Investor Insight
Anax Metals is an ASX-listed exploration company looking to develop its copper assets in the Pilbara Region of Australia. It has important joint ventures and partnerships that can facilitate the execution of a strategic processing hub to offer a compelling investor value proposition.
Overview
Anax (ASX:ANX) is a project developer that is on track to begin producing copper and zinc concentrates from its flagship Whim Creek project located in the Pilbara region of Western Australia. The project is 80 percent owned by Anax, with JV partner Develop Global (Develop) owning the remaining 20 percent. The Whim Creek DFS (and leaching study) have demonstrated the opportunity for an eight-year mining operation producing copper concentrates, cathodes and valuable byproducts. The operation will generate $410 million in cash flow and deliver an NPV of $270 million with a development capex of $71 million.
The company believes its growth potential lies both in expanding the mineral resources across the project’s four deposits and a consolidation strategy that includes a processing hub with a concentrator and heap leach at Whim Creek. Benefits from the consolidation include delivering economies of scale with processing flexibility to treat ores from regional orebodies. The permitted infrastructure is ideally located and suited to becoming the Pilbara-processing hub.,
Anax and Develop have commenced a scoping study to evaluate the potential for treating high-grade oxide/transitional ores from Develop’s wholly owned Sulphur Springs project on the Whim Creek heap.
During the second quarter of 2024, Anax and GreenTech Metals announced they had signed a non-binding and non-exclusive memorandum of understanding to assess the potential to treat mined material from GreenTech’s base metal assets, with a focus on the open-pittable Whundo deposit.
Whim Creek Pit
Since acquiring the project in 2020, Anax has increased its contained metal resource inventory by over 57 percent. At the end of the second quarter of 2024, Anax signed a contract with drilling company Topdrill for up to 1,700 metres of diamond drilling. Diamond drill rigs have been mobilized at site with the primary goal of testing the down-plunge extensions of the high-grade copper zones at the Evelyn deposit. Previous drilling intersected 13 m @ 4.46 percent copper, 3.10 percent zinc, 45 g/t silver and 1.61 g/t gold from 204 m. Evelyn remains open down plunge with lots of expansion potential.
Company Highlights
Focus remains on delivering near-term copper production, within the next 18 to 24 months, at the Whim Creek copper-zinc project, which will generate in excess of $400 million in free cash flow over an eight-year mine life.The company’s growth strategy includes delivering both resource growth and consolidation of copper assets in the Pilbara region through the development of a central processing hub.Since completing the DFS last year, Anax has been considering the potential to expand the production capacity of Whim Creek infrastructure beyond 20 kt of copper equivalent per year.Capital requirements are anticipated to be low as Anax plans to utilise substantial existing infrastructure and implement preconcentration technology to reduce process capacity requirements. The company is currently working with key partners, including Develop Global (ASX:DVP), Greentech Metals (ASX:GRE), and several metal trading groups.
Whim Creek Copper Zinc Project
Whim Creek is located 120 km from both Port Headland and Karratha on the NW Coastal Highway in the Pilbara region of Western Australia. The project has a long history of copper production with existing infrastructure that includes dams, haul roads, offices, workshops and a dedicated gas spur line to site. The project is currently being developed as a joint venture (80/20) between Anax Metals and Develop Global. The project has four main deposits, namely Whim Creek, Mons Cupri, Salt Creek and Evelyn, with structurally controlled, volcanic-hosted massive sulphide style copper-zinc-lead mineralization.
Production – Concentrator and Heap Leach
Since completing the definitive feasibility study in 2023, Anax has promoted Whim Creek as a regional processing hub, with potential for an expanded production capacity in excess of 20 kt copper equivalent. Highlights of the technical report include FCF generation of $410 million over an eight-year mine life. Processing would be predominantly through the planned concentrator. Heap leaching is anticipated to begin in the second year of production.
A processing hub with sorting, concentrator and heap leach facilities
The company believes the project will also provide a processing solution for surrounding projects located within trucking distance of Anax’s processing facility. Longer term, Anax plans to establish a Pilbara Base Metal Alliance to facilitate collaboration with other base metal projects in the region.
Exploration
The project exploration tenure is located in the highly prospective Archean granite-greenstones of the Pilbara region, encompassing the width of the Whim Creek Greenstone Belt. Near mine extensions to known copper-zinc-lead VMS resources remain underexplored with potential at Mons Cupri South for the discovery of a new intact Mons Cupri-sized deposit. VMS-style alteration and mineralisation have been intersected over 1km. The two satellite deposits at Salt Creek and Evelyn have excellent down plunge and strike potential for blind massive sulphide shoots and drilling is under way at Evelyn.
Management Team
Phillip Jackson – Chairman
A barrister and solicitor with significant legal and international corporate experience, Phillip Jackson specialises in commercial and contract law, mining and energy law and corporate governance. He has been a director and chairman of a number of ASX and AIM listed minerals companies.
Geoff Laing – Managing Director
Geoff Laing is a chemical engineer with 30 years in mining and project development. He has been involved in the exploration and junior mining sector for the last 15 years, taking on corporate and advisory roles. He was a key player in Exco Resources’ divestment of a substantial copper asset for $175 million to Xstrata Copper, and as managing director, he delivered the successful takeover of the company by WH Sol Pattinson.
Peter Cordin – Non-executive Director
Peter Cordin is a civil engineer with over 45 years’ global experience in mining and exploration, both at operational and senior management levels. He has direct experience in the construction and management of diamond and gold operations in Australia, Fenno-Scandinavia and Indonesia.
Phil Warren – Non-executive Director
Phil Warren is a chartered accountant with over 25 years’ experience in board governance, corporate advisory and capital raising advice. Warren has spent a number of years working overseas for major international investment banks. He is currently a non-executive director of ASX listed companies, including Family Zone Cyber Safety, Narryer Metals, Killi Resource and Rent.com.au. He was a founding director of Cassini Resources, which was subsequently acquired by Oz Minerals.
Jenine Owen – Chief Financial Officer
Jenine Owen joined Anax in 2020, where she is responsible for corporate risk management, financial management and financial reporting. She is a chartered accountant with extensive finance and commercial experience, including several CFO roles in ASX listed entities. Having started her career with Deloitte (Zimbabwe) in the external assurance division, she moved to London in 1999 where she held various finance and governance roles before settling in Australia in 2008. Prior to joining Anax, Owen was CFO at Predictive Discovery (ASX:PDI).