Resources Top 5: Punter favourite Kuniko prepares to drill some juicy cobalt targets
Here are the biggest small cap resources winners in early trade, Thursday April 14.
Gold explorer MEG has purchased a rare earths project in the US.
MEG listed on the ASX October last year with a portfolio of mostly gold projects in the little known (and tumultuous) jurisdiction of Ethiopia.
Today’s pivot to critical minerals in a tier one jurisdiction was welcomed by investors, with the stock gaining +90% in early trade.
MEG will acquire Felix Strategic Minerals, which holds the contractual rights to the ‘North Fork’ rare earth project in the mining-friendly Idaho Cobalt Belt region of Idaho, US.
The 42sqkm project includes areas of outcropping, high-grade, rare-earth element (REE) mineralised rock, MEG says.
Previous exploration returned exceptional grades in channel samples, including 2m @ 10.3% Total Rare Earth Oxides (TREO) at the ‘Silver King’ prospect.
MEG will raise $2.4 million to fund initial exploration at North Fork, which will kick off once the acquisition is complete.
“The North Fork Rare Earth project is a tremendous opportunity for Megado,” MEG CEO Michael Gumbley says.
“The incorporation of a high-grade rare earth element project in an extremely receptive mining jurisdiction is an incredible addition to the Company’s portfolio.
“Importantly, historical exploration, sampling mineralised outcropping veins, indicated extremely high-grade total rare earth oxides in excess of 20%, including significant returns of critical rare earths.
“The US government has designated rare earth elements as strategically critical and thus made domestic production integral to its clean energy transition and national security.
“We are excited that Megado will benefit from the accommodating political climate, the welcoming Idaho jurisdiction, an existing strong US investor base, and obvious drill-ready targets to commence exploration upon finalisation of the North Fork acquisition.”
The $8.6m market cap stock is up 150% year to date.
Commercial production has commenced at the ‘Peko’ stage 1 magnetite processing plant in the NT, ELE says.
Production has now begun to ramp up to meet the rail capacity constraint of 350,000 tonnes per annum, it says.
“Today marks exactly one year to the day since Elmore was reinstated to official quotation on the ASX,” managing director David Mendelawitz says.
“Whilst it hasn’t been easy, we are a very proud of what we have achieved against all odds, both in regards to return to shareholders and the delivery of our first, cornerstone project.”
“We look forwards to both making Peko operations a success through firstly the sales of magnetite and then adding copper, cobalt and gold, but also using Peko as a stake in the ground to develop a successful mining services company as we add other operations to our portfolio, including the Territory Minerals Far North Queensland gold and antimony projects.”
ELE is a reskinned and revitalised company called IndiOre, which decided built an iron ore project in India without defining any resources first. Dumb idea.
In late 2018, after company management suddenly resigned for ‘personal reasons’, IndiOre conducted a drilling program and realised there was not enough iron ore to justify all the expensive processing equipment they were purchasing.
“Disappointingly, the drilling did not intersect any mineralisation of adequate grade or thickness to justify mining on any of the project areas,” the company said January 2019.
“Furthermore, drilling and associated geological recognisance did not identify any information that would justify further expense on the projects, particularly given the limited size of each tenement.
“As a consequence, the company has immediately cancelled the P3 project and has begun the process of dismantling the process plant and site equipment, reducing staff numbers, and remediating the sites.
“The company has initiated an independent review in both Australia and India into the history that has led to the decision to build the project, in particular the P3 expansion, without sufficient defined resources.”
The $47m market cap stock is up 165% in 2022.
Another IPO explodes off the blocks.
Led by former Cassini boss Richard Bevan, this explorer is focused on giant nickel-copper-PGE discoveries in South Australia and WA.
NYM’s underexplored ‘Narryer’ project in WA is on “the edge of the ancient craton that hosts Chalice Mining’s (ASX:CHN) Julimar Ni-Cu-PGE discovery”.
There is also potential for ionic rare earths at Narryer, similar to Krakatoa Resources’ (ASX:KTA) recent REE discovery at Mt Clere.
The Sturt and Ceduna projects in SA are in strategic geological domains that have been under-explored, it says.
NYM raised $5m at 20c per share.
MCM has completed a Bankable Feasibility Study – the most advanced of all project studies – on its 296Mt ‘Makhado’ hard coking coal project in South Africa (68% interest).
The BFS envisages a production of 13.7Mt (coking) and 11.9Mt (thermal) over a 22-year mine life. Post tax IIR and NPV were estimated at 38.2% and $268m, respectively.
The project would use excising infrastructure to minimise upfront costs, which have been estimated at $41m.
MCM expects to finalise the financing in Q3 with 12-month construction period commencing soon thereafter.
This tiny South African coal miner and project developer squeezed out an $US800,000 loss for the December half, still better than the $2.7m loss from the prior corresponding period.
The $27m market cap stock is up 67% year-to-date.
Punter favourite KNI will kick off maiden diamond drilling on 2 May at three cobalt-copper targets near a historic mine in Norway.
One of the targets, known as Middagshvile, was drilled with 6 holes back in 2018.
These historic boreholes provided KNI the opportunity to acquire downhole geophysics data, “enabling de-risking the forthcoming drill campaign at this location”.
DHEM surveying involves sending a probe attached to a wire cable down a completed drill-hole.
The probe is able to detect conductive sulphide mineralisation off-hole, with the potential to “see” mineralisation up to 75m away.
The technique is widely used in base metal exploration, and has played a pivotal role in some of the share market’s most famous discoveries.
Crucially, this DHEM data found strong conductors had been previously missed or only partially intersected by the existing boreholes.
“With drilling set to launch in the next weeks, these latest borehole geophysics results provide further signs of the potential and opportunity at the Skuterud Cobalt Project,” KNI CEO Antony Beckmand says.
“The downhole geophysics has confirmed the presence of the conductors we originally identified at the Middagshvile target using airborne electromagnetic and magnetic surveys in 2021, while downhole geophysics modelling identifies the conductors aligning with and corresponding to mineralization observed in the available historic core assays.”
“We have done our geological due diligence on the Skuterud targets, putting Kuniko in a prime position of being well prepared and having solid reasons to be confident and enthusiastic about prospects for unveiling cobalt mineralisation with our upcoming drill campaign.
“With a prevailing and forecast undersupply for this valuable mineral, where current sources of supply are heavily reliant on Democratic Republic of Congo, Russia and China, Kuniko is firmly focussed on the rapid development of Skuterud project to bridge the supply chain gap with ethically sourced, responsibly developed, net zero-carbon cobalt.”
One of the hottest IPO’s of 2021, Vulcan Energy (ASX:VUL) spinout KNI gained 325% on its first day, before briefly peaking at a remarkable $3 per share shortly thereafter.
It is currently up 20% in 2022.