Resources Top 5: If you can’t join ’em, say hi to the neighbours
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Here are the biggest small cap resources winners in early trade, Wednesday November 15.
More opulent buying in Azure Minerals (ASX:AZS) shares has pushed the one-time exploration minnow to near untouchable levels, with Mineral Resources (ASX:MIN) revealed to have upped its stake to 13.56% with yet more on-market purchases at well above Chilean giant SQM’s $3.52 offer price.
Azure is up 2% this morning to $4.12, having become a billionaire’s plaything since SQM lobbed its bid. Gina Rinehart is already sitting pretty with an 18.9% stake, Pilbara Minerals (ASX:PLS) is said to be snooping.
Not to say anything of more than 13% holder Mark Creasy, who also owns 40% of the large-scale Andover lithium discovery in the Pilbara that has made Azure and its investors wealthy(-er).
German investor Wilhelm Zours’ Delphi Group, who committed to the SQM offer, has 10.8%, while SQM controls almost 20%. There’s not a lot left to go around, with many early punters surely taking their winnings in the maelstrom.
Azure is up in the order of 1750% in 2023, having started the year at just 24c, and well over 2000% since it shifted focus from Mexico to explore — initially for nickel and copper — at Andover in the aftermath of the pandemic.
We all dream of gains like those. So with Azure looking close to maxed out for now — like Mario on 99 lives — punters are looking next door hoping their pegmatites contain similarly massive spodumene intercepts.
Next door $167 million Raiden Resources (ASX:RDN) is up another 13% today and almost 700% over the past year as Andover fever grips the market.
The breakout star on the ASX today though is $24 million Errawarra Resources (ASX:ERW), fresh off the release of a new investor presentation on the potential of its Andover West project.
The spex are thus: ERW’s Andover West boasts a pegmatite swarm just 12km from Andover’s priority pegs and under 4km from where RDN has found lithium samples containing up to 2.73% Li2O.
A number of pegmatites were found in a maiden program primarily focused on drilling for nickel, with multiple assays of over 150ppm lithium, well above background levels of 15ppm.
Meanwhile, it says ground reconnaissance and sampling is ongoing with a number of new pegmatites identified, with follow up sampling showing numerous anomalous results containing LCT (lithium, caesium and tantalum) elements.
‘Lithium anomalous pegmatites may be part of a new discrete lithium pegmatite zone that includes recent discoveries by Raiden,” ERW claims.
Osmond Resources has thrown down a wide net in search of the resources play that sticks since emerging on the bourse in 2022 with a string of nickel and copper targets across Western Victoria and South Australia’s famous Gawler Craton.
Earlier this year it made a quantum leap into lithium, picking up the Salt Wells lithium and borate project in Nevada from advanced boron developer 5E Advanced Materials (ASX:5EA).
Today the $6 million market capper has piled on a more than 40% gain (it just keeps going up as we type), via another agenda-shifting acquisition.
It’s announced a staged earn-in agreement with Spain’s Global Mining Enterprises Pty Ltd and subsidiary Omnis Minera SL to launch head-first into a European fertiliser project known as Iberian One.
The target here is potassium sulphate (let’s not call it sulphate of potash lest we revive ill memories of Aussie investors scorched by the promise of the salt), alumina and graphite.
It all fits into the theme of increasing Europe’s capacity to feed its own materials supply chains. The EU wants to extract 10% of its critical minerals and undertake 40% of its processing onshore by 2030. Currently? Nowhere near.
Graphite, in particular, is almost completely dominated by China, which recently announced export controls on battery grade graphite products.
Good timing for OSM then to announce its acquisition, which will include a $75,000 payment for six months of exclusive due diligence.
It can acquire a 100% interest in the assets by issuing 65 million shares and 5 million options to the vendor subject to a three stage earn-in.
Iberian One already contains 190 historic drill holes, with hits including 3.7m at 37.21% aluminium oxide from 34m in hole SI-30, 2m at 36.1% SO3 from 55.5m in SI-9, 3.3m at 19.93% SO3 from 42m in SI-10, 11.3m at 4.8% K2O from 38.7m in SI-3 and 8.1m at 21.62% carbon from 32.5m in SM-26.
“This project represents an exciting opportunity for Osmond to fast-track the development of a European fertiliser and critical materials’ project. With over 190 historic drill holes and two historical mines, the project is well delineated meaning we can fast track resource definition with a view to focusing on early mining studies,” OSM executive director Andrew Shearer said.
“The earn-in terms are also very advantageous for shareholders with expenditure focused on project delivery and Osmond having sole discretion at each relevant milestone whether or not to progress.
“This has the potential to be transformative to Osmond and to deliver serious value to shareholders.”
A quick little bit of background here. Iberian One is located in an historic region know for its kaolin, iron and graphite mining between Madriguera and El Negredo in Spain’s Segovia Province, jut 100km north-northwest of the capital Madrid.
Spread over 50km2, the project area contains a mining permit at Becerril of 1.6km2 and the Grafenal Investigation Lease, covering 47.5km2 of turf, where exploration since the 1970s has focused on the potential to extract aluminium from alunite, a mix of aluminium and potassium sulphate.
Osmond’s main aim will be to hone in on the increasing global demand for SOP, normally produced through the emissions intensive Mannheim Process, to identify the potential to extract SOP from the alunite material at Iberian One.
Used in higher value crops like fruits, vegetables, nuts and coffee, SOP attracts a premium of US$200-300/t over the more commonly traded muriate of potash, which is the main feedstock for SOP via Mannheim.
But other projects have previously tapped alunite as a source of SOP, including a long-running operation in Azerbaijan and the Blawn Mountain project in Utah, which is currently at a DFS stage.
