RE: Investors Chronicle18 Mar 2018 13:31
Greenland greenfield
SolGold isn�t the only junior miner to tread a path vacated by the majors. BlueJay Mining (JAY), currently one of the hottest shares listed in London, is in the process of developing several assets in two overlooked mining postcodes: Greenland and Finland. At the forefront of investor hopes is the accelerated development of the Dundas ilmenite project in Greenland, which was recently backed by a �17m equity fundraising at 22p a share � a 200 per cent premium to the company�s stock price just a year earlier.
Dundas won�t take a lot of cash to build, and once it is up and running, it promises to give BlueJay (and Greenland tax authorities) an excellent revenue stream and a source of free cash flow. Indeed, calling this a mining project would be overstating it; the initial resource focuses on a raised beach area, which will require little more than dredging and shipping. It also helps that Dundas is the highest-grade mineral sand ilmenite project globally, and currently comprises just 17 per cent of one of two primary target areas.
Surprisingly, this wasn�t the project that most excites chief executive Rod McIllree, as he explained to us last year. BlueJay is also hoping its early success at Dundas can be replicated at two other sites in Greenland, which despite their excellent grades were passed over by mining majors. The first, a nickel-copper-platinum prospect known as Disko-Nuussuaq, has parallels with the massive resources presided over by Russian metals giant Norilsk Nickel (MNOD), and was previously drilled by Cominco and a group later absorbed into what is now Glencore (GLEN). The second potential company-maker, the Kangerluarsuk SedEx lead-zinc-silver deposit, was a former prospect of Rio Tinto�s zinc division. As exploration on these projects advances, and climate change leaves Greenland�s coast a less inhospitable place to work, the attraction of a long-term stake in BlueJay should become more clear.
As it stands, the prospects already look fairly enticing: what appears to be an excellent position in a small market (ilmenite), which can in turn fund expansion into several much larger metals markets.