Why A-list gold investors think Arika has major discovery potential
That has worked in Arika Resources' favour with drilling about to get underway
We chat to Lowell Resources Fund CIO John Forwood about why he likes the stock
Market volatility has propelled gold to historic highs in both US and Australian currencies, bringing renewed interest to junior explorers.
We're ~22% higher since the beginning of the year, and although the excitement hasn't been reflected in the share prices of all small-cap explorers, it has shone a light on those increasing investment in new projects via exploration and drilling programs.
Arika Resources (ASX:ARI) is one example, having recently secured $5 million in funding to scale up drilling efforts from 6000m to 10,000m across its Kookynie and Yundamindra assets in the heart of WA's Goldfields, covering aircore, reverse circulation and diamond drilling.
The combined program, set to begin in early June, will largely focus on Yundamindra – a promising area that has flown under the radar of major companies.
Around 45,000oz was mined at Yundamindra at grades of over 19g/t up to 1970, but it remains under-explored, with 97% of the drilling in the 1980s and 1990s only targeting shallow oxide resources less than 80m from surface.
The upcoming campaign will test around high-grade intercepts at multiple targets including Pennyweight Point in the project's eastern corridor.
Shares in the company surged 50% after diamond drill results at Pennyweight Point were reported in April, which included 35.76m at 2.14g/t gold from 104.27m as well as 13.46m at 5.28g/t gold from 111.40m.
Yundamindra is within a stone's throw of AngloGold Ashanti's Sunrise Dam and Gold Fields' Wallaby, two huge multimillion-ounce gold mines that have been in production for ~30 years, as well as major players like Genesis Minerals (ASX:GMD) and Northern Star Resources (ASX:NST).
The project is also along strike to the south of the $44m Guyer JV between Iceni Gold (ASX:ICL) and Gold Road Resources (ASX:GOR), part of the 15km-long Guyer gold trend that hosts ICL's 14 Mile Well gold asset.
At last month's Resources Rising Stars Gather Round conference, Arika outlined its pursuit of a multimillion-ounce discovery, a goal that caught the attention of Lowell Resources Fund (ASX:LRT).
Lowell chief investment officer John Forwood, the expert behind our Ten Bagger column, told Stockhead what particularly piqued his interest in Arika Resources was the prospective geology of both projects.
'We're pretty familiar with the areas that the assets are in, we have an investment in Carnavale Resources (ASX:CAV), which is Arika's immediate neighbour at Kookynie, so we know and like the geology,' he said.
'I've also been following Wade Johnson at Iceni Gold, which is immediately north of Arika's Yundamindra asset and really, really like the geology there – in fact, it looks like the Guyer trend, which Iceni has, trends straight down into Yundamindra.'
Forwood said another interesting aspect of the project was the geology in the southern part of the asset, which represents a high-priority, complex structural target that has never been effectively sampled by historical surveys.
'We're very interested in new areas, and I the think bigger picture with both Arika's assets being in the heart of the Goldfields (is) if you find something in that region there is going to be a lot of interest,' Forwood added.
'Arika have had some really good hits already from the diamond drilling at Pennyweight Point so I think they are well on their way,' he said.
'Both projects are big enough to be standalone projects and hold the potential to be toll treated.'
Solid backing and well-funded
Leading the Arika team is managing director Justin Barton, who brings over a decade of experience at the Big Four accounting firms across Australia and Europe, where he advised top-tier mining, energy, and financial institutions globally.
'Arika's current exploration manager, Steve Vallance, is an impressive guy and has the right approach,' Forwood noted.
'We really like to see Roger Steinepreis as the chairman there; he has done well with companies in the past including Apollo Consolidated Limited – which was the subject to a takeover by Ramelius in 2021 – and he's putting his money where his mouth is there with Arika.
Forwood also likes the fact Arika's tenure sits on granted mining leases. While it doesn't mean permitting is done and dusted, it significantly shortens any production timelines should a major, or even modest, gold discovery be uncovered.
'The high gold prices, which are currently sitting around Aussie $5000 an ounce or thereabouts, provides explorers with the potential to monetise, smaller and lower grade deposits," Forwood said.
'It really incentivises explorers to go out there and have a look and they don't necessarily have to find a million ounces, they might only find 100,000oz or 10,000oz and if it's of a reasonable grade then it's something that they can make money from.