(Up on no news)
Precious little going on today to really explain the 30% run in Titanium Sands’ share price, which has the $23 million capped penny stock on a little lift today.
It’s still trying to work on a mining licence for its Mannar project in Sri Lanka’s northwest, where it holds five exploration licences on Mannar Island and the adjacent mainland.
The company has placed a $545 million NPV on the development of the heavy mineral sands project, where it announced written and binding land access agreements had been received from affected landowners in the priority zone where it boasts 82Mt of high grade ore, housing and its initial processing plant back on November 6.
TSL says the Sri Lankan Government’s Central Environment Authority has initiated environmental clearance for the project and completed an initial site visit. The CEA’s sign-off is, according to TSL, the key step that will lead to the issue of the project’s mining licence.
“The signing of the priority 1 zone land access agreements is another milestone achieved in the CEA process. Further CEA site visits are expected to address other outstanding milestones that will lead to completion of the process,” TSL MD James Searle said at the time.
A scoping study in May placed a $122 million capex bill on developing the first stage 4Mtpa project, which would have a mine life of 20 years with “potential for capital payback within two years”.
“The high quality ilmenite product is expected to find a ready market with titanium slag and sulphate route pigment producers in the Middle East, Korea, India, China and elsewhere,” the company said in May.
Speaking of a bit of nearology, Odessa Minerals is surging up the bourse today, trading huge volumes and collecting 43% and more in gains after announcing — in ALL CAPS mind you — STANDOUT LITHIUM PEGMATITE DRILL TARGETS AT YINNETHARRA.
OK, I know what all of those words mean on their own, but together?
This isn’t quite discovery territory, but Odessa has identified some anomalous lithium pegmatite trends based off 248 soil samples returning over 100ppm Li2O, with a 4km by 2km northwest trending anomaly at Robinson Bore with lithium and pathfinders like caesium, tantalum, beryllium, rubidium and bismuth ‘coincident to 16,500m of sub-cropping fractionated pegmatites, and another 2.7 by 2km Li-Cs-Ta-Be anomaly at the Eastern Pegmatite field.
There’s more smoke from its Yinnetharra project at the Lockier Range in WA’s Gascoyne, a nearology play for Delta Lithium’s (ASX:DLI) Yinnetharra, where a maiden resource for the initial Malinda prospect is due soon.
That’s in the form of rock chip samples at Mt Yaragner and a number of elevated lithium peg pathfinders in rock chips, with a peak Li2O result of 1911ppm and 22 samples above and beyond 500ppm. This all sets up an ALL CAPS MAIDEN DRILLING PROGRAMME.
“Odessa’s exploration team have processed thousands of rock chip and soil samples from Lockier Range over the past 6 months and the results have now defined some exceptional lithium rich areas that will be targeted with our maiden drilling programme,” exec director David Lenigas said.
“The company is actively engaging with Native Title Holders to complete the necessary access permissions so that we can get the drills turning on the ground.
“We have excellent targets to drill at four locations, with a number of key indicators pointing to existence of extensive LCT systems, and drilling is the next phase of exploration planned here. At Robinson Bore alone, for example, we have identified a lithium trend of 4km that needs to be drilled.”
Lockier Range is located 25km west of Delta’s Yinnetharra, adjoins Tim Goyder’s Minerals 260’s (ASX:MI6) Aston lithium project and is 8.5km southwest of Delta’s Jameson prospect, the next major target the MinRes backed junior (which emerged from an Ellison backed $70 million cap raising today) will drill after Malinda.
The materials sector is up a party hardy 3% this morning and there are plenty of resources players surging, meaning we had a few options for this last slot.
We’ve decided to go with dual-listed Atlantic Lithium, which has punted a 33 pence a share offer from its major shareholder Assore International Holdings to buy up the company looking to deliver Ewoyaa, Ghana’s first lithium mine.
That’s 63c a share in Australian terms, well above Atlantic’s current share price of 49c but far below its 52-week high of 93c. It’s the latest M&A play in the lithium sector, which until now has largely focused on Australian assets in WA’s world-leading Pilbara and Goldfields spodumene districts.
But Ewoyaa has emerged as a prize for a bargain-hunting buyer after Atlantic had its mining lease granted last month for the project, that is set to be owned 50-50 between it and US lithium refining hopeful Piedmont Lithium (ASX:PLL).
According to a DFS in June the mine would produce some 3.6Mt of spodumene concentrate over a 12-year life, delivering US$316m in EBITDA annually with a 19-month payback on its US$185m capex.
The mine would have low all in sustaining costs of US$610/t if the study is to be believed, based off a resource of 35.3Mt at 1.25% Li2O and what was then considered conservative pricing of US$1587/t.
However, spodumene prices have fallen hard in recent months, threatening those levels. Despite the pullback in lithium prices, premium M&A bids have flown in for companies sitting on substantial or potential lithium resources in recent months, with Liontown Resources, Essential Metals and Azure Minerals all recent takeover targets.
In rejecting the bid, Atlantic said the offer ‘undervalued’ Atlantic and was not in the best interests of shareholders “having regard to the near-term producer status of the project, the status of the pending investment from the Minerals Income Investment Fund and the positive near-term outlook for lithium project developers.”
South Africa’s Assore, taken private and delisted from the Johannesburg Stock Exchange in 2020, holds around a quarter of Atlantic, and also owns a similar stake in the Gemfields Group, industrial minerals producer Wonderstone, half of the Assmang manganese and iron ore business and the Dwarsrivier chrome mine.
Ghana’s Minerals Income Investment Fund announced a non-binding deal to tip US$32.9m ($51.4m) into Ewoyaa in September.
At Stockhead, we tell it like it is. While Titanium Sands is a Stockhead advertiser, it did not sponsor this article.