pile and a poorly thought out gold stream\/royalty deal. It meant they made no profits from the substantial gold credits.<\/p>\n

\u201cThe final bit of debt they also took on came with a gold stream and a gold royalty associated with it,\u201d Parsons says.<\/p>\n

\u201cThe orebody is 1.85% copper and 0.5g\/t gold \u2013 so from all that gold, and there was a lot of it, they didn\u2019t make any profit whatsoever.<\/p>\n

\u201cIt was all taken by the stream and the royalty. That was a quarter of their profits gone. They just ran out of money.\u201d<\/p>\n

That deal was thankfully extinguished by the bankruptcy process.<\/p>\n

Most importantly, all the issues that culminated in Rambler\u2019s failure are fixable and have nothing to do with the orebody itself.<\/p>\n

Its why there were ~30 parties bidding for Green Bay besides Firefly, which won the asset based on its veteran team and its part cash, part scrip offer.<\/p>\n

\u201cI think the previous creditors could see that scrip would be worth more. They believed the project was sound,\u201d Parsons says.<\/p>\n

\u201cWe knew a few of them quite well, and so I think they had real faith we could turn this project around.\u201d<\/p>\n

\u00a0<\/p>\n

\u2018Geology first\u2019<\/h2>\n

\u201cOne of the things we really pride ourselves on is that everything we look at\u00a0 goes back to the basics of the geology,\u201d Parsons says.<\/p>\n

\u201cWith Bellevue we could see that was going to turn into something substantial very quickly. With Auteco\/Firefly, we saw that at Pickle Crow, one of the world\u2019s highest grade gold projects<\/a>.<\/p>\n

\u201cWe weren\u2019t expecting to jump into another project but because Green Bay was so robust geologically, our view was that this has real potential to turn into something globally significant.<\/p>\n

\u201cIt\u2019s exactly what we see with Pickle Crow, and exactly what we saw with Bellevue.\u201d<\/p>\n

Bellvue provides a template for success in other ways. Very simple, straightforward step-out growth, for example.<\/p>\n

\u201cThe orebody is completely open,\u201d Parsons says.<\/p>\n

\u201cIn fact, we are drilling it right now and are seeing very good visuals, as you would expect. We expect to see this orebody just carrying on.\u201d<\/p>\n

Weekly copper drilling highlights pic.twitter.com\/OYwjH35o9a<\/a><\/p>\n

\u2014 MinerDeck (@MinerDeck) December 14, 2023<\/a><\/p>\n\n

Caption: \u00a0Ming Mine is relatively shallow in comparison to other large underground operations in Canada.<\/p>\n

The other factor is that neither property had actual exploration work done for 30 years, which means there\u2019s a real chance of additional discoveries.<\/p>\n

But the big similarity is that all that underground infrastructure.<\/p>\n

\u201cBellevue was able to fast-track quickly into production after discovery [thanks to existing infrastructure]. That mine was up and running in almost record time,\u201d Parsons says.<\/p>\n

\u201cHere at Green Bay and there\u2019s something like $250m of underground infrastructure ready to go with a shaft and a decline, ventilation, and hydro power.<\/p>\n

\u201cThis should be fast-tracked into production as well. If you can show a pathway to production that is quick, low cost and has scale then shareholders should be rewarded.\u201d<\/p>\n

\u00a0<\/p>\n

The road to the mid tier<\/h2>\n

The ASX and TSX\/TSXV copper mid-tier has been plundered by M&A over the past few years, with only Sandfire (ASX:SFR)<\/a> left standing on the local bourse.<\/p>\n

Firefly is hoping to change that.<\/p>\n

Pic: Via Firefly Metals.<\/p>\n

Parsons believes the company\u2019s plan to supersize Green Bay could put it in an enviable position ahead of a widely predicted copper boom.<\/p>\n

Source: \u00ad\u00adCompany Reports, Woodmac, CRU, ICSG, Macquarie Strategy March 2022 2. Source: \u2018The Future of Copper\u2019, S&P Global Report, July 2022, p.11<\/p>\n

\u201cWhen it was in production [Green Bay] was doing 10-12,000t copper a year. I\u2019m not sure where that sits in the scheme of things and it\u2019s not really relevant, as we are not planning on turning it back on,\u201d Parsons says.<\/p>\n

\u201cOur view is that we would like to see a 2Mtpa, 4Mpta or perhaps even bigger processing plant on site. If the head grade is anywhere between 1.9-2.2% copper eq, you are talking good scale, in the top few copper producers on the ASX.<\/p>\n

\u201cWe\u2019d probably be next after Sandfire if we produce those sorts of numbers. That\u2019s our goal.\u201d<\/p>\n

Firefly\u2019s plans for Green Bay in 2024 include a lot of drilling.<\/p>\n

\u201cThe drill rigs are on site so 2024 is really a year of drill results, stepping out, resource growth, demonstrating that this orebody is robust, and then moving it quickly though economic study work,\u201d Parsons says.<\/p>\n

\u201c2024 is going to be a very exciting year for us.\u201d<\/p>\n\n

\ufeff<\/span><\/span>\u00a0
\n<\/span><\/p>\n

The post This formidable team of Bellevue alumni has its sights set on the copper mid tier<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

The talent-stacked team which transformed Bellevue (ASX:BGL) into one of Australia\u2019s biggest, highest grade gold miners now has its sights set on the copper mid-tier. 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