I bought some Arras Minerals shares at .45c on Thursday after a discovery hole on their Elemes deposit. Full headline: Arras Minerals Drills 261 Metres @ 0.64% CuEq In First Holes at Berezski Central Target – Elemes Project, Kazakhstan (NR)
Table & Map
Here is a map of the region, with the yellow circle indicating the location of recent drilling.
Note that the Elemes project is 100% owned by Arras. Projects under the Arras-Teck Alliance are highlighted in blue. Arras was created as a spin-off of Silver-Bull Resources in 2021.
Reasons I bought:
- Good economic drill results over long widths. Looking at the upper-left portion of the map, you can see a “Bozshakol Cu Mine” label (in white). The Bozshakol mine, started in 2016, has 1.003 Bt at 0.52% CuEQ (0.33%Cu & 0.13g/t). The Kazak advantage is low costs: Bozshakol is the lowest copper producer globally (according to Mining Visuals (link)) with costs around per pound $1 a pound.
- Potential of district: Most projects haven’t had modern drilling since Soviet-era.
- Low share count: Only 89M shares out, 108 FD. Teck 9.3%, Insiders 6.5%. Only 40M MCAP.
- Teck Alliance adds financing help and optionality. Teck put up 5M to test several targets in 2024-2025. After which, it can select up to four projects (in the blue areas on the map), and then earn up to 75% interest by spending 47.5$m per project. This should generate some cash for Arras and news flow. Also it makes sense–there’s no way Arras can explore all of these deposits on its own.
- Location: In a mining region (near two other mines), only 20-minute drive from a mining town (Ekibastuz), where the company has its office. Near rail, electrical powerlines, etc.
- Geo quote from webinar says they are “not yet in the core” of the porphyry, suggesting the best is yet to come.
- No First Nations
Reasons to be wary:
- I don’t know of the management team.
- The company has only 1M in the bank. They will need to raise eventually. The Teck Alliance, however, hopefully will provide a source of non-dilutive financing post 2025.
- Kazakstan is an unknown for me.
Notes on other projects:
- Aimandai target (100% owned), which they think has multiple porphyries. They hope to drill it in 2025.
- Beskauga has a 43-101 Resource Estimate that Arras put together in 2022. This is a project they optioned from Copperbelt for 15M. The Resource estimate indicates elevated arsenic levels, but can be reduced via leaching process apparently. Had hits like “1124.1 m @ 0.61% CuEq, Including 136.0 m @ 1.01 % CuEq” in 2022. Didn’t garner much interest then, though I think more eyes are in Kazakstan now. It’s not clear whether Arras will move forward with Beskauga (This would require Arras pay US$15 million to purchase 100% of Beskauga in 2025).
What’s next? According to the webinar, this is my understanding:
- Two more releases from this 5000m drill program. The next NR will focus on east in gold-rich era (based on historical soviet times). This will be followed by a NR on Berezski north testing new Soviet-era porphyry system at depth. Waiting for the next results to come through in next month or two. I assume these two NRs will come in Jan and Feb.
- Afterward, they company will plan the rest of 2025.
I had promised myself not to gamble on pure exploration plays, but I also planned to (occasionally) buy explorers on positive drill results (as I did with NGEX). This is the latter. I hope this will work out like NGEX. One reason I bought was a bit of familiarity. Though I haven’t spoken with mgmt, Arras wasn’t a complete unknown. I had come across it first by following Vukasin Pekovic, a mining analyst and a good follow. His intel was one factor that helped me pull the trigger on Regulus Resources (a company I had been watching), which has more than doubled since my initial entry.
What I’ve learned in the past few years is that following a slew of companies and market news is draining and time-consuming. However, when an opportunity arises, having mental/digital notes on these companies can be quite valuable when time-sensitive information comes out.
Let’s see how this plays out.
Disclaimer: This content is for informational purposes only and should not be construed as financial advice. The views expressed are those of the author, who is not liable for any losses or damages arising from any actions taken based on the information provided in this blog. Investing and trading involve risk; you are solely responsible for your decisions.