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Resources Top 5: Island eyes smile on Flynn’s golden Tassie payday; and why there’s such love for this lithium IPO
Mining
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- Flynn hits a highlight 5.4m @ 10.63g/t gold with maiden drillhole
- Fresh lithium IPO Oceania continues to rocket higher
- Small copper explorer CBE has slashed board compensation
Here are the biggest small cap resources winners in early trade, Tuesday July 5.
FLYNN GOLD (ASX:FG1)
FG1 hit the boards last year with a focus on underexplored northeast Tassie, where the company believes there are ‘Fosterville-style’ gold deposits to be found.
FG1 has now hit paydirt with the very first drillhole into the Trafalgar prospect, part of the Golden Ridge project in northeast Tasmania.
The highlight intercept was 5.4m @ 10.63g/t gold from 160.1m, including 0.4m @ 52.20g/t.
Geological logging of the core has identified a second, deeper parallel zone of potential mineralisation from 264 to 297m.
This zone — for which assays are not yet available — is consistent with the position of historically drilled mineralisation which included 5m @ 12.56g/t, the company says.
All up, the planned Trafalgar drill program comprises 3 to 4 holes (for up to 1,400m), designed to test a 250m-long mineralised strike zone.
Drilling program extensions are already being planned.
“This is a very exciting start to the drilling campaign at Trafalgar,” exec director Sam Garrett says.
“We eagerly anticipate the assay results for the remainder of the hole.
“Trafalgar is the only location to date where drilling has tested the intrusive-hornfels contact and the team on site are already making plans to expand the current drill program and exploring options to add additional rigs.
“Drilling is also planned to test new targets at Blinding, Link Zone and Kensington.”
The $11m market cap stock is up 20% year-to-date. It has about $6.5m in the bank.
OCEANA LITHIUM (ASX:OCN)
(Up on no news)
The freshest of lithium IPOs continues to run after locking in a ~70% gain on debut last week.
The company raised $6m via its IPO with $1m from cornerstone investor Sichuan Yahua Industrial Group, the world’s #3 lithium hydroxide producer and major supplier to EV manufacturers Tesla, BYD Auto and Sinopec.
OCN’s focus is the Solonopole and Napperby lithium pegmatite projects in Brazil and Australia, respectively.
At Solonopole, pegmatite mineralisation has been identified along an ~17km corridor.
High grade outcropping rock samples have returned assay values of over 9% Li2O, which is very high. Ore grade is usually around 1%.
OCN says it will rank targets for immediate drill testing upon completion of an initial sampling program and detailed review of the existing dataset.
COBRE (ASX:CBE)
Small copper explorer CBE has slashed board compensation to ensure “as much capital as possible flows into the exploration programme in Botswana”.
All up, these changes will result in an annualised saving of around $300,000 plus entitlements.
Investors liked that, sending the stock up 20% in early trade.
“The Board of Directors is committed to ensuring that the company has sufficient capital available to accelerate our new exploration program and maximise shareholder value,” says exec chairman and managing director Martin Holland, who had his salary reduced to $240,000 plus superannuation.
CBE holds 51% (soon to be 100%) in Kalahari Metals (KML), a private UK company which controls ~8,100km2 of tenements within the Kalahari Copper Belt (KCB) in Botswana.
This represents the second largest tenure holding in the Botswana portion of the KCB Belt after mid-tier miner Sandfire Resources (ASX:SFR).
The KCB is regarded as one of the most prospective areas globally for copper exploration by the US Geological Survey (USGS), with several copper-silver deposits currently under development by both Sandfire and Cupric Canyon Capital.
While the CBE board has been pared back, the on-the-ground KML team has been bolstered by several experienced geologists.
They include David Caterall, a geologist with a long history of exploration in the KCB where he has been involved in the discovery of several of the known economic deposits.
Joining him is Thomas Rogers, who was a co-recipient of the 2015 PDAC Thayer Lindsley Award for his role in the discovery of the Kamoa Copper Deposit (DRC), as was Dr Ross McGowan, who was recently appointed to the CBE as a non-executive director.
The $4.7m market cap stock is down 70% year-to-date. It had $3m in the bank at the end of March.
KULA GOLD (ASX:KGD)
Yesterday, this gold-kaolin-lithium explorer announced it had picked up rock samples containing up to 7.95g/t gold at the Donnybrook prospect, part of the Brunswick project in Southwest WA.
This sampling has now defined a ~250m wide, 650m gold zone which is open in both directions.
Sampling also revealed a ~300m x 200m area of copper anomalism.
This ongoing early-stage work will help KGD define and rank drill targets.
The $7m market cap stock is down 44% year-to-date. It had $1.1m in the bank at the end of March.
PEARL GULL IRON (ASX:PLG)
(Up on no news)
There is a maiden resource due out this quarter on the flagship Cockatoo Island ‘Switch Pit’, where the company has been drilling into thick, high grade iron ore like ~57m grading 68.9% fe from ~80m.
That’s high. The benchmark grade often quoted is 62% fe – anything higher than this can attract a substantial price premium from buyers.
Aside from rare exceptions like Mount Gibson Iron’s (ASX:MGX) Koolan Island mine – right next door to Cockatoo — Australia doesn’t have many high grade hematite resources like those in Brazil or Africa.
The $2.5m market cap minnow is still down +40% year-to-date. It had $1.1m in the bank at the end of March.
