ASX juniors are delivering on iron production and critical minerals exploration

MarketTalk is an investor event series that brought together seven ASX-listed resource developers and producers for an afternoon of presentations on 6 May at Sydney’s Hubert Theatre Royale.

Hosted by Perth-based Resolve IR and Sydney-based Investability, the one-day investor event showcased carefully selected, high growth companies at various levels of development in the resources sector.

The format was a series of 10-minute presentations which centred on exciting, upcoming plans and near-term growth outlooks followed by a 5-minute Q&A session

ASX resources stocks discuss upcoming plans

This week’s MarketTalk event showcased seven companies that prove there’s still immense value to be unlocked on the ASX.

Here are all the juicy details.

Fenix Resources (ASX:FEX)

John Welborn, chairman

Fenix Resources is a profitable iron ore producer that operates the Iron Ridge mine that produces 1.3Mtpa of iron ore that is developing more two more pillars to its business.

During the first half of FY2024, the company’s operations delivered record revenue of $126.9m, up 49% from the previous corresponding period, EBITDA of $42.8m – up 110% pcp, and net profit after tax of $22.1m, up 102% pcp.

However, the company is also expanding into new operations with its own haulage fleet and port infrastructure base in Geraldton

FEX is providing port and haulage services for Midwest iron ore producers CuFe (ASX:CUF) and private company Gold Valley.

We have signed up other Midwest iron ore producers CuFe – an ASX listed company – and Gold Valley – a private company, and we are doing port services and haulage services for those two customers.

Separately, the company has negotiated a 10Mt right to mine on SinoSteel’s W11 Beebyn deposit that is 20km away from Iron Ridge and expects to publish a feasibility study that will pave the way for bringing W11 Beebyn into production to augment its existing production.

It is also working to make a similar decision on the Shine iron ore mine it acquired from Mt Gibson (ASX:MGX).

“I think investors should be looking for us to define and then execute our pathway from being a single mine producer to being a multi-mine producer in the Mid-West with the corresponding boost to our revenues and profitability,” Welborn told Stockhead.

American West Metals (ASX:AW1)

Dave O’Neill, MD

North America-focused American West Metals is primarily a copper explorer though it also has some zinc assets as well.

The company’s major project is the Storm copper play on Somerset Island in Nunavut, Canada, which has a resource of 17.5Mt at 1.2% copper and 3.4g/t silver and is currently being progressed through exploration and from there to development.

AW1 has now embarked on its largest exploration season yet with more rigs, more electromagnetics and geophysics mapped out to build the existing resource and look for new copper deposits in the Storm area an beyond.

This is expected to deliver regular news flow from the exploration though O’Neill adds that the company is also doing a lot of environmental work, which will help with permitting for the project.

Already, the ongoing moving loop electromagnetic survey being carried out as part of this season has already identified a growing collection of conductive anomalies, some of which are adjacent to known copper deposits and mineralisation.

“We are also doing a lot of study work, mine study, metallurgical study, that’s very advanced and going very well and also doing a lot of planning for next year as well,” he told Stockhead.

The company is also planning to get a sea lift to site this year that will get fuel and heavy equipment to site, which is expected to save considerable amounts on next year’s costs.

Terra Metals (ASX:TM1)

Thomas Line, MD

Formerly known as GCX Metals, Terra Metals adopted its new name to reflect its pivot towards critical minerals with a focus specifically on the flagship Dante copper-PGE-gold-nickel project in WA’s West Musgrave region.

Dante is surrounded by majors including one of the largest copper and nickel sulphide discoveries in recent times – BHP’s (ASX:BHP) $1.7bn, 390Mt Nebo-Babel nickel-copper-PGE project that is currently under construction.

The project also happens to have geology similar to Chalice Mining’s (ASX:CHN) Julimar-Gonneville deposit as well as South Africa’s Bushveld region, the world’s largest source of PGEs with over 2 billion ounces of platinum, palladium and gold along with large base metal deposits and very large vanadium-titanium deposits.

Line pointed out that both the Bushveld and Dante are large, layed entrusions which produce reefs that are often enriched in precious metals.

Each layer within the layered intrusion can contain different enrichments in large deposits of different metals, though the most prominent are the precious metals, platinum, palladium and gold.

Where the two areas differ is that where the average reef at Bushveld is about 80cm thick, Dante has reefs outcropping at surface that are sometimes 10-15m thick.

“We have similar geology, we have proven there’s precious metal enrichment amongst other copper as well in these reefs but they appear to be much thicker than we see in the Bushveld,” Line said.

TM1 is currently in the middle of an intensive drilling program at Dante that had grown from an initial 4000m to 7000m before geological observations in the field led to another expansion to 10,000m.

Assays from ~6000m worth of drilling is currently in the lab and are expected to deliver a steady stream of results over the next couple of months.

The company also anticipates that once all the results from the 10,000m program are out on the market, it should be back drilling again.

Additionally, the company will carry out deep diamond drilling at Dante that is co-funded by the WA’s government’s exploration incentive scheme grant to a cap of $245,000.

It has also secured up to $215,000 in co-funding for a high powered EM survey to be flown over the Dante project, which will identify new conductive sulphide targets for drilling.

Both these programs will likely start around June of this year.

Xanadu Mines (ASX:XAM)

Colin Moorhead, executive chairman

Mongolia-focused copper and gold explorer Xanadu Mines has two early stage exploration assets – the Sant Tolgoi nickel-copper project in the northwest of the country and the Red Mountain copper-gold porphyry project – and its flagship Kharmagtai operation, an advanced porphyry copper project in the South Gobi region not far from the Chinese border.

Kharmagtai is a large porphyry copper system that is envisioned to be an open pit mine that will produce ~50,000tpa of copper and 110,000ozpa of gold for 30 years under the scoping study. Improvements to these figures are being considered in the pre-feasibility study that is currently underway.

