Diggers and Dealers: Four stories to follow as mining’s biggest talkfest gets into gear
Link copied to
We are on the ground in Kalgoorlie-Boulder, famed for its ownership of the world’s tallest bin, for the Diggers and Dealers Mining Forum.
What goes in the bin, we’ve always wondered? Best bet is it’s piled to capacity with unread presentations from the pen and paper days of companies liquidated long ago.
Many, we hear on the grapevine, were iron ore juniors once. Their shells are now drilling for lithium in James Bay.
There’ll be more to come as the week unfolds.
But the tradition of Diggers morning announcements is a long one. Most stand out as much as a bloke on the side of a Mumbai train.
Many belong in the tailings dam, never to be seen again.
We’ve picked a few you should pay attention to.
There’s plenty of FOMO from explorers trundling punchdrunk around the streets of Kalgoorlie this week, each with their own tale of how they just narrowly missed a role in Azure’s (ASX:AZS) massive Andover lithium discovery.
‘I coulda been a contender’, they’re all yelling Brando-like from the back of a Twin City Cab on the way home from the Gold Bar.
The 60-40 JV with the world’s luckiest fossicker Mark Creasy, of Nova and Bronzewing fame, is all anyone can talk about, musing just how big the thick, juicy Pilbara pegmatite will be.
We have some indication today, with an exploration target setting the scene for an anticipated Q1 2024 mineral resource estimate which could spell out something very special indeed.
100,000m of drilling is the water to run under the bridge, but the bar has been set high. Azure is looking for 100-240Mt at 1-1.5% Li2O.
That would be, clearly, within Tier-1 territory. Patriot Battery Metals’ (ASX:PMT) Corvette discovery in the far more dicey jurisdiction of Quebec in Canada came in at 109Mt at 1.42% Li2O, for reference. It’s the world’s eighth largest spodumene deposit.
AZS is down in early trade. Maybe the punters are disappointed. That said, it’s gone from a sub-$100m market cap to over $1 billion in under eight months, so there’s plenty of fat to burn before the next drilling results come through.
Boss Tony Rovira takes the stage at the Goldfields Arts Centre on Wednesday morning.
Liontown Resources (ASX:LTR) is nearing the pointy end of its construction program at the $895 million Kathleen Valley lithium mine.
And the monster project in WA’s Northern Goldfields could still get bigger. MD Tony Ottaviano talks at 4.05pm today, but there’s a strategy update out this morning and it is, like everything about the mine, a biggie.
A partnering strategy has been commenced with Japan’s Sumitomo to study a downstream processing route with Liontown’s involvement and its Kathleen Valley ore, to take place over the next two years.
“The agreement will support a jointly-funded study that explores the feasibility of using Liontown’s spodumene, or a future lithium sulphate product produced in a Western Australia based plant, to produce lithium hydroxide in Japan,” LTR said.
“We are putting our downstream strategy into action by partnering with Sumitomo Corporation to explore the feasibility of developing downstream lithium products between Australia and Japan – two longstanding and successful partner nations in natural resources,” Ottaviano said.
Japan was the original backer of our iron ore and coal industries. It now wants a major role in the WA lithium boom.
Idemitsu took a cornerstone stake in Delta Lithium (ASX:DLI) only a short while ago. Mitsubishi, co-owner of BHP’s (ASX:BHP) BMA met coal mines, also has its battery metals team running the ruler over lithium investments in the Land of OZ.
I drive an Outlander, it’s a sturdy unit. Hopefully I can get one with WA lithium in it at a reasonable price sometime soon.
Liontown could be in need of a bit more funding. 60% of its project spend is committed, but it’s also been seeking export credit agency support on top of a $300 million loan from potential offtaker Ford.
“Liontown has received a joint Letter of Support from the international Export Credit Agencies (ECAs) of Australia, South Korea and the US,” LTR said.
“The letter accompanies three individual Letters of Support/Interest, indicating total non-binding and conditional finance interest for up to A$300 million to support delivery of the Kathleen Valley Project.”
If Andover is looking like a monster, Pilbara Minerals (ASX:PLS) is becoming a Godzilla of the lithium industry after a huge 36% increase in its world class Pilgangoora mine resource.
It now contains some 4.75Mt of lithium oxide and 101.8Mlb of tantalum pentoxide, a total ore inventory of 413.8Mt at 1.15% Li2O and 112ppm Ta2O5.
Of that the measured and indicated resource has grown 64% to 337.3Mt at 1.17% Li2O, 1003ppm Ta2O5 and 0.53% FeO3 — equivalent to almost 4Mt of lithium oxide.
While far lower in grade, Pilgangoora is now larger in tonnage than the Greenbushes mine in WA’s South West, the world’s most prolific producer of the EV material.
That’s going to produce a whole lot of spod for EV for decades to come, even at an expanded 1Mtpa rate expected to be hit from late 2025. PLS produced around 620,000t in FY23.
More drilling is to come, with the prospect of continued expansion at Pilgangoora floated by PLS MD Dale Henderson.
“This significant Resource upgrade reinforces our 100% owned Pilgangoora Operation as one of the largest hard rock lithium deposits globally. The upgraded Mineral Resource is consistent with our strategy to grow our operating base and therefore maximise value by achieving the full potential from our world class operation,” he said.
“We have added 109Mt of additional Mineral Resource at a direct exploration cost of only 13 cents per tonne of additional resource – an outstanding result.
“We are looking forward to completing an updated Ore Reserve this Quarter that will underpin operations for many years to come and may provide an opportunity to further expand production capacity beyond P1000.
“The FY23 drilling campaign has also identified further prospective target areas including areas in close proximity to the East and Central pits which will be drill tested in our FY24 drill program.”
Australia’s thrashing of Canada in the Women’s World Cup must have made for some tetchy final days for negotiations in this Canuck-Australian marriage.
Maybe the Tanzanian interests played peacekeeper to get OreCorp’s (ASX:ORR) acquisition by TSX-listed Silvercorp Metals over the line.
It will see ORR shareholders get 0.0967 Silvercorp shares and 15c a pop in cash, a move designed to get its Nyanzaga gold project in Tanzania into production by H2 2025.
Nick Giorgetta and Tim Goyder backed OreCorp will go for 60c a share, equivalent to around $240 million and a quarter of that in cash, with the development by Silvercorp of Nyanzaga already supported by the Tanzanian Government, currently trying to revive its previously pitiful reputation as a place for foreign miners to invest.
A 40c per share, $28m placement from Silvercorp will also help ORR progress Nyanzaga until the deal, recommended by both boards, clears the various shareholder and regulatory approvals.
The deal already has the support of Giorgetta, a former chairman of Diggers and Dealers and father of forum co-owner Sharon Giorgetta, whose private company Rollason Pty Ltd holds 12.3% of OreCorp’s shares.
A study in August 2022 showed the 2.8Moz project could deliver 234ozpa over a 10.7 year mine life.
At Stockhead, we tell it like it is. While Azure Minerals is a Stockhead advertiser, it did not sponsor this article.