The group’s shares are down 31% year-to-date to 0.81p. They suffered a big drop in June after Alien Metals announced the termination of an earn-in deal signed with Capstone Mining in relation to a copper-gold project in Mexico.
Although the share price movements are not encouraging, there has been positive news coming out of the company this year. Last month it announced that it had completed the second phase of drilling on its Hancock tenement in Western Australia, part of the Hamersley Iron Ore Project.
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Hamersley Iron Ore Project looks critical to success
At the time of the announcement, chief executive Bill Brodie Good, said: “With iron ore prices remaining robust and the consistently good results we are seeing from our exploration, the team is increasingly encouraged by the potential of Hamersley Iron Ore Project, and we look forward to updating the market further as we continue to drive these projects up the value curve.”
According to a note from Turner Pope Investments, the Hamersley Iron Ore Project contributes £61.2 million to the total valuation of Alien Metals’ continuing projects, which is £82.9 million.
Good news coming out of the project, which makes up such a big chunk of the company’s portfolio, will be encouraging to shareholders as it removes some of the exploration risk.
The company also announced that it has been granted a 30-day extension in its Elizabeth Hill Silver Tailings Project, so that it can finish its tests and have time to study the results.
Iron ore has been a hot market this year
Iron ore has been one of the best performing commodities of the year, with the iron ore spot price up 107.6% over one year to $214.43. This was driven mainly by demand from China, however as governments around the world are turning to infrastructure projects to drive a post-pandemic recovery, commodities, like iron ore, are expected to see a further boost.
Meanwhile, silver is a component in solar cells, electronics and battery electric vehicles, which drives up demand as these markets continue to grow.
Alien Metals, which has a market cap of £30 million, has projects in Mexico, Australia and Greenland that includes silver mining projects in Los Campos and zinc and lead exploration programmes in Greenland.
Rising iron ore prices in Australia, where Alien Metals has two high-grade iron ore projects, are expected to further support the company, with prices to average $137 this financial year, up from an earlier forecast of $128, according to a government report.