Over the past year, shares in mining company Alien Metals (LSE: UFO) have been on a roll – surging by over 300 percent against a backdrop of appreciating prospects for commodities such as silver and copper.
In this interview, CEO Bill Brodie Good reveals how Alien Metals is well equipped to deliver on the opportunity ahead and why buying UFO shares offer a unique and rare opportunity to investors on the London stock markets who seek exposure to silver and iron ore within their portfolios.
Firstly, tell us a bit about Alien Metals and its value proposition?
Alien Metals is a mining exploration and development company listed on AIM of the London Stock Exchange (LSE: UFO). The Company’s focus is on precious and base metal commodities, with its operations located in proven mining jurisdictions. We have embarked on an acquisition-led strategy headed by a high-quality geological team to build a strong portfolio of diversified assets. Alien provides exposure to some of the best performing commodities on the market, including iron ore, copper, silver and gold.
In 2019, the company acquired 51% of the Brockman and Hancock Ranges high-grade (Direct Shipping Ore) iron ore projects and moved this to a 90% holding in June 2021. In 2020, Alien acquired 100% of the Elizabeth Hill Silver Project, which consists of the Elizabeth Hill Historic Silver Mine Mining Lease and the surrounding Munni Munni North Exploration Tenement. The Australian projects are located in the world-renowned Pilbara region of Western Australia.
The Company also holds two silver projects located in Zacatecas State, Mexico’s largest silver producing state, which produced over 190m oz of silver in 2018 alone, accounting for 45% of the total silver production of Mexico for that year. The Company’s Donovan 2 Copper Gold project in the same region was held under an Earn-in agreement with Capstone Mining Corp. of Canada but was returned to Alien in June 2021.
The company was also awarded an Exploration Licence in Greenland in late 2020, which surrounds the world class Citronen Zinc-Lead deposit.
In addition to progressing and developing its portfolio of assets and following its strategic review of its portfolio of silver and precious metals projects, Alien Metals has identified priority exploration targets within all of its projects which it is working to advance systematically.
The combination of these strong building blocks for growth means that Alien provides an attractive investment opportunity and a strong value proposition for investors.
The current climate is presenting challenge and opportunity – how has this applied to your business?
Given the cross-border nature of the mining industry, the COVID-19 pandemic has naturally had an impact on the ability for the team to travel to our projects. Challenges have also arisen in Australia, simply due to the booming industry in the country at the present time, with drilling results held up in a backlog. This has been a particular challenge at our Hamersley Iron Ore project in the Pilbara region of Western Australia, where delays in services that support the industry has been a challenge to overcome.
However, COVID-19 has not had a material effect on the progress that the Company is making with our exploration and development work. This continuity of the development of our projects has been manifested in the progression of our priority exploration targets within all of our projects which we are working to advance systematically. This was showcased recently at the Elizabeth Hill Silver Project, where we have identified 20 Priority Exploration targets, with seven highest priority targets delineated for PGE and Ag/Ni/Cu mineralisation.
Two phases of drilling have also been done on the Hancock Iron Ore project, to lead to what is hoped will be a maiden inferred resource on the Sirius Extension Prospect in the north east corner, with new highly prospective DSO targets defined by Alien in a series of Iron bearing ridges, some of which were also provisionally drilled.
Opportunities in the current climate are plentiful, with the rise in commodity prices in metals such as iron ore, silver, copper and gold through the pandemic positively impacting the Company and justifying Alien’s strategy of investing in these commodities through the projects we hold. The Company’s ability to operate effectively through the current climate has also put us in an enviable position to accelerate growth as we emerge from the COVID-19 period.
Growth catalysts are crucial to business growth – what do you believe yours are?
In terms of catalysts for Alien’s growth, we have positioned the Company to be exposed to a number of favourable conditions and trends that are beneficial for long-term growth and providing shareholder value.
One key catalyst for growth is the diversity of the projects that we currently hold and are actively exploring. The location of the projects in proven mining jurisdictions and in safe haven commodities that have performed strongly, both historically and in the short term, is a strategic advantage for the Company. Alien is diversified in both the commodities that it is exploring and the countries that it operates in. With exposure to some of the best performing commodities in recent years, including iron ore, silver, gold and copper, Alien has developed a portfolio of projects that provides investors with a unique opportunity to invest in these in demand metals.
A further catalyst is that the commodities that Alien focus on have all had a strong rise in value in the previous few months, but also have a strong forecasted medium to long term outlook, including Iron Ore, Silver and Copper.
The fact that we operate in proven, mining friendly jurisdictions is also a significant catalyst for the Company, and enables the smooth management of Alien’s projects by our experienced geological and project management teams on the ground in these countries. In Australia, the Elizabeth Hill silver project and the Brockman and Hancock Iron ore ranges project are located in the famous Pilbara region of Western Australia, which is home to some of the largest and best performing mines historically. In Mexico, the Los Campos and San Celso silver projects and the Donovan 2 copper and gold project are located in Zacatecas State, Mexico. Zacatecas is Mexico’s largest silver producing state which produced over 190m oz of silver in 2018 alone, accounting for 45% of the total silver production of Mexico for that year.
What are the biggest headwinds you foresee to achieving growth in the coming months and years? How will you tackle them?
Although COVID-19 has been a significant headwind globally and also within the mining industry, our operations have not materially suffered. This is primarily due to the strong field teams that we have built up within these countries. The strong demand and high prices for the commodities that Alien operates within has shielded the Company from COVID-19 related struggles. Further, silver, a key commodity that Alien is exploring, will fuel the growing demand for a sustainable and renewable future, which Alien is an excellent position to benefit from.
A headwind that we undoubtably face is the full realisation of the value of our projects and the Company as a whole by the market. This manifests in the at times difficult process of achieving mining permits to begin drilling and receiving drilling results back from laboratories in a timely manner – both of which factors have also been impacted by COVID. Given the governmental emphasis on travel restrictions and closed borders, it has been difficult to progress this process as quickly as it would have been if travel hadn’t been so disrupted. However, with the global economy and travel slowly opening up, we are excited to get back on the ground in the countries that we operate in and are confident that we will be able to drive our projects forward to realise their true value.
Imagine you find yourself in a lift with Warren Buffett. What would be your ‘elevator pitch’ to summarise why he should invest in your business?
Alien is an attractive investment for a number of reasons, and is well capitalised and ready to achieve growth and deliver shareholder value.
The Company is strong in both precious and base metals, ensuring a diversified offering to investors. We only operate in safe, mining friendly jurisdictions, enabling Alien to unlock project value. We have an experienced board with significant experience, expertise and knowledge of the mining sector and particularly in the commodities we operate in. The Company is well capitalised with around £4.3 million cash for planned 2021 exploration and we have the potential to add significant value to projects through low-cost development. The strong relationships in the regions we operate in, enable the Company to pursue its strategy of establishing partnerships to fund exploration and project development.
Alien’s weighting in its portfolio towards silver and iron ore provides a rare offering to the London market and the Company’s strategy to add significant value to its diverse range of projects in commodity and country terms is a Unique Selling Point. Alien provides investors exposure to a unique portfolio, carefully constructed to maximise the potential to add value and bring in partners to quickly commercialise projects.
Please note: this interview with Bill Brodie Good of Alien Metals is part of the ShareBuyers’ going for growth series. This series enables companies with strong growth potential to share their story with retail investors.