Resources Top 5: Fertiliser frenzy, hot IPOs and a ‘spectacular’ copper discovery
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Here are the biggest small cap resources winners in early trade, Monday March 28.
The junior explorer surged +130% after making a big copper discovery in its very first hole at ‘Orion’, part of the flagship ‘Meleya’ project in WA.
The first 709m-long hole of a two-hole diamond drilling program — mostly designed to test the geology of this untested area — has pulled up three mineralised copper sections:
‘To end of hole’ means the third mineralised zone probably keeps going at depth.
This is a spectacular outcome, TEM managing director Don Smith says.
“To make a new discovery on our very first hole into an entirely untested region far exceeds our expectations,” he says.
“This drilling was designed to help understand the geology and to inform future exploration and we’ve actually hit multiple zones of sulphides and copper mineralisation.
“It shows our tech innovation, science and hard work are paying off. The team and I are very excited and just itching to get on with analysing exactly what we have here, do more drilling and continue exploring the hundreds of square kilometres of untested ground along strike we have secured.”
The second drillhole is in progress to depth of ~1.1km.
Meleya is part of TEM’s 900sqkm ‘Yalgoo’ tenements, where the company has unearthed more than 50km strike length of a previously unrecognised and unexplored segment of the Yalgoo greenstone belt which hosts several world class mines.
They include one of Australia’s most successful high-grade copper-zinc and precious metal operations, Golden Grove.
The $21m market cap stock is up 135% year-to-date. It had $1.7m in the bank at the end of December.
(Up on no news)
Fertiliser supply, or lack thereof, is a hot topic and so are the stocks looking to supply into this constrained market.
KLL kicked off production at its Beyondie sulphate of potash (SOP) project in WA in October last year.
The project is expected to be operating at an ~80,000tpa SOP production run rate by Q1 CY2023, with the targeted 120Ktpa run rate established by Q3 CY2024.
The company flagged some start-up difficulties in an operations update earlier this month.
KLL remains confident and expects to have accumulated sufficient ‘start-up grade’ harvested potassium salt (KTMS) by June.
The re-start of its SOP purification plant is also expected in June, with targeted commercial SOP sales from July.
Kalium Lakes had around $48 million in cash late Feb and $176 million of drawn senior debt facilities with NAIF and KfW – but said that with its revised production ramp-up schedule it will require further external funding by Q3 FY22.
It’s worth noting that Kalium’s stage one production is already tied up in a 10-year offtake deal with German fertiliser king K+S, which currently supplies more than 60 per cent of the Australian and New Zealand SOP markets.
(Up on no news)
Another aspiring fertiliser play.
Earlier this month construction kicked off on non-process infrastructure for the initial production plant at its 800,000tpa ‘Ardmore’ phosphate project in Queensland.
First production is on schedule for July this year with first shipment in August.
“Planning and contract discussions are well advanced for production and shipment of five individual 5,000 tonne trial parcels (25,000t total) to be sent to customers for their prequalification,” the company said.
“Negotiations continue with these customers for potential longer-term arrangements over the remaining 50% of uncommitted first right production offtake.”
The $60m market cap stock, which hit a four-year high in early trade today, is up 61% year-to-date.
The newly listed stock has hit the bourse with a bang, up 40% in early trade.
FEG boasts a 1Moz and growing gold resource at the ‘Wonogiri’ project in Indonesia.
There’s also ‘Trenggalek’, where more than 17,700m of drilling has been carried out to date, and ‘Woyla’, a project previously held by Barrick Gold and Newcrest.
FEG also has a bunch of earlier stage projects in Australia.
Cumulatively, over $40m has been spent across the portfolio to date, it says.
The explorer has pulled up thick and shallow gold at good grades in early-stage drilling at several prospects in WA.
Highlights include 7m at 5.36g/t gold from 31m at ‘Transylvania’ and 15m at ~2g/t from 51m (including 1m at 13.8g/t) at ‘Kingswood’.
“We are very encouraged by these results as the majority of the gold intercepts are at shallow depth and mineralisation remains open with strong potential for open pit development,” OAU chairman Rick Crabb says.
“We are particularly excited about the company’s first drilling of the Kingswood Prospect within the Abernethy Shear Zone, which is a large 7-kilometre-long mineralised structure incorporating tonalite intrusive.
“The Transylvania prospect is now shaping up for resource drilling and the company’s first drilling on the Crown Prince East gold prospect was successful in intersecting mineralisation in the same area as previous explorers (8m at 2.89g/t Au from surface CKAC018 – Doray Minerals Limited).
“Our drilling continues to show the potential of the Garden Gully Gold Province to build on the existing resource at the Crown Prince mining lease.
“The main near-surface targets are open-ended shallow mineralisation on the Lydia mining lease, Transylvania and the Abernethy Shear Zone and the large targets in the deeper gold mineralisation in the primary zone under these prospects.”
The $20m market cap stock is down 25% year-to-date. It had $1.6m in the bank at the end of December.