Ausmex Mining Group (ASX: AMG): Gold Producer and Copper Gold Cobalt Explorer in Australia; Interview with Matt Morgan, Managing Director
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 6/30/2019
We learned from Matt Morgan, Managing Director of Ausmex Mining Group (ASX: AMG), that they are a gold producer and copper gold cobalt explorer, with a unique exposure to 2 tier-one IOCG projects in Australia. Ausmex shares a project called Mt. Freda, with Newcrest Mining in Queensland, which they are both drilling and expect significant high-grade results. In South Australia, Ausmex has a very large tenement holding with numerous high-grade copper gold workings on surface, where they identified a large conductive structure that is very similar in magnitude, scale and geochemistry to BHP's Olympic Dam. Near term plans include new exploration drilling programs on both projects, while at the same time continuing mining at the Company's shallow, high-grade, oxide gold deposits on surface. The bulk of that oxide gold material will be trucked to two processing plants. According to Mr. Morgan, Ausmex has a team of seasoned geologists, mining engineers, chemical engineers, and mechanical engineers, with over 100 years of combined experience and a great track record.
Ausmex Mining Group: High grade copper/gold ore up to 32.70% Cu and 33.40g/t (Refer ASX release 6th December 2017)
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing Matt Morgan, managing director of Ausmex Mining Group Ltd. Matt, could you give our readers and investors an overview of your company?
Matt Morgan: Certainly. Ausmex is an Australian listed ASX listed public company. We're a gold producer and copper/gold/cobalt explorer. We offer shareholders quite unique exposure to 2 large tier one IOCG projects. I believe we're the only junior on the ASX listed companies that can offer such exposure to such value. We have assets in Cloncurry, Queensland in Australia and within the Mount Isa Inlie, which is host to several significant world class mines by IOCG copper gold and deposits as well as Century zinc and Cannington zinc mine and Ernest Henry, which is an IOCG mine.
We share a project with New Crest Mining Ltd in Queensland. We call it our Mount Freda project. So New Crest Mining Ltd, I think they're a $14 billion listed gold explorer. We share a tier one IOCG target that they've identified as their lead project in Queensland. We're both drilling. New Crest is yet to release their results. They drilled it last year, but we have a large significant conductive target. It looks like a large IOCG target. Extensive high-grade gold on surface that we're drilling to. So, that's what we have in Queensland.
We have a project in South Australia. In the, down in, something called the G2 Structural Corridor. Same again, we were looking for large IOCG's and we have 7000 square kilometers, which is a large tenement holding, with numerous high-grade copper/gold workings on surface. We've identified a large, again conductive structure that is very similar in magnitude and scale in geochemistry to BHP's Olympic Dam. So $10 billion IOCG copper gold uranium project Olympic Dam.
Both are drill ready. And we're about to commence exploration drilling again, up in Cloncurry, Queensland. We've been drilling for two years. We've identified significant, shallow, high bright gold in some high-grade workings and, and under historic mines. Now we're about to start turning out deeper IOCG targets that we share with New Crest Mining Ltd.
So, that's a quick summary.
Dr. Allen Alper: Sounds excellent! It sounds like you have great potential and great locations. Could you tell our readers/investors a bit about yourself and the team?
Matt Morgan: I'll get to the time I actually missed out on the assets we have in Cloncurry, Queensland. We actually purchased them because it's a known mining province and there's currently spare processing capacity in town for copper and for gold and particularly for oxide gold.
We originally went there targeting and drilling shallow, high-grade gold. We have numerous shallow, high-grade gold intersections, within granted mining leases. They're easy to get in production, but they don't require extensive capital requirements because it's all within 20, 30 kilometers. So, we can truck and toll treat at numerous processing plants that have already approached us. They have an oil shortage.
So, one of them is owned by Washington H Soul Pattinson. They're a multi-billion dollar company. They've already purchased some ore from us and they want to purchase more. We are quite unique, we do have a near term additional gold production capacity, potentially the end of this year. So to continue funding exploration, we just completed a $7 million capital raise, which was over-subscribed. So, we're in a good position to keep drilling.
The team were all seasoned geologists, mining engineers, chemical engineers, and mechanical engineers. We all have a history of exploration success, mining success, and processing success. We've built plants before. We've been involved with public companies before and we've all created significant value for shareholders, through public companies. We've orchestrated takeovers before with very good outcomes for shareholders in public companies. We have that history of success. We spend all our money in the ground. We don't have heavy corporate overheads, we don't have expensive offices. We don't have expensive fleets of new cars. It's all about dollars in the ground at the end of a drill bit. It's all about drilling and results.
