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Resources Top 5: A graphite stock back from the dead, and how many $34m explorers possess a 3Mt copper, 8Moz gold resource?
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- Perpetual struggler Quantum Graphite is out of suspension
- Xanadu Mines gains after recently growing ‘Kharmagtai’ resource to 3 million tonnes copper and 8Moz gold
- Kalamazoo expands Pilbara lithium portfolio
Here are the biggest small cap resources winners in early trade, Tuesday December 14.
QUANTUM GRAPHITE (ASX:QGL)
This Aussie graphite play doesn’t have a great track record but is looking to turn things around as graphite prices boom.
QGL first suspended operations at its struggling ‘Uley’ graphite mine in South Australia in late 2015, before entering administration in July the following year.
The share price tumbled from highs of 70c to 11.5c prior to suspension.
It relisted on the ASX in late September 2018 after three years in securities purgatory after ostensibly sorting out its debts and finances.
It was suspended again in 2020 after the ASX required further info relating to its Annual Report.
The ASX then advised the company’s securities would be reinstated to quotation once sufficient exploration has been undertaken – which has now occurred.
Uley was Australia’s sole producer of coarse flake graphite.
The next stage of development of the Uley mine is the +$80m, 55,800tpa ‘Uley 2’ Project, a new pit to be developed immediately to the south of the Uley 1.
The project is fully permitted, but QGL is still going to need to raise cash to build it. The company has about $1.1m in the bank following a recent cap raise.
TENNANT MINERALS (ASX:TMS)
Another budding turnaround story.
The copper-gold explorer, which previously went by Blina Minerals, was suspended from the ASX in March last year on concerns over its financial condition.
Blina undertook a recapitalisation and share consolidation and acquired the remaining 50 per cent stake in the ‘Barkly-Babbler’ IOCG copper-gold project in the Northern Territory.
The company was relisted on the ASX early April this year.
Yesterday, it raised $1m to immediately advance exploration at Barkly where drilling is currently “intersecting a new zone of copper-gold mineralisation”.
The first four diamond drillholes into the ‘Bluebird’ prospect have all intersecting significant intervals of haematite breccia with copper mineralisation, the company says.
Assays are pending.
TMS is hoping the Bluebird shoot can replicate other major high-grade copper-gold deposits in the Tennant Creek mineral field such as the 147,000 tonnes copper, 414,000oz gold ‘Peko’ deposit, which is only 20km away.
The $12m market cap stock is up 50% over the past month.
KINGWEST RESOURCES (ASX:KWR)
This popular gold explorer is up 190% since announcing a discovery underneath a WA salt lake called ‘Goongarrie’ in September.
This so-called ‘Sir Laurence’ discovery is now 2km long, with mineralisation open in all directions.
A drillhole 1.5km west of Sir Laurence also pulled up 8m at 5g/t gold “demonstrating the project’s larger potential”, KWR CEO Ed Turner says.
“Sir Laurence continues to exceed expectations with significant intersections on every line of drilling now over more than 2km strike length and up to 500m across strike,” he says.
“Importantly the last four lines at the northern end of Sir Laurence all had their best results in the last hole of the line at the eastern end so mineralisation is wide open there as well as to the north and west.”
A planned diamond core drilling program kicking off early 2022 has now been doubled.
A minimum 4,000m of aircore drilling is also being planned to test for further extensions to the Sir Laurence mineralised system.
XANADU MINES (ASX:XAM)
(Up on no news)
Last week this Mongolia-focused explorer grew its ‘Kharmagtai’ porphyry resource to 3 million tonnes of copper and 8Moz of gold.
Absolute monster.
This updated resource — which covers only ~30% of the 8km long mineralised complex — positions Kharmagtai as one of the largest undeveloped copper assets held by a listed junior globally, XAM says.
There are a few other things that set the project apart, CEO Dr Andrew Stewart says.
“The higher-grade zones (>0.8% CuEq) have grown from approximately 58Mt in the previous estimate to just on 100Mt with this update,” he says.
“This could be a real game-changer for project economics, with better defined and larger high-grade zones, setting the project apart from similarly sized orebodies, with the higher-grade component potentially unlocking project scenarios that could pave the way to put Kharmagtai into production.”
“A significant increase in gold to copper ratios has resulted in a greater than 80% increase in contained gold, which means higher by-product credits that will be reflected in lower all-in sustaining costs.”
Many of the largest copper projects worldwide — peers to Kharmagtai — have logistical and social challenges, leading to significant delays and increased capital costs.
Kharmagtai has advantages in both areas, Stewart says.
“Logistically the South Gobi is flat terrain with ready access to industrial water, nearby power, rail and road infrastructure, and proximity to the largest consumers of copper in Asia,” he says.
“Socially Xanadu has a strong social licence to operate and Kharmagtai is in a very low population area.
“Further, the Mongolian regulators support mining development; it’s important to remember that the Oyu Tolgoi pit was able to move from discovery to production in approximately five years, an incredible outcome given the time it takes large mining projects to get off the ground elsewhere.”
The $34m market cap stock is flat over the past month, and down 25% year-to date. It had $7m in the bank at the end of September.
KALAMAZOO RESOURCES (ASX:KZR)
The explorer is expanding its Pilbara lithium portfolio with the acquisition of ‘Pear Creek’, a project which has seen little to no modern exploration for the key battery metal.
KZR explored this exact ground for gold back in the day.
“Kalamazoo has unfinished business at Pear Creek, having previously explored there in 2013 for a few years, whilst searching for gold,” CEO Luke Reinehr says.
“Of course, at that time, there was little interest in lithium exploration, so it was not on our radar.
“Our teams’ excellent soil geochemistry surveys and pegmatite dyke mapping over the last few months at the DOM’s Hill and Marble Bar Lithium Projects, provides us with confidence in exploring for LCT pegmatite mineralisation in the immediate area, so leading us back to Pear Creek.
“Combining the Pear Creek Lithium Project with our highly prospective existing tenure is an important component of our strategy to discover long-life, large scale lithium deposits in the Pilbara, which complements our major gold exploration activities in the area.”
The $55m market cap stock is flat over the past month, and down 27% year-to-date. It had ~$44m in the bank at the end of September.
