Resources Top 5: The manganese explorer aiming to feed the insatiable battery thematic
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Here are the biggest small cap resources winners in early trade, Tuesday July 27.
It’s a good time to be a manganese explorer as prices and demand rally strongly.
$5m market cap AX8 has kicked off manganese exploration at its new East Pilbara manganese assets.
It is targeting new discoveries to feed the lithium-ion battery and steel production sectors where it has identified “future supply disruption and metal shortfalls”.
AX8’s projects are close to the tier one high grade ‘Woodie Woodie’ manganese deposit and is contained within similar host stratigraphy that has remained underexplored, it says.
“We are excited by the opportunity to explore within a world class region for high grade manganese, a critical mineral for battery and steel production with forecast demand shortfalls,” AX8 managing director Yaxi Zhan says.
“This timely, high value strategy is in a proven yet underexplored area with excellent infrastructure and we believe there is significant opportunity for new discoveries.”
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Energy Metals is one strange egg.
The sleepy $40m Chinese explorer has a bunch of mothballed uranium projects in the Northern Territory and WA.
Its main game is the ‘Bigrlyi’ uranium-vanadium project, where a prefeasibility study (PFS) was completed in 2011 before the uranium price hit the skids.
Work was suspended in 2012 and not much has been done since – despite a healthy bank balance of $15.7m at the end of the last quarter.
The stock is tightly held, with only ~200m shares on issue. Most of this (66 per cent) is held by a subsidiary of the state-owned China Nuclear Power Group (CGN), one of the largest nuclear power providers in the world.
CGN has five more power plants under construction and an additional two planned.
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This low-profile stock is owner of one of the largest undeveloped gold projects in Europe — the plus million-ounce ‘Salave’ project in Spain.
BDG says it is currently prepping an all-important Environmental Impact Assessment (EIA) for submission.
The explorer had about $1.8 million in the bank at the end of the March quarter.
A couple of surveys have uncovered “compelling” gold targets on the ‘Kaiwalagal’ project, adjacent to AQX’s more advanced ‘Horn Island’ project in the Torres Strait, Queensland.
Several ‘Mt Leyshon’ (~3.5 million ounce) gold deposit “look-a-like” reverse polarised magnetic anomalies were identified, the company says.
Follow-up exploration programs are now being considered.
“This is a huge result in our continuing Torres Strait exploration where we continue to seek additional ounces to our flagship Horn Island resource,” managing director Andrew Buxton says.
“Kaiwalagal’s location, immediately adjacent to Horn Island, bodes well for Alice Queen as any significant discovery will provide additional ore for any future mining operation established on Horn Island.”
The $25 market cap stock is down 50% year-to-date.
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Yesterday, the company raised almost $50m to underpin the development of Burgundy’s diamond projects, including bringing the ‘Ellendale’ diamond project back into production in 2022.
Previous Ellendale operator Kimberley Diamond Company went into administration in 2015. An ASIC investigation led to exec chairman Alexandre Alexander being charged with allegedly issuing false information to the market.