Alien Metals – a ‘penny stock’ ready to show massive upside
By this time next year this £30m capitalised mineral exploration group could be valued very considerably higher than it is today.
By then it could have upgraded its operations from just holding exploration licences to holding permissions to go into mining production.
That really is when the group’s revenues could start to show through quite dramatically.
The company today
Established in 2006 under the name of the Arian Silver Corporation, the company which changed its name to Alien Metals Ltd in October 2018, is a mining exploration and development company.
It floated on the AIM market way back in 2006 with the view to develop and mine a 100m oz silver project in Mexico.
The company underwent a corporate restructuring and re-capitalisation in 2019, subsequent to which it then re-commenced the exploration on its Mexican silver, copper and gold projects. It also acquired silver and iron ore projects in Australia.
What does it do
Headquartered in London, the company’s focus is upon precious and base metal commodities, with its operations located in proven mining jurisdictions.
The group centres upon the identification and subsequent researching of prospective ‘early-stage’ or ‘brownfield’ exploration projects.
Its management targets ‘tier-1’ mining countries with high valued commodities which have strong demand fundamentals.
It explores for copper, zinc, lead, silver, gold, iron ore, rhodium, platinum, palladium, nickel and other precious metal deposits.
The company has embarked upon an acquisition-led strategy, headed by a high-quality geological team, with the view of building a strong portfolio of diversified assets.
Through low-cost and systematic evaluation, the company’s teams look to develop and quickly advance those projects, thereby delivering value to the group’s shareholders.
Where are its projects now on hand?
Defined in terms of importance the group has three main geographic areas of operation – Australia, Mexico and Greenland.
Western Australia –
Its interests are situated in the famous red-earth Pilbara region in Western Australia, known for its vast mineral deposits, especially iron ore.
Most of Australia’s iron ore comes from Pilbara, which has been explored, developed and mined by leading groups like BHP, Rio Tinto and Fortescue Metals.
It is in this region that Alien Metals has a 90% stake in the Brockman and Hancock Ranges high-grade iron ore projects.
It also has a 100% stake in both the Elizabeth Hill Silver Project, taking in the historic silver mining lease and the surrounding Munni Munni North Exploration Tenement.
Mexico is the world’s largest producer of silver, accounting for some 17% of the world’s output.
The group has two silver projects – the San Celso and the Los Campos.
Both projects are located in the important Zacatecas State, which is Mexico’s largest silver-producing state, it is the host to two of the largest silver mines in the world,
producing almost half of Mexico’s silver production.
In the same region, it also owns a copper-gold project, the Donovan 2.
Late 2020 saw the group being awarded an exploration licence for an area surrounding the world-class Citronen zinc-lead deposit.
The group is concentrating upon the Australian and Mexican interests before looking to commit to further activity in this country.
Progress to date
Hamersley (90%) – Iron Ore, MRE 10.4Mt @ 60.4% Fe. Upside potential to be explored on the Hancock Project, which is one the Eastern side of the region, while on the Brockman Tenement, on the Western side, there is a reconnaissance program in planning.
The group has identified significant results from its Ridges C and E on the Hancock Tenement, previously explored by Rio Tinto. They showed some 10.4Mt @ 60.4% Fe.
Initial Life of Mine studies show the current resource will sustain an 8-year life based on a mining rate of 1.25Mt per annum, with a pre-production capital estimate of $30m. It has exceptionally low strip ratios, while its operating costs would be around $60/t FOB.
Those studies were based on an iron ore price of US$100/t, today it is around US$133/t.
The Hancock project potential has been described by Bill Brodie Good, the group’s CEO, as “quite remarkable and which could show a significant return.”
It is hoped that Hancock will be ‘shovel ready’ by Q2 2023.
There is a considerable amount of the Hancock project, stretching over several miles of ridges, that has never previously been explored.
Such potential shows the massive scalability when Hancock’s infrastructure is in place.
Elizabeth Hill (100%) – Silver. This is a historic high-grade silver mine, with grades
averaging 2,195 g/t Ag. Inaugural drilling program is now underway.
Historically Elizabeth Hill is one of Australia’s highest grade silver mines and had produced over 1m ounces at an average of 2,195 g/t Ag from an initial resource of just over 4m ounces.
