Worth Watching V: Brumby Resources Limited (ASX: BMY)
Interesting that both companies are named after animals. In Australia a “brumby” is either a wild horse or a wild and unruly person. Although it can have a different meaning in the US.
Marindi is the name of a dingo (native dog), prominent in Australian Aboriginal Dreamtime stories. He fought the lizard Adno-artina, and lost. His blood stained Australia red. It is worth noting that Australian lizards can be huge, with giant claws – easily the match of a dingo.
I have always thought that one of the best reasons to visit Australia is the extreme wildlife (unless, of course, you visit Australia to view the world’s pre-eminent Nanny State).
Australian wildlife is poisonous, big and bizarre. That was the first subject raised when I worked in Canada, back in the day.
“How about all those poisonous snakes, eh, you wouldn’t get me working in the Australian bush.”
They are right. I spent two years developing an iron ore deposit located in Death Adder Gully, South Australia. The place was well named. Spring was a particularly tense time of year.
Anyway, back to the story.
A couple of years back, Marindi Metals entered into an agreement with Prairie Metals Limited to acquire the Prairie Downs base metal project. I am familiar with the Prairie Downs project, as I floated it in 2005.
The project is one of the most interesting, and complex, base metal projects in Western Australia. I don’t plan to discuss it in depth here. But it is something well worth following.
In essence, the project has a near surface resource, Prairie, comprised of a series of small veins remobilised from a deeper source. Then there is a broad, low grade zone, Wolf, which could be the halo about and above the real target. That target is a SEDEX (sedimentary exhalative) deposit, these are the largest, and often the best grade, lead-zinc deposits on Earth.
Marindi has brought some interesting management expertise to BMY. Joseph Treacy was the MD of zinc miner Kagara Limited. Ross Ashton was the MD of Red Back Mining Limited, a remarkable story of persistence against the odds.
BMY is in the midst of a capital raising of $3.75M at $0.01 per share. With success, there will be a plethora of new 1c shares that would swamp current bids. The new board, and underwriter, will be well aware of this. And will have planned accordingly.
A great project, some real management strength and cash for drilling. Put it on your watch list.
My “Worth Watching” series is a brief review of companies that appeal to me. They are not based on in-depth research and are in no way a recommendation to buy or sell shares. The reader is advised to do their own research and/or consult with their broker.