Resources Top 5: Give us your damn copper

$53 million indicative private equity bid rejected by Nifty copper mine owner Cyprium
Novo banks $11.5 million on share sale in unlisted silver company
ESR, EGR, ARN among the juniors moving on no news

Your standout small cap resources stocks on Thursday, December 5, 2024.

CYPRIUM METALS (ASX:CYM)

The planned development of its Nifty copper mine is a bit of a Neverending Story, but Cyprium Metals has launched to a ~32% gain today after batting away a private equity takeover at 3.5c targeting its Pilbara assets.

That cash offer from Appian Capital Advisory was close to double its closing price yesterday of 1.9c and was reportedly lobbed the day before CYM released a PFS on the development, suggesting it would cost $458 million to redevelop the former Metals X and WMC operation.

Despite the apparent premium on offer, CYM’s board says the non-binding indicative offer “does not reflect Cyprium’s inherent value and progressing the NBIO would not be in the best interests of Cyprium’s shareholders”.

The bid also lobbed just two days before the company’s AGM, with CYM saying it also considered the conditional nature of the bid, which would have required foreign investment approval, when knocking it back.

Producing 718,000t of copper metal with 37,300tpa over its first 10 years, Nifty would be split into two separate streams according to last week’s PFS.

The first is a concentrate operation, costing $239m with capitalised operating costs of $189m to refurbish and expand the Nifty concentrator, based off ore reserves of 83Mt at 0.9% copper for 753,000t of metal.

A cathode project utilising oxide resource that can be heap leached would cost $30m to establish with total project costs of $46m and ore reserves of 10.6Mt at 0.41% Cu for 44,000t metal.

Appian is well known in the world of distressed assets, notably restarting the Santa Rita nickel mine in Brazil after taking the project out of bankruptcy, though later attempts to sell it to majors ACG and Sibanye fell through, the latter prompting a court dispute.

The rejected bid puts a $53.5 million price tag – all cash – on CYM. Its performance since picking up Nifty has been less than stellar, climbing as high as 37c when copper prices hit then record highs of US$10,700/t in May 2021 three months after announcing Nifty’s purchase from MLX.

But that enthusiasm has disappointed with a string of funding challenges and project revisions since. That culminated in the appointment of Matt Fifield as exec chair in February and a $40m loan facility from major copper smelter and trader Glencore.

Yet copper is hot property and is the prime M&A target of majors like BHP and Rio Tinto. With that in mind its little wonder private equity likes the look of a sold-off asset like Cyprium – down ~90% over the past five years.

NOVO RESOURCES (ASX:NVO)

Novo shareholders shouldn’t have to dip into its pockets too soon after the Pilbara and Victoria gold explorer, in a JV with soon-to-be-acquired Hemi supremo De Grey Mining (ASX:DEG), profited from the partial sale of its stake in unlisted San Cristobal.

The $11.5 million capital injection for 38% of NVO’s stake will give the junior, famed for its leadership of the ill-fated conglomerate gold boom a few years ago and now reimagined as a conventional gold explorer, a $16.7 million cash balance heading into a busy 2025.

It also values the company’s share portfolio at $19m, giving significant cash backing for the $240m capped company.

San Cristobal, a Bolivian silver company, is one of a host of investments Novo held as of its last quarterly, along with GBM Resources (ASX:GBZ), Kalamazoo Resources (ASX:KZR), Calidus Resources (ASX:CAI), Kali Metals (ASX:KM1) and Elementum 3D.

It’s the second time in recent weeks the company has cashed in, after selling the remaining 20% of its Quartz Hill JV and the gold and silver rights at the project to Liatam Mining’s Austroid, once the company in line to take over MinRes’ Bald Hill lithium mine.

Novo, which is also listed on the TSX, is aiming to find +1Moz deposits via its Belltopper asset in Victoria, Becher, where De Grey was planning to spend $25m over four years for a half-share, Nunyerry North – part of a 70-30 JV with Mark Creasy – and more.

ESTRELLA RESOURCES (ASX:ESR), ALDORO RESOURCES (ASX:ARN) and ECOGRAF (ASX:EGR)

(Up on no news)

Every dog has its day and as always the mysterious forces of the share market are pushing a string of explorers higher on fumes today.

For Aldoro, at least, those fumes are still in the tank from a hot announcement yesterday that revealed the discovery of a line, 262m long, of niobium-rich rocks at surface at the Kameelburg project over in Namibia.

The company is aiming to be the next to boom on the ASX small cap market’s new-found love for niobium, a steel alloying metal that creates material for high-strength applications in jet engines, rockets, beams and girders for buildings and oil rigs and pipelines.

It’s also got superconducting properties, so it’s used in things like MRIs and super hi-tech applications like the Large Hadron Collider.

There’s one near monopoly supplier in Brazil – CBMM – and a handful of smaller producers, but Australians have awoken to the metal’s possibilities with the company-making Luni discovery by WA1 Resources (ASX:WA1).

Aldoro’s line 4 samples at Kameelburg included 94m at 0.93% Nb2O5 and 30m at 1.2% Nb2O5. The commodity currently trades at US$57,000/t, which means 0.15% of the stuff in a tonne of ore is equivalent to 1g/t gold in revenue terms.

Estrella, which shares its name with a drink we imbibed in Barcelona, has had a number of different guises in its many years on the ASX.

Currently the tiddler is trying to prove up a supergene manganese discovery in the underexplored Timor-Leste, having previously drilled gold, nickel and lithium prospects in WA’s Goldfields.

Induced polarisation surveys are planned soon to develop and refine Estrella’s exploration model, with manganese prices rising strongly this year after a cyclone knocked out production from South32’s major high-grade Groote Eylandt operation in the Northern Territory.

$46m-capped EcoGraf, meanwhile, is looking to establish a vertically integrated battery anode materials business, leveraging its Epanko graphite project in Tanzania.

It’s chasing US$105 million in funding to bring the project to life, leveraging what it says is an environmentally superior process to produce 99.95% carbon high-performance battery anode material for buyers in Asia, Europe and North America.

EGR copped a first strike against its remuneration report at its AGM last month, with more than 53% of shares voted against the motion.