IPO Watch: Ballard Mining – the ‘new' gold explorer ready to hit the ground running

News.com.au

a day ago

Delta Lithium spin-off Ballard Mining has raised $30m ahead of anticipated July 14 ASX listing
Plan is to explore and develop 1.1Moz Mt Ida gold project in WA, including 930,000oz Baldock deposit
130,000m of drilling planned to prep potential mid-tier gold mine for investment decision
Paul Brennan, the executive charged with bringing the ASX's newest gold explorer Ballard Mining to public markets, says the launch of its IPO has been "the great reveal".
That's because the company's Mt Ida gold project has been, so to speak, hiding in plain sight.
Sitting in the back pocket of Mineral Resources (ASX:MIN) and Gina Rinehart backed Delta Lithium (ASX:DLI), the project has quietly grown into one of the largest pre-development standalone WA gold assets on the ASX.
Located west of the WA Goldfields towns of Menzies and Leonora, Mt Ida contains a resource of 1.1Moz of gold at 3.33g/t, scale and grade rarely found in a new explorer.
The centrepiece is the Baldock deposit, a 930,000oz at 4.1g/t deposit quirkily named after St Kilda's sole premiership captain Darrel and odds-on to be become a gold mine before the Sainters crack a second.
"I think it's been the great reveal. It's been sitting within Delta Lithium, people aren't going to go there looking for gold investments," Brennan, who once ran the large Carosue Dam gold operations in a three year stint with Raleigh Finlayson's Saracen Mineral Holdings, said.
"In addition to the resource you're on granted mining leases, there's no native title, we're fully permitted for mining, we've submitted a works approval application to DWER (WA's Department for Water and Environmental Regulation) for a standalone processing plant.
"There are three key risks. Resource risk is obviously always number one, metallurgy risk is number two and permitting risk is number three, because if you haven't got your permitting sorted, you haven't got a mine.
" The advanced permitting status in particular, as well as the high-grade resource and the million ounces, will be what sets us apart from our peers."
Big raise
Ballard will come to the ASX, currently scheduled for July 14, stocked with $30 million to drive an expansive 130,000m exploration campaign.
That's come in the form of a priority $5m raise to existing DLI investors, which will bring MinRes and Rinehart's Hancock Prospecting into the fold as foundation shareholders, along with a $25m public raising, both oversubscribed.
With gold prices at US$3350/oz, there has been no shortage of admirers and it still screens value. Delta will maintain a ~46% stake, bolstering its balance sheet, and after an in-specie distribution to DLI shareholders Ballard will boast an EV of just $57m or $52/oz.
To give a sense of how the open market is valuing junior gold stocks, when the IPO was launched neighbour Gorilla Gold Mines (ASX:GG8) was running at an EV to resource ounce ratio of $288/oz.
Baldock has what it takes to be the centrifugal force for a significant gold project of mid-tier scale. Around 80,000m of infill and extensional drilling will be focused there, with the intention of eventually defining a reserve that could underpin the first half of a hoped for decade long mine life.
402,000oz at Baldock sit in the higher confidence indicated category.
Around 50,000m of drilling will be pure exploration spend, tapping into 26km of underexplored greenstones, located along the shears known for hosting major gold deposits in the Goldfields.
With any luck and solid exploration work, Mt Ida could be shepherded to a final investment decision in the next 18 months.
"The first five years (will be) fully de-risked out of Baldock and then an additional five years based on exploration success which we're reasonably confident of," Brennan said.
"We've got a site team who comes across from Delta to Ballard. So they've all been out there kicking rocks around for the last two or three years.
"There's a lot of on-ground knowledge and they've already identified 20 walk-up drill targets. We're flying a high resolution magnetic survey in July just to firm up those targets and then we'll roll out with the rotary lie detector test probably early August to start on the exploration."
Hot property
It is with great irony that Mt Ida has come, effectively, full circle.
The 19 tenements that comprise the Mt Ida gold and lithium projects were vended into the old TNT Mines in 2021 by a then struggling Ora Banda (ASX:OBM) for $11m.
At the time, the project contained an outdated JORC 2004 resource of 318,000t at 13.8g/t for 141,000oz, though historic mining at the Timoni mine – 265,000oz at 1-2oz to the tonne from until 1960 – gave a sense of the site's potential.
Later renamed Red Dirt Metals and then Delta Lithium, the landscape has transformed since.
Delta uncovered swathes of untested pegmatites at the project which, separate to the known gold deposits, led to a maiden resource of 14.6Mt at 1.2% Li2O and 207ppm Ta2O5.
As lithium prices climbed to record highs, ~$200m of fresh capital passed through the door along with major institutional backers in MIN, Gina, America's Waratah and Japan's Idemitsu.
When lithium went south, the focus turned to maximising the value of the nearby gold resources, pushing critical mass beyond 1Moz in April this year.
The demerger will unlock new capital for Ballard while conserving the balance sheet of Delta, which also owns the +20Mt Yinnetharra lithium project in WA's Gascoyne region, preserving its lithium deposits for the next battery metals boom.
Ballard is a potential whale in an increasingly interesting but often overlooked gold hotspot.
Just 6km to the south is the Mt Ida gold project owned by private Aurenne Group, which contains a 200 person camp and 1.5Mtpa CiL plant.
Around 100km to the south sits Ora Banda, which under new management has become a $1.4bn gold miner at its Davyhurst gold mine, at last word on track to produce 95,000oz last financial year.
"Ora Banda is probably a good analogue for us," Brennan said.
"It's the same geology, same narrow vein, high-grade underground mining method – we certainly see Mount Ida as predominantly an underground operation.
"Aurenne are friendly, we continue to talk to them, we currently give them water, we share an aerodrome. There's an ongoing relationship there.
" Our plan is to continue to go for genuine standalone scale.
" (But) there's four processing plants within 100km so that just gives us the flexibility and optionality which is great. We're not some stranded gold mine. It's the first rule of real estate, right? Postcode, postcode, postcode."
The aforementioned Gorilla – market cap $240m – owns the high-grade Comet Vale underground near Menzies, close to where $220m capped Brightstar Resources (ASX:BTR) also owns a collection of gold deposits where production is planned to start next year.
Institutional support
The attractiveness of Ballard to new investors has been accentuated by corporate activity and growth among mid-tier miners capitalising on the booming gold price.
That's hollowed out the field of sub-ASX 100 and ASX 200 stocks small cap funds can dabble in.
"You've got companies like Capricorn, Genesis, and Ramelius all entering the ASX 100, if they haven't already," Brennan said.
" They've had De Grey, Spartan and Gold Road obviously acquired. So there's six companies that for a lot of funds are un-investable because their mandates don't allow them to invest in the ASX 100, and there's another three that are gone completely.
"That's certainly what we've seen during the IPO. We were surprised at the amount of institutional support we received and I think there's a big recycling of capital occurring there."
Ballard's board brings with it a wealth of experience.
Alongside MD and CEO Brennan and Delta MD James Croser (a non-exec director in his Ballard hat) are non-exec chair Simon Lill, hot on the heels of the successful sale of his explorer De Grey Mining (ASX:DEG) to Northern Star Resources (ASX:NST) in a $6bn scrip deal, and former Gold Fields Australasian boss Stuart Mathews.
The most recent addition has been finance director and CFO Tim Manners, who brings top-tier pedigree including six years as CFO at Ramelius Resources (ASX:RMS).