Krakatoa Resources (ASX: KTA) – Hopeful Gold Explorer On The Doorstep Of Australia’s Largest Gold Mine

Krakatoa Resources Ltd.
  • ASX: KTA
  • Shares Outstanding: 219M
  • Share price A$0.04 (27.05.2020)
  • Market Cap: C$7.7M

Interview with Colin Locke, Exec. Chairman of Krakatoa Resources (ASX: KTA)

Krakatoa Resources is a mineral exploration company listed on the ASX, which is focussed on discovering new copper-gold porphyry systems in the Lachlan Fold Belt of New South Wales, Australia. The two core projects are the Turon Gold Project and the Belgravia Porphyry Project. It’s early days, but what is the plan?

Matthew Gordon Interviews Colin Locke, 28th May 2020

Aside from using evocative language, what does Locke have to tell us about his assets? What does the company know? The acquisitions the company has made are based entirely on prospective, unexplored mineralogy. The reason it hasn’t been explored before is that it is covered by up to 30m of tertiary basalt; there is no outcropping. Discoveries are usually made via outcroppings, but Locke claims that looking in the “shadow of somebody else’s headframe” provides Krakatoa Resources with a large amount of gold potential. It is located 40km north and along the crest line of ‘Australia’s largest gold mine:’ Cadia, owned by Newcrest Mining Limited (ASX: NCM).

Locke tells us that its assets have been locked up for a while because, in New South Wales, the Australian government gave landholders the upper hand. However, a change in the legislature has now given the upper hand to explorers and miners. He claims that the last major discovery in the Lachlan Ford Belt was discovered 300m below, so investors may be reassured about the basalt.

On the upside, Krakatoa Resources’ assets are located “right next” to a resource of nearly 1.5Moz of gold that shares Copper Hill’s igneous complex. Can Krakatoa Resources demonstrate that it shares the same kind of potential?

Krakatoa Resources has less than A$1M of cash as it continues to explore. An aeromagnetic survey, conducted over the licence, has picked up a “number of geophysical anomalies that stand out and the company is trying to understand what they reveal. There are 6 targets and upon preliminary examination of one of the targets (a “little bit of drilling right” next to Copper Hill), the geophysical anomalies have been married up with some geochemical anomalies. Some deep diamond drill holes later in the year may de-risk the project further.

Outlook For 2020

What is the plan for the rest of 2020?

Locke wants to continue to de-risk the deep diamond drilling as much as he can. He’d like to create at least 3 holes. Krakatoa Resources has just completed a deep ground-penetrating radar survey. The company is trying to tick boxes to allow it to bring home a major discovery for gold investors. Locke expects to raise some more capital later this year.

Shareholder Registry

Krakatoa’s shareholder base is quite personal to Locke.

He knows most of the shareholders in the top 100, and there is only a handful that he doesn’t know. The top 20 comprises c. 40% of the registry. There are 0 institutions on the registry; they are “all Friends & Family, Mums & Dads and HNWIs.” Locke claims that his wife is the fifth-largest shareholder: c. 4M shares from c. 219M outstanding.

Does the team have a good track record? There are 3 Directors and 1,000 shareholders in total. The team appears to have a mixed background and Locke himself has a financial background. Have they made a major mining discovery before? Locke didn’t say.

What did you make of Colin Locke and Krakatoa Resources? Are they a gold explorer that captures your attention? Comment below and we will get back to you.

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