Resources Top 4: Another Creasy payday and all the junior uranium stocks
Here are the biggest small cap resources winners in morning trade, Friday January 12.
Another day of gains for Creasy-backed CZR, which yesterday announced the $102m sale of its Robe Mesa iron ore project in the Pilbara to a Chinese buyer.
The sale 43c/sh sale will see CZR bank double its pre-bid market cap in cash.
The buyer is Miracle Iron, which will pay a combined $122m to secure Strike Resources’ (ASX:SRK) Paulsens East project, which was briefly mined and shipped through the junior Utah Point Facility in Port Hedland a couple years ago, and CZR’s larger 33Mt Robe Mesa, an extension of Rio Tinto’s (ASX:RIO) Mesa F deposit at its Robe River JV.
“An investment decision on a DSO operation commencing next year was due in the second half of 2024,” writes Stockhead’s resident iron ore authority Josh Chiat.
“But the deal will see CZR shareholders, including those who aren’t Creasy – currently deliberating on the sale of his 15% minority stake in the asset – see a return on their investment years earlier than they would have if they had to spend $109 million to build the thing.”
According to its DFS, Robe Mesa will have a C1 cost per tonne of iron ore of US$49, against current prices over US$130/t and a long-term base case of US$90/t.
The deal still needs shareholder, Foreign Investment Review Board (FIRB), and Chinese government approvals.
CZR would retain the Croydon gold project, along strike from De Grey Mining’s (ASX:DEG) multi-million ounce Hemi gold discovery, and the Buddadoo vanadium-titanium project in WA’s Mid-West.
(Up on no news)
The dual listed ASX-TSXV gold producer has been struggling with high costs at the Guanaco-Amancaya gold-silver operations in Chile.
This is the same mine targeted by armed bandits, who absconded with ~500oz of gold worth $1.25m in August 2022.
Were they ever caught? Was the gold recovered?
We don’t know, but probs not. AGD mentioned it once, briefly, in its FY23 Annual Report, and then never again.
In the most recent September quarter, Guanaco-Amancaya produced 5273 gold equivalent ounces (GEOs) at an eyewatering all-in-sustaining cost (AISC) of US$2,277/oz.
Guidance for the full year was subsequently revised down from 34-38,000oz GEOs @ US$1400-1450/oz AISC to 28-30,000oz GEOs at AISC of US$1,800/oz.
AGD had US$3.9m in cash and unsold bullion at the end of September, plus a $3m unsecured short-term loan agreement with a major shareholder.
This loan is included in AGD’s US$18.4m debt pile, of which US$4.5m was owed at the end of Q3 2023.
The company’s December quarterly is due sometime this month.
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The last we heard GTI was planning an expanded 2024 drill program at the Lo Herma ISR uranium project in Wyoming, targeting resource upgrades, expansions and hydrogeologic data collection.
This will support project studies, the company said late December.
Lo Herma – a stone’s throw from seven ISR operations, including one owned by major Cameco – has a current resource of 4.11Mt @630ppm for 5.71Mlbs, plus an exploration target worth up to ~10Mlbs of additional uranium.
ISR, or in-situ recovery, uses wells to inject a solution which dissolves the uranium in the ground. The solution is then pumped to the surface for further processing.
60% of the world’s production comes from ISR, which offsets low uranium grades with better CAPEX and OPEX than conventional mines.
(Up on no news)
Earlier this week GLA reported that analysis of uranium samples too high grade for its equipment had returned hits up to 7139ppm.
The results come from a trenching program at Southwest Corner (SWC), part of the Mkuju project in Tanzania.
The average grade of the exposed parts of the layers in the trenches range from 708 to 2563ppm U3O8, with the layers interpreted to be between 1m and over 6m thick.
The uranium is hosted in a coarse sandstone, like the 124.6 Mlbs Nyota deposit 50km to the north.
Drilling of the ~3km long North and South Limb zones at SWC will kick off in Q2. Mkuju already has two established resources at Mtonya (1.9Mlbs U3O8) and Likuyu North (4.6Mlbs U3O8).
The $20m capped stock is up 60% in 2024.