'Now that Arika are well-funded and raised five million during the last placement that we participated in, I think they've got all the elements there.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
ABC News
7 hours ago
- ABC News
Uncertainty still surrounds government pay deals with police, teachers, and nurses and midwives
Most people know at least one nurse, midwife, police officer or teacher. They make up a tick over 63 per cent of Queensland's key frontline workforce, and right now the state government is negotiating new pay deals with all of them. Griifith University industrial relations expert Ben French said dealing with three such influential groups all at once put the government in a "tricky spot". The situation is a result of enterprise bargaining agreements "rolling over" during the COVID-19 pandemic. "Now they've all come up at the same time for the new government," Dr French said. It's been tough going for negotiators. The police union has agreed in-principle to a deal, but the government is in conciliation with both the nurses' and the teachers' unions in front of the Queensland Industrial Relations Commission (QIRC). In early August, teachers across the state went on strike for the first time in 16 years. Earlier in the month, nurses and midwives took industrial action by refusing to do tasks not related to critical care. Pandanus Petter from Australian National University's School of Business and Politics said as opposition leader, David Crisafulli was keen to paint himself as someone who would not repeat "the mistakes of the Newman era". "He positioned himself as someone who was not going to radically cut the public service," Dr Petter said. "He was saying, 'You know, what I want to do is empower the public service.' The government has offered an 8 per cent raise over three years to the police and teachers, while nurses and midwives have been offered an 11 per cent wage rise. This "fairly prescriptive model" has come with various add-ons and extras for each industry, Dr French said. He said these one-off payments "that are not part of the actual increase" are a way the government can save money down the track. "If you get a pay rise and you get an increase, it's on the base rate … the next time you come around your base rate is higher and you can build on that," he said, adding bonus payments did not feed into employees' super or overtime. Already those differing extras have caused friction. The Queensland Nurses' and Midwives' Union (QNMU) publicly derided the government for offering some police officers an $8,000 retention bonus over two years. Secretary Sarah Beaman said it was "outrageous" that the government had already struck a "better deal" with the police union after months of negotiating with the QNMU. The nurses and midwives EBA nominally ended on March 31, while the teachers and police ended on June 30. "Does this government have a problem with nurses and midwives?" Ms Beaman asked. Dr French said none of the three deals were set in stone. The state legislation allows for six months of negotiations from the day the EBA nominally ends or three months from the beginning of conciliation. After that, the parties can apply for arbitration, where the QIRC will decide what's fair. In the case of nurses and midwives, who are chasing a 13 per cent wage rise they say will deliver "nation-leading pay", the last scheduled conciliation meeting is September 2. At the behest of QIRC deputy president John Merrell, the QNMU agreed to pause industrial action until then, but said they would take further steps if negotiations failed. The Queensland Teachers' Union sent a letter to members on Thursday, seen by the ABC, confirming they had given the government until the end of the month to come up with a better deal or risk further strike action. QTU vice president Leah Olsen said more work stoppages would be a "last resort" option for the union, adding the union's members did "not take industrial action lightly". "Further strike action during school hours can be avoided if the government delivers a package members see value in," Ms Olsen said. As for the police, while there is an in-principle deal in place, union members still have to vote on whether to approve it next month. "My guess is they will vote it down," Dr French said. Both Education Minister John-Paul Langbroek and Health Minister Tim Nicholls have expressed their commitment to getting deals over the line through the conciliation process. Mr Langbroek said the government met with QTU negotiators 18 times over five months before the conciliation process began. The QNMU said they had met with the government for a total of more than 150 hours before they took industrial action last month. Dr Petter said with an election just gone there was little political risk for the government to come off as "tough but fair" in this round of negotiations. However, if three-year deals were signed all round, the next time they would be negotiating would be in the lead up to the 2028 election.
News.com.au
8 hours ago
- News.com.au
Qantas to be given penalty for unlawfully sacking hundreds during Covid-19 pandemic
Qantas is braced to find out how much it is expected to pay in penalties after it unlawfully sacked more than 1800 ground staff. The airline was found to have acted unlawfully three times when it fired 1820 staff in favour of outsourced contractors during the height of the Covid pandemic. While an earlier compensation hearing before Justice Michael Lee found Qantas should pay $120m to impacted workers, a further three-day hearing May sought to decide the additional penalty Qantas must pay for the 2020 decision. The maximum penalty Qantas can be ordered to pay is $121m, on top of the compensation fund that is now in the process of being administered to workers. Since Justice Lee reserved his decision in May, many sacked Qantas workers have anxiously awaited the final figure. On Monday, he is expected to reveal the full amount, which should be well into the millions. The Federal Court earlier found that Qantas had acted against protections in the Fair Work Act in its outsourcing and was partly motivated by a desire to prevent industrial action. The airline appealed the decision to the full bench of the Federal Court and later the High Court, both of which were unsuccessful. After losing the appeal, the union and Qantas went to mediation to determine how much Qantas would have to pay the outsourced workers for economic losses linked to lost wages. TWU secretary Michael Kaine told media ahead of the hearing the airline's decision to get rid of a 'loyal workforce' was 'appalling' and the 'biggest case of illegal sackings in Australian corporate history'. 