• Australian Rare Earths inks a nonbinding offtake, technical collab deal with global rare earths processor
  • Strike Resources gains after spinoff Lithium Energy (ASX:LEL) goes into trading halt pending drilling results
  • Bellavista, Monger Gold, Aguia up on no news

Here are the biggest small cap resources winners in early trade, Monday October 17.

STRIKE RESOURCES (ASX:SRK)

(Up on no news)

SKR’s spinoff, $70m market cap Lithium Energy (ASX:LEL), is in a trading halt pending drilling results from Solaroz lithium brine project in Argentina.

SRK currently holds +36% of LEL shares.

SRK has otherwise endured a bumpy ride since opening the new 9.6Mt high grade Paulsens East mine in the Pilbara earlier this year.

It announced its maiden shipment in August but is now reviewing the project considering the slowdown in 62% Fe iron ore prices, which have fallen from ~US$160/t in March to ~US$95/t today.

“Strike continues to advance the development of an export solution through the Port of Ashburton, which has the potential to significantly improve the economics at Paulsens East and thus will play an important part in any decision to restart operations at Paulsens East,” the company said late September.

The $30m market cap stock is down 4% year-to-date.

 

AUSTRALIAN RARE EARTHS (ASX:AR3)

The South Australian explorer has inked a nonbinding offtake and technical collab deal with global rare earths processor Neo Performance Materials.

TSX-listed Neo, a big producer of neodymium iron boron (NdFeB) rare earth permanent magnets (REPM) and other rare earth products, has been a shareholder in AR3 since its listing in 2021.

Neo has several rare earth production facilities around the world, including separation plants in Estonia and China that source rare earths concentrate from third-party producers.

AR3 says Neo has identified its flagship Koppamurra project as a potential key future source of neodymium, praseodymium, terbium and dysprosium, which are all vital to REPMs.

The deal signed today could see the companies ink a joint development agreement to fast-track Koppamurra to production.

The subsequent offtake deal could see Neo purchase up to 50% of Koppamurra’s production from the first two modules.

They will also look for new projects together in Australia and New Zealand.

“AR3 is delighted to partner with Neo, a world-leader in the rare earths industry, to accelerate the development of our world-class Koppamurra project,” AR3 chairman Dudley Kingsnorth says.

“Koppamurra has the potential to be a significant near-term source of strategically important heavy rare earths as well as neodymium and praseodymium and it is pleasing to see Neo identify the significance of our project.”

The deal potentially puts AR3 in the crosshairs of advanced project developer Hastings Technology Metals (ASX:HAS), which late last week finalised the acquisition of ~19.9% in Neo shares, worth CAD$134m.

The acquisition was funded by a A$150 million cornerstone investment in HAS by Andrew Forrest’s Wyloo Metals.

$34m market cap AR3 is down 60% year-to-date.

 

BELLAVISTA RESOURCES (ASX:BVR)

(Up on no news)

The explorer listed in May with a bunch of zinc, copper, silver, PGE and uranium projects in WA.

It is backed by heavy hitters like Bellevue Gold (ASX:BGL) founder and managing director Steve Parsons and Capricorn Metals (ASX:CMM) executive chairman Mark Clark, with each having a significant 10% stake in the company.

In the last quarter a 3500m drilling program kicked off to expand the flagship Brumby SEDEX zinc-silver-copper system.

Assays are pending on all 11 holes.

A 35km long uranium target at the Kiangi project was also identified for follow-up.

The $7m market cap stock is down 5% on its IPO price of 20c per share.

 

AGUIA RESOURCES (ASX:AGR)

(Up on no news)

Last week this aspiring fertiliser miner strengthened its management team in readiness for the construction of its Três Estradas project, which will be the only domestic producer of phosphate in southern Brazil.

The TEPP – considered a project of importance by the Brazilian government — is expected to produce 306,000tpa over 18 years following a three-year ramp up.

It will cost just $8m to build.

AGR is awaiting the granting of the construction licence, which is the last remaining regulatory requirement for construction to commence.

However, the project is also tied up in court after a Federal Public Prosecutor in Southern Brazil filed a public civil action in 2021, seeking an emergency injunction to put a stay on environmental licensing for the TEPP, granted on 15 October 2019.

The $25m market cap stock is up 20% year-to-date.

 

MONGER GOLD (ASX:MMG)

(Up on no news)

The Torian Resources/Asra Minerals (ASX:ASR) spin-off has been on the lithium acquisition trail in 2022.

It first picked up the large ‘Scotty’ sediment-hosted lithium project in Nevada for $2m.

The 5665ha project surrounds the ‘Bonnie Claire’ project (host to one of North America’s largest lithium resources at 18.3Mt LCE), is 70km from Albermarle’s ‘Clayton Valley’ mine (the only producing lithium mine in the US) and 330km from Tesla’s Gigafactory.

Earlier this month, it also exercised an option to acquire the Brisk hard rock lithium project in the James Bay district of Quebec.

Brisk is 15km from Winsome Resources’ (ASX:WR1) Cancet project.

“Brisk’s geological setting has clearly spawned numerous pegmatites – many more than previously mapped and anticipated,” MMG CEO Adam Ritchie says.

“The vast and highly prospective nature of Brisk was a major driver behind exercising the option and immediately planning further field work.”

The $18m market cap stock is up 114% in 2022.

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