Resources Top 5: Creasy’s magic touch, emerging discoveries, and a great day to buy a lithium project
Here are the biggest small cap resources winners in early trade, Monday May 16.
CZL is the latest ASX stock to pivot to lithium, locking in a deal to buy WA-based Westoz Lithium for $740,000 in cash and shares.
Global Lithium Resources’ (ASX:GL1) Marble Bar Lithium Project (MBLP) is also nearby.
WA is one of the safest jurisdictions in the world, a refreshing change of pace for CZL which has struggled to make a go of its ‘Plomosa’ zinc mine in Mexico.
Late last year, bandits allegedly stole ~90 tonnes of zinc and lead concentrate from the mine (valued at around US$90,000) after locking security guards and employees in a sea container.
March quarter results were also disappointing, with CZL posting a small loss on the sale of 200t of zinc and 42t of lead concentrate due to the “cumulative impact of several incidents”.
The $10m market cap stock is down 10% year-to-date.
Mark Creasy has bought another 3 million shares in GAL on market at 58c per share – which has pushed the price up to ~70c.
The billionaire prospector now owns 26.35% of GAL, which is up 240% since announcing a major palladium-platinum discovery at the ‘Norseman’ project in WA last Wednesday.
Creasy has a knack of picking winners.
In 2012, Sirius Resources made the Nova nickel-copper-cobalt discovery in WA that was eventually sold to large miner Independence (ASX:IGO) for $1.8 billion.
Creasy was a joint venture partner in the Nova-Bollinger project and the deal earned him a $630 million pay cheque.
Through his various companies, Creasy is now one of the largest holders of exploration ground and exploration stocks in Australia.
(Up on no news)
AR1 is the newest copper producer on the ASX at its ‘Mt Kelly’ project in northwest Queensland. Great timing, Barry Fitz says.
“Assuming the project hits its straps, it has got to be said that 10,000tpa for an initial four years is a lot of copper for a company with a [$70m] market cap,” he says.
“In gross revenue terms, it equates to $A530m at the current copper price.
“Compare Austral’s market cap to the $150m-plus market caps of a crop of junior explorers that have recently reported copper exploration success in the same neck of the woods.
“Promising for sure, but they don’t have a proven resource, and they are certainly a long way off from producing, if at all.”
AR1’s plan is to plough back $10m into exploration over the next 12 months from project cash flow to build a bigger resource base — enough to make Mt Kelly a 10-year plus operation, potentially at a bigger production rate too given installed capacity is good for 30,000tpa of copper.
Planning to drill the first five or six priority targets is underway.
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The goldie is still rising after a new diamond drillhole hit gold-hosting rock at ‘Mulgabbie North’ last week, “further validating the potential of Mulgabbie to be a significant gold discovery”.
Late last month OZM hit 1.31g/t over 56m — including 18m @ 2.07g/t — in drilling at the project, next door to Northern Star’s (ASX:NST) tier 1 Carosue Dam operations in WA.
The results, which include significant hits from three holes spaced 100m apart, come from a recently launched 7,500m reverse circulation (RC) drilling campaign.
It’s early days, but this virgin discovery at the so-called ‘Demag Zone’ remains ‘open’ all over the place. RC drilling of the Demag Zone will kick off in a couple of weeks’ time.
The $11m market cap stock is up 46% year-to-date. It had ~$3.3m in the bank at the end of March.
(Up on no news)
The manganese explorer is bouncing back from recent lows in early trade.
In March, it reported a “game-changing” +170% resource upgrade at the flagship ‘Oakover’ project in the Pilbara to 172 million tonnes at 9.9% Mn.
The total resource across its Oakover and ‘Hill 616’ projects increased by 90% to 229 million tonnes – growth which FRB says is “well above initial expectations” and provides a compelling opportunity to establish a long-life manganese operation.
The stock is now pivoted from a rapid start-up strategy to focus on developing a profitable, long-life mining operation.
Scoping studies – the first proper look at the economics of building a mine – are expected to kick off shortly on a +20-year operation.
The $18m market cap stock is down 17% year-to-date, and well off highs of 76c per share in March last year.
It had ~$1.1m in the bank at the end of March.