The company is now just a few weeks away from the release of a preliminary economic assessment on the Salave project in Asturias, following on from the successful delineation of a 1.6mln ounce gold resource grading at just under five grams per tonne.
READ: Black Dragon will shortly demonstrate the economic viability of the 1.6mln ounce Salave gold project in Spain
It’s a remarkable turnaround from the situation that pertained two years ago when the company owed a South African bank US$10mln and was completely shut out of the equity markets.
At that point, it seemed there was nowhere else for Black Dragon to go, but up stepped Paul Cronin and Jo Battershill with US$8.5mln in rescue financing and a new vision for taking the company forward.
So it was all change at the top. Cronin came in as chief executive and Battershill as non-executive chairman, and old stager Alberto Lavandeira brought on as key Spanish point man.
Those who follow the Spanish mining scene will recognise Lavandeira as the man who transformed the troubled beast that was EMED Mining into the successful copper producer that is now Atalaya.
And he’s not the only Spanish face involved with the development of Salave. In fact, the project is held through a local operating company called EMC. This is entirely staffed and run by Spanish industry professionals.
“All we do as Black Dragon is basically provide funding, guidance and governance,” says Cronin.
And it’s an approach that’s already paying off. The heavy Spanish contingent and the rapid pace of development that we’ve seen to date go hand in hand and look set to continue.
“The first thing we did when we took over is to ask for a drilling permit,” says Cronin. “Normally it takes a year, but for us, it took three months.”
Now, with the PEA almost in the bag, Black Dragon is in the process of applying for more permits, and there’s every confidence that these will come through pretty quick too.
The company is on good terms with the government in Asturias and, with the help of Lavandeira knows its way around the Spanish mining scene at a national level too.
The hope is that once the PEA comes in and provides a solid economic base case for Salave, Black Dragon can then set the drill rigs turning again and move the resource forward once again.
“Our view is that we can grow it to at least 2.5mln ounces with a drilling campaign,” says Cronin.
“We’re doing the structural work now, but we’re pretty sure we know where to drill. There’s the potential really to expand it out and grow it quite dramatically.”
If Black Dragon Gold does manage to move the resource up towards the 2.5mln ounce mark it will establish Salave as one of Europe’s most attractive gold projects, given the grade.
“It’ll be a relatively easy project to mine,” says Cronin, “and the economics of the project will look pretty good. We’ve got grades that make most projects look ordinary.”
With all that in mind, it’s no wonder that some serious institutional investors have already taken an interest in Black Dragon.
Over in Australia Hartleys has taken a significant position in the company, and what’s more the Hartleys broker most closely involved, David Michael, has taken a sizeable personal position too. As if that wasn’t enough Blackrock, one of the biggest financial institutions in the world, also holds a significant block.
Despite that heavy-hitting support, it remains a tough market for companies moving projects through development at the moment, and Black Dragon’s shares have weakened over the past year or so.
But with the economic parameters of Salave about to be revealed, and a major resource upgrade now just beginning to appear on the horizon, it may now be time for a re-rating.
After all, if you can make Spain work it’s as good a jurisdiction to go mining in as any, and with the gold price still holding strong at above US$1,230 it’s surely only a matter of time before the wider market wakes up to the disconnect between Black Dragon’s current market capitalisation and the value that’s on offer in the ground.