Resources Top 5: REEnergised rare earths players, lithium stocks poised for a breakout
Here are the biggest small cap resources winners in early trade, Tuesday August 3.
It’s almost two years to the day that ARR – then Broken Hill Prospecting – announced plans to acquire the ‘La Paz’ rare earths project in Arizona.
It was a popular move, with the stock is up almost 900% since August 2019.
Drilling has now delivered a 117% boost to indicated resources, “demonstrating the potential for La Paz to be one of the largest rare earths projects in North America”.
Total resource tonnage increased 33.1% to 170.6 million tonnes, while the total rare earths grade increased 5.2% to 391ppm from 372ppm.
Mineralisation remains open, ARR says, so there are opportunities to increase resources further.
“The company has seen a significant upgrade in both the quality and quantity of the JORC resources at La Paz,” ARR says.
“The report’s findings confirm that La Paz is an environmentally sustainable resource with low uranium and thorium grades, compared to most other projects in the market.
“This announcement supports the development of the US domestic rare earths supply chain and highlights the strategic value of our assets to the US Government as it identifies risks in the supply chain for critical minerals including rare earth elements.”
‘Ionic clay’ — a new buzzword for players in the rare earths elements (REE) space.
A month or so ago there was only one ionic clay (IAC) hosted rare earths project on the ASX, Ionic’s (ASX:IXR) ‘Makuutu’.
Now there are several.
Companies are catching onto the idea that IAC deposits – like the ones exploited in southern China — are some of the cheapest and most readily accessible sources of heavy rare earths.
Frontier is the latest ASX small cap to dip their toes into IAC after acquiring the ‘Murraydium’ project in South Australia.
It’s in the same neighbourhood as fellow IAC play Australian Rare Earths (ASX:AR3), which is up +50% since listing early July.
“The Murraydium rare earth project offers exciting exploration upside potential,” Frontier chairman Alec Pismiris says.
“Previous work done in the area has outlined an extensive mineralised system where shallow near surface exploration has the potential to delineate shallow JORC resources.”
The advanced lithium play is certainly heading in the right direction in morning trade.
~$85m market cap Lepidico wants to build a lithium mine and concentrator in Namibia, and a chemical conversion plant in Abu Dhabi.
Lepidico’s chemical plant would have a low carbon footprint once developed, new studies show, which is increasingly important to investors.
The company’s scope 1 and 2 emissions intensity associated with its Abu Dhabi Phase 1 chemical plant is just 7.46t CO2-e2/t lithium hydroxide – which independent consultant GHD advised as being, “low compared with other emission intensities reported or derived from lithium hydroxide production facilities.”
Aspiring graphite play/ battery maker Magnis has secured $20m from US instos to fund “aggressive growth plans in the lithium-ion battery industry”.
Magnis is part of an international consortium called Imperium3, which is looking to develop a lithium-ion battery Gigafactory in Townsville.
It’s one of three large scale Gigafactories Imperium3 has in the works, with its New York location – called iM3NY — the most advanced.
“We are very pleased to fund Magnis Energy Technologies, an innovative Australian company focusing on producing green high performing lithium-ion batteries and developing technologies for rapid charging,” says John Hancock, Senior Advisor to The Lind Partners.
“The global lithium-ion battery market is expected to grow at a compound annual growth rate (CAGR) of 15% from 2020 to 2026, and US$41.1 billion in 2021 to US$116.6 billion by 2030.”
“Companies that can deliver better-performing batteries at scale will be rewarded with market share, and we look forward to being part of Magnis’ journey in this space.”
US$13 million has been invested by Magnis into iM3NY to assist with further expansion plans and the potential listing in the US on either the Nasdaq or NYSE.
Funds will also be used for general working capital — including to advance early works with the Nachu graphite project — along with any support required towards the Townsville Battery Plant.
$130m market cap Galena wants to be producing first lead and silver concentrate from the ‘Abra’ mine in WA by Q1 2023.
Abra is set to produce 95,000t of lead and 805,000oz of silver each year after ramp-up, at cash costs “among the lowest of global primary lead producers”, Galena said in yesterday’s investor update.
The stock is funded through to production through combination of existing cash resources ($96.2m) and debt facilities (~$107m).