Monsters of Rock: Uranium strikes, gold hits and lithium upgrades liven up a dull day for the big boys
Major mining stocks have the same uncomfortable feeling you get when you’ve left the beach hours ago but the sand still lingers between your, uh… toes.
You shower once more but the grit still finds its way into your bedsheets the next morning, condemning you to another day waiting for the washing machine and praying for sunshine.
Materials stocks are threatening to enter the death by a thousand cuts stage of the cycle, falling not by great magnitude but with disarming regularity.
Today the move down is 0.88%, nothing to write home about although this is a regular column so I will, with BHP (ASX:BHP) off 1%, Rio (ASX:RIO) and FMG (ASX:FMG) very pale green and gold stocks slightly weaker.
At least there’s coal to keep you happy though, if you’re that way inclined with your investments.
Thermal coal prices surged again overnight, with Newcastle futures lifting 1.7% to US$419/t. We’re pushing record levels from late and early May again, with thermal coal prices so overcharged they’re picking up a highly irregular US$150+ premium to metallurgical coal, which is typically viewed as a higher quality product.
A couple of mines heading into production in a tough construction environment, Boss Energy (ASX:BOE) and Tietto Minerals (ASX:TIE) have reinforced the quality of their upcoming uranium and gold assets with some decent drill results.
Boss says it made the FID on the restart of the $113 million Honeymoon uranium mine in South Australia on just 50% of the resources at the project.
Infill and resource extension drilling, the company says, will support its plans to increase the mineral inventory, mine life and production rate at the project, one of the few approved uranium projects expected to begin selling yellowcake in the next couple years.
Well field delineation drilling at the main restart area has finished, with intersections including 6.1m at 2640ppm U3O8, 3.4m at 1700ppm U3O8 and 1.2m at 3500ppm U3O8.
Boss says it intersected “substantial” mineralisation outside the existing JORC resource as well, with drilling now to focus on satellite deposit outside of Honeymoon to upgrade current inferred and indicated resources.
“These results show Boss’ two-pronged strategy for creating shareholder value is well on track,” Boss MD Duncan Craib said.
“This involves the recent Final Investment Decision to restart Honeymoon’s production and generate substantial cashflows, which will make Boss Australia’s next uranium producer, and to grow Honeymoon’s mineral resource and mine life by advancing numerous highly promising near-mine and regional targets.
“We will undertake detailed geological modelling and planning for resource infill/upgrade drilling this quarter, designed to increase resource confidence on the Jason’s and Gould’s satellite deposits.
“Infill drilling will commence Q1 2023, with the aim of increasing the production throughput and growing the mine life at Honeymoon.”
Tietto meanwhile is over in Cote D’Ivoire where it is planning to build on the 3.45Moz resource at its Abujar gold project, where first gold is expected in the fourth quarter of this year.
New hits from infill drilling at the AG South deposit included 4m at 16.16g/t from just 19m including 3m at 21.36/t and 1m at 62.27g/t from 21m, 1m at 63.85g/t from 72m and 1m at 35.82g/t from 313m.
The hits are from an area of the mine that will be dug out in the first two years of production, raising the prospects of strong early cash flow at the West African gold mine.
“Our infill drilling continues to add more shallow high‐grade gold intercepts to our ever‐expanding drilling database; this time at AG South,” MD Caigen Wang said.
“We are confirming continuity of these high‐grade shoots in close spaced 25m drilling. ZDD1178 sits outside of the DFS pit, which adds the potential to increase our mining inventory.”
Core Lithium (ASX:CXO) has been weighed down as much as other lithium stocks in recent weeks, but unlike many of 2022’s boom to bust lithium class it is edging towards production this year.
The Finniss mine in the NT — Australia’s first producer outside WA — is due to enter production by the end of 2022.
It is small in stature, but has been made a little bigger with recent drilling success to extend Finniss’ life from 10 to 12 years.
Mineral resources have been increased by 28% to 18.9Mt at 1.32% Li2O, with measured and indicated tonnes up 61% to 13.3Mt at 1.4% Li2O and reserves 43% higher to 10.6Mt at 1.3% Li2O.
A DSO shipment is expected to depart the north by the end of 2022 with concentrate production to start soon after.
“This is a tremendous outcome for Core and our shareholders and testament to the efforts of our operations and exploration teams as we focus on growing Finniss’ mine life and scale beyond last year’s DFS assumptions,” Core non-exec chairman Greg English said.
“The new Ore Reserve Estimate has resulted in a 12-year mine plan. In parallel, our teams will complete the 2022 drilling campaign to see if it can deliver equally impressive results across both our open pit and underground deposits.
“Most of the deposits at Finniss – including BP33, Carlton, Hang Gong, Ah Hoy and Sandras – remain open at depth and along strike and we are confident in the potential to deliver further significant increases to the Finniss resource and reserve position.”