There are good vibrations radiating from Kalgoorlie this week as the iconic Diggers & Dealers mining conference benefits from increased confidence in the sector.
This year registrations were well over 2100 by day two, with last-minute registrations still filtering in.
Interest in the annual event – which is the largest mining conference in the southern hemisphere – picked up a lot earlier than last year, with numbers starting to rise from January and accommodation in the West Australian mining town filling fast, say organisers.
The event was “definitely more upbeat than last year”, Sheffield Resources (ASX:SFX) managing director Bruce McFadzean told Stockhead.
“I think generally the whole industry is up, so I think it’s quite buoyant. I think a few people made a bit of money in resources in the last 12 months.”
Sheffield is advancing its Thunderbird mineral sands project in Western Australia towards production.
A feasibility study shows Thunderbird is a low risk, modest capex project that generates strong cash margins from production over a mine life of 42 years.
Sheffield has already locked in binding supply agreements for all of its zircon and is in the process of squaring away deals for its ilmenite.
Mineral sands are old beach sands that contain zircon, ilmenite and other minerals.
Ilmenite is the main source of titanium dioxide, a white pigment used in paints, fabrics, plastics, paper, sunscreen, food and cosmetics.
Zircon, meanwhile, has a high melting point, making it ideal for use in engines, electronics, spacecraft and the ceramics industry.
“So 77 per cent of our gross revenue for the first five years is now locked away in binding contracts,” Mr McFadzean said.
“On top of that we’re now just finalising our ilmenite, or our titanium feedstock. So we anticipate being around that 90 per cent of gross revenue under binding take or pay contracts within a couple of months.”
While the West Australian mining town isn’t experiencing the same level of excitement as it did during mining boom, there is a “reasonable sort of buzz”, says Byron Dumpleton, chief geologist for gold producer Red 5.
“There’s an atmosphere out there. Obviously people are in good spirits, they’re positive,” he told Stockhead.
The boss of cobalt explorer Cobalt Blue Holdings (ASX:COB), Joe Kaderavek, said the overall backdrop was strong.
“There’s a big tailwind in the sector,” he said.
Cobalt Blue made the list of top 100 performing ASX mining stocks over the past year back in June with a 450 per cent gain.
The company is earning in to Broken Hill Prospecting’s (ASX:BPL) Thackaringa cobalt project in New South Wales.
However, Hedley Widdup, a fund manager for investment firm Lion Selection Group, said the sentiment didn’t seem as “exuberant” as he was expecting.
“It just seems a bit tempered,” he told Stockhead.
“The last month or so has sort of taken a bit of the wind out of the sails with I suppose trade war feelings in the market, and it’s affected base metals more than most things, but with the US dollar trading the way it has it has affected gold as well.
“Even the bubble of enthusiasm around things like lithium and cobalt, they’re getting attention but it seems like people are letting off steam more than high fiving.”
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