CuFe completes deal to become latest player in hot lithium exploration district

CuFe has officially added lithium to its array of critical minerals, completing the acquisition of a tenement just 20km from the Mt Marion mine, one of the world’s largest producers of spodumene concentrate.

Located 10km from the Spargos Reward gold project, tenement E15/1495 is also considered prospective for the precious metal, with several parties already approaching CuFe (ASX:CUF) to participate in its exploration programs there.

Now secured for just $300,000 cash and a $300,000 milestone payment on future production along with a 1% royalty, the 14km2 package throws the iron ore miner and copper explorer headlong into the lithium market.

A field trip is planned next week, with CuFe telling shareholders this week it was now in a position to talk to third parties to add value to the project, which sits in the same spodumene rich mineral field between Coolgardie and Norseman as MinRes’ (ASX:MIN) Mt Marion, the Bald Hill mine and Liontown Resources’ (ASX:LTR) Buldania.

“As usual the Cufe team is keeping busy and making good progress across our project suite,” CuFe executive director Mark Hancock said.

“We are very pleased to complete the acquisition of our new tenement near the Mt Marion Lithium mine and we are already seeing interest from industry participants who see the potential there.”

Iron ore outlook improving

It comes as CuFe moves a step closer to securing an additional 40% of the JWD iron ore mine, with an independent expert’s report finalised and expected to be included with a notice of meeting that is currently with the ASX for review.

The JWD mine hit its most productive monthly rate since opening under CuFe’s management a couple of years ago, exporting 83,147wmt of ore including 71,367t of lump.

The JWD lump is improving with depth and being sold at a headline grade of more than 63.5% Fe. This not only attracts a premium due to its 1.5% grade advantage over the 62% Fe benchmark, but also gets the lump premium.

Lump is preferable to standard fines iron ore because it can be put straight into the blast furnace at a steel mill, bypassing the energy and carbon intensive sintering process.

CuFe says falling iron ore index prices over April and May have made the economics of the project more challenging, but there’s plenty working for the junior.

Sea freight prices are down 50% since last year, while lower fuel costs and the weaker Aussie dollar are also helping alongside cost efficiencies being chased by CuFe at the mine.

Executive director Hancock noted iron ore prices have lifted US$7/t in June, with China’s steel sector showing green shoots.

“At JWD, operations are back to full production following the weather disruptions experienced earlier in the quarter,” he said.

“We continue to focus on controlling the controllables there and await an improvement in sentiment in the Chinese steel sector to boost index prices.

“There have been some encouraging signs in that regard recently, with prices up by approximately US$7 so far over June, so we hope that trend continues.”

Meanwhile, fieldwork on a flora survey over CuFe’s Yarram tenure was completed on June 2, which will complement fauna studies completed as part of the environmental approvals process for the NT iron ore project.

An updated mining management plan for more drilling at Yarram has recently been approved by the NT government, with a local contractor being lined up to complete proposed diamond drill holes in July.

They will provide geotechnical data to support pit designs at Yarram and metallurgical data to define product characteristics such as the lump to fines ratio and density of the ore.

Another drill program will take place later in 2023 to grow the Yarram resource and move its classification from inferred to the higher confidence indicated category, which can be converted into economic ore reserves.

“At Yarram the recently completed flora survey is a key part of our environmental approval submissions and we would like to acknowledge the assistance from the Traditional Owners in assisting over the course of the survey,” Hancock said.

This article was developed in collaboration with CuFe, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.