Lukin Resources launches $7.5m IPO to explore Queensland and South African projects

Multi-commodity explorer Lukin Resources is setting out to raise up to $7.5 million in its initial public offering (IPO) to explore for gold, copper and critical minerals in Queensland and South Africa.

In north Queensland, the company holds a 100% interest in the Stratmin project and is earning up to 51% in the Ebagoola South gold project through a recent farm-in deal inked with Australian Metals Corporation (AMC).

It also holds varied stakes in three mineral projects in the Northern Cape province of South Africa – Vaalkop, Bushy Park and Koa.

Of note, Lukin’s management is very familiar with South Africa having previously been involved at Universal Coal, taking it from an explorer to a multi-mine coal producer prior to its sale to Terracom (ASX: TER) in 2020.

Lukin is offering 27.5-37.5 million shares at $0.20 each to raise between $5.5 million and $7.5 million, with the majority of the proceeds intended to be used for an exploration and development strategy focused on its Ebagoola South and Vaalkop projects including extensive drilling.

The company plans to close its offer in early November with trading on the ASX anticipated to commence later that month under the ticker code ‘LKN’. Upon listing, it is expected to have a market capitalisation of about $11-13 million.

Queensland projects

In April, Lukin’s wholly-owned subsidiary Nash Gold entered into a farm-in and option agreement with unlisted AMC to earn up to 51% in the 312 square kilometre Ebagoola South project in Queensland’s far north Cape York Peninsula.

Under the terms of the deal, Nash must outlay $1 million in exploration expenditure to earn an initial 25% stake, with the option to spend a further $4 million on exploration and vendor payments to obtain a 51% stake. There is a further option to increase its shareholding to 60% by solely funding a feasibility study, should AMC elect not to contribute.

Ebagoola South contains 16 historic albeit poorly explored intrusive-related gold targets and its geological setting is similar to the large intrusive-related systems at the 5-million-ounce Kidston and 3.5Moz Mount Leyshon gold mines.

Lukin’s other Queensland asset, the 100% owned Stratmin project, is located in the Hodkinson province in the northeast of the state and comprises five granted semi-contiguous exploration permits covering a combined 574sq km.

Here, Lukin is exploring for tungsten, tin, molybdenum and bismuth along with copper-gold mineralisation.

South African projects

Lukin holds 74% stakes in both Vaalkop and Koa, located approximately 550km north of Cape Town and 540km southwest of the country’s biggest city, Johannesburg.

It also has a 50% stake in the Bushy Park project in the eastern part of South Africa’s Northern Cape province.

Lukin’s priority asset in South Africa is Vaalkop, which includes the Salt River polymetallic deposit that hosts a JORC resource of 24 million tonnes at 1.8% zinc, 0.58% copper, 0.59 grams per tonne gold, 0.43% lead and 19.9g/t silver, including a higher-grade zone of 10Mt at more than 6% zinc equivalent.

Recent research completed at Salt River identified the presence of molybdenum and the company also plans to investigate the potential for economic concentrations of molybdenum and other critical minerals such as bismuth going forward.

Vaalkop also hosts the Graafwater prospect where historic scout drilling intersected massive sulphide mineralisation that remains untested and offers the opportunity to increase JORC resources further.

The Koa project lies 15km southeast of Orion Minerals’ (ASX: ORN) 27.8Mt Prieska copper-zinc asset. It remains unexplored but contains known copper occurrences. Lukin is targeting blind volcanogenic massive sulphide (VMS) deposits in the Areachap Terrane underlying the western part of the project area and has completed the first phase of an airborne electromagnetic survey.

Bushy Park is prospective for copper, lead and zinc and earlier this year Lukin delivered a JORC resource estimate for the project totalling 10.9Mt at 3.78% zinc and 0.15% lead, with more than 3Mt in the indicated category.

The deposit remains open at depth. Lukin noted the area also hosts untested base metal geochemical anomalies, including a compelling copper target associated with a regional structure, where grab samples of fault breccia contain up to 3% copper.

Exploration strategy

The bulk of the IPO funds will be used to execute Lukin’s exploration strategy, which involves targeting tier one intrusive related gold deposits at Ebagoola South and increasing JORC resources at Vaalkop.

Depending on how much is raised in the IPO, between $1.24 million and $2.27 million has been budgeted to explore Ebagoola South over the next two years, including geological mapping, geochemistry, geophysics and drilling.

Ebagoola South’s drilling program is planned to comprise 1,000m of RC and diamond core drilling at each of the Lapunya Mount, Spion Kop and Yarraden prospects, plus a minimum 1,950m of infill RC drilling at historic mesothermal prospects including Golden King, Lady Jayne, Savannah, Gold Mount and Lukin King.

At Vaalkop, Lukin plans to spend $900,000 on drilling, analysis and metallurgical testwork aiming to increase the JORC resources in preparation of a scoping study.

Between $490,000-$940,000 is budgeted for the Koa project, where Lukin plans to complete airborne EM geophysical survey and scout drilling of identified conductors.

Minimal amounts of the IPO funds have been earmarked for Bushy Park ($149,800) and Stratmin ($200,000) and exploration will mainly comprise target generation, mapping, soil geochemical surveys and metallurgical testwork.