{australien_flagge} We don’t know what was driving former US President Donald Trump when he tweeted last year that he wanted to buy Greenland from Denmark. At the time, Trump referred to it as “essentially a large real estate deal”…. Danish Prime Minister Mette Frederiksen immediately called the idea “absurd”. Firstly, Greenland was not for sale and secondly, it was “not Danish, but Greenlandic”. But is Trump’s idea really as crazy as it seems at first glance?
Perhaps there is something to be learned in this case after all: How about investing in Greenland yourself, for example? If – as is to be assumed – you have never thought about this before, we now recommend the story of Conico Ltd. (ASX: CNJ; FRA: BDD). Perhaps after reading it you will realize the strategic importance Greenland could play in the future, especially for Europe: as a strategic supplier of raw materials such as copper, nickel and other battery raw materials. Neighbouring Iceland could supply the green energy needed for this, according to the vision.
Incidentally, Greenland geologically is part of North America, but belongs for the most part to Denmark. Politically, the Greenlanders are autonomous, but Danish and thus European law prevails on the world’s largest island, which is a good start from an investor’s point of view. Beyond its strategic military importance, Greenland, which is about six times the size of Germany, possesses above all rich mineral resources. And the climate-induced retreat of the glaciers is now making areas and projects accessible that until a few years ago would have been impossible or extremely difficult to realize. So why search for copper or nickel in the Congo when you can do it right on your doorstep? This is roughly how the business plan of Conico Ltd. could be summarized.
Fascinating exploration thesis: No fear of size
The exploration thesis of Conico Ltd. is as daring as it is fascinating: The Conico geologists suspect that there is a second Noril’sk Nickel in Greenland. For all those to whom this name does not ring a bell: the Russian Noril’sk Nickel, or Nornickel (NASDAQ: NILSY) as it is now called, is the world market leader in the mining of nickel and palladium. More than 95,000 employees work for the company. The company’s shares are listed on the London Stock Exchange and in New York, among others. The Russian Noril’sk deposits were discovered as early as 1920. They have been producing without interruption since the Second World War. It is therefore either megalomania or very good reasons for a hitherto unknown explorer to take the world market leader as a benchmark. Normally, one would dismiss such a thing as a promoter’s trick, if there were not scientifically sound arguments: the 4,500 km² Ryberg project lies at the intersection of so many favourable geological events that the thesis must be taken seriously. A drilling success this summer could possibly mean a historical turning point and permanently change our view of Greenland.
Summer of truth: First drillings are the culmination of 12 years of preparatory work
Discoveries – especially big ones – cannot be planned, but they can be worked towards. In the case of the 4,521-square-kilometre Ryberg project on the east coast of Greenland, this “preliminary work” took 12 years. That is how long British geologist Thomas Abraham-James has persistently collected facts. One can therefore attest the 38-year-old CEO of Conico Ltd a fair amount of persistence. Someone here believes in his cause! And this summer, the summer of truth is coming for him. For the planned drilling is the ultimate test of his hypothesis.
Figure 1: Conico Ltd owns a total of two projects on the east coast of Greenland. Mestersvig includes the historic Blyklippen zinc mine (1949 – 1965); while Ryberg contains the Sortekap prospect which is a freshly discovered greenstone gold occurrence and Conico’s real main focus, the Miki prospect – there, recent electromagnetic surveys have confirmed strong conductors indicating significant deposits of Cu-Ni-PGE sulphide ore.
Figure 2: The Ryberg project in detail. To the east is the Miki Cu-Ni-PGE prospect and, to the north, the Sortekap greenstone gold prospect. Miki in particular is characterised by its good accessibility.
Figure 3: Close-up of the Miki prospect at the head of the Sodalen Glacier. The image gives an idea of the size of the geological structure. It is an advantage for geologists that the rock is not covered by ice or vegetation in summer. In addition, metal contents measured on the surface can be considered representative of deeper mineralisation because the Arctic climate greatly slows down weathering processes. Samples from surface rocks yielded ore grades of up to 2.2% Cu, 0.8% Ni, 3.3 g/t Pd and 0.15 g/t Au. The grade of such samples depends on the abundance of sulphide spherules and patches in a given sample. However, the metal grades (metal content in 100% sulphide) give a good indication of what the primary, deeper massive sulphide may contain. These have been calculated and are in the range of 40% Cu, 20 g/t Pd and 5 g/t Au (Holwell et al. 2012).
