Resources Top 5: Small iron ore explorer rockets 160pc in a week, doesn’t know why
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Here are the biggest small cap resources winners in early trade, Friday June 10.
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This tiny iron ore explorer is now up 160% over the past week on no official news, driven by some outsized gains – on outsized volumes — over past two days.
PLG said ‘we don’t know why this is happening’ in response to a speeding ticket delivered yesterday from the ASX.
However, there is a resource due out this quarter on the flagship Cockatoo Island ‘Switch Pit’, where the company has been drilling into thick, high grade iron ore like ~57m grading 68.9% fe from ~80m.
That’s high. The benchmark grade often quoted is 62% fe – anything higher than this can attract a substantial price premium from buyers.
Aside from rare exceptions like Mount Gibson Iron’s (ASX:MGX) Koolan Island mine – right next door to Cockatoo — Australia doesn’t have many high grade hematite resources like those in Brazil or Africa.
Geological and resource modelling has now kicked off and expected to be delivered very soon.
“Once our resource work is complete, we look forward to updating the market with further plans for our high-grade iron ore project,” chairman Russell Clark said last month.
The $4.4m market cap minnow is still down 5% year-to-date. It had $1.1m in the bank at the end of March.
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This emerging producer is confident of achieving combined production of >275,000 ounces silver for June and July from its flagship 50.94Moz ‘Wonawinta’ project in NSW, which is currently in the ramp-up stage.
In May, MKR made ~$2m revenues from the sale of 55,600oz silver and 175oz of gold.
Once it hits steady state, production will be 150,000oz silver per month.
“The majority of other ASX listed silver companies are explorers or emerging producers and are still a number of years away from getting into production,” executive chairman Dennis Karp said early April.
“There are certain ASX listed companies who do produce silver, but that is in a concentrate form (as opposed to metal) alongside other commodities such as lead or zinc.
“If you want direct silver exposure as an investor, the choice will become quite simple.”
FRS is approved and ready to go on a drilling program at the “high priority” ‘South Iron Cap East’ lithium prospect, part of the ‘Forrestania’ project in WA.
Several other program of work (POW) applications to drill other prospects are pending.
South Iron Cap East is ~1km from a 2016 drill result reported by Western Areas of 50.6m @ 0.95% Li2O “which is a significant result and demonstrates the prospectivity of the area”, FRS says.
The $4.5m market cap stock is down 50% year-to-date. It had $2.3m in the bank at the end of March.
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The explorer has held the gains made earlier this week after hitting 173m grading 1.05% copper from 313m depth in drilling at the ‘Lana Corina’ project in Chile.
The drilling also intersected a broad zone of high-grade molybdenum mineralisation — 85m @ 1,367ppm Mo and 0.07% Cu from 486m — which “highlights the presence of a deeper mineralised source of the base metal system … and provides new targets for exploration”, CPO says.
The stock listed on the ASX September 10 with a couple of porphyry projects in Chile — ‘Las Petacas’ and ‘Quelon’ — and only entered into an agreement to acquire 80% of Lana Corina in March.
CPO exploded out of the blocks later that month after hitting the copper motherlode in its very first drillhole at the project.
Assay results have now been reported for three holes, all of which have returned significant copper grades over wide intervals. Further results are pending.
The $15m market cap stock is up 110% in 2022. It had $3.3m in the bank at the end of March.
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In May, HAW and JV partner Legacy Iron Ore (ASX:LCY) cemented a deal with a subsidiary of billionaire Gina Rinehart’s Hancock Prospecting, which shelled out an initial $9m to earn into the ‘Mt Bevan’ iron ore project in WA.
Mt Bevan hosts a 1,170 million tonne magnetite resource @ 34.9% iron, 250km north of Kalgoorlie in WA.
While magnetite iron ore resources are lower grade than hematite in the ground, they can be concentrated into a higher-grade product which fetch higher prices.
This initial investment of $9m gives Hancock a 30% interest in Mt Bevan, with $8m cash being paid to LCY and HAW in proportion to their interest in the project (Legacy $4.8m and Hawthorn $3.2m).
The remaining $1m will be working capital.
LCY will hold 42% and HAW will hold 28% upon completion of the initial investment.
Hancock can earn an additional 21% by funding the completion of a pre-feasibility study (PFS), a detailed look at whether the project is economic to build.
Meanwhile, HAW is making a bit of cash ($1m last quarter) from processing gold stockpiles at the ‘Trouser Legs’ mine, as well as exploring for nickel, copper and lithium in eastern region of the Mt Bevan lease.
“Detailed geological mapping and surface sampling will now be undertaken in the northern and eastern areas,” HAW said last month.
“The northern area is proximal to the St George (ASX:SGQ) Cathedrals Ni-Cu sulphide discovery and the eastern area is along strike of the broad NNW trending corridor from the recently reported Red Dirt Minerals (ASX:RDT) Li/Ta discovery at Mt Ida.”
$40m market cap HAW is up 30% year-to-date. It had $14.5m in the bank in April.