Further to my recent post about Rumble Resources, they today released their Maiden Mineral Resource Estimate for the Tungsten mineralisation they’ve discovered at Western Queen (discovered by some sharp-eyed Geo’s when focus was primarily on Gold).
Key positives to note:
· Total inferred Tungsten resource is 4.31MT @ 0.31% WO3 making for over 13,000 tonnes of Tungsten at a 0.1% cut-off grade. This includes a solid higher-grade area of 1.44MT @ 0.51% WO3 for 7,400 tonnes of Tungsten with a 0.3% cut-off.
· The tungsten remains open along strike & depth, and sits parallel to the main gold resource areas.
· Preliminary Metallurgical work indicates the Tungsten bearing ore could produce a “meaningful revenue stream”.
· They have identified a number of high-priority targets for further testing of likely further tungsten mineralisation.
Key cautions to note:
· While JORC compliant and done using RC & diamond core drill data & expert interpretation, it is still only an INFERRED MRE (so still needs to be taken with a degree of caution, knowing subsequent additional drilling and test work could materially change this estimate (for better or worse, as assumptions made are validated or disproved).
· Company’s near and medium-term future still hinges on getting Western Queen’s gold ounces into production (3.72Mt @ 3.1g/t Au for 370,000 oz). The tungsten is a side-show, and while could be very nice to have in parallel with the gold revenue, is unlikely in itself to be a company maker. Best considered as icing on a cake that’s yet to be baked.
· Rumble is still an investment prospect only for the brave with highish risk tolerance. It has only a modest amount of cash left on the balance sheet, and needs to get Western Queen into production & earning, &/or secure/formalise the upfront royalty deal it is in advanced discussions with a royalty funder about (see earlier post – which is likely to eventuate soon in my opinion, and will alleviate near-term funding risk & hopefully lift this drag on the company’s share price when it happens).
Next Steps for the Tungsten:
· Conduct more detailed Metallurgical test work on a bulk-sample from Western Queen (currently being prepared), to more accurately determine the economic potential of the Tungsten mineralisation at WQ.
· Field program to do some initial analysis on the high priority targets, which will inform likely future further exploration activities targeting tungsten at WQ.
Next Steps for Gold:
· Company needs to finalise its alternative underground mining study/plan and make a final decision on whether shareholders best interest is to exploit WQ gold by (a) Open-Pit or (b) Underground mining.
· If they do pivot to underground, can Bain/MEGA resources still play a role (rather than the mining JV ready to sign for open-pit mining of WQ)? And if open-pit, it will likely be full-steam ahead then with Bain/MEGA’s help (they are funding most of the initial cap-ex up to $25-$35M, to be repaid out of gold revenue).
· Lock in the deal with royalty funders to receive some of the future gold royalties upfront now, to take pressure off the balance sheet (far better option than a dilutive capital raising at these levels). Or alternatively secure 3rd party investment or alternative agreement with Bain.
Remember, only for the brave - but I do believe the potential rewards significantly outweigh the risks, and I continue to monitor these risks closely as possible.
Disc: Held
Price today: 3.2c (2.8c when initially posted).
Hi All,
@navrock1’s recent thread “Mining... Thinking outside the Iron Ore Box” (on VRX & BCI and @Chagsy and @Bear77’s insights on the nuances of the silica sand market dynamics) got me thinking, and motivated me to take the time to do a write-up for my fellow strawmen of a small off-the-radar mining company I’ve been following for a little while.
Not sure if anyone is familiar with Rumble Resources (RTR), a small mining exploration outfit which after making a very promising major Zinc/Lead/Silver discovery 3-4 years ago, has subsequently suffered a protracted and painful fall from grace. Despite its terrible chart and constrained balance sheet, I see some real potential in the company’s assets that simply isn’t being reflected in its very meagre current share price.
Please find below an overview of my understanding of the company, its management and its prospects. Should it perk anyone’s interest enough to take a look “under the bonnet” – I would also welcome others’ thoughts & insights on Rumble and its target commodity markets from their review / insights.
Quick Snapshot of Key Numbers
· Current # Shares: 903M (+ 8M unlisted options)
· Current Share Price: 2.8c
· Current Market Cap: $25.3M
· Cash: $1.9M @ 30-Jun-2025
· Debt: Nil
· EV: $23.4M
· Shareholdings as at Nov 2024:
o Board & Management = 8%
o Top 20 = 26%
RECENT HISTORY
Company Management
Management of the company is best viewed in two separate and distinct eras.
The first era being that of the previous MD Shane Sikora (up until Sep 2023), who oversaw a period of some quite successful exploration campaigns & mineralisation discoveries, but who in my opinion dreamed (and spent!) a little too big, probably assuming shareholders would always be around and willing to keep tipping in capital when required to fund all the drilling campaigns of their heart’s desire, and then to progress these projects into production.
