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Doug Bright
Zenith Minerals has thrown open its doors to a strategic review, signalling it is ready to weigh up a range of corporate and asset-level options as it looks to stem what it sees as a widening gulf between its share price and the underlying value of its portfolio.
Management says the formal process will assess a broad menu of alternatives across its gold and lithium assets, spanning corporate initiatives, funding, joint ventures and development pathways.
The company has appointed Argonaut as financial adviser, while emphasising its activities will continue as usual during the review.
Zenith’s board believes the market is not fully pricing in the current scale and strategic position of its flagship consolidated Dulcie gold project in WA’s Southern Cross–Forrestania belt, including its granted mining leases and what it calls “development optionality”.
The Dulcie project has rapidly achieved a significant critical mass, with a 675,000-ounce inferred resource reported on granted tenure across its consolidated six-kilometre-long mineralised corridor.
A recent important addition to the overall Dulcie picture is the recent acquisition of a mining lease, which has until now separated the northern and southern parts of the Dulcie tenure. The dividing ground comprises an untested 600m-long section of the key mineralised trend.
The gold signature through Zenith’s tenure on both north and south sides of that intervening lease, including its existing resources, is remarkably continuous.
With such continuity inferred to extend through that intervening 600-metre stretch of ground, Zenith believes it may contain additional resource potential, justifying the company’s move to bring the full 6km-long Dulcie trend under its control.
The current Dulcie gold project contains a JORC-compliant 21.3 million tonne inferred resource at a grade of 1.0 gram per tonne gold for 675,000 ounces of gold across the entire consolidated six-kilometre-long mineralised corridor.
Zenith has also flagged it has received inbound approaches and expressions of interest in recent months and will engage with parties under confidentiality and standstill arrangements. However, it has stressed there is no certainty the upcoming review will lead to any deal.
The planned review comes after Zenith fired up a fresh drilling program at Dulcie in early April, targeting near-resource zones for additional gold ounces and a potential grade uplift, while also planning to drill the newly acquired mining lease and to chase regional upside across its wider Split Rocks lithium project tenure.
With drilling already on the hunt to augment Zenith’s existing combined resource, established infrastructure access and development studies underway, Zenith believes Dulcie represents a scalable and strategically positioned development opportunity in one of WA’s premier and active gold districts.
And with its strategic advisers now on deck, the next few months should give the market a clearer read on what Zenith’s Dulcie build-out is really worth – and which pathway the company picks to unlock it.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
