Investors who want to know what happens when you deploy veteran mining entrepreneur Colin Bird in one of the world’s most prolific copper producing regions have two directions in which they can look: the past, and the future.
The past speaks for itself. Colin was instrumental in the development and the eventual sale of Kiwara Resources for a nine-figure sum, having proved a concept, sunk a few drill holes and sold to First Quantum at the height of the market.
Kiwara had ground in Zambia, which alongside the Democratic Republic of Congo on the other side of the border, occupies most of the region known locally and globally in mining circles as the Copperbelt.
Kiwara’s getting on for 10 years ago now, and is beginning to fade from the memories of investors who subsequently went through one almighty mining bust.
But those who want to know how it’s done may yet get an object lesson from Mr Bird himself again, as he positions Galileo Resources (LON:GLR), once solely a fertilizer play, strategically across an area of South Africa with its own admirable track record of copper production.
“It was one of the biggest copper mining areas of the world,” says Bird.
The obvious questions then, are how much copper is left and how does Galileo plan to get it out?
It’s a bit early to answer that second question in detail, but the first question is straightforward enough, and just goes to show that as times change, so do opportunities to turn a dollar or two.
“We found that the cut-off grade used by the earlier miners was 0.8%,” says Bird. That may not mean much to non-specialists, but the salient point is that nowadays copper miners can mine economically at grades much lower than that.
“The average grade of copper mines in the world has dropped from about 1% to about 0.6%,” explains Bird.
It’s as simple as that: all of a sudden, the Galileo ground became highly prospective.
“We extended our search of the area,” continues Bird, “and we found more higher grade areas. I think we’re onto something, I really do.”
Of course, working up a prospect like Concordia isn’t easy when money is as hard to come by as it has been in the mining sector over the past couple of years.
But here Galileo has an ace up its sleeve. Instead of spending large amounts of hard currency drilling up ground that’s already been gone over before, Galileo can fall back on old data gathered by former owners between 1960 and 1990.
“We’ve got a massive database and we’re just interrogating that,” says Bird. “We’re modelling the lithological package in discrete units. Once we’ve created our model, we’re going to drill.
That will probably require new money to come into the company, but for the time being the company’s not too badly off.
“There’s RND3.5 mln in the bank,” says Bird, “and I try not to do any placements.” As a big shareholder himself, Bird’s as worried as anyone about dilution and about getting the maximum bang per buck.
The next news is therefore likely to state that the model holds together, and that a new resource is in the pipeline.
Certainly, by October Bird is hoping to have some idea of tonnes and grade as well as an emerging mine plan. There’s likely to be news on the net present value of Concordia by then too, and Bird has some confidence it’s going to be good.
“On the global drawing board of emerging copper projects, this will be in the top two or three,” he says.
If that turns out to be correct, it will only go to confirm the investment potency of mixing Colin Bird and copper-rich jurisdictions.