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Resources Top 5: Excitement builds for Raiden’s Andover lithium results, taking others along for the ride
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- Raiden Resources paused to update on Andover lithium drill hits, sending nearby explorer Errawarra higher
- James Bay up over 300% since announcing Nevada gold deal
- Novonix has Volkswagen on board to buy its graphite
Your standout small cap resources stocks for Monday, November 25.
ERRAWARRA RESOURCES (ASX:ERW)
(Up on no news)
On the face of it, like your gym bro who puts on 20kgs of pure muscle on what they claim is a diet of coco pops and McMuffins, this is a case of unexplained gains.
But scratch a little deeper and it seems like some investors may be sidestepping the trading halt at neighbour Raiden Resources (ASX:RDN), taking a proxy bet on some speculation about its latest drill hits.
Raiden is a stock of major interest, even with the cooling in lithium prices over the past year, thanks to its positioning next door to Gina Rinehart, SQM and Mark Creasy’s Andover lithium discovery.
Andover, one of the biggest pegs ever pegged, is said to be a monster resource, though now that it’s in the hands of the private Hancock and Creasy and US-listed SQM, we haven’t seen it divulged publicly.
It was sufficiently exciting, albeit in a far hotter lithium market, to get Rinehart and SQM parting with $1.7 billion in cash for the deposit’s founder Azure Minerals.
Raiden, which holds ground to the south of the lithium deposit near Roebourne in the Pilbara, finally got access to drill this year and has requested a trading halt today pending some results from the campaign.
Errawarra punters have already asked their mates to hold their beer.
The Tom Reddicliffe-chaired minnow holds Andover West, where its taken hundreds of soil samples and identified two priority areas with a combined 3km strike.
ERW also boasts a farm-in and JV with London-listed Alien Metals at Pinderi Hills to the west of Andover, where its reconnaissance sampling has turned up an Li2O soil and stream anomaly with a 6km2 footprint. ERW can earn up to 50% by funding exploration.
JAMES BAY MINERALS (ASX:JBY)
(Up on no news)
It’s been a rough year to be a lithium explorer, with the flurry of Canadian exploration listings in 2023 crashing back to earth amid a price correction, and the realisation oversupply may take longer to work through than first expected.
But miners are nothing if not flexible, and those who have shown they can do the splits have given themselves an opportunity to capture the attention of the market.
Take James Bay, which is up over 300% since mid-October, when it announced the acquisition of the Independence gold project in the Battle Mountain region of Nevada in the USA.
Gold, of course, is having a year to remember, hitting all-time highs in October of ~US$2800/oz.
JBY’s decision not to stay 100% true to its name has paid off so far. Its 20% gain today takes its five-day run to 44%.
Independence contains a high-grade inferred resource of 3.794Mt at 6.53g/t gold for 796,200oz, along with 334,300oz measured and indicated on the international NI 43-101 standard. That’s some low hanging fruit for a JORC 2012 complaint resource.
There’s some silver in there as well, with drilling planned to take place this quarter.
Located next to Barrick and Newmont’s Phoenix gold mine, after paying $2.4m in shares for an initial 51.54% ownership stake, JBY thinks a heap leach operation could be permitted in some 8-12 months according to a recent presentation.
NOVONIX (ASX:NVX)
A shake of the hands with auto giant Volkswagen has Novonix shares on the up on Monday, after the synthetic graphite hopeful signed a binding offtake deal to supply 32,000t of ‘high performance synthetic graphite material’ over five years from 2027.
The intention is to use graphite from Novonix’s Riverside plant in the United States to underpin graphite supply for PowerCo, the gigafactory subsidiary set up by VW in 2022.
Its three planned locations in Salzgitter, Germany, Valencia, Spain and St Thomas, Canada, could produce batteries with a combined capacity of 200GWh per year.
The PowerCo deal comes after another binding offtake deal with major auto giant Stellantis, owner of the Fiat, Jeep and Chrysler brands among others.
The Riverside plant, where commercial production is due to begin next year, is expected to grow its output to 20,000tpa, and is part funded by a US$100m grant and US$103m tax credit from the US Department of Energy.
NVX says it is looking to build another facility in America’s south-east with a 30,000tpa which can eventually be scaled up to 75,000tpa, with its eventual aim to deliver 150,000tpa.
There’s still no specifics on the pricing structure of the deal, though battery graphite has been under pressure in the past couple years because of rising supply of both natural and synthetic graphite products in China.
But both the US and EU have introduced legislation incentivising the sourcing of battery raw materials like graphite, which is the critical component of the anode in an EV lithium-ion battery, from friendly (non-Chinese) jurisdictions.
$470-million-capped NVX, which commanded a now mind-boggling price of over $10 in late 2021, has moved from breakeven for the year to a ~29% YTD gain on today’s news to 94.5c.
Gateway Mining (ASX:GML) and Sabre Resources (ASX:SBR)
(Up on no news)
A couple of quick hits before we go.
Gateway has little to share, but is up over 21% on Monday. The explorer engineered a shift in strategy with the recent $14m sale of the gold rights at the Montague East project this year to Brightstar Resources (ASX:BTR), which is attempting to consolidate the historic Sandstone gold district.
That included $5m in cash, leaving Peter Langworthy-chaired Gateway with plenty of cash to spend after monetising the 507,000oz gold deposit.
GML still holds the other mineral rights at Montague East along with all mineral rights at Montague West. It’s currently pursuing some interesting nickel-copper-PGE prospects on the latter.
$5m-capped tiddler Sabre Resources (ASX:SBR) is sitting on a 60% YTD loss, but saw some buying Monday despite over three weeks of radio silence since its September quarterly dropped.
The explorer owns an 80% stake in uranium projects in the Ngalia Basin of the NT, including the Dingo project, where it has been working up drilling targets.
Sabre has around 50km of the Mt Eclipse Sandstone on its ground, a feature hosting the Bigrlyi uranium-vanadium deposit and the Camel Flat resource. SBR is using the same technique (a gradient-array-induced polarisation survey) that resulted in the Camel Flat find, looking for extensions to the north-east within a corridor that also includes a sample of up to 5914ppm U3O8 on its own ground.
Drilling will follow approval of a mine management plan from the NT government, targeting extensions of high grade mineralisation found at Eclipse 1. It’s worth noting that, probably more relevant for today’s big move, Sabre holds gold and lithium tenements across the Pilbara including at Andover East and Andover Northeast, up the road from where Raiden has been drilling.
At Stockhead, we tell it like it is. While Raiden Resources and James Bay Minerals are Stockhead advertisers, they did not sponsor this article.
