Building a sustainable & valuable future together

The following blog is the first of a short three part series which will examine Corporate Social Responsibility (CSR) programmes in place by three different DGR created companies, demonstrating the importance behind community initiatives and how they play a crucial role in the advancement of DGR created exploration companies which in turn, progresses the project, the company itself and most importantly, value for its shareholders.

Part one focuses on IronRidge Resources and its CSR programmes in West Africa.  


In order for each project to develop in the most sustainable, community respectable and environmentally conscious way, each DGR creation ensures its Corporate Social Responsibility (CSR) programme is built on strong foundations.

This ‘good neighbour’ approach starts from the very beginning – when our exploration geologists first step foot on the tenure.

Making a positive impact and establishing mutual respect between the company and community, play a crucial role in the ongoing success of the Company in its host Country.

All companies, from small junior explorers to mining majors, depend on local community acceptance for the project to operate successfully - no matter what jurisdiction it may be.

Maximum community involvement, transparent communication and open negotiation situations are the key requirements that each DGR founded project takes on board, when setting out to achieve each CSR aspiration.

Operating within small communities in West African regions, IronRidge Resources has a strong CSR programme in place which currently focuses on creating synergies within the communities, village chiefs, youth leaders and local government bodies with a goal to improve the quality of life – initially for the people on ground in the project footprint, then growing this to reach the outer communities.

“We focus on making an impact from the early exploration stage. We aim to employ locally, empower locally and develop the local industry to enrich the community and leave a lasting legacy” says Chief Operating Officer, Len Kolff.

The IronRidge team currently has a number of different programmes in place for different demographics within the local community at its Ewoyaa lithium project in Ghana.

IronRidge sponsored the local marathon challenge in the Asante Akeym district Ashanti Region in Ghana - empowering youth through sport is a huge part of the CSR programme in place.

IronRidge sponsored the local marathon challenge in the Asante Akeym district Ashanti Region in Ghana - empowering youth through sport is a huge part of the CSR programme in place.

1.       Total Immersion

The only company office in Ghana is located with the project area and has a strong Ghanaian employee representation.

Another huge factor to community involvement is actively sponsoring local sporting events and the donation of goods for local initiatives.

“Sport is a big part of African life. We have sponsored the annual marathon event and travelling costs and uniforms for international sportspeople. I want to really build this out and support more local events as this empowers the youth within the community” said Len Kolff.

IronRidge has also helped clear an area for the Ewoyaa community market hall and will continue to contribute to this initiative by donating building materials for the construction.

A plant nursery has been established in preparation for reforestation initiatives post exploration and drilling activities.

1.       Local employment

Plant nursery in the Ewoyaa Village.

Plant nursery in the Ewoyaa Village.

IronRidge employs 16 full time staff, and up to 50 additional people from within the local communities on regular occurrences, with only one expatriate employee on the team. The aim to continuously employ locally as much as possible is one of the most important sectors of IronRidge’s CSR programme.

The majority of the current staff working on the lithium project are from within the project area and often work across a number of different roles.

2.       Education

Empowering through training and education is a key element for enriching the lives of community members.

IronRidge currently trains graduate geologists that are brought on board for employment, as well as office employees on data entry, environmental monitoring and other operational duties.

IronRidge has also set up its own laboratory and has trained local staff to use new technologies (PRESS, LIBS and pXRF) for regional lithium exploration. This is likely the first time this has been undertaken at such a scale in Africa.  

As each project expands and develops, so will the CSR programme.

Through the spirit of mutual respect and a view of each project lasting inter-generationally, ongoing discovery and development, the DGR group ensures its social and environmental impact measures will create value for all parties involved.

Part two of this series will focus on SolGold and its growing CSR programmes in regional Ecuador. 

 


DGR Global – Listed on the ASX : DGR IronRidge Resources – Listed on the LSE AIM : IRR

DGR Global Gearing up for the White Gold Rush

Robert Draper writes in his assignment The Rush For White Gold, for the National Geographic, February 2019:

“What gold meant to earlier eras, and petroleum to the previous century, lithium may eclipse in the coming years.” (Draper, 2019)

In this assignment, Draper delivers a comprehensive update on the universal demand for lithium which continues to increase.

