DTM 3.57% 13.5¢ dart mining nl

HUGE DISCOVERY - 19m @9.39g/t plus Copper and Silver, page-70

  1. 137 Posts.
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    Dart Mining does not meet my investment criteria so I will not be buying shares at this stage. I have been investing in exploration companies since 1987 and even managed to sell my entire holding except Ariadne (that was a mistake!) before the crash in October 1987. Shares had drifted down for about two months so I sold out 4 days before the crash. So why doesn't Dart meet my criteria?

    1 - Success from 2007 to now:

    Mountain View - 26,000 tonnes at 4.5 g /t gold and 4.2 g /t silver (JORC) - ML obtained no mining

    Unicorn - 203Mt @ 0.06% MoEq (JORC) - Sub-economic porphyry even at todays prices, no JV obtained

    Fairley’s - 21,787 tonnes @ 2.53 g/t Au (JORC)

    Rushworth Non-JORC ~130,000 tonnes @ 1 g/t to 5 g/t Au (drilled out by Metals Ex in the 1980s I believe)
    Granite Flat - Some good intersections but seem to have drilled down the dip of the ore in some holes also at Sandy Creek recently, thereby increasing length of intersection.

    2 - Board structure

    DTM does not have an independent chairperson. With three directors, two of whom have had no other listed company directorships in the last three years, my view is that the Managing Director will have a high degree of influence over the company (this can be seen as a positive for small companies). As the company grows it may need to change its Board composition to include an independent chairperson. In 2008 DTM had 5 directors including and independent chairperson and a chief executive officer.

    3 - Low exploration spend or way too many leases

    The exploration expenditure of less than $1m p.a. (capitalised not written off) is small and given the considerable spread of exploration ground it may take a long time to prove up any JORC resources. The deep drilling required to target porphyry deposits and deeper structural targets is expensive and my view is that DTM will be seeking joint venture partners to do this. This will dilute shareholders exposure to the projects, on the other hand it will speed up the process. DTM has been clear that it is seeking joint venture partners.

    4 - Cash and shares
    The company does not have a large amount of cash reserves although there are not many shares on issue so it could create more cash through share issues. There have been a number of share issues in the last three years between 5 and 10 cents, well below current share prices. A plus is that share options issued to staff and directors are at high strike prices.

    6 - Environmental and social issues
    NE Victoria has the potential to be difficult from an environmental and social perspective. My knowledge here is old and may be completely inaccurate. DYOR.

    5 - What would change my mind?
    • Two JVs of NE Victorian assets with $5-10 million expenditure commitment.
    • A focus on tin at the Sandy Creek and Eskdale tin field. This was a good gold and tin field with plenty of potential. Previously narrow lodes but broader disseminated mineralisation is possible. Tin prices justify the work. Lithium would be a by-product if present.
    • A serious exploration effort at Rushworth - say $10million over 5 years commitment, deeper drilling and reopening the Growler's Hill shaft and accessing/drilling deeper zones underground. Rushworth has the potential to be a jewel.
    • JORC resources at economic grades without environmental or social issues. JORC resources at economic grades are assets, everything else is exploration potential. There are many companies with low market capitalisation that have significant JORC resources (assets) with high exploration upside (and more cash in the bank) and are less risk in my view, e.g. HMX, AME, CNB, AZY, RDM
    • Stop taking on new leases. Any one of the exploration areas deserves at least the total annual spend by DTM.
    • An independent Chairperson and balance of independent directors.
    • More cash to fund the exploration the leases deserve

    .If my analysis offends anyone or if I have missed out information I apologise in advance. This is just my honest view and not investment advice. DYOR and always take responsibility for your investment decisions. This analysis is why I will not be buying shares at present but good exploration results can see the share price rocket and shareholders win big, that is the great thing about small explorers.
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