Power Metal Resources (LSE:POW) and its Australia gold JV partner Red Rock Resources (LSE: RRR) will be well known to UK investors.
Each has seen its share price triple in the last six months. And yet, with market caps of £32 million and £11 million respectively, there remains a strong argument that both are still cheap given their global portfolio of work.
The most highly-rated of POW and RRR’s opportunities is their 50-50 joint venture project Red Rock Australasia (RRAL). This is focused on developing what could be a series of world-class discoveries in Victoria, Australia’s newest gold hub.
Under the RRAL banner, the pair have 13 licenses in application in the area around the long-producing Ballarat mine. Ballarat is an anchor for the region, maintaining an annual production of between 40,000 and 50,000 ounces of gold in since production kicked off in Q3 2011.
Ballarat, of course, is also just down the road from the Fosterville project. As readers will likely be aware, Fosterville kickstarted south Australia’s precious metals revolution when owner Kirkland Lake announced the discovery of one of the highest-grade gold resources on earth at the asset.
It’s understood that the Ballarat trend lies on a similar structural setup to the 2.5Moz Swan-Eagel orebody that underpins Fosterville.
Bottom line is, this is Australia’s premier gold belt.
Investors and shareholders have been champing at the bit for RRAL’s Victoria gold projects to get moving, but the wheels of Victoria’s government have turned slowly amid the pandemic.
With the state locked down for most of the last 12 months, progress on the license applications has been less rapid than either Power Metal or Red Rock would have liked.
But we heard on 2 February 2021 that RRAL had successfully won three licenses across substantial five-year periods. Blue Whale, Blue Chip and Blue Ribbon together cover 215km2.
And with ten more licenses in application, there appears to be no end to the potential riches on offer here.
Now the key is for POW and RRR to get on the ground in Victoria and to start marshalling that vital data to identify potential drill targets.
The way data was handled even ten years ago is a world away from how it works now. Back then, it would be entirely possible to miss an asset, but that happens so much less frequently now.
Modern sampling techniques and 3D modelling really have revolutionised the industry, allowing smaller firms to compete on a level playing field with the largest gold players in the world in many respects.
There are a clutch of ASX-listed miners all vying for the licences that RRAL already have in hand. That adds a superb amount of value to the JV and elevates this partnership to a new level. Barely a month goes by without some new discovery being reported in Victoria.
We need only look at the likes of Navarre Minerals, which has just a single 122km2 tenement under its control and reported strong maiden drilling results from its Ballarat prospect in early February 2021.
RRAL has licences granted that almost double that area, and another ten in the works. It’s no wonder investors are turning their attention to Power Metal Resources and Red Rock Resources.
Author: Mark Sheridan
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