Dr. Allen Alper: That sounds excellent. Could you tell our readers/investors what your plans are for 2019?
Matt Morgan: 2019! It's a very exciting year.
Our two projects: We are about to commence drilling for deeper IOCG targets in the Mount Freda complex, in Cloncurry Queensland.
We are looking for copper, gold, uranium and cobalt. We have some beautiful conductive targets, three geophysical targets, below known mineralization at depth and they're not deep. They're ranging from two to 500 meters in depth. Looks like we control over half of New Crest Mining Ltd.’s targets, and we have the shallower ends. That's all been released in our different announcements. We're commencing drilling those within two weeks. We'll continue extending out our known shallow, high-grade, oxide gold deposits on surface, targeting bulk mining, high-grade bulk mining oxide material that we can just truck and haul to 2 processing plants. So that's Cloncurry, Queensland. It's going to keep us busy all year. It's all results based and we have the financial capacity to continue that out.
In South Australia, we have our second project, called Burra, which looks like it is very large magnitude, with a capacity for scale. We commenced drilling that mid-year this year. We've had some beautiful conductive signatures underneath known historical mines. The high-grade copper mines in IOCJ country. They're not that deep. Two to 500 meter targets. So we have two lines, two large targets and two known mineral Provinces. Probably the two best mineral Provinces in Australia, the Mount Isa Inlier and the G2 Structural Corridor. The project in South Australia shares the same geological setting as Carrapateena, Olympic Dam and Prominent Hills. So, all very large scale tier-one IOCG projects.
We've had an external review completed by an emeritus retired professor, Ken Collerson, last year on the South Australian project. He's correlated that our mineralogy, our signatures are all very similar, same age and same origin as the larger projects. So now we're quite excited, plenty of drilling, plenty of results and we're well-funded. So we intend to drill for the next six to nine months.
We're targeting large, large projects and expect a lift in market value.
Dr. Allen Alper: I see that you have market recognition for your explorations.
Matt Morgan: Yes. Yes we do.
Dr. Allen Alper: Could you tell us a little bit about your share structure?
Matt Morgan: Currently, probably about 470 million shares on issue and we have 87 million options. So within that 470 million shares, 30 shareholders control 75% of the company, 20 shareholders control 70%, five of us control over 50%. So quite tightly held. We are in a good position.
We have liquidity and we have volume. We have the market’s interest at the moment and we're starting drilling. So it's an exciting project. We have a multi-billion dollar neighbor, New Crest Mining Ltd, a large multi-national company drilling the same target next door to us in Queensland and they've identified that as their tier one IOCG target. They've done a lot of drilling. They drilled for four months last year. They did 850 meter holes, I saw the whole lot because they had to drive through our mining license to get to theirs’. They're going back in two weeks to commence drilling again.
So, it's very positive for us. They've hit something. It's past their first stage of assessment and re-investment and they're going back to invest more in it, and to explore more. So, we're very excited!
We are drilling on our side too. The interesting part is, we have the shallow side. We have the shallower target. If any mining were to ever commence, you'd start on that, the shallower target area.
Dr. Allen Alper: That's excellent!
Matt Morgan: It's nearly a unique situation. The Company's been going for two years, two years of hard work, getting that altogether.
Dr. Allen Alper: Well that sounds like an excellent place to be.
Matt Morgan: Yeah, it is. Copper is strong. Uranium prices are coming up. Both projects have copper, gold and uranium potential and there is cobalt too. Cobalt's dropped off, but there's gold.
And then we have our largest standalone project. It will have its own plant. We can't quote ounces, but there's potential for significant large shallow oxide gold ounces to toll through two plants. There's current capacity in town and approximately million tons per annum processing in two plants, within 25 kilometers of the truck. There's all the infrastructure. There's a beautiful haul rode. There's a whole lot.
Dr. Allen Alper: Well that sounds outstanding. Could you summarize and highlight the primary reasons our readers/investors should consider investing in your Company?
Matt Morgan: Number one. We've just completed a capital raising so, we're well funded. We don't need to go back to the market. We have capacity for our exploration programs for the next 18 months. We envisage getting into near term production, the end of 2019, to generate additional cash flow. We've already sold some material to some processing plants next door to us and they hunger for more. We have the potential cash flow, without having to go back to the marking for capital investment and building infrastructure. So, that's great.
