Flagship tables huge Thai tungsten target

Flagship Minerals has unveiled a massive JORC exploration target for its wholly-owned Khao Soon tungsten project in southern Thailand, outlining between 22 and 40 million tonnes of resource at a substantial grade of 0.15 to 0.3 per cent tungsten.

However, as Khao Soon sits outside its core gold and copper strategy in South America and Canada, the company is now weighing up how best to crystallise the project’s value, including a full sale, a spin-out into a dedicated listed vehicle or a joint venture with a strategic partner.

Such a move could generate further non-dilutionary capital to pour into its priority Isidora gold project in Chile and the recently acquired Whipsaw copper project in Canada, following the recent divestment of its Reung Kiet lithium project in southern Thailand for a handy US$4 million (A$5.7M) in cash.

The timing of attracting a new owner appears spot on, with the market for tungsten heating up and prices hovering near record highs as the West scrambles to secure supplies of the critical metal. Recent Chinese export restrictions put a rocket under the metal, sending its price soaring from US$300 (A$430) per metric tonne unit – where one MTU equates to 10 kilograms – to as high as US$3800 (A$5470) per MTU in little more than 18 months.

‘Khao Soon provides Flagship’s shareholders with meaningful exposure to a advanced and strategically positioned tungsten exploration asset.’

Flagship Minerals managing director Paul Lock

The exploration target at Khao Soon is predominantly defined by drilling and surface soil sampling, with conservative vertical depths of just 120m below surface and mineralisation remaining open laterally and at depth throughout.

The project’s potential resource is split between five prospects, the biggest being Than Pho West, with an exploration target of nine to 14 million tonnes grading 0.2 to 0.3 per cent tungsten. Its Last Hill prospect also represents a hefty 5 to 10 million tonnes at 0.2 to 0.4 per cent tungsten.

Khao Soon has a rich history, operating as a significant underground tungsten mine for a decade until 1980. The area was known for its exceptionally high-grade ore, with a 1974 United States Geological Survey report noting that only material grading between 5 and 12 per cent tungsten was being mined from the underground, leaving a large amount of lower-grade material behind.

Flagship’s own drilling has confirmed the project’s potential, with significant near-surface intercepts including a stellar 51.2m at 0.50 per cent tungsten trioxide from surface and 34m at 0.63 per cent, also from surface.

Flagship Minerals managing director Paul Lock said: “Khao Soon provides Flagship’s shareholders with meaningful exposure to an advanced and strategically positioned tungsten exploration asset in a price environment which suggests that securing such a strategic industrial input is difficult – to say the least – and therefore assets such as Khao Soon are becoming increasingly valuable.”

Flagship says its core copper and gold interest remains in North and South America, with the company recently swooping on its Whipsaw copper project in British Columbia for just A$6.5 million. The pick-up has landed Flagship a foothold in the newly invigorated mining province, where historical drilling has already pointed to large-scale copper porphyry potential in a historic address.

Whipsaw sits just 17 kilometres from Hudbay Minerals’ massive 345-million-tonne Copper Mountain copper and gold mine and Flagship believes a copper-focused spin-out could put the project under a serious market spotlight of its own.

Any capital unlocked from Khao Soon could also turbocharge exploration across Flagship’s Isidora gold project in Chile, where satellite imagery is already hinting at substantial scope to expand the deposit beyond its existing 2.1-million-ounce gold footprint.

With tungsten already proven across multiple zones and a sizeable exploration target now putting a scale around Khao Soon, Flagship has some interesting options on the table. If a buyer, strategic partner or spin-out can crystallise that value, the Thai asset could yet provide the financial ammunition to fire up the company’s gold and copper push elsewhere.

Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au