Caprice Resources Limited [ASX:CRS]
Metals & Mining
An early-stage high-potential multi-commodity play
Caprice Resources Limited (ASX: CRS) is a mineral exploration company with a diverse portfolio of exploration assets in tier-1 mining jurisdictions in Western Australia. It conducts exploration and project development activities for high-value commodities, focusing primarily on gold, copper and niobium (a rare earth element) at its Murchison Goldfields and West Arunta Projects. With the recent strength in gold price and the arrival of a new board and the new CEO during Q3 CY2024, CRS is now focused on its gold assets, particularly its Projects in the Murchison Goldfields. CRS has a twopronged approach – Focussing on the Island Gold Project (IGP) in Murchison Goldfields while advancing its copper, gold and niobium greenfield exploration in the recently acquired West Arunta Project.
Gold projects in Murchison to deliver value catalysts in CY2025
The company’s Murchison Projects’ tenements are strategically located in the Archean greenstone terrain (yielded >15Moz gold since the 1990s), ~20km from Cue and Westgold’s gold processing mill and 60km from Mt Magnet and Ramelius’ mill (via the Great Northern Highway in Western Australia). The company’s three-pillar Murchison gold strategy encompasses (a) discovery and resource expansion at the IGP, which had an initial exploration target of 200-300koz @ 1.5-1.9g/t gold (JORC compliant, although before recently announced exciting drill results) and has demonstrated discovery of new lodes of high-grade intercepts in recent drilling campaigns; (b) exploration at Cuddingwarra; and (c) development studies at the New Orient Gold Mine helping provide optionality on a production pipeline. With outstanding recent discoveries of newly identified thick mineralised lodes and an aggressive active drilling programme, Caprice is well-positioned to deliver significant value catalysts at IGP.
Potential upside from the West Arunta Project
The West Arunta Project's value proposition is underpinned by its prime location sharing a 55km border with WA1 Resources' Luni Niobium-REE discovery (200Mt @ 1% Nb2O5), favourable geological setting within the prospective Central Thrust Zone, and encouraging initial geophysical assessments that indicate signatures similar to neighbouring discoveries. With land access agreements secured and an exploration programme planned, the Project is well-positioned for potential discoveries over the next 12 months, offering investors exposure to multiple critical minerals.
Valuation
We have not assigned a valuation to the company as all of Caprice's exploration projects are in the early stages without any defined resource estimates. However, given the diverse portfolio of strategically located projects targeting commodities with strong demand growth, we see significant upside potential beyond the company's current valuation of A$28.3m. The upcoming news flow on the additional drilling results from the IGP, with high potential for future discoveries along the 5km’s of prospective strike targeting untested structures of which seven have already been identified as identical to Vadrians but remain untested by drilling, and the potential release of a mineral resource estimate in CY2025 could be catalysts for stock re-rating. Since sharing the latest drilling result update mid-February, the stock has already been up >115%. Additional updates on exploration activities at the West Arunta Project could provide further catalysts for significant stock appreciation. Key risks include commodity price fluctuations, execution delays, funding challenges, and geological uncertainties.