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Resources Top 5: Latin Resources soars 50pc on Pilbara Minerals lithium deal, copper and gold finds shine
Mining
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- Brazilian lithium explorer Latin Resources announces buy out by Pilbara Minerals at 32% premium
- Lightning Minerals jumps on Latin nearology
- Lachlan Star and Artemis rise on copper and gold finds
Here are the biggest small cap resources winners in morning trade, Thursday, August 15. Prices accurate at time of writing.
Latin Resources (ASX:LRS)
In the biggest news of the week so far, WA hard rock lithium miner Pilbara Minerals (ASX:PLS) has stunned the market with the purchase of LRS and its 77Mt Salinas hard rock lithium project in Brazil for $560m in PLS shares.
LRS owns the advanced Salinas lithium project and the buyout by PLS is at a 32% premium to its 30-day VWAP, or volume weighted average price.
The Salinas deposit adds 20% to PLS’ resource base and a further ~30% of production if Salinas fully ramps up to a 499,000tpa at 5.2% Li2O capacity over an initial mine life of 11 years.
LRS shareholders will receive 0.07 new PLS shares for each LRS share held and will own ~6.4% of PLS upon implementation of the scheme, expected to complete in November if approved.
“This acquisition is on-strategy, diversifying the business with what we believe is a counter-cyclical, accretive extension that further builds out our position as one of the leading lithium materials suppliers globally,” PLS MD Dale Henderson says.
“It provides us with optionality to sequence new supply and diversify into new growth markets for lithium such as Europe and North America.”
It goes without saying that low lithium prices have hurt developers in recent times, but majors have remained on the sidelines this year apparently unwilling to snap up explorers sitting well below their 2023 highs. That’s changed today, with PLS’ heft greatly improving the prospects of funding Salinas, the next large scale development prospect in Brazil after Canadian-listed Sigma Lithium’s Grota Do Cirilo.
The sheer size and success of $8bn capped PLS should de-risk development funding, with the premium on offer giving an indication the market giant doesn’t see spodumene prices staying where they are long-term.
LRS’ board is unanimously recommending the buyout, as is largest shareholder José Luis Manzano (7.9%), who has confirmed his intention to vote his LRS shares in favour of the scheme.
At one stage, LRS reached 42c a share back in 2023 at a high point in lithium exploration sentiment in August last year, though spodumene prices have since come down in the order of 75%.
Current LRS shares soared on the takeover news, rising 50% in early trade to 18c.
Lightning Minerals (ASX:L1M)
(Up on Latin Resources’ news)
Speaking of Brazilian lithium, nearology is in this session.
L1M has expanded its lithium tenure in Brazil by snapping up the Esperança project which is just 5km away from its recently acquired Caraíbas and Sidrônio lithium projects in Minas Gerais, Brazil.
The company’s stock rise today may have something to do with Pilbara Minerals’ buyout of LRS, since L1M’s tenements are along trend from its lithium deposits, including the more than 70Mt Colina.
The option agreement to purchase allows for identification of drill targets prior to the potential full acquisition. Current exploration work will carry over to the new Esperança project, which includes ground recon, rock chip and soil sampling.
Shares in L1M were up a substantial 41.5% to 7.5c per share at time of writing.
Artemis Resources (ASX:ARV)
ARV has intersected a 10,000g/t gold vein at the Titan prospect at its Karratha gold project. Not an orebody does it make in itself, but it certainly hints at a potentially encouraging gold find.
New gold mineralisation has been discovered across the tenements, covering a 700m strike zone that remains open just 2km from the 374,000oz gold (plus some base metals) Carlow deposit.
The gold found in rock chips, 300kg of which were extracted, was consistent enough to produce 10.4oz worth of gold – almost $40,000 at current near record prices.
That doesn’t translate directly into a bedrock gold deposit, but it will have the punters excited something of scale is lurking in the quartz veins beneath, around 15km from the mining hub of Karratha.
“The re-focus of exploration efforts and strategy on a tenement wide scale is continuing to deliver evidence of multiple new zones for gold mineralisation, which we believe could contain the potential for large scale deposits,” ARV exec director George Ventouras says.
“The next steps will allow us to refine these zones, delineate bona-fide prospects and work towards more targeted exploration efforts.”
Shares in the Pilbara gold explorer are up ~40% to 1.3c per share on the back of today’s news.
Lachlan Star (ASX:LSA)
A wide copper sulphide system has turned up at LSA’s Basin Creek prospect at Junee in NSW after going to the archives and relogging a 50 year old drill core.
The core showed a thick 21.3m of 4.51% copper mineralisation from 41.1m down hole including a 4.6m slice that contained 18.54% copper.
Surface geochem indicates that the copper system is extensive and has >1km of anomalous copper-in-soil grades, yet is untested along strike.
LSA says it’s going to drill test along the sulphide system down-plunge from the historical intercepts and use downhole electromagnetics to confirm the scale and geometry of the high-grade copper under the ground.
Shares in LSA shot up on news of the copper sulphide system find, up 22.9% to 8.6c.
Nex Metals Exploration (ASX:NME)
NME has appointed Maki Petkovski as its new CEO, bringing his extensive experience in resource exploration and management to lead the company’s Kookynie gold tailings project and other ventures.
The explorer yesterday also announced it had re-commenced drilling at its Yundamindra gold project across the Pennyweight Point prospect, which remains open at depth.
Grades of up to a whopping 56.36g/t have been found in historical results and the 40-hole, 3000m RC drill campaign is looking to extend mineralisation across the 20kms of potential strike identified.
It all seems like music to investors’ ears, having resolved disputes with its JV partner and is poised to advance projects and explore potential acquisitions.
Shares in NME have shot up for a second day straight, rising 34% today to trade at 3.5c.
At Stockhead we tell it like it is. While Latin Resources and Artemis Resources were Stockhead advertisers at the time of writing, they did not sponsor this article.
