Analysts are giving the new Austral Resources a qualified thumbs up.

Austral spent more than two years off the bourse at management’s request before being reinstated in November last year.

During that time, the company completed a successful $40 million capital raise, entered into a memorandum of understanding to buy Lady Loretta from Glencore, and acquired the mothballed Rocklands copper-gold project north of Cloncurry.

Lady Loretta borders the company’s Lady Annie mining lease north-west of Mount Isa.

Main image: Copper plate from Austral Resources’ Mount Kelly oxide SX/ EW treatment plant

Analyst David Coates of Bell Potter recently inspected the operations and said Austral was on the right track.

“These guys have got a good management team in place,” Mr Coates said.

“They’ve got a pretty good track record of getting Mount Kelly and the assets there underway, but now it’s about execution on an expanded portfolio, so it’s getting and maintaining that right skill base and executing.

Related: Rocklands plant attracts new toll treatment MOU

“They’ve definitely got big objectives and the region around here has been ripe for some consolidation and there’s probably plenty of competition to do that. With the deals they’ve most recently done, they’ve probably put themselves in the box seat.

“Most operations, once they have their foundation asset up and running, will look to monetise the invested capital by developing satellite operations nearby.

“The thing that’s setting these guys apart is having both that oxide processing capacity and sulphide processing capacity and that makes them pretty unique in the Australian landscape.”

A hub-and-spoke model, where Austral would toll-treat sulphide ore at Rocklands and oxide ore at Mount Kelly, was timely, Mr Coates said.

The service now suited smaller deposits like the former Aeris-owned Barbara operation, which is in care and maintenance just off the Flinders Highway between Cloncurry and Mount Isa, he said.

“If there’s one thing you can say at the moment, the market conditions have certainly changed. That does bring assets like Barbara into favour.

“The other thing is with an asset the size of Barbara, it’s not big enough to be a standalone operation, it’s not a processing operation, but with the processing capacity these guys are restarting, that changes the dynamic for something like Barbara.

Related: Aeris Resources backs away from Barbara

“It’s not that far from the processing plant and again, the market conditions are helping, so those sort of stars can align to give an asset like that quite a different outlook on life.”

Austral was one of a few pure copper plays currently listed on the ASX, he said.

“There are literally, I think, four copper producers at the moment on the market and they’re not very big — Sandfire, then Aeris, then AIC (and) Hillgrove Resources.

“If these guys (Austral) come into production at the sort of levels they’re talking about, they’ll be very competitive with those current offerings.

“I don’t know where the world’s copper is going to come from and the market dynamics for copper are very, very positive in my view.”

Disclaimer – The author is an Austral Resources shareholder.

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