Resources Top 5: Friendly takeovers, new gold finds, and a big silica sand offtake
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Here are the biggest small cap resources winners in early trade, Wednesday November 10.
A friendly takeover will see kaolin tech joint venture partners Andromeda Metals (ASX:ADN) and MEP combine.
ADN, which is consolidating 100% ownership of both the ‘Great White’ kaolin project and Natural Nanotech Pty Ltd, say the deal is “a logical positive next step in the evolution of the project, unlocking value for all Andromeda and Minotaur shareholders”.
“Great White is an exciting, low-cost project capable of supplying premium grade refined kaolin minerals into growing market demand for high value bright-white halloysite-kaolin in ceramic/paint sectors and other applications,” ADN managing director James Marsh says.
“Consolidating ownership of Great White provides for increased future funding flexibility and development optionality.”
The unanimously recommended off-market takeover offer (1.15 new Andromeda shares offered for every 1 Minotaur share) values Minotaur at $108m, or 20.8 cents per share.
This represents a 59.8% premium to last close of Minotaur shares on 8 November 2021.
MEP shareholders will hold ~19.5% interest in the enlarged ADN. MEP will also separately demerge its copper and gold assets into Minotaur subsidiary, Breakaway, which it intends to list on the ASX.
$435m market cap ADN didn’t fare as well on the news, down 12.5% at the open.
BAT has received a mining license for the 50,000tpa ‘Balama Central’ graphite project in Mozambique, which it intends to offload alongside the ‘Montepuez’ project to LSE-listed producer Tirupati Graphite.
Completion of this $12.5m sale agreement (cash and shares) is expected to occur in the coming months, BAT says.
The boundary of the exploration licence is also just 7km from the rich Stawell gold mine, which has produced ~5Moz of gold to date.
The $44m market cap stock is up 50% over the past month. It had $3.1m in the bank at the end of September, giving it an estimated two quarters of funding.
The project developer has inked an offtake deal for ~200,000t of foundry grade silica sand over 4 years from its ‘Arrowsmith North’ project.
The two Korean customers are suppliers to Hyundai Motors, Kia Motors, and Renault Samsung Motors, VRX says.
The company expects this initial offtake term sheet to underpin future supplies into the South Korean market as companies seek to replace dwindling volumes from current suppliers.
The key features for foundry sand are particle size distribution and grain shape and size, it says. Lab results indicate the product from Arrowsmith North is superior in quality to the product relied on by incumbent suppliers.
“The term sheet is a major milestone in the journey to develop our high-quality WA silica sand projects,” VRX managing director Bruce Maluish says.
“We are delighted with the calibre of our first offtake partners Dong A and DongNam, given their significant industry experience and high standing in the foundry industry in South Korea.”
“Both companies have shown confidence in the quality of our foundry sand product from Arrowsmith North and are very keen to convert this term sheet into a secure, long-term supply agreement.”
The $110m market cap stock is down -4% over the past month. It has about $13m in the bank at the end of the September quarter.
The recently listed explorer has pulled up thick, high-grade gold in maiden drilling at the ‘Alice River’ project in north QLD.
The highlight intercept was 26m at 3.6g/t gold from 104m, including 3m at 21g/t from 126m.
This is an exceptional outcome from the first holes into a new, large-scale target, PGO managing director Tony Schreck says.
“High-resolution IP geophysics data highlights the new target zone extending over 800m south from beneath the open pit and these initial two drill holes confirm our interpretation that the system significantly widens only 50m to 100m below surface and is open in all directions,” he says.
“These results represent a significant advancement for the Project, with the potential to greatly accelerate towards resource definition through further drilling on this large-scale new target.”
This new target represents just one of numerous new large-scale targets being tested in the current drill program.
The $11m market cap stock is up 40% on its IPO price of 25c per share.
(Up on no news)
One of these is POD, which aiming to be Australia’s first PGE producer at the ‘Parks Reef’ project in WA.
“The project contains a resource of 2.2Moz of platinum, palladium, and gold plus 79,000t of copper, which we hope to grow with an aggressive drilling schedule, currently in progress,” POD chairman Clayton Dodd told Stockhead recently.
“There is also further upside with rhodium credits, which could add over 35% to the 3E PGM price.”
The $100m market cap stock is cashed up with about $10m in the bank.