Aldoro Resources doubles down at Narndee amid battery metals boom

Aldoro Resources Ltd (ASX:ARN) is moving closer to capitalising on the battery metals boom as it prepares for a drilling campaign while launching plans to spin out non-core gold projects. In the last six months, the company has turned its focus to the WA-based Narndee Igneous Complex - a move that has seen Aldoro’s share price skyrocket from 15 cents in November to 33.3 cents in May. The project has quickly become Aldoro’s flagship asset - a strong nickel-copper-platinum group element (PGE) play with unprecedented scale. Now, with a major drilling campaign just weeks away and an imminent asset divestment, Aldoro is prepared to take the battery metals industry by storm. Confidence builds at Narndee On May 31, Aldoro noted rising confidence in an upcoming drilling program at the Narndee project, targeting nickel and PGE mineralisation. The company will cover 5,000 metres with diamond drilling and focus on three high confidence anomalies. Work is slated to commence later this month. Crucially, pre-drill surveying and exploration have revealed two of Aldoro’s priority drill targets lie in close proximity to historic drilling activity - a promising sign for the junior explorer. Previous exploration at Narndee also points to a strong nickel-copper sulphide signature, which lies immediately west of Aldoro’s VC1 drill target. As it gears up to drill at Narndee, Aldoro has concluded that the base metals exploration campaign will require much of its attention. It’s this realisation that led the company to make a major move - divest its gold tenements by listing its subsidiary on the ASX. A new chapter for gold assets To better prioritise Narndee’s exploration, Aldoro will entrust its Penny South, Ryans Find and Unaly Hill South gold assets to a spinoff company in a priority IPO. Aldoro executive chairman Joshua Letcher said of the move: “The Aldoro board carefully considered all available options to appropriately recognise the value of its gold exploration portfolio following a number of unsolicited approaches. “We resolved that the most value accretive way to recognise the inherent value in the gold portfolio for the company together with its shareholders was via a priority IPO spin-off into what is arguably the most leveraged WA gold exploration play to be listed on the ASX.” Aurum, Aldoro’s wholly-owned subsidiary, will raise up to $5 million to fund gold project exploration when it floats on the local share market in 2021’s third quarter. Existing shareholders will have priority access to the IPO, with 22.5 million shares up for grabs at 20 cents each. After the float, Aldoro will hold onto five million Aurum shares and receive $200,000 to partially cover expenses incurred as it developed the gold projects. Initially, Aldoro executives Joshua Letcher and Troy Flannery will represent the company on the Aurum board in non-executive positions. Letcher continued: “In its effort to maximise shareholder value via the priority spin-off, the resultant Aldoro company structure will be well-positioned to benefit from the continued groundswell of the electric vehicles thematic. “Aldoro will benefit from the sharpened focus on the Narndee nickel-PGE project where drilling is expected to commence next month.” Battery metals boom Aldoro’s pivot to battery metals comes as the electric vehicle (EV) industry prepares to emerge as one of the decade’s core markets. Significantly, with a compound annual growth rate of 22.6%, the global EV market is poised to reach $802.81 billion in value by 2027. While much of the electric vehicle industry’s popularity will initially play out in Europe and North America, base metals from powerhouses like Australia will become essential. The company’s Narndee complex is one of the world’s largest battery metal projects, meaning Aldoro well-positioned to fuel the boom. Meanwhile, the explorer continues to develop its other WA-based nickel-copper-PGE plays - the Cathedrals Belt Nickel Project, Leinster Nickel Project and the Windimurra Igneous Complex. With global nickel demand poised to jump to 2.6 million tonnes in 2040, Aldoro is determined to make its mark in the battery metals space. Funded for exploration As it prepares to drill at Narndee and capitalise on the green energy revolution, Aldoro has prioritised capital management, ensuring it is well funded to conduct exploration. At the end of 2021’s March quarter, the ASX-lister had in excess of $2 million in the bank to fund exploration activities. Taking into account the quarter’s cash burn, the company has enough capital to sustain operations for five more quarters before it needs to tap investors for a cash injection. Speaking of what’s to come, Letcher concluded: “The board of Aldoro anticipates a very busy exploration campaign over upcoming months progressing towards drilling and is confident for a resource discovery.”