New ASX floats offer exposure to mineral discoveries through smart technology
Cash has become king, as junior explorers and miners find it harder to raise capital in the current climate.
Contrary to a common view that mining simply involves digging holes in the ground the industry has always been a technology leader and remains so even in today’s world of artificial intelligence, digital imaging and big data.
One obvious example of how mining embraces the latest developments in science can be found in the automation by BHP (ASX: BHP), Rio Tinto (ASX: RIO) and Fortescue Metals (ASX: FMG) of their iron ore operations, especially their railway systems.
Recent and upcoming ASX floats
But examples of technology improving the rate of discovery, development and mineral processing go much deeper than a computerised train set with two new floats scheduled to list on the ASX next month examples of value creation in mining by the application of smart science.
SensOre (ASX: S3N), which is scheduled to start trading on 28 January, is developing a business based on “hoovering” up data from multiple streams of information generated by analysing geological, geophysical and geochemical work to help predict the locations most likely to contain economic mineralisation.
Orexplore Technologies (ASX: OXT), which has 21 January as its expected listing day, is working on ways to apply a combination of scientific instruments such as X-ray Fluorescence (XRF) and industrial computed tomography (CT) to non-destructively scan through drill cores and mineral samples.
A third recent example of a new company applying technology in mining is recently listed Aquirian (ASX: AQN), which has developed a number of consumable products used by explorers and miners including its Collar Keeper, which improves blast hole control and while a simple concept it is already profitable.
Billions spent on exploration
For investors with an appetite for mining mixed with technology there are four reasons to feel confident that the outlook is bright, including
- High levels of exploration expenditure which saw $877 million spent on the search for minerals and energy in the September quarter alone – a rate which equates to an annual spend of $3.5 billion.
- Record-breaking inflows of fresh capital with $2.55 billion raised in the September quarter, an annualised $10.2 billion.
- Energy transition, a global event which boils down to swapping fossil fuels with energy metals such as uranium, and battery metals for energy storage such as lithium, nickel, copper and graphite, and
- Australia’s rich geological endowment which should make it a globally important new-energy leader.
Aquirian
Of the three mining technology stocks mentioned Aquirian is the easiest for a layman to understand because its Collar Keeper is essentially a rolled up flexible sheet of reusable material inserted into the top of a drill hole before expanding to support the walls of the hole, preventing rocks falling down the hole and saving the need for costly re-drilling.
Aquirian has been off to a slow start since listing in late July, but this week moved to an all-time high of $0.26 (valuing the stock at $17 million) after reporting that strong demand had encouraged management to forecast monthly revenue of up to $200,000 by the end of next year.
Orexplore
Orexplore, which is a spin-off from exploration drilling specialist Swick Mining Services, aims to revolutionise mineral exploration through the application of Swedish-developed digital technologies which utilise computer software to visualise and analyse data.
The company said in its prospectus “By leveraging medical imaging technology, Orexplore can enable customers to rapidly create a three-dimensional (3D) digital image of their core comprising resource characterisation at 200-micron resolution.”
Orexplore’s first product, the GeoCore X10 is a transportable XRF scanning technology that provides “through the rock” image of internal structures and texture in additional to mineral element detection.
Handheld XRF units are commonly used in exploration to get a quick reading of core composition. Orexplore’s technology takes the science to a higher level and could prove popular with explorers wanting quick and accurate information on drill results.
SensOre
SensOre is doing more than developing mineral exploration technology, it is applying the science on its own projects where it hopes to pinpoint mineralisation, as well as working with partners on a range of projects.
The company said its SensOre Data Cube and Discriminant Predictive Targeting Technology has been designed to advance the way mining companies integrate, interrogate and analyse geoscience data in order to better understand where and how to explore.
“SensOre is focused of fast-tracking the mines of tomorrow and believes the combination of big data and artificial intelligence and machine learning will provide the next generation of exploration success for in-demand commodities,” the company said in its prospectus.
Emerging technologies
Like all emerging technologies there is a degree of uncertainty and an associated speculative element whenever a bright idea emerges from a laboratory into the commercial world
But there is also a touch of history and evolutionary development to the work of SensOre and Orexplore which can be traced back to earlier attempts to unlock mineral secrets trapped in rocks which are often buried deep beneath the earth’s surface.
Back in the 1970s one of Australia great geologists, the late Roy Woodall, who is credited with the discovery of the Kambalda nickel mines and the Olympic Dam copper mine, spoke of the need to developed technology capable of “peering beneath the regolith” – the layer of loose rock and sand, sometimes tens-of-metres deep, which sits above a bedrock target.
Woodall’s wish is slowly coming true as miners and their technology associates apply a variety of sciences to see what lies below, potentially unlocking geological secrets and creating value for investors.
Not all new technologies will work as promised, but with record spending on exploration, backed by record fund raising, and a fast-growing market for battery metals the climate is perfect for the marriage of science and mining.