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Resources Top 5: Another resources IPO makes a scorching debut
Mining
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- Diversified resources IPO Viridis debuts with early 30% gain
- Estrella hits high grade nickel-copper sulphides below the old ‘Carr Boyd’ underground mine
- Great Western (gold, copper), Greenstone (gold), and Rafaella (tin, tungsten) up on no news
Here are the biggest small cap resources winners in early trade, Monday January 24.
VIRIDIS MINING AND MINERALS (ASX:VMM)
Another explorer hits the bourse with a bang in 2022.
VMM, which raised $5m in an IPO, has five projects in Australia and Canada: South Kitikmeot and Boddington West (gold), Bindoon (nickel, copper, PGEs) and Poochera and Smoky (kaolin-halloysite).
The company’s primary focus post-listing will be to undertake a drill target generation program at South Kitikmeot in Canada, with follow-up drilling to be completed at defined targets.
Early-stage exploration has been promising with a significant, partially tested drill target already defined at the Esker Lake prospect.
Mapping and sampling programs will kick off at the remainder of the projects including Boddington, a greenfields opportunity just 1km from Newmont’s mammoth Boddington mine in WA.
GREAT WESTERN EXPLORATION (ASX:GTE)
(Up on no news)
Last month the explorer completed a drilling campaign at the Thunder copper gold target — ~100km from Sandfire’s (ASX:SFR) DeGrussa mine – with assays due February.
GTE called initial results “promising” but investors disagreed. The stock plummeted 43% from 21c to 12c before staging a mild recovery.
GTE is also planning drill programs at ‘the Yandal West’ gold project and a high-resolution airborne magnetic survey over the underexplored ‘Fairbairn’ project in the red hot Earaheedy Basin of WA in the current quarter.
The $20m market cap stock had $4.4m in the bank at the end of September.
GREENSTONE RESOURCES (ASX:GSR)
(Up on no news)
The WA gold stock formerly known as Barra Resources poured first gold at the ‘Burbanks’ mine earlier his month.
840oz was poured — worth about $2.1m — using 20,500t of low-grade ore mined from tunnels during the establishment of underground operations.
High-grade underground mining activities are now underway. A further two to three processing campaigns are expected totalling between 60,000-75,000 tonnes over the coming months, GSR says.
But this is just a trial mining campaign, designed to bring in a bit of cashflow while de-risking future operations.
The main game for GSR is building the relatively small 145,000oz resource “through the continuation of aggressive exploration activities at Burbanks”.
The first drill campaign of 2022 is scheduled for late January, MD and CEO Chris Hansen says.
“The initial focus will be on following up on the high-grade mineralisation intercepted immediately north of the Burbanks Mining Centre in late December 2021, where high-grade mineralisation was previously thought to terminate due to faulting,” he says.
“The recent intercept in [of] 3.1 metres @ 11.72g/t Au from 282.4m, in conjunction with several holes completed in early 2021, serves to extend the prospective strike extent for high-grade mineralisation at Burbanks North to over 1.50km.”
GSR is currently in a trading halt pending a response to an ASX price query.
RAFAELLA RESOURCES (ASX:RFR)
(Up on no news)
RFR owns the flagship ‘Santa Comba’ tungsten and tin project in Spain and a couple of tungsten projects in Portugal. In January, it also picked up the mothballed San Finx tin and tungsten mine in Spain, 50km south of Santa Comba.
San Finx last operated in 2017, producing 35t of high-grade (~73%) tin concentrate and 32t of (~57%) wolframite concentrate.
The acquisition gives RFR another near term production asset, including a material exposure to tin at a time of record prices.
“The addition of the near-term production potential of the San Finx tin and tungsten mine, along with the Portuguese tungsten projects, significantly bolsters the Company’s longterm goal of being a significant supplier of the critically listed metals of tungsten and tin, both which have attracted significant price rises over the past 12 months on the back of supply concerns and diminishing global stockpiles,” MD Steven Turner says.
The company will be looking at debt options “to fund the modest capital requirements” required to bring San Finx back into production.
The $17m market cap stock is up 21% over the past month. It had $2.56m in the bank at the end of September.
ESTRELLA RESOURCES (ASX:ESR)
WA explorer ESR has intercepted two broad zones of massive (the highest-grade stuff) and semi-massive (almost as good) nickel-copper sulphides below the old ‘Carr Boyd’ underground mine.
Carr Boyd Mine was worked between 1972 and 1976 by Western Mining Corporation (now (ASX:BHP)) before being mothballed due to lowering nickel prices.
Work will now focus on identifying where, and how far, this mineralisation is going “so as to exploit [its] further potential”.
But ESR also has a bigger fish to fry.
“Of more importance” to Estrella is to prove or disprove the concept that the Carr Boyd mineralisation is derived from a much larger ‘pool’ of sulphides located on the T5 basal contact, located about 250m away:
A geological contact is the boundary separating one rock body from another.
In 2020, a spectacular intersection at T5 pushed ESR into #5 spot on Stockhead’s Best Performing Resources Stocks of 2020. In 2021, most drilling was around the T5 prospect, which remains open in multiple directions.
This is the area within an intrusion where nickel-copper sulphides were most likely to accumulate before later geological events remobilised those sulphides elsewhere, ESR says.
“Work by Estrella and the CSIRO should be able to resolve this link,” it says.
“If proven, the opportunity then exists that this large pool of sulphides still exists at depth.”
The ESR share price has drifted badly since that rerating event in 2020. The $48m market cap stock is on the rebound in 2022, up 85% over the past month.
