Resources Top 5: Super high-grade copper and a sneaky Christmas dividend
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Here are the biggest resources winners in early trade, Friday December 10.
IBG is trading again for the first time since receiving preliminary approval for a senior debt facility of up to US$657 million from US based EXIM bank for their ‘Citronen’ project in northern Greenland.
This is big moment for IBG, which has been plugging away at this isolated project for well over a decade.
Guy le Page calls it “an impressive deal even though there are a lot of hurdles to get over to satisfy the lenders”.
Which brings us to today’s small $4m placement, which will be used for Phase 2 due diligence with US EXIM, whereby Ironbark is responsible for funding both its own and EXIMs costs.
A mid-year BFS estimates the 3.3Mtpa, ~130,000tpa zinc operation will cost $US654m to build, delivering post tax free cash flow of $US1.46bn over a 20-year life.
As a near pure zinc play, ‘Citronen’ is very sensitive to movements in the zinc price with every $US0.10/lb change impacting post-tax-free cash flow by $US360m, IBG says.
The $74m market cap stock is up 63% over the past month and 225% year to date.
Recently listed RRR reckons it’s onto some super high-grade copper-zinc at the ‘Diane’ project in QLD.
An “outstanding” 6.95m wide massive sulphide drill hit from 145.92m included a visual estimate of up to 90% combined sulphide over the full interval, the company says.
Here’s a chunk:
Assays are pending.
Between 1979 and 1983 Dianne produced 63,578 tonnes of copper at an ore grade of 22.7%, making it one of the highest-grade copper mines in the world.
“If a picture paints a thousand words, then these results speak volumes,” RRR managing director Pat William says.
“We are thrilled with the early drill results achieved at our Dianne Project. This asset clearly demonstrates the hallmark signs of an exceptional mineral deposit.”
“We are now in a position to deliver our Initial Mineral Resource Estimate well ahead of our original IPO timelines, aiming for the beginning of Q2 2022.”
The $37m market cap stock is up 130% on its IPO price of 20c per share.
(Up on no news)
The stock formerly known as Sinetech is exploring for kaolin and silica in WA.
A maiden resource estimate of 24.7Mt was announced early November at its flagship asset — the ‘Tampu’ kaolin project 250km northeast of Perth.
The high purity specification of the Tampu deposit highlights the potential of the resource to qualify as feedstock for the lucrative high purity alumina (HPA) market, CR9 says.
With mineralisation open in all directions, an average depth of 4m and a footprint covering less than 0.15% of the total landholding, Tampu “has the potential to become one of the highest quality undeveloped kaolin deposits globally”, the explorer says.
A scoping study – the first proper look at the economics of building a mine — is due out Q1 next year alongside some initial HPA test work results.
More drilling will also kick off around the same time.
The $14.5m market cap stock is down 8% over the past month, and up 15% year-to-date. It had $4.5m in the bank at the end of September.
WML could be poking the edges of a discovery at ‘Mt Venn’ in WA.
Low grade nickel-copper intersections were returned from first-ever reconnaissance drill holes into the base of the so-called ‘Mt Cornell Sill’.
Highlights include 11m at 0.42% copper and 0.34% nickel from 41m in MVRC064, including 2m at 1.31% copper from 42m and 2m at 0.87% nickel from 47m.
Previous exploratory drill holes had targeted a different rock type, without success.
The new holes into the mineralised sill are considered highly encouraging, and justify further drill testing, WML says.
“To put the scale of the exploration target into perspective the partially oxidised intersections in drill holes MVRC063 and 064 are interpreted as a supergene blanket over a larger mineralised system,” the company said.
“From a regional perspective, the mineralised ultramafic horizon represents the previously undiscovered basal contact of the east-west trending (synformal fold) Mt Cornell Sill.”
“The basal contact may extend over 15km strike as depicted in Figure 4 and remains open with depth. The Ni-Cu-PGE mineralisation remains open in all directions.”
WML plans to drill a few holes to confirm the geometry of the mineralised sill complex in the new year.
The high-grade Tasmanian iron ore miner will pay a special 10c per share dividend on 29 December after a strong performance in 2021.
This will result in 14c being paid in dividends during 2021.
Not surprising, given GRR held cash and liquid investments of $554.6m at the end of the September quarter, despite a plunging iron ore price.
That’s because it supplies pellets grading around 65% which attract a substantial price premium to the benchmark.
In the June quarter, for example, Grange sold ~653,000t of pellets at an average realised price of US$287.15/t ($373.72/t) — roughly US$130/t higher than the prices generated by BHP and Rio Tinto.
With operating costs down 20% to $90.16/t, Grange made a headline margin of $283.56/t or US$207.63/t.
So yeah, a lot of cash floating around.
The $809m market cap stock is up 30% over the past month, and 135% year-to-date.