Resources Top 5: The small cap battery metal stocks staying balanced as markets go belly up

Mining, exploration stocks hammered as ASX slides for 3^rd straight day
Former battler Quantum Graphite is +131%, nickel-cobalt stock GME Resources +100% year-to-date
DMC Mining (nickel), Equus Mining (silver, gold) and Xantippe Resources (lithium) up on no news

Here are the biggest small cap resources winners in early trade, Tuesday May 10.

QUANTUM GRAPHITE (ASX:QGL)

(Up on no news)

This former battler has performed well since re-joining the bourse late last year.

The focus is the mothballed, century-old ‘Uley’ graphite mine in South Australia, one of the largest high-grade natural flake deposits in the world.

A recent study estimated the ‘Uley 2’ Phase 1 project would produce 55,000 tonnes per annum at a cost of $US368/t.

The company says the current product price is ~$US920/t, which represents a nice profit margin. The project would cost $80m to build, with discussions around financing ongoing.

QGL doesn’t have a strong track record at Uley, to put it mildly.

QGL first suspended operations at the struggling mine in late 2015, before entering administration in July the following year.

The share price tumbled from highs of 70c to 11.5c prior to suspension.

It relisted on the ASX in late September 2018 after three years in securities purgatory ostensibly sorting out its debts and finances.

It was suspended again in 2020 after the ASX required further info relating to its Annual Report.

The ASX then advised the company’s securities would be reinstated to quotation once sufficient exploration has been undertaken – which has now occurred.

The $107m market cap stock is up 131% year-to-date. It had $1.3m in the bank at the end of March.

GME RESOURCES (ASX:GME)

(Up on no news)

GME’s main asset is its advanced ‘NiWest’ nickel cobalt project next door to Glencore’s Murrin Murrin Operations.

NiWest, which hosts one of the highest-grade undeveloped nickel laterite resources in Australia, was recently dusted off due to improved battery metals sentiment.

An updated prefeasibility study (PFS) has now commenced.

The update would consider the impact of higher nickel and cobalt prices since the original PFS was completed mid-2018.

“Nickel is currently trading above US$15/lb compared to the US$8/lb assumption applied in the PFS, which returned projected free cashflow of A$3.34 billion and NPV8 of A$791 million,” GME says.

The updated PFS should be completed in the current quarter.

$66m market cap GME is up almost 100% year-to-date. It had just under $1m in the bank at the end of March, which means a cap raise could be imminent.

DMC MINING (ASX:DMM)

(Up on no news)

The recently listed WA-based nickel explorer has two projects: ‘Ravensthorpe’ and ‘Fraser Range’.

Ravensthorpe is a nickel and gold project next door to First Quantum Minerals’ (FQM) open-pit nickel mine and the RAV8 sulphide nickel mine.

There has been limited historical exploration within the project, DMC says.

The 873sqkm of Fraser Range tenements makes DMC one of the largest junior landholders in the region, which is best known for its company-making Nova nickel discovery.

At the Fraser Range ‘Trinity’ project, a review of old data identified six nickel-copper-cobalt targets for follow-up detailed soil surveys and detailed ground electromagnetic surveys.

This will help rank targets for drill testing, the company says.

The $4m market cap minnow is up 41% year-to-date, but below its IPO price of 20c per share. It had $4m in the bank at the end of March.

EQUUS MINING (ASX:EQE)

(Up on no news)

The market has quickly brushed off recent legal dramas related to a gold asset EQE sold back in 2014.

EQE became a junior gold and silver producer in 2021 via the processing of low-grade stockpiles at the flagship ‘Cerro Bayo’ project in Southern Chile.

The project – fully acquired from the vendor in December – includes an operational 0.5Mtpa flotation plant and stockpile processing, mining infrastructure, existing mineral resources and 295km2 mining claim package.

During the March quarter, revenues of $5.5m were overshadowed by production costs of $6.2m.

“Overall, higher comparable production costs in the March 2022 quarter relate to the processing of lower gold and silver grades plus higher fuel and transportation costs,” it says.

“Continued optimisation of stockpile processing via increased selectivity and implementation of ore particle size screening is expected to provide improvements in gold and silver feed grades.”

Longer term, EQE’s main game is proving up some high priority brownfields and greenfields targets and feeding high grade ore into the mill.

The $27m market cap stock is up 11% year to date. It had $3.3m in the bank at the end of March.

XANTIPPE RESOURCES (ASX:XTC)

(Up on no news)

The former goldie is now all-in on lithium after locking in a deal to buy the 3,000ha ‘La Sofia’ tenement next door to Lake Resources’ (ASX:LKE) advanced ‘Kachi’ project in Argentina.

“The acquisition of La Sofia adds to our strategy of extending our footprint in Catamarca and developing a lithium product sourced from brines in South America that will offer a clean product using direct lithium extraction (DLE) which requires a smaller environmental footprint and uses less water,” MD Richard Henning said late April.

XTC says there’s potential for development of a district scale lithium brine project, with further ground acquisitions being considered.

The $91m market cap stock is flat year-to-date. It had $9.2m in the bank at the end of March.