Resources Top 5: This junior lithium explorer is stacking the team with Pilbara Minerals alumni
Here are the biggest small cap resources winners in early trade, Tuesday February 7.
Former Pilbara Minerals (ASX:PLS) geologist Nigel Broomham will join reinvigorated Canadian lithium explorer BM8 as general manager of exploration.
At $14bn capped PLS, Broomham was responsible for exploration, resource development and production at the world-class Pilgangoora lithium-tantalum operation in WA.
He joins BM8 CEO and fellow PLS alumni Gerard O’Donovan, who was project manager on the concentrator at Pilgangoora and the subsequent Ngangaju plant, acquired from PLS’ collapsed neighbour Altura.
Broomham will be responsible for overseeing exploration across all BM8 assets, with a strong initial focus on the upcoming maiden exploration campaign at the Falcon Lake lithium project in Canada.
$33m capped BM8 — the old Pathfinder Resources, itself a reskinned Winmar Resources – is up 45% on its recent relisting price of 40c per share.
NY fund Sapphire Global Energy will invest ~$25m in EVR to acquire projects and drill its extensive existing copper, lithium, and tin-tungsten portfolio.
The explorer formerly known as Jadar Resources has a bunch of active projects spread across the globe. They include Don Enrique in Peru (copper), Shaw River in WA (lithium), Khartoum in Queensland (tin, silver, tungsten), Eastern Alps in Austria (lithium), and Christina in Morocco (tin, tungsten).
Exploring multiple projects in multiple jurisdictions effectively can cost a lot of money – which is where Sapphire Global Energy comes in.
“The investment commitment is another major milestone that will enable us to grow significantly over the next 12 months,” EVR exec director Navin Sidhu says.
“Sapphire is very supportive of the company and realises the potential we have, thus they have provided us with an extremely competitive and sizeable facility.
“This facility enables us to drawdown when necessary, allowing us to better manage our funding needs, reduce dilution and not be at the mercy of the markets.”
EVR has the option to draw down the $25m facility for 60 months starting March 1.
There are a bunch of conditions, but when EVR withdraws some of the cash, Sapphire Global Energy gets shares in the company at around the current price.
Sapphire is managed by Obsidian Global Partners, which recently invested $2.2m in pot stock Althea Group (ASX:AGH). Another $25m deal with fellow cannabis company Creso Pharma (ASX:CPH) fell through August last year.
$16m capped EVR spiked 60% in early trade on high volumes to be up 130% year-to-date. It remains substantially below its 12-month high of ~6.5c per share.
This explorer – which listed early last year with a bunch of gold and base metals projects – had struggled to pique investor interest until today.
The catalyst for this morning’s high volume 40% gain? A lithium acquisition (of course) in the very popular James Bay region of Quebec, Canada.
OM1 can earn up to 100% in the 540sqkm Lac des Montagnes project, which consists of three properties.
It’s a good neighbourhood, with Namaska Lithium’s (TSXV:NMX) world class Wabouchi lithium deposit (36.7Mt @ 1.16% Li2O) just ~38km away.
OM1 says over 40 pegmatite granites have been mapped within the project area. Seven of these have been identified as a “high priority” and highly prospective for spodumene hosted lithium deposits.
The explorer will pay the vendor up to $600,000 cash and 10.35m shares (worth ~ $2.5m at today’s prices) over a 36-month earn in period.
“I believe the company has a fantastic opportunity to make a major discovery and our shareholders are poised to significantly benefit from the exposure