Transcription of The Stock Network Interview with Metals Australia (ASX:MLS), CEO Paul Ferguson
Lel Smits: Metals Australia has established a maiden mineral resource at its Menindee West of ETM project in Western Australia, adding significant scale to its critical minerals portfolio. Test work has also produced high purity titanium oxide, while further resource growth remains possible through the exploration target and additional zones not yet included in the resource. With the existing zinc-copper-silver project just one kilometre away, and zinc market conditions strengthening, Metals Australia is also exploring opportunities across the broader Menindee portfolio.
I’m joined today by CEO Paul Ferguson to discuss the new resource, the titanium opportunity, the zinc upside, and the company’s next phase of growth. Paul, welcome back to the Stock Network.
Paul Ferguson: Thanks, Lel. Nice to be back with you.
Lel Smits: Pleasure to have you on. And looking at growing your VTM opportunity, you’ve got the maiden resource establishing a significant VTM opportunity, but also the exploration target and additional zones that could provide further growth here.
Paul, what are you looking for in terms of unlocking next at Menindee West?
Paul Ferguson: Yeah, so it’s great. I mean, we drilled Menindee in just the latter part of 2025. So this is really the first mineral resource additions to that project since 2015, in fact.
So it’s been a long time. But the project itself is really a good one. We were able to demonstrate we’ve got great continuity of mineralisation from the drilling that we did.
We’ve got a 47.5Mt mineral resource, albeit in inferred, but it really demonstrates the geometry and continuity of the mineralisation we’ve got out there. Good grades. On top of that, we’ve got 4 lookalike targets right beside it, and they’re not even included in the exploration target that was put together on the original discovery zone of somewhere between 67Mt and 89Mt.
So it’s quite large. And when you think about it, in the report that we put out last Friday, we just looked at some other projects, some other VTM projects, and their processing rates, just to sort of give us a bit of a steer on what does 47.5Mt actually mean. And one of the projects we looked at was planning around about 2 to 2.25Mt of processing.
Well, if you put that inside our project, that’s going to be the equivalent of 21 years in that mineral resource. Forget about the exploration targets and the targets that we’ve got in addition to that or the other zones that we’ve identified. So it’s a great scale.
And we think what it really does for the company is it unlocks a second opportunity to get a development project away. Fantastic. And Paul, when it comes to turning VTM into value, you’ve got test work that successfully produced high purity titanium oxide alongside iron oxides.
What does this really demonstrate to you about the quality of the resource and also its potential development pathway? Yes, so the resource, we’ve already been able to demonstrate that we could produce two commercially attractive concentrate products. So if you kind of back up a step, we sort of reminded everybody that we can produce a really nice iron product, a 66% iron with very low impurities and comes with a vanadium credit, all from very simple crush, grind and low intensity magnetic separation. And then the second product that we produce, which we demonstrated was an ilmenite ore concentrate, very high in titanium oxide, which we reported as just under 44%, but we know we can get that a lot higher.
And so in a base case level, we already have a good pathway for this project. But in parallel, we started working with a third party who has some IP around a hydro process. And we published those results here last Friday that using their process on our ilmenite ore, we could extract the majority of the titanium oxide from within that ore really rapidly within six hours, I think we’re over 90% or about 90%.
And then we were able to cover that quite well in addition. So we produced a titanium oxide product that is 99%, more than 99% pure. The benefit of that is, if you’re producing a product that is that pure in titanium oxide, you’ve entered a whole new world of value, appreciation for your project somewhere in the order of 10 to 15 types of what you could get per product tonne versus selling it as a simple concentrate.
So whilst we have a really solid base case, which would be tried and tested and modest overall capex and opex, we have now this wonderful step out opportunity to be able to produce high purity titanium oxide and we’ll explore that in parallel.
Lel Smits: Brilliant. And Paul, really in terms of unlocking that broader Menindee portfolio with the zinc copper silver project just one kilometre away and the zinc market fundamentals also improving now, what options are you really exploring now to unlock that value across both projects as you head and progress in the current financial year?
Paul Ferguson: Yeah, so that’s right.
So I think in the release we published last Friday, we noted that zinc copper silver resource that we’ve got is just one kilometre away from this now VTM resource that we’ve mapped out. And that resource has kind of sat there really unmoved since 2015 when it was published. But some of the key things there our shareholders, interested parties need to be aware of, I mean, there’s 4 separate resource pods that comprise that total resource.
They’re all very shallow. So they’re all, you know, open cut in my opinion. And there’s over 70,000 tonnes of zinc contained within that.
I mean, it’s open along a strike. It’s open at depth. We’re certainly going back over some of the old drilling.
Some of these programs date back to the 1970s to make sure that everything is being looked at. But the opportunity there is that that resource could grow as well. It’s reasonably good grade.
I think, you know, if you throw some numbers around, it depends on, prices of minerals on any given day, but we’re probably not much under 8% zinc equivalent grade on this project if you do the math, which is really good in its own right, especially when you consider that zinc prices have risen nearly 30% this year alone, touched $4,000 a tonne, that’s US, which is in excess of 5,500 Aussie dollars a tonne. So if you’ve got 8% something around or equivalent to 8% zinc or thereabouts and 5,500 US dollars a tonne, you can certainly look at, you know, what are the opportunities to monetize that project? And in that regard, we’ve been looking at whether or not we could develop that project standalone, maybe some additional exploration, whether or not we could actually just sell the ore and or whether or not we could actually do some further concentration on that ore. So we’ve got some test work going on on using some ore sorting to potentially increase the effective grade of that product and then truck it either to another mill or indeed to export, as I said, those kinds of numbers it stacks up.
And in addition to that, we’re sort of open to also in parallel exploring options to develop this zinc copper silver project in parallel with the VTM. Of course, with the zinc, we’re open to farming joint ventures. We know that there are a number of other projects in close proximity to us that have either gone into care and maintenance or have mills that aren’t completely full, that are based on zinc and copper.
And so I’m sure that this is raising a few eyebrows, not only because of its relative proximity to a VTM project, that gives it an opportunity to be developed in cohorts with that, but also as a standalone shallow resource.
Lel Smits: Yes. And Paul, finally, you are heading off to Canada soon.
Can you tell us what you’ll be looking at, what you’ll be doing and what’s your expectations for the trip?
Paul Ferguson: Yeah, so the Canada trip is really all about Lac Cargill graphite. I mean, the first week I will be in Toronto, also going down to New York and then back to Quebec City. And in that regard, talking to investors and potential groups that have an interest in that project, some of those have sort of been following us for quite a while.
So that’s kind of the nature of the first week. And then really, I will be out in regional Quebec, I’ll be in Vermont, I’ll be in Setil and I’ll sort of be in Bakermo, which are the two prime locations, Vermont for the upstream part of our graphite project and Bakermo for the downstream. So a lot of social engagement and interaction with stakeholders and community.
Lel Smits: Fantastic. Well, it sounds like a very diverse trip. I look forward to hearing more when you get back.
But for now, thanks for the update from Metals Australia.
Paul Ferguson: Perfect. Thanks for that.
Ends