White Rock Minerals (WRM) - Share Price Rockets after Stagnant 10 Years. Why?

White Rock Minerals, founded in 2010 is a zinc-silver-lead-gold exploration and development company with the majority of its focus directed towards the 'historic mining centre' of Ballarat in Victoria, Australia. The company has 2 core projects: Red Mountain in Central Alaska, which is a high-grade zinc-silver-lead-gold asset, and the advanced historical flagship, the Mt Carrington silver-gold project, located in New South Wales, Australia.

Matthew Gordon talks to Matthew Gill, 23rd July 2020

Let's start with its former Australian flagship project, Mt Carrington. Its potential is underpinned by a Mineral Resource estimate of 340,000oz gold and 23Moz silver. The resources are distributed in seven surface deposits, and each deposit has a granted mining lease with developed infrastructure. A PFS was released towards the end of 2017, and now Gill intends to accelerate progress, targeting a DFS and, eventually, a decision on whether to mine themselves, JV or sell. As a relatively small asset, it is probably the reason the market has not been that interested in the company for the past 10 years.

That has changed with the recent move to focus on Red Mountain. Alaska is obviously a well-established mining jurisdiction with good infrastructure and permitting timescales. In terms of the project itself, the Red Mountain project has a Mineral Resource estimate of 9Mt at a grade of 13% zinc Eq. It is at the advanced-exploration stage and White Rock Minerals thinks it has 'significant potential' to produce large-scale zinc-silver-lead-gold-copper discoveries whilst extending the known zinc-silver-lead-gold deposits at both West Tundra Flats and Dry Creek. The company has announced that it is going to focus on going after the gold component. Why not? Most gold companies are riding the wave at the moment and money is dripping down into explorers.

Since 2011, the share price had been on a downward trajectory. Value has now been driven back into the stock courtesy of the gold anomaly at Red Mountain. More on that later. How is Gill going to continue to drive value back into the stock? How will he combat a potential overhang and what can long-suffering investors look forward to with the change in strategy and the new promotional zest?

White Rock Minerals listed with the Mt Carrington project as its signature asset. Gill joined 5-years ago and the company's intention was to bring Mt Carrington into production. In the last few years, the single-project nature of White Rock Minerals became increasingly obvious, with very little excitement in the market. As a consequence, the company recognised the need to find another story or risk being left in the sidings. Red Mountain became a priority. In the last few months, it has been "the gamechanger for the business."

When it was acquired, Red Mountain was a 15km2 land package with a 127 drill hole database. In 2017, this database was given to independent geological experts to produce the aforementioned maiden resource. It is a zinc-silver VMS deposit. in 2018, White Rock Minerals raised money and conducted its first drill programme. In 2019, the billion-dollar Sandfire Resources (ASX: SFR) became interested, participating in a second season US$8M JV drill programme that White Rock Minerals served as the manager of. However, earlier this year, Sandfire Resources withdrew from the JV. Is this exit something that should concern investors?

Towards the end of the company's work last year, it discovered a gold anomaly. Earlier this year, White Rock Minerals set about trying to raise US$2M to test the gold anomaly, but now it has been able to tuck away US$15M to explore the gold anomaly because of the huge momentum within the gold space right now. Some credit must be given to the decision to take on Quinton Hennigh as a technical advisor. Hennigh's reputation has meant that he has been paid to sit on and advise to multiple boards. He is also CEO of Novo Resources. His reputation and access has allowed White Rock Minerals to reach new capital pockets in North America. Some "major shareholders" were brought in via interest in Red Mountain in 2018, but the real turning point has been the discovery of the gold anomaly over 15km2 in a highly-prospective mineral belt, the Tintina gold belt, which hosts numerous +10Moz gold mines. Now, they need to go through the process and deliver real results to show the scale of what they think they are dealing with.

Looking forward, there is plenty of technical work to do before Red Mountain can get off the ground. Gill wants to see Mt Carrington get approved, so it can enter the 12-18-month construction and commissioning phase. It can then be sold or brought into production, and hopefully provide cash for the Red Mountain project. With cash in the bank today and a positive gold market, Gill does not need to rush to a decision with Mt Carrington.

Company Website: https://www.whiterockminerals.com.au/