Coda Minerals launches $6.5m IPO to advance Elizabeth Creek copper-cobalt project

Newly-established junior Coda Minerals will turn to the investment community this month in an effort to raise $6.5 million to fund exploration activities at the copper-rich Elizabeth Creek project in South Australia.

Incorporated in 2018 as a wholly-owned subsidiary of Gindalbie Metals before Gindalbie was sold to Chinese steelmaking giant Ansteel, Coda has launched an initial public offering (IPO) of a maximum 21.66 million shares at $0.30 each to underpin a planned debut on the Australian Stock Exchange next month under the ticker ‘COD’.

The young company is in the process of earning up to 75% equity in Elizabeth Creek (formerly the Mt Gunson copper-cobalt project) by way of a three-stage farm-in with Terrace Mining, which includes a pathway to increased ownership via joint venture expenditure.

The project comprises three tenements over 739sq km in the Olympic Dam copper belt of the Gawler Craton – a region that hosts some of the world’s largest copper-producing provinces and major deposits, including Olympic Dam and the recent Oak West Dam discovery owned by BHP (ASX: BHP), and the Carrapateena and Prominent Hill projects owned by Oz Minerals (ASX: OZL).

Coda is targeting 1.5 million tonnes of contained copper equivalent at Elizabeth Creek for the current calendar year.

It has spent $5.6 million to date to drill and assess metallurgical and geotechnical properties and de-risk the project, giving it a 51% equity.

This is expected to increase to 70% in the first quarter of 2021 following a third and final farm-in stage.

Coda retains the option to acquire an additional 5% interest for $1.5 million following completion of the farm-in process.

IOCG exploration

Proceeds from the offer will seek to advance a systematic exploration program at Elizabeth Creek in search of commercial quantities of copper and associated base and precious metals.

The project comprises the flagship, drill-ready Emmie Bluff deposit to the north and two advanced JORC-compliant resources at Windabout and MG14 further south.

Earlier this month, Coda released an updated headline exploration target for Emmie Bluff of between 46-77 million tonnes and grading up to 2.3% copper equivalent.

Coda chief executive officer Chris Stevens said the increase followed a 2019 re-assessment of the historical mineralised area and completion of the first new drilling at the prospect since Mt Isa Mines drilled there in the 1990s.

“We have since developed and tested our exploration model, resulting in a potentially game-changing increase to the target mineralised area,” he said.

“The results of magnetotelluric and 2D seismic geophysical surveys obtained over the past nine months of exploration work have more than tripled the target exploration area at Emmie Bluff [and we believe] the overall footprint of the shale body may be at least two to three times that of the initial exploration target,” Mr Stevens added.

A diamond drilling program scheduled for November aims to expand the target even further and provide fresh drill core for geotechnical and metallurgical analysis and bulk density measurements.

Exploration will also take in Windabout and MG14, which have a combined 159,000t of contained copper and 9,500t of contained cobalt.

Resolute focus

In the company’s recent annual report, Mr Stevens told shareholders that Coda would maintain a “resolute focus” on increasing the resource base at Elizabeth Creek.

“Although Coda is a relatively new company as a separate entity, our technical team has been involved with [this] project for over three years, and in that time we have seen interest in the project area and its surrounds grow steadily,” he said.

“The eastern Gawler Craton is now one of the most sought-after copper exploration locations in Australia and we believe the next year will be transformational as we build on our exploration work and commence drilling with the goal of building a significant resource base at Emmie Bluff.”