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Resources Top 5: More lithium projects snapped up as ‘price rally reboot’ approaches
Mining
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- Askari Metals pegs the ‘Red Peak’ and ‘Mt Deverell’ lithium projects in WA
- MinRex Resources also expanding its lithium portfolio, picking up at least 4 projects in the Pilbara
- Mark Creasy backed Galileo Mining could be scratching the surface of a massive sulphide discovery
Here are the biggest small cap resources winners in early trade, Wednesday November 17.
ASKARI METALS (ASX:AS2)
Another gold stock dips a toe into lithium. And why wouldn’t they?
With prices for hydroxide and carbonate already up 265% and 345% year-to-date, insiders have reported to Benchmark Mineral Intelligence that some non-integrated spodumene converters (those without access to a mine) are beginning to run out of feedstock.
This could force some to switch to a tolling business model, “indicating potential for price rally reboot if fears over availability reignite”, Benchmark says.
There is a distinct supply crunch developing which sets this current lithium market apart from previous lithium price spikes, AS2 exec director Gino D’Anna says.
“This current pricing environment is becoming the new normal,” he says.
“Western Australia has always been the leading jurisdiction for hard rock lithium exploration, development and production and Askari Metals is now well placed to leverage its skills and experience in this exciting space.”
AS2 has pegged the ‘Red Peak’ and ‘Mt Deverell’ lithium projects in WA following a “search for under-explored lithium pegmatite projects located in proven geological settings”.
At least 11 significant pegmatites have been mapped at Red Peak, several more than 3km long and between 150m and 200m wide. The project is also prospective for uranium, another booming commodity.
Besides lithium, Mt Deverell also has lead-zinc potential, similar to the nearby ‘Abra’ deposit owned by mine developer Galena Mining (ASX:G1A).
The recently listed $7m market cap stock is up 20% on its IPO price of 20c per share. It had about $4.7m in the bank at the end of September.
MINREX RESOURCES (ASX:MRR)
MRR is also expanding its lithium portfolio, picking up four projects in the Pilbara region of WA.
This is all part of an strategy to become “an emergent lithium explorer with high-quality assets” within 70km of world-class lithium and tantalum producers Pilbara Minerals (ASX:PLS) and Mineral Resources (ASX:MRL), it says.
A further 97sqkm in exploration licence applications are currently subject to a ballot across four projects, including three tenements surrounding and adjoining Global Lithium’s (ASX:GLI) 10.1 million tonnes at 1.1% Li ‘Archer’ project near Marble Bar.
“These projects have been carefully chosen by MinRex as part of its Pilbara tenement acquisition plan,” CEO Pedro Kastellorizos says.
“At this stage we are extremely confident that we have the projects and team ready for exploration in the heart of the eastern Pilbara lithium hotspot.”
Field mapping and surface soil/rock chip sampling will kick off to evaluate the lithium potential of the numerous pegmatites in all areas, MRR says.
The $16m market cap stock is up 25% over the past month. It had ~$2m in the bank at the end of September.
GALILEO MINING (ASX:GAL)
The Mark Creasy and IGO (ASX:IGO) backed explorer (24.6% Creasy, 8.9% IGO) could be scratching the surface of a massive sulphide discovery at the ‘Norseman’ project, located within WA’s rich Kambalda nickel belt.
Early stage aircore drilling was unable to substantially break through the massive sulphide, but these are the sort of samples GAL is pulling up:
Hitting massive sulphide in an aircore drill program is an exceptional result, GAL managing director Brad Underwood says.
“Although the portable XRF measurements show minor amounts of nickel and copper, the overall context of the mineralisation is incredibly prospective,” he says.
“The sulphide occurs on the margin of a large ultramafic intrusion in the exact setting where mineral deposits can occur.
“Further to that, the sulphide is just 52m below surface (60m downhole) and with the prospective unit under a clay/alluvium cover which means the target is blind at surface.”
Samples have been submitted to the lab for analysis which will include palladium, platinum, and gold assays.
Meanwhile, the aircore drill program continues and is expected to be completed over the coming weeks. Follow-up work on the massive sulphide prospect will include EM surveying to define the orientation of the target prior to RC drill testing, planned for 2022.
$38m market cap GAL is down 6% over the past month. It had ~$10.4m in the bank at the end of September.
CRADLE RESOURCES (ASX:CXX)
(Up on no news)
Cradle is a shell company “focused on assessing and acquiring new business opportunities and assets” since offloading its share in a Tanzanian niobium project mid-year.
There’s a tight deadline in place to find something new if it wants to keep trading on the ASX.
“ASX will allow the company a period of 6 months from 28 June 2021 to demonstrate its operations are sufficient to warrant its continued listing otherwise ASX will suspend trading in the Company’s securities on 28 December 2021,” CXX said in its latest quarterly.
The $9m market cap stock had ~$670,000 in the bank at the end of September.
Stockhead has approached the company for comment.
HAWTHORN RESOURCES (ASX:HAW)
(Up on no news)
This $40m market cap stock is now up three days straight – for a cumulative gain of ~120% — after a subsidiary of Gina Rinehart’s Hancock Prospecting inked a $9m deal to earn into the mammoth ‘Mt Bevan’ magnetite iron ore project in WA (LCY 60%, HAW 40%).
While magnetite iron ore resources are lower grade than hematite in the ground, they can be concentrated into a higher-grade product. Premiums for higher-grade iron ore are increasing, partly because they generate steel with more efficiency.
The JV has also just drilled 10 holes with the objective of exploring for DSO (direct shipping ore) hematite iron ore in the southern part of the tenement. Assays are pending, HAW says.
The company is also about to process a 50,000t parcel of low-grade gold ore from the ‘Trouser Legs’ mine, which should provide some much-needed cashflow. HAW had $11.4m in the bank at the end of September.
