Thursday 17 August 2017

Minerals firm plans listing to fund Sligo drill

Erris Resources is plotting a flotation on London's AIM market

'Potential investors have been told that the company is looking to have its shares admitted to trading as early as August.' (file photo: Reuters)
'Potential investors have been told that the company is looking to have its shares admitted to trading as early as August.' (file photo: Reuters)
Gavin McLoughlin

Gavin McLoughlin

Minerals explorer Erris Resources is looking to float in order to raise funds for drilling a zinc prospect in Sligo.

The London-based company is plotting a potential listing on that city's AIM market, raising as much as £5m (€5.7m).

Potential investors have been told that the company is looking to have its shares admitted to trading as early as August. Erris declined to comment.

The prospect is at Abbeytown in Co Sligo and was the site of a lead mine in the 1950s and 1960s.

Erris believes that zinc, lead, silver and copper are at the site, which it labels historically overlooked. Drilling work that the company has undertaken indicates that there is a potential new mineral zone at the site.

It has presented investors with two scenarios; one, in which it raises £3.5m, releasing just over £1.5m for work at Abbeytown, and another, where it raises £5m, with more than £2.8m for Abbeytown.

A £5m fundraise would give the company a market capitalisation of £9.7m on a fully diluted basis - meaning that share options are included in the calculation of the company's value, as well as shares.

Meanwhile, another zinc explorer with interests in Ireland, Group Eleven Resources, has plans to float.

The company, which has been backed by former Davy corporate finance chief Hugh McCutcheon, is hoping to list in Canada in the autumn.

"The reason to go to Canada is that Vancouver is really the capital of the junior resource market in the world. But if it made sense for us, I'd love to be listed in Dublin at some stage in the not-too-distant future," Group Eleven chief executive Bart Jaworski said.

Last week, the company announced a deal to buy 60pc of a prospect which covers areas of Co Longford and Co Westmeath.

It is buying the asset known as the Ballinalack prospect from the Canadian mining giant Teck. The other 40pc of the prospect is owned by a Chinese company. The asset is located 50km west of Europe's largest zinc mine at Navan in Co Meath.

A big rise in the price of zinc has lifted activity in the Irish sector in recent months.

The island of Ireland is the biggest zinc producer in Europe.

Australian-listed Hannan Metals has been drilling at a prospect in Kilbricken in Co Clare and announced its estimates of the resource potential based on the results earlier this week.

Chief executive Michael Hudson said the result "ranks Kilbricken as one of the top 10 base-metal deposits discovered to date in Ireland. This is a significant initial achievement in a country that is ranked first in the world in terms of zinc discovered per square kilometre since the 1950s."

He added: "While this resource is substantial, it is also lies open in all directions, with excellent potential for expansion.

"We currently have one drill rig operating a resource expansion programme and we will soon be mobilising additional drill rigs."

Elsewhere, the mining giant Glencore has resumed drilling at its Pallas Green prospect in Limerick.

"The objective is to better understand certain aspects of the deposit," a Glencore spokesman said, adding that any decision about building a fully fledged mine at the site was "a long way down the road".

The Limerick project had previously been put on hold.

Sunday Indo Business

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