The presence of globular ores is often spatially associated with massive sulphides. In particular, the dykes and sills in Noril’sk and Voisey’s Bay that overlie massive sulphide bodies often contain rounded, spherical sulphides of the type identified in Makrodykes. Thus, Holwell et al. (2012) suggested that the presence of the rounded sulphide spherules in the macrodykes is a clear indication of the presence of a large massive sulphide body somewhere at depth in the area.
{letter}
Thomas’ first visit to Ryberg dates back to 2008, and with private funds and at his own risk, he initially financed the exploration through his private company Longland Resources, which allowed only a very slow pace in the face of continued capital shortages. But in 2017, the crucial airborne geophysical electromagnetic survey did take place on a 200-square-kilometre sub-area (4%) of Ryberg. You can imagine the courage it took for a small private company to do this, because there was already electromagnetic data from the past, according to which Ryberg appeared to be completely uninteresting geologically. However, Thomas had come to the conclusion, based on his observations on site and through the new evaluation of the data, that the historical measurements contained serious measurement errors – that was the only reason why nobody was interested in Ryberg!
The courage to make new measurements was rewarded. A strong electromagnetic signature was revealed that had previously been invisible. Therefore, ground-based electromagnetic measurements were taken last year (2020) at the site with the highest anomaly over an area the size of a postage stamp of only one square kilometre. During the independent evaluation of these data from the Miki prospect within Ryberg, the geologists already celebrated a small friends’ party, because they fit perfectly with the Noril’sk hypothesis. At a depth of only 150 metres, a flat-lying horizon of sulphidic (presumably Cu-Ni-PGE-rich) ore was found, which appears to spread like sediment along a kilometre-long horizontal magma pipe. Thomas uses the term “chonolith” for it, which is otherwise only familiar to experts (see Figure 4).
Figure 4: Actually, technical terms like “chonolith” are only for geological experts, and even they usually have to look them up first. But the picture above illustrates the principle. Highly concentrated sulphide mineralisation has settled as sediment in a magma pipe. Conico plans to drill into this sediment at a depth of only 150 metres, probably from June 2021. The same principle was used to form the world-class deposits around Noril’sk.
In the summer of 2021, this geological rarity, which is typical of deposits such as Duluth in the USA, Nova-Bollinger in Australia or Noril’sk in Russia, will be tested by drilling for the first time. The expectations are enormous. A success would catapult Conico abruptly onto the shortlist of the world’s largest mining companies, certainly also with Anglo American (LSE: AAL) because this global mining giant is already active on the west side of Greenland and knows the Ryberg project very well.
This is why Ryberg is the perfect candidate for a major discovery
To understand Miki/Ryberg, there is a veritable checklist of geological factors that must be met in order for exceptional deposits to form. If you love a bit of geology and plate tectonics, you’ll get your money’s worth. The evidence goes something like this:
1. Ryberg lies at a weak point in the earth’s crust, where the drift of the continental plates has resulted in a triple rift, a so-called “triple junction”. Greenland has broken away from Norway (east-west drift) and moved north (north-south drift) at the same time.
2. According to this theory, the strong magma plume that now sits under Iceland and fuels the volcanoes and warm springs there migrated just below this fracture. The magmatic activity on Ryberg must have been unimaginably large. As a result, lava piled up to form a 9 kilometre! thick basalt layer (in Noril’sk this layer was 7 kilometres thick, according to current knowledge). In the meantime, this basalt layer on Ryberg has been almost completely eroded, so that geologists today stand practically directly above the presumably magma-bearing pipes and fortunately do not have to drill through kilometre-thick basalt packages first. By the way, such thick basalt layers still exist in the north of Greenland, which is how we know of their former existence.
3. The bedrock of Greenland is extremely old and dates from the earth’s early history. It is so-called “greenstone”, which is typically particularly rich in metals because the separation of the heavier metals into the liquid core of the earth was not yet complete when it was formed. Volcanism was able to melt and mobilise the metal contained in the greenstone.
