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Alice Queen Takes Over Viti Mining

Viti Mining will continue to manage the Fiji assets for Alice Queen, in an agreement where the purchase price was said to be confidential in nature.
13 Mar 2021 13:21
Alice Queen Takes Over Viti Mining
Alice Queen managing director, Andrew Buxton and Viti Mining executive chair, John Sanday.

Alice Queen (AQX), an Australian mineral exploration company, has signed a binding, conditional share sale agreement for the acquisition of Viti Mining in Fiji.

The announcement on the Australian Stock Exchange means Viti Mining will own title and right of repossession until the purchase price is paid in full.

Viti Mining will continue to manage the Fiji assets for Alice Queen, in an agreement where the purchase price was said to be confidential in nature.

Under the agreement, the company will acquire all the shares in the Fiji-domiciled exploration corporation, Alice Queen said in a statement released on the Australian Stock Exchange.

Viani site in Vanua Levu.

Viani site in Vanua Levu.

Two prospecting licences 

Viti Mining was last week granted two prospective special prospecting licences, for mineral exploration sites at Nabila, 40 kilometres from Nadi, and Viani, in Cakaudrove, Vanua Levu.

Through the acquisition of Viti Mining, Alice Queen will obtain the right to explore the Nabila and Viana licences, the statement said.

The Nabila licence hosts the Faddy’s prospect and the historic Mistry Mine, which may have produced 746 ounces of gold from 1720 tonnes at an average grade of 13 grams per ton up until 1958, Alice Queen said.

Nabila was previously explored by several companies, including Emperor, Climax, Millennium and Geopacific Resources.

The Viani licence is a greenfields project, Alice Queen said.

A greenfield project in exploration terms refers an underexplored area with only little preliminary work completed, but is enough to give geologists a basis upon which to theorise possible mineralisation models.

The project has undergone significant work in the past, throughout the 1980s and 1990s.

Previous exploration at Viani returned positive gold assays, boding well for future exploration under Alice Queen, the Australian mineral exploration company said.

Senior geologists 

The company’s Fijian exploration team will be led by its chief technical advisor, John Holliday, and his former colleague, Patrick Creenaune, who were senior geologists with Newcrest and who have both done extensive exploration work in Fiji before.

Alice Queen’s corporate affairs in Fiji will be led by John Sanday, a local investment banker and former national rugby player.

Alice Queen’s managing director, Andrew Buxton, said it took two two years working with the team on the ground to secure the two Fiji assets.

Given Alice Queen’s progress with Horn Island St Barbara joint venture in Torres Strait, Australia, and a scoping study launched to assess the economics of a future operation in respect of Horn Island Resource, the company said it believe it was perfectly positioned to take advantage of the highly prospective Fiji assets and create further value for all shareholders.

Prospective mineral exploration sites in Fiji.

Prospective mineral exploration sites in Fiji.

Fiji’s potential 

Viti Mining said the potential in Fiji’s mineral exploration sector was enormous, given the luxury of geographical advantage in location.

“Fiji is located in the middle of the mineralogically abundant area in the world, the so-called Pacific “Rim of Fire” where vast and large deposits of valuable minerals occur,” Viti Mining executive chair, Mr Sanday, said.

“From a mineral exploration point of view, Fiji holds vast potential.

“It is important to note that I am talking about the mineral exploration asset class as distinct from the mining asset class, let me explain:”

The exploration asset class comprises companies that carry out the initial exploration to identify good mineral tenements that have strong potential to be discovered as a mineable or a world class  mining project, Mr Sanday said.

Map of the Nabila mineral exploration site from Mistry Mine and Faddy’s Prospect.

Map of the Nabila mineral exploration site from Mistry Mine and Faddy’s Prospect.

Juniors

“These are usually called “juniors”, who are the risk takers that spend enough money to identify a potentially mineable deposit.”

Upon identity of a mineable deposit, these are either on-sold to the senior end of the industry, the mining companies, Mr Sanday said.

“They have the engineers, geologists, metallurgists and the vast cash resources available to bring a potential project into a full scale mining operation,” he said.

“It is important to discern the difference in these two asset classes within the same industry.

“When I say asset class, I am talking from an investment point of view.

“It is a sub sector within the industry in which we can invest in.”

Given that junior exploration companies operate in the very risky end of the investment spectrum, they are usually high risk investments, he explained.

“But if the junior exploration company has good, proven geologists who can do the work to define a potentially large mineable resource within a tenement, it places itself out in the marketplace as a potentially worthy, “high risk” investment,” Mr Sanday said.

All it needs is for the junior company to intersect a drill hole containing good grades of minerals, and proves up the mineralisation theory, then it will send the share price soaring.

The play

“That really is the play.

“The same could be said of the opposite, if the drilling doesn’t intersect anything exciting then the share price won’t rise and that could potentially be a failure.”

Mr Sanday said: “As an example, a junior exploration company is listed on the Australian Stock Exchange, and carries out exploration in Fiji.

“It has been working on a tenement or a prospect in Fiji for a year or so, and has developed a theory for the way the gold has been deposited.

“They then decide to invest in several drill holes to prove the existence of the ore-body deep down in the earth to prove the theory they have developed.

“Let’s then say that prior to drilling, the share price is A$0.05cents(FJ$0.07)/share.

Game changer

“If the drill hole intersects a vein of gold mineralisation that supports the theory, it immediately changes the whole perception around this junior exploration company.

“This will have the effect of increasing the share price.”

When the share price rises to say $7.5cents/share, you would have gained a 50 per cent growth in value of your initial investment, Mr Sanday said.

Either way

But if the drill hole intersects a very thick vein carrying very high grades, the share price could end up increasing like 300 per cent, as an example,he said.

“It could also end up the other way, where the drill holes misses everything,” Mr Sanday said.

“This is where the quality of the people involved becomes important.

“It is important that I set this out clearly so that we stay focused on the investment aspects of this first, before we dived deeper.”

Feedback: frederica.elbourne@fijisun.com.fj



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