Mt Carrington has a potential pathway to production, and continuing exploration provides the opportunity to increase forecast mine life, with a key benefit access to existing mining infrastructure.
Adding interest, White Rock is also leveraged to the zinc price through its Red Mountain Zinc-Silver-Lead-Gold Exploration Project in Alaska.
To tell us more is Matt Gill, the recently appointed managing director, who exclusively joins Proactive Q&A Sessions™.
PROACTIVE INVESTORS: Welcome Matt.
First of all, can you outline some key metrics of White Rock’s valuation compared to peers?
Matt Gill: Mount Carrington is a fairly unique 50% gold and 50% silver resource project.
We are one of the very few projects where we could mine either silver or gold or both together – silver is not a by-product.
As a consequence, when we compare ourselves to peers, we cannot really be compared only to a gold producer and neither can we be compared to silver producers only.
This is why we convert the silver component into a gold equivalent.
If we give silver the same value as gold, we are about a 650,000 ounce gold equivalent mine and that makes us cheap compared to our peers on an enterprise value where we're less than $10 an ounce.
If we do it the other way and convert our gold to silver equivalent and then compare ourselves to silver companies, we are about a 48 million ounce silver equivalent mine, and that again makes us very cheap compared to our peers.
On either metric, whether you like gold or silver or both, we are certainly undervalued.
It is actually quite important for an investor to see that on either side of the coin, we are a good value proposition.
Does Mt Carrington host any potential high-grade mineralised areas which could be used to generate cash from an ore processing agreement, or perhaps be mined as a starter pit?
Matt Gill: Mt Carrington’s area is a collapsed volcano, which means that the gold and silver mineralisation appear in deposits within an epithermal system.
We get very wide zones (30 - 40 meters wide) of one to two grams of gold and in the silver deposits, around 60g/t of silver. Within these areas, smaller high grade sections can be found.
The beauty of Mount Carrington resides in its broad zones where mining is easier with less dilution and a higher mining productivity, with associated lower operating costs.
The two gold dominant pits that we plan to mine first are actually already pre-stripped, meaning we have got an immediate start and we do not need to chase a high grade bit for early cash flow.
When could a Definitive Feasibility Study (DFS) be undertaken, and how would it be funded?
Matt Gill: Mount Carrington has an advanced scoping study that wraps an initial seven year mine plan around that, includes a preliminary process flow sheet and engineering design, and which delivers really good financial metrics.
The next step is to finish the metallurgical test work, which is part of the DFS, do some more optimisation of the mine plan and wrap the DFS around that along with a permitting process.
Part of our current capital raising is available to fund this body of work, we are more than halfway through to complete the funding.
The DFS study should then be completed by the end of next year.
In parallel, we will be completing our Environmental Impact Statement (EIS), and engaging with our major stakeholders – the local and regional communities and interest groups, Council and state government departments.
We anticipate that this process can run alongside the DFS work.
Moving to the Red Mountain Zinc-Silver-Lead-Gold Exploration Project in Alaska, how did the company acquire the tenements and what are the next steps?
Matt Gill: The Red Mountain Project was initially a private unlisted project that White Rock Minerals acquired in April 2016.
By acquiring this project, we now reach out to an expanded investor base and a larger funding source.
It also added another dimension to White Rock and helped broaden and provide more colour to the White Rock’s story, and upside and value-add for investors.
Following the acquisition of the Red Mountain Project, we expanded our strategic footprint tenfold from 16 to 140 square kilometres.
We hope to commence work during 2017 on the two known deposits (Dry Creek and West Tundra Flats), and on the top five of the 30 targets we have already identified, and do some drilling at the end of the Alaskan summertime next year, funding dependent.
White Rock recently completed an entitlement offer. How much was raised during the capital raising program, and where will these funds first be allocated?
Matt Gill: The capital raising is $5.6 million in total, which is quite aggressive for an $8 million market capital company.
However once we have raised this amount, we will be fully funded to complete the feasibility study and permitting, and as we already have a $25 million facility to build the mine, there is no need to raise further capital to get into commercial gold production.
This is a clear advantage compared to a lot of junior companies that have to raise multiples of their market capital to build the mine.
The capital raising will see us fully funded with a clear pathway to production and a clear view to cash flow positive production, with no need to raise any more money afterwards.
It will be allocated into three parts:
1. Feasibility study work (circa $2 to $3 million);
2. Environmental impact statement and environmental approvals (approximately $1 million); and
3. Working capital over the next 18 months.
Finally, why should an investor consider adding White Rock Minerals to their portfolio?
Matt Gill: The capital raising has already reached about $3 million, meaning there is still $1 to $2 million of opportunity.
White Rock’s share price is currently around $0.02, and the capital raising is at $0.015. As such, interest is very strong.
The capital raising is open to sophisticated investors, and any other investors who would like to add White Rock to their portfolio can buy on-market.
We are two to two and a half years away from production and we are also dealing with two really good commodities, gold and silver.
We also run a very good side project, the Red Mountain Project which is rich in zinc and silver, another two strong commodities.
To put it in a nutshell, I would say that White Rock Minerals is an undervalued company, with a great opportunity to go into production in the next two years and a pipeline of strong projects in Australia and Alaska.
PROACTIVE INVESTORS: Thank-you Matt.
Matt Gill presented for White Rock Minerals at Mines and Money Melbourne in November 2016.