ASX Resources Quarterly Wrap: Arafura progressing Nolans towards production, Alliance advances NiWest DFS
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It’s the quarterly season again as the ASX market announcements page becomes increasingly flooded with update lodgements.
To save you the trouble of trudging through it all, we’ve wrapped up the highlights from some of the (resources) reports that caught our eye.
During the June 2023 quarter, the company progressed development of its Nolans rare earths project in the NT with the advancement of early works.
This included the completion of village area bulk earthworks, commissioning of the 48-person fly-camp and commencement of commissioning of the first two phases of the construction camp.
It also started plant site bulk earthworks and commenced the installation of the 25km 450mm diameter water main from the borefield to the plant site.
Other work completed includes the raw water pond and pipeline to the village, additional production bores required for construction activities in the borefield and commencement of the headworks as well as groundwater monitoring bores in the borefield, residue storage facility and plant site.
But it wasn’t just the site that saw activity.
Arafura selected MACA Interquip as preferred contractor for the beneficiation plant and completion of an ECI phase to optimise the design, selected General Electric Company as technology partner for power and steam generation as well as an independent power provider selected to implement GE technology.
The company already has a binding offtake agreement in place with Siemens Gamesa Renewable Energy and advanced negotiations continuing with prospective offtake partners including automotive and wind turbine sector OEMs, and tier 1 motor component manufacturers.
On the financing front, Arafura has received in principle support for up to US$300m ($437.8m) in debt financing from Canadian export credit agency Export Development Canada and is also progressing debt funding.s
Additionally, the company has executed a $30m Modern Manufacturing Initiative Grant Agreement with the Australian government and has received the first grant payment of $6m.
The Nolans Project is expected to produce 4,325 tonnes of NdPr oxide per annum over four decades with first production expected in 2025.
Alliance Nickel continues to advance its NiWest nickel-cobalt project in Western Australia after pulling off a massive coup during the June 2023 quarter when it signed a binding investment and offtake deal with global automaker Stellantis.
Stellantis, the producer of the Peugeot, Chrysler, Alfa Romeo, Jeep, Dodge and Fiat car brands (amongst others), spent $15 million building an 11.5% shareholding in Alliance and will take 40% of NiWest’s nickel and cobalt sulphate production over the first five years.
The order for about 170,000t of nickel sulphate and 12,000t of cobalt sulphate is transformative for Alliance Nickel and places it in a strong position to continue engagement with other Tier 1 OEM and EV battery supply chain manufacturers regarding potential future offtake and strategic investments.
NiWest, which is located close to Murrin Murrin, the largest nickel-cobalt operation in Australia, is currently expected to produce 456,000t of nickel in nickel sulphate and 31,400t of cobalt in cobalt sulphate over its mine life, with annual production of 19,200t of nickel and 1,400t of cobalt over its first 15 years.
Alliance has appointed Blackbird Partners as its financial advisor to assist with its project finance strategy and is considering a range of debt financing options, including traditional bank debt, government debt, strategic partner financing and export credit agency funding.
Meanwhile, key Definitive Feasibility Study work programs are progressing to plan and on budget with completion expected in the fourth quarter of 2023.
The company has completed geotechnical assessment drilling completed for the Mt Kilkenny mine pit as well as planned infrastructure construction sites around the refinery, heap leach pads and evaporation ponds,
It has also completed infill drilling that will be used to define final mine pit designs and delineate additional Ore Reserve tonnage.
NiWest currently has an Ore Reserve of 64.9Mt grading 0.91% nickel and 0.06% cobalt.
Other activity completed in the quarter includes drilling for ground water, shipping of six tonnes of ore to SGS in Canada for pilot plant processing into premium battery grade product as part of the offtake customer qualification process, and the start of metallurgical testwork to further refine the operating costs associated with heap leaching activities.
Alliance has also received strong interest from mining contractors regards contracting of the NiWest mining operations and is continuing discussions with rail logistics providers Qube and Aurizon, for the import and transport of sulphur through the Port of Esperance.
BPM is focused on progressing its Santy and Claw projects in Western Australia while continuing to assess various project opportunities in the precious, base and battery metal space.
During the quarter, an induced polarisation survey at the IZ5 prospect within its Santy gold and base metals project identified two conductive zones that are thought to be indicative of massive sulphide accumulations.
