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Mac Equity Partners
Equity Capital Markets
August 2019
Yandal Resources | Company Summary
COMPANY OVERVIEW
CAPITAL STRUCTURE
GICS Industry Group Materials
Shares on Issue 64.44m
Share Price $0.20
52 week low/high $0.19/
$0.25
Cash $5.7m
Market Capitalisation
(undiluted) $12.89m
Unlisted Options ~11.9m
MAC EQUITY PARTNERS
Hugh Pilgrim | + 61 449 581 256
Author
Hugo Shervington | +61 409 912 074
Yandal Resources Limited (“YRL” or “the Company”) is an emerging Australian gold company focused on the discovery and development of tier 1 gold projects in the highly prospective Yandal and Norseman-Wiluna Greenstone Belts of Western Australia. The Company’s flagship project is its 100% owned Ironstone Well Project, containing the Flushing Meadows Prospect, located 60km South West of Wiluna. The Project is located adjacent to and along strike from several existing mines and well established infrastructure including:
Northern Star’s (ASX:NST) Jundee >10Moz
Echo Resource’s (ASX:EAR) Bronzewing 2.3Moz
Bellevue’s (ASX:BGL) Bellevue project >2.5Moz
Blackham Resources (ASX:BLK) Wiluna >11Moz
Red 5’s (ASX:RED) Darlot >3Moz
MANAGEMENT
Lorry Hughes Managing
Director
Katina Law Non-Executive
Chair
Kelly Ross Non-Executive
Director
MAJOR SHAREHOLDERS
Kesli Chemicals Pty Ltd 17.5%
Northern Star Resources
Ltd 15.5%
AU Xingao Investment Pty
Ltd 10.9%
Abadi Investments Pty Ltd
<VK &ML Datt Super A/C> 7.3%
Top 20 79.1%
TARGETING “TIER 1” GOLD DISCOVERIES
Strategic tenement package located within multi-million oz gold province & projects
adjacent/along strike from existing >1Moz deposits & well established infrastructure.
ENCOURAGING EARLY STAGE SUCCESS
RC drilling at the Company’s flagship Flushing Meadows Project has returned shallow,
high grade intercepts including 27m @ 2.32g/t Au from 89m, 16m @ 2.72g/t Au from
24m & 16m @ 2.26g/t Au from 5m.
TIGHT & STRATEGIC SHARE REGISTER
Northern Star’s 15% stake proves the quality of YRL’s tenement package & presents
exciting future growth opportunities for the Company.
WELL FUNDED FOR FUTURE EXPLORATION & DEVELOPMENT
Rights Issue and Shortfall Placement completed in June/July currently raised $2.9m. The
Company currently has $5.7m cash on hand for future progress.
AUD GOLD PRICE AT RECORD HIGH
Gold soaring well beyond A$2,000/oz & Australian dollar continuing to fall presents
exciting times for the industry.
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MAC EQUITY PARTNERS | Equity Research Yandal Resources Limited
FLAGSHIP PROJECT | FLUSHING MEADOWS
Figure 1: Flushing Meadows Cross Section
Figure 2: Location of Flushing Meadows & other YRL prospects
The Company has recently undertaken an extensive RC drilling program targeting shallow oxide gold intersections at Flushing Meadows. Encouraging results have been returned defining shallow gold mineralisation over a identified strike length of 1.9km, whilst remaining open along strike and at depth. Significant drill intercepts from recent drilling include:
16m @ 2.26g/t Au from 91m including 12m @ 3.02g/t Au;
16m @ 2.72g/t Au from 24m;
27m @ 2.32g/t Au from 89m;
16m @ 2.26g/t Au from 5m;
4m @ 9.09 g/t Au from 24m;
96m @ 0.26 g/t Au from 72m.
Looking forward, YRL’s next step is compiling the results to
develop a maiden JORC Resource Estimate, set to be
completed in August. From here, the Company plans to
continue drilling, targeting untested ground which has the
potential to grow and define the resource further. Exploration
costs at Flushing Meadows appear to be ~$5/oz. Extremely
cheap discovery costs will continue to be beneficial for the
Company’s cash levels as future exploration will target further
mineralization across a number of known deposits including
Oblique and Quarter Moon. The current geological and
structural understanding of Flushing Meadows presents an
opportunity for low cost, easy access, open pit mining which
should create significantly lower costs for future mining
operations. With the mining license already granted, mining
could start in H2 of 2021.
With an abundance of operating mines, processing plants and
other infrastructure within a close proximity to Flushing
Meadows, the Company is in a healthy position to benefit from
any potential future corporate activity. A number of currently
operating mills within close proximity to Flushing Meadows are
working below capacity, which presents the opportunity for
toll treating or JV arrangements, which could create significant
cost benefits for the Company.
The Wiluna mill owned by Blackham Resources (BLK.ASX) is
currently operating at half capacity and the company is actively
trying to build its stockpile. While Echo’s (EAR.ASX) Yandal
Gold Project includes the Bronzewing Processing Hub, centred
around a 2.0 million tonnes per annum conventional CIL gold
treatment plant. The mill is currently on care-and-
maintenance, however detailed studies undertaken by Echo
demonstrate it can be refurbished in a six month timeframe.
