Resources Top 5: One of Australia's finest exploration teams is drilling near Chalice's Julimar discovery

Castle Minerals continues to blaze a trail of WA battery metals acquisitions in late 2021
In one month Metal Hawk has made a nickel discovery at ‘Berehaven’, hit high grade gold at ‘Kanowna East’
Korab (magnesium, phosphate), Cradle (shell), Todd River (nickel-copper-PGEs) up on no news

Here are the biggest small cap resources winners in early trade, Wednesday November 24.

TODD RIVER RESOURCES (ASX:TRT)

(Up on no news)

This WA and NT focussed stock has one of the finest exploration teams in the business.

Managing director Will Dix was part of the team that discovered the ‘Waterloo’ nickel mine and the 2Moz ‘Thunderbox’ gold project, which is probably where he met non exec director Mark Bennett, best known for his leadership of small cap success story Sirius Resources.

Also on the board is Stu Crow, non-exec chairman at white hot lithium stock Lake Resources (ASX:LKE).

TRT has 5-6 projects, the most interesting right now being its ground near Chalice Mining’s Julimar nickel-copper-PGE discovery called ‘Berkshire Valley’ where 8,000m of drilling has now kicked off.

The explorer is targeting some “outstanding” geochemical anomalies along the Eastern Trend, Dix says.

“In addition, we will imminently commence a Moving Loop Electromagnetic survey to identify conductors at depth over the Eastern Trend and at a highly prospective new area in the far north of the project,” he says.

“This is an exciting time for the company; we are well funded to carry out our exploration activities and look forward to sharing the results with shareholders as soon as they are received.”

Phase one of this work program is expected to be completed around Christmas 2021 with follow-up work anticipated in early 2022, the company says.

The $62m market cap stock is up 37.5% over the past month, and 120% year-to-date. It had $6m in the bank at the end of the September quarter.

CASTLE MINERALS (ASX:CDT)

Castle is blazing a trail of WA battery metals acquisitions in late 2021, today picking up the historical ‘Kendenup’ graphite project in the State’s beautiful southwest.

CDT listed in 2006 to explore for gold in Ghana and, over the next decade or so, sank tens of millions of dollars into its huge ~11,000sqkm landholding.

The company made several significant greenfield discoveries, with the share price peaking around 64c in 2010.

But a subsequent tough period for junior exploration led to a refreshed board and a rationalisation of what new management called these “legacy” Ghanaian gold assets.

Castle made the move into Pilbara conglomerate gold in 2017-2018, which was great for a while. (Not so much now, of course.) It has been searching for a new flagship project essentially ever since.

CDT has kicked up a gear in 2021, first dusting off its Kambale graphite project in Ghana in March due to surging battery metals sentiment.

In April, it made a timely ground grab around Rumble Resources’ (ASX:RTR) significant lead-zinc discovery at Earaheedy in WA.

It was then a very busy September quarter for CDT, which dialled in on some large SEDEX-style zinc-lead targets in the Earaheedy, picked up lithium ground next to the Greenbushes mine and Bald Hill mines, and hit industry benchmark concentrate grades of fine-flake graphite in test work at the ‘Kambale’ project in Ghana.

Still, CDT – which now calls itself a “project incubator” — maintained it was keen to “apply for and/or acquire interests in additional licences and early-stage projects in areas of Western Australia prospective for battery metals”.

Another new acquisition was announced today, with CDT picking up 150sqkm of tenure covering the historical Kendenup graphite mine and the nearby ‘Martigallup’ graphite occurrences.

A 1913 report by the Inspector of Mines stated that the Kendenup mine workings comprised a 15m-deep vertical shaft and some 20m of level development “onto an east-west striking array of veins, lenses and seams of graphitic material”. It is not known to what extent these workings were subsequently extended, CDT says.

Aside from reconnaissance regional programs for gold and base metals, little modern exploration appears to have been completed.

Castle intends to kick off exploration with the reprocessing and reinterpretation of available geophysical datasets and the relogging and assaying of historical diamond drill hole core for graphite, if the core can be located.

