Alien Metals Limited (LON:UFO) Executive Chairman Bruce Garlick caught up with DirectorsTalk to discuss the proposed acquisition of the Georgina Basin Iron Oxide-Copper-Gold Project, the company’s strengthened management and technical team, its funding position, and its wider project-generation strategy.
Q1: You’ve announced the proposed acquisition of the Georgina Basin Copper-Gold Project. This acquisition appears to represent a significant strategic shift for Alien Metals into copper, uranium IOCG exploration. What attracted you to the Georgina Basin Project, and why do you believe it has the potential to become a transformational asset for shareholders?
A1: This is a great opportunity for Alien. Copper is certainly taking off in world markets, etc., and this area is extremely prospective. We have the Mount Isa mine, which was a former zinc, lead, and silver mine, it’s in the same belt, and in this particular area, there are some really big gold operations. I’ve actually worked just near Tennant Creek, I was there for about four months, so I actually know this area, or part of it, in the Northern Territory. It’s elephant country, as they describe it.
There are some really huge opportunities that we are fortunate to have the opportunity to exploit. It’s a great jurisdiction, and we have a really, really diverse portfolio of assets now, including silver, as well as PGMs over in Western Australia, plus the iron ore. So, it’s a fantastic addition to our current basket of commodities.
Q2: A considerable amount of technical work has already been completed, with more than 90 conceptual IOCG targets identified and three described as ‘drill-ready’. What are the key milestones that investors should expect over the next six to 12 months, and what would success look like?
A2: Well, there’s going to be a lot of activity on these tenements.
The current advisers; the engineers and geologists, etc., we’re engaging them for a further 12 months and they’re going to be assisting us in developing these targets. I think investors really will be expecting that we get ourselves into a situation where we can actually sign contracts with drilling companies and start drilling. We don’t have to do this from day one and we’re going to be carefully planning our strategy going forward to start exploiting especially the three targets that we currently have.
There is a significant amount of geophysics and aeromagnetics that has actually been undertaken by the previous owner, and we’re going to be using and interpreting all of that data.
So, I think certainly the investors can be very, very excited about what we’ve got in the future for the next 12 months.
Q3: Now, alongside the acquisition, you’re bringing Vincent Fayad in as an Executive Director and adding an experienced technical team. How do these management changes strengthen Alien Metals’ ability to execute its strategy and unlock value across the wider portfolio, not just Georgina?
A3: Vincent Fayad is a really experienced financial analyst and an M&A specialist as well. He works with other people that I do know, Tony Leibovitz, and Tony is a very highly respected person in Australia. They both live over in the east, in Sydney. There’s plenty of access to funds over there, potential joint ventures, and that all augurs well for not only this new Georgina asset that we’ve got, but also for our current assets, especially the iron ore.
So I’m really excited and very, very happy to have them on board. It’s extremely difficult to get such high-calibre people and for me, it’s all about people in the organisation. Obviously, you’ve got to have the right commodity grades, etc., but it’s so important to have good technical people, as well as M&A people like Vince. So, yes, we’re very, very privileged to have them.
Q4: The announcement states that the initial exploration programme is expected to be largely funded through existing resources, while the convertible loan repayment has been extended. Can you just remind investors of Alien’s cash position, funding flexibility, and broader asset base, and just explain how well the company is positioned to deliver its work programmes without any need for near-term equity funding?
A4: People don’t actually understand what Alien’s got; I do. We have two free-carried joint ventures, one with West Coast Silver, and I happen to be the Executive Chairman there, so I know a fair amount about West Coast. Also GreenTech Metals, and GreenTech Metals are actually our neighbour.
I’ll talk about West Coast first. Alien’s got 30-odd million shares in West Coast, the share price is 10 cents, and it’s been as high as 35 so certainly there’s a fair amount of what I would say potential growth in that shareholding.
GreenTech as well currently is 6.6 cents. They’ve got about, I think it’s, 39 million shares there and GreenTech are about to start drilling their PGMs. As soon as you start doing that, the share price should go up. And the same at West Coast.
We’re busy doing our silver drilling at the moment and obviously, hopefully we have some success there. I guess Alien will be expecting that the share prices of both companies will increase. I suppose the potential there is to sell down some of the shares as required and the actual cash burn in Alien is not that high, we have the financial situation well under control. The con note has been extended to the 31st of December. That’s purely just to give us some additional, I use the words “cash-flow headroom”, we could have paid it off, but we decided it was prudent to retain it. So, we’re very, very well positioned.
In terms of the value of both these joint ventures, Alien owns a 30% equity stake in both joint ventures and there are always people around who want to come and take part in that joint venture or invest in it. So, we may divest part of it, or we may not. We have all this potential.
Also, we’ve got the iron ore. The iron ore is strategically in such a great situation, or great area. I was there about three or four weeks ago and there’s a lot of activity happening in the iron ore sector. So, it’s just very exciting for us at the moment.
Q5: Looking beyond this transaction, as you pointed out, Alien now has exposure to iron ore, copper, uranium, silver and PGMs, and that’s through a mix of wholly owned projects, joint ventures, and equity holdings, as you pointed out. How would you see the company evolving over the next couple of years and what should investors expect from Alien’s project-generation and monetisation strategy?
A5: Well, my aim for Alien would be to become a producer. In my opinion, you can explore, you can continue to explore, and you can divest, and you can make a significant amount of money through doing that, and certainly, the tenements up in the Tennant Creek area lend themselves to that.
Ideally, if you can become a producer, I think that should be the goal of the company and the investors. I’ve been involved in quite a few mining projects, gold as well as base metals and PGMs and obviously, provided you get it right, you can really make significant sort of money out of those commodities.
So, it really augurs well for the future, in my opinion. We’ve got a great technical team, a great management team so we’re really very well poised to succeed in the future. I’m very happy to have been able to assist the company in achieving these goals.
