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Caerus Minerals Shares Jump 29% On Cyprus Drilling Result – How Much Further Will It Go?

Tim Worstall
Tim Worstall trader
Updated 13 Jan 2022

Key points:

  • Caerus is re-examining gold and copper deposits in Cyprus
  • Cyprus has been mined for at least 3,000 years so we might think it’s all done
  • Caerus says modern techniques can still extract from old deposits
  • The best AIM shares to buy

Caerus Mineral Resources PLC (LON: CMRS) is making what might seem to be a very odd assumption. That in a place like Cyprus, which has been mined for copper and gold for at least 3,000 years, there might be more copper and gold that’s worth mining. If the environmentalists are right, that once we’ve mined somewhere that’s it, then this would be an invalid assumption.

However, going back and having another look at old mines – most especially for gold – has for centuries been an entirely valid operating plan. The reason being that technology marches on and this is exactly what Caerus Minerals is assuming.

Caerus Minerals is exploring around Troulli, in Cyprus. There are wastes from previous mining escapades to look at, also the possibility of tracing the original mineralisation and seeing if it extends further than previously thought. This may or may not pan out although these recent results are encouraging. This will sound odd to those who think that after 3,000 years we’ll have already found everything. This is not so.

Also Read: The Best Gold Stocks To Buy

For technology advances and there are three ways that it does – that Caerus is taking advantage of. The first is exploration tech, we can now drill better, deeper, faster, more cheaply. So, we can look in more detail to trace those mineralisations. Secondly, extraction tech has advanced, so we can mine more accurately, or more cheaply, any mineralisations that are found. Finally, processing tech has advanced so we can make use of lower-grade mineralisations than earlier iterations of tech could.

So, it’s an entirely viable strategy, as Caerus Minerals is doing here, to go and have another look at past sites of mining. The wastes of the previous processing plants might well be of a high enough grade to be worth processing again – this has proven to be true several times with many gold processing plants. Those old mineralisations that could not be found, or if they could not be extracted, with old tech might now be viable.

Note that there are several “mights” in there. Like all junior miners what Caerus Minerals is doing is testing this strategy. Trying to convert that might into an “is”.

This latest announcement is showing that there definitely is mineralisation there which is worth processing. That is not, though, the end of the testing process. Having some interesting mineralisation is a start, the next part is to show that there’s enough. For there are economic sizes of processing plant. So, there needs to be enough of the interesting gold mineralisation, that is also extractable, to make it worth building and running the processing plant.

That Caerus Minerals has found interesting gold mineralisations is a step along the road to showing that there’s a viable project there in Cyprus. The Caerus share price is likely to be volatile upon changing opinions of the volume of that gold mineralisation – whether there’s enough there to actually mine and process.

Tim Worstall
Tim Worstall is a freelance writer specialising in economics and the financial markets.