Resources Top 5: Is an ASX price query in PSC’s future? And one red-hot lithium acquisition

PSC continues its two-day streak of gains
CY5 strikes a deal to earn up to 70% in the Pontax Lithium Project in Canada
Gold stocks DEX, PRX, and LRL up

Here are the biggest small cap resources winners in early trade, Friday July 29.

PROSPECT RESOURCES (ASX:PSC)

(Up on no news)

This battery minerals play continues its two-day streak of gains today on no news and prompting some curiosity as to why they haven’t been called out by the ASX yet.

While equity markets have endured a period of volatility, PSC says it has provided opportunity for the company given its strong and extensive development expertise.

PSC after recently sold its 72.7Mt Arcadia Lithium Project on the outskirts of Harare, Zimbabwe to a subsidiary of lithium-ion battery material producer, Zhejiang Huayou Cobalt Co for around US$377.8m.

PSC says this is an attractive outcome for Prospect shareholders, with consideration equating to roughly A$1.23 per Prospect ordinary share.

Prospect managing director Sam Hosack says the board is seeking to grow value in Prospect 2.0 through the process of identifying, assessing, investing, and then advancing battery and electrification metals opportunities.

CYGNUS GOLD (ASX:CY5)

Perth-based ASX tiddler CY5 has just dealt itself into one of the hottest commodities in one of the world’s hottest regions.

Backed by Steve Parsons, Bellevue Gold (ASX:BGL) managing director, CY5 has struck a binding agreement under which it can earn up to 70% of the Pontax Lithium Project in Quebec, Canada.

As well as also taking a significant shareholding in current Pontax owner and TSXV-listed Stria Lithium, Cygnus has received commitments for $4.2m in a share placement to fast-track exploration.

Pontax is a drill-ready project located within a world-class lithium province, which hosts major projects such as James Bay (40Mt at 1.4% Li2O), Whabouchi (56Mt at 1.4% Li2O) and Rose (34Mt at 0.85% Li2O).

Spodumene has already been identified over a 620m strike length with hits such as 2.6% Li2O, making it ‘an exceptional opportunity’ for the company.

“The growth potential is immense, with the mineralisation open along strike in both directions and numerous walk-up drilling targets,” non-executive director Mike Naylor says.

“The metallurgical test work has generated 6% spodumene concentrate, meaning it meets the key criteria set by global customers.”

Shares at the time of writing are up 46.88% on the news.

DUKE EXPLORATION (ASX:DEX)

Duke’s flagship project is the Bundarra Copper Project, a previously mined area dating back to the 1870s where hand mining of visible high-grade copper spanned 40 years.

In its latest June quarterly report released today, the company says it continued the Scout reverse circulation (RC) program within Bundarra and received an integrated study on the geophysical signature of the project which was the basis for a reinterpreted geological framework for copper mineralisation in the Bundarra Intrusive Complex (BIC).

The work program in Q3 will focus on completing the test drilling of several structural and magnetic anomalies generated by the study.

Assuming positive outcomes from this process and suitable prevailing market conditions, the RC rig will be following on with mineral resource delineation drilling of the top targets.

PRODIGY GOLD (ASX:PRX)

(Up on no news)

Junior goldie PRX is also shining bright this morning.

Prodigy’s initial six-month $2.5m unsecured loan facility agreement with Mount Sun Investments was extended yesterday for a further three months to December 23, 2022.

The funds will continue to be used to finance operations and cover working capital until the completion of an equity raising.

Throughout the June quarter, RC and diamond drilling continued across the Lake Mackay Project (northwest of Alice and adjacent to the WA border) while the Buccaneer scoping study progressed and work was carried out to advance the Old Pirate sales agreement with Stockton Mining.

“Drilling at the Lake Mackay Project has been an exciting activity which allowed Prodigy Gold to earn back a 70% interest in the gold tenements while maintain a 30% interest in the base metal tenements,” managing director Mark Edwards says.

“Sole-funding requirements for the gold tenements have been achieved and we are now part way through completing the sole-funding requirement, involving diamond drilling at Phreaker, for the base metal tenements.”

LABYRINTH RESOURCES (ASX:LRL)

(Up on no news)

Labyrinth’s maiden surface drilling program at its namesake project in Canada intersected high-grade mineralisation of up to 44g/t gold earlier this week.

Hole LABS-22-01A intersected two zones of 2.2m at 10.67g/t gold from 143.5m including 0.5m at 44.12g/t gold and 1m at 7.43g/t gold from 147.8m within a broader 8.1m interval at 4.05g/t gold from 143.5m about 125m down-dip of the currently defined Front-West lode.

Adding further interest for LRL, visual quartz and pyritic mineralisation observed in both LABS-22-01A and LABS-22-02 indicates that the mineralisation extends down dip for at least 375m and to a depth of about 550m below surface.

“To hit 44g/t in the first hole is an outstanding start to our surface drilling program. And we are highly encouraged by what we see in the second and third holes,” chief executive officer Matt Nixon said.

“We now eagerly await results for the rest of the surface campaign, which will test vertical lode extensions down to approximately 700m and across the majority of the 1.6km strike.”