In recent months Heidelberg-based Deutsche Rohstoff AG has made a number of new investments in promising natural resource projects. Here the main focus has been in the American oil and gas sector and in copper and gold exploration in Australia.
In the USA there are now good entry opportunities, as a number of companies have got into difficulties as a result of the fall in oil prices. Deutsche Rohstoff has signed two agreements to secure licence blocks of some 10 km2 in the Federal State of Colorado. The Heidelberg company is proposing to drill as many as 60 horizontal boreholes in this area. The new technique they will be using first involves drilling vertically downwards until the oil-bearing measures are reached. The drill head is then diverted to travel horizontally for some distance through the oil beds. This maximises the flow of oil into the well, production rates increase and profitability is improved as a result. The cost of each well is currently put at some 3.5 mill. US$.
Since 2011 Deutsche Rohstoff AG and its American-based subsidiaries have drilled more than 20 successful oil wells in the USA. In mid-2014 the company sold its licence blocks and oil production rights, along with the potential for further drillings, to an American operator for the sum of 200 mill. US$, thereby making a profit of some 130 mill. US$. The newly acquired blocks have roughly the same potential as the project that was sold in 2014.
In Australia Deutsche Rohstoff AG has bought into an exploration company that is prospecting for copper, gold and molybdenum. This company, which trades under the name Hammer Metals, has large exploration blocks in the north-west of Queensland. Deutsche Rohstoff is already familiar with this region as it previously had gold and tungsten mining operations of its own in this locality. The Hammer Metals site lies immediately adjacent to facilities owned by major market players such as Glencore and BHP Billiton, which operate large and highly profitable mines in this area. In this industry the proximity to existing mining operations provides advantageous conditions for finding lucrative new deposits, which can then be developed very effectively using the established infrastructure. Last year Hammer Metals achieved very good drilling results and is currently engaged in further drilling work. The medium-term aim is to strike copper-gold deposits that will also prove an attractive proposition to some of the industry’s major mining companies. Deutsche Rohstoff AG is now the largest shareholder in Hammer Metals.
(Deutsche Rohstoff AG/Si)