Harmanis back in leverage land as Talisman eyes a ‘very big 2022’

Former Rio and key Winu geologist turned Talisman exploration chief names NSW copper prospect his top pick.
25th November 2021
Barry Fitzgerald

And staying in NSW, Peel set for resource update at Mallee Bull and Wirlong copper deposits while in WA watchers are puzzled by muted reaction to RareX’s high-grade rare earth hits.

It took Kerry Harmanis all of four minutes to go off-script in his chairman’s address to the annual meeting of Talisman (TLM) in Perth during the week.

Talisman is a $33 million (17.5c) gold-copper explorer in NSW’s prolific Cobar Basin. Harmanis felt he had to explain to his hometown audience, why NSW?

“I remember being on the drill rigs in the NT in 1958 with my Dad. So I have been in the exploration industry all my life,” Harmanis – an 18% Talisman shareholder – said.

“When I first came on board Talisman a year and a half or so ago, I was a bit grumpy about all these NSW tenements. And we really tried hard to find some tenements, in WA particularly, but everybody wanted telephone numbers for silly little things.

“(So) now actually we have built our tenement holding in NSW to the point where personally – you can always be wrong – I am very, very excited about what we have got going forward.

“We’ve been messed around a bit by COVID, and floods more recently. And things do take a bit of time in NSW. You have to deal with private landholders instead of open Crown land like here in WA.

“So it is a more tedious process sometimes. But it is also very rewarding once you are on the ground. I believe 2022 is going to be a very big year for us.”

It was what his loyal followers wanted to hear.

They’re loyal because Harmanis made them wealthy back in 2007 when his 16 per cent-owned Jubilee Mines – having spent 20 years of hard grind before making the high-grade Cosmos nickel discovery – was sold to Mick Davis’ Xstrata for a cool $3.1 billion.

A couple of years later, Xstrata’s major shareholder, Ivan Glasenberg’s Glencore, put an end to Xstrata by taking out the minorities. Oh yeah, Glencore sold the Cosmos nickel operation to Western Areas (WSA) for $24 million in 2015.

Harmanis has been smiling ever since, even if he was initially grumpy about Talisman’s NSW focus.

With an enterprise value of about $23 million after counting its cash, Talisman is certainly as leveraged as could be to exploration success in its 2022 Cobar exploration effort.

It’s worth mentioning too that it is fair enough to point out the EV value as unlike other juniors, Talisman has a regular source of cash coming in the door from an iron royalty from Chris Ellison’s Mineral Resources.

The royalty is on production from the Wonmunna mine in the Pilbara and is struck at an uncapped 1% of gross revenue, payable monthly.

The first payment was made in April 2021 and to date, Talisman has received $3.2 million, with Wonmunna ramping up to 5Mtpa.

The royalty stream is dream stuff for a junior and as Harmanis noted, it means he as a 16% shareholder and the rest of the shareholders won’t be hit up for new funds as the company steps up its NSW campaign.


The royalty stream and the $11m cash on hand must have had something to do with Talisman being able to lure long-time Rio Tinto explorationist Russ Gregory to the company and its NSW hunt.

Gregory – he responds to either Russ or Gregory – was on the Rio team that drilled the first hole into the Winu copper-gold discovery in the Paterson region of WA, and as might be suspected after a 14 year career at Rio, he is across all of the big-thinking and techniques required to make a hidden find like Winu.

He joined Talisman in August as exploration manager and was on hand at the AGM to give  shareholders a run down on what to expect in 2022.

“Talisman holds some of the highest unexplored potential in the Canbelego-Mineral Hill volcanic belt,” Gregory said.

He volunteered that of the four project areas Talisman will focus on early next year, it is the Babinda copper prospect that is “perhaps the one I get most excited about”.

It is an area with known mineralisation at historic mines. “We’re dealing with a vein system that may light up under EM (planned for next year),” Gregory said.

In the meantime, a 1200m RC program will test the strike length of historic copper mineralisation and structures interpreted from geophysical lineaments.

Starting to get technical there. All that needs to be known though is that the ex-Rio man is excited.


Peel Mining (PEX), trading at 23.5c for a market cap of $95m, has long had the Cobar Basin as its hunting ground.

And why woudn’t it? Over the decades, the basin has been good for 2.5Mt of copper, 4,8Mt of zinc, 2.8Mt of lead, 7Moz of gold and 148M oz of silver.

So it doesn’t kind of matter what Perth mining-types think about the region’s prospectivity versus the biggest and the best, the Golden west.

There could be some corporate action in the region too with Glencore confirming recently it was considering offers for the long-lived CSA mine near Cobar itself. A price tag of more than $US550 million has been mentioned in the past but no cigar.

The recently listed 29Metals (29M), Aurelia (AMI) and Aeris (AIS) have all been mentioned as possible buyers in dispatches. But still no cigar.

Peel on the other had is busy working on becoming a copper-focused polymetallic producer from its collection of discoveries in the southern part of the basin.

It wants to get to a collective 15 million tonnes of mineralisation to underpin a centralised mill at its 2010 Mallee Bull copper-silver-gold discovery, 100km south if Cobar.

Getting there is about to happen, with the company flagging a resource update for Mallee Bull will land shortly, and a maiden resource estimate for its exciting Wirlong copper discovery (80km south-east of Cobar and 35km from Mallee Bull) is imminent. Scoping studies would follow in the first quarter of next year, moving a development into PFS stage.

Canaccord’s research desk likes the Peel story (the firm was a joint lead manager to a capital raise in March). It has a 60c price target on the stock.

“Our base case scenario assumes a resource inventory of 15Mt at 2.8% copper equivalent (in situ) through a 1Mtpa plant over a seven-year life of mine for capex of $A150m and C1 (cash costs) of $US2.15/lb,” Canaccord said, mentioning on the way through that its NPV valuation included a takeover scenario.

RareX (REE):

Talking about NSW exploration, the joint venture between ASX and Toronto-listed Kincora (KCC, 65% and funding) and RareX (REE, 35%) at the Trundle Park gold-copper prospect on the Lachlan Fold Belt continues to stand as one of the most leveraged to potential success stories out there.

Drilling by the joint venture continues to vector into, as they say, a potential large-scale system. It is in the same neck of the woods as the Cadia (Newcrest) and Northparkes (CMOC) porphyry monsters, and drilling continues.

But the interest here today is in RareX and its report early in the week of high-grade rare earth hits (up to 10.6% total rare earth oxides) at its advanced Cummins Range project in WA’s Kimberley.

RareX ran from 9.5c to 11.5c on the news and has since settled back at 11c. The response looks to be underdone, according to people who know about these things.

Veteran analyst Chris Baker at Bridge Street Capital (the firm is a corporate advisor to the company) is in that camp.

“Not only is this one of the highest grade intercepts ever obtained at Cummins Range, mineralisation is hosted in the fresh rock (or primary),” Baker said.

Previous thinking about Cummins Range was that the orebody would finish at the base of the weathered zone.

“This appears not to be case. This means that the Cummins Range deposit is open to depth. This has a major impact on the potential size of the orebody,” Baker said.

He finished up saying he was surprised by low-key response from the market.

“We continue to see RareX as one of the best-priced entry points for REO space, and there are not many ways to play the space.”

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