Resources Top 5: Chalice nearology plays and Australia’s next tungsten miner

KIS – to be rebranded as Group 6 Metals — has locked in $88m of funding to get the ‘Dolphin’ tungsten mine into production
Julimar nearology plays Venture Minerals, Australian Silica Quartz gain in early trade
Argent (gold, silver), Superior Resources (gold) up on no news

Here are the biggest small cap resources movers is early trade, Thursday November 11.

KING ISLAND SCHEELITE (ASX:KIS)

The redevelopment of KIS’ ‘Dolphin’ tungsten mine on King Island, Tasmania, is officially on.

KIS – to be rebranded as Group 6 Metals — has locked in $88m of funding the get the $73m mine up and running again.

Activities on the ground at King Island have commenced, with earthworks scheduled for December 2021.

Dolphin, which was mined between 1917 and 1990 before closing due to low tungsten prices, is one of the highest-grade deposits in the world.

A revised Feasibility Study in December 2020 on a 14-year, 275,000tpa tungsten trioxide operation delivered a net present value (NPV) of $241m and cash operating costs of $126/t WO3 — giving it an impressive operating margin at current prices of ~$195/t.

“The company has worked tirelessly to progress to this stage, at which it is fully funded to commence its future trajectory to becoming a significant tungsten producer, and for all of those who have supported us on this journey, we thank you,” KIS executive chairman Johann Jacobs says.

“The Dolphin Tungsten Mine is host to the highest-grade tungsten deposit of significant size in the Western world, and we look forward to the recommencement of mining from this fantastic asset.”

The $89m market cap stock is up 21% over the past month, and 70% year-to-date.

SUPERIOR RESOURCES (ASX:SPQ)

(Up on no news)

This busy explorer’s focus is getting the small – but potentially lucrative — 122,00oz ‘Steam Engine’ gold project in Queensland into production.

Base-case economic modelling indicated that the project could deliver post-tax, life of mine cash flow of $24.4 million over 21-months of mining, based on an assumed gold price of A$2,200 per oz.

At A$2,500 per oz, the post-tax cash flow is estimated to jump to $41 million.

The cash from Steam Engine could underpinning an aggressive exploration push across the wider ‘Greenvale’ project encompassing copper, gold, and nickel.

A fully funded, 13,000m drilling campaign at Greenvale, focused on Steam Engine, the ‘Bottletree’ copper prospect and ‘Wyandotte’ copper deposit is currently underway.

Recent extensional drilling at Steam Engine hit a “better than expected” 5m at 24.9g/t from 27m.

Together with deep drilling at Bottletree, the company aims to deliver up to two JORC compliant copper mineral resource estimates by the end of 2021; one at Wyandotte and the other at the larger ‘Cockie Creek’ copper prospect.

In 2022 – after the wet season which runs from December to about April — Superior aims to further advance its ‘Big Mag’ and the new nickel tenements, which are seen as highly prospective for Voiseys Bay-style Ni-Cu-PGE systems.

The ~$30m market cap stock is up 120% over the past month. It had $1.6m in the bank at the end of September, giving it just over one quarter of funding.

ARGENT MINERALS (ASX:ARD)

(Up on no news)

Drilling results are pending from the historic ‘Pine Ridge’ gold prospect in NSW.

Outstanding high grade gold results were received during the September quarter, with most drill holes hitting thick intersections of gold mineralization that remain open in all directions and at depth.

Highlight hits included 6m at 10.52g/t from 60m, including 2m at 27.94g/t.

At he end of the quarter 647 samples awaited assay reporting, ARD says.

“Pine Ridge continues to prove itself as an exciting exploration target,” ARD managing director George Karageorge says.

“We are confident the project will deliver more gold mineralisation with the view of commencing the first independent Maiden JORC Resource estimation on the remaining drilling program is completed in October 2021.

“I have no doubt my team will be planning the Pine Ridge Stage 3 drilling program once the Company receives the final assays for the remaining holes well before the end of the year.”

ARD’s other key asset is the 52moz ‘Kempfield’ silver-lead-zinc project, where recent drilling hit 36m @ 96.05g/t Ag from 64m, and 25m @ 2.59% Zn from 73m. A resource upgrade is due Q3 2022, the company says.

The $36m market cap stock is up ~40% over the past month, and down 28% year-to-date. It had $3m in the bank at the end of September, giving it about 4.5 quarters of funding.

AUSTRALIAN SILICA QUARTZ (ASX:ASQ)

A high-quality Chalice nearology play, amongst other things.

Yesterday, ASQ’s JV partner DevEx Resources (ASX:DEV) — chaired by Chalice/ Liontown lynchpin Tim Goyder — said that visual observations from first two diamond holes at the ‘Sovereign’ project near Chalice validated “the significant potential for Julimar-style nickel-copper mineralisation”.

“The encouraging results from these initial diamond holes have provided strong endorsement of the prospectivity of the 12km long Sovereign Mafic-Ultramafic Intrusion, which is located within the Julimar Complex to the north of Chalice Mining world-class Gonneville Ni-Cu-PGE discover,” ASQ says.

The diamond holes are currently being logged with sampling of the core underway.

DevEx is earning into the non-bauxite rights at Sovereign by an initial spend of $3m to earn a 50% interest.

Following the initial spend, ASQ may elect to contribute to further exploration to maintain its 50% interest or may have DevEx spend an additional $3m to earn a further 20% interest with ASQ diluting.

The $36m market cap stock is up 55% over the past month. It had a substantial $5.5m in the back at the end of September, giving it an estimated 4 years of funding.

VENTURE MINERALS (ASX:VMS)

Another quality Chalice nearology play.

The sting of having to suspend iron ore production at the small ‘Riley’ iron ore mine due to declining market conditions after just one shipment is fading. VMS has other irons on the fire, like the flagship Mount Lindsay tin-tungsten project and the ‘South West’ nickel-copper-PGE project, a JV with market darling Chalice Mining.

An EM survey has now recommenced at South West, VMS says. It is the first stage of the JV earn-in focused on Venture’s ‘Thor’ Target, a 20km long, “Julimar lookalike” magnetic anomaly interpreted to be mafic-ultramafic intrusive complex.

Chalice may earn up to 70% by spending $3.7 million on exploration over four years.

“The Board is pleased to see the recommencement of our JV partner Chalice Mining’s ground EM program, with this next phase targeting the area where Venture’s own airborne EM survey delineated 13 anomalies, suggesting the current survey is highly likely to generate further bedrock conductors and potentially high priority drill targets,” VMS managing director Andrew Radonjic says.

“What is most exciting is the opportunity this gives to Venture shareholders with Chalice potentially drilling these conductors early next year with the aim of making another Julimar discovery.”

The $71m market cap stock is flat over the past month. It had over $9m in the bank at the end of September, giving it an estimated 2.5 quarters of funding.