Resources Top 5: Investors dust off promising gold juniors, drilling uncovers high grade graphite monster
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Here are the biggest small cap resources winners in morning trade, Friday April 28.
VTX’s is looking for early cashflow at the historic, well-trod 484,652oz Hill End gold project in NSW, where 1.6Moz has already been mined.
The company has sampled three stockpiles around the mothballed Hill End plant, and all three contain substantial amounts of gold.
The Process Plant stockpile averages 1.26g/t across 24 samples with a max gold value of 5.50g/t; Tails Dam Road stockpile averages 2.10g/t across 15 samples with a max gold value of 12.20g/t; and Consolidated Pad averages 0.89g/t across 20 samples with a max gold value of 6.74g/t.
VTX says grade estimation of stockpiles can be difficult due to their random nature and can only truly be determined by processing a bulk sample.
It plans to run this bulk sample through the Hill End plant, where previous recoveries exceeded 95%, once it has been refurbed.
The plant will be ready for wet commissioning next month, the company says.
When these stockpiles were created in ~2009 the price of gold was around A$1156 per ounce, VTX says, which would mean a break-even grade of around 12g/t at Hill End.
Material below this break-even grade would have likely been directed to the mine stockpile by the production geologists at the time.
“Vertex considers the stockpile to contain material that is economically viable to process and plans to restart the existing processing plant and process enough of the stockpiled material (+100 tonnes) to determine the average grade of the stockpile,” it says.
“If the grade of this initial bulk sample is sufficient to provide an economic benefit, the company will continue to process the stockpile.”
The $5.6m capped minnow has rebounded strongly from recent lows to be up 60% over the past month. It had $1.8m in the bank at the end of December.
TSO has surged ~75% since releasing a scoping study on its El Zorro project — “one of the largest and most prospective gold projects in Chile” — earlier this month.
A scoping study is the first proper look at the economics of building a project.
TSO envisages a 93,000ozpa ‘starter pit’ at the 1.3Moz Ternera deposit across a 7.4-year life.
All in sustaining costs would come in at a reasonable US$1,068/oz and it would cost US$132m to build.
Across its initial life TSO would make US$12m in net cashflow, at a gold price of $US1750/oz.
At current prices net cash jumps to US$442m.
Phase 2 studies, targeted for Q4 this year, could involve underground mining at Ternera. An updated MRE for Ternera (and El Zorro) is also scheduled for Q4 2023.
The current resource of resource of 30.5Mt @ 1.12g/t Au for 1.1Moz (at 0.3g/t gold cut-off) comes from exploring just less than 5% of its tenure.
Regionally, TSO is punching holes into multiple ‘Ternera-like’ undrilled gold targets up to 7km long and 6km wide.
The $42m market cap stock is up 12% year-to-date. It had ~$7.2m in the bank at the end of December.
ITM returned “outstanding” drill results from the SugarLoaf graphite prospect in South Australia, including 27m @ 7.7% total graphitic carbon (TGC) from 8m and 13m @ 26.1% TGC from 73m.
Importantly, 15 out of 17 drill holes in this maiden program hit thick, high-grade mineralisation from surface to +100m depth over 2km strike.
This is a new discovery directly south of a ~2km graphite rich area drill tested by Archer Materials between 2008 and 2012.
That means ITM has a 4.3km stretch of thick, high grade graphite at SugarLoaf – “a significant indicator for the scale potential of the project”, managing director Mike Schwarz says.
The next job is metallurgical test work to produce a concentrate precursor to battery anode material. Drilling is also ongoing at the nearby Lacroma graphite prospect.
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Earlier this month PRS unveiled a potential rare earths monster at the recently acquired Jokikangas project in Finland, where old drill core returned intercepts over a strike length of 4km.
Highlights included 0.20m @ 24,448ppm TREO and 4,700ppm niobium from 74.2m (sampling was limited to very narrow intervals for academic purposes, PRS says).
The explorer has started sampling wider intervals of the Jokikangas drill core, which includes 36 diamond drill holes at Jokikangas and 68 diamond drill holes at Korsnas.
Korsnas surrounds a former lead mine, where previous operators reported total REE content in samples ranging from 0.7% to 2.2%, PRS says.
Things are now looking up for the $4m capped stock, which has struggled since listing as a gold explorer late 2020. It had $228,000 in the bank at the end of December and announced a $2.5m raise in March.
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The Tony Sage-backed minnow has acquired the Block 103 project in Canada, which it calls “the largest undeveloped magnetite iron ore project in the world”.
Block 103 covers 7,275ha in the Labrador Trough, one of the largest iron ore belts in the world accounting for 99% of Canada’s iron ore.
It has a historical non-JORC resource of 7.2 billion tonnes grading 29.2% iron, based on 4km of the 12km of strike.
Over US$35m has been spent on the project thus far, CLE says.
Magnetite projects are normally a lot costlier to build than hematite mines due to the need to process the lower grade ore into a concentrate.
But that concentrate is typically super-high grade, meaning it captures a significant premium over the 62% Fe benchmark and is suited to low emissions steelmaking.
“The green transition and global targets towards net-zero carbon emission have made magnetite ore more desirable as it will be pivotal in emissions reduction for the iron ore and steel industries,” Sage says.
“We see tremendous potential for Block 103 to become a crucial piece of the iron ore supply worldwide whilst promoting the reduction of carbon emissions in the steel industry.”
CLE will now focus on defining a maiden JORC 2012 compliant resource, completing metallurgical and pelletising test work, updating the existing economic feasibility studies, building a trial pilot plant, and completing environmental mitigation studies.
$18m capped CLE is up 33% year-to-date. It had ~$500,000 in the bank at the end of March.