Hammer Metals managing director Dan Thomas said investor fatigue has forced them to take stock of their Mount Isa interests and diversify into gold exploration in WA.
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Hammer has a 2000 sq km tenement in the Mount Isa region that has been seeking copper-gold for five years but it is now more focused on seeking gold at Bronzewing in WA since Mr Thomas took over in October last year.
Speaking on video with Crux Investors Mr Thomas said Hammer began in 2014 predominantly focused on Mount Isa.
"A couple of guys on our board have worked in Mount Isa for years such as Russell Davies," he said.
"We've probably raised over $20 million in expenditure which has gone primarily to explore in the region."
Hammer has five projects in the area with JORC defined resources but when asked why Mount Isa had not delivered for Hammer yet, Mr Thomas said they had seen some investor fatigue with culminated with their WA gold play last year.
"The plan has been to define a large scale deposit which we were hoping to do ourselves primarily funded by our capital raising but what we've seen over time is a small-scale budget spread across a large area doesn't always produce the results," he said.
"There's a lot of work to be done over 2000 sq km, there's large parts that haven't been easy to explore."
Mr Thomas said they had a JV in 2017 with Newmont for 18 months but they didn't like what they saw.
"We drilled four or five holes, spent a few million dollars and you get a bit of fatigue once you have those types of people look at your projects and not have immediate success," he said.
"We paused in October last year to understand what we've got there, the key to us unlocking the value in those JORC resources and targetting the best projects we have in Mount Isa."
That has led Hammer to a joint venture with Japan's JOGMEC set for $6m expenditure over five years.
"A key thing there was a rapid start, they had $2m in 15 months which we are in the middle of," Mr Thomas said.
"I'm also leveraging off some funding opportunities from the Queensland government, the JOGMEC drilling and other drilling is happening with government funded money."
However most of Hammer's own $2.8m reserve will go on gold exploration in WA.
"Our investors are more in tune with gold than they are in copper and gold, so we are trying to find more joint ventures in our Mount Isa portfolio," Mr Thomas said.
"But we don't want to do that unless there is a tremendous deal on the table so we have been selective about who we've approached and why."
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Derek Barry
Editor of the North West Star Mount Isa since January 2016. Prior to that, an editor at several regional southern Queensland newspapers. Passionate about telling local stories. Comes with a strange accent to due an Irish accident of birth.
Editor of the North West Star Mount Isa since January 2016. Prior to that, an editor at several regional southern Queensland newspapers. Passionate about telling local stories. Comes with a strange accent to due an Irish accident of birth.
