Resources Top 5: Cashed-up lithium stocks first out of the gate

Explorers Global Lithium, Arizona Lithium gain after announcing big cap raises yesterday
Construction of Alara Resources’ copper-gold project scheduled for completion by late 2022
M3 Mining (copper, gold), Frontier Resources (rare earths, HPA) up on no news

Here are the biggest small cap resources winners in early trade, Tuesday November 2.

GLOBAL LITHIUM RESOURCES (ASX:GL1)

(Up on no news)

Yesterday the company announced a “heavily overbid” $13.6m cap raise to fast-track exploration at the Marble Bar Lithium Project (MBLP) in 2022.

This is in addition to the $7.3m GL1 had in the bank at the end of September.

As part of the placement, Yibin Tianyi — the lithium chemical arm of world’s largest EV battery producer Contemporary Amperex Technology Co. (CATL) – will invest $6.2 million for a 9.9% interest in GL1.

Yibin Tianyi plans to ramp up to 110ktpa of lithium hydroxide production by the end of 2024. That would make it one of the largest lithium chemical suppliers in China, GL1 says.

For GL1, the focus so far has been drilling the advanced 10.5Mt @ 1.0% Li2O Archer deposit, which remains open along strike and at depth. Now the company is starting to step out exploration to the surrounding area.

“The capital raising funds provide us with the ability to ramp up our activities on site as we seek to grow our project and we are looking forward to a busy 2022 period,” GL1 managing director Jamie Wright says.

“Drilling is continuing at our MBLP and we will update the market as we start to receive results.”

The $70m market cap stock is up 290% on its May listing price of 20c per share.

ARIZONA LITHIUM (ASX:AZL)

(Up on no news)

Like GL1, this recently rebranded lithium play announced a $13m cap raise yesterday.

Proceeds from the placement – plus the $5m it already had in the bank — will be used to design and construct a research facility to process material from the flagship ‘Big Sandy’ project and fast-track metallurgical test work.

Exploration drilling is also fully funded and will begin immediately after US Bureau of Land Management approval is received, AZL says.

Big Sandy currently has a resource 32.5 million tonnes grading 1,850 parts per million lithium for 320,800 tonnes of lithium carbonate equivalent. This covers just 4% of the project area, the company says.

“With metallurgical testing continuing at Hazen, and further drilling planned at Big Sandy with the aim of further expanding the existing resource, it is an exciting time for all AZL stakeholders,” managing director Paul Lloyd says.

The $172m market cap stock has gained an impressive 150% over the past month, and 900% year-to-date.

M3 MINING (ASX:M3M)

(Up on no news)

M3M is led by founding director of popular takeover target Egan Street Resources Simon Eley and ex-Gold Road (ASX:GOR) director Russell Davis.

The explorer listed in July with the ‘Victoria Bore’ copper and ‘Edjudina’ gold projects in WA. Drilling is due to kick off “in the coming weeks” across high priority targets at both projects, M3M said late October.

At Victoria Bore, historic workings cover a length of 130m via a series of shallow shafts, with the historical Victoria copper mine producing 183t at 32.7% Cu for 60t copper.

Edjudina, nearish Kalgoorlie, is nestled between Northern Star Resources (ASX:NST) Carosue Dam Operation and advanced explorers like Saturn Metals (ASX:STN).

$6.5m market cap M3M is up 10% on its IPO price of 20c per share.

ALARA RESOURCES (ASX:AUQ)

(Up on no news)

Construction of the ‘Al Wash-hi–Majaza’ copper-gold project in Oman (AUQ 51%) is scheduled for completion by late 2022, the company says.

A revised DFS envisaged an open pit operation producing 35,000tpa concentrate a year for~80,000t copper and 21,800oz gold over 10 years. It will cost about US$60m to build, the company says.

These metrics for the Al Wash-hi–Majaza Project are now enhanced by higher current copper prices.

At $US7,000/t copper EBITBA was $US208m. At a $US9,500/t copper price, project EBITDA increases to $US370m, AUQ says.

The current cash price for copper on the London Metals Exchange is $US9,870/t.

The $22m market cap stock is up 45% over the past month.

FRONTIER RESOURCES (ASX:FNT)

(Up on no news)

Yesterday, FNT announced it had secured a couple of WA rare earths and high purity alumina projects to complement the recent acquisition of the ‘Murraydium’ ionic clay (IAC) hosted rare earths project in South Australia.

The ‘Gascoyne’ rare earths project adjoins the Hastings Technology Metals (ASX:HAS) world-class ‘Yangibana’ deposit, which is set to be the next REE producer outside of China by 2023.

The ‘Koolya’ High Purity Alumina (HPA) project is prospective for bright white kaolin. Kaolin deposits with low impurities are an optimal feedstock for HPA, a market which is witnessing dramatic consumer driven growth, FNT says.

“HPA growth has been invigorated in response to global investment in new applications and technologies such as electric vehicles, static energy storage sector and LED lighting have created increased demand and market opportunities,” the company says.

Koolya is a “drill ready project” with reconnaissance drilling to be undertaken immediately on a tenement grant to investigate the depth, thickness, ISO brightness, mineralogy, and alumina content over the project area.

$18.5 market cap FNT is up 35% over the past month.