Sumitomo's show of support has Tivan running higher. Pic: Getty Images
Resources Top 5: Japan’s Sumitomo wades deeper into critical minerals mission
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- Tivan reveals terms for planned $60 million Sumitomo fluorite JV
- Bowen Coking Coal boasts of “record” quarter
- Christmas rally becomes New Year’s celebration for MTM Critical Metals and Green Critical Minerals
Your standout small cap resources stocks for Friday, December 27, 2024.
TIVAN (ASX:TVN)
Few stakeholders have emerged as a bigger backer of Australia’s ailing critical metals sector than the west in the east powers of Japan and Korea, whose maritime traders and carmakers have been falling over themselves to invest in a sector at its lowest ebb.
Uneasy neighbours of China with all the animus and cultural exchange that entails, the technologically advanced but resource-poor nations were among the earliest backers of our iron ore and coal sectors.
They’re now throwing their might at our nickel, vanadium, PGE and uh, fluorite, resources in the hope of securing a new source of supply that bypasses Beijing.
The latest is an MoU that will see Sumitomo invest up to $60 million in a special purpose vehicle to take an interest of up to 22.5% in ASX minnow Tivan’s Speewah flourite project.
The payments will include $5m for a 7.5% interest to fund a feasibility study, a further $5m for a subsequent definitive feasibility study for a 7.5% interest and $50m in equity for the project’s development if a positive FID is reached to take a final 7.5% stake.
The MoU is non-binding but exclusivity arrangements will be extended through to the end of March. Should it be consummated Sumitomo will in turn take 100% of the offtake for the life of the project as part of a future JV.
“To cap a year of material progress at Tivan, I am pleased to share the key terms of our proposed joint venture with Sumitomo Corporation,” Tivan exec chair Grant Wilson said.
“On behalf of the Board, I extend sincere thanks to our partners in Tokyo who have worked diligently with us all year to advance the Speewah Fluorite Project.
“We are looking forward to finalising our joint venture in Q1 and to commencing a long-term partnership based on enterprising spirit and a common vision of shared prosperity.”
Already in a strategic partnership with Sumitomo before the Xmas Eve announcement, Tivan earned major project status for Speewah in early December. It aims to be the first Aussie producer of acid grade fluorspar, a source of fluorine used in semiconductors and EV batteries.
TVN also received a $7.4m cash grant as part of the Australian Government’s International Partnerships in Critical Minerals Program, a government funding pool designed to facilitate relationships like the one between Tivan and Sumitomo, whose reps visited the Speewah site and Port of Wyndham in November.
A pre-feasibility study in July suggested the project would cost $236.3m to build, producing 1.48Mt of fluorspar over a 10.6 year mine life, around 139,700tpa.
That would generate $114m of earnings annually at C1 costs of $467/t shipped, with a post-tax NPV8 of $354.7m and post-tax IRR of 33.2%.
China currently produces over 60% of the world’s fluorspar, but has been increasing imports with its reserves dwindling and mine safety inspections ramping up. Most of its external supply comes from Mongolia.
MTM CRITICAL METALS (ASX:MTM)
(Up on no news)
MTM shares hit a fresh high of 24c on Friday, hitting a 160% year to date for the $92 million capped junior which has surged since it began promoting a minerals processing technology called flash joule heating.
Developed at Rice University in Houston, Texas, the technology is being assessed for its capacity to extract critical minerals from waste including lithium ion batteries, ewaste, coal fly ash and bauxite revenue.
But interest has really spiked since a MoU with New York-listed Indium Corporation in November, that would see it use the tech to process gallium, indium and germanium from scrap.
The big end of town piled in this week, with Pengana Capital Group cornerstoning a $7.5 million, nil-discount raising to instos with a $4m investment.
Jeremy Bond’s Terra Capital also upped its substantial stake in the equity deal.
READ: MTM raises $7.5m from leading institutions to commercialise gallium tech
BOWEN COKING COAL (ASX:BCB)
It’s been the year from hell for Bowen, the junior coal miner which briefly held a more than $500 million valuation as Russia’s invasion of Ukraine sent prices surging higher in 2022.
The Nick Jorss-backed producer of met coal in Queensland has suffered a drop of over 90% in its share price, seen off a proposed board spill and posted a $95m loss.
While coking coal prices have remained strong, the past couple of years have been tougher for PCI producers, who are competing in a market with a large amount of discounted Russian material. Bowen had been producing the product at its Bluff mine until moving it into care and maintenance in November last year.
Is it out the other side?
BCB announced a $70m entitlement offer closed in early November, backed by existing shareholder and extending underwriting agreements with lenders Taurus Mining Finance and New Hope Corp (ASX:NHC) to almost $50m.
That came ahead of amendments to the terms of its loan agreement that would defer payments among other things, while Jorss announced his decision to move from the exec chair role to non-executive director late last month.
Staffan Ever, chair of resources trader Square Group, came on board as an NED, with former Felix Resources COO Michael Chapman, an executive in coal billionaire Brian Flannery’s businesses, also stepping into a NED role.
On Friday, the company, which has focused on reducing its strip ratio to alter its cost base, announced a 31% QoQ lift in coal sales to 544,000t for December so far, a new record for the company.
The company says its Burton mine produced 544,000t ROM at the Burton complex to the end of November at a strip ratio of 5.9:1, above its targeted production rate of 250,000t a quarter.
“Capital expenditure, primarily consisting of capitalised box-cut development at Plumtree North, and cash costs for FY2025 Q2 are in line with the outlook (A$150/t excluding State royalties) for the quarter, as stated in the AGM presentation dated 28 November 2024,” the company added.
“The Burton Mine Complex continues at steady-state and we are proud to report another record being achieved, this time a quarterly coal sales record. Product stockpiles have been depleted to normalised levels and we have now overtaken any sales shortfall previously reported, with 0.96Mt being sold this financial year to date,” CEO Daryl Edwards said.
“This is guiding to the top end of our annual outlook range of 1.6-1.9Mt at the half-way mark of the 2025 financial year. Our focus remains maintaining steady-state production, further cost-improvement, strict capital allocation and striving for improved cash generation from our operations. We are now also looking at expansion opportunities at the Burton Complex.”
Its first ROM coal from the Plumtree North development came in November.
GREEN CRITICAL MINERALS (ASX:GCM) and ABx GROUP (ASX:ABX)
(Up on no news)
GCM is on a sprint heading for the 2024 finish line, up over 80% in the past week of trade.
It’s begun construction on a pilot plant in New South Wales to produce VHD graphite blocks for use as heat sinks in the high performance computing sector and solar-thermal energy storage systems.
The plant is expected to be in commissioning in Q3 next year.
The promise of the process is that it can produce block graphite in just 24-36 hours at around half the temperature (1500C v 2900C) of the primary synthetic graphite process.
Also up on no news today, $10 million market cap Abx has a number of strings to its bow.
The Tasmanian-focused explorer boasts an ionic adsorption clay-hosted rare earth project on the island state and recently received indicative terms for a $1m loan from the Tasmanian government for a pilot plant to test a process extracting fluorine from aluminium smelting waste.
It’s also got an interest in the booming bauxite market, one of the world’s top performing commodities this year, with projects in Queensland and Tassie.
At Stockhead, we tell it like it is. While Green Critical Minerals and MTM Critical Metals are Stockhead advertisers, they did not sponsor this article.
