Resources Top 5: Stellantis makes ‘pioneering’ investment in small explorer, GL1 snaps up stake in neighbouring lithium play
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Here are the biggest small cap resources winners in early trade, Monday July 3.
Carmaker Stellantis has become a major shareholder in Norway nickel-cobalt explorer KNI, acquiring 19.99% of the company for $7.8m and inking a term sheet for future offtake.
During the ICE (internal combustion engine) age, the idea that a carmaker would invest directly in metal and mining operations to ensure supply – let alone an early-stage explorer with no resource — was unheard of.
This investment in a pre-resource stock is a pioneering move from the European carmaker.
“We are on an aggressive path to securing a holistic portfolio of raw materials needed to meet our Dare Forward 2030 electrification targets,” Stellantis’ chief purchasing and supply chain officer Maxime Picat says.
“With Kuniko, we are adding another lever to support our European battery needs with a local and environmentally conscious solution from its Norwegian projects.”
KNI has multiple brownfields projects in Norway including Skuterud (cobalt) Ringerike (nickel, copper cobalt) and Undal-Nyberget (copper), as well as the obligatory James Bay lithium tenure in Canada.
One of the hottest IPOs of 2021, the Vulcan Energy (ASX:VUL) spinout gained 325% on its first day, before briefly peaking at a remarkable $3 per share shortly thereafter.
The $30m capped stock is up 100% from mid-June lows, and 15% in 2023.
Emerging WA lithium producer Global Lithium (ASX:GLI) has acquired a 10.5% stake in nearby explorer KAI via $4m placement.
The deal, first announced late June, was done at a 6% premium to KAI’s last closing price on June 26.
This will be followed by a $6.5m entitlement offer, leaving KAI cashed up to pursue exploration on its portfolio of gold and lithium projects across the state.
$410m capped GLI is particularly interested in KAI’s underexplored Roe Hills lithium project, which abuts GLI’s 32.7Mt Manna resource near Kalgoorlie.
An initial 5000m of RC drilling has been planned for the Black Cat, Crystal Palace and Blue Jay prospects at Roe Hills, the company says.
“We are rapidly generating a host of highly promising lithium targets at Roe Hills in the shadow of the Manna lithium deposit,” KAI boss Pete Turner said mid June.
“… the area has immense potential but has barely been explored for lithium and critical minerals.”
The $50m capped stock is up 30% year-to-date.
ARN says it is pulling up visible disseminated sulphides, including a thick 49m zone, at its flagship Narndee nickel-copper project in WA.
When a deposit consists almost entirely of sulphides, it is termed “massive sulphide”. When it consists of clots or patches of sulphides, it is “disseminated”.
Eyeballing core is no substitute for actual assays — as many explorers and their investors have found out — but ARN is already planning an additional drillhole near that 49m-long hit which included possible pentlandite (an important nickel ore).
The 2000m program continues, with drilling of Hole 3 now under way.
ARN recently acquired the Kameelburg REE project in Namibia and released a maiden resource for the Niobe lithium-rubidium project of 4.6Mt @ 0.17% Rb2O and 0.07% Li2O, equivalent to 8,060t of Rb2O and 3,080t of Li2O.
A new drilling program is planned to grow the resource size and upgrade the classification.
It is also pushing ahead with development approvals and a scoping study, the first proper look at the economics of building a mine.
The $15m capped stock is down 35% in 2023. It raised $3.8m in April at 17.5c per share.
WC8 has been on roll since acquiring the historical Tabba Tabba tantalum mine and lithium-tantalum project in the Pilbara.
Maiden lithium drilling is pencilled in for July, it says.
The historical Tabba Tabba tantalum mine and lithium-tantalum project in the Pilbara includes a bunch of mining leases – important if you want to get into production quickly — large areas of outcropping pegmatites, and a high-grade 318,000t at 950ppm Ta2O5 tantalum deposit.
The project, briefly explored and mined by Pilbara Minerals (ASX:PLS) in 2015, was historically a tanty asset so assays for lithium are limited.
However, there are some nice hits like 8m at 1.42% Li2O from 4m for WC8 to follow up.
Since then, WC8 has secured a project called Pilgangoora North, which includes outcropping peggies 10km to the north of the giant 309Mt Pilgangoora lithium mine operated by Pilbara Minerals (ASX:PLS).
$100m capped WC8 is up 625% year-to-date, making it one of the best performing small caps of 2023.
(Up on no news)
The small copper-iron ore stock (hence CuFe) may have to update its name to ‘CuFeLiREE’ after buying a small lithium-rare earths project in the goldfields of WA.
The 7.4sqkm project is a stone’s throw from a bunch of high profile lithium assets including the Mt Marion mine, Liontown’s (ASX:LTR) Buldania project, and Essential Metal’s (ESS) 11.2Mt Pioneer Dome project.
Meanwhile, CUF’s high grade JWD iron ore mine achieved record monthly export volumes for May.
“The quality of JWD lump is continuing to improve at depth, with recent shipments sold at a headline grade in excess of 63.5% Fe,” CUF said early June.
“This is leading to high demand from customers, with a May shipment completed to leading international steel mill, Hyundai, and a July shipment has been sold for delivery to a European mill at an attractive fixed price relative to index.
“While falling index prices over April and May make the project’s economics more challenging, the impact of this has been partially offset by a significant fall in sea freight prices (down more than 50% from last year’s highs), falling fuel prices benefitting road haulage costs and the weaker AUD.”
The benchmark iron ore price (62%fe) is up almost US$10/t since early June to US$112/t currently.