Resources Top 4: Fly or fail – what will imminent Black Mountain lithium assays do to Chariot’s share price?
Here are the biggest small cap resources winners in early trade, Tuesday January 30.
The refocused gold explorer has pulled up a 20cm drill intersection grading 340g/t — a new record high assay for its namesake mine in Victoria.
NAG listed in 2006 to explore around Nagambie which produced about 134,000oz of gold from open pits between 1989 and 1995.
That didn’t pan out initially but one of these water-filled pits is pretty big — 900m long and 50m deep — so the company planned to make money storing excavation material produced from tunnelling at the West Gate Tunnel, Melbourne Metro Rail and North East Link.
It even bought an adjacent farm from a deceased estate to “investigate and advance several new business possibilities”.
Those ventures didn’t pan out either.
In 2022 it refocused on finding more gold-antimony at the actual mine after recalling a thick high-grade hit from 2006 which “was never explained geologically”.
That seems to be going well, so far.
This newest hit opens the likelihood that the mine could host high-grade shoots along its known strike length of at least 2km, the company says.
“The laboratory checked the 340g/t gold assay three times and confirmed that it was real,” NAG boss Mike Trumbull says.
“The high-grade underground mineralisation being drilled at the Nagambie mine is now showing attributes of both Costerfield mine-style and Fosterville-mine style.”
The super high-grade Fosterville mine poured its 4 millionth ounce in 2023, while nearby Costerfield boasts head grades of 9.6g/t gold and 2.2% antimony (13.8g/t AuEq).
“With no visible gold, and no visible sulphides, the assay represents fine, free gold within the quartz vein,” Trumbull says.
“The volume influence of a gold nugget in quartz (nuggety Bendigo/Ballarat style) can be very limited. The volume influence of fine, free gold, by its nature, can be significantly greater.”
Trumbull says NAG has only scratched the surface “of what could be a major high-grade, antimony-gold orebody”.
A maiden resource for the shallower mineralisation is due this quarter.
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Maiden assays from one of the biggest lithium IPOs of 2023 are imminent.
CC9, which hit the bourse late in the year with a market cap of $67.5m at 45c per share, briefly surged above $1.30/sh on buzz surrounding its Black Mountain project.
Black Mountain has never been drilled — until now — despite 60cm long spodumene crystals (~6-7% lithium) being observed back in 1997 and subsequent early-stage exploration returning assays up to 6.68% Li2O from rock chips. That’s high grade.
Six diamond holes for 652m had been completed thus far of the 200m-3000m program, which was halted for the year-end holiday period.
CC9 says drill progress have been hampered by “harsh early winter conditions” but drilling restarted January 8, with plans to continue through to March.
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Like most stocks exposed to nickel and cobalt AXN – formerly GME Resources — has been in the doldrums, down 74% on its 2022 peak price of ~15c/sh.
Its flagship is the high grade 971,000t nickel, 65,000t cobalt NiWest laterite project near Leonora in WA, where a definitive feasibility study (DFS) – the most advanced of all project studies – is now due mid 2024.
An updated prefeasibility study (PFS) envisaged average annual production of ~90,000 tonnes nickel sulphate and ~7000 tonnes cobalt sulphate over the first 15 years of a 27-year mine life.
Post tax net present value (NPV) was estimated at ~US$1.45 billion at a US$11/lb nickel price, which is currently languishing at ~US$7.50/lb.
The project has a $1.2bn price tag.
Depressed nickel-cobalt markets aside, the company has “continued to be active in its engagement and discussions with existing and other potential strategic partners” around offtake and project funding.
“The company expects to make further announcements on this in due course,” it said last week.
Its main partner is global carmaker Stellantis, which last year inked a binding offtake deal and equity investment at 18c/sh — a near 90% premium to the share price at the time.
Stellantis, which owns the Opel, Peugeot, Citroen, Fiat and Chrysler brands, is also a major shareholder in geothermal lithium plays Vulcan Energy Resources (ASX:VUL) and Controlled Thermal Resources.
Project generator AQD has a longstanding strategic exploration alliance (since Feb 2017) with major miner South32.
AQD basically acts as S32’s informal exploration division — it finds projects, does the early work, and if S32 likes them an earn-in agreement is formed.
Under the JV terms, S32 must contribute $US4.5m to earn a 70% joint venture interest in each project. It can earn an 80% interest in each project by completing a pre-feasibility study.
This deal was recently extended for another two years to December 2025.
AQD also has a portfolio of porphyry-IOCG prospects along the southern coastal belt of Peru, one of the world’s best copper destinations.
During the December quarter several parties expressed interest in these projects, signing confidentiality agreements to gain access to the company’s database and subsequently undertaking site visits to the Cerro de Fierro, Pirata, Cangallo, and Parcoy prospects.
Expressions of interest are expected during Q1 2024, AQD says. Both the Cangallo and Cerro de Fierro prospects should be ready for drilling in Q2.