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Resources Top 5: High grade gold, copper hunters and another ASX explorer fires on debut
Mining
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- Brazil-focused explorer Alvo Minerals leaps out of the gate on debut
- Polymetals hits shallow high-grade gold in Guinea
- Copper play Redstone is drilling the ‘West Musgrave’ project
Here are the biggest small cap resources winners in early trade, Wednesday October 20.
ALVO MINERALS (ASX:ALV)
The explorer jumped out of the gate after commencing trading on the ASX this morning.
ALV’s flagship is the advanced ‘Palma’ VMS project in Brazil, which already has 44,000 tonnes of copper, 179,000 tonnes of zinc and 3,000,000 ounces of silver in resource.
VMS deposit occur in clusters, so ALV is hoping there is a lot more where this came from.
The project has been sitting largely idle for the last 30 years, the company says. There’s sufficient cash to conduct a two-year exploration program, which includes 20,000m of diamond drilling.
POLYMETALS RESOURCES (ASX:POL)
The explorer listed on the ASX late June to hunt gold deposits in the West African nation of Guinea, home to Predictive Discovery’s (ASX:PDI) mammoth 3.65Moz ‘Bankan’ discovery.
All assays are now in from 7,320m of Phase 2 drilling at the ‘Alahiné’ project, featuring numerous thin, shallow, and super high-grade hits like 1m at 51.73g/t from 9m and 1m at 96g/t from 8m.
There are also multiple targets that remain open at depth, POL chief exec Alex Hanly says.
“The third batch of assays have confirmed our interpretation from Batches 1 and 2, that there are a number of targets on-strike that require further extension drilling, and north-south step-out drilling,” he says.
“The high-grade near surface intercepts of 96g/t Au, 51g/t Au and 34 g/t Au provide potential for possible near-term gold production within the Alahiné licence.
“Further drilling of these shallow high-grade areas and the multiple undrilled zones of +100ppb gold in soils within the Alahiné licence will be systematically tested over the coming months.”
The $7.2m market cap stock is down 10% on its IPO price of 20c per share.
REDSTONE RESOURCES (ASX:RDS)
After many months of planning, copper play RDS has finally dusted off the drill bit.
Good timing by this $10m market cap explorer, with spot copper prices hitting record high above $US11,000/t on supply concerns.
3000m of drilling has kicked off at West Musgrave project focused on the ‘Tollu’ copper veins and surrounding target areas.
RDS are looking to build on the existing 38,000 tonne resource at Tollu, which is only 50km from OZ Minerals’ (ASX:OZL) world class ‘Nebo Babel’ nickel, copper, and PGE development. Redstone says similar geology could be present at West Musgrave.
A deeper drilling program is planned for later this year.
GLOBE METALS AND MINING (ASX:GBE)
(Up on no news)
Globe says its ‘Kanyika’ project in Malawi will be the first niobium mine in 50 years when it comes online.
Over 90% of niobium is used in the manufacture of high strength alloy steels. Intensity of usage is rising rapidly as markets, and in particular China, moves towards the manufacture of higher quality steels, GBE says.
A feasibility study envisaged an initial 23 year mine life producing 3,250t of niobium and 140t of tantalum for average annual cashflow of $US225m. The payback period is just 1.5 years, the company says.
With advanced project studies and government approvals in the bag, GBE is now talking to potential project financiers to cover the $US250m development capex.
The $63m market cap stock is up 22% over the past month and 237% year-to-date.
HIGHFIELD RESOURCES (ASX:HFR)
(Up on no news)
HFR is developing its flagship ‘Muga’ potash project in Spain.
The company was granted the mining concession in July and, following a recent $18m cap raise, is well funded to buy long lead items for the processing plant.
It is expected to cost €368 million to build Phase 1 (500,000tpa MOP) and another €208 million for Phase 2 (1mtpa MOP). Financing talks are underway.
HFR is anticipating NPV8 of €1.97 billion, IRR 25% and EBITDA of €310 million per annum at full production.
The $211m market cap stock is up 18% over the past month, and down 12% year-to-date.