Echo is currently exploring ground around Bronzewing to build
on it’s total resource of 1.7 Moz Au.
In addition to this, M&A activity has been highly prominent
within the mining sector in recent years as major miners look
to replenish their resources. The majors’ have been particularly
eager to add further resources to their inventory to take full
advantage of the current record high gold prices. Northern
Star’s 15% stake in the Company shows their confidence in
YRL’s assets and willingness to progress further exploration to
help delineate and define gold mineralisation across these.
THE YANDAL GOLD RUSH
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MT MCCLURE
The Mt McClure Project contains some highly prospective
ground, including three shallow open pit mines that
produced 110koz Au.
The Success pit was mined between 1993-2010 for 38,000
oz to a depth of 80m. The mine remains open at depth
with drilling indicating high grade plunging shoots;
5m @ 16.08g/t; and
5m @ 11.56g/t at the base of the pit
6.6m @ 4.12g/t (154.8m);
4.6m @ 3.61g/t (185.9m);
7.1m @ 3.09g/t (180.9m);
8.0m @ 3.23g/t (140.0m);
5.0m @ 4.04g/t (204.0m).
MAC EQUITY PARTNERS | Equity Research
The Gordons Dam Prospect is located 16km North of NST’s
Kanowna Belle mine. The Company has undertaken early
stage drilling to gain a better understanding of
mineralisation trends which discovered new paleochannel
and porphyry hosted mineralisation. Intercepts included;
8m @ 7.33 g/t Au from 35m;
3m @ 18.30 g/t Au from 33m;
15m @ 0.95 g/t Au from 80m;
8m @ 1.16 g/t Au from 100m.
The company is targeting extensions to both shallow oxide
mineralisation and primary mineralisation related to a
porphyry and mafic contact zone.
Yandal Resources Limited
GORDONS GOLD PROJECT
The company has recently undertaken a new SAM Survey
over 750m of strike covering the mineralised area. The
results are currently being interpreted and will be used to
plan the next RC drill program set for August/September.
Further drilling programs for Mt McClure are in line for the
future to test between 150m –250m depth.
The added advantage to this project is that it is located ex-
tremely close to the 2Mtpa Bronzewing processing plant,
owned by Echo Resources (ASX:EAR), presenting the oppor-
tunity for toll-treating arrangements or any other corporate
activity that mat be beneficial to the Company.
Figure 3: Mt McClure underground drilling
Figure 4: Gordons Dam Prospect
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AUSSIE GOLD PRICE AT RECORD HIGH
DISCLAIMER
DISCLAIMER | This research note has been prepared for and is intended for Wholesale Investors only as defined by Section 761G of the Cor po-
rations Act, 2001. In accordance with Section 949A of the Corporations Act 2001, this document contains unsolicited general financial information
only. In preparing this document Mac Equity Partners Pty Ltd (AFSL 338731, ABN 32 126 369 640) did not consider the investment objectives, fi-
nancial situation and particular needs (‘financial circumstances’) of any particular person and no recommendation (whether express or implied)
contained in this document should be considered reliable. Accordingly, before acting on any information contained in this document, you should
assess whether the information is appropriate in light of your own financial circumstances or contact your Mac Equity Partners Pty Ltd adviser.
The company featured in this document should be considered speculative in nature and carry a high degree of investment risk. Please consider if
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MAC EQUITY PARTNERS PTY LTD AFSL: 338731 ABN: 32 126 369 640
The Australian dollar gold price has recently been tracking
well above the $2,000/oz mark, setting new record highs
for the precious metal. Analysts are predicting this to
strengthen well into the future, creating significant growth
in returns for Australian based gold miners.
To add to this, the Australian dollar declined 5.1% over the
2018/2019 financial year and this trend is predicted to
continue with the Reserve Bank continuing to slash the cash
rate.
SUITE 7, 29 THE AVENUE, NEDLANDS, WA 6009, AUSTRALIA
T: +618 9386 9577 F: +618 9389 1464 E: [email protected] WWW.MACEQUITY.COM.AU
KEY RISKS
Exploration Risk: Mineral exploration is inherently high risk and there is the potential that Yandal’s exploration programs may not yield economically feasible mining projects. Market Risks: Declines in equity markets may put pressure on junior resource companies as investors move away from the sector into safe haven investments. Capital Risk: The Company will likely need to raise capital in the future. An inability to raise capital could significantly affect the Company, its operations and future exploration programs. Commodity Risks: Whilst Yandal is not financially exposed to movements in the gold price, as it does not have any production at this stage, movements in the gold price are likely to impact sentiment towards the company and its projects.
MAC EQUITY PARTNERS | Equity Research Yandal Resources Limited
UPCOMING CATALYSTS
Ongoing – Continued news flow from drilling
across all deposits
JORC compliant Resource Estimation set to
be announced in August
Following the maiden JORC Resource Estimation
announcement, the Company is expected to have
a PEA for Flushing Meadows completed in the
December Quarter
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