Man behind the search for gold in Co Armagh believes mining could return rich rewards
The negatives of the UK’s shock decision to leave the EU have been well documented. Some commentators have found it difficult to see any upside from Brexit, with a potential UK recession being mooted. As share prices in Ireland and the UK plummeted following the vote, there was one place investors highlighted as a safe haven. It was gold.
Swathes of UK gold companies reported major increases in transactions after the June 23 referendum as Britons sought refuge from what seemed an open-ended plunge in the value of sterling.
However, it isn’t just companies selling gold that are benefiting from the uplift in demand — Irish exploration firm Conroy Gold and Natural Resources has begun to feel a welcome knock-on effect.
Conroy chairman Professor Richard Conroy said that despite a lack of saleable gold, the economic situation has a major impact on his business.
He said: “When we’re doing our economics on a potential gold mine, it becomes very important, and it’s also important in various other ways, in that the major and the intermediate companies obviously have a greater interest in doing a joint venture.
“That’s to our advantage for the actual development of a mine when the emphasis is on gold.
“There are a number of elements which impinge on us, but we can’t directly sell the gold because we haven’t as yet produced any.
“If you’re a major gold company, then you will be all the more anxious to do a deal with a much smaller company — such as ourselves — which has the potential to discover a large quantity of gold.”
The increase in demand for gold comes off the back of a strong year for the company. Last year, Conroy slapped a potential value of €150m (£125m) on Ireland’s first commercial gold mine, at Clontibret in Co Monaghan.
It has also been carrying out an exploration programme in Co Armagh, and last year said “wide gold zones” had been found during trenching and drilling at Clay Lake in Keady. A gold nugget was found in the area in 1989, and is now on display in the Ulster Museum.
Its exploration in Northern Ireland has been going on for around 12 years, and Mr Conroy said it could go on for many more years.
The €150m Clontibret valuation, Prof Conroy said, was still holding more than a year on was actually tipped it to rise in value, rather than dip, due to the increase in the price of gold.
In the year to date, gold has risen from $1,078 (£821) per ounce in January to $1,331 (£1,013) per ounce in July. While its value has fluctuated, dropping from a 2011 high of $1,864 (£1,419), Conroy’s chairman maintained it was a smart move to have some of your wealth in gold.
“It makes absolute sense for people to have a percentage in gold — certainly, the central banks are indicating that,” he said.
“For the last number of years, they have been building up their reserves of gold. Central banks have been scarcely selling any over the last number of years. They feel that is advisable to do.”
On Monday last week, Conroy announced it had found four new gold zones on its Glenish target in Monaghan. The discovery was made in a 150 metre-wide structural corridor in the western part of the target. The new zones were found partly thanks to capital raised in December. Conroy Gold raised over €0.5m (£0.42m) at the time for the further development of gold mines through a share placing and debt conversion.
That capital is still sufficient to keep the firm going, and Prof Conroy ruled out the possibility of another capital raise in the not too distant future. “We’ve been fortunate to raise funds to keep our exploration going and very fortunately we’ve gotten the results as we’ve gone along, but it’s a very prolonged process,” he said.
Year-on-year the company continued to reduce its net loss, down to €315,314 (£ 263,706). However, making a profit does not seem to be a pressing concern just yet.
“Curiously not (intentions to bring down net loss),” Prof Conroy said. “It may seem a contradiction, but if you’re running an exploration company, your cash flow is outward not inward. Now we try to run a tight ship and watch all our expenses because we go as far as possible to see money going into the ground to make discoveries.
“We’ve been involved in the exploration business for many years, and it takes a long time. For quite a long time, people found it difficult in seeing Ireland as a major international base metals country.
“Now, if you go out to the big mining conferences in Toronto they’ll immediately say ‘Ireland — oh yes of course, a zinc province’. But they don’t think of it as gold yet and we’re hoping that gradually that message will get across.”
Prof Conroy previously spent time in medicine and politics before taking on the Irish mining scene, something he finds there is a peculiar lack of awareness about.
“It’s remarkable the contrast in Finland — they’re very conscious of their mining industry,” he said. “They encourage it in every way that they can, they’re very upmarket and they’re very good environmentally and technically.
“Whereas here in Ireland, we don’t even know about it. In fairness to people here, those involved in the Geological Survey here and in the Geological Survey in Northern Ireland, they are enormously helpful. They have very high-quality people. But when you go beyond that circle of people, it is surprising how little is known about mining.”
The former senator said Ireland as a country was missing a trick in not capitalising on gold mining, adding that it has genuine potential for job growth.
Ireland does not seem to be a hard sell either, compared to the more familiar destinations for mining. “People imagine that a mine in Africa or in the Australian outback would be financially more attractive, but there’s more to it than that,” Prof Conroy said.
“As well as the actual financial situation, which in Ireland is quite attractive, not because of the tax, but because you have a good infrastructure, you have a good power supply and you’re not flying expats out to Liberia or wherever it is. Ireland has many attractions and it is also considered to be politically stable.”
Conroy looked at gold in the 1990s and believed it was vastly undervalued.
As a result the company is now looking at potential benefits from its early investment.
However, Mr Conroy said it had been a “long, hard process”.
The company remains comparatively “tiny” to other gold companies, employing just 10.
A return on investment is hoped for fairly rapidly, but the Conroy founder said the company was open to a joint venture with larger firms as it looks to exploit its gold targets dotted across Ireland.