This week Tertiary announced a further copper project in Nevada. With a portfolio of base and precious metals the current market cap presents an interesting investment proposition
Digressing slightly from the subject of this blog, late last year I came across a company called Alien Metals (UFO). They have an interesting portfolio of projects including Iron Ore, copper gold and silver. They have a fair weighting on silver in Mexico and the Iron Ore in Australia.
Immediately you can spot that these are considered lower risk jurisdictions not to mention pretty hot commodities. Sadly I pondered too long on this even having spoken to the company. I didn’t think they had a coherent plan so deliberated. The company went on the achieve a 10x share price increase- peaking at £70m Market Cap, today trading c.£35m
What is the lesson from this? The key to this was that the company had a very low (nano-cap) valuation of a few million and with commodities experiencing a major up-lift the company and it’s projects appeared under-valued.
Often we see low cap mining companies that have been beaten down to valuations by comparison that seem incredibly cheap. Tertiary appears to be another, here’s a quick summary:
Now let me just say, I’ve taken a smaller position in this as a ‘speculative’ investment. I’ve not done in depth due-diligence (yet) on the company and Management as I do with my larger investments where I produce detailed research notes so I see this as a higher-risk, higher-reward play for a shorter-term investment that I will review as the company progresses.
This is a ‘valuation play’ on what I believe to be an under-valued junior mining company that has some interesting project potential namely copper, gold, silver and potential uranium. How do I determine that? Well by comparing to others some sporting market caps £30m+ without any defined resources, like Tertiary, a portfolio of early stage projects but in hot commodities.
This is also why you’ll see me banging on about the likes of Armadale Capital (ACP) who’s valuation is currently a mere £23m yet fully JORC’d, DFS complete, an excellent graphite project with millions of historic drill spend. You can read more on that here and I believe this will be one of my top performers this year.
So what do Tertiary have?
They have a portfolio of six projects in Nevada. Also some interests in Sweden but I’m not going to focus on those. Nevada is considered one of the best mining jurisdictions in the world so from a location perspective a big plus.
Pyramid Gold/Silver Project
The project is located within the Walker Lane epithermal gold/porphyry copper belt with a number of successful mines in operation such as Goldfield (4.2moz)
Previous exploration work in 1980’s focused on surface rock sampling with 43 widespread historical surface samples assayed up to 7.27g/t Au, average 1.3 g/t Au. Soil sampling also completed over an area approx 600x600m. Previous drill hole in 1980 produced 1.52m grading 17.8 g/t Gold.
Company drilling on the Western Line target was successfully completed with an Intersection of 0.55m grading 2.01 g/t Au from 82.6m down hole, confirming that the target zone is gold-mineralised
Following additional soil sampling on two separate anomalies the company will perform trenching work to prioritise drill targets given the potential ore-grades.
Polymetallic Projects
Two projects at an early stage as follows:
Paymaster
Grab samples assay up to 21% Zn, 6.5% Pb, 3.3% Cu, 253 g/t Ag and 0.11% Co with further Chip sample c. 2m @ 15.8% zinc & 95 g/t silver!
Infill soil sampling results awaited with a Drone Magnetic survey also completed.
Peg-Leg
Main target – exposed skarn copper-silver mineralisation in limestone adjacent to granite contact. Outcropping mineralisation assayed 59 grammes/tonne (g/t) silver 1.4% copper, 2.4% lead and 1.8% zinc. Waste samples from old workings assay up to 181 g/t silver, 3.9% copper, 10.1% lead and 1.2% zinc
MT Tobin Silver Project
Located 73km south of Winnemucca in north-central Nevada, Covers large area of hydrothermal alteration 60m wide x 1,200m long, Preliminary sampling from prospectors’ pits returned values of up to 101 g/t silver
Lucky Copper Prospect
Located 96 km northeast of the major porphyry copper mining town of Ely, north-east Nevada.
- 1951 drill hole ended in mineralisation, intersected 20.4m at 0.65% copper to bottom of the hole at 77.7m depth
- Targeting disseminated replacement/porphyry copper mineralisation
The company plan to drill to confirm and extend at depth the copper mineralised drill intersection made in 1951
Brunton Pass Copper Project
A new project in 2021 with 24 mining claims staked and copper mineralisation spread over a 1km x 0.6km target area. Samples collected by United States Bureau of Mines (USBM) contain up to 6.91% copper including a chip sample grading 1.36% copper over 3.66m (12ft) – excellent grades!
The Company’s follow up samples confirm widespread copper mineralisation and include an 8ft channel sample grading 4.66% copper over 2.44m (8ft). In addition, Copper mineralised samples were also anomalous in uranium – large scintillometer anomaly reported
The company have commissioned a drone magnetic survey to further define the exploration programme.
The company also have interests in Flourspar (a strategic mineral) projects in Sweden, these aren’t the feature of my blog but more information can be found on these in their presentation here
Summary
As can be seen, the company have an interesting project mix across copper, gold and silver. All of these commodities have experienced a significant up-lift in pricing with copper particularly of interest as a supply deficit is anticipated.
The company will clearly need to prioritise exploration work with near-term work focusing on the copper and gold projects. The company had c.£600k cash at the end of the financial year which should help progress the projects to the next stage.
I would expect the company will need to raise further funds though for selected drill programmes however the company have eluded in interviews to interest from third-parties where possible JV’s could be struck.
Given the location of the projects being in a very stable mining jurisdiction and the back-drop particularly for copper, gold and silver it may not be that hard to bring in project partners.
The Investment Case
This is pretty straight forward from my perspective. The investment case is early-stage but established exploration across a mix of hot commodities with some interesting results to date that look promising in a first-class jurisdiction where some of the projects sit in established gold/copper belts with surrounding mining operations in place.
The above is appealing if you fancy some early-stage exposure but perhaps what is most appealing is the current Marke Cap at £2.5m which for the license pool seems incredible value for the potential exposure to these commodities,
Given that other company’s with license pools of interesting projects and minimal or no defined resources such as Power Metal Resources and Alien Metals sit at market Caps of approximately £30m, one can see the potential on offer as Management ramp-up the news-flow and get the drill-bits turning!
Management will need to deliver of course!
Disclaimer
Research materials prepared based upon my own analysis and research. Accuracy cannot be guaranteed and research notes should not be taken as investment advice. Please always do your own research.
