Anax Metals: Pioneering innovation and growth in the Australian mining sector

Paul Sanger: I'm Paul Sanger for the Finance News Network, and today we're talking with Anax Metals. Anax Metals, trading under the ASX code ANX with a market capitalization of approximately 15 million, is an exploration and development company with a vision to deliver outstanding shareholder return through innovation in exploration and resource development. Headquartered in WA, the company has three active projects within the state. Joining us today is Anax Metals MD, Geoff Laing. Geoff, welcome back.

Geoff Laing: Hello, Paul. Pleasure to be with you.

Paul Sanger: Now, Geoff, it's been a while since we've had you in the studio, so maybe we can begin with you giving us an update on the company's flagship Whim Creek development.

Geoff Laing: Yep. Paul, we continue to push along on the project financing activities and we've also been having a look at expanding the Whim Creek Project, as we outlined in the Definitive Feasibility Study. So, taking it to become a production hub within the region and essentially delivering scale to our business. And so I guess those are the two main areas of focus up at Whim Creek at the minute.

Paul Sanger: And what is the current status of the studies on what I believe now is 20,000 tons per annum production hub at Whim Creek?

Geoff Laing: Yes. So the Definitive Feasibility Study was all around the 12,000 tons per annum traditional concentrator. We're now looking to, in parallel with that, utilize the existing heap leach infrastructure and add another 10-12,000 tons of copper equivalent production using all of that infrastructure that's already on site. And that will be used by bringing in ore from satellite deposits through this consolidation strategy. So we've already kicked off studies looking into that, how we would refurbish and expand that heap leach infrastructure.

Paul Sanger: Okay. I want to talk about, I believe you're planning to use a unique bioleaching technology to process some of the copper ore. Can you just explain a little bit more detail what this is and how it works?

Geoff Laing: Yeah, sure. So just to, I guess, take a step back. It's, as you say, it's on some of the copper ore. So the main business is still around producing traditional concentrates through a concentrator. So that's essentially the copper, zinc and lead concentrates. In addition to that, because we've got all the heap leach infrastructure, we've been looking into taking the low-grade rejects from our pre-concentration plant, putting that on the heap and using bacteria in bioleaching to liberate the copper and the zinc. Importantly, and the zinc. And we've kicked some big goals in that. We've been working with the CSIRO, and over about three years now, we've developed some very exciting leach technology. And we're not alone in that, but we've cultivated our own Whim Creek bacteria consortia, and we've delivered some encouraging results. And we expect that this bioleaching will deliver a lot of upside for us on the low-grade material that's sub-economic to go through a concentrator.

Paul Sanger: And using the low-grade ores, as you said, it means you don't have to use as much acid, so it's a bit more of an environmentally-friendly way of processing that lower-grade ore. Would that be correct?

Geoff Laing: Yeah. So, the bioleaching process actually liberates, it breaks down the sulphur, or the sulphides. In breaking down those sulphides, it generates acid. So it helps with the acid consumption because it's actually generating acid from the sulphur that's within the ore. So absolutely from a carbon footprint perspective, it's a very good process. And as I say, we're not the only ones looking at it. All the major companies are looking at this technology. It's highly sought-after.

Paul Sanger: I'm sure it is. And you touched on this a little bit earlier. You mentioned the plans for Whim Creek to serve as a processing hub solution for multiple projects. How are these plans progressing?

Geoff Laing: Very well. And we were very pleased to be able to tell the market that our joint venture partners, Develop, have agreed to work with us jointly on a study looking at bringing in some of the oxide ore from their flayer, well, one of their projects, Sulphur Springs, bringing that into Whim Creek and putting it onto the heap to leach. So we see that as the first step in what will be a larger accumulation of assets or access to assets. We're also talking to some of the other players in our region, and we just see this as a step-wise fashion to bringing in more ore sources to the processing hub that we'll develop at Whim Creek.

Paul Sanger: Fantastic. And regarding the project development, what's the current status of the debt funding proposals? They've progressed, I think, since we last spoke.

Geoff Laing: Yeah. So as I said, that's been a key area of focus. We've been working with a number of trading companies and mining funds and dealing with a lot of due diligence questions. We were also very pleased to announce just the other day that we have received non-binding term sheets. And so we're obviously now progressing to get those to a more formal state. We're very pleased to be able to be working with a combination of traders and, I guess, other more traditional financiers. And we think that we'll likely end up with a hybrid, ultimately where we have a trader providing some financing for off-take and then a more traditional group becoming the principal financier.

Paul Sanger: Would I be right in saying base metals have been pretty volatile over the last six or seven months, but copper in particular has become frontline and center, and the big brokers have put huge upgrades through on their copper forecasts for short and medium-term? Has that in turn created a bit more, I guess, leverage for you with conversations you're having with debt funding and off-takers?

Geoff Laing: Yeah, absolutely, Paul. We've seen a turnaround in the last two to three months in the focus, I think, and the interest in the company from financiers, investors, that finally we've been looking for the step change in the copper industry. And I think finally it's really taking grip and the markets are coming to understand that not only is the demand going to continue to drive up, but the supply side, that's where the challenge is. The supply is just not going to keep up. And of course, although we're going to be a modest producer, we will provide near-term supply within Australia and the Pilbara. What better place to be producing copper? So we've certainly seen a change in the last two to three months.

Paul Sanger: Now, Whim Creek's not your only project, so maybe you could give us an update on the company's, is it Evelyn and Salt Creek Resources?

Geoff Laing: So, Evelyn and Salt Creek both fit within the greater Whim Creek Project itself, but we've highlighted them because both of them, they're high-grade deposits that will come into the production profile in the second half of the development. They'll both be underground mines. We've got reserves at both of them, but importantly, they're both open at depth. Evelyn's only been drilled to 170 meters and the last hole that went in there was extremely encouraging, running at several percent copper and zinc. So at 170 meters, it could still go a long way down. So we do plan to do some drilling in the not-too-distant future at Evelyn, just to see how much we can extend that by. Salt Creek is similar, but it's deeper. It's been drilled to about 400 meters. But again, completely open at depth. So those are, I guess, from an organic growth perspective, two important parts of the story.

Paul Sanger: Yeah. No, absolutely. And I guess what investors like to know is, what key news flow should investors and shareholders anticipate for the remainder of 2024?

Geoff Laing: I think the key bits of news that will come out over the near-term will be updates on the study work of the processing hub, specifically around the joint study that we're doing with Develop. We will look forward to also providing the market updates on the funding, and we see that probably be the key announcement that'll come out over the next couple of months when we're able to announce binding terms on some of these discussions that we've been having. And then just back to Evelyn and Salt Creek, if we are able to get in and do some drilling there, we'd be looking forward to updating the market on what we find at Evelyn.

Paul Sanger: Geoff, there seems to be a lot going on. The funding news, we will watch very, very closely, because that could be an absolute game-changer for Anax. And many thanks for your time. It's a pleasure having you here today.

Geoff Laing: Thanks, Paul.