Ground Breakers: Alkane’s 900m of Christmas cheer, ALS expands Perenti deal and Panoramic nickel sails for China
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Today we have a couple of monster porphyry hits, which have in one day turned its owner around from a near 20% 2021 YTD loss to under 5% and seen it reclaim its Monster of Rock status.
Alkane (ASX:ALK) shares charged by over 18% this morning as it announced two drill hits containing more than 900m of low grade gold and copper mineralisation at its Boda and Kaiser prospects.
The porphyry copper-gold project is located near Alkane’s Tomingley gold mine, and stretches to a strike length of around 3km.
The ~$500 million company is targeting a maiden resource estimate at Boda in the March quarter and put itself in good stead today with the outlandishly large porphyry drill hits, which extended Boda to the northwest.
They included BOD059 (Boda) which struck:
And the KSDD043 (Kaiser) hit:
There’s more where that came from with drilling also taking place at Boda Two, Boda Three, the area between Boda and Kaiser (Korridor Prospect) and other regional targets within the Northern Molong Porphyry Project in New South Wales.
Alkane managing director Nic Earner said: “These drill results show the extension of the high-grade system to the northwest of Boda.
“With the gold-copper mineralisation at Korridor appearing to connect Kaiser to Boda, we’re looking at a system over 3km in length.
“We look forward to bringing shareholders more results as well as our initial resource model in the coming quarter.”
If there is one complaint miners and explorers are expressing with predictable uniformity right now it is assay times.
$982 million worth of drilling was completed in Australia in the September Quarter, with potentially more in December (though that may be crimped by the traditional Xmas slowdown).
That means more drill core than ever is heading to the labs, frustrating company boards and investors who have seen wait times blow out from ~10 days to more than three months in some cases.
It’s mint for the analysis firms though. The biggest on the ASX is ALS (ASX:ALQ), which is saw its first half NPAT rise 57.7% to $127.1 million, exceeding its AGM guidance of $115-125 million.
ALS is understandably keen to increase its exposure to the mining industry, and has found a way by paying $43.6 million for Perenti Global’s (ASX:PRN) MinAnalytical business, which will deliver ALS new labs in Kalgoorlie and Perth.
It will also give ALS exposure to Chrysos Corporation’s PhotonAssay technology – a modern assaying technique that uses X-rays rather than screen fire assay to conduct non-destructive mineral analysis.
“This is a strategic bolt-on acquisition for our geochemistry business, which further expands our capacity and technological service offering to our clients,” ALS boss Raj Naran said.
“It supports our strategy to grow mine site testing which delivers more stable sample volume throughout the commodities cycle.”
Perenti will keep its 8% stake in Chrysos, which is being prepped for an IPO next year. The sale, along with a $32.1m sale of land and buildings in the Perth suburb of Canning Vale, will help the mining services firm reduce its leverage.
It released a new capital management strategy which states when net debt is below 1x underlying EBITDA (net leverage) it will pay a dividend of up to 40% of free cash flow. Perenti does not think it will pay a dividend in FY22.
WA’s on-again off-again nickel mine, Panoramic Resources’ (ASX:PAN) Savannah operation in the Kimberley, is inching towards reclaiming its status as a nickel exporter for the third time.
The company announced today its first ship is scheduled to dock at Wyndham Port on December 20 and expected to depart to Chinese offtaker Jinchuan by December 27.
With 8950t of nickel-copper-cobalt concentrate at the port, the first shipment is expected to send around 9000-10,000t of product off to sea with Panoramic to bank its first payment in early January.
It comes after the company halted operations in 2015 as the nickel industry went into a long depression and again in early 2020 as the Covid-19 pandemic hit.
“We remain pleased with how the team is progressing on site and we are well on track to achieve our targeted first shipment from Savannah before the end of the year,” Panoramic MD and CEO Victor Rajasooriar said.
“Concentrate production is continuing as planned and is being supported by stockpiled ore at surface. We are managing subsequent labour accessibility issues caused by the current border restrictions and are seeing the benefit of our ore stockpile strategy.
“We expect conditions to improve in February. Our grade control drill program is returning strong results that support the resource model, giving us greater confidence as we ramp up stoping activities in the coming months.”
Panoramic is a long-term fixture of the WA nickel industry and an interesting piece of WA’s nickel consolidation chess game. Around 20% of the company is owned by Western Areas (ASX:WSA), which yesterday announced a $1.1 billion deal to be taken out by IGO (ASX:IGO).
IGO itself stalked Panoramic back in 2019, but was ultimately unable to secure a deal to eat up the smaller nickel miner after Panoramic’s board rejected the Nova nickel mine owner’s advances.