Rising demand for critical minerals is fuelling Osprey Minerals’ multi-commodity exploration play in the East Kimberley and its IPO journey, writes JESSICA GABITES.
Look out the window on your way to work this week and chances are you will see an office worker whiz past you on an electric scooter or a Tesla quietly overtake you on the freeway.
There is no denying that demand for Electric Vehicles (EVs) is on the rise – and the statistics prove it. Despite a global pandemic – or perhaps because of it – EV registrations rose in 2020, with more than 10 million now on the roads and Europe overtaking China as the biggest market, according to International Energy Agency research.
In a sign of things to come, and as a sure sign of the phenomenal growth in the EV market, more than 10 of the world’s largest car manufacturers have declared electrification targets for 2030 and beyond, with some – such as Volvo – planning to produce nothing but EVs. By 2025, sales of EVs are estimated to be anything from 55 million to 72 million.
In spite of a general slowdown in Initial Public Offerings (IPOs) among Australian investment markets, this all bodes well for Osprey Minerals, which is targeting an ASX listing later this year.
“We are already seeing a rise in scooters, Teslas and other EVs on the roads, and it is only going to continue to grow,” explains Osprey CEO Dale Hanna.
“As we see a reduction in combustion engines powered by fossil fuels, we are seeing an equal increase in battery powered vehicles.
“And as the demand for EVs rises, so too does the demand for the ingredients that go into their batteries – critical minerals.”
While lithium has been attracting a lot of attention in the media lately, commodities including nickel, cobalt and copper are also key ingredients to this move to renewables.
Global demand for copper is expected to increase by more than 30 per cent from 2020 to 2030, while nickel demand is set to rise as EV production ramps up, with conservative estimates predicting 4 per cent year-on-year growth. Cobalt’s chemical applications are also dominated by the rechargeable batteries segment.
There is also a strong appetite for platinum group elements (PGEs), which have a major role to play as stricter emissions limits for vehicles come into force globally, coupled with supply disruption.
With international demand for these minerals soaring, Osprey Minerals has assembled an impressive range of exploration projects in WA’s East Kimberley region.
The company aims to capitalise on the region being largely under-explored to date, but having access to good existing infrastructure.
Osprey’s three key projects – Eileen Bore, Sally Downs and Springvale – are highly prospective for copper, nickel, PGEs and cobalt.
They are also in good company, being located in the vicinity of several established projects including Panoramic Resources’ Savannah nickel-copper mine and Future Metals’ Panton Sill PGE Project.
The company owns 100 per cent of its portfolio and intends to advance exploration and development with the intention of announcing a JORC-compliant mineral resource estimate (MRE) in Q1, 2023.
Dale says while global investment markets have slowed down considerably and the timing is not ideal for some companies to pursue public listings, for Osprey the prospect is still highly viable.
“On the one hand, the overall market is tighter than it was 12 months ago when it comes to attracting investment,” Dale said.
“But on the other hand, there are less companies vying for that capital meaning less competition. For those companies with a compelling proposition, an IPO is still viable.”
Osprey plans to open the book in July, with the company aiming to raise up to $5 million at $0.20 per share.
Capital raised from the IPO will help fund the company’s significant exploration program for the next two years, including an on-ground electro-magnetic (EM) survey followed up with a drilling campaign which is planned to commence in October 2022.
The company will take advantage of extensive historical drilling results at its Eileen Bore project and, coupled with results from the current year’s exploration program, is targeting the release of a JORC MRE in early 2023.
“It’s a really exciting time for the company and the culmination of 18 months of work – identifying, securing and then corporatising the ground,” says Dale, who leads an experienced team with significant mining industry experience across multiple ASX-listed companies.
Dale says any company planning to list has to be more aware than ever of the need to present good environmental, social and governance (ESG) credentials, and that has been a key focus as Osprey advances its exploration activities.
The company has been heavily focused on building meaningful relationships with its stakeholders, including traditional owners, the Malarngowem people.
“The importance of ESG cannot be underestimated – its importance probably trumps grade and if you’re not meeting those requirements, your ability to attract capital diminishes significantly,” explains Dale.
“You may have the best project and a great team surrounding it but if you don’t have your ESG policies in place and some tangible measures to achieve the desired outcomes, you are not going to attract the required funding.
“This focus from investors has been slowly building and we are seeing it in politics too, with policies shifting and shaping to ensure companies are addressing these issues.
“Mining companies must pay particular attention to their policies and practices to ensure they’re adhering to best practice.”
Prior to commencing on-ground exploration activities, the company must complete heritage surveys with the traditional owners, which are scheduled to occur in early July 2022. Once this has been achieved, the company will be fully permitted to commence all planned exploration programs.
Through the use of on-ground EM, the company will first identify which way the mineralisation is trending at Eileen Bore, enabling RC and DD drilling to then chase the trend along strike and at depth.
Dale notes that while the East Kimberley is largely under-explored, this presents a real opportunity for those companies that have been able to secure tenure in the region.
Previous work carried out by Thundelarra Exploration in the area has provided a good basis on which Osprey can build, confirming the presence or disseminated sulphide mineralisation.
“Thundelarra, through historical drilling completed in the early 2000’s, encountered broad intercepts of copper, nickel and cobalt mineralisation including a 116m hit from surface ending in mineralisation grading at about 2 per cent copper equivalent,” Dale says.
“The exploration plan is simple – we start off with EM to light up the mineralised trend, followed by twinning a number of Thundelarra’s old holes. We believe the mineralisation is trending north, and if we can hit it 300m in that direction, from the old holes at say a depth of 300-400m, we’re going to have a sizeable JORC MRE on our hands in a short period of time.”
He adds that Osprey’s Eileen Bore project alone has the potential for a substantial exploration target, independently calculated to contain up to 30 million tonnes with a median target of 12 million tonnes.
“Let’s put that into perspective – Panoramic’s Savannah mine is currently operating off a resource base of around 14 million tonnes,” Dale explains.
“Therefore, if we are able to define a JORC MRE of say 20 million tonnes, this would have the potential to underpin a standalone mining operation and it would also be a pretty eyewatering number.”