Aldoro Confirms 100M Tonnes Mineral Resource Milestone Met Using Gold Equivalent Formula
Aldoro Resources has responded to ASX queries clarifying the basis for converting performance rights linked to mineral resource milestones, confirming independent verification and board ratification. The company commits to enhanced disclosure practices going forward.
- Performance rights conversion based on mineral resource milestones expressed in gold equivalent terms
- Independent verification by Lily Valley International Ltd using a detailed gold equivalent regression
- Board informally confirmed milestone satisfaction and later ratified conversion decisions
- Company did not initially disclose detailed conversion basis citing potential investor confusion
- Aldoro affirms compliance with ASX Listing Rules and commits to improved future disclosure
Background to the ASX Query
Aldoro Resources Limited (ARN) recently addressed a formal query from the Australian Securities Exchange (ASX) regarding the conversion of performance rights issued to two directors. The performance rights were tied to specific mineral resource milestones, originally framed in terms of gold equivalent grades. However, the company’s announcements reported resource estimates based on total rare earth oxides equivalent (TREO eq), prompting ASX to seek clarity on the basis for milestone satisfaction and disclosure practices.
Clarifying the Milestones and Conversion Basis
Aldoro explained that the milestones were defined as mineral resource estimates compliant with the JORC Code 2012, specifically requiring 30, 60, and 100 million tonnes grading at an equivalent of 2 grams per gold equivalent. The company emphasized that TREO was considered a "gold equivalent" mineral for these purposes, reflecting the Kameelburg Project’s focus on rare earth elements rather than substantial gold mineralization.
To objectively verify milestone satisfaction, Aldoro engaged independent geological consultancy Lily Valley International Ltd (LVI). LVI applied a gold equivalent regression formula incorporating prices and recoveries for TREO, niobium pentoxide (Nb2O5), and molybdenum (Mo). This regression converted the TREO-based resource estimates into gold equivalent terms, confirming that the milestones had been met.
Governance and Disclosure Considerations
The company acknowledged that while the board informally confirmed milestone satisfaction upon receipt of LVI’s reports, formal board approval was only ratified subsequently. Aldoro noted that at the time, it did not consider a formal resolution necessary given the independent verification and the board’s confidence in the consultancy’s expertise.
Regarding disclosure, Aldoro admitted that it did not immediately provide detailed information on the conversion basis when announcing the resource estimates and performance rights conversion. The company cited concerns about potential investor confusion and the complexity of reporting a high-grade subset of the resource at the specific TREO equivalent cut-off grade determined by LVI. Nonetheless, Aldoro recognized that more comprehensive and timely disclosure would have been appropriate to meet continuous disclosure obligations under ASX Listing Rules.
Commitment to Compliance and Future Transparency
Aldoro confirmed its compliance with ASX Listing Rules, particularly Listing Rule 3.1 concerning continuous disclosure. The company committed to improving its disclosure practices to ensure that significant matters, such as performance rights conversions tied to technical milestones, are communicated clearly and promptly to the market. This response was authorized and approved by the board, underscoring Aldoro’s dedication to governance standards.
Investors and analysts will be watching closely how Aldoro manages transparency around its rare earths project milestones and the implications of performance rights conversions on its capital structure going forward.
Bottom Line?
Aldoro’s clarification marks a step toward greater transparency, but investors will expect clearer disclosures on milestone achievements and governance in the future.
Questions in the middle?
- Will Aldoro disclose the detailed TREO equivalent cut-off grades and resource sizes underlying milestone satisfaction?
- How will the informal initial board approval of performance rights conversion affect investor confidence in governance?
- What impact will the performance rights conversion have on Aldoro’s share capital and shareholder value?