The company has identified from four diamond drill holes, that the mineralisation at Elizabeth Hill is amongst the highest of any silver project in Australia.
They have indicated that the project could well be much larger than the group’s management had previously expected, what is more it has shown near-surface oxide and could prove to be a highly prospective mineralised system.
Munni Munni North (100%) – Nickel, Copper and PGE. The exploration permit is around Elizabeth Hill. It has numerous Ni, Cu and PGE target, with exploration planning now underway.
San Celso (100%) – Silver. This covers two historic silver mines. High grades up to 2,683 g/t Ag, with an average of 441 g/t Ag. The maiden drill program started in 2021.
Los Campos (100%) – Silver. This is a historic mine in Zacatecas. High grade surface samples include 547 g/t Ag. The underground mapping and maiden drill program is underway. It is a bigger but less explored area than San Celso.
Donovan 2 (100%) – Copper/Gold. 25km from the Teck San Nicolas VMS copper deposit. Sample results have shown 3.34% Cu and 2.68 g/t Au. The group is finalising a drill program to identify initial thickness, grade and continuation.
EL 2020-44 – Zinc. Some 208 sq.km surrounding the Citronen zinc-lead project owned by Ironbark Zinc (ASX:IBG). The Citronen project is believed to be one of the world’s largest undeveloped zinc-lead projects.
There is a data review underway. Currently Alien is seeking a Joint Venture partner for the developing of its license in Northern Greenland.
What are the group’s aims
In addition to progressing and developing its portfolio of assets and following its strategic review of its portfolio of silver and precious metals projects, Alien Metals has identified priority exploration targets within all of its projects, which it is working to advance systematically.
What experience does the group’s management have
The group’s Australian Chief Executive Officer is Bill Brodie Good, who is also its Technical Director.
His experience has been gained working with several key players in the global mining sector including Rio Tinto.
He developed further experience with establishing exploration teams and managing mineral exploration projects throughout Africa, Asia and Australia.
The group Chairman is Dan Smith, he has been and is involved with several AIM/ASX resource companies, including Europa Metals, White Cliff Minerals and Artemis Resources.
Howard Baker, who is the company’s Resource Geologist, has over 20 years’ experience in the evaluation of Iron Ore projects, their exploration and resource calculation.
Jo Battershill is the group Corporate Advisor, he has over 25 years’ experience in the global mining sector, covering operations, business development and finance-based roles.
Lloyd Edmonds is the group’s Country Manager. He has some 20 years’ experience in project development for mining and engineering firms.
Who owns or controls the equity
The Alien Metals shares are listed in London under the code AIM:UFO, in Frankfurt (FWB:I3A1) and in the US (OTCMKTS:ASLRF).
The £29m capitalised group has some 4.75bn shares in issue, of which Artemis Resources owns 7.53%, Bennelong Ltd has another 6.75% and Gilmore Capital holds 5.43%.
Artemis Resources, whose shares are quoted on both the ASX and on AIM under the ARV code, it is also on the OTCCQB under ARTTF, and in Frankfurt: ATY.
It is a Western Australia gold and copper-focused resources company, operating in both the East and West Pilbara regions.
Artemis sold its 70% joint venture interest in the Munni Munni Platinum Group Metals and Gold Project to Alien Metals in late March this year. It received Aus$0.25m cash and 358,617,818 Alien Metals shares in the Aus$4.9m transaction.
At the time Executive Director Alastair Clayton stated that
"We are pleased to become a significant shareholder of Alien who have been able to consolidate for the first time in many years one of Australia's largest PGE projects.
Artemis is supportive of Alien's plans to explore and develop what could become a major strategic metals project and we look forward to being a shareholder of the company."
What are its potential earnings
The group’s priority appears to be the development of the Hancock Project.
Bill Brodie Good describes it as a “fantastic project, a very simple one, where a revenue stream could be possible in 2023.”
The group is already talking to potential partners for various of its projects, especially for Hancock.
It currently considers that it has sufficient resources to fund its all of its 2022 projects.
Exact timing on the group gaining its mining licence for Hancock is not yet known, but the process in now proceeding.
We do know that the project could prove to be a significant and very profitable operation for Alien Metals, whose shares today are only trading at 0.60p each.
When those revenues start showing through that price is expected to have been left well behind.