In a market crying out for more copper exposure, it’s not surprising that Lux’s initial public offering, which raised A$15 million at A25c per share, was oversubscribed.
The company, chaired by former Red 5 managing director Mark Williams, holds two exploration projects in Alaska with base metals potential.
The flagship Baird project, in Alaska’s Ambler Mining District, has seen limited historical work but has returned high-grade copper and zinc.
There has only been around 2800m of drilling completed across two programs in 1966 and 2012 at the Omar prospect and very limited modern geophysics.
Best results included 37.7m at 2.45% copper, including 4.9m at 10.23% copper; 30.3m at 1.9% copper, including 19.6m at 2.78% copper and 10.4m at 3.46% copper; and 20.9m at 1.24% copper, including 3.4m at 4.79% copper.
Grab samples over a 4km x 1km geochemical trend have returned up to 34.3% copper.
Drilling at the Frost prospect in 2012 returned 53.1m at 1.08% zinc, while the Deadfall prospect returned 11.9m at 3.27% zinc.
“It looks pretty exciting, but it’s barely scratched the surface,” Lux CEO Dr James Warren said.
“So, our job now is to leverage off all the geochemistry data and the little bit of drilling that we’ve had and really grow this thing out.
“There’s a Bureau of Land Management hypothetical exploration target for the Omar prospect of 30 million tonnes at plus 3% copper, so it sort of gives you an idea of the scale of orebody we’re looking at, and I think over the broader area there’s discovery opportunities for new deposits that haven’t been drill tested.”
Lux is aiming to start drilling next month with at least 5000m planned between now and the end of the season.
Warren, a geologist who previously worked for Echo Resources and Tali Resources, said equipment was already being mobilised to site.
“We’re going to have two drill rigs on site. We’re going to have a heap of people. We’re going to have four helicopters,” he said.
“Following listing, there’ll be a heck of a lot of activity.
“We’ve been booking everything in advance, but obviously now it’s go time. We’ve got the money in the bank, and we can pay the bills and get moving.”
Alaska hot for copper
The Ambler Mining District also hosts Trek Resources’ Red Dog, one of the world’s largest zinc mines, and Trilogy Metals and South32’s Upper Kobuk projects, which host around 9 billion pounds of copper as well as zinc, gold and silver.
The US Department of War recently agreed to invest US$35.6 million in Trilogy.
Upper Kobuk needs an access road to be built in order to be developed, which has been backed by the Trump Administration.
Warren said there was a push from the state and federal government to build the road to unlock the district.
“The people in Alaska want it, even the traditional owners that we’ve been talking to,” he said.
“They want that road open and those deposits to be to be extracted, so we’re confident that over the next 5-10 years, this whole area has got to start slowly unlocking itself. The road being built will be the major kicker in that.
“But having said that, you’re not going to a place where you’re looking for small deposits. You need big, world-class style deposits to justify the effort to go and explore and develop out there, basically.”
Lux’s second project, Ambler, sits right next to Trilogy’s projects and while earlier stage, the company is planning reconnaissance work this quarter.
Warren said the timing of the IPO was right.
“The copper thematic in America is strong right now, given Trump wants to source a lot of these minerals internally and build up domestic supply chains,” he said.
“Obviously, the copper price is very high at the moment as well.”
Joining Williams on the Lux board is Canadian geologist Simon Dahrouge and chartered accountant Troy Cavanagh.
Williams and Dahrouge are also directors of another recent successful listing, US-focused gold explorer Sentinel Metals.
Resources investor Tolga Kumova is one of Lux’s largest shareholders with 11.5%.
Lux expects to list with a market capitalisation of A$30 million.
