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Resources Top 5: Are these some of the best clay-hosted rare earth hits seen in Australia?
Mining
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- OD6 hits rare earths paydirt at Splinter Rock project in WA
- Testing confirms Avenira’s phosphate ore well suited for use in batteries
- Exploration kicks off at Koba’s Whitlock project in Canada
Here are the biggest small cap resources winners in early trade, Thursday November 10.
OD6 METALS (ASX:OD6)
Initial assay results from drilling at Splinter Rock in WA “represent some of the highest grades and thickest clay-hosted rare earth intersections seen in Australia” OD6 says.
The first 65 holes of a completed 179-hole program returned grades up to 6,729ppm total rare earths oxides (TREO) across four significant prospects, each 4-7km long and 10m-80m thick.
Assays contain large proportions of magnet rare earths, high value NdPr and heavy REEs.
Standout results include:
- 41 metres at 1262ppm TREO (24.1% Magnet REO) from 15 metres,
- 30 metres at 1576ppm TREO (22.1% Magnet REO) from 15 metres, and
- 21 metres at 2029ppm TREO (24.2% Magnet REO) from 18 metres.
“The extent and consistency of these shallow, high-grade clays have resulted in four significant prospects being identified that are between four and seven kilometres in width which are open in length, on our 2,579km2 Splinter Rock project,” OD6 managing director Brett Hazelden says.
“Importantly, these drill results validate historic assays, plus they extend the discovery of clay-hosted rare earths across a new drill line perpendicular to the original line.
“This bodes well for future drilling, which we anticipate will significantly grow the known mineralised area.”
Splinter Rock, with its proximity to port and renewable energy generation potential, could be a world class asset as the world transitions to the decarbonised economy, Hazelden says.
“The scale of these clays is hard to comprehend when you start talking multiple kilometres in one direction at a thickness of between 10 to 30m,” he says.
“The potential is massive.”
The recently listed stock is up 57% on its IPO price of 20c per share.
AVENIRA (ASX:AEV)
Phosphate stock AEV has gained 66% since announcing a two-pronged move into selling ore from its Wonarah project in the NT and lithium iron phosphate (LFP) battery cathode production.
In September, AEV inked a non-binding deal with LFP battery manufacturer Aleees and the NT government to build a battery cathode manufacturing plant in Darwin, leveraging Avenira’s flagship 67Mt Wonarah phosphate project.
EV, Aleees and the NT will now work towards a LFP battery cathode manufacturing facility in a phased capacity program starting at 5,000-10,000tpa in 2023/24 and potentially scaling to 200,000tpa by 2032.
AEV is also looking to sell direct shipping ore (DSO) to battery and agricultural customers.
Testing has now confirmed Wonarah ore “to be well suited for the production of battery-grade Phosphoric Acid due to its high grade, physical robustness and large consistent lump sizing”, AEV said today.
The company is full steam ahead towards a production dcesion.
Offtake discussions are well advanced, it says, with a binding offtake agreement expected to be executed for the sale of up to 600,000tpa of high grade, high value Wonarah DSO phosphate ore.
A mining study for a DSO project is due for completion this month, which various permits and agreements also well advanced.
“Prices for high grade Phosphate ore (32% P2O5) continue to trade at or near record highs,” AEV says.
“[They] are expected to remain elevated throughout 2023 and 2024 due to global fertiliser shortages and the accelerating adoption of Lithium Ferro Phosphate battery cells.”
The popularity of LFPs has exploded over the past year.
They are ostensibly cheaper than NCA or NCM (nickel manganese cobalt) cells, mainly because they don’t require scarce and price-volatile metals such as nickel or cobalt.
They also have much longer useful lifetimes, though this is offset by lower energy densities.
KOBA RESOURCES (ASX:KOB)
Exploration has kicked off at the visually stunning (and hopefully lithium-rich) Whitlock project in Canada, which surrounds the country’s only operating lithium mine, Tanco.
How’s this for a view:
Four geologists are now onsite sampling and inspecting the project’s extensive network of outcropping pegmatites identified in historical mapping:
Initial assay results from rock sampling are due back in January.
KOB gained 136% after announcing the pegging of Whitlock on October 27 before going into a trading halt pending a “clarifying announcement”.
The subsequent explanation from the company emphasised that, nearology notwithstanding, no economic mineralisation had been found on the property in the past.
“… the company has reviewed all the relevant reports associated with the 81 holes drilled within the project area during previous exploration for gold, copper, nickel, PGEs, chrome, uranium and lithium, and that there are no material results from the 81 holes, other than the intersection of several pegmatites during exploration for uranium (that were not assayed for lithium), as noted in the announcement.”
The $15m market cap company is still up +90% since the news was announced.
SOUTHERN CROSS GOLD (ASX:SXG)
(Up on no news)
Guy Le Page’s junior stock pick of the week.
SXG is hitting impressive numbers in drilling at the Sunday Creek gold-antimony project in Victoria, Guy says, including 119.2m downhole @ 3.9 g/t Au equiv.
“There is a lot to like about this project and as [managing director Lisa Gibbons] pointed out to me today, intercepts at depth are returning ‘Fosterville-like grades’,” he says.
“Fosterville, located in Victoria, as the Stockhead faithful know, is one of the highest-grade gold mines in the world (23.78Mt @ 7.9g/t gold for 6 Moz producing +600Koz at a head grade just under 20g/t gold) and is owned by TSX listed Kirkland Lake Gold.
“Sunday Creek looks like something with resource potential upwards of 750Koz at high grades and good widths.
“At a market capitalisation of around $70 million this could be a standout play, particularly as many gold bulls are projecting 2023 to be a stellar year.”
BESRA GOLD (ASX:BEZ)
(Up on no news)
BEZ’s 3.3Moz ‘Bau’ gold project in Malaysia also includes an additional 4.9Moz – 9.3Moz exploration target, which is insane for a company of this size.
Over the past few months drilling at the ‘Jugan’ prospect has returned thick hits like 64m @ 1.9g/t and 67m @ 1.8g/t from ~140m depth.
Drilling then moved to the 644,000oz ‘Bekajang’ prospect to grow that resource. Assays are pending.
In October, BEZ raise $1m via placement at 9c per CDI — an unusually large ~190% premium to the last closing price.
The subscriber is US-based Quantum, already a big shareholder.
