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Mining
Here are the biggest small cap resources winners in early trade, Monday April 24.
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The small clay rare earths explorer has now surged 75% over the past five trading days, and +200% from lows of 7c/sh late March.
On March 29, M24 reported wide zones of clay rare earths in 20 of 22 drill holes at its ‘Hyden’ project in the WA Wheatbelt.
Highlights include 54m at 758ppm from surface to end of hole. Each interval contained high grade zones (+1000ppm), with a peak of 3607ppm.
Clay REE orebodies often grade between 700–1500ppm.
“While we are surprised by the width and consistency of the mineralisation, it is also surprising that the mineralisation is so shallow, with little or no surficial cover over the clay mineralisation,” managing director Mike Dunbar says.
“It is also very encouraging that the mineralisation can be traced over the entire extent of the drilling, some 500m x 500m and remains open in all directions.”
Fourteen of the holes also end in mineralisation, suggesting “that there is potential for not only clay hosted mineralisation, but also bedrock mineralisation in the area”, Dunbar says.
M24 has previously said the source of the TREO in the clay could be a nearby hard rock system (either REE pegmatite or a carbonatite).
Additional drilling of another anomaly, 2.5km from the clay target, was completed April 5, with assays due in in a few weeks.
The $12m capped stock had $2.2m in the bank at the end of December.
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Morgans analyst Chris Brown has maintained a ‘speculative buy’ rating and a target price of 9.8c on the emerging tungsten miner, which earlier this month increased Mt Carbine mine resources to 28.7Mt @ 0.30% WO3, containing 8.6Mt of WO3 (previously 6.5Mt).
EQR is just months away from a restart of the historic operation, near Cairns in North Queensland, which was mined between 1973-86.
This represents Phase 2 of the restart with Phase 1, currently underway, involving treating a 11Mt low grade stockpile ore (0.075% WO3) in its 50/50 JV with partner European metals trader and recycler CRONIMET Group.
A potential third phase, not included in the Mt Carbine BFS, could see EQR expand into underground production.
Brown says with increased resource base, Morgans have lifted its projected mining rate to 2Mtpy from the open pit; a rate achieved from the pit footprint during previous campaigns.
“Our net present valuation (NPV) uses a 10% discount rate to derive a Valuation of A$0.13 per share. We discount this by 20% to generate a Target Price of A$0.10,” Brown says.
“In our view, successful sustained processing of the LGS by EQR limits processing risk in terms of cost and recovery, and the prior 13-year open pit mining history gives us confidence in EQR re-entering the open pit and re-starting mining.
“The ‘critical mineral’ status of tungsten, with the market dominated by China, also gives us confidence that the price has limited downside.”
The ~$130m capped stock is up 60% in 2023.
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The mid-2021 IPO is focussed on two lithium projects: Lake Johnston in WA, and Bynoe in the NT.
All assays have now been received from a maiden lithium drilling program at Lake Johnston.
Drilling at the Medcalf prospect has delineated a swam of stacked spodumene-bearing pegmatites up to 13m thick within a 100m wide, 700m long corridor.
High-grade lithium results, such as 4m at 1.21% Li2O from 208, 3m at 1.33% Li2O from 110m, and 3m at 1.35% Li2O from 136m, will now be modelled to define priority targets for follow-up drilling to test for extensions to the mineralisation.
In late March CHR appointed veteran small cap boss Aiden Platel as managing director and CEO, with lithium stalwart Adrian Griffin moving across to the non-exec chairman role.
At Bynoe — right next door to Core Lithium’s 18.9Mt Finniss lithium mine in the NT — an upcoming maiden drill program will target three sizeable, +500m long peggies.
The $20m capped stock is flat year-to-date. It had $7.1m in the bank at the end of December.
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The explorer keeps gaining after last week reporting high grade clay rare earths drill results up to 1.26% (12,611ppm) at the Merivale South prospect, part of the Eyre lithium-nickel-REE project in WA.
That 1m intercept was within a larger 12m at 2326ppm TREO.
The company says the mineralisation may be hosted within ionic clays, making it suitable for simple, cost-effective extraction.
Testwork to confirm this theory is currently underway.
If there is an ionic component the reported grades are very high compared to known deposits, which usually grade between 700ppm and 1500ppm.
The size is also potentially significant. LRV’s drilling targeted an 800m section within an 8km-long TREO anomaly, and mineralisation remains ‘open’ in all directions.
‘Open’ just means LRV hasn’t found the edges yet.
Results from the all-important met testwork – which will indicate whether a portion of the mineralisation is ionic (aka can be mined and processed economically) – will inform the next phase of exploration.
The $16m capped stock is up 60% year-to-date. It had $6.4m in the bank at the end of December.
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Earlier this month LRL reported a high grade 95,710oz gold resource (open pit and underground) at the historic Comet Vale project in WA.
The resource, which includes an Indicated component of 42,000oz @ 10g/t gold, is open in all directions “demonstrating substantial growth potential through both the near-mine and regional drilling”.
While grade isn’t necessarily king when it comes to gold deposits, 10g/t is very impressive.
“Importantly, the estimate shows high grade mineralisation continues at depth and along strike,” LRL CEO Matt Nixon says.
“This provides immediate high priority drill targets to further grow the resource.”
Drilling to grow LRL’s 500,000oz at 5g/t resource at its namesake project in Quebec, Canada is also in the works.
$22m capped LRL is up 60% over the past month, but down marginally year-to-date. It had $1.3m in the bank at the end of December.
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