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Forrestania Resources (ASX: FRS): Interview with Managing Director Dr Michael Anderson

May 24, 2023

Forrestania Resources, FRS


Forrestania Resources (ASX: FRS)

We spoke to Dr Michael Anderson, Managing Director of Forrestania Resources (ASX: FRS), about the Forrestania project in the Southern Cross Greenstone Belt and its potential given the quality neighbours, such as Earl Grey for lithium, Bounty for gold and Flying Fox and Spotted Quoll for nickel.

We looked at the company’s entry into the emerging James Bay lithium province in Canada in joint venture with Canada’s ALX Resources. And we talked about the recent pick up of some projects in the Leonora and Menzies districts of WA’s Eastern Goldfields.

Full transcription below.


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Stuart: Hello, and welcome to “Stocks Down Under.” My name is Stuart Roberts, and I’m one of the co-founders of our service. And joining me today on the afternoon of Monday, the 22nd of May 2023 is Dr. Michael Anderson, who’s the Managing Director of Forrestania Resources. ASX:FRS. Michael, good afternoon.

Dr. Anderson: Afternoon, Stuart.

Stuart: So Michael, you’ve just executed a transaction that a lot of your peers on ASX are doing. You’ve just gotten some interesting ground in James Bay. Now for those who came in late, James Bay is one of those attractive new jurisdictions for lithium exploration, thanks in part to Allkem with their pretty successful project around there, way up in the northern part of Quebec facing over near James Bay, which ultimately opens up to the Hudson Bay Area or a lot of areas that are very good for granites with the sort of pegmatites you want to get lithium out of. Michael, tell us about the ground that you’ve just laid your hands on?

Dr. Anderson: Yeah, look, so definitely, as you say, a lot of our peers, ASX peers, have done similar transactions. But ours is different for a couple of key reasons we’re entering into a joint venture. So, with a partner rather than a vendor, and I say that because of two key reasons. One, you know, a vendor wants to sell you something, then you’re on your own. You know, then not only you paying for the acquisition, but you’re paying to do the work, and you have to organize the work yourself. And the one thing that’s certainly the case in James Bay is it’s one of the hottest exploration areas going around at the minute, and people and accommodation, equipment are all in short supply. So, we looked at a number of different deals, and a number of different deal structures.

And ultimately, the joint venture with a company called ALX Resources, who our Toronto Stock Exchange listed, stood out to us because is with a partner who staked the ground themselves, who didn’t want it then, but were happy to share some risk, but who also have a field season set up and ready to go in just over a week’s time that they’re into the field on the 31st of May, getting on the grind across eight separate projects that they called overall, the hydro project, and it runs west-east across the northern side of James Bay, proximal to a couple of very well-known deposits, including Patriot Battery Metals, Corvette. We got one lease just within a couple of kilometers of their non-pegmatite occurrence that they’re working up a resource on we believe, other big projects where we’re staked off the basis of known geology, from mapping from the Quebec Province, historical lake sediment, sampling and anomalies there. And they’re also going down a path of looking at all the available mapping geophysical data that it’s in the data banks and the like.

So, we’ve got a real first foot over there, it might not be the last thing we do. But I think it’s a very good first step for us cost-effective with a partner who is set up to go, you know, versus acquiring something that required you to get over there yourself and start recruiting people, and lining up field programs, which I think would be easier said than done. Definitely very keen to see how this unfolds, as I say, will effectively be in the field with our partner on the 31st of May. I’m heading over for a couple of weeks in the second half of June. Obviously, this time of the year it’s great, you know, the stove [SP] was melted, a lot of outcrop there, hopefully, plenty walk up pegmatites to be then thinking about what next? And yeah, definitely the right areas. As you said, there’s Allkem, there’s Patriot Battery Metals, there’s Winsome, a number of people who we’d love to replicate the success that they’ve had, and we believe we’re in the right areas to do just that.

Stuart: So, what have ALX got in mind for this field season? I’m guessing mostly rock chip sampling and so forth.

Dr. Anderson: Sampling and mapping, and look I think, you know, drilling will happen in good time, and the positive is that you certainly can drill through winter. In fact, I’m led to believe that the access probably becomes a little bit more straightforward. It’s pretty rugged terrain up there at the minute. There is quite a lot of infrastructure put in place by the Quebec hydro schemes up there, but you know, this isn’t a metropolis by any stretch, you know, so you’ve limited accommodation, limited transport, lot of exploration does get executed in the first instance by chopper just for ease of getting around and efficiencies and the like. So yeah, you know, a lot of desktop work being lined up at the minute to home in on obvious targets. They did do some work last year and got on the ground, and certainly established a number of pegmatite outcrops. And so, looking at those, sampling those and refining, if you like, the ultimate drill targeting, which is, I guess the ultimate test.