Lithium has been found to be highly prevalent in Chile, China, Argentina, Africa, Australia, Portugal, Brazil, United States, Canada and Bolivia; and resource company creator DGR Global is establishing lithium positions in Ghana, Côte d'Ivoire and in Argentina.

Lithium, also being labelled “white gold” has many admirable features, primarily being one of the lightest solid elements on earth and one of the most abundant, making it ideal for portable energy storage. Lithium also powers many of our everyday items such as our phones, laptops, batteries and electric cars (to mention a few). With demand for these items increasing, lithium continues to be a commodity that will be crucial for everyday life in urbanised areas.  

Two of DGR Global’s daughter companies, Iron Ridge Resources (AIM:IRR of which DGR holds a 22.13% stake) and Dark Horse Resources (ASX:DHR of which DGR holds a 16.73% stake) are currently making positive progress with their lithium hard rock and lithium brine exploration projects.

IronRidge Resources is focused on frontier regions in West Africa and is currently exploring two separate lithium projects in highly prospective areas. The Cape Coast Lithium project where Iron Ridge Resources is actively drilling its Ewoyaa discovery, has already boasted high grade drilling results and remains open in all directions. The core being drilled is course spodumene which is the most ideal setting to feed directly to suppliers. IronRidge’s second lithium project in Côte d’Ivoire shows significant lithium potential in areas where there has been little to no modern-day exploration completed – providing IronRidge with a first mover advantage across its large land package. 

“This is a significant lithium discovery; not only have we demonstrated grade and width across multiple drill intersections which are spodumene dominant, the deposit is located within 1km of a bitumen highway, approximately 100km of the operating deep-sea port of Takoradi and has through going grid power; not many projects can boast such credentials, and all wrapped up in the stable, pro-mining jurisdiction of Ghana” says Len Kolff, Chief Geologist, IronRidge Resources.

Ghana - Egyasimanku Hill. An Iron Ridge Resources Lithium project.

Ghana - Egyasimanku Hill. An Iron Ridge Resources Lithium project.

Exploring the riches of Argentina, Dark Horse Resources is securing two main lithium projects – one being a hard rock spodumene project in central Argentina and the other focused on defining a large lithium brine resource in the north.

Dark Horse Resources Geologists site visit in Argentina.

Dark Horse Resources Geologists site visit in Argentina.

In 2016, Goldman Sachs released a special series; ‘What if I told you?’ This series covered future trend topics such as disruptive technologies, space travel and of course, lithium demand. Bob Koort, Head Industrials and Materials Goldman Sachs Research described the commodity as the gasoline of the future. He notes that by 2025, we can expect to see lithium demand triple. Using electric vehicles as an example; electric vehicles represent 3% of global new vehicle sales on the road today, projected to reach more than 20% of global new sales by 2025. (Goldman Sachs, 2016).

When we overlay this positive project progress from both IronRidge Resources and Dark Horse Resources combined with lithium industry trends; an investment into lithium stocks now could provide long term benefits in the future. DGR Global offers a dual gateway into lithium via two different stock exchanges, three different jurisdictions and multiple stages of exploration.  

DGR’s core business model is about recognising the importance of these macro-economic trends and to explore for projects that will yield world-class deposits for future supplies not just in the lithium space, but across a diverse range of commodities.

Reference

Draper, R. (2019). Gearing up for the White Gold Rush. National Geographic. [online] Available at: https://www.nationalgeographic.com/magazine/2019/02/lithium-is-fueling-technology-today-at-what-cost/ [Accessed 2 Feb. 2019].

Goldman Sachs (2016). Lithium is the new gasoline. Available at: https://www.goldmansachs.com/insights/pages/what-if-i-told-you-full/?playlist=0&video=0

This article does not constitute investment advice and should not be relied upon as such.

BHP’s tick of approval for DGR

The DGR business model – to create world-class resources companies – has been given a huge tick of approval by one of the world’s mining heavyweights, BHP, which has bought 6.02% of daughter company, SolGold, and then subscribed to a further 5.1% at a 35% premium.

What attracted BHP is the world-class Alpala copper-gold deposit that SolGold – which is listed on the London and Toronto Stock Exchanges – is developing in northern Ecuador.

In January this year, SolGold released its Maiden Resource Estimate (MRE) for the Alpala deposit of 2.3 million tonnes (Mt) of copper and 6 million ounces (Moz) of gold in the indicated category, and 2.9 Mt of copper and 6.3 Moz of gold in the inferred category. After further drilling, an updated MRE is projected for completion and release before the end 2018.

