Albion Resources uses ASX debut to fund exploration work at WA assets

Albion Resources IPO ASX ALB zinc lead Western Australia
Albion Resources’ shares are expected to begin trading on the ASX this morning under the ticker ALB.

With zinc back in the spotlight, base metal explorer Albion Resources (ASX: ALB) will use the proceeds of an oversubscribed $5 million IPO to advance its assets in Western Australia’s Kimberley and Kalgoorlie goldfields regions.

The junior’s IPO closed this month after raising $5 million through the issue of 25 million shares at $0.20 each to retail investors, with CPS Capital Group Pty Ltd acting as lead manager.

Albion made its debut this morning under the ticker “ALB”.

IPO funds will be put towards the development of Albion’s asset suite, which includes the flagship Lennard Shelf zinc-lead project in the WA Kimberley’s Lennard Shelf region.

Lennard Shelf comprises four sub-projects and is made up of six exploration licences (five granted, one pending) over 393.4 square kilometres.

Sub-projects are Pillara East, Prices Hill, Sadler Ridge and Oscar Range historic finds.

WA zinc assets are back in investors’ sights after Rumble Resources (ASX: RTR) and Zenith Minerals (ASX: ZNC) revealed a major discovery at the Earaheedy project earlier this month.

Rumble, which owns 75% of the project, has seen its share price rocked 480% the past month.

Additionally, the outlook for zinc is positive with demand predicted to outpace production this year and erode supplies.

World-class region

Lennard Shelf is considered to be a world-class Mississippi Valley-type zinc-lead region where known resources have included Pillara (19.3 million tonnes at 7.8% zinc and 2.6% lead) and the Cadjebut Trend (16.4Mt at 8.9% zinc and 5% lead).

The region has historically produced very high-grade lead and zinc concentrates recognised as being some of the best in the world.

Its mineralisation is believed to produce a clean concentrate requiring minimal processing and retaining potential to attract premium prices from smelters.

Albion said numerous “exciting” high-grade geochemical and drilling targets at Lennard Shelf warrant immediate investigation such as Pillara East which has previously returned assays of 4.6m at 5% zinc and 30.5% lead from 53m, including 1.6m at 7.2% zinc and 49.4% lead.

Previous exploration

Situated 30km southeast of Fitzroy Crossing, the Lennard Shelf project has been subject to previous exploration by both juniors and majors.

At Pillara East, now-defunct resources company Amax Exploration (Australia) carried out reconnaissance and detailed geological mapping in 1973, as well as gossan and stream sediment sampling, induced polarisation (IP) surveys and rotary air blast drilling across 22 holes.

BHP (ASX: BHP) went on to drill another 66 diamond holes in the 1980s, the majority of which were vertical and appeared to target either stratigraphic-hosted mineralisation within the Pillara Formation or were located across the project area to assess the down-dip potential of mapped structures.

At Prices Hill, the mining giant completed wide-spaced grid drilling but failed to intersect any significant mineralisation while an IP survey by delisted explorer Western Metals Ltd in 1997 led to the discovery of an anomalous gossan at the north-east edge of the deposit’s outcropping limestones, in the footwall of the Cadjebut Fault.

BHP also worked on the Oscar Range tenure, drilling 26 percussion holes and six diamond holes from 1977 to 1983; and a further 11 holes in 1988 along with gravity and IP surveys.

Previous exploration at Sadler Ridge was conducted by Esso Australia in the mid-1980s and included gridding; Landsat imagery; soil, stream sediment and ironstone sampling; mapping; and geophysics.

Over the following years, Geopeko (the exploration arm of Australian miner Peko-Wallsend, later acquired by North Limited and Rio Tinto, ASX: RIO) drilled the northern portion of the Sadler Ridge tenement and collected rock chip samples which returned grades exceeding 0.5% zinc-lead.

Leinster project

As well as Lennard Shelf, Albion also has a pending application over an additional 42.4sq km of the Leinster massive nickel sulphide project in WA’s tier-one Leinster nickel mining complex.

The project straddles the Weebo-Mt Clifford greenstone belt and is close to historic and developing nickel projects.

It is also along strike from Auroch Minerals’ (ASX: AOU) high-grade Horn nickel-copper discovery.

Public company objective

Albion executive chairman and veteran explorer Colin Locke said the objective as a public company would be to increase shareholder wealth through the acquisition, exploration and development of mineral resource projects.

“Our focus is now on implementing the exploration programs we have designed for the Pillara East, Prices Hill and Sadler Ridge sub-projects and if granted, the Oscar Range and Leinster too, with the objective of delineating mineralisation,” he said.

“We believe the combination of an outstanding exploration portfolio, an experienced board with a loyal, long-term investor following and lean capital structure has laid the foundations for leverage to any exploration success.”

Mr Locke said the company planned to reward shareholders in the near future with a loyalty options offer via the issue of one $0.25 option for every two ordinary shares held within three months from listing.

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