Artemis Resources Ltd
- ASX: ARV
- Shares Outstanding: 1.12B
- Share price C$0.07 (11.09.2020)
- Market Cap: C$83M
Interview with Alastair Clayton, Exec. Director of Artemis Resources (ASX: ARV).
We always have time to hear a good turnaround story at Crux Investor. Mining is mining, and many things can always go wrong, but it is the actions of the management team that determine whether a company tumbles into obscurity or whether it rises back to prominence. So, is it the former or the latter for Artemis Resources?
Matthew Gordon talks to Alastair Clayton, August 2020
Artemis Resource is a copper-gold explorer and developer with significant assets in the West Pilbara and new tenement acquisitions in the Paterson Range. To tell you the truth, the company had been nothing short of a trainwreck up until recently. Ever since the share price peaked at A$0.52 in November 2017, it has been on a constant, despairing fall. Having sold its non-core gold assets for A$4.8M in March, Artemis Resources has been focussing its time and resources on developing the 2 best assets within its portfolio. They are polymetallic assets spread across Western Australia: the Armada/Paterson Range and Carlow Castle. So, what exactly does the company have with these 2 projects?
Is this really going to become the next tier-1 copper deposit? Artemis Resources certainly seems to think so. An airborne magnetic survey was conducted at the property in November 2018, covering the western 47% of the Paterson Central tenement. It identified no less than 8 exploration targets within a 22km radius of Greatland Gold’s high-grade copper-gold Havieron project (which Artemis Resources’ tenement is adjacent to). Armada/Paterson Range is also situated in close proximity (100km east) to Metals X’s Nifty copper mine. The geology and mineralogy of the region is undoubtedly positive and promising, but there is plenty of action needed before this potential can be monetised. With majors like Rio Tinto, FMG and Newcrest taking interest in the range, it is clearly for a good reason.
Carlow Castle is a gold-copper-cobalt play that is perhaps the most advanced of Artemis Resources’ portfolio projects. Moreover, it is located 28km Northeast of the 100%-owned Radio Hill processing plant: Artemis Resources’ strategic, centrally-located asset that is permitted for gold production. Artemis regards Carlow Castle as one of Australia’s most exciting Cobalt discoveries; now, it is time to prove it.
In March 2019, the company announced a JORC Resource update. This impressively grew the Resource by 71% based on 2018’s drilling up to an inferred resource of 7.7Mt grading 1.06g/t gold, 0.51% copper and 0.08% cobalt (260,000oz gold, 38,000t copper and 5,900t cobalt). Given the solidity of these numbers, despite their lack of real scale, it surprises me that investors have exhibited such little interest, especially given the current gold bull environment. I’m seeing some pretty average gold companies attract capital right now, so one would think any gold would be getting attention. Are these legacy issues or are there problems in the here and now?
Whilst Clayton is confident he can get an Artemis deposit up to 1Moz by conducting an aggressive exploration programme, he wasn’t quite able to clear articulate exactly what gives him the confidence to make this prediction.
Artemis Resources has plenty of other projects in its densely-packed portfolio, but I am unsure what value, if any, should be attributed to them.
Aside from the aforementioned Radio Hill Processing Plant, the company owns the following projects:
Sitting just 30km from Northern Star’s Paulsens gold mine is Artemis Resources’ small-scale gold-silver asset, with a JORC-compliant resource of 64,400oz gold and 618,500oz silver.
Copper and zinc have been historically mined at Whundo from the 60s all the way up until 2006. The company is currently developing the projects based on a mineral resource: 2.6Mt grading 1.14% copper and 1.12% zinc.
Mt Sholl East
The company claims that this asset gives investors access to the value of ‘nuggety gold from quartz veins.’ Impressively, the company once sent 27kg of quartz to the Perth Mint for minerals totalling 38.3oz gold and 5.3oz silver.
Nickol River (Au)
Four prospects at this project have reported historical gold production, but this is too early stage to be meaningful.
Having been drilled previously, Artemis Resources has developed an upgraded JORC resource: 152kt at 0.63% nickel and 0.47% copper. There could be a bit of gold to throw into the mix too.
This is the company’s youngest baby. It was discovered via geochem programme and is yet to be drilled.
When you take a look at this portfolio objectively, a slight lack of scale becomes apparent, but there should still be enough within this 1,659km2 of tenements across the Pilbara to get prospective investors excited about the company. So, let’s dig into why this hasn’t happened.
Clayton and his team became involved last October, immediately putting US$6M into the company to pay off debt and following it up with US$2.5M in January/February this year. Having fully transacted its former 50/50 JV at Purdy’s Reward to Novo Resources in March, Clayton and his team have clearly been cashing in on their Novo stake. He claims this straightforward decision was made because Artemis Resources’ team is not comprised of miners who operate on an eluvial scale. Furthermore, the company already has enough tenements on its plate.
So, having just raised US$5.6M, how is Artemis Resources going to obtain a resource for Armada/Paterson Range whilst timing a financing perfectly to get its processing plant back up and running? This is a “rolling programme” or regional exploration. Using an RC rig at a cost of just over US$30/m, drilling 25-40 8m holes, Artemis Resources will be focussing on its eight exploration targets. Is this the best path to creating accretive value for shareholders? He claims this is efficient, rapidly-progressing exploration that will return value in an accelerated timeframe. Let’s hope so.
With some members of the senior management located in London, and with the majority of the recent fundraising coming from the city, could Artemis Resources list on the LSE? Clayton believes there is already enough interest on the ASX.
As Clayton tries to build momentum behind this story, he’s going to really struggle to break through the multiple inevitable overhangs. However, Clayton is confident his company has avoided a tsunami of selling. He acknowledges this will remain an issue for the company as it chews through the register, but he believes very few people are offloading gold stocks right now.
Can Clayton and his team monetise Artemis after so many years of share price obscurity? Comment below and we will respond.
You can more copper & gold investing content and exclusive views from experts from all over the world at cruxinvestor.com/club, along with company reports and research, interview summaries and a thriving community of like-minded intelligent investors sharing investment ideas and thoughts in a considerate way.
Company Website: https://artemisresources.com.au/
If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.
Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.