Metals explorer Arkle warns investment squeeze will push up prices

Chairman John Teeling says company returned to pre-tax profit last year

Irish-based zinc and gold explorer Arkle Resources says prices will rise as a result of a drop in exploration spending and increased demand for metals driven by the green economy.

The warning comes as the group swung back to a profit in 2021, after trebling its losses a year earlier. The company made a pretax profit of more than €426,000, compared to a loss of €1.1 million in 2020, largely on movement in the fair value of warrants. At the operating level losses halved from just over €654,000 to €320,266 last year.

Arkle chairman John Teeling said Ireland was faltering, with long delays in renewing permits and “unhelpful” political statements fuelling uncertainty.

“An exploration dollar is an orphan with no loyalties. It goes where it is most wanted,” said Mr Teeling. “Anything that increases uncertainty will have a detrimental impact on exploration. There are more commercial deposits to be discovered in Ireland. For more than 50 years Ireland has been at the forefront with clear, transparent and stable policies relating to title, tax and environmental commitments. It is hoped that the current uncertainties are purely temporary.”

The company said it had very promising results from drilling undertaken by its partner Group Eleven on the Stonepark zinc licences in Limerick, with drilling discovering a fault that could point toward a large zinc target a few hundred metres to the north of the discovery hole.

Arkle described its gold exploration in Wicklow and Wexford as “an enigma”, with veins produced by a 13 hole programme either petering out or missed by drilling. Arkle has re-examined the data and has commissioned a full review and modelling exercise on its extensive database.

“While awaiting this we are looking at some further detailed sampling and mapping using the new technology that successfully identified new zones. There remains huge potential in the area and we intend to drill,”

Delays in renewing licences have caused the company to miss a window for drilling in the Inishowen peninsula in Donegal, it said.

With share prices languishing, Arkle is also turning its attention to potential opportunities outside Ireland. The company said it is focusing on battery metals such as lithium, cobalt, copper and rare earths, and was awarded three licences after the year-end in southern Zimbabwe to prospect for lithium. It is also examining a specific exploration opportunity in another jurisdiction, with further updates to come.

“It is frustrating to be an explorer at present. With zinc selling above $3,700 a tonne and gold over $1,800 an ounce it should be a good time for explorers. The future outlook for metals has rarely been better. There is an increasing demand and consumption of metals, being driven by the green economy: electric vehicles require substantial quantities while one offshore wind turbine contains up to 1,600 tonnes of metal,” said Mr Teeling said.

“Yet there has been a substantial drop in exploration expenditure. We anticipate there can only be one outcome — higher prices. For those of us willing to take the chance the potential returns are greater.”

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist