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Strong first day for Saturn

Saturn Metals (AU:STN), which was swamped with interest in its oversubscribed A$7 million (US$5.5 million) initial public offer, has seen strong interest in its first day of trading from under the wing of parent Peel Mining (AU:PEX), in what was generally a lacklustre day for mining stocks.
Strong first day for Saturn Strong first day for Saturn Strong first day for Saturn Strong first day for Saturn Strong first day for Saturn

Saturn Metals rose on its first day of trading in what was a lacklustre trading day in Australia

Haydn Black*

Trading was thin, but saw the company surge A$0.03 from its last price of A$0.20, before closing at A$0.215 as 274,000 shares changed hands.

The ASX 200, meanwhile, was up 0.34% for the day.

Interest in the stock is driven by the company's large, prospective land holding, its one million ounce resource (albeit at just 0.5g/t), and the fact the known mineralisation at the flagship Apollo Hill project in Western Australia hosts an unrivalled gold alteration system.

Saturn managing director Ian Bamborough, a former senior geologist for Newmont Mining (US:NEM), told MiningNews.net he'd initially been sceptical about the viability of the low-grade Apollo Hill resource to support a company, but that it wasn't long after he started interrogating the data that he realised the project had never been given its due.

Since Fimiston Mining made the original discovery in 1986, it has changed hands almost a dozen times.

"It was not until you start looking at those owners and what they were doing that a pattern emerges," the geologist said.

Battle Mountain Mining picked it up just before it made the big Vera-Nancy gold discovery in Queensland. Homestake Gold had it when the gold price cratered to US$250 per ounce. Apex Minerals secured it shortly before it went bust. Hampton Hill Mining was lured away from gold by the spiking iron ore price.

Peel picked it up but promptly had its company-making discovery at Mallee Bull in New South Wales, Australia, and never really advanced the project.

At each stage, Bamborough said enough good work was done to keep Apollo Hill interesting, but not enough to stop it from being eclipsed.

Bamborough describes Apollo Hill and the adjacent Ra zone as a "proper, big, robust gold system" that only really becomes obvious once all the data is put together.

Further, Saturn's tenement package sits within an anomalous area of the greenstone belt, along the prolific Keith-Kilkenny tectonic zone that is curiously lacking in the multi-million ounce deposits that surround it.

That could be due to the fact the most promising areas are beneath Lake Raeside, and the ability to explore beneath lake beds is still fairly new and that ownership of the area has been fractured.

But, the paradigm Bamborough wants to test - and hopefully smash - is the perception the area is one for low-grade gold.

Having looked at all the data, where there are drillholes with gold all through the system at Apollo Hill, he believes the deposit could be the halo of a robust high-grade system that has not been recognised for what it is: a potential 2 million ounce gold system, although how much would be recoverable is another mystery.

"What I see, this 0.5-1g/t resource is the alteration halo. Most deposits have haloes of other minerals, but what I think it we have an alteration halo of gold, and I am looking for the architecture within it that can offer the real surprise," he said.

A mix of extensional and infill drilling should start by April, and will attempt to explain the high-grade hits at Apollo Hill and target what are potentially flat-lying structures.

Saturn is about 50% owned by Peel, with Hampton Hill owning around 2%.

*Haydn Black is a reporter at MiningNews.net