Zenith weighs corporate pathways for emerging WA gold hub
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Doug Bright
Zenith Minerals has opened the door to a strategic review, signaling it is prepared to weigh a range of institutional and asset-level options to address what it sees as a widening gap between its share price and the fundamental value of its portfolio.
Management said the formal process will consider a broad menu of alternatives covering corporate initiatives, financing, joint ventures and development pathways across gold and lithium assets.
The company appointed Argonaut as financial advisor and emphasized that its operations will continue as usual during the review.
Zenith’s board believes the market has not fully priced in the current scale and strategic location of its flagship consolidated Dulcie gold project in WA’s Southern Cross-Forrestia belt, including the mining leases granted and what it calls a “development option”.
The Dulcie project has rapidly reached significant critical mass, with a reported inferred resource of 675,000 ounces over the given tenure in its consolidated six-kilometre-long mineralized corridor.
A significant recent addition to the overall Dulcie table is the recent acquisition of a mining lease separating the northern and southern parts of the Dulcie tenure. The divide floor includes an untested 600 m long section of the basement mineralization trend.
Zenith’s golden signature, including its available resources, has been fairly continuous throughout its tenure on both the north and south sides of the intervening lease.
With such continuity, understood to extend across the 600 meters of intervening land, Zenith believes it could contain additional resource potential, justifying the company’s move to take control of the entire 6km Dulcie line.
The current Dulcie gold project contains 21.3 million tonnes of JORC compliant inferred resources at 1.0 grams per tonne gold for 675,000 ounces of gold along the entire consolidated six kilometer long mineralized corridor.
Zenith also said it had received incoming approaches and expressions of interest in recent months and would communicate with the parties in accordance with confidentiality and standstill arrangements. However, it was emphasized that he was not sure that the upcoming review would lead to any agreement.
The planned review comes after Zenith launched a new drilling program at Dulcie in early April; This program targets areas close to the resource for additional gold ounces and a potential grade increase, while also planning to drill the newly acquired mining lease and pursue regional uplift over the tenure of the broader Split Rocks lithium project.
As drilling continues to increase Zenith’s existing combined resource, as well as established infrastructure access and development, Zenith believes Dulcie represents a scalable and strategically located development opportunity in one of WA’s leading and active gold districts.
With strategic advisors in place, the next few months will give the market a clearer read on how valuable Zenith’s Dulcie structure actually is and what path the company has chosen to unlock it.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
