Resources Top 5: The WA lithium hunt continues unabated and big-time gold M&A in West Africa
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Here are the biggest resources winners in early trade, Monday October 30.
Lithium, nickel and gold exploration junior ($6.85m market capped) TG Metals is leading the ASX ressie charge this morning with a 100% gain.
Well, we say charge… the ASX 200 is looking pretty droopy on the whole at the time of writing, with Materials one of only two sectors from 11 just holding its head above water.
But regarding TG6, it’s got big news, announcing an interception of high-grade lithium at its Lake Johnston Li-Ni-Au project in the Lake Johnston Greenstone Belt of WA.
The company notes that initial drilling of the 4.5km by 1.7km Burmeister lithium soil anomaly within the project has found a spodumene-bearing pegmatite with grades up to 2.28% Li2O.
Five of the six holes targeted and now completed in this phase have reportedly intersected pegmatite with all intervals hosting spod-bearing lithium mineralisation. (See tweet below – that’s some pretty-looking spod under UV light.)
CEO David Selfe
“There appears to be multiple pegmatites with consistent widths of between 8m to 12m that are completely mineralised with spodumene."
⚒️Follow-up drilling to recommence immediately
— TG Metals Limited (@TGMetals) October 29, 2023
Overall, the average assays came in at 1.46% Li2O returned for fresh pegmatite with down-hole widths of between 9m and 12m.
Assessments done, ASX report written, backs patted, now the company is frothing to get the drills spinning again “immediately”.
TG Metals CEO David Selfe said: “These are exceptional initial drilling results especially since we have only tested such a small part of the soil anomaly.
There appears to be multiple pegmatites with consistent widths of between 8 to 12 metres, that are completely mineralised with spodumene. The targeted soil geochemical anomaly is very large and remains open, particularly to the east.”
TG6 share price
Recently reinstated onto the ASX and formerly known as Ookami Limited, First Lithium has news from its highly prospective Blakala prospect in Mali, West Afrcia, where it recently began a drill campaign.
The company reports it’s drills have hit a continuous 112.8m pegmatite at the tier 1-rated Blakala, with: Drillhole 1 (BDFS01) finding pegmatites of 4.58m and 5.05m; and Drillhole 2 (BDFS02) intercepting one thick pegmatite of 112.8m, and “additional previously unmapped thinner pegmatites intersected in the footwall”.
The company notes that there is “very significant spodumene mineralisation seen throughout the two intersections”.
What’s next? Assays, naturally, which the company hopes will confirm high-grade results. Those are expected within about 6-8 weeks.
In the meantime, an additional diamond drill rig will be set up in Blakala within the next two weeks.
— First Lithium Ltd (@FirstLithiumLtd) October 29, 2023
Recently, we reported that:
First Lithium’s Faraba and Gouna permits are surrounded by world-class lithium projects, including Leo Lithium’s (ASX:LLL) giant 211Mt at 1.37% Li2O Goulamina JV with Ganfeng Lithium, as well as Kodal’s 24Mt Bougouni project.
Goulamina and Blakala are the only two Tier 1 priority lithium targets in Mali ranked by CSA Global in 2008, with FL1’s prospect first identified in the 1960s by Russian geologists.
FL1 share price
Yet more M&A activity in the Australian mining and exploration scene.
Tietto owns the more than 3Moz Abujar mine in Cote d’Ivoire, Didier Drogba and Yaya Toure’s neck of West Africa. It’s on the winners list today after receiving an off-market takeover offer from Chinese gold miner Zhaojin Capital to acquire all shares it doesn’t already own in the company for 58c/share — a 38% premium to the last close.
Zhaojin started building up its holding in TIE last year and is the company’s second biggest shareholder behind Chijin International HK, with around 7% of its shares.
Tietto notes that “there is no certainty that the Indicative Proposal will ultimately result in a binding proposal that the Board of Tietto is willing to recommend to its shareholders,” adding:
“The Board has appointed Barrenjoey and Corrs Chambers Westgarth as financial and legal advisers to help them consider the Indicative Proposal.”
However, the bidder’s statement has already dropped, which triggers the offer to go from non-binding to binding, pending what the rest of the Tietto register wants of course.
