The Speculator

Robust Resources has upgraded its resource potential … and its shares have surged.

PORTFOLIO POINT: Robust Resources shares have rallied following upgrades of its gold-silver and base metals project on Indonesia’s Romang Island.

Portfolio stock Robust Resources (ROL) today announced enhanced resource potential from a newly-drilled target within the Lakuwahi Caldera on Romang Island, 500 kilometres north-west of Darwin.

Eleven shallow diamond drill holes have been completed on its new Batu Hitum East prospect within the caldera, all with a 100% hit rate.

All holes intersected near-surface zones of silver and gold mineralisation with a weighted average of 19 metres at 1.2 grams/tonne gold equivalent, plus up to 5.12% combined copper-lead-zinc.

Two weeks ago, Robust shares, like so many other stocks, drifted down to a 12-month low of 57.5 cents – well below their high last year of $2.19. Then last week the stock rallied to a week’s high of 70c on turnover of 523,000 shares.

On Monday of this week the shares jumped to a high of 81c and closed the day at 76c on turnover of 111,500 after the ASX issued a “please explain” notice on the company.

Yesterday (Tuesday) the company replied it was not aware of any information that had not been released to the market that would explain the recent increases, adding that all drilling results available at this time had been released to the market.

Robust’s Sydney-based company secretary, Ian Mitchell, suggested recent share price increases may have been due to recent announcements of continuing good results.

Then, this morning, the new drilling report emerged.

Robust’s managing director, Gary Lewis, confirmed in the report that the company was in the course of evaluating extensions to the near-surface oxide and transitional gold-silver mineralisation, “which could be incorporated into mineral resources and may ultimately provide feed for an open-pit mining operation and a heap leach treatment plant.”

Before the discovery of these newly confirmed extensions, Robust had most recently confirmed a JORC-compliant resource estimate for its 77.5%-owned Romang Island project of:

  • 1.18 million oz of gold equivalent (592,000ozof gold and 27.7 million oz of silver), plus
  • 1.47 billion pounds of combined lead, zinc, copper and
  • A manganese resource yet to be quantified with drill holes grading up to 56.8% manganese.

A strong local partner

Robust’s interest in the Romang Island project is held through a 77.5% equity in the foreign investment company PT Gemala Borneo Ulama, which owns the mineral titles on Romang Island.

The other 22.5% is owed by Indonesia’s Salim group of companies, which also hold 19.69% of Robust Resources. With a total issued capital of 88 million shares, Robust at 70c carries a market capitalisation of $6l.6 million with net cash at bank of $31.6 million and no debt.

In today’s announcement, Lewis confirms that the Batu Hitam East anomaly “is significantly larger and stronger than the anomaly over the current resource areas of Batu Hitam and Batu Hitum West, and is therefore a promising drilling target.”

He added that recent exploration results had given the highest surface rock chip silver assay of 709g/t (that’s about 5oz of silver). The eastern lobe of the anomaly, which contains the highest silver in soil grades, has not yet been drilled and is therefore an attractive drilling target.

Robust aims to complete a feasibility study by the end of 2012 aimed at starting construction on a plant in the new year, and commissioning and production in 2014. 

Shareholders are unlikely to be called upon for a further injection of capital this side of the new year, which offers scope for holders of the stock to see further recovery in its share price if the current exploration program continues to yield encouraging results.

Minemakers seeks trading halt

Phosphate mining hopeful Minemakers Ltd (MAK) surprised the market on Monday with a request for a trading halt “pending the release of an announcement of a potential material asset disposal involving the company.”

The request was granted, but at the time of writing today the announcement was still to be revealed.

The company is fighting off an all-paper takeover bid from its joint venture partner UCL Resources Ltd (UCL), which is seeking control of a submarine phosphate resource of the west coast of Africa.

Minemakers has so far urged shareholders to reject the UCL takeover offer, which is scheduled to close on October 15.

David Haselhurst writes a monthly column for Money magazine. Please note that he is not able to provide personal replies to emails.

The Speculator portfolio (as at September 25, 2012)

CompanyCodeNo of sharesBoughtPurchase PriceCurrent PriceCurrent Value
Image ResourcesIMA*15,00031/12/2010* 0.362 av$0.280$4,200
Robust ResourcesROL6,00031/12/2010*$1.49 av$0.685$4,110
Scotgold ResourcesSGZ27,50031/12/2010*5.5 av$0.066$1,815
GoConnect LtdGCN250,00031/12/2010*0.034 av$0.016$4,000
Minemakers MAK20,00025/01/2011*0.425 av$0.135$2,700
Broken Hill ProspectingBPL30,00022/02/2011*0.132 av$0.100$3,000
Austpac ResourcesAPG40,0002/03/2011*$0.060$0.030$1,200
Potash West PWN11,05030/03/2011*$0.220$0.250$2,763
Cortona Resources CRC25,00013/04/2011*0.146 av$0.091$2,275
Golden Gate Petroleum GGP408,50020/04/2011*0.0145 av$0.009$3,677
TNT MinesTNT4,44022/07/2011*$0.000$0.250$1,110
Quickstep HoldingsQHL20,00023/11/2011*$0.185$0.165$3,300
Orpheus EnergyOEG19,25017/08/2011*0.164 av$0.089$1,713
Black Mountain ResourcesBMZ10,00017/04/2012$0.300$0.265$2,650
Chesser ResourcesCHZ12,00027/08/2012$0.360$0.440$5,280
Total value of portfolio$53,071
Owe the bank-$10,570
Portfolio change since January 3, 2012 (started with $50,000)-15.00%
All Ordinaries change since January 3 2012 (then 4155.22)5.78%
All Ordinaries close 25 September 20124395.5

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