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Sticking with the WA gold theme, minnow
NTM Gold (NTM, 3.6c) faces an unusual dilemma as it contemplates a drilling campaign at its mainstay Redcliffe gold project.
Rather than craving institutional backers, NTM wants more retail punters to round out the register and inject some liquidity into the stock, which is 7 per cent owned by Ausdrill, which earned the stake by providing drilling services.
NTM shares have gained favour since mid last month, when the company almost doubled its resource base to 538,000 ounces (roughly evenly split between the indicated and inferred categories).
The company aspires to double again to 1 million ounces, enough to support a 100,000 ounce a year operation, but to achieve this it has to find a new deposit on the tenement.
Not wanting to die wondering, NTM is testing 30 targets along a 40km strike zone, much of which is yet to see a drill bit. The campaign covers previous drill hits, extensions to existing deposits and “new conceptual targets”.
Should NTM get into production, mining is likely to be a “toll treatment” operation, where the ore is trucked to one of four nearby processing plants.
Chief Andrew Muir says the market is valuing NTM’s resource base at a fraction of which it values its peers. Criterion has heard such a lament many times before, but given NTM’s slender $12m market cap, he might have a point.
NTM is not only close to Mt Morgan, but is on the same geology of famous projects including Gwalia (owned by St Barbara), Thunderbox (Saracen), Darlot (Red 5) and Kin Mining’s Leonora, which is in development.
“We are a pretty simple digestible story,” Muir says.
Despite bullion’s current lack of popularity, it tends to react well to ballooning government deficits and debts, which is what’s been happening in the US.
On the supply side, the best and biggest gold resources are also rapidly declining, leaving the up and comers to fill the gap.
Tim Boreham edits The New Criterion
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https://www.theaustralian.com.au/bu...r/news-story/b5b137e97c157a1264afd18c4d3227e2
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