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With the copper price recovery now in full force, one revitalised ASX company has just acquired a highly prospective project – and with a tiny market cap of just $4.3M, and a recent raise of $3.26M from institutional investors complete, has a very low Enterprise Value.
Exploring the East Lachlan Fold Belt in New South Wales, Elysium Resources (ASX: EYM) has a revised Board of Directors, an updated, highly targeted strategy and has identified promising new targets at its flagship Burraga project.
As part of the transformation of this company, one of the top small cap resource investors in the country has taken a cornerstone 8% stake. Whilst its early days for this refreshed company, top investors taking big stakes in the company on the back of its growth plans is a good sign.
EYM is focused on a trifecta of minerals: copper, zinc and gold. The company is looking to capitalise on growing zinc demand and improving gold economics in a region with a long history of producing copper, gold, lead, and zinc. However, there is plenty of potential for new discoveries.
With that in mind, EYM is fast tracking its exploration programme and has just released highly promising first results from its phase 1 drilling at Lloyds Copper Mine, part of its Burraga Project.
Of course, if considering this stock for your portfolio, you should take into account your own personal circumstances and risk profile and seek professional financial advice.
Results from the program consolidated historical records and previous drilling that a halo of mineralisation remains around the existing underground workings grading up to 3% copper, occasionally higher where pillars are encountered and where historic mining was unable to access.
The results now set up EYM’s next catalyst: phase 2 drilling to the east of the current mineralisation to define the extent of the ore body, which in turn will produce what is expected to be highly promising assays.
The Catalyst: Phase 2 drilling and results in coming weeks
EYM has now set the treadmill to high speed on the back of its latest results and will now set a quick turnaround time to complete Phase 2 drilling.
Phase 2 drilling will be conducted on the back of highly promising results Phase 1 released by EYM yesterday from its Burraga Project.
- Results included:
- 9m @ 2.9% Cu, 0.16% Zn, 15.5ppm Ag from 197m – including 1m @ 9.6% Cu, 0.4% Zn, 0.1% Pb and 50.4ppm Ag from 198m
- 20m @ 1.1% Cu, 0.12% Zn, 10ppm Ag from 180m – including 3m @ 3% Cu, 0.1% Zn, 28.6ppm Ag from 192m
- 1m @ 4.2% Cu, 1.1% Zn, 50.4ppm Ag from 238m
- 17m @ 0.6% Cu, 5.99ppm Ag from 164m to end of hole – including 13m @ 0.8% Cu, 7.46ppm Ag from 168m to EOH
These are solid results showing some shallow mineralisation, which is highly encouraging for the company and set the company up for the next round of drilling.
These results also consolidated historical records and previous drilling that a halo of mineralisation remains around the existing underground workings grading up to 3% copper, occasionally higher where pillars are encountered and where historic mining was unable to access.
The following map indicates the contiguous exploration licences over the Burraga Granite and prospect locations with Phase 1 drilling at the Lloyds prospect shown in red.
Broad mineralised halo widths demonstrated in the results are beyond what was assumed in 2011 pre-feasibility study completed by EYM (when known as Burraga Copper Limited) and enhance the economic viability of the project.
Potential investors should note here though that EYM is still in early stage exploration mode and therefore any decision with regards to adding this stock to your portfolio should be taken with caution and professional financial advice sought.
Signs are positive for EYM to drill further and the next phase expected to commence in the coming weeks, following the completion of the current $1.3M Share Purchase Plan.
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A quick look at Burraga
The Burraga Project is EYM’s flagship project (one of three) and is highly prospective for not only gold and copper, but potentially zinc as well.
Burraga covers a total area of around 221.5 square kilometres, having been recently expanded and lies in an area with a rich history of gold and copper exploration and mining.
In the region you will find the world-class Cadia Gold Mine, Northparkes Copper-Gold Mine, the Cowal Gold Mine, and the emerging McPhillamy’s Gold Discovery.
Suffice to say EYM shares the region with quality neighbours.
As you have seen on the map above, Burraga consists of three contiguous exploration licences (EL6463, EL6874 and EL7975) and hosts three main targets:
- The Lloyd’s Copper Mine.
- Hackney’s Creek Gold Mine.
- The Lucky Draw Gold Mine.
The good news for EYM is the Burraga Project already includes the “ready to process” resources of the Lloyds tailing dam and slag heaps (tailings:280,000@1.2%Cu, all indicated, 0,3%Cu cutoff, slag: 140,000t@0.9%Cu, all indicated, 0.3% Cu cutoff). The numbers should give EYM confidence in quickly moving the project forward.
Copper on the rise?
Whilst the new Board at EYM looked to diversify its interests away from a single focus on copper, this week’s results highlight just how important copper remains to its overall business strategy.
And with the copper price recovery looking to be underway, there is a lot to look forward to.
Headlines like this paint a promising, yet still cautious picture for the copper market and the players within:
And this from just a couple of weeks ago:
Of course commodity prices do fluctuate and caution should be applied to any investment decision here and not be based on spot prices alone. Seek professional financial advice before choosing to invest.
EYM could be onto a good thing at Burraga and at the right time too.
Remember zinc and gold are in the mix here as well, with zinc prices benefitting from a pick-up in demand from China’s infrastructure sector combined with production cuts that led to severely low inventory levels.
The following article gives you a quick overview of the zinc market:
It’s thus all systems go for EYM, as it puts together a multi-commodity exploration programme that aims to capitalise on current market sentiment.
Looking forward
With some heavy hitters in its camp, a revised and very clear focus on what it is trying to achieve and a highly attractive multi-commodity portfolio, EYM could see its value increase markedly over the coming weeks and months, from its very low current base.
The Burraga Project is EYM’s main focus right now and with Phase 2 drilling targets being planned, this company is really looking like its moving forward in the right direction.
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