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Caerus Shares, CMRS, Up 10% On Drilling Results, Could It Be More?

Tim Worstall
Tim Worstall trader
Updated 3 May 2022

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Key points:

Caerus Minerals (LON: CMRS) shares are up 10% this morning on the announcement of drilling results from their exploration in Cyprus. The results are indeed interesting, if not earthshaking. We’ve also seen these sorts of bounces at Caerus before.

The results themselves are interesting enough, but they’re not quite something to write home about. Write to shareholders, yes, but not amazing enough for that mythical schoolboy to put pen to paper. They’re from the JV with Bezant Resources (LON: BZT) and the further investigation of the Troulli Project in Cyprus. Expansions of areas containing useful copper levels (1% and above, that sort of grade) have been found, and that expands the possible economics of the project.

None of this is definitive, in the sense that it shows some massive Tier 1 project, nor do we have the opposite, an absence of extensions to the mineralisation showing that the project is smaller. It’s, in its way, simply good enough news. There’s that bounce on the back of it being just that.

The other thing for us to consider is that base strategy being followed here. Copper is something that’s likely to be in increasingly short supply as the world electrifies. Gold is always useful – so, looking for gold and copper is a sensible idea. But it’s possible to wonder a little about looking in Cyprus.

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We do know there has been decent mineralisation there, after all the place has been minded for the two metals for 3,000 years. But that’s the thing to ponder, there’s been mining for gold and copper in Cyprus for 3,000 years now – is there any left?

The intermediate answer to this is that exploration and extraction technologies do change, improve, over time. So, areas and mineralisations which could not be uncovered, or if they could not exploited, using past techniques might well become economic with new ones.

What this means is that with each new generation of tech, there’s a standard enough strategy – go looking where we think a place is mined out using the old techs. We do, after all, have considerable proof in that past production that mineralisations of the right type occur in that place. We’re not prospecting entirely blind that is.

Which is exactly what Caerus and Bezant are doing with their current exploration. We know, absolutely, that Cyprus has contained useful copper and gold mineralisations. Modern technology allows us to go and check and see in much greater detail what those old mines have left behind. There is still no certainty that the findings will be economic but we do at least know that there will be some findings – risk is reduced that is.

This is, of course, all still the early stage of such exploration, Caerus is defining the mineral resource at present. There’s work to be done to define that, then more checking to upgrade to a reserve, and so then on to mining. But as we can see, the continuation of that exploration is bringing in interesting news.

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