Zhaojin Mining Industry chairman Jiang Guipeng, understandably, reckons the offer is attractive. Tietto remains 25% down YTD even after today’s lift having encountered ramp up issues at Abujar and the near $650 million valuation implied by the offer would resemble a 720% five year gain for investors.
Tietto produced 33,750oz in the September quarter, with TIE planning to ramp up to 170,000ozpa between 2024 and 2032.
Zhaojin already has FIRB approval for the bid and produced almost 620,000oz in 2022, with smelted and processed third party gold taking its overall output to ~880,000oz.
We've received a non-binding proposal from Zhaojin Capital, which holds 7.02% of $TIE, to acquire remaining Tietto shares at A$0.58/sh in a takeover offer. The Board will carefully consider the Indicative Proposal, & advises shareholders not to take any action at this time. $TIE pic.twitter.com/O9f79GZYCs
— Tietto Minerals (@TiettoMinerals) October 29, 2023
TIE share price
(Up on no fresh news today)
Junior gold, copper and base metals hunter Larvotto is rivalling TG1 for intraday gains this morning, up +60% as fingers tap keys.
There’s nothing new to report this morning, however, the company has been in the news lately and certainly on the radar of Stockhead’s ‘Garimpeiro’ columnist Barry FitzGerald.
“It is a rare thing for a junior explorer to have a 1 million-ounce plus gold resource under its belt within two years of listing,” wrote Barry…
“But that’s just what Larvotto Resources has achieved courtesy of its deal to acquire the Hillgrove gold-antimony mine near Armidale in NSW for the knockdown price of $8 million, including $4.89m in replacement environmental bonds.”
The stock, says Barry, is set for a re-rating as it sets about re-establishing Hillgrove as a significant producer from its high-grade 1.4 million ounce gold equivalent resource (1 million ounces of gold and 90,000 tonnes of high-value antimony).
That’s a good chunk of antimony on the side, by the way, which is an industry-valued semi-metal used for fire retardants, batteries, plastics, and a growing number of high-tech applications.
“A feature of the Larvotto’s pick up of Hillgrove is that the funding package (share placement and rights issue at 7c a share) will see the Chinese investment group Gage Capital emerge with 19.9% of the company, and commodity trader Trafigura with 15%,” noted Barry.
Read more… here:
Media Coverage I @StockheadAU
"Larvotto’s Hillgrove acquisition means the stock is set for a re-rating as it sets about re-establishing Hillgrove as a significant producer from its high-grade 1.4 million ounce gold equivalent resource."$LRVhttps://t.co/n8Kev5nowB
— Larvotto Resources (@LarvottoR) October 29, 2023
LRV share price
Emerging, $272m+ market capped, 100kozpa gold miner Ora Banda is well up today as well, on the news it’s signing a “transformational” lithium-focused, $26 million JV with Australian industrial giant Wesfarmers (ASX:WES).
It’s through a subsidiary of the big WA chemicals, fertilisers and industrial products conglomerate called Brenehan Exploration, and sees the $57b company – best known for its Bunnings sausage sizzles – embark on a first noteworthy M&A step since the $776m cash deal in 2019 that netted Kidman Resources’ 50% share in the Covalent Lithium JV (and Mt Holland mine) with SQM.
OBM is essentially selling 65% of its non-gold minerals rights from its flagship Davyhurst project for $26 million cash, a 2% royalty, and a free-carry on exploration spending.
Brenahan and Ora Banda will be forming a 65-35 joint venture to advance exploration of a large under-explored tenement package, notes Ora Banda, with Brenahan able to solely fund $15 million of exploration over three years to increase its stake in the JV to 80%.
Ora Banda’s MD Luke Creagh said:
“Although we have had encouraging early stage lithium results [at Davyhurst], Ora Banda is a gold-focused company and given the underexplored nature and size of this belt, we expect it would take many years to do it justice for other minerals.
“We are very excited by this transaction as WesCEF is a high calibre strategic partner who has the technical expertise and capability to unlock the belt for minerals that are non-core to Ora Banda.
“The WesCEF team that will work on this tenement package has a track record of success as they discovered and are helping deliver the Mt Holland Lithium Project.
“In total, we view this as a $45 million dollar deal with $30 million in cash and $15 million in exploration expenditure.”
OBM share price
At Stockhead we tell it like it is. While First Lithium and Ora Banda are Stockhead advertisers at the time of writing, they did not sponsor this article.