A new year, a new beginning and a glittering potential reward

Under new CEO, Pennine is shifting its focus to gold mining projects

Jan. 5, 2021

By Jon Harris, Chief Executive Officer

It goes without saying that 2020 was a terrible year for everyone and, in that context, the travails of Pennine and other junior oil companies pale in significance.

The oil-and-gas industry was already suffering before COVID-19 struck, and it’s unlikely that the junior sector will see any meaningful recovery in the near future.

On that basis, the decision the company took to investigate opportunities in the mineral sector is further justified. As vaccines start to roll out, 2021 will be a New Year in more ways than one, and for Pennine, the move into mining also represents a new beginning.

Des Smith, our outgoing CEO, has worked tirelessly to secure projects in the oil-and-gas sector but, under the circumstances, it was always going to be difficult to secure the funding the company needed to develop. I would like to thank Des for his efforts and ongoing support as we work together to take Pennine in a new direction. As you know, Des will remain on the Pennine board as a non-executive director, where his experience and knowledge will continue to add value to the company.

Although I have board experience with oil-and-gas companies, my background is in mining. Having trained as a metallurgist with Anglo-American Corporation in Zimbabwe, I have been active in evaluating and operating a number of junior mineral resource projects in Southern Africa.

Through my experience with a number of gold projects, I have identified an opportunity to earn into a producing gold mine in Zimbabwe. The Pennine board has reviewed this project and has agreed that this could be the building block on which to expand Pennine’s interests in the region.

Why Zimbabwe? Although the Zimbabwe Archean Craton hosts some 800 recorded gold deposits with more than 6,000 identified gold occurrences, the country still produces far less gold than similar cratons in the major gold producing regions of Tanzania, Australia and Canada.

Despite their known potential, most of the known deposits in Zimbabwe remain largely untapped. Greenfield exploration has been sporadic for a number of reasons, not least being the hyper-inflation in the early 2000s. Mining has been predominantly “on reef” and financed through internal cash flow, with few projects being able to raise capital on public markets.

Pennine’s initial objective is to earn-in to a producing mine and raise funds to complete an NI 43-101 resource estimate for the deposit. Thereafter, the company will seek to raise development capital through a public offering in order to fully exploit the resource.

This model will be replicated by securing similar earn-in arrangements with other projects that have already been identified in the neighbourhood of the initial target. As one of the precedents for the completion of such a transaction, it was necessary for Pennine to ask its creditors to convert their debt to equity in the company. I would like to thank those that took up the offer, particularly those who have become “new” shareholders, because it represents your continued support for Pennine.

I am excited to have the opportunity to take Pennine “onwards and upwards” in what will truly be a new beginning.