Stuart: Right. Meanwhile, back here in Australia, you’ve just gotten some interesting ground in the eastern goldfields. Tell us about those projects.

Dr. Anderson: Yeah, so we’ve had three packages of tenements in Western Australia since listing, Forrestania flagship project that we’ll talk about in a minute, but we also have two packages around Leonora and Southern Cross, loosely lumped together as the Eastern goldfields. And we knew of a couple of key tenements that were contiguous with ours, and highly complementary in terms of the geology. So, we’ve been on the ground there, sampled pegmatite on our own ground, we’re well aware of some historical gold occurrences, and a closure in, you know, the shadows of a number of existing operations there. And so, having tied those up in a two-year option deal gives us a chance to get on the ground, and really, I guess, do justice to what we believe is neither complimentary package. And the green stone geology certainly runs into this ground that we’ve picked up. And so, highly prospective gold for lithium, for copper. And indeed, we even have a small rare earth potential discovery there we announced a few months ago. So, Eastern Goldfields is rapidly becoming a real prospective [inaudible 00:06:36.684].

Stuart: We have to change the name. It won’t be the Eastern Goldfields anymore. It’ll be the Lithium fields.

Dr. Anderson: That’s right. But, yeah, and then you’re right, because, you know, others are already quite active there, and making discoveries. And again, we certainly believe we’re in the right geology, in the right areas to replicate that success. So, the teams are up there as we speak, doing the same sort of sampling and mapping to hopefully define some walk-up drill targets for us.

Stuart: Right. Now, let’s go back to your foundation project, which is down in the Forrestania region of Western Australia, hence the name. So, the area that gave us bounty originally going back in time. And Mount Holland developed by the folks that, well, ultimately was bought by Westfarmers.

Dr. Anderson: Westfarmers and [inaudible 00:07:25.786]. Yeah, but originally Kidman. That’s right. And, of course, totally contiguous with what was western areas nickel ground, now owned by IGO. So, we’re in again, demonstrably the right areas. Covalence [SP] are a great pegmatite. The [inaudible 00:07:43.173] is 189 million tons at 1.5%. That’s truly world-class. It has been nickel mining and [inaudible 00:07:50.605] fox and spider crawl for 20-odd years. As you say bounty and lots of gold prospectivity through this region, but it’s the lithium, I suppose that’s been our first priority. We’re following up on some known intersections, historical intersections, 30 meters at 3% Lithia. And we’ve followed up at the giant pegmatite. Most recently drilled 10 meters at 1.5% ourselves. So, we know we’ve got ore-grade lithium in this belt, a raft of targets, and our team led by Melissa McLennan, came from Kidman.

And so, she knows the region, she knows the geochemistry, she knows the pathfinders to be looking for here. She knows the weathering profile. And as part of all of that, and our targeting is driven by soil sampling. And, of course, the known historical currencies and outcrops. And all of that is continuing to define targets for us. So, once we’ve had success at Giant, we definitely have all the right ingredients at places like [inaudible 00:08:58.456], we’re just across the tenement boundary. Western Areas has built 50 meters at 1%.

And then Calypso, which is a target that we’ve defined, but not yet drilled, again, pegmatites at surface, and again, proximal to known historical intersections, we get lots to be going after here, and it has attracted the attention of quite a few of our peers in the region. And we keep talking because we’re not shy to collaborate as we’ve shown with the ALX joint venture, and our strategy is summed up by getting on the front foot proactively exploring, but also collaboration, and an acquisition as we’ve shown too with the outback deal in the Goldfields. So, all of those things is about getting on the ground proactively making things happen, and not being afraid to turn projects over. But making sure that we absolutely do them justice.

Stuart: Right. What surprised you most about that ground down in Forrestania, you’re talking about outcropping pegmatites is one thing and some particularly valuable intersections on the early drilling. But since your time in the company, what’s come across your radar screen to say, wow, we could really be onto something?

Dr. Anderson: Well, I don’t think there’s any new revelation in my time per se, but we are definitely drilling and finding the right sorts of results. And not just those key intersections of ore grade mineralization, but just the geochemistry and the pathfinders that you look for, and you’re looking for that evidence of these pegmatites, having been fractionated. They can be so, but you know, there’s plenty of pegmatites. They don’t all carry lithium, and they don’t all give you even the sniff that you’re on the right direction. But we’ve seen all of that here. And so, you know, there’s no lack of encouragement in the work that we’re doing, and far from finished. So, you know, the plan is to get back into the field with the drill bit as soon as we can at Giant where we’ve had those healthy intersections, but also at the southeast, [inaudible 00:10:57.732], Calypso and others where we now have the clearances that we need to go in and drill our highest priority areas.