Once access agreements are negotiated, the company will extend VTEM coverage over the project and drill test anomalies.

“The acquisition of the Kendenup graphite project in Western Australia’s southwest is highly complementary to Castle’s growing battery metals interests comprising the Kambale graphite project and the Wilgee Springs and Woodcutters lithium projects,” managing director Stephen Stone says.

“We can see a lot of upside at Kendenup and are very keen to progress this project as rapidly as possible.”

The $23m market cap stock is up 45% over the past month, and 190% year-to-date. It had $2.3m in the bank at the end of the September quarter.

METAL HAWK (ASX:MHK)

This gold and nickel stock is on a hot streak.

Earlier this month, the explorer rerated after uncovering Kambalda-style nickel in maiden drilling at the ‘Berehaven’ project near Kalgoorlie. Assays subsequently confirmed this is a high-grade nickel discovery, the company says.

Today, MHK hit high grade gold during a recent maiden drilling program at the ‘Kanowna East’ project, 8km northeast of Northern Star’s (ASX:NST) Kanowna Belle gold mine, also in the WA goldfields.

Highlight hits from the ‘Little Lake’ prospect include 4m at 17.8g/t gold from 75m, including 1m at 42.7g/t from 76m.

The next stage of RC drilling will follow up the new gold intercepts at Little Lake and ‘Western Tiger’ and will further explore the poorly tested bedrock, MHK says.

“Our first RC drilling program at Kanowna East has further highlighted the potential of this gold project,” managing director Will Belbin says.

“Following the company’s nickel sulphide discovery at Berehaven and the successful capital raising in October, the company is very well positioned to continue delivering exploration success across its highly prospective gold and nickel projects.”

Miner Western Areas (ASX:WSA) is currently earning-in to the nickel rights at Kanowna East, recently launching into a 4,000m drilling program along strike from the world class ‘Silver Swan’ nickel sulphide deposit.

WSA have the right to earn a 75% interest on three of MHK’s projects — Kanowna East, Emu Lake and Fraser South — by spending $7m over five years. Metal Hawk is free-carried to decision to mine and, importantly, retains gold rights at Kanowna East and Emu Lake.

It also has a deal with Chalice Mining (ASX:CHN) on the ‘Viking’ gold project whereby CHN can earn up to 70% by spending $2.75 million on exploration over 4.5 years.

$17m market cap MHK is down 30% over the past month, but up 40% year to date. It had $3.3m in the bank at the end of the September quarter.

KORAB RESOURCES (ASX:KOR)

(Up on no news)

This long time battler has moved quickly to profit from positive investor sentiment in the supply constrained magnesium and phosphate markets.

Earlier this month it decided to pull the pin on the planned sale of its increasingly valuable Winchester (magnesium) and Geolsec (phosphate) projects in the Northern Territory.

Over the last few months, KOR says it has been approached by two separate groups expressing an interest in developing the ‘Winchester’ magnesium project in the NT.

The latest unsolicited proposal would see the two parties “jointly develop the Winchester quarry where the other party will fully fund the development in exchange for sharing the future profits from the quarry”.

The company says it is also in discussions with magnesium metal users and magnesium buyers, including car makers (Fiat and Daimler), and aluminium/magnesium alloy producers.

Last week it inked a Heads of Agreement (HOA) – a non-binding deal to look at signing a real agreement – with Darwin Port for the export of up to 30,000 tonnes per annum of magnesium metal.

“The HoA with Darwin Port will allow for exporting of large quantities of high purity magnesium metal to Europe, USA, and ASIA, where users of this critical metal have been suffering repeated shortages and supply interruptions that are likely to continue,” the company says.

The $28m market cap stock is up 170% over the past month and 710% year-to-date. The stock had ~$2m cash at the end of September, plus a small financing facility.

CRADLE RESOURCES (ASX:CXX)

(Up on no news)

Is there an acquisition on the horizon?

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.