Resources Top 5: Investors want in on the ground floor of this potential copper discovery story
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Here are the biggest small cap resources winners on Friday October 14.
Investors love getting in on the ground floor of a discovery story, because they can make a lot of money and tell everyone ‘hey, I was into this company before they were cool’.
But it’s tough to get the timing right. That’s why investors often jump into a stock on the hint of a major find, like they have with small explorer REC.
REC re-rated heavily in March after hitting 300m of copper mineralisation in drilling at its flagship Brandy Hill South project in WA.
But assays failed to live up to initial hype, and the share price has since retreated from those heady highs.
However, the company put the less than stellar results behind it and proceeded with a new program which includes five diamond holes to be completed on a few EM targets, and RC drillholes designed to test anomalous copper results from historical aircore drilling programs.
Companies like REC use electromagnetic (EM) surveys to map the electrical conductivity below the Earth’s surface.
This provides a detailed 3D picture – like a CT scan – that is used to map potential mineral resources.
Today, it announced that the first two diamond drillholes hit zones of massive sulphides, blebby sulphides and disseminated sulphide mineralisation where a conductor was expected to be.
The successful interception of the modelled DHTEM conductor (BHD026-3) included extensive zones of massive, semi-massive to disseminated pyrite, chalcopyrite and pyrrhotite, REC managing director Brett Wallace says.
“Significantly, both holes were collared in untested ground west of the Salt Creek Shear – a great result for Recharge,” he says.
“We now look forward to completing three further diamond holes testing the remaining DHTEM conductor and receiving the assay results from the eight pre-collar holes.”
The $9m market cap explorer is up 10% year-to-date.
(Up on no news)
On October 11, E25 announced that a feasibility study into the production of high purity battery grade manganese sulphate monohydrate (HPMSM) for battery markets is on schedule for December 2022 delivery.
The manganese miner, which looks to have overcome early problems at the Butcherbird manganese mine in the Pilbara, is shifting its focus to the emerging battery market.
While manganese is mostly used in steel applications, EV batteries are trending toward higher manganese content to make them safer and more cost-effective, the company says.
Using its own tech, E25 wants to build a bunch of HPMSM plants in major locations around the world, such as Malaysia and the US.
The company has also been engaged in “constructive discussions” with several potential offtake partners in relation to the supply of HPMSM, it says.
“Counterparties to these discussions, aimed at securing binding supply agreements with high quality project partners, have included electric vehicle OEMs as well as established cathode and precursor material manufacturers.
“The discussions have also been focussed on combining offtake, pricing, and finance outcomes to bring certainty to project delivery and, in turn, provide supply and pricing certainty to customers.
“These discussions are progressing well and in line with stated project timelines, the company anticipates being in a position to announce binding agreement(s) in the near future.”
The $157m market cap stock is up 40% over the past week, and down 13% year-to-date.
(Up on no news)
Another good morning for BUS, which listed yesterday with a bunch of early-stage manganese and rare earths projects in the NT and WA.
They include Amadeus (prospective for manganese), Coomarie (prospective for heavy rare earths), Nolans East (prospective for light rare earths) and Pargee (prospective for heavy rare earths).
BUS raised $5m at 20c per share in an IPO.
At Amadeus, there is outcropping manganese grading up to 45% Mn all over the joint, but previous explorers were unable to find the source.
BUS says there are over 15 historical prospects that have had little or no exploration.
The region also over 70% sand cover which has resulted in most historical soil geochemistry being ineffective, it says.
Nolan’s East is an early stage project just 15km from Arafura Resources (ASX:ARU) advanced Nolan’s Bore rare earths development.
Both Coomarie and Pargee — ~90km from Northern Minerals’ (ASX:NTU) advanced Browns Range REE project — are also considered greenfields.
A single diamond drill hole is underway at the Kulin Hill nickel project in WA after an early stage aircore program returned promising results up to 0.86% nickel and 575ppm cobalt.
Three of the four aircore holes drilled at Kulin Hill showed strongly elevated responses in elements such as Ni, Cr, Mg, Fe, S and Co throughout their entire length, “indicating that the sequence is quite thick and warrants deeper testing of the fresh ultramafic sequence”.
Which is what’s happening now with this 500m deep diamond hole.
“This will be the deepest hole ever drilled at the Kulin Hill prospect and will provide the best look to date of the layered ultramafic sequence,” SLZ says.
“Previous drilling has included the aforementioned aircore holes and a series of 4 diamond holes drilled ~2km to the southeast in the 1960s.
“The deepest of these holes reached ~265m.”
The $8m market cap stock is down 35% year-to-date.
A few days ago, MGU entered a binding deal to buy Appalachian Iron in an all-share deal.
The acquisition includes a formal licence agreement to use a process called HIsmelt, which was shown to produce the highest return for the conversion of magnetite to pig iron.
MGU wants to use this acquisition to integrate HIsmelt into its 232Mt Buena Vista magnetite project in Nevada.
“The decision to replace the rotary kiln with the HIsmelt Process was recommended by an independent engineer, MinRizon Projects, after the completion of a technology assessment report undertaken by MinRizon that compared the effectiveness of the rotary kiln, blast furnace and HIsmelt pig iron production technologies,” the company says.
“This proposed development is intended to utilise the premium quality and low-cost Buena Vista Magnetite Project resource and the abundant local biomass to produce carbon neutral green pig iron products.”
The deal also comes with Appalachian Iron’s proposed West Virginia pig iron project, which is still at concept stage.
“The West Virginia Project is ideally suited to serve the US steel plants located in the eastern half of the US, whereas the Buena Vista Magnetite Project is equally well suited to serve the western half of the US and Asia,” MGU CEO Neil Goodman says.
The $20m market cap stock is down 55% year to date.