Resources Top 5: Lithium stocks run, large investors shovel cash into copper-gold exploration
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Here are the biggest small cap resources winners in early trade, Tuesday December 20.
A late year resurgence continues for Gavin Wendt favourite PXX.
The North America-focused gold-copper explorer is now up 55% over the past few days thanks to an investment from major gold miner Northern Star Resources (ASX:NST).
NST is now a 10% shareholder after shelling out ~$1m as part of a recent placement — the equivalent of finding a few bucks underneath the couch cushions for NST, but a big deal for PXX and its shareholders.
“Northern Star is an ASX-listed gold company with a current market capitalisation of ~A$12Bn,” the company said yesterday.
“A top 10 global gold producer, Northern Star own and operates mines in Western Australia and Alaska.
“PolarX welcomes Northern Star’s entry into the share register as a fellow Australian company operating in North America and looks forward to a mutually rewarding relationship.”
PolarX is looking for giant deposits. It has now raised ~$3.63 million since 30 November as drilling continues at Star Canyon, part of the Humboldt Range gold-silver project in Nevada.
A May 2022 drill program at Star Canyon returned a highlight 9.1m at 124.4g/t Au and 48.6g/t Ag.
PXX also owns most of the Alaska Range project in south-central Alaska.
That includes the Zackly skarn deposit, comprising 4Mt at 1.1% copper and 1.6g/t gold from surface, along with the Caribou Dome sedimentary copper deposit, which hosts a JORC2-12 compliant resource of 2.8Mt at 3.1% copper.
5,000m of lithium drilling will kick off mid-January across FRS’ namesake Forrestania project in WA.
There are four juicy targets in the crosshairs including Giant Pegmatite, where a 2016 drillhole pulled up 34m @ 3.1% Li2O from 68m.
The true thickness of the pegmatite was later established to be between 5–10m. FRS plans to test the body of the pegmatite to see how ‘giant’ it actually is.
The other three targets are Gemcutter, where FRS is targeting extensions to historic pegmatite and lithium intercepts beneath the Gem mine; Bounty East, only 6km from the world class Mt Holland lithium mine; and South Iron Cap East, which is less than 1km from a 50.6m @ 0.95% Li2O intercept at IGO’s (ASX:IGO) South Iron Cap target.
“Today’s announcement is significant marking the receipt of final approvals to drill the highly prospective Giant Pegmatite where a historic drillhole intercepted 34m @ 3.1% Li2O,” FRS boss John Hannaford says.
“We are also planning to drill test other high-quality prospects including South Iron Cap East, which is a significant, undrilled target given its proximity to IGO’s South Iron Cap lithium discovery.
“Along with other planned drill targets the Company will have a very active drilling program to start 2023.”
LPD yesterday reminded punters that it has improved the economics of its Phase 1 lithium project, based on an integrated mine, concentrator and 5,600tpa hydroxide plant.
LPD wants to build the lithium mine and concentrator in Namibia, and the chemical conversion plant in Abu Dhabi.
The original release from November 22 was updated to include “additional JORC-related disclosures in Annexure 1” which … who knows, might be important new info.
Mostly though, it was an opportunity to run through the improvements LPD had made on its original 2020 DFS.
The base case NPV8% of US$530m and IRR of 42% at a long-term lithium hydroxide price of US$22,840/t is a big improvement on DFS data of US$221m and 31% respectively.
Some fairly conservative lithium price sensitivity analysis sees the NPV8% range from a downside scenario based on a US$16,800/t lithium hydroxide price of US$452m ($675m) to an upside figure of US$703m ($1,050m) based on a lithium hydroxide price of US$32,350/t.
The capital cost estimate including contingency for the chemical plant is US$203m and for the concentrator US$63m for a combined US$266m.
The next step for LPD is to lock in financing.
“Completion of the control estimates and schedules represents a major milestone in the advancement of the Phase 1 Project, allowing critical path lender technical due diligence to complete,” managing director Joe Walsh says.
“It is also gratifying to see that the significant capital cost inflation – a result of a global phenomenon – has been more than offset by higher lithium price forecasts, which are predicated on market fundamentals that continue to improve as energy transition momentum grows.
“Phase 1 is demonstrated to be robust technically, economically and from a sustainability perspective.
“The immediate focus is now on banking the Project to transition the business into development and on into production.”
CBE rocketed an unbelievable ~2,000% in two months, from 3c to a high of 61c, thanks to exploration success at the Ngami copper project in Botswana.
It quickly gave back a huge chunk of those gains after drilling assays in September failed to live up to the early hype.
And yet CBE still believes it has a tiger by the tail at Ngami. Yesterday, it announced a placement – supported by big name investors Sprott and Metal Tiger – at 15c per share.
In addition to the placement, the company’s drilling and exploration service providers have subscribed for US$400,000 and US$70,000 respectively at the placement price, as part of a scrip for service deal.
CBE also intends to launch a Share Purchase Plan (SPP) to eligible shareholders in Australia and New Zealand to raise up to an additional $1 million.
“With Cobre’s current $4m in cash at bank, combined with the funds raised through this Placement, Cobre will have a total of ~$10m that will be used to fund a substantial drill program, including two diamond drill rigs and one RC/AC drill rig onsite that will be drilling throughout 2023,” exec chair Martin Holland says.
“The Placement was well supported by our existing and new shareholders, who we thank for supporting the Board in delivering on our strategy to fast-track exploration and realise the potential of Cobre’s Botswana tenements.”
(Up on no news)
This WA focused explorer has a bunch of REE in the portfolio, including the recently acquired 1,300km2 Hyden project in the State’s south.
M24 says a zone of very high-grade rare earths up to 46,000ppm has already been identified in clays from early sampling.
Clay deposits usually grade between 800-2,000ppm, so this is unusual.
M24 believes the source of the TREO in the clay could be a nearby hard rock system (either REE pegmatite or a carbonatite).
“Given most clay hosted REO mineralisation tends to be between 800 and 2,000ppm TREO, to have identified a zone of 46,700ppm, or 4.67 per cent TREO in clays from the very limited sampling represents a very compelling target,” M24 managing director Mike Dunbar said.
“The preliminary technical due diligence completed so far has also identified a significant gravity anomaly just to the east of the area of limited REE sampling, which suggests there is significant potential in the area, not just for clay hosted REE deposits but hard rock REE potential as well.”
M24 has committed to drill at least 10 holes and expend at least $25,000 on exploration at Hyden prior to the end of January 2023.