Stuart: Right. Now, Michael, you and I met when you were running a company called Firefinch. Tell us about your background up to that point, and then how you’ve come to choose Forrestania as your next vehicle.

Dr. Anderson: Going back, I started my career as a geologist. So, I studied in London. My career started in South Africa and the like, but worked my way through a number of roles in engineering and metallurgy, before getting into the junior mining game in the early 2000s, initially in Africa, and then my first MD’s role was with EXCO Resources here in Australia, that was 2006 to 2011. Despite the GFC in the middle of all of that, it ended extremely well. We developed a little gold mine in South Australia called White Dam, and made quite a lot of success out of that.

And then ultimately, I guess the big prize there was selling our Cloncurry copper project to Xstrata in 2011. And that sort of felt like job done for me at that stage. We’ve taken the company from around 20, 30 million market cap to 260, of which 250 odd was in cash. So, a lot of that was distributed back to shareholders, and I think everybody who invested in EXCO did pretty well. I spent the next decades with the Taurus fund in across a range of equity and debt style investments, which was all extremely varied and interesting for me, but…

Stuart: One of the world’s more canny project financiers of choice in the resources game. You’ve been to a great company.

Dr. Anderson: I had a great time, particularly in the latter stages. We’ve funded a number of very successful West African gold projects. But COVID sort of pulled the rug under a lot of that strategy. In some respects, it wasn’t as easy to travel. It wasn’t as easy to deal make, notwithstanding that Taurus is still going very strongly with all of its endeavors. But I was approached with probably off the back of those West African gold deals to take on the role at Firefinch. They just acquired Morila. And of course, they also had the Goulamina lithium project, which prior to the name Firefinch company was called Mallee Lithium. And Goulamina has emerged as an absolutely world-class deposit as well. So, you know, being run by Simon Hay, who I know well, and have tremendous respect for, you know, they’re up to about 140 million tons at 1.5%.

Stuart: I mean, let’s face it, for a while Goulamina was at risk of being a stranded asset.

Dr. Anderson: It was. It was.

Stuart: You were part of the team that broke it out of that, and unlock the value which Simon is now taking forward. Right?

Dr. Anderson: Yeah, then look, the deal with Ganfeng was extremely successful, in my view of bringing in a world-class partner, the world’s leading lithium chemicals producer, you know, highly talented people driven to secure product and offtake, and that has enabled this project to be well done the construction path by looking, as I say, becoming a world-class producer. So, there’s certainly a lot of value unlocked there. I learned a lot about the lithium business along the way.

And so, when this opportunity came along, much smaller company, of course, Forrestania, but a real attraction for me to be there from the beginning and mapping out the way forward. You know, in the short time I’ve been here, we have broadened our horizons. And, you know, exploration is about opportunity, about giving yourself as much as you possibly can, increasing your probability of success, and I now genuinely believe we’ve got three tremendous footholds in world-class lithium exploration jurisdictions, Forrestania at Eastern Goldfields package, and now James Bay, and up to us to do justice to that move forward, and be proactive, and unlock the value for everyone especially ourselves.

Stuart: And it’s fair to say that the news flow will be pretty good over the next little while. You’ve got your programs down in Forrestania, and on those three or four prospects we were talking about. ALX are now active up in James Bay. And I presume you’ve got stuff on the boil for the new Eastern Goldfields project…

Dr. Anderson: Yeah, as I said that the team is up there, literally as we speak. So you know, there’ll be some groundwork put in place to hopefully move towards some priority drill targets in the near term, again, off the back of outcrops that we know about and some early sampling that will do. So yeah, you’re right. And a junior company like us is absolutely at the mercy of what’s useful. We can’t afford to be quiet for too long. But rest assured, you know, none of us have come here to sit in our hands. And our motto is to not stand still and to go forward, and seriously test the obvious prospectivity that we see here.

Stuart: Well, Michael Anderson well done on taking charge of Forrestania resources. And get us some good news flow because there’s a lot of shareholders who really want their stock price to benefit from the fact that lithium is now back in favor.

Dr. Anderson: Absolutely. Well, that’s our intent. No worries.

Stuart: Thanks for joining “Stocks Down Under.”