Elon Musk. Pic: Joshua Lott / Stringer, Via Getty Images North America
Mining
Here are the biggest small cap resources winners in early trade, Tuesday February 21.
Zinc miner NCZ has received a takeover offer from disgruntled major shareholder (19.9%) Sibanye-Stillwater at $1.10 per share, valuing the company at ~$145m.
That’s 42.9% premium on the last traded price, but a 43% discount on the same time last year.
JSE/NYSE-listed Sibanye-Stillwater is a US$6.6bn miner with additional recycling and tailing retreatment operations around the globe.
Tailings is the waste generated from the processing and extraction of valuable minerals and metals from ore.
A lot of older tailings facilities have high grades, by modern standards, and it was NZS’ tailing strategy at the old Century zinc mine in QLD which attracted Sibanye-Stillwater to invest in the first place, the company says. That strategy has now changed.
“Sibanye-Stillwater has been concerned about the change in the strategic direction of New Century under current management, with the building of a tailings asset management services business no longer a focus,” it says.
“The substantial decline in shareholder value (with the New Century share price down 59% over the last six months) implies that the current strategy has not been well received by shareholders and investors.”
Sibanye-Stillwater says the NCZ balance sheet is “under strain” and the company may need to raise additional cash for growth projects.
“[This] could result in a material dilution for existing New Century shareholders, particularly given New Century’s current share price, broader equity market conditions and limited trading liquidity in New Century’s shares.”
In addition to the offer, Sibanye-Stillwater has placed a buy order on the ASX at or below $1.10/sh to acquire 10.92% of the total shares on issue.
$140m capped NCZ is currently trading at the offer price on high volumes. It had cash and concentrate on hand worth $79m at the end of December, and no debt.
Management told shareholders to take no action on the bid.
Elon Musk’s Tesla is looking to shore up raw materials supply in an increasingly tight market.
Its latest target is $430m capped graphite developer and emerging battery maker MNS, which has signed a deal to supply the carmaker with a minimum 17,500tpa active anode material (AAM).
AAM is a value-added graphite product used in batteries.
Tesla has given MNS a tight deadline, with supply to begin in February 2025.
“The agreement is conditional on Magnis securing a final location for its commercial AAM facility by 30 June 2023, producing AAM from a pilot plant by 31 March 2024, commencing production from the commercial AAM facility by 1 February 2025, and customer qualification,” the company says.
MNS is in the process of selecting a location in the US for its AAM facility. Large scale pilot plant development for both AAM and Nachu graphite concentrate will then commence “immediately”.
MNS is 61% owner of a lithium-ion battery plant in Endicott, New York, and the Nachu graphite project in Tanzania, where an investment decision is yet to be made.
Magnis is also yet to announce commercial sales from the battery plant, which began production in August.
Chairman Frank Poullas told shareholders at the company’s AGM last year it expected to see revenues from the Imperium3 factory from December.
(Up on no news)
The South Australian explorer has pivoted from copper into clay rare earths exploration at its Mt Craig project.
As a result of this re-alignment of priorities, CEO Thomas Line resigned earlier this month.
“Following the recent drilling campaign at Mt Craig in 2022, the company is seeking to validate a potential flowsheet for extraction of the magnet REE oxides (MREO) identified before further exploration drilling is conducted,” it says.
“A phased program of further metallurgical testing is underway to identify the minerals hosting the MREO, with the aim to determine a flowsheet that will have the potential for economic recovery of the high value elements.”
Early stage met test work has already shown that extraction of up to 70% of the MREO and 60% of the heavy REE oxides (HREO) is achievable in a moderate acid solution.
This work is important to test whether a project is economic or not.
Further optimisation work will now be undertaken, the company says.
The $12m capped stock is flat year to date. It had $4.12m in the bank at the end of December.
(Up on no news)
The hard drilling explorer has now defined a 620m long +1g/t gold trend — – open on strike and at depth – at Caledonia, part of the namesake project in Victoria.
The company says it could be sitting on a repeat of the same structure that underpins the nearby 5Moz Stawell gold mine.
“What we’re seeing at Caledonia looks to be awfully like a repeat of the Magdala dome style basalt units that form the core to Stawell-type mineralisation,” CEO Russell Krause told Stockhead.
Future drilling in the area will focus on depth continuity, plunge and controls on grade and thickness to rapidly advance the prospect.
The $21m capped stock is flat year-to-date. It had $5m in the bank at the end of December.
Company CEO Prashant Chintawar has purchased the first of several intended tranches of VRC shares on market, “demonstrating his conviction in Volt’s strategy”.
The battered graphite/anode stock owns a controlling stake in the Zavilievsky graphite mine in Ukraine, where operations restarted in August before shutting down again, because war. And winter.
“Over an initial 2-week period of production, 846 tonnes were produced, for an average of 60.5 tonnes of graphite product per day,” VRC says in its latest quarterly.
“In November 2022, energy supply disruptions commenced due to Russian missile attacks on power generation facilities affecting the entire Ukraine energy grid.
“Combined with the continuation of supply disruptions, this has resulted in ZG management being unable to recommence production prior to the Ukraine winter.
“Volt and ZG management continue to monitor the situation, address the issues, and define the best way forward.”
The stock has other strings to its bow, including an MoU with 24M Technologies, providing a pathway to supply coated spheronised purified graphite – which attracts a far higher price — to big companies like Volkswagen.
“Customer evaluation of the Company’s natural graphite anode continues, with an additional request for 200kg of material, indicating that our product is advancing in the qualification process,” it says.
“More broadly, we are receiving greater interest from battery and automotive companies regarding collaborations, reflecting in part the rapidly tightening conditions in the natural graphite market.”
Its Bunyu project in Tanzania is also one of the world’s biggest undeveloped greenfield natural graphite projects.
$46m capped VRC is up 20% year-to-date.
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