New management, renewed focus for Venturex

10th May 2018
VXR

The new managing director of Venturex Resources is determined to unlock the value sitting inside the company (reports MiningNews).

WASM-educated mining engineer AJ Saverimutto joined the company as MD last month.

Saverimutto's appointment is set to give the company some momentum as it progresses its Sulphur Springs copper-zinc project in the Pilbara towards production.

Sulphur Springs contains around 740,000 tonnes of zinc and 230,000t of copper.

A 2016 value engineering study on the project outlined an operation costing A$166 million that would produce 32,000 tonnes of zinc and 12,000t of copper per annum over 12 years.

A definitive feasibility study is underway on an open pit and underground operation for completion by the end of the year and potential cost savings, in areas like the camp, have already been identified.

The value engineering study returned a net present value (8% discount rate) of $338 million and free cashflow of $601 million.

Saverimutto told MNN that at today's higher metal prices, the NPV could be as high as $500 million, with free cashflow rising to $1 billion.

The company is already in talks with potential financiers, which are understandably keen given the lack of Australian development projects around.

"This project will get developed," Saverimutto said.

Saverimutto said if Sulphur Springs was a gold project, its resource would be equivalent to around 2 million ounces at 4 grams per tonne, with planned production of 150,000oz per annum at all-in sustaining costs of about $1000 an ounce.

The company has a market capitalisation of less than $50 million, yet the in-situ value of its resource is around US$4 billion, with further exploration upside.

"A A$50 million market cap just doesn't stack up and that's where I saw the value," Saverimutto said.

Another factor that excited Saverimutto when he was looking at Venturex was the exploration upside of Sulphur Springs.

The company has brought in a new geology manager, Stefan Gawlinski, who was most recently at Golden Grove.

Saverimutto said the company saw Sulphur Springs as having the potential to be a long-life producer like Golden Grove.

Sulphur Springs covers 27km of the Panorama VMS trend, but remains underexplored.

Venturex recently completed a heliborne electromagnetic survey, which defined at least 10 new drilling targets.

The company has completed ground-based EM on two of the targets to the west of the Sulphur Springs resource, which will be drilled shortly.

"We're chomping at the bit to get in there," Saverimutto said.

Phase two of the program will test the prospective contact between the Sulphur Springs and Kangaroo Caves resources, with the third phase to test the little-explored southern portion.

It is the company's belief that Sulphur Springs is only the first of multiple centres of VMS mineralisation at the project.

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