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White Rock Minerals Ltd: THE INVESTMENT CASE

White Rock Minerals talks company-making assets in Proactive Q&A Sessions™

We are joined by Matthew Gill, CEO and managing director, in Proactive Q&A Sessions™.
White Rock Minerals talks company-making assets in Proactive Q&A Sessions™
Matthew Gill, CEO and managing director, White Rock Minerals

White Rock Minerals (ASX:WRM) has two company making assets, being its zinc–silver–lead–gold-copper Red Mountain Project in Alaska and its gold–silver Mt Carrington Project in New South Wales.

Red Mountain recently revealed that it hosts a world-class resource, and Mt Carrington is on the pathway to production.

To find out more we are exclusively joined by the company’s managing director, Matthew Gill, in Proactive Q&A Sessions™.


First of all can you outline the new resource at Red Mountain, and costs behind acquiring the asset?

Matthew Gill: In May this year we announced a maiden JORC Resource for our newly acquired Red Mountain asset.

At a 3% zinc cut-off, this resource is a top quartile asset – 9 million tonnes at 13% zinc equivalent, and we have only just scratched the surface.

The two deposits identified host zinc, silver, lead, gold and copper – a true volcanogenic massive sulphide (VMS) setting.

We became aware of the Red Mountain project in Alaska early last year.

We did our due diligence, including seeking advice from a world-renowned expert, and subsequently acquired the project for 63.8 million White Rock shares, for a market value at the time of circa A$1.2 million.

Given the outstanding tenor of the resource, containing over 1 million tonnes of zinc metal equivalent, this is a very cheap acquisition cost, and adds a second company-making asset to the White Rock portfolio.

Touching more on the grades of the resource from surface, could there be an opportunity for a starter pit or potential ore agreement?

Matthew Gill: The two deposits so far identified were discovered over 20 years ago, and the last drilling was done in the 1990’s.

We see enormous opportunity to add to these two known deposits, as well as the broader exploration potential.

The mineralisation at both Dry Creek and West Tundra Flats is open down-dip and in some portions along strike.

There are two holes with good mineralised intercepts at Dry Creek South that are open in all directions.

Additional drilling, particularly at Dry Creek South could add tonnage to the reported resource.

Dry Creek outcrops on surface and presents a real opportunity to consider an open pit early start-up opportunity.

What are the next steps for Red Mountain, and would you consider a joint venture partner?

Matthew Gill: We were genuinely surprised by the size and grade of the Red Mountain resource estimate.

We had anticipated the need would be for more exploration work and drilling to get to a size amenable for mining, but with a global estimate of 16 million tonnes, and a high grade portion within that of 9 million tonnes, we are now looking at what it might take to get an operation up and running sooner than later.

We are looking at what work we can do on-ground this field season, and are keen to advance this project as it contains a significant resource of zinc, silver and gold – commodities that have been performing well and for which there is much interest.

We are open to all ideas on how best to advance this project and add value for White Rock shareholders – be that on a go it alone basis, or joint venture.

Moving to Mt Carrington, what is the envisaged pathway to production?

Matthew Gill: Our Mt Carrington project in northern New South Wales and hosts a JORC Resource of both gold and silver – two commodities doing well in Australian currency terms.

The site is on an approved mining license and with some A$20 million of infrastructure already existing.

The first two gold pits are already pre-stripped by the previous owners.

This presents a quicker pathway to production than many other projects.

We are well into our feasibility study work here – geology, mine planning, metallurgical test work and processing design, and we envisage this work will be completed in early 2018.

In parallel, we are advancing the key environmental studies, and have prepared a community engagement and consultation plan.

We expect the approvals process will be ongoing during 2018, and with a short construction period, be in production before the end of 2019.

Assays from Mt Carrington this week yielded more wide high-grade gold and silver results. How do these assays add to the metallurgical understanding of the mineralisation?

Matthew Gill: One of the drill holes returned intersections of: 11 metres at 4.21g/t gold and 86g/t silver from 58 metres; and 19 metres at 1.5g/t gold and 255g/t silver from 119 metres (LHDM002).

This result is very pleasing as it continues to support our confidence in the wide zones of mineralisation known to exist in the Lady Hampden silver and gold deposit.

The drill core from this will be used in metallurgical test work to further our knowledge and refine our plans for the gold and silver processing route and plant design.

Does the company have any existing facilities in place to fund Mt Carrington through development into production?

Matthew Gill: White Rock recently raised over A$5 million to advance its studies, and this work, which commenced in January this year, utilises the expertise of six consultancies and is progressing well.

Once this study is completed and the necessary approvals received, White Rock is in the unique position of having a finance proposal from a large private equity group in New York to fund the construction and commissioning of the mine.

This is a huge advantage for a company the size of White Rock, in that the US$19 million facility is re-paid out of pre-tax revenues, and not repaid from debt, hedging or having to be raised as equity with further dilutive effects for existing shareholders.

Finally, why should an investor consider adding White Rock Minerals to their portfolio?

Matthew Gill: White Rock has excellent exposure to precious metals – gold and silver, as well as zinc.

On any comparison with its peers, given the amount of gold, silver and zinc contained in its two projects, the company is very much under-valued when compared to either its gold peers, or zinc peers.

Commodity diversification should be attractive to an investor, especially when the underlying assets are under-valued, and with ongoing work and news flow, should see significant value added over time.


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