Page 78 - pd306-July22-mag-web_Neat

OPERATIONAL REVIEW
DIGGeRs & DeALeRs PReVIeW MACA.NET.AU

Two for the price of one

eeka Gold Ltd managing director Tim we’ve advanced the gold assets. We’re cer- gold and the rare earths so they can both
MDavidson concedes his company will tainly taking a view that we will advance the get the focus and the capital required to be
need to make a decision over the next 12 rare earth opportunities at the same pace properly advanced. I think that’s something
months about whether to establish separate as the gold, if not faster.” that we’ll work on over the next 12 months.
vehicles for its gold and rare earths assets, Meeka has key milestones earmarked for “The way we look at it is investors are get-
but for now he is comfortable building up each commodity division over the coming ting free exposure to rare earths based on
shareholder value under the same invest- months, namely the results of the ANSTO the value of our gold assets. And while in-
ment house. metallurgical test work on the rare earths at vestors often seek out pure-play commodity
What started as a calculated strategy Cascade and Circle Valley, and a PFS for companies with exposure to one commod-
to expand its gold exploration footprint in its Murchison gold project. ity, which then allows them the freedom to
Western Australia’s Albany-Fraser belt has Davidson said positive outcomes on go and invest in various companies to gain
pivoted suddenly towards a focus on rare both work streams will help to define the exposure to individual commodities, we
earths after Meeka uncovered thick zones respective development pathways for both think having exposure to both gold and rare
of ionic clay-hosted mineralisation at its the gold and rare earths assets, including a earths is a positive thing and provides a
Cascade and Circle Valley projects. potential split of the portfolio. level of stability to those investors who want
The company now controls more than “These opportunities we see as being of the exposure to the rare earths but also pro-
2,200sq km of tenure in the emerging rare such great scale will likely warrant their own tection against any potential downside.”
earths province, with drilling continuing to vehicles eventually,” he said. Meeka’s initial scoping study on the
generate high-grade results such as 2m @ “As we start to get more information and Murchison project indicated production of
715 ppm TREO from 8m (including 4m @ understanding about the rare earths – and 443,000oz gold over an 8-year mine life,
1,269 ppm), 36m @ 672 ppm TREO from ensuring there’s a possible commercial out- delivering $182 million of undiscounted free
12m (including 16m @ 1,098 ppm) and 5m come – then we’ll look to potentially split the cash flow.
@ 1,040 ppm TREO from 36m (including Before being shuttered in 2017, the
4m @ 1,177 ppm). Andy Well mine produced 330,000oz at
Investors were initially sceptical over an average grade of 8 g/t when the gold
Meeka’s decision to continue explor- price was $1,600/oz. An underground
ing for rare earths in the Albany-Fraser, resource of 1.8mt @ 8.6 g/t gold for
especially with feasibility work only just 505,000oz remains.
getting under way on a potential restart Meeka’s restart plan also includes
of the mothballed Andy Well mine in the development of a large open pit at the
Murchison where the company has built nearby Turnberry resource (11.3mt @ 1.7
up a 1.1 moz resource hub. g/t gold for 610,000oz) with potential for a
Davidson said the company had future underground mine.
moved quickly to allay any concerns its Davidson said ongoing concerns over
gold division was being parked to the inflation rates provided another compel-
side. ling reason for the retention of an ad-
“Initially there was a lot of scepticism vanced gold project.
from investors and the investing com- “If you look at the gold price today in
munity around whether we were jumping Australian dollar terms, or even in US
from gold to rare earths because rare dollar terms, we’re sitting at near-record
earths are a hot commodity right now,” highs…and that’s a fantastic place to be
Davidson told Paydirt. for a gold development company and for
“Our gold assets we feel are hugely gold producers,” he said.
valuable and we’ve got plenty to work “It’s an important commodity around
on without chasing the hot commodity the world, particularly when you see the
of the month. It’s not so much a case of inflationary environment that we’re oper-
us trying to market something that is hot, ating in. A large part of the western world
but us trying to market a project which is is experiencing inflation in excess of 5%
material. And if that opportunity justifies and a number of countries are actually
management’s time, we will pursue it. closer to 10% annualised inflation.
“While it’s early days, we actually think “I don’t think people’s inflation expecta-
the rare earths could be significantly tions are diminishing either and that really
more valuable than the gold – and not is what’s driving the price of gold right
just one or two times more valuable – now. Gold is viewed as a pristine asset
given the supply-demand imbalances and a hedge against inflation. I think our
that are forecast in rare earth prices over shareholders support that view and have
the next 5-10 years. backed us to move forward with the de-
“I think the investing community has velopment.”
really got behind and supported us be- Meeka now controls more than 2,200sq km – Michael Washbourne
cause they’ve seen the speed at which of prospective gold and rare earths tenure
in the Albany-Fraser belt

Page 78 JULY 2022 aUSTRaLIa’S PaYDIRT