Ground Breakers: Mincor rattles tin, AVZ launches (legal) attack on Dathomir and iron ore fires up market

Mincor rattles tin for $60 million to advance development of ‘Golden Mile’ nickel discovery
AVZ starts legal proceedings against Dathomir over Manono stake sale
Iron ore threatens US$110/t after Vale guidance drop

Mincor Resources (ASX:MCR) is rattling the tin for $60 million in a bid to ramp up the development of one of the few new nickel discoveries in Kambalda this century.

It has only been a few months since Mincor revived its Kambalda ops in the midst of a rising nickel price and transition of Australia’s historic nickel sulphide mining industry from supplying steelmakers to supplying products for electric vehicle batteries.

Mincor, the supplier to BHP’s (ASX:BHP) Kambalda nickel concentrator, has been ramping up exploration to look for nickel tonnes missed by the old timers.

And Kambalda continues to deliver new discoveries despite the fact it has produced 1.5Mt+ since it was founded in 1966.

The Golden Mile has a high grade ore reserve of 12,500t, which Mincor wants to start development works at in January with an eye to hitting first development ore in the fourth quarter of FY23.

$20m will be put towards work at Golden Mile and extensional drilling across its Northern Operations, consisting of the Durkin North and Long mines.

Another $15m will be put toward underground exploration and resource definition drilling at the Cassini mine after securing a third underground diamond rig to bring the program forward to late January, enabling drilling at both Golden Mile and Cassini next year.

But the cash, comprising a $55m placement and $5m share purchase plan, will also go to providing working capital “providing sufficient headroom to mitigate unforeseen ramp-up delays” as well as close out hedges.

Mincor had 3569t left at $21-22,000/t (Australian) at November 30 with BNP Paribas, taken out as part of its financing requirements.

Those are now well out of the money. Three month LME Nickel prices fell 5.5% to US$29,725/t overnight, or almost $44,000/t in Aussie terms, double the price of tonnes in the hedge book and 43.4% higher than prices at the end of 2021.

Mincor Resources (ASX:MCR) share price today:

AVZ saga drags on

An imbroglio between AVZ Minerals (ASX:AVZ) and Chinese miners looking to consume slices of the giant Manono lithium deposit in the Democratic Republic of the Congo continues to roll on.

Former ASX 200 company AVZ has had its shares suspended at 78c since May, after it was revealed Chinese gold giant Zijin Mining had laid claim to a 15% share of the Manono project which AVZ said it had the right to buy from Congolese State mining company Cominiere.

Separately one of the JV partners Dathomir, off which AVZ claimed to have bought a 15% stake, reportedly pulled out the deal, something AVZ said it was not able to do.

The upshot of it all is Zijin claims AVZ’s stake in Manono, after a planned 24% sale to Chinese battery manufacturer CATH, will come to just 36%, not the 66% AVZ thought it would have.

AVZ, now subject to proceedings in the International Chamber of Commerce from Zijin subsidiary Jin Cheng Mining, continues to maintain that it holds valid legal title 75% of the Manono project and right of first refusal to the 15% stake Jin Cheng claimed to have bought from Cominiere.

It has now launched the first of what AVZ says will be two arbitration proceedings against Dathomir in the ICC “to seek a declaration affirming AVZI’s legal title to the 15% stake in the Manono Project acquired under the validly executed and completed sale and purchase agreements with Dathomir.”

“The Company considers it has strong prospects of success in the Dathomir Arbitrations and Jin Cheng ICC Arbitration Proceedings and will vigorously pursue its claims to vindication,” it said.

AVZ Minerals (ASX:AVZ) share price today:

Iron ore lifts on Vale news, making ressie stocks mean, green mining machines

The materials sector rose 1.16% this morning, propelled by the big boys of the ASX resources scene.

The big catalyst was news yesterday that Vale was poised to fall well short of its medium term targets, revising its 2023 guidance to a flat 310-320Mt and dulling medium and long term expectations from 400Mtpa to 340-360Mtpa by 2026 and 360Mtpa+ by 2030.

Vale’s “value over volume” mantra, which showed it continues to struggle with mining constraints more than three years after the Brumadinho dam collapse, sent iron ore prices to a touch under US$110/t.

Fortescue Metals Group (ASX:FMG) rose 3%, with Rio Tinto (ASX:RIO) up 2.61%, South32 (ASX:S32) up 1.95% and BHP (ASX:BHP) lifting 1.86%.

Among the mid-caps Chalice Mining (ASX:CHN) kept rising for the second straight day as investors absorbed the news of a second major nickel and PGE sulphide discovery at its Julimar project near Perth, 5km north of the massive Gonneville deposit.

Copper rose above US$8500/t on hopes around China’s Covid exit, with Sandfire Resources (ASX:SFR) up 3.79% and 29Metals (ASX:29M) up 2.07%, while coal miners New Hope (ASX:NHC) and Stanmore (ASX:SMR) were also among the winners.

Champion Iron (ASX:CIA) joined the larger ASX iron ore stocks with a 3.58% lift and graphite miner Syrah (ASX:SYR) was also up 2.37%.

While China’s Covid reopening measures have been received bullishly by the market, experts have cautioned rising virus cases could have a heavy impact as well, particularly with its poor elderly vaccine coverage.

“Cases are rising, it is a bit shocking how many people in my Beijing circle have it now, and the authorities are telling people to stay home and self-treat unless they are really sick,” China expert Bill Bishop of the Sinocism Substack wrote today.

“Let’s hope that the PRC experts are correct that the vast majority of people will be fine, otherwise we are heading into an awful couple of months, especially as tens of millions or more people start traveling in the next several weeks for the annual Lunar New Year migration.”