Oh, hey there Vale. Pic: Getty Images
Resources Top 5: Vale deal stirs the Iron Bear for Cyclone Metals
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- Cyclone Metals signs up Vale to progress Canadian iron ore project
- Metal Hawk up ~50% for the week in mystery gold move
- Tungsten Mining, Patriot Lithium, Metals Australia among no-news gains
Your standout small cap resources stocks for Friday, November 15.
CYCLONE METALS (ASX:CLE)
Share price in need of a bit of revitalisation? A deal with one of the world’s largest mining companies will do it.
$20 million-capped minnow Cyclone has risen from a share consolidation and emerged straight into news of an MoU with the mining behemoth Vale, a Brazilian major trading at around US$45 billion.
The mining giant sits only behind Rio Tinto (ASX:RIO) in the ranks of the world’s top iron ore exporters by volume, having previously laid claim to the title of numero uno before the deadly Brumadinho dam disaster in January 2019 saw it rein in production to conduct safety tests across its sites.
Vale’s competitive advantage is the range of markets it plays in. While the Pilbara iron ore producers typically ship cheap to produce hematite DSO that grades 62% Fe and increasingly below that into discount product range, Vale is the world’s largest purveyor of high-grade iron ore products.
That includes hematite exports that grade at the premium 65% Fe benchmark, material used to blend into a 62% Fe feedstock in Asian steel mills.
But it is also one of a handful of producers of even purer DR grade pellets, a product which is essential for use in low emissions direct reduction steel plants. Vale thinks the undersupply of high-grade iron ore could hit some 70 million tonnes by 2030, informing its search for more material.
Iron Bear is, potentially, one of those sources, with testwork showing it can make a DR grade product from the 16.6Bt at 29.3% fe magnetite resource in Canada’s Labrador region, down the road from Champion Iron’s (ASX:CIA) Bloom Lake project.
The first phase of the MoU will see Vale tip US$18m in to complete, among other things, a pre-feasibility study. A second phase would see it ramp up to 30% interest in a JV and then 75% after a decision to mine or US$120m spend. There are provisions after for Vale to potentially take out the whole project at market rates.
The MoU remains non-binding, with CLE hopeful of completing a formal agreement within 90 days.
“Vale is a powerhouse for the production of ultra clean iron ore products which includes DR pellets and their proprietary cold briquettes,” CLE CEO Paul Berend said.
“They are an ideal partner for us, and we look forward to leveraging Vale’s extensive operational and financial resources to realise the full potential of Iron Bear.”
Bulk samples of DR and BF concentrates will be made available to steelmakers in Q4 this year, with pellets to be sent for sampling in Q2 2025.
Vale is already familiar with Canada as the owner of the world class Voisey’s Bay and Sudbury nickel fields.
PATRIOT LITHIUM (ASX:PAT)
(Up on no news)
Not to be confused with Ken Brinsden’s Patriot Battery Metals (ASX:PMT) (which funnily enough listed on the ASX on the same day as PAT almost two years ago), Patriot Lithium has had a little bit more of an identity crisis.
While PMT was already locked into the massive Corvette (now Shaakichiuwanaan) discovery in Quebec, PAT had some earlier stage plays in the USA to work through.
It’s since shuffled the decks a fair bit. Lithium is a tough market right now for a small player, after all.
It was last week revealed the company’s Black Hills assets in South Dakota, including the Keystone project would be rolled up into Martin Holland’s Rapid Lithium.
That came after Patriot pivoted to focus on the Gorman project around 70km from Frontier Lithium’s PAK project in Ontario, Canada, where drilling has been held up by approvals from the Sandy Lake First Nations group.
It also picked up options over two copper projects in Zambia, Katwaro and Jisanshi, where work is ongoing in the fourth quarter to review historic exploration data and map surface geology.
METAL HAWK (ASX:MHK)
(Up on no news)
Metal Hawk is now on a hockey-stick-like growth trajectory, with the nickel-turned-gold explorer up a further 15% today.
That’s around 50% for the past five trading days, a distinct return to form even if it’s still trading at less than half the highs seen in the heady, speculative days of its Berehaven nickel discovery near Kalgoorlie.
The name of the game now is the Leinster South gold project, located within 30km of Gold Fields’ long-running Agnew and Lawlers gold mines.
So far there’s not a lot to go on, though high-grade rock chips have been found across a string of prospects over a 1.5km strike in the project’s south-west corner.
Maiden drilling is expected to start next year after heritage surveys, funded by a recent $2.5 million raising at 20c a share.
Metals Australia (ASX:MLS)
(Up on no news)
MLS is catching a bid, up 40% in the last month as it prepares to drill down on ground near the site of an $82 million acquisition.
London-listed Pan African Resources stormed into the NT copper and gold scene with the planned takeover of Tennant Creek Mining Group.
The private explorer is, notably, 55% of the way through the construciton of the Nobles processing facility, which will enable the company and its JV partner Emmerson Resources (ASX:ERM) to head into production from FY26.
MLS reminded shareholders this week of its plans to drill down on the Warrego East project, located immediately east of TCMG and Emmerson’s Warrego mine, which historically produced 4.95Mt of ore at 2% copper and 8g/t gold.
Metals Australia said on Tuesday that its mine management plan had been authorised by the NT government, with a field exploration program to kick off once it has access agreements with land holders.
“The takeover of TCMG by Pan African Resources demonstrates the potential now being seen by bigger overseas players in the Tennant Creek Mineral Field,” MLS CEO Paul Ferguson said on Tuesday.
“With a market cap of more than $1 billion, South African based Pan African Resources has recognised the potential of this underexplored region to host significant mineral resources where less than 10% of drilling has extended beyond 150m in depth and where almost all significant deposits to date have been discovered under shallow cover.
“The Warrego mine was identified undercover as a magnetic anomaly during an airborne survey conducted in 1956. Similar magnetic anomalies occur within a corridor through our Warrego East lease, with the Gekko and Orlando deposits discovered further to the east, within the same corridor.”
TUNGSTEN MINING (ASX:TGN)
(Up on no news)
Another gainer moving up strongly on little news flow, Tungsten is progressing its Mt Mulgine project in WA’s Murchison, a tungsten and molybdenum deposit containing 290,000t of WO3 (tungsten oxide) and 71,000t of molybdebyn in the ground with by-products of copper, gold and silver.
It remains the highest priority development project for the cashed-up junior, which had over $6 million in the bank at September 30.
In the last quarter the company completed six RC holes over 714m testing extensions to mineralisation, with assays due in the December 2024 quarter.
TGN also boasts the Hatches Creek project in the Northern Territory after acquiring in August the 80% interest in the project held by JV partner GWR Group (ASX:GWR).
European tungsten concentrate prices have lifted eight per cent this year, with Chinese demand growing strongly in a tightly supplied market over the past two years, lifting imports of tungsten con by 95% according to Argus Media.
At Stockhead, we tell it like it is. While Cyclone Metals and Tungsten Mining are Stockhead advertisers, they did not sponsor this article.