Other improvements that the company is considering include using leaching to turn the oxide waste material at the top of the deposit into ore along with the use of technologies such as coarse particle flotation or electric leaching to further enhance its economics.

To top it off, the PFS is funded by a 50/50 joint venture with China’s Zijin Mining Group – one of the largest copper-gold producers in the world.

“They (Zijin) have backed us to the chin with $35m and in the upcoming quarter, we will be bringing our PFS together, so all the metallurgy, process engineering, and mining engineering will come together,” Moorhead said.

“In the September quarter, we aim to release a maiden ore reserve and details of that PFS.

“In the December quarter, we would hope to announce some sort of funding agreement with Zijin to take the project forward.”

Pursuit Minerals (ASX:PUR)

Aaron Revelle, MD

Pursuit Minerals holds the Rio Grade Sur lithium brine project that covers 9260 hectares of the Rio Grande Salar within Argentina’s Salta province.

It has an inferred resource of 251,300t of lithium carbonate equivalent at an average grade of 351mg/L lithium.

The Stage 1 drilling campaign on the four tenements to the south of the tenement package is underway with drilling of the first hole DDH-1 in progress.

“We are quite excited by the interim and intermediate results that are coming out from some of the packer samples as we progress to depth,” Revelle said.

“We are expecting that program to continue over the remainder of the quarter into the half of the year, when we are expecting to complete all four diamond holes, which should total about 2500m of drilling.”

Results to date indicate that a significant upgrade to the resource could be delivered before the half year or into the third quarter.

The company has also completed its lithium carbonate pilot plant, with its engineering team now focused on producing the first 5-10kg of lithium carbonate products, which will be sent to potential offtake partners for quality certification and product analysis.

This will in turn enable the company to carry out advanced offtake discussions with that plant and turn the plant into a 250t continuous operation even as its constructs and develops evaporation ponds at site.

“We are working towards those milestones in the near term, as well as advancing some of the other elements of our project including our bankable feasibility study, which we are on track to deliver a larger, commercial scale study by the end of this year,” Revelle added.

Castile Resources (ASX:CST)

Mark Hepburn, MD

While Castile Resources is like any other junior miner in its focus to bring its Rover 1 mine in the Northern Territory into production, it sets itself apart by being a downstream processor developing a processing pathway that will enable it produce gold, copper, cobalt and a high-grade magnetite product.

This means that rather than just digging up the ore and shipping it to a smelter, the company is looking to produce end user metals in the NT.

Rover 1 is expected to produce for about nine years, generating between $240m and $250m in revenue per year and delivering IRR of 46% according to the pre-feasibility study.

Hepburn told Stockhead that these numbers were based on where gold and copper prices were at prior to their large runs in the last two to three months.

“It is an extremely financially robust project that is easily manageable and highly profitable,” he added.

“I think sometimes people go that it needs to be a certain size, well ours is certainly of size when it comes to how much profit it makes and revenue it makes.”

Unsurprisingly, its efforts have led to the Rover 1 project being granted major project status by the NT government, opening up what Hepburn describes as a “treasure chest of grants and loans”.

This essentially enables the project to get a lot of aid from not just the NT government but also federal government help for loans and critical minerals grants.

In return, the company has committed to getting Rover 1 into development as quickly as possible using resources within the NT.

“Major project status has proven that we are now a very viable project and very important to the NT, so hopefully we are starting to get to the point where we are ready to start developing the project in a more meaningful way,” Hepburn said.

“We are now starting to get that proliferation of interest in the company and people are seeing that there is value in that diversity of both the metals and the metal streams and the revenues.”

Cobre Limited (ASX:CBE)

Adam Wooldridge, CEO

Copper explorer Cobre holds the second largest tenement holding within the Kalahari Copper Belt in Botswana that sits between two producers in the region, Sandfire Resources and MMG.

This places its ground along strike from and adjacent to some of the known deposits – including producing deposits – in the belt.

The company has a three pronged approach towards exploration, the first of which is to look for new tier 1 discoveries, particularly in the large fold structures that occure in the Kalahari.

“We want to target areas where those fault structures still have the roof preserved and this will bring bigger scale systems on board for targeting,” Wooldridge said.

“In that aspect we have partnered with BHP, so we are part of the 2024 BHP explore program and we are really focusing on that aspect through the program.”

The second prong is to look for short-term windfalls by drilling strategically to look for new copper discoveries.

At its Okavango, the company is drilling next door to MMG and expects any copper intersection there to have a significant impact on its share price in the short term.

Wooldridge added that the last prong of its exploration strategy is the Ngami copper project that has an exploration target of more than 100Mt at 0.5% copper and all the key hallmarks for a successful in situ copper project including chalcocite dominant mineralisation that is under the water table and its association with a large fracture system.

“If we can get this to work, we focus a lot on the engineering and hydrological side of this project, this will put it on the development pathway as well,” he noted.

Getting in situ recovery to work would not only be more environmentally friendly due to not needed excavation, it would also be on the bottom of the cost curve in terms of extraction methodology.

“You’re looking at a low capex, low opex process. It is scalable and if we can get to this work, and given the size of the exploration target we are looking at, it will be a game changer for the company,” Wooldridge said.

To test this, the company has drilled a large diameter injection well straight into the fracture zone at Ngami and is currently extracting and repumping water into the fracture zone and using series of monitoring wells to model the fluid flow through this fracture zone.

It has also started engineering studies to build an economic model – a process that will happen over the next six months.

Other work includes news flow from hydrological testing in the coming month and a seismic program starting at the end of May to target the big fold trap sites.

At Stockhead we tell it like it is. While American West Metals and Terra Metals are Stockhead advertisers, they did not sponsor this article.