Today Legend Mining, an ASX-listed junior headquartered in Perth, Western Australia, has one of those company-making projects that every junior explorer wants to have on its asset register, and it all started with a cup of coffee between friends. Mark Wilson, Legend’s Managing Director, met with one friend, a broker, and another, the promoter behind Legend’s Cameroon gold project, now operated by a subsidiary of Legend and Cameroonian company, Camina SA.
“We really developed that from a coffee discussion in May last year, to a site visit to Cameroon with myself and my exploration manager, Derrick Waterfield, in August, a decision to proceed shortly after that, an acquisition agreement with the Cameroon entity,” Wilson says, noting that you don’t actually see Legend in operation at the project because it is done through Camina.
Reflecting on quite how pivotal that coffee meet turned out to be, TABJ simply had to know more about the project which today looks set to make Legend shareholders very happy within the next 24 months.
Coming to Cameroon
Wilson says that Legend shareholder approval for the acquisition of Camina happened in December 2009. Under the deal, Camina shareholders are paid in Legend shares.
“We flew our first, very extensive, aeromagnetic survey in January/February last year, and off the back of that survey we decided to move to final completion, which was Legend buying 90 per cent of the shares in Camina and paying those Camina shareholders in Legend script,” Wilson explains. “The real exploration effort started on February 4 in Cameroon, and within the four months that we’ve been there we’ve established an exploration camp from scratch just out of a little village called Eseka.”
In doing so Legend enjoys, through Eseka, great proximity to the road and rail infrastructure which links the project directly to the port of Douala; Cameroon’s main trading port and well equipped to be of use to a future producing operation.
“Also within that time, we’ve started to highlight some of the prospectivity of the area around Eseka with the rock chips that we’ve been releasing. We’ve made two releases to the market, the most recent of which was just around the middle of May,” Wilson says.
It is important to put the Cameroon gold project’s size into perspective here. At 100 kilometres long and 30 kilometres wide, Legend has an awful lot of ground to play with; land which Wilson says is by no means an easy-going place to explore.
“We’re talking about tropical rainforest, quite rugged and challenging terrain typographically, and it’s nearly all soil cover. The challenge for the geologists is a very serious one and I think that’s why it’s been left undiscovered until we’ve come upon the opportunity,” he says.
“The degree of difficulty associated with it is really quite high. There are no penalties in front of goal just when you need to wrap up the match, it’s hard work every inch of the way.”
In addition to the gold exploration, Legends aeromagnetic survey [or ‘mag’] has picked up potential iron ore targets too. Taking us through the survey map, Wilson explains that the several black elliptical features represent these areas. The survey is central to Legend’s geologist’s plans for the coming months.
“What our geologists are doing is moving through those target areas, looking for drill targets, assessing them from the mag [survey] and what they see in the geology, and then ranking them from preparation for a drilling programme which we’re now confident is going to start in the third quarter this year —some time between July and September,” Wilson says.
“It’ll be conducted with a man-portable rig, nominally the holes will be of the order of 100 metres deep, and it’s a diamond rig so we’re getting diamond core out of those holes.”
An enviable cash position
In addition to the Cameroon gold project, Legend also has three programmes in WA that the company continues to progress; in the Pilbara, Mount Gibson and Gum Creek. However the Cameroon gold project is definitely the real company focus and this is reflected in Legend’s budgeting for development there.
“We’ve got a war chest of $17 million in our treasury, we’re planning to spend that at the rate of three to four million dollars a year in Cameroon, and the point is that if we get onto something, without having to go back to the market, we can very quickly ratchet that three or four million expenditure up to $10 million just to get a resource drill out,” Wilson says.
“Then we no longer have a company that’s capitalised in tens of millions of dollars, more likely a company capitalised in hundreds of millions of dollars based on current benchmarks.” Quite rightly pointing out that Legend’s cash position is “the envy of many juniors,” Wilson says that other market edges for the company include the size and proximity of the project to infrastructure.
“I always remember somebody telling me that Cecil Rhodes said, ‘if you’re in Africa, think big.’ We’ve got a big project with great prospectivity for iron ore,” he says. “Iron ore is a very, very desirable commodity amongst the growing economies of China and India—everyone talks of China but I don’t think they should leave India behind—and like everything in life, it’s the combination of a number of things which gives us this opportunity which I think will truly reward our shareholders in the next 24 months.”
The focus for Legend today lays on the results of the aeromagnetic survey and targeting work on the Cameroon gold project according to those findings.
“It really comes down to methodically looking at the targets that the geologists are presenting to us, looking and the drilling that we’re doing so that we can continually review the ranking—I don’t intend to start from the most northern spot and start south, I’m going to be looking for the best ones first if I can,” Wilson says.
“The problem is that until you drill a hole, whilst you can have the geological and geophysical theory of what you’re going to get, until you get it you don’t know what the very nature of exploration is.”
Ultimately, Legend’s goal is to build a project with as large an itabirite magnetite resource and as large a direct shipping ore resource (DSO) as the company can at its Cameroon project.
“What the market wants and what Legend wants is DSO’s, and the only way to find it is to start drilling these targets and understand about the mag [survey] and what it’s telling you,” Wilson says.
And to date, Legend’s execution of the aeromagnetic survey proper, and subsequent reaction and use to its results, looks likely to prove fruitful and making those shareholders very happy indeed. The lesson? If Legend ever asks you to go for a coffee, it could be the best cup you ever have.