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Battery metals could charge

gold exploration

by Dominic Piper

hile many gold explorers continue to reinvent themselves “Some explorers are still gold stalwarts but for shareholders,
Was critical minerals players, identifying pegmatites or you have to assess all the options,” he said.
rare earths mineralisation could allow those eager to stay in Turning to hot commodities doesn’t necessarily mean
gold an opportunity to reinvigorate their plans. abandoning gold entirely. Instead, sentiment could be used
Last year saw a flurry of gold explorers declare lithium, nickel to avoid dilution. Haese pointed to Breaker Resources NL’s
and rare earths discoveries as they chased investors who divestment of its remaining 20% interest in the Manna lithium
drifted from the traditional precious metal to the more exotic project to Global Lithium Resources Ltd for $60 million as a
battery minerals space. prime example.
Some have benefited immensely from the switch. Prior to mid- “If you have the ability to monetise non-core assets, you
2022, Dreadnought Resources Ltd hadn’t broken through the should consider it,” he said. “Breaker played a blinder through
5c/share barrier since 2014 but after the company announced the Manna deal and have money for their gold exploration with
the discovery of rare earths on its Mangaroon project, the no dilution.”
market took interest, sending shares up to a high of 15.5c.
Kalgoorlie-focused explorer Alchemy Resources
Ltd enjoyed a similar breakthrough in April when Metres drilled vs Expenditure. Source ABS
it announced first lithium assays from its Karonie
project.
Even newly established gold miner Calidus
Resources Ltd referenced the company’s Pirra
lithium project when raising $20 million in August.
The interest came as relief to many gold explorers
who found conditions tough in 2022, with investors
displaying little interest in anything but the best
gold exploration results.
The dearth of market support was laid bare in
quarterly reports. Research by Argonaut showed
exploration expenditure remained flat in the
September quarter but analyst Royce Haese said
it was likely actual activity had reduced.
“Having spoken to companies and analysed the
June quarterlies, I was expecting the exploration
Gold explorers found it tough in 2022 and will be hoping for
spend to wind back, but instead it has stayed flat,” Haese told
greater investor support this year
GMJ. “So, many companies are talking about reduced activity
and drillers are telling us they have spare capacity for the first
time in two years, which likely means increased costs, not a With share prices depressed and capital tight, gold explorers
surprise in this market.” could soon come under pressure to execute corporate
Haese said he expected activity to reduce further in the transactions. Haese said much would depend on the
December quarter as explorers conserved cash to avoid performance of the gold miners in the next few reporting
dilutive capital raisings. periods.
“I don’t envy the position some companies are in, trying to “The producers don’t have spare cash and their paper is not at
maintain relevance and momentum but every capital raising the highs of 2020, so they are not wanting to do scrip deals,”
means more dilution,” he said. “It is a difficult balancing act.” he said. “But they need to invest in exploration so will have to
make a move at some point. I think we can expect that when
Hence why companies such as Alchemy and Dreadnought
the flood gates do open it will be pretty rapid.”
have turned to on-trend commodities.
Haese said it was a sensible option for dynamic explorers.

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