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The transformation of Empire Metals to Australia-facing gold company continues apace


There are currently three strands to Empire Metals Ltd (LON:EEE).

The first, and the one that’s likely to add the most value in the short term, is the company’s option to acquire a stake in the Eclipse gold project in Western Australia. This asset lies just 50 kilometres north of Kalgoorlie, one of the most famous addresses in gold mining, and is currently the subject of a drilling campaign.

Empire has until February to decide whether or not to exercise the option, but chief executive Mike Struthers is optimistic on the basis of results so far that a positive decision might be reached earlier than that.

The second strand is a deal to acquire a major stake in the largest unexploited platinum group metals project in Australia, Munni Munni, from Artemis Resources (ASX:ARV). The deal was first mooted earlier this year, but hit a stumbling block when the terms of the transaction were disputed by a third party. It’s therefore currently on hold while the two current owners of Munni Munni resolve their differences, although the interest from the Empire side remains as firm as ever.

The third current strand to Empire is its long-standing ownership of copper-gold assets in Georgia. Despite some early exploration successes the company hasn’t since made as much headway with these as it had hoped it would because of political issues around the extension of some exploration permits, and so it is now in the process of divesting these assets into Canadian-listed Candelaria Mining (CVE:CAND).

As part of this process, Struthers will move across to run Candelaria as chief executive, while taking on a non-executive role at Empire. Empire’s chairman Neil O’Brien will remain as Empire’s chairman but will also become a director of Candelaria.

The transaction on the Georgia assets is an all-share deal, meaning that Empire shareholders will continue to be exposed to upside on these projects even as they move on into a new company, but they won’t have to provide any funding for them.

What’s more, Candelaria also has some gold assets in Mexico, one of which is likely to be in production in early 2022, albeit at the relatively modest rate of around 15,000 ounces per year. The other one is at an earlier stage but much larger, and therefore brings even greater upside.

The transaction is set to close in two weeks time, at which point the three strands to Empire Metals will become two, and the focus will move firmly to Australia.

How exactly the Munni Munni transaction will pan out remains an open question, but Struthers has no doubt that if it does complete it will be a boon for Empire.

“If the company could get both Munni Munni and Eclipse, that would be great,” he says.

But with Struthers stepping aside, who will be taking on the helm?

That’s a decision, he says, that’s likely to be deferred until the company decides whether or not to exercise its option on Eclipse, or potentially if and when the company brings in additional assets.

If it does, it will have control of an asset right at the heart of Australia’s greatest gold district, and smack dab in the middle of an ongoing gold boom. It’s not a bad position to be in, and would provide the perfect jumping-off platform for any inbound chief executive.

In the meantime, more drill results from Eclipse are likely in the coming weeks, and that’s likely to help focus attention firmly on the future.

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