The second era was that of the current MD Peter Harold, who was appointed in Oct-2023 and commenced at the company in Feb 2024. Formerly the CEO of Poseidon Nickel (POS) for > 3 years (which was recently acquired by Horizon Minerals), and prior to that MD of Panoramic Resources (PAN) for many years (which I believe he co-founded / IPO’d way back in 2001).
(While Panoramic subsequently collapsed into administration after Peter’s time following the Chinese massive investment in Indonesian Nickel capacity which completely hollowed out higher-cost Nickel production in other countries including Australia – I don’t see this as being a stain on Peter’s record, or that the demise of the Australian Nickel industry was easily foreseeable, given this structural shift blind-sided even the most experienced of the Aussie Nickel majors including the likes of BHP, IGO and many others).
A candidate of Peter’s calibre and experience would likely be sought after by many small Aussie exploration mining companies – but he chose Rumble as his next big gig due to the considerable long-term potential evident in the company’s Earaheedy project (Zn-Pb-Ag).
When looking at “recent performance” of the company – it is important to note that Peter took over Rumble when the company had already been run into a challenging financial position, having spent almost all its capital on exploration proving up the massive Earaheedy mineralisation (covers a large geographic area) & less so Western Queen assets, assuming it would be able to easily continue to raise capital to fund its operations as and when required. When the capital markets funding door effectively slammed shut for small Aussie mining outfits back in 2023 (especially pre-production, pre-revenue companies like Rumble) except on all but the most extortionate of terms, Rumble found itself with some good assets but with little means to exploit them.
This is what Peter inherited, and hence why any fair judgement of his performance during his 18 month tenure must take the company’s very difficult position upon his commencement into account. Peter’s near-term mandate was to raise enough capital to get the company back on in its knees, with a priority to progress its nearest term project (Western Queen – Gold) into production and generating meaningful revenue, while it quietly progressed the big (and main game) project being its Earaheedy asset (a massive Zn-Pb-Ag resource with the potential to one day become a multi-decade, Tier 1 Zinc/Lead/Silver mine).
RECENT HISTORY – Share Price
Rumble’s share price exploded back in Mar/April 2021 from 10c to 70c upon the discovery of one of the largest Zinc Sulphide discoveries in some years in their Earaheedy tenements (110km north of Wiluna, WA) which hosted very significant Zinc/Lead/Silver mineralisation likely well suited to a large-scale, long-life, low-cost open pit mining operation. After the initial euphoria and spike to 70c, Rumble soon settled in the 40-50c range over the following year.
However as the Zinc price dropped away (from US$4500/t in early 2022 to sub US$2500/t in mid 2023 with China’s economy coming off the boil and many industrial commodities turning down with it) the perception of the company’s ability to attract a partner to help move Earaheedy towards becoming a viable major Zinc mine probably became more and more remote, which on top of its dwindling capital without a corresponding feeling of progress with Earaheedy, is what likely saw the share price slip away and steadily decline ever since.
Zinc Price – 5 Year Chart
The highly anticipated (and very tardy) cap raising at 13.5c in Aug 2023 cratered already fragile investor confidence in the company, and was poorly supported as a result. Following Peter’s taking of the reigns – he pivoted the company’s immediate priority towards monetising Western Queen (being in the sector du jour & in demand commodity of gold), but this progress required two modest but rather dilutionary capital raisings under Peter’s watch ($4M at 4c in May 2024 and $8M at 4.5c in Nov 2024) to prove up the more extensive gold resources at WQ, and progress it towards production.
Many long-standing burned shareholders have understandably thrown up the white flag and moved on to greener pastures. Thankfully I only began taking an interest in the company around the 10-13c level, before starting to build a material position as it dropped down into the 6.5c and below range.
RISK & LIQUIDITY
While I am acutely aware that Rumble is considerably further up the risk curve than I would normally be comfortable with, after a fair bit of homework on the company, its assets and its new management – I became reasonably confident that the risk-reward equation was there and the market was materially under-valuing the company’s assets and their future potential.
I believe Rumble’s future is almost completely dependent on Peter’s ability to execute – namely of walking the liquidity and confidence tight rope (i.e. find sufficient funding options including maintaining sufficient confidence to raise a minimum of funds required to get the company into gold production) relatively soon (so Rumble can stop tapping shareholders for funds (this dilution risk is what continues to overhang the stock so heavily in my opinion). Revenue from Western Queen will provide their bread & butter, but Earaheedy is the potential game changer / whale-event / company-maker opportunity.