4 In the case of Ryberg, however, there must have already been an organic sediment layer above the greenstone when volcanism erupted. It was a particularly rich source of sulphur due to the organic compounds. According to theory, this sulphur was dissolved and could form the chemically preferred compound with metals. This heavy sulphur metal fraction could have eventually settled at the bottom of the magma pipe by simple gravity. Thomas compares the process of separation to an oil-water emulsion, where the two fractions separate when they come to rest. At some point, the lighter oil floats on top and the heavy water underneath. Transferred to the Ryberg/Miki geological model, the metal-containing sulphur compounds represent the heavier fraction that sinks to the bottom. The result is then the chonolite described above, voilà. So much for the theory. Of course, the processes are much more complicated in detail. If you want to know more about it, we recommend the paper on Ryberg https://www.goldinvest.de/images/pdf/Ryberg.pdf.
Figure 6: Checklist for the Miki project.
Conico Ltd: The listed company and further financing
It is only since November 2020 that all Greenland projects formerly owned by Longland Resources have been owned by the listed Conico Ltd, a move that has since enabled the project to be financed. Conico has raised about A$4.5 million in the capital markets in recent months. The last round of A$3 million was a rights issue for existing shareholders at A$0.03. Conico has already issued 830 million shares, which is not unusual by Australian standards, but still represents a certain legacy. After all, Conico still has an Australian cobalt project that could possibly be sold if prices continue to rise. It is quite possible, and even likely, that the company will raise money again before work begins in April this year. Thomas estimates a total budget of A$3.0 million for the current year. This sum is to be used for drilling at Sortekap (Gold) and Miki (Cu-Ni-PGE).
Conclusion:
The matter is actually quite simple for Conico and its investors: after long preparation, the moment of truth is now coming with drilling on all three projects. The Mestersvig Zinc Project, as a former producer, offers a lot of proven substance on the one hand, but also plenty of room for growth. The Sortekap gold project at Ryberg could easily be the main project for an average explorer. Nevertheless, Mestersvig and Sortekap pale behind the potential of Miki/Ryberg: the drilling there, planned for the middle of the year, is expected to attract global interest – especially from Danish, Greenlandic and British investors. In the best case, the drilling next summer will confirm the young geologist’s daring hypotheses. Then the Ryberg project will make history and change Greenland’s strategic role. In the negative case, the drilling on Miki is a flop. That would certainly not lead to the abandonment of the project, but it would certainly make it more difficult to finance further investigations. Either way, Conico will still need a lot of money for exploration. In the medium term, it is hard to imagine Conico getting by without the support of large corporations – even if it is successful. It is a fascinating project that we recommend to investors and that we want to continue to pursue in any case.
Figure 7: Expected sequence of works.
{letter}
Risk notice: GOLDINVEST Consulting GmbH offers editors, agencies and companies the opportunity to publish commentaries, analyses and news on https://www.goldinvest.de. This content serves exclusively to inform the reader and does not represent any kind of call to action, neither explicitly nor implicitly, and is not to be understood as an assurance of any sort of price development. Furthermore, it does not in any way replace individual expert investment advice and does not constitute an offer to buy or sell the shares discussed or a solicitation to buy or sell securities. This is expressly not a financial analysis, but an advertorial / journalistic text. Readers who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between GOLDINVEST Consulting GmbH and its readers or the users of its offerings, as our information only relates to the company and not to the reader’s investment decision.
The purchase of securities involves high risks which can lead to the complete loss of the capital invested. The information published by GOLDINVEST Consulting GmbH and its authors is based on careful research. Nevertheless, any liability for financial losses or the guarantee of the topicality, correctness, adequacy and completeness of the articles offered here is expressly excluded.
In accordance with §34b WpHG and § 48f Abs. 5 BörseG (Austria) we would like to point out that GOLDINVEST Consulting GmbH and/or partners, principals or employees of GOLDINVEST Consulting GmbH can hold shares in Conic Ltd. and therefore a conflict of interest exists or may exist. GOLDINVEST Consulting GmbH also reserves the right to buy or sell shares in the company at any time. Furthermore, a contractual relationship exists between Conico Ltd. and GOLDINVEST Consulting GmbH which involves GOLDINVEST Consulting GmbH reporting on Conico Ltd. This is another clear conflict of interest.
