The Queensland government is in QEM's corner with Strategic Project award. Pic: Getty Images
Mining
Your standout small cap resources stocks for Monday, December 23, 2024.
The market has, strangely enough, come back around to an overlooked battery metal just as 2024, a terrible year for most metals linked to the electrification megatrend, comes to an end.
Steam is emanating from the Julia Creek region of North Queensland, where some of the world’s richest deposits of vanadium and oil shale have been found.
A host of companies are in the area, with Japanese trading giant Idemitsu putting the market on notice last week by taking a 51% stake in the near $800 million Vecco Critical Minerals Project, which sent a nearby exploration minnow flying.
Now QEM is on top of the small cap world for Monday, after announcing that its Julia Creek vanadium and oil shale project inland from Townsville has been declared a Coordinated Project by the Queensland Government.
The designation by the Office of the Coordinator General means it will have streamlined environmental approvals and its environmental impact statement will be assessed and decided through a bilateral agreement between the state and federal governments.
Vanadium has traditional been used in the steel industry, where its properties as a hardening alloy make up the bulk of demand.
But it’s got a small yet growing market in vanadium redox flow batteries, a lithium ion battery alternative suited to home and large scale stationary storage.
QEM is also expected to supply transport fuel to the tune of 313 million litres annually alongside 10,571t of vanadium pentoxide over the mine’s 30 year life.
That dual-track nature means the project can, theoretically, be prosperous in cycles when either battery or more conventional energy commodities are weaker.
“The dual commodity nature of our project aims to address two urgent needs: long-duration energy storage and domestic fuel security,” QEM MD Gavin Loyden said.
‘The adoption of vanadium flow batteries is accelerating around the world and Queensland is uniquely positioned to establish a “pit to battery” manufacturing industry. QEM will expand its participation in the value chain by processing its vanadium pentoxide into vanadium electrolyte for flow batteries.”
Julia Creek is expected to begin construction in early 2028, with 600 jobs to be created in construction and 588 in operation, 35% located nearby under residential arrangements.
(Up on no news)
Leeuwin Metals is running higher again, rising over 45% in early trade after its purchase last week of the Marda gold project from Ramelius Resources (ASX:RMS).
RMS mined Marda, near Southern Cross, for a few years as a satellite mine for its Edna May gold mine, where it plans to end processing this year.
But LM1 is looking to chase up high grade zones that went unmined by RMS, which never had a discrete focus on the deposit, one of many feeding the mill at Westonia.
LM1 has been in less attractive markets previously, pivoting to gold having previously explored for lithium in Canada and iron ore in the Pilbara.
While the latter two are well off their long-term highs, gold is not far off its October record of a touch under US$2800/oz, currently fetching US$2626/oz or A$4200/oz.
It’s a tried and tested strategy to go after an old deposit held by a major or mid-tier which needs to rationalise and get unnecessary costs off its books.
By placing capital and a specific company-wide focus, the thesis is a smaller company can extract more water, or in this case gold, out of the stone.
Javelin Minerals (ASX:JAV) and Labyrinth Resources (ASX:LRL) are two juniors who have done the same recently, with JAV picking up the formerly RMS owned Coogee project east of Kalgoorlie, and LRL dealing directly with RMS for the Vivien underground mine near Leinster.
Javelin’s up 75% YTD, while LRL is up almost 400%. Leeuwin has packed on the pounds, adding 140% in the past week to put some meat on its bones ahead of Christmas lunch.
Most capital raisings do damage to a company’s share price, because in order to make them attractive to investors they need to be conducted at a discount, diluting the value of shares held by existing retail shareholders.
But MTM’s $7.5 million placement from instos has had the opposite effect, with renowned Aussie instos Pengana Capital and Terra Capital each taking a bigger chunk at the prevailing share price.
It’s a strong hint the fundies see MTM’s shares moving higher, with the vote of confidence in the minerals processing tech play sending its shares ~28% higher on Monday.
$78 million capped MTM is up over 100% this year, thanks largely to a change in strategy, pivoting from a sole focus on exploration to the commercialisation of a technology called Flash Joule Heating.
It has been applied to produce cleaner lithium chemicals from spodumene, but has garnered more attention recently for its potential use in scrap recycling.
In a deal with New York-listed Indium Corporation, MTM will test the FJH tech to try extract gallium, germanium and indium.
While the latter is commonly used in touchscreens and solar panels, gallium and germanium are drawing serious excitement in the west after China moved to restrict exports to the United States.
That places serious impetus behind efforts like MTM’s to produce the commodities domestically Stateside.
Pengana will become a substantial shareholder in MTM via a $4m investment, while Jeremy Bond’s Terra will up its existing 6.9% stake having previously paid over $3m to take the strategic position.
MTM anticipates it will finalise the design, construct and commission a demo plant in Texas over the first three quarters of 2025, setting the scene for offtake discussions before the end of next year.
In a fairly unusual set of circumstances, Black Dragon Gold has been surging around three weeks since its application to rezone land in Tapia de Casierago, northern Spain, for its Salave gold project was knocked back by the local council.
Off the back of an uneventful AGM Friday, where all resolutions were passed with near complete yes votes, the company’s shares shot up as high as 5.8c today, having traded at 2c as recently as December 16 and 2.8c last Wednesday.
That prompted a speeding ticket – aka a price and volume query – from the ASX, with BDG’s response saying it had no news the market wasn’t aware of to report.
(Up on no news)
Previously the owner of the Cangai copper project, recently rebadged New Frontier is up big Monday, with around $75,000 worth of stock changing.
The explorer’s focus has shifted from QLD copper to Harts Range in the Northern Territory, where it’s looking for uranium, niobium and rare earths and recently announced it was flying the first airborne survey over the project since the mid-1990s.
Located 140km northwest of Alice Springs, the survey is expected to be complete next month.
$23m capped NFM was up over 20% to 1.6c late in the trading day.
At Stockhead, we tell it like it is. While QEM and MTM Critical Metals are Stockhead advertisers, they did not sponsor this article.
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