Resources Top 5: Lithium juggernaut AVZ raises $75m, hits all time high
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Here are the biggest resources winners in early trade, Monday December 13.
On Friday, this advanced lithium project developer received firm commitments to raise $75m from institutions and sophisticated investors.
It means that 90% of funding to build the monster Manono lithium and tin project in the DRC is now secured, on paper.
The issue price of 50c per share represents a discount of 22% to the last closing price — but that follows a doubling of AVZ’s share price during the past two months, so the mark down is not as bad as it looks.
The company is now waiting on the all-important Mining License which managing director Nigel Ferguson says is “taking longer than we had previously anticipated”.
“We are in close consultation with the DRC Government authorities that are undertaking the Mining Licence assessment and are confident of delivering a favourable outcome for all stakeholders – most importantly the people of the DRC and our shareholders,” he says.
Manono is a standout project. According to the company, it is:
Over the past year or so AVZ has inked long-term, binding sales agreements with three major Chinese lithium converters for 80% of its 6% Li2O spodumene concentrate.
It has also brought on cornerstone investor CATH Energy Technologies, who will shell out $US240 million for a 24% direct interest, plus another ~$160m to get the ~$US540m project into development.
The $2.32bn company is up 25% over the past month, and 313% year-to-date.
(Up on no news)
The TSX and ASX-listed gold explorer is focussed on the high grade 740,000oz ‘Tuvatu’ project in Fiji.
LLO are infill drilling (closer spaced to upgrade resource confidence) the near-surface stuff, which has been earmarked for earliest production.
Recent highlights include 20.61 g/t gold over 7.50m, including 227.3 g/t over 30cm.
LLO are also drilling deeper, targeting lode extensions and additional ‘feeders’ under the Tuvatu resource.
There are currently 3 drill holes targeting the deeper ‘500 Zone’.
Results of these will be reported as they become available, LLO said earlier December.
With the wet season starting in Fiji, the regional drill program is scheduled to restart in early 2022.
“High grade mineralization continues to be defined both in the near-surface portion of the deposit, as well as in the expanding deep feeder Zone 500,” LLO’s Sergio Cattalani says.
“The additional data generated by the infill drilling and resampling programs will greatly enhance our understanding of the geometry of the veins, and raise the level of confidence needed, ahead of Lion One’s near-term underground development at Tuvatu.”
“Our objective remains to work toward a near-term modest production start, concomitant with an aggressive exploration program aimed at the continued expansion of deep bonanza-grade resources for the eventual scaled-up development of a larger and richer resource base.”
The ~$176m market cap stock is up 19% over the past month and down 10% year-to-date.
Like AVZ, this Germany based fertiliser play has raised money to accelerate project development — albeit on a much smaller scale.
Today’s $5.3 cash injection ensures SHP is well funded to complete the two-hole drilling program, upgrade the mineral resource, and finalise a scoping study at the flagship ‘Ohmgebirge’ development.
Two drillholes — expected to kick off in coming weeks — should allow the company to upgrade a substantial proportion of the current ‘Inferred’ mineral resource (325 Mt at 13.1% K2O) to the higher confidence ‘Indicated’ category.
This is expected to allow the release of a Scoping Study (the first proper look at the economics of building a project) by end Q1 2022.
“We believe that the specific geological and geographical attributes of this deposit, and the broader South Harz Project, deliver the strong potential for the finalisation and release of a truly transformational Scoping Study in late Q1 2022,” managing director Dr Chris Gilchrist says.
“This is set against a background of a global potash market facing increasing supply constraints and geopolitical challenges, evidenced in the rapid and substantial increases in potash prices which the market expects to continue into 2022.”
“We believe that South Harz provides premier exposure to a world-class potash development project, located in a Tier 1 operating jurisdiction, at the centre of a key global demand market.”
The $62m market cap company is down 12% over the past month and up 150% year-to-date.
It already had $7.6m in the bank at the end of September.
(Up on no news)
Is there big news on the horizon?
Despite some potentially sticky environmental issues, the North American lithium developer has hit several key milestones at its ‘Rhyolite Ridge’ project in 2021.
That includes signing binding offtakes and selling 50% of the project for $US460m to help fund development, currently estimated at $US785m.
Upcoming news flow includes US-focussed offtake, a US listing, the remainder of project financing, and all-important development permits.
“After completing our initial lithium off-take with EcoPro, one of the top cathode makers in the world, for 7,000 tonnes per year, our sales team has been overloaded with requests to discuss off-take arrangements for our remaining capacity,” exec chairman James Calaway said early November.
“We anticipate finalising our final lithium off-take contracts by the end of Q1, calendar year 2022.”
“[And] with the equity in place, we are now confident that prior to FID we will be able to secure favourable project debt.”
INR says it is on track to be construction ready by Q4 next year.
The $1.58bn market cap stock is up 8% over the past month and 177% year-to-date.
This gold-copper-lithium focused explorer is heading into 2022 at a canter.
In early December, CNB stumbled upon a significant lithium soil anomaly at the ‘Big Hill’ project, about ~70km from the world class ‘Pilgangoora’ (ASX:PLS) and ‘Wodgina’ (ASX:MIN) mines in WA’s Pilbara region.
Today the company announced visible copper in drilling at the ‘Greater Duchess’ copper-gold project in Mt Isa, Queensland where it could be tickling the edges of a Iron Oxide Copper Gold (IOCG) system.
A drilling rig started drilling the Greater Duchess Copper in the first week of December.
CNB says the rig is double shifting and to date 6 holes for 872m of drilling has been completed of a 4,000m planned program.
Results are pending from all holes completed.
At the ‘Nil Desperandum’ prospect, the first the first diamond hole in the current program hit an 80m downhole interval of intermittently disseminated, semi massive to breccia hosted copper mineralisation.
The high-grade breccia hosted stuff looks like this:
Drilling at ‘Lady Fanny’ has also “intersected strong copper sulphide mineralisation in several holes”.
A 10,000-drilling blitz at the ‘Strelley’ gold project in the Pilbara has also moved to double shift to complete the program before the end of the year.
The $35m market cap stock is flat over the past month and down 33% year-to-date. It had $5.2m in the bank at the end of the September quarter.