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S2 Resources (ASX:S2R) is cashed up and ready to explore, with the company “better funded than at any other time during its ten-year history” after selling its Fosterville exploration licence to Agnico Eagle for $17 million this week.
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Some investors, especially on the HotCopper forums, were a little stunned by the news S2 was shipping way Fosterville, especially because it was often heralded as one of the explorer’s crown jewels over the years.
One user said they weren’t convinced Fosterville was a winner and welcomed the move – a sentiment shared across the threads – while others were on the fence. Some said they were only torn because “the prospect of Fosterville’s high-grade riches” had been why they’d originally bought into the company.
S2 chairman Mark Bennett has argued it’s a strong move though, explaining the company will be able to “explore vigorously” now its coffers are full.
The explorer already has a battle plan, too, of course: S2R will immediately inject the $17 million it’s banked (as well as $3M from a placement) into first drilling at Warraweena; it will look for geophysical targets. S2 is earning up to 80% interest in ground held by Oxley Resources at the northern New South Wales digsite.
And, Warraweena is just one of the “several potentially high-impact exploration targets” S2 has been watching closely. The explorer is also negotiating with traditional owners of the Jillewarra area in Western Australia right now.
Should those talks go as S2 expects, the company will then be able to start working on several gold targets at the Jillewarra JV near Big Bell and Never Never.
Only a little red tape remains, with the Victorian gov’t required to approve the deal. They’ll be casting their eye over numbers, including the already-confirmed $3 million placement picked up by Agnico and its 10.1cps price.
HotCopper expects any approvals to be wrapped up by January.
S2R heads into Thursday’s trade selling at 8.3cps.
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