ROX Resources won’t be tempted by fads or short term planning as it decides what to do with the $A15.8 million which landed in company coffers last week, managing director Ian Mulholland says.
The company received the first cash from the sale of its 49% stake in the Reward zinc project to majority holder Teck Australia last week, with another $3.7 million to be paid within six years, or when a bankable feasibility study is completed over the project.
The Teena prospect within the project was hailed last year as the biggest high-grade resource announced in Australia in 20 years, when its maiden inferred resource of 58 million tonnes at 12.7% zinc and lead for 7.4Mt of contained zinc and lead was released.
But despite the size of the deposit, Mulholland said the path to continual zinc production at Reward was 10 years away, after the Teena target was found.
“The market wasn’t prepared to give us any value for that, and that is the reason we sold it,” he said.
“So (today) we would be looking for something that had a clear and obvious pathway – that was going to be developed within a timeframe your average investor can tolerate, and it is probably 3-4 years maximum I think.”
Mulholland told MNN Rox would try to find the balance between acquiring projects for a reasonable price and having as short a time to production as possible.
“We are obviously looking at other projects we might be able to get involved in, now that we have got a reasonable war chest, but we are not going to jump into the first thing that comes along,” he said.
Mullholland said Rox’s future acquisitions would likely be in base or precious metals, with the company seeking projects at a more advanced level, rather than greenfields exploration grounds.
“We are not afraid of exploring, but we are not going to be looking for grassroots opportunities, we will be looking for something that is reasonably advanced that we can move along quickly and have a clear path to production,” he said.
“We have got our view on what commodities we would like to chase, but unless it was an outstanding opportunity, we probably wouldn’t be doing another nickel acquisition.”
Mulholland added that he was wary of the reliance that specialty metals, as well as lithium and graphite, have on their industries’ downstream sector, saying sometimes miners needed to be aligned to a producer interested in buying the product.
“There is no point in being the last to follow the fad. We will concentrate on those metals that we think are going to have a long life and an open and transparent market,” he said.
Rox’s most recent acquisition was its deal with Falcon Minerals to acquire the Collurabbie nickel-gold project, 70km east of its Fisher East nickel-gold project, in a cash and scrip deal in October last year.
Mulholland told MNN that Rox would conduct an aircore drilling program on Collurabbie once it was formally acquired – with the company hoping any nickel found could feed into a future plant on Fisher nickel.
“We have got to the point, I think, with our Fisher East project where the best development option is to have a processing plant on site, and so other deposits that could feed into that, especially at higher grades, are quite attractive to us – that was the kind of rationale behind that.”
The company is also planning a reverse circulation drill program on the Horatio, Mount Tate Cutlass and Sabre North prospects at Fisher East, having received a $119,200 exploration incentive scheme grant during the December quarter to explore its Camelwood prospect.
Mulholland said the nickel projects were well worth progressing as the company considered its options for the future.
“We are obviously looking at other projects we might be able to get involved in, now that we have got a reasonable warchest, but we are not going to jump into the first thing that comes along,” he said.
“So perhaps the jury is still out on nickel but people are suggesting it is going to be a strong metal over the next couple of years, so it is a good time to be in something when the chips are down.”
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