Redstone Resources Limited (RDS) are explorers who offer investors much more than their current exploration projects, which comprise the largest holding in the resource rich West Musgrave region, and which according to the company’s directors is one of the most exciting land holdings in Australia
Redstone currently has a prospectus on issue for an initial public offering to raise $5,500,000 with an expected closing date of the 20th of July 2006.
In an interview with Managing Director Mr. Anthony Ailakis and Non Executive Director Mr. Carlos Olivero, The AI gets a real insight into why an investment with Redstone is much more than simply a roll out of the company’s exploration plans for its extensive West Musgrave projects.
Redstone Resources Limited has a corporate strategy that is designed to manage and minimise the normal associated risk within the industry by offering an investment in its people its network and its strategy.
Yes the investment offers the opportunity to “take part in exploration of one of the best portfolios of exploration projects presented to the market for a long time” and yes Redstone has
“a geological team that is normally only found in large multi national companies with the ability to exploit and develop mineral targeting concepts to on ground exploration utilising proven industry leading exploration techniques” states Mr Olivero.
However the real key to appreciating the opportunity lies in an appreciation of the company’s strategy:
“The strategic model is to use the specialised skills and international reputation and networks of the members of the geological team to identify major mineral deposit targets. The strategy involves selecting projects which are of sufficient scale and prospectivity to attract exploration funding from the large established mining companies who have the capacity to undertake such funding in a Joint Venture setting. There is a definite worldwide shortage of major mineral deposit targets across most metals and it is this shortage that is the focus of the company’s strategy. The strategic model is being proven by the high level of interest from major mining and smelting companies in Redstone’s West Musgrave projects. ” says Mr. Ailakis.
“The underlying principle of the strategic model is to provide investors with a risk minimisation strategy based on the targeting capacity of this geological team which is almost unique among exploration companies. Risk is mitigated by generating a continuous stream of projects that will provide ongoing opportunities for Redstone over and above its current projects.” states Mr Ailakis.
The key strengths of the Company are its current portfolio of projects, its team and its strategies for success.
Project Portfolio
Redstone was incorporated in 1999 to identify and acquire mineral exploration projects in the West Musgrave Region, with an emphasis on world-class Nickel-Copper-Platinum Group Elements (Ni-Cu-PGE) and Iron-Oxide Copper-Gold (IOCG) deposits.
Redstone recognised the potential for discovery, and identified the West Musgrave Region as being highly prospective for these types of deposits. Much of the area remains unexplored, or has had only limited exploration during the 1950 to 1960s due to aboriginal access restrictions. Mr Ailakis said “Over the past 7 years, Redstone has developed a very good working relationship with the Ngaanyatjarra Council and traditional owners in the region and formal access agreements are in place for key projects.”
Companies have started to explore the area, and already two significant Ni-Cu-PGE discoveries have been made by Western Mining Corporation adjacent to one of the Company’s projects. These discoveries were made within two years of commencement of on-ground exploration by WMC, and were initially located by low-cost surface geochemical sampling techniques.
The company’s four main projects which have been independently assessed as being highly prospective by SRK Consulting include:
1. Red Rock High grade surface nickel mineralization over 300m open in all directions with peak nickel values up to 6.8%. located approximately 4 km from the Nebo and Babel deposits.
2. Tollu High grade copper mineralization over an area of 2 km² (with an average grade of 6.75% from 68 Rock chip samples) open under cover in all directions.
3. Blackstone Range includes the Saturn Complex which is a 12 km long layered intrusion with a spectacular aeromagnetic finger print and similar to other layered intrusions around the world which host major Ni-Cu-PGE and Cr-PGE (Chrome- Platinum Group Elements) deposits.
4. Baggaley Hills this project is centred on two gravity-magnetic targets which have similar geophysical characteristics to the Olympic Dam deposit.
The Team
Redstone has assembled a high calibre Board and a geological team with exceptional technical and operational skills, and experience in the acquisition and discovery of mineral deposits.
The company’s geological team has an outstanding exploration targeting capability with the following characteristics:
• Experience in most of the world’s major mineral provinces;
• Over 40 years collective industry knowledge and experience;
• Leaders in conceptual targeting and mineral endowment analysis;
• Extensive international networks; and
• A track record of innovative exploration and discovery.
Chairman Dr David Groves and Dr Stephen Gardoll have spent the last decade developing mineral-deposit targeting and province-scale metal-endowment estimation methodologies within a Geographic Information System (GIS).
“The unique state-of-the-art expertise developed by Professor Groves and Dr Gardoll provide Redstone Resources Limited with technical and competitive advantages in the targeting of world class mineral deposits. It is these targets which are in short supply worldwide and which are in demand by the large mining companies.” says Mr. Carlos Olivero.
The Strategy
The first component of Redstone’s strategy is to explore its current portfolio of projects.
The second component of the company’s strategy is to fully exploit the mineral targeting ability of its team to create a constant flow of new projects. This strategy is essentially a risk mitigation strategy and is based on a scarcity of innovative target generation teams and a resulting worldwide shortage of major mineral deposit targets across most metals.
As stated above by Mr Ailakis “The strategy involves selecting projects which are of sufficient scale and prospectivity to attract exploration funding from the large established mining companies who have the capacity to undertake such funding in a Joint Venture setting”.
Market timing
“We see the current strength in commodity prices continuing for quite some time driven by the additional demand coming from the Chinese and Indian economies coupled with supply constraints for some commodities”, says Anthony Ailakis.
“What is starting to emerge is that end users of metals such as smelting companies are becoming increrasingly active in the mineral exploration arena in an attempt to secure long term supply for their smelters.. This is a trend which we believe will increase significantly over the next 10 years. In the case of Redstone, we have already been approached by several of the world’s major smelting groups seeking to commence discussions about involvement in our exploration projects and global targeting strategy”.
In summary
Redstone’s competive advantage in the market is the outstanding skill set of its geological team. It is this competitive advantage which lies at the heart of the company’s strategy, which is to minimise shareholder risk while maximising the shareholder returns that flow from the discovery of mineral deposits.
The risk minimisation strategy is based on the targeting ability of the geological team which is almost unique among exploration companies. Risk is mitigated by generating a continuous stream of projects that will provide ongoing opportunities for Redstone over and above its current projects.
“The current opportunity provided by the company’s West Musgrave projects is really only a stepping stone to a much larger plan as Redstone exploits its global targeting opportunities” says Mr. Anthony Ailakis
“ An outstanding portfolio of current projects, the fact that founders have retained significant shareholding in the company, the offering of a world class geological team and the strategy to use that team to spread risk over as many projects as possible which are funded by third parties makes this a high quality value proposition” states Mr. Olivero
For more specific information about the current explorations and tenements click on the logo at the top of the page.
Be the first to comment