My first toe dip into the resource side of the ASX so comments/advice/redicule all welcome please.
New World Resources own a high-grade copper project in Arizona in the US. Arizona is a mining friendly state producing 70% of the worlds copper. The mine site is well located on private land (making approvals slightly easier to obtain) with access to roads/rail and a town of 35000 people. It is also close to other high grade VMS deposits (including United Verde) the likes of which typically appear in clusters. High grade deposits provide a low capex and high margin production opportunity.
The project is unique in that it has historically produced 70Mt to a depth of 150m over the period 1916-70 but production was halted due to uneconomical copper prices. The remaining historical resource currently sits at 4.6Mt at 5%CuEq.
Over 20000m of drilling has taken place since early 2020 (2 rigs) with a maiden JORC report expected this year. This has been pushed out a couple times already as the company continues to discover good grades in both the main and south shoot but I am hoping for something before the year ends. Drilling has progressively moved deeper and moved to include the South Shoot. Results have been consistently good including shallow "low capex" areas. The latest from the company states that the deposit extends over more than 500m of strike with improving mineralisation at depth and remains completely open. A new area 200m south of the "South shoot" also looks promising.
Other points to note:
Supportive copper price with demand expected to exceed supply longer term
Both Perennial and Paradice now substantial holders
Cobalt assets to be divested which should provide further funding for Antler plus $23m in cash post a recent raise
Management/board own 6%
CEO/Chairman both geologists; Director Tony Polglase experienced low cost mining engineer
PFS work is expected to begin this quarter; 18-24 months permitting process
Valuation:
Based on a maiden reserve of 6.8Mt 4%CuEq I get to a price of 19c with potential for the resource to expand over time. At around 8c these seems a pretty decent risk/reward.
