Resources Top 5: Big REEaction as ASX investors froth over rare earths discoveries

OD6 Metals now 115% since announcing “some of the highest grades and thickest clay-hosted rare earth intersections seen in Australia”
Advanced porphyry hunter Celsius Resources obtains an all-important social license to operate
Rafaella rolls out big 27.8Mt at 1.49% copper equivalent resource at advanced Horden Lake deposit

Here are the biggest small cap resources winners in early trade, Wednesday.

OD6 METALS (ASX:OD6)

Punters are frothing over a slew of rare earths discoveries.

Last month it was WA1 Resources (ASX:WA1), which has today announced a second, potentially even better, niobium-REE discovery at West Arunta.

(The only reason WA1 isn’t soaring into low orbit is because it is in a trading halt to finalise a cap raise.)

This month, the spotlight has been on Victory Goldfields (ASX:1VG) and OD6.

OD6 is now up 115% since announcing “some of the highest grades and thickest clay-hosted rare earth intersections seen in Australia” last week.

The first 65 holes of a completed 179-hole program at Splinter Rock in WA 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.

More results are pending.

“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 could be a world class asset, 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.”

CELSIUS RESOURCES (ASX:CLA)

One of analyst Warwick Grigor’s stocks to watch.

Yesterday, the advanced porphyry hunter obtained an all-important social license to operate at the flagship MCB copper-gold project in the Philippines.

‘Social license to operate’ means CLA ostensibly has the support of employees, local stakeholders and the communities in which it operates.

The deal inked with the Balatoc Indigenous Cultural Community (ICC) gave their consent to allow development and operations at MCB for 25 years, renewable for another 25 years.

It’s a mandatory step if CLA is going to get a mining permit from the government.

A scoping study on the 1.5Mt copper, 1.47Moz gold project released December 2021 envisaged a 2.28Mtpa operation over an initial 25 years with an post tax NPV of US$464m and IRR of 31%.

This assumes a copper price of US$4.00/lb and gold price of US$1,695/oz. It would cost US$253m to build.

CLA also owns the 1.2Mt copper, 1Moz gold Sagay project in Philippines and the 225.5Mt Opuwo project in Namibia, “one of the largest undeveloped cobalt projects outside the DRC”.

READ: Are these copper stocks in pole position to move once China gets over its Covid hang-up?

BARTON GOLD (ASX:BGD)

This hard-drilling 1.1Moz South Australian gold explorer has been at the Zurich Precious Metals Summit to spruik its advanced Tarcoola and Tunkillia projects.

Whatever it’s saying is going down well with investors, with the stock gaining ~20% in early trade Wednesday.

It has rebounded nicely alongside the gold price over the past month with a ~40% gain.

Its Tarcoola project is a brownfields site within trucking distance of BDG’s mothballed processing plant (yes, it already has a plant), while the Tunkillia project sits on a host structure extending 7km north and 7km south of the existing resource.

Over 15,000m of drilling was expected over the second half of the year to grow the Tarcoola and Tunkillia project footprints, making new regional discoveries, and building on the current ~1.1Moz resource.

BGD has targets all over the joint and a resource update is planned for March 2023.

The $30m capped stock is very cashed up for its size with ~$11m in the bank.

RAFAELLA RESOURCES (ASX:RFR)

RFR has rolled out a big 27.8Mt at 1.49% copper equivalent resource at the advanced Horden Lake deposit in Quebec, Canada.

That resource – collated from a bunch of old drilling results – includes 200,855t copper, 61,726t nickel, 167,114t palladium, and 65,000oz gold.

RFR is in the process of acquiring the project for $4m. It will “immediately become the focus of the company’s portfolio, particularly with the substantial upside still available”.

Drilling is planned grow and upgrade the mineral resources, focusing on higher-grade copper ore-shoots and on those areas only drilled by INCO in the 1960s, where assay data is only available only for copper and nickel.

A 2023 PFS will also look to finally include the entirety of the contained gold as well as adding the cobalt and silver, RFR managing director Steve Turner says.

“Horden Lake, with new road infrastructure, HV power lines from the Le Grande hydroelectric station and supportive jurisdiction, is a top-class polymetallic deposit,” he says.

EQUINOX RESOURCES (ASX:EQN)

EQN listed on the ASX last year looking to develop its Hamersley iron ore project, nestled between major mines owned by Rio Tinto (ASX:RIO) and Fortescue Metals Group (ASX:FMG) in the Pilbara.

The junior explorer has been fairly quiet in 2022 (alongside the iron ore price) as it plugs away at boring but important stuff like heritage surveys and environmental work programs.

Once heritage surveys complete the company is planning to drill.

It is also reviewing potential acquisition opportunities and partnerships “that have a strategic fit for the company and that have the potential to deliver value for shareholders”.