Notably, both conductive zones are about 250m in length, a realistic size for a massive sulphide accumulation and do not appear to be stratigraphic.
Adding further encouragement, previous drilling at the prospect returned a top intersect of 1m grading 0.89 grams per tonne (g/t) gold, 90.3 parts per million (ppm) silver, 2.03% copper and 0.19% lead+zinc from a down-hole depth of 66m.
The company has also carried out an electromagnetic survey to constrain conductive zones for drill testing as most of the prospect is under alluvial cover.
Over at the Claw project, which is immediately along strike of Capricorn Metals’ 2.7Moz Mt Gibson gold project, the company carried out an environmental survey during the quarter as part of the drilling approval process.
Subject to the receipt of environmental and heritage survey results, BPM plans to carry out a +10,000m aircore drilling program that will begin later this year.
During the quarter, Caravel completed an independent review for the metallurgical process flowsheet for its namesake copper project.
Results from the review will underpin a simplified process flowsheet design and confirm the absence of any technical flaws leading into the bankable feasibility study.
This has already led to an increase in process plant capacity from 27Mtpa to 30Mtpa, the inclusion of a molybdenum recovery circuit to produce the metal as a separate marketable by-product, the deferment of coarse particle flotation as a future expansion option, and adjusting copper recovery to better reflect test data and industrial benchmarks.
The company has also selected Perth-based Lycopodium Minerals as lead engineering for the BFS and is carrying out metallurgical test work programs to support the BFS.
Groundwater drilling and modelling has also confirmed the presence of newly discovered aquifer sufficient to meet the requirements of the project and Caravel is working with Western Power to secure access for transmission grid supply by the third quarter of 2024.
Financing proposals have also been received from several mining equipment manufacturer’s, which are progressing towards a commercial arrangement for an automated and electrified mining fleet, whilst final environmental studies required for the State and Federal environmental approvals are nearing completion.
In the June quarter, Dalaroo delineated a strong rare earths soil anomaly with coincident phosphorus and significant low level niobium at its Lyon River project in Western Australia’s Gascoyne region.
This anomalism coincides with a large northwest 2km strike length high thorium anomaly identified in radiometric imagery.
In addition, 27 rare earth elements and carbonatite targets corresponding to a range of magnetic, radiometric and ASTER imagery response have been outlined at the project while systematic geochemical sampling programs are underway at the Marloo River and View Hill REE prospects and have started at the newly identified REE carbonatite targets.
REEs are not the only commodities present at Lyon River.
The project also hosts the Thirty Three Supersuite pegmatite swarms which have lithium potential.
These swarms extend across a 9km by 6km zone and will be targeted in the current next phase of exploration.
Highly anomalous values of 114ppm lithium, 1638ppm rubidium, 329ppm niobium, 116ppm tantalum, 182ppm tin have been reported across a number of lithium targets at Lyons River.
Dalaroo has also received an exploration inventive scheme grant of $180,000 to co-fund maiden diamond drilling at the Browns lead-zinc-silver target.
Four deep diamond drill holes will test Browns to build on highly encouraging results returned from the maiden AC drill program undertaken at Browns in 2022.
During the quarter, diamond drilling below the existing resource at Dateline’s Colosseum mine in California returned a bonanza intercept of 63.2m grading 10.28 grams per tonne (g/t) gold including a higher grade zone of 23.5m at 21.8g/t gold.
This is significantly higher grade than the mine’s overall resource grade of 1.2g/t and there are seven more holes to go in the current eight-hole program.
The existing open pit extends to a depth of 208m from surface while the current resource of 813,000oz of gold extends to a depth of 128m below the pit.
Dateline also reached an agreement to sell the Gold Links and Lucky Strike mill to MW Sorter for $12m in cash and novation of $17.75m in liabilities to the seller.
Additionally, MW Sorter agreed to acquire a 5% interest in Dateline via take up of the rights issue shortfall.
Following the end of the quarter, the company acquired an 80% interest in the Argos strontium deposit in California that is about 100km from Colosseum.
Strontium is a key component of permanent ferrite magnets, increasingly viewed as a low cost replacement for neodymium- based permanent magnets in EV motors.
At Stockhead we tell it like it is. While Arafura Resources, Alliance Nickel, BPM Minerals, Caravel Minerals, Dalaroo Metals and Dateline Resources are Stockhead advertisers, they did not sponsor this article.