Resources Top 5: Porphyry discoveries and a spurned takeover bid

Gold explorer Kin snubs a 16c per share takeover offer from miner St Barbara
Sunstone pulls up a 480m-long copper-gold intersection at ‘El Palmar’ project in Ecuador
Culpeo (copper), Eastern Iron (lithium, copper, iron ore) up on no news

Here are the biggest small cap resources winners in early trade, Thursday October 7.

KIN MINING (ASX:KIN)

The WA gold mine developer has snubbed a 16c per share takeover offer from miner and major shareholder St Barbara (ASX:SBM), and will instead raise $13m to advance the flagship 1.28moz ‘Cardinia’ gold project on its own.

It was move predicted by the guru himself, Barry Fitzgerald, late last month.

The SBM offer represents a 60% premium to the last closing price but is well below the 23c per share peak hit October last year.

Kin says it rejected the deal after “canvassing the views of its major and substantial shareholders”.

“The Board determined that the proposed NBIO could not progress because the proposed transaction was not acceptable to the major and substantial shareholders other than SBM, and therefore would not have been approved by the requisite 75% voting majority of Kin’s shareholders,” Kin says.

A takeover at the right price is not off the table, though, with “the Kin Board welcome[ing] the continued interest from St Barbara”.

The $13m cash injection will be used to grow resources at Cardinia, Kin managing director Andrew Munckton says.

“The additional funding will allow us to continue to assess the recent discoveries at Cardinia Hill and follow up on new prospects like Mt Flora, Eagle and Crow – in short, to maintain the very strong exploration momentum we have built up over the past two years,” he says.

“Other targets across the land package have been identified by recent soil geochemistry and modern geophysical surveys over largely untested areas within the highly mineralised Cardinia area.

“We expect this work to generate new follow-up programs of work stretching into 2022.”

SUNSTONE METALS (ASX:STM)

“Discovery confirmed!” says the South American porphyry hunter, after pulling up a 480m-long copper-gold intersection from 11m depth at the ‘El Palmar’ project in Ecuador.

Assays from the very first drillhole at the project include:

480.85m at 0.41g/t gold and 0.15% copper (0.66g/t gold equivalent) from 11.3m, including 163.55m at 0.71g/t gold and 0.20% copper (1.05g/t gold equivalent) from 52.35m.

A monster.

“These grades and widths, combined with the size of the magnetic target we are drilling and the fact that mineralisation starts from surface, show that El Palmar is an outstanding discovery with huge potential,” Sunstone managing director Malcolm Norris says.

“And it is early days, to have drilled mineralisation in all four holes drilled to date is an incredible start to this drilling program.

“Importantly, the copper and gold grades in drilling are aligning very well with the magnetic target, which gives us immense confidence in the size of the prize.

Complete assays from holes two and three are expected in ~six weeks. Hole four is currently being drilled.

Porphyries are huge deposits responsible for ~60 per cent of the world’s copper, most of its molybdenum, and significant amounts of gold and silver.

Their easy-mining large volumes make up for the low grades, typically between 0.3 per cent to 1 per cent copper equivalent.

DELECTA (ASX:DLC)

Samples from the company’s recently acquired ‘REX’ uranium project were rejected by a lab in Nevada due to radiation limits exceeding laboratory thresholds.

Super high grade, in other words.

Delecta says all samples will now be sent to another lab with the processing capability to measure elevated levels of Naturally Occurring Radioactive Materials (NORM) uranium samples.

“It’s encouraging that interim assays have returned elevated levels of uranium mineralisation from initial sampling programs and the company considers the small delay in lab samples to be a net positive in the context of expected higher-grade assays,” DLC managing director Malcolm Day says.

“Our initial exploration has confirmed the company’s view that the REX Project is prospective for higher-grade uranium mineralisation in what is an extremely buoyant uranium market.”

CULPEO MINERALS (ASX:CPO)

(Up on no news)

This explorer listed on the ASX September 10 with a couple of porphyry projects in Chile – ‘Las Petacas’ and ‘Quelon’.

Las Petacas is immediately along strike from — and in the same rocks as — Lundin Mining’s (TSE:LUN) ‘Candelaria’ mine, one of the largest copper operations in Chile.

A 3,200m drilling campaign has already kicked off across several targets at ‘Las Petacas’ where significant copper mineralisation has been identified over a 6km stretch.

Results of this drilling program will be reported “in the coming weeks”, CPO said 20 September.

The $10.5m market cap stock is up 30% on its IPO price of 20c per share.

EASTERN IRON (ASX:EFE)

(Up on no news)

One of September’s biggest movers.

The iron ore junior has pivoted to lithium, partnering with Chinese lithium giant Yahua to find and develop Aussie lithium projects.

First cab off the rank is the recently acquired ‘Trigg Hill’ project, ~75km from Pilbara Minerals’ (ASX:PLS) ‘Pilgangoora’ lithium mine.

The old Trigg Hill lithium-tantalum mine operated during the 1960s and early 1980s. Pegmatite swarms cover ~5sqkm with surface spodumene and lepidolite reported, Eastern Iron says.

Exploration activities will kick off when the tenement is granted.

The company is also planning a four-hole drilling program at the ‘Nowa Nowa’ copper project in Victoria and a feasibility study on a nearby iron ore project, due for release later this year.