Resources Top 5: Former Northern Star boss arrives to jumpstart ailing gold miner
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Here are the biggest small cap resources winners in early trade, Monday July 4.
The explorer named Celsius is so hot right now™ – after hitting a highlight 611.4m-long intersection at 1.39% copper and 0.75g/t gold in drilling at the flagship MCB project in the Philippines.
This includes a 77.5m-long high-grade portion grading 2.47% copper and 2.12 g/t gold (3.34% copper equivalent) from 232.10m.
This hole (MCB-038) was designed to improve confidence in the existing 1.5 million tonnes copper and 1.47 million ounces gold resource, in addition to defining further higher-grade areas to enhance the upcoming feasibility study.
Like the holes before it, MCB-038 confirmed the presence of an extensive shallow higher-grade position, CLA exec chairman Martin Buckingham says.
“We still have a few more diamond drill holes to come which are planned to further define the shallow and easy to access higher-grade copper at MCB,” he says.
“The drilling results over the past 6 months have identified important additions to copper mineralisation and we are looking forward to understanding the impact of these results as we move into our JORC Update resource estimate and feasibility studies in the second half of this year.”
A Scoping Study for the project announced December 2021 eyed the development of an underground copper-gold operation with a 25-year mine life.
Highlights from the Scoping study includes a Post tax NPV (8%) of US$464m and IRR of 35%, assuming a copper price of US$4.00/lb and gold price of US$1,695/oz.
Initial capital expenditure was estimated to be US$253m with a payback period of ~2.7 years.
The $34m market cap stock is flat year-to-date. It had $3.5m in the bank at the end of March.
Ring the alarum bells, this near-term copper miner has formed a JV to bid for the 353 km2 Khnaiguiyah zinc-copper exploration license in Saudi Arabia.
It includes AUQ’s formerly owned (and very advanced) Khnaiguiyah zinc-copper project, the was subject of a bitter battle between the explorer and its JV partner at the time back in the early 2010’s.
The new Alara-Al Tasnim JV (Alara 51%, Al Tasnim 49%) is among 8 shortlisted parties bidding for the Licence, AUQ says.
Meanwhile, AUQ’s focus is on developing the Al Wash-hi Majaza copper-gold project in Oman, where it is in the process of building the mining and processing facilities.
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 $41m market cap stock is up 220% year-to-date. It had $59m of unused financing facilities available at the end of March.
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This recently listed Red Dirt Metals (ASX:RDT) spinout is focused on adding the East Canyon uranium and vanadium project to its ouevre in Utah.
UVA is fully funded to kick off maiden drilling at East Canyon having just raised $6m at IPO.
The drilling will follow an underground mapping and sampling program by RDT in 2020 which identified extensive historical workings at the None Such and Bonanza prospects.
“Visible uranium-vanadium mineralisation was observed and sampled throughout both prospect’s workings, which returned high grade assays,” managing director Peter Woods says.
“UVRE intend to follow up this work and explore the rest of the project area to define other priority drill targets.”
The project is smack bang in the Colorado Plateau region, which has been an important source of uranium and vanadium in the US for more than 100 years.
The $5m market cap stock is down 20% on its IPO price of 20c per share.
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The junior bauxite miner has done it tough as cost of key inputs put a huge dent in the bottom line, despite strong prices for the aluminium ingredient.
MMI hopes to move to profitability with a “low risk” $28.3m expansion of the Bauxite Hills mine to 7Mtpa, which was approved today.
All regulatory approvals are in place with intention to execute the expansion by Q4 2023, MMI boss Simon Wensley says.
“The completion of the expansion DFS confirms Bauxite Hills Mine as a highly profitable, low-cost, long-life producer of good quality bauxite,” he says.
“This brownfield expansion is low risk and low capital expenditure, with 100% binding offtake now confirmed for 2023 and 2024 with our established customer Xinfa, and no further approvals required.
“Expanding to 7M WMT pa is perfectly timed to respond to bauxite market conditions expected to be very strong in the next few years.
“The scale benefits mean that the prospective financial returns are outstanding, and I thank [lenders] Greenstone and Lambhill for their support to move immediately to accelerate implementation.”
The shortened March quarter saw MMI sell 300,000t at record prices of $75/t (A$24.9m revenue, $5m net loss) before operations ceased in February 2022 for wet season maintenance.
Production and shipping restarted in April.
The $56m market cap stock is up 5% year-to-date. It had $5.2m in the bank at the end of March.
Struggling gold miner OBM has secured the services of a new chief exec to improve its fortunes.
Luke Creagh is a mining engineer with 20 years’ experience working for both contracting and mining companies at projects throughout Australia and overseas.
He most recently served as chief operating officer at Australia’s second biggest gold miner Northern Star Resources (ASX:NST).
“We couldn’t be happier that Luke is joining us,” OBM chairman Peter Mansell says.
“He has had considerable experience managing mining operations and is highly qualified to guide Ora Banda through its current operational reset plan.
“We look forward to working with him for many years to come and are confident that, together, we can extract maximum value from Ora Banda’s highly prospective land package.”
In late 2018 consistent problems at the historic Davyhurst gold operation near Kalgoorlie saw its then owner Eastern Goldfields Limited call in the administrators.
Believing the project had unrealised potential, the company’s major shareholders agreed to a restructure by way of a Deed of Company Arrangement – a process that allowed the company to settle up its debts and start a fresh.
And so, in 2019 Ora Banda Mining Limited was born. Mining was restarted in February 2021 with an initial 5.2 year mine life, 81,000oz per year production.
The aspiration was $68.8m in average annual profit at a ~$2,550/oz gold price.
This was not to be, with ongoing cost and performance issues prompting the company initiate a strategic review and ‘reset’ of its Davyhurst operations earlier this year.
The $52m market cap stock is down 36% year-to-date. It had $28.2 million in cash, 1,657oz of bullion on hand and no debt at the end of March.