Secondly, I believe we're the only ASX, possibly TSX listed company that can offer exposure to 2 very large tier-one IOCG projects that are drill ready. It's only one hole of over 100 meters of one percent gold and one percent copper. We might get two or three hundred meters. We're a totally different company.
The closest similarity. This is what the market's told me, not what I've told the market. The last time this happened was a company called Minotaur. It was an ASX listed company in 2002. It drilled Prominent Hill, which is a large copper gold project, which is very close to our South Australian project. And in four days, they went from sixteen cents to three dollars.
We will be a prime take-over. Not to say we want to be taken over. We're tightly held, so if any corporate transaction happens they have to talk to the top five of us. No-one will get control. We are primed for significant success.
Dr. Allen Alper: That sounds like an excellent opportunity.
Matt Morgan: It is. It is. It is. And, I think we're quite undervalued. New Crest Mining Ltd., who are drilling next door, just bought a project in Canada. You can see it on their website.
They paid $800 million US, so $1.2 billion Australian, for 70% of what they call a potential tier-one IOCG project. Very similar setting to what we have in Queensland, Cloncurry, which we share with them. That project was slightly more mature, had some more mining on the surface, shallow copper gold mineralised findings. But it was all about the deeper target underneath. That would equate to three dollars a share straight up for us.
In addition, we have our project in South Australia. We pegged 7000 square kilometers, over nine historic mining areas, three years ago when there was a downturn. Shortly after we pegged it, we were approached by the Geological Survey of Australia, a government organization. They told us they'd been conducting an AusLAMP Survey, looking for deep conductive sources, below known mineralization, to correlate with known mineralization, to use as a potential exploration tool. They told us we have a large AusLAMP target underneath our Burra project, which made us very excited. We didn't know what it was excited. They recommended we contact the University of Adelaide in South Australia that has M-tier Magneto Telluric Survey technology that can look down ten kilometers from the Earth's crust for conductive structures.
They ran these M-T surveys underneath some tier-one IOCG's; Prominent Hills, Olympic Dam and Carrapateena. They get a beautiful signature from their Ausland survey up to the surface. They call it fluid pathways. It is very cost effective. The University of South Australia ran that project for us, very inexpensively. They identified seven large targets, all with known mineralization on the surface, large historic copper mines on surface. We were over the moon!
They recommended that we needed to do a smaller scale survey, called an AMT, Audio Magnetic Telluric. We just completed that and we have the first set of results back. We picked out three of the shallowest targets. We have a conductive target which could either be graphite, salt water or sulfides, two to 300 meters below these mineralizations. They're big, to several kilometers wide and they're highly conductive. Excellent drill targets!
It's quite unique what we have. We've been contacted by all the major world class miners wanting to get involved with that project. But, we have the capacity to drill it first. We've had plenty of offers to joint venture because this is a project that the majors look for. Now we've done all the hard work and it's drill ready. This is only one hole and it could be another Olympic Dam which is a $10 billion project, or Prominent Hill which is a $4 billion project.
We've released all these. This is all announced and this is what the market understands. We're on the cusp of potential rapid growth and we have multiple quality projects.
Dr. Allen Alper: That's really excellent! Sounds like you're in a great position. It's in a great area.
Matt Morgan: It's worth looking at all our ASX announcements on the Australian Stock Exchange and all our announcements, with all our results. It's quite unique what we have!
Dr. Allen Alper: We'll do that and as you make more announcements, we'll post them on Metals News. Is there anything else you'd like to add?
Matt Morgan: To summarize it. We're drill ready in two large projects. We have a multi-billion dollar company next door, drilling the same target. The race is on. We’ll get the results out and create market awareness. We’ll either get into production or accept a very, very big bid by one of the majors.
Dr. Allen Alper: That sounds excellent!
Matt Morgan: Probably every major in Australia will ring me, wanting to be involved with the project.
Dr. Allen Alper: That's really great. That's a great position to be in. The large companies need resources. They're running out and you have them. That's enviable!
Matt Morgan: Thank you. And thank you for interviewing me and Ausmex Mining Group for Metals News.
Dr. Allen Alper: It was a great interview. We’ll publish your press releases as they come out so our readers/investors can follow your progress.
https://ausmexgroup.com.au/
Level 14, 309 Kent Street, Sydney NSW 2000
+ 61 2 9248 0104
+ 61 2 9994 8008
info@ausmexgroup.com.au
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