Resources Top 5: Explorer hits +2 year high on big nickel-copper-PGE acquisition
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Here are the biggest small cap resources winners in early trade, Friday January 28.
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The $35m market cap minnow is now up almost 90% over the past five days, and 170% year-to-date.
These are exciting times for the company and its shareholders.
AUQ has been plugging away for well over a decade at its 51%-owned ‘Wash-hi Al Majaza’ copper-gold project in Oman.
Now production is finally in sight, with first concentrates scheduled for late 2022/early 2023.
A revised DFS envisaged a smallish 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.
At $US7,000/t copper earnings before tax (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 $US9,916/t.
AUQ’s contracting business, Alara Resources LLC, has also inked a preliminary 10-year, $167.83m deal to provide mining services to the project.
There is jurisdictional risk though, with a “temporary” halt on new mining licences imposed by the Middle Eastern country of Oman in 2014.
In fact, the Wash-hi Al Majaza project JV has been the first to receive a copper mining licence since 2004.
The former coal stock has pivoted to more palatable commodities like copper and gold.
Today IEC added another string to its bow with the acquisition of a nickel-copper-PGE project near Kalbarri, WA, called ‘Yalgarra’.
Yalgarra is in the northern sector of the emerging West Yilgarn Ni-Cu-PGE province, sitting amongst active exploration projects owned by S2 Resources (ASX:S2R), Todd River Resources (ASX:TRT), Chalice Mines (ASX:CHN), South32 (ASX:S32) and AusQuest (ASX:AQD):
AQD recently upgraded the potential of its Julimar-like ‘Morrisey’ nickel-copper-PGE project — held under the Strategic Alliance Agreement (SAA) with S32 — after receiving highly encouraging results from soil geochemical programs.
“Initial exploration by others in the vicinity of Yalgarra has already defined a number of new magmatic NiCu-PGE±Au prospects,” IEC says.
“Importantly, Yalgarra sits centrally over the core gravity high in the region, possibly indicating thicker underplating by mafic-ultramafic rocks and has a number of large magnetic features which may represent potential unexplored mafic-ultramafic intrusions.”
IEC will target the mapped ultramafic rocks on Yalgarra before moving on to investigate the other large magnetic features, it says.
G50 listed August last year with a bag of gold projects in the USA.
The flagship ‘Golconda’ project in Arizona — next to a major copper porphyry deposit — was historically mined for lead and zinc.
It was never systematically tested for precious metals, despite delivering very high-grade gold and silver results, G50 says.
After recently adding its landholding at Golconda, G50 is now defining high priority exploration targets ahead of a maiden exploration program in Q1, 2022.
A maiden drilling at the ‘Top Gun’ project in Nevada to test a 1,150m long gold anomaly was completed in December 2021. Assays are pending.
3,500m of drilling is also due to kick off at the ‘Spitfire’ gold-silver project in the coming days.
“The December quarter has seen a continuation of the cracking pace that was set in the September quarter. Continued claim acquisition, sampling, geophysics, mapping, and the completion of our maiden drilling campaign at Top Gun in Nevada is much to celebrate over this December quarter,” G50 managing director Mark Wallace says.
“We have an exciting period ahead as we continue drilling in Nevada and commence our maiden drilling campaign at our flagship Golconda project and I look forward to updating our shareholders as the results come through.”
The $14m market cap explorer is currently sitting on its IPO price of 25c per share.
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The Africa-focused explorer formerly known as Tanga Resources is looking for a fresh start in 2022.
“The name Wia means ‘Sun’ in Baoulé, one of the major languages in Côte d’Ivoire,” WIA said December 7.
“The name and logo are intended to reflect a new dawn of opportunity for the company in Côte d’Ivoire.
“The sun also symbolises ‘Life and Energy’ and the warmth of Namibia, the other country in which Tanga is actively pursuing exploration success.”
Results of an augur drilling program at the ‘Bouaflé’ project are pending, while a couple of drilling programs are due to kick off in the current quarter at the ‘Mankono’ project.
The $32m market cap stock is up 21% year-to-date.
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KP2’s main game is the Kola and DX potash projects in the Republic of Congo (RoC), not to be confused with its neighbour, the Democratic Republic of Congo (DRC):
Kola is a monster project at the pointy end of the development cycle, and KP2 expects H1 of 2022 to be a “very busy period”.
The first key milestone is to finish a study on Kola “to improve the project value, reduce the capital cost and shorten the construction schedule”. Completion is imminent, KP2 says.
A DFS released 2019 envisaged a 2.2 Mtpa MoP operation with a 33-year life. Average annual EBITDA of ~US$585m means it would take 4.3 years to pay back the whopping construction cost of $US2.1bn.
That right — $2.1bn. One of the main aims of the optimisation study currently underway is to reduce the capital cost of Kola to less than $US1.65 billion.
“The company expects to receive the financing proposal from the [financing] consortium 60 days after the study is complete,” CEO Brad Sampson says.
“The delivery of the financing proposal for the full financing of the construction of Kola is a key milestone for our company.
“We are looking forward to the completion of the financing phase and being able to move rapidly into the construction of Kola.”