BHP’s interest in SolGold validates DGR’s position in the company (DGR Global owns 11.11% of SolGold), as can be seen clearly in the DGR Global share price, which almost doubled, from 8.4 cents at the end of August to 16.5 cents in mid-October, as other investors noticed BHP’s move.

BHP joins on the SolGold register fellow Australian miner Newcrest Mining, which is SolGold’s largest shareholder, with 13.43% of the company.

The recent endorsement of SolGold by mining giant BHP, further endorses DGR’s main business model.

DGR is focused on creating companies that explore for globally demanded commodities which are strategically important as the world urbanises and electrifies – namely copper, lithium and gas. Gold of course is timeless, the oldest form of money.  

After conducting a top down search for the commodity, country and region, DGR provides seed capital to grow its daughters by proving the concept and taking the company through to initial public offering (IPO) on a stock market. With the capital raised, we explore further, to establish a resource base – as this is progressively defined, we mount secondary capital raisings. The final phase is developing the company through to advanced exploration with an ultimate aim of production. Frequently, these companies don’t get there, being taken over beforehand, and so enriching all shareholders.  

SolGold exemplifies this process. The Company started exploring in Ecuador in 2012, when there was still a sovereign risk stigma associated with the country and it remained largely underexplored.

Back in October 2016, BHP and Newcrest competed for the right to buy strategic stakes in SolGold. Despite BHP then offering a small amount of money at a higher price, SolGold accepted Newcrest’s invest in 10% of its shares, as the terms allowed SolGold to remain fully in control of the project. Newcrest was also at the time, the number one block cave miner in the world, very relevant for when SolGold progressed to mining the Alpala orebody which is ideally positioned for an underground block cave mine. 

Other mining heavyweights have also since flocked to Ecuador to explore for copper, including Chilean copper company CODELCO, Australian iron ore producer Fortescue Metals Group and Gina Rinehart’s Hancock Prospecting, which has secured ground surrounding SolGold’s Cascabel tenement on three sides.

It is likely that these players are all attracted by the suggestion that Alpala, which is on the gold-rich northern section of the prolific Andean Copper Belt, contains the same style and age of mineralisation in Ecuador as that which hosts the massive porphyry copper deposits in Chile – which supply half of the world’s copper production.

With ore grades declining in the Chilean copper regions, and costs rising, it makes sense for miners to look north along the Andean Copper Belt to a country that is underexplored, yet highly prospective. SolGold has four-year first mover advantage and is the largest concession holder in the country, with Fortescue the second largest. Ecuador has revised its mining tax laws and has created a Mining Ministry in a bid to woo mining investment. Ecuador expects producers to make at least US$8 billion ($11.3 billion) in investment in new mines by 2024.

Time will only tell whether the majors see the SolGold opportunity. In the meantime, the traditional arbitrage between DGR Global’s Australian Securities Exchange (ASX) price and the SolGold London valuation continues to provide a huge value opportunity for investors.

With a SolGold market capitalisation of about 660 million pounds at the current exchange rate, SolGold has a market cap of about $A1.19 billion, which makes DGR Global’s stake worth $A131.5 million.

That is a lot more than DGR Global’s market capitalisation of $A89 million.

Before BHP bought in to SolGold, the value gap to DGR was even wider.

Other resource companies that DGR Global has created – and listed – include:

·       Aus Tin Mining (tin in Australia): ASX market capitalisation $34 million, market price of DGR’s stake $6.2 million.

·       IronRidge Resources (gold in Chad and Ivory Coast, and lithium in Ghana and Ivory Coast): London Stock Exchange Alternative Investment market (AIM) market capitalisation 61.32 million pounds ($110.4 million), market price of DGR’s stake $26.8 million.

·       Armour Energy (natural gas in Australia): ASX market capitalisation $42 million, market price of DGR’s stake $9.4 million.

·       Dark Horse Resources (gold and lithium in Argentina): ASX market capitalisation $10 million, market price of DGR’s stake $1.7 million

All in all a total asset list totalling A$175.6 million.

As the value chasm narrows, DGR shares still offer discounted entry into SolGold, plus free entry to Aus Tin, IronRidge Resources, Armour Energy and Dark Horse Resources.