'The penalty to Qantas must reflect this and send a message to every other company in Australia that you cannot sack your workers to prevent them from using their industrial rights,' he said. Meanwhile, Noel Hutley SC told the court in May that Qantas should pay the maximum penalty given its decision was the 'largest ever instance of the contravention of the Fair Work Act'. He said Qantas was faced with an 'once-in-a-lifetime opportunity' during the pandemic to save more than $100m per year by outsourcing workers and were driven by the 'temptation of the potential to produce a massive profit'. However, Qantas barrister Justin Gleeson SC said any penalty close to the maximum would be 'manifestly unfair'. 'Qantas has accepted the seriousness of its conduct,' he said. 'The court can and should impose a significant deterrent penalty. However, it is in effect a first contravention (of the Fair Work Act).' On the first day of the hearing, Qantas people manager Catherine Walsh took the stand and issued an apology on the airline's behalf. 'I want to reinforce that we are deeply sorry, and we apologise for the impact on the workers, the TWU (Transport Workers Union), to the court for their time and to the family and friends that felt the impacts, we are deeply sorry,' she said. However, the airline was later criticised for failing to call Qantas chief executive Vanessa Hudson during the hearing, and instead calling Ms Walsh, who was not employed by Qantas at the time of the sackings. 'One would have thought if you were truly contrite, you would put someone in the witness box who was there at the relevant time,' Justice Lee said. The TWU is seeking a large majority of the penalty and also argued affected workers should receive further compensation. The funds may otherwise will go directly to the Commonwealth.
ABC News
8 hours ago
- ABC News
Short-term rental advocates say restrictions hurt tourism, not help housing
Advocates of short-term rentals say regulations in the sector are shifting the blame away from governments and towards property owners. Short-stay rentals, typically associated with websites like Airbnb and Stayz, have drawn criticism for taking properties away from the long-term rental market. In other parts of the world, jurisdictions are putting restrictions on short-stay accommodation, including in New York City and Barcelona, amid housing shortages. But research from the University of South Australia has claimed restrictions and bans have done little to help housing stocks. Tourism expert and study author Peter O'Connor said jurisdictions that had banned short-stay accommodation failed to see any meaningful growth in housing access. He said the main consequence was limiting tourism accommodation, in turn increasing prices. "If you reduce the number of short-term rentals which are available, one of the things you do is make it more difficult for tourists to find accommodation," Professor O'Connor said. "Here in Australia, tourism is our number one service export and it has a lot of knock-on effects in terms of the local community and spending in bars, restaurants and shops." A South Australian parliamentary committee is looking into the short-stay accommodation sector, including possible regulations on short-stay rentals. Wendy Roeters owns two homes in Mount Gambier which she rents out for short stays. She said the sector was needed in regional areas where workers travel and stay for extended periods and where there were fewer large hotels. "For companies, the short-term stays are the better option," she said. "You get a lot of people for the hospital, like doctors and nurses. I've just had a nurse stay for three weeks. "You'll have work crews who might be working on construction who might be doing it for a period of six months." Ms Roeters added it was unfair to penalise short-stay property owners for there being a wider shortage of housing. "I can understand that the government wants housing, but that's not the responsibility of people that have a property, that's the government's responsibility," she said. Property reform advocacy group Grounded produced its own report into the short-stay sector in Australia, released in June. It found the profits on short-term rentals were 81 per cent more than if the property was placed on the long-term market in 13 of Australia's busiest tourism towns. Grounded managing director Karl Fitzgerald said it was clear short-stay accommodation was impacting local housing supply. "It's more supply coming out of the long-term rental market and out of the ownership market," he said. "When government is talking about supply on every front, it's strange that Airbnb is not considered as a factor. Mr Fitzgerald said a plan to limit the growth of short-stay accommodation would be more effective, such as a "cap and trade" scheme, which would give licenses to property owners. "That's where having at least a licensing system that regulates the growth and the supply and perhaps caps it and reduces it over time until there's enough funding to channel some of the profits away from Airbnb," he said. "Use that money to fund long-term affordable housing under a community land trust model." Professor O'Connor argued short-stay accommodation had become a "quick fix" for governments in favour of more complicated plans to ease the housing crisis. "It's a lot easier for a state government or a council to introduce a regulation that limits the number of short-term rentals than it is to introduce some way of encouraging the building of new houses," he said. South Australian Greens MLC Robert Simms is leading the state's parliamentary committee into short-stay accommodation. He agreed the sector was not solely to blame for the state's housing crisis, but said it still needed regulation. "I think there's no doubt that short stay is here to stay, but the question is whether or not we've got the balance right," he said. "It is concerning that people might be running a property that is, in effect, a business, and yet they might be paying at the same rates as their neighbour who is living in a private residence. "That doesn't really seem fair, and that's why I think there's a level of community interest in the idea of regulation of the sector."
