Overview
Copper’s surprising performance in 2021 makes many market watchers expect its prices to remain high and supply to get tighter in the coming decades. “Copper is a good thing to own,” said Barrick Gold (TSE:ABX) CEO Mark Bristow. Despite being part of one of the world’s largest gold mining companies in the world, Bristow (among other mining corporations) has apparently named copper a metal of interest for future growth. Meanwhile, Goldman Sachs (NYSE:GS) Global Head of Commodities Research Jeff Currie went as far as calling “copper the new oil.”
While China is already looking to expand its exposure to copper supply, experts predict China will source a large portion of its copper supply from Belt and Road countries like Mongolia.
Mongolia has one of the best up and coming mining economies in the world, with an estimated $1 to $3 trillion dollars in mineral wealth and a combined billions of proven resources in copper, coal, iron and other metals. With current exploration and mining licences accounting for less than 5 percent of the geological survey, it’s clear Mongolia presents investors and mining companies with a largely untapped source of high-demand metals.
Aranjin Resources (TSXV:ARJN) is a Toronto-based mining exploration and resource company operating out of Mongolia, with particular focus on copper. The combination of the company’s strong leadership team as well as its work in the untapped, but mineral rich Mongolia puts Aranjin Resources in a potential position to greatly profit off its operations.
Aranjin Resources currently has three active mining projects, with majority shares in each of the projects. The first is the Sharga Project, located in Sharga Soum of Gobi Altai Province (approximately 80 km away from the city of Altai and 20 km away from roads connecting Altai to China).
The Sharga Project consists of over 9,000 hectares, with significant prior explorations and surveys. The second is the Bayan Undur Project, located in Bayan Undur Soum of Bayankhongor Province. The Bayan Undur project consists of four mining licences issued for a thirty year period and has had $10 million in previous exploration already utilized. The third is the Baruun Tal Project, located in the South Gobi Copper Province. The Baruun Tal Project is located near several other projects and well-positioned, providing the project with already available resources and infrastructure.
Beyond geography, there are several reasons as to why Aranjin Resources is a potentially attractive option for investors. Its management team is near unrivaled with respect to mining operations in Mongolia, with members of the team having been involved in Hunnu Coal (which achieved an exit price of $500 million) and Steppe Gold (Mongolia’s top gold producer). Furthermore, management and the board control 50 percent of the outstanding shares of Aranjin, providing them with investment in the company’s success.
Aranjin recently entered into a term sheet agreement for an exploration joint venture with ION Energy (TSXV:ION,OTC:IONGF) granting one another reciprocal exploration rights on their respective exploration licences within Mongolia. According to a press release, both ION and Aranjin will leverage one another’s expertise in their respective metals, with Aranjin being granted a right to explore ION’s properties for base metals (including copper, lead, zinc, nickel, cobalt and associated metals), and ION being granted a right to explore Aranjin’s properties for lithium.
Company Highlights
- Aranjin Resources is a Canadian company operating out of Mongolia with particular focus on copper.
- Aranjin Resources has three projects:
- The Sharga Project is located in Sharga Soum of Gobi Altai Province. Significant prior work was conducted in the project, with multiple high grade copper targets, extensive rock chip samples and tens to hundreds of kilometers of geological surveys.
- The Bayan Undur Project is located in Bayan Undur Soum of Bayankhongor Province. This project has significant prior work, including but not limited to hundreds of drill holes and a ground magnetic survey that covered the entire area.
- The Baruun Tal Project is located in South Gobi Copper Province, with proximity to successful nearby coal, copper and gold mines (including Tavan Tolgoi and Oyu Tolgoi) and established infrastructure.
- The company features a proven management team with an established track record when it comes to mining in Mongolia.
- Aranjin entered into a joint venture agreement with ION Energy for reciprocal exploration rights on their respective exploration licences within Mongolia.
Key Projects
Sharga Project
The Sharga project is located in the Sharga Soum of Gobi Altai Province and is Aranjin Resources’ primary project. Significant prior work was conducted in the project, with multiple high grade copper targets, extensive rock chip samples and tens to hundreds of kilometers of geological surveys.
Project Highlights
- Drill Hole Results: At the East Prospect of the Sharga Project, Araniin Resources announced a best result (of 6 drill holes, totaling 2211 meters) of 15.4 meters at 1.33 percent copper and 0.94g.t gold.
- SH-2: 54.1 meters at 0.27 percent Copper and 0.35g/t Gold, including 7.7 meters at 1.04g/t Gold and 2.9 percent Zinc.
Bayan Undur Project
The Banyan Undur project,located in Bayan Undur Soum of Bayankhongor Province,consists of four mining licences, with an issuance period of thirty years, and over 2,773 hectares of land.
Project Highlights
- Historical Analyses: There has been $10 million and thousands of geochemical and laboratory analyses in previous project work.
- Ground Magnet Survey: A ground magnetic survey covered the entire project area, at a distance of 125.2 m total.
- Geochemical Sampling: 1,973.52m3 of trenching with 137 channel samples, 57,446.8m (546 drill holes) and RC drilling with 14,215 core samples.
Baruun Tal Project
The Baruun Tal Project is located in the South Gobi Copper Province. The Baruun Tal Project has the advantage of being positioned in a well-defined mining jurisdiction and a history of successful mines including the Tavan Tolgoi and the Oyu Tolgoi.
Project Highlights:
- Developed Infrastructure: The Baruun Tal Project is located close to significant infrastructure, including but not limited to, roads and direct access to the Chinese border.
- Nearby Competitors: There is a history of successful mining operations and competitors nearby, including Rio Tinto’s Oyu Tolgoi mine.
Rock Chip Sampling Results: Rock chip sampling results revealed a highest copper grade of 14.5 percent copper with over 90 samples revealing greater than 1 percent copper.
Management Team
Ali Haji – President and CEO
Ali Haji jointly serves as CEO & Director of ION Energy, a lithium brine explorer in Mongolia and is proudly a member of the family of companies that includes Steppe Gold, Mongolia’s premier gold producer. Haji has over 13 years of international experience, including asset management, risk analysis and program governance. He serves as Director of Antler Hill Mining Ltd and as Advisor to ATMA Capital Markets. He holds a Bachelor of Sciences from the University of Western Ontario.
Matthew Wood – Executive Chairman
Matthew Wood has 30 years of global industry experience in mining and commodities investments. Wood was the founder of Hunnu Coal Limited, which sold for ~A$500M (2011). He was also the Chairman of the TSX main board listed Steppe Gold (TSX:STGO). Wood was awarded the Order of the Polar Star, the highest state honour that can be awarded to a non-citizen of Mongolia.
Jeremy South – Chief Financial Officer and Executive Director
Jeremy South has over 35 years of experience in M&A, capital markets and private equity in Europe, North America and Australia, including senior positions in investment banking at Deutsche Bank, NatWest Markets and Deloitte. For 10 years ended December 2016, South was Global Leader, Mining M&A Advisory at Deloitte. Based in Beijing for four years, he advised leading Asian trading houses and financial investors in mining M&A, financing and strategy and he counted some of Asia’s largest companies as clients. He worked extensively in Mongolia over the past 8 years.
Solongo Gunsendorj – Executive Director
Solongo Gunsendorj is a Mongolian national with considerable experience in the resources sector across a range of commodities including copper, gold, coal, iron and hydrocarbons. Gunsendorj is an executive at boutique Mongolian investment firm Garrison Capital Development (GCD). She currently acts as a Corporate Secretary of Steppe Gold Ltd, a Mongolian precious metals company listed on the TSX.