Accelerate grabs full control of Pilbara manganese play

Accelerate Resources has grabbed full control of its Woodie Woodie North manganese project 260 kilometres east of Port Hedland in WA’s East Pilbara region in a savvy move that clears the decks of all legacy payments and royalties ahead of a significant drilling campaign planned for next month.

The company has executed two binding, share-only agreements that deliver 100 per cent of the 432-square-kilometre tenure. The deals simplify a previously complex ownership structure and remove any future milestone payments, which could otherwise have potentially cost the company up to $2 million in cash and 20 million shares.

In the first transaction, Accelerate will acquire full title to two key exploration licences by issuing 25 million shares to subsidiaries of First Development Resources. The shares will be subject to a 12-month voluntary escrow period.

Previously, the company held only the manganese and iron ore rights over the tenements under a 2021 option. The deal now gives it outright ownership and extinguishes all remaining claims, including milestone payments and royalties.

‘All manganese we discover and develop at Woodie Woodie North will now belong solely to Accelerate shareholders.’

Accelerate Resources chief executive officer and managing director Luke Meter

A second transaction involves Accelerate issuing 30 million shares to a group of seven unrelated vendors to terminate all legacy agreements across the wider project. The move scrubs all future milestone payments, deferred consideration, royalties and reversionary rights tied to resource definition and development.

The company says the two scrip-based deals mean no cash will leave its coffers for the acquisitions, leaving it well-funded for its upcoming exploration push.

Key to the consolidation is that Accelerate now stands to capture 100 per cent of the upside from any future discovery, resource upgrade or development at Woodie Woodie North. Management says the simplified structure will also better support any potential funding, offtake or partnering discussions down the track.

Accelerate Resources chief executive officer and managing director Luke Meter said: “This is a decisive simplification of the Woodie Woodie North ownership structure. On Completion, we will own the Area 42 corridor outright and every remaining milestone payment across the project will be extinguished, with no cash leaving the Company. From that point, all manganese we discover and develop at WWN will belong solely to Accelerate shareholders.”

The Woodie Woodie North project sits 55km north of Consolidated Minerals’ long-running Woodie Woodie manganese mine. The company has already carved out a maiden inferred mineral resource of 1.2 million tonnes grading 19.1 per cent manganese, alongside an exploration target of between 5.3 and 10.7 million tonnes at grades of 10 to 19 per cent manganese.

Being on the doorstep of a major, multi-decade mining operation is an enviable position for any explorer. Perhaps more importantly though, the at-surface geology doesn’t respect tenement boundaries, with Accelerate saying it appears to be sitting on a significant extension of the same mineralised system that has made its neighbour a globally significant producer.

With the ownership structure now cleaned up, the company is turning its focus to the drill bit.

Scheduled for October, maiden drilling at the project’s Gingarrigan prospect follows recent mapping that identified more than 200 manganese outcrops across it and the nearby El Largo area, outlining a combined manganese footprint of almost 10 hectares. Rock chip sampling from the outcrops returned high-grade results of up to an impressive 59.4 per cent manganese.

The upcoming 3000-metre reverse-circulation program will test the continuity of the surface mineralisation at depth and along strike, with management eyeing the potential to add a second resource area to the project.

Additionally, rock chip sampling from the company’s newly defined Rancor and Wampa prospects has returned grades as high as 58.4 per cent manganese, with a slew of other impressive hits including 57.6 per cent and 55.6 per cent manganese. For context, Australia’s two major operating mines at Woodie Woodie and Groote Eylandt run resource grades of 45.5per cent and 43.6 per cent manganese, respectively.

The outcropping grades look bang on for direct-shipping ore (DSO). DSO is the holy grail for bulk commodity miners, meaning the ore is high-grade enough to be dug up and shipped directly to customers with minimal processing, dramatically slashing both capital and operating costs.

Accelerate’s focus on manganese is part of a dual-pronged strategy, which also includes the Balagundi gold project near Kalgoorlie. In a nod to its two key commodities, the company is planning to rebrand as “Mango Metals”, a combination of the words manganese and gold.

For now, however, all eyes are on the manganese. Having tidied up its ownership and removed the burden of legacy payments, Accelerate has a clear run at its Pilbara project. If the upcoming drilling at Gingarrigan can convert those high-grade surface rocks into a significant discovery, taking full control of the project will look like a very shrewd piece of business indeed.

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