Worth noting (and I don’t think the market trusts in yet) is their ability to potentially receive a large upfront gold royalty payment (from royalty funders), in return for granting a higher future royalty stream in return (i.e. in theory this will be worth more to the royalty funders than their upfront payment, so win-win, in that it provides Rumble with much needed funding now to help get WQ into production). From the most recent announcement:
“The existing gold royalty applicable to the Western Queen open pit(s) is a very modest A$6-20 per ounce of gold mined. Consequently, there is an opportunity for Rumble to sell an additional gold royalty of 1-2% Net Smelter Return (NSR) for an upfront payment. The strategy would provide Rumble with working capital while having only minor impact on future cashflow from the gold project. A non-binding indicative offer was received during the quarter from a speciality royalty company. Discussions with the company are continuing.”
The market appears to not be placing much credence on this potential liquidity opportunity (and to be fair after the last few years who can blame it!) However I do believe this is more likely than not to eventuate (would make far more sense to the Board than another dilutive capital raising). If/when it does crystalise it could very quickly remove the heavy dilution risk discount that I believe has been overhanging the stock and suppressing the share price, as well as helping fund Rumble through to steady production.
KEY ASSETS
1) Western Queen (GOLD)
Rumble acquired Western Queen from Ramelius Resources back in September 2020 (when the USD gold price was between USD1600-1900). It is around 100km North West of Mt Magnet, and historically mined for 880,000t @ average 7.6g/t Au for 215,000 oz.
The company has spent the last few years proving up the considerable gold resources at Western Queen – which following the latest drilling campaign its MRE is now 3.72Mt @ 3.1g/t for 370,000 oz of gold (with likely considerable more resource in-site waiting to be proved up).
Having already been a producing mine, the requisite mining approvals are de-risked and pretty much just a formality. There are several gold processing facilities within a 100-200km radius.
In Sep-2024 Bain Resources (associated with BGR Minding & Infra Limited – one of the largest mining contractors in India, based in Hyderabad with an order book over US$11Bn) purchased $1M of Rumble shares at 4c, followed by a further $1.6M of shares at 4.5c in Nov-2024 to fund the latest 20,000m RC/diamond drilling campaign at Western Queen and general costs.
Looking to expand offshore, Bain became interested in the potential and working on Western Queen for its near-term ability to get into production. (No doubt they also have longer-term eyes on what would be far larger possible future mining operations at Earaheedy).
On 28th Nov 2024 Rumble entered into an Indicative Non-binding term sheet to:
· Bain (and their mining subsidiary MEGA) would provide all the open-pit mining services to develop and mine Western Queen up to $25M (with a $10M cost-overrun facility).
· Once Bain/MEGA’s development costs have been recovered from the gold revenue, all further free cash-flow to be shared (between Rumble & Bain).
· Parties agreed to negotiate and draft definitive commercial arrangements including a Joint Venture Agreement & Mining Services Agreement in early 2025.
· At the time, Peter commented:
o “Bain Global Resources have been keen to expand their operations in Australia and we are delighted they have agreed to assist Rumble and develop our Western Queen Project. We are also pleased they have already come on board as shareholders of Rumble, through their subsidiary Bain Resources Holdings, and look forward to a long and mutually beneficial relationship with them.
o In addition to Western Queen, Bain and MEGA are interested in our Earaheedy zinc lead-silver project given the size of the resource and the potential for it to be a large scale, open pit mining and processing operation in the future.”
Bain/MEGA have purchased all the major pieces of mobile equipment for this project, with “arrival in Australia scheduled for mid-year”. The mobile equipment purchased by Bain/MEGA for this project includes: o EX1200 brand new excavators o 10 x Cat 777 brand new haul trucks o 2 x Cat D10 dozers o 1 x 16M Grader. To my mind this shows a pretty serious level of intention.
Initially aiming for 28th Feb 2025 for signing of firm commercial agreements, this slipped to 15th April, and then 30th May – at which time a disappointing update came out that following a number of changes to the open pit mine plan by MEGA, the required development cap-ex would exceed the original $35M envisaged and funded by Bain ($25M + $10M overrun facilities).
This (along with further drill results & resource understanding during that period) seems to have been the catalyst for Rumble to re-assess whether an open-pit mine was in fact the best way to go – with them now exploring a more detailed underground mine plan.
It the project economics of an underground mining option look more favourable than the revised open-pit costs (keep in mind they can relatively easily burrow in to gold seams from the existing open-pits), they might pivot to an underground mining option. However they are clearly keeping both options alive, with permits and documentation progressing for the open-pit mine in parallel, and mutual agreement to defer the deadline for commercial sign-off with Bain to 30th Sep 2025 (thereby allowing enough time to assess the best way forward for shareholders).
Once the decision has been made, I anticipate things could move reasonably quickly towards production.
With 370k oz of readily accessible gold (and likely more with further future drilling) – the potential revenue income from WQ could be substantial.
2) Western Queen (TUNGSTEN)
Tungsten was an unexpected bonus that arose in mid-late 2024, when geologists were reviewing historical cores from Western Queen & planning new drill campaigns. Subsequent drill results have confirmed the existence of a material Tungsten resource at Western Queen, which may be able to be exploited in parallel with the gold.
It could provide a material extra revenue stream, and with Tungsten high on the critical minerals list (and China controlling 80% of global supply + recently imposing export bans on it to the US in return for trade sanctions) – this discovery comes at an opportune time for Western critical minerals supply chain interest and appetite.
The latest Tungsten assay results have just been announced today (5th August), confirming the existence of a material Tungsten system at Western Queen. It sounds like a maiden tungsten Mineral Resource Estimate is imminent (“is nearing completion”), with “eighteen separate tungsten lodes interpreted at the project”.
3) Earaheedy (ZINC, LEAD & SILVER)
Earaheedy hosts a maiden inferred MRE of 94MT @ 3.1% Zn+Pb (at 2% cut-off) of Zinc, Lead & Silver mineralisation, including a pit-constrained 41Mt higher-grade component that would be the first candidate for open-pit mining.
The inferred resource contains 2.2Mt of Zn, 0.7Mt of Pb and 12.6Mg of Ag, and has been proven up with over 650 holes & over 102km of drilling. Despite this, less than 30% of the 70km host unconformity unit (host geology) has been effectively drill-tested, and the deposits remain open in all directions - so obvious potential to locate further high-grade Zn/Pb/Ag deposit zones with infill and extension drilling.
Considerable Metallurgical Testing has been carried out on Earaheedy deposit samples, and confirmed very high Zinc recoveries using a simpe cost-efficient flowsheet and Hydrofloat technology (allows early rejection of 30% of barren material, smaller plant & lower operating costs) producing a high-grade 61% Zn+Pb, marketable bulk-concentrate with no penalty elements perfect for export. If interested, the best announcement to read on Earaheedy’s detailed Met studies it that of 28th November 2024.
The company has an Internal Scoping Study well underway right now – which should help provide some high-level rough project economics for a range of future commodity prices. They also have expert consultants working out a mining study on some of the most promising deposits as well as a process plant design & operating cost estimates. – which should then allow progression to start high-level feasibility studies & most importantly the ability to start approaching and holding dialogue with some mining majors to try attract a suitable project partner & sponsor.
Despite Zinc’s current suppressed prices, I am sure there just aren’t that many large-scale Zn/Pb/Ag resources like Earaheedy, in mining-friendly jurisdictions with what I’m pretty sure will be attractive project economics with easy access to ports. I am sure Earaheedy will prove attractive to a mining major who can take a longer-term view on the quality of the resource & underlying commodity markets. No doubt Zinc & Lead will again have their time in the sun (especially after a relatively prolonged period of lower prices which should lead to steady depletion of existing producing mines), and Silver’s pricing is currently (and likely to remain) attractive throughout the cycle.
Other Assets
While the company does hold numerous other tenements with Lithium, Gold and Copper mineralisation – none of these are sufficiently advanced to warrant much value or discussion at this early point in time (in my opinion).
NEAR-TERM CATALYSTS
· Decision on Underground / Open Pit Best Way Forward for Western Queen – remove uncertainty in market & current scepticism about their ability to get WQ into production.
· Tungsten – Maiden resource soon to be announced. If of a reasonable size & feasible economics to mine – this could provide a valuable additional income stream &/or attract critical minerals interest. Hopefully can be processed in parallel with the gold from WQ.
· Gold Royalty Upfront Payment – Would reduce funding uncertainty & help illustrate a firm financial path forwards to get WQ into production & Rumble earning revenue from it.
· Earaheedy Scoping Study – Internal Scoping Study being published. This is the gateway step to be able to start consulting with mining majors & testing interest in potentially developing the asset (needs a deep pocketed major to fund & construct the plant for what would likely be a massive, multi-decade Zn/Pb/Ag producing mine.
Summary
Rumble is probably not one for those with a low risk tolerance. But as per @navrock1’s thread hunting for an undiscovered gem in the Aussie mining sector – I thought that perhaps Rumble just might be a candidate. It should at the very least be able to fairly easily get Western Queen into near-term production (with Bain/MEGA’s help), and at current gold prices the 370k oz this alone could see a major source of income for Rumble and justify a much higher market cap (rather than the paltry current market cap of c$23-24M).
Throw in the Tungsten potential, and most importantly the sleeping whale of Earaheedy – and is hard to believe what this company is currently being valued at. So it is I’m putting forward Rumble as perhaps just might be that unloved gem hiding in the bargain basement bin…!
Disclosure: Held (in my Strawman portfolio & in the real world).