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Resources Top 4: ‘All the ingredients are there’ – this ASX junior is targeting a 1Moz gold system
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- Matsa Resources believes it has uncovered a potential +1Moz gold system at Fortitude North prospect
- Financing and offtake deals are expected to be finalised shortly for Minbos’ Cabinda phosphate project
- Lithium-REE play Voltaic now up 335% year-to-date
Here are the biggest small cap resources winners in early trade, Friday June 2.
MATSA RESOURCES (ASX:MAT)
MAT believes a potential +1Moz gold system at the Fortitude North prospect could rerate the wider 886,000oz Lake Carey project in WA.
Thick, high-grade mineralisation has now been defined over 1.7km and remains open, with highlights from the most recent drill program including:
- 25m @ 3.3g/t Au from 147m
- 14m @ 3.4g/t Au from 113m, and 35m @ 3.0g/t Au from 150m
- 19m @ 3.8g/t Au from 100m
Of the 20 holes drilled there were 10 intercepts above 25-gram metres, 3 intercepts above 50-gram metres, 1 intercept above 100-gram metres, and 13 intercepts greater than 10m thick.
This system will be substantially bigger and better that MAT’s nearby 489,000oz Fortitude gold mine, says chairman Paul Poli.
“These fantastic results speak for themselves and whilst further work is obviously required, we see this as a confirmed significant discovery,” he says.
“Matsa’s geology team tell me that they can see multiple phases and styles of mineralisation that speaks to a very long lived system, with up to four gold-forming events.
“Before this drilling, we were targeting another Fortitude, but all this now points to something much more substantial and our target is now much bigger commensurate with these bigger intercepts.
“With this new information and the fact that mineralisation is still open in the major directions, we are targeting a mineralised system which is potentially in excess of 1Moz at Fortitude North, all the ingredients are there.”
A study on the 489,000oz Fortitude pit outlined production of 132,000oz across 30 months generating >A$95m surplus at A$2,400/oz.
The Aussie gold price is currently over $3000/oz.
Meanwhile, MAT has a 50/50 profit sharing JV over the nearby high grade 42,000oz Devon gold project, where production is expected to kick off in 2024.
A DFS is due out late August.
MAT is free carried (doesn’t pay anything) for all costs associated with permitting, financing, development, and mining.
An updated scoping study demonstrated a cumulative cash surplus of $50.4m over 16 months could be achieved producing 40,000oz at a gold price of $3000/oz.
The $16m capped stock is flat year-to-date. It had $1.8m in the bank at the end of March.
MINBOS RESOURCES (ASX:MNB)
Financing and offtake deals are expected to be finalised shortly for the Cabinda phosphate project in Angola, where siteworks and equipment procurement has already begun.
“The company is now well advanced in its offtake discussions with most of the Stage 1 production expected to be covered within current negotiations,” MNB says.
“The board anticipates making an announcement in relation to this shortly.
“Significant progress has been made on non-dilutionary funding (debt and/or prepayment) for a significant proportion of the outstanding capex for the project, with negotiations expected to be finalised in August/September.”
Key environmental approval licences have also been received for construction activities, MNB says.
A recent definitive feasibility study (DFS) on the 85%-owned project delivered “compelling economics”, including a post-tax net present value (NPV) of $US471m and an internal rate of return (IRR) of 66% (100% basis).
Plant capacity is ~187,500tpa in a ‘one plant’ scenario, which will then expand to two plants across a 20-year project life.
This could deliver project gross revenues over US$1.4bn, MNB says.
The $100m market cap stock is up 40% year-to- date.
READ: As the fertiliser bottleneck hits food supplies, these ASX small caps are racing into production
ZINC OF IRELAND (ASX:ZMI)
(Up on no news)
ZMI is acquiring an early stage rare earths project called Cascade next door to OD6 Metals’ (ASX:OD6) Splinter Rock project in Esperance, WA.
Shallow (~3m) augur drilling conducted by AngloGold Ashanti between 2010 and 2012 encountered REE anomalism up to 1031ppm over a considerable 6km by 3km area, the company says.
With no drilling below 3m, these hits may represent “a conservative reading compared to the bedrock TREO composition”, it says.
Two large targets are being prepped for drill testing.
“ZMI is pleased to have expanded into the green metals sector through this low-cost acquisition,” ZMI chairman Pete Huljich says.
“The exploration model that will be applied offers immediate and significant leverage to shareholders, at a time when the Esperance REE province continues to deliver exciting results and many countries seek to guarantee their own supply of REE metals from outside of China.
“We look forward to exploring this project and any other complementary projects that ZMI may acquire.”
VOLTAIC STRATEGIC RESOURCES (ASX:VSR)
(Up on no news)
In May, 2022 relistee VSR exploded out of the blocks on some promising lithium drilling results at Andrada, part of the Ti Tree project in the Gascoyne region of WA.
The 15-hole for 900m first pass program returned continuous pegmatite up to 58m thick, from surface across six targets.
All holes hit pegmatite – rock that contains lithium — which remains open at depth. Assays are due in about three weeks, VSR says.
Ti Tree sits around Delta Lithium’s (ASX:DLI) potentially monstrous Yinnetharra project, where the company recently hit 56m at 1.12% lithium as part of an extensive multi rig drill program. DLI boss David Flanagan says Yinnetharra “is looking more like a province than a project”.
Meanwhile, drilling at Neo, part of the Paddy’s Well project has uncovered a large clay REE system, the company says.
Grades go as high at 10,072ppm TREO and widths up to 78m from surface, with that hit — 78m @ 1,001 ppm TREO — one of widest reported in Australia. Met testing is now underway.
$33m capped VSR is up 335% year-to-date.
