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FINALIST: EXPLORER

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extension for Breaker

by Dominic Piper Senior geologist Mike Outhwaite
on the Bombora project

reaker Resources NL’s appearance at November’s first time in three years. That allowed us to do some detailed
BNewGenGold conference was confirmation of the solidity of interpretation and plan the next phase of drilling which started
its 1 moz Lake Roe project, but the company now must find the in November.
optimum path for growth on the asset. “We have a good understanding of it now; we’ve confirmed the
Lake Roe’s immediate path appeared defined last year with projected lodes and targeted those with step-out drilling and we
Breaker spending much of 2019 working on a PFS around are starting to get them at depth so this next programme will be
the Bombora deposit. However, as Breaker’s self-imposed very interesting.”
October deadline approached the company began to reassess Greenfields stories have failed to excite a market more attune
its strategy and has now put the PFS on ice as it refocuses to brownfields plays. Sanders admitted it had been challenging
attention on resource growth. explaining Breaker’s approach to investors eager to see a flurry
Although markets don’t take kindly to companies failing to of high-grade hits.
meet promises, Breaker executive chairman Tom Sanders is “Sometime people don’t realise what we are trying to do at Lake
unperturbed. He believes ultimately the decision to delay the Roe,” he said. “They think of the typical brownfields environment
PFS will be of benefit. of finding the deposit and then drilling it out but that is not the
“PFS was always going to continue to grow and change,” case here.
Sanders told GMJ. “We have drilled 233,000m at Lake Roe and “It is almost a reverse of that brownfields environment where
the system is still open in all directions. At the same time, we you define a big global resource before infill drilling brings
wanted to do some preliminary mining studies to ensure what you back to the mineable component. We are starting with a
we were outlining was mineable.” smaller indicated resource and working our way out with step-
Meeting expectations has been a constant challenge for out drilling.”
Breaker since it announced the discovery of Lake Roe – 100km That strategy and postponement of the PFS indicates a
east of Kalgoorlie – in 2016. The company’s share price hit 72c reluctance to pursue an early-start scenario.
in September that year and reached 78.5c 11 months later as
“The smart thing to do is keep all options on the table and
the discovery began to take shape. However, this was followed
the early start is certainly possible. We had expressions-of-
by a strong retraction in April 2018 (to 27c/share) after the
interest from parties over that, but they didn’t equate to value
company’s maiden resource for Bombora – 624,000oz @ 1.6
for shareholders.”
g/t gold – underwhelmed.
Instead, Breaker struck a deal with US private equity group
It has been a case of steady recovery since and Sanders was
Electrum Strategic Opportunities Fund II. Electrum took an $8
eager to avoid another market correction by releasing a PFS
million placement (at a 10% premium) in Breaker on November
which didn’t reflect the overall size and growth potential of the
13, handing it a 9.95% stake in the explorer. Sanders said
project.
Electrum’s investment strategy – which has seen it take sizeable
“We decided it was always going to be a Stage 1 PFS but the positions in the 45 moz Donlin and 11 moz Livengood projects
problem with releasing such an early PFS is that it sets market in Alaska – was well-matched to Breaker’s outlook.
expectations about what the project is.”
“Electrum’s strategy is obvious,” he said. “They pick up large
Instead, Sanders is focused on building the Lake Roe resource, deposits with potential and allow them time to grow; that
which stands at 23.21mt @ 1.3 g/t for 981,000oz gold (80% approach suited our low-risk growth strategy.”
indicated).
Sanders appears comfortable with Electrum’s longer-term
“It is a case of progressively building the picture,” he said. expectations at a time when the domestic market is fixated on
Part of the challenge has been the greenfields nature of gold producers and rapid developers.
Lake Roe which has led to the “nice problem” of intercepting “It takes some of the risk off the table for our existing investors
mineralisation almost everywhere holes are drilled. around early-stage single asset development and the
“We have made at least one discovery every quarter for the associated dilution,” he said. “The Australian market just doesn’t
last three years. It is a big area – 8km of strike – with a lot of have the depth to have a fund like Electrum. We do intend to
complexity and building an understanding of it takes time. After develop our North American and European investor bases off
the last resource update, we put a pause on drilling for the the back of this deal.”

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