Alba Mineral Resources to create Greenland-focused spin-out company
(ALBA ) announced in its final results for the year ended 30 November 2020 that it intends to create a new Greenland-focused, spin-out firm.
The company explained to investors that the planned restructuring will see it form a new AIM-quoted firm that will unlock ‘real and sustained value’ across its asset portfolio.
The decision comes after the COVID-19 pandemic had placed ‘considerable doubt’ upon Alba’s ability to execute its field programmes over the year, particularly at the Amitsoq Graphite Project where it had plans to drill. In response, Alba said it has been exploring how best to unlock value across the assets in its portfolio which it considers to be undervalued.
Most pertinently, this applies to its Greenland mining project portfolio which the group said includes two assets with ‘particularly strong potential,’ Amitsoq (graphite) and Thule Black Sands (ilmenite), as well as Melville Bay (iron ore), which the company stated deserves renewed attention given the significant rally in the iron ore price over the past 12 months.
As part of the spin-out, it is intended that Greenland Listco will acquire the Greenland Projects for shares and simultaneously undertake an IPO fundraising to secure the necessary working capital to fast-track the development of the Greenland Projects, Alba explained.
The company said it believes that moving the Greenland Projects into a new listed vehicle will allow the market to set ‘a clear value for those assets in isolation’ rather than as part of a larger pool of diverse mining, oil and gas and exploration assets, as is currently the case.
In 2020, Alba focused its efforts on Clogau-St David's Gold Mine in Wales, a more readily accessible site. The group managed to successfully raise money over the period ‘at ever increasing prices’, which it said was ‘testament to the great results’ at Clogau-St David.
Alba said it has made ‘great progress’ at Clogau which has enabled it to advance its goal of bringing the mine back into commercial production. A number of milestones were reached at Clogau in 2020 including a phase 1 underground drilling programme, a surface drilling programme and an underground bulk sampling programme, all of which proved successful.
The company also carried out evaluation pitting of the historic waste rock dump at Clogau-St David's last month, in line with Alba’s wider objective to unlock early revenue streams at Clogau while it continues ongoing drilling work to prove up new gold-bearing zones.
Throughout 2020, graphite specialists ProGraphite undertook a test work programme in relation to Alba’s Amitsoq graphite in Southern Greenland which reaffirmed that the graphite content of ore is very high and amongst the highest found in flake graphite deposits globally.
It also demonstrated that a >96% graphite concentrate can be produced, and that purification test work confirms the suitability of Amitsoq graphite for Lithium-Ion Batteries with standard alkaline purification, in particular, achieving a carbon level of above 99.95%, the grade needed for the production of spherical graphite for LIBs. LIBs are the fastest growing market for flake graphite, with massive growth rates forecast for the next decade.
Looking ahead, Alba has described its outlook as ‘strong’. In the near-term, the group said it will continue its activities to prove up sufficient new mineralised zones at Clogau-St David's to make a compelling case for bringing the Mine back into commercial production.
Alba said it is currently ‘putting the finishing touches’ on summer drilling programmes for both the Thule Black Sands Ilmenite and Amitsoq Graphite Projects in Greenland. It said that despite ongoing COVID-19 restrictions, it is confident that these will go ahead ‘as it stands.’
The company said drilling at TBS will be aimed at significantly increasing its JORC Resources. Meanwhile, at Amitsoq, the drilling programme will be aimed at defining a maiden JORC Resource for the project to position it for fast-track development and to capitalise on the surge in demand for battery-grade graphite emanating from the electric vehicle sector.
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If approved, Alba’s proposed Greenland-focused, spin-out company will enable it to form a new vehicle that could unlock ‘real and sustained value’ across its Greenland projects which the company views as being ‘materially undervalued’ within its current asset portfolio.
In recent weeks, Alba has declared a significant exploration target for the Amitsoq Graphite Project following the group’s recent statement that test work on graphite from the graphite project had confirmed the suitability of the graphite for Lithium-Ion Batteries ("LIBs"). The project represents one of two assets that Alba views as having ‘particularly strong potential.’
Shares in Alba Mineral Resources have increased by over 11% in value in the past month. The stock was trading 10.07% lower at 0.26p this morning following the announcement.
Alba Mineral Resources is a well-diversified exploration and development company which owns and operates mining projects in Greenland, Wales and Ireland. Its strategy is to identify and secure undervalued assets with a diversified commodity mix where there is potential for discovering further unexploited resources alongside the existing mine site.
Limerick Base Metals Project
Historically, only eight drillholes have been completed within Alba’s Project area of the Limerick Base Metals Project, the most recent being the three holes drilled in Q2 of 2019.
Alba said these low levels of drilling are unusual in the Irish context and, for this reason, the area is considered under-explored. Alba has previously identified a number of attractive targets that have never been drilled before.
Alba’s current technical team, led by Mark Austin, Alba’s COO and Senior Geologist, will undertake a comprehensive review of the licence area before determining the next phase of planned exploration activities.
The expenditure conditions attached to the renewal of PL 3824 require Alba to incur expenditure of €15,732 by 26 May 2021 with a further €50,000 to be spent by 26 May 2022.
JORC Resources expected
Despite losing field time to the COVID-19 pandemic, Alba said it is in a position to execute one of the most significant underground work programmes seen for several decades at its Clogau gold mine in Wales, just as the commodity is reaching all-time highs in value.
Alba said its mining projects remain on ‘a sound footing’, with JORC resources at both Thule Black Sands and Melville Bay, and plans to drill a maiden JORC resource at Amitsoq in 2021.
In recent weeks, Alba said an independent testwork programme at the Group’s Amitsoq graphite project in southern Greenland has confirmed ‘very high carbon content.’ Due to the high carbon content, the product would offer ‘a significant advantage, as no purification would be needed to achieve that level,’ the Company explained to investors.
Accordingly, subject to certain follow-up testwork which the Group said is recommended, the testwork successfully indicates the suitability of Amitsoq graphite as feed material for Lithium-Ion Batteries ("LIBs"), the fastest growing market for flake graphite globally.
‘This finding that the concentrate appears to be suitable for LIBs is significant, as the market for LIBs is the fastest growing market for flake graphite, with massive growth rates forecast for the next decade due to the expected demand for LIBs in electric vehicles,’ Alba outlined.
Transition from Exploration to Production in Greenland and Wales
Other ‘significant’ progress has also been made in recent years towards Alba’s ultimate goal of achieving commercial production at one or more of its sites, including at the Thule Black Sands in Greenland, the Amitsoq project in Greenland and the Horse Hill well in Surrey.
In 2020, Alba announced that surface trenching activities would kick-start over the first of the group’s 10 regional gold targets over the Dolgellau Gold Field.
The trenching will target the first of 10 separate new gold targets over the Dolgellau Gold Field which have previously been identified by Alba.
Alba said up to eight trenches have been planned in this first phase, each varying in length from 40-90m for a total of 575m, with each trench being 1m wide and up to 2m deep.
Once exposed, the quartz veining and other structures from the trenches, those of which are pictured below, will be sampled, and those samples sent to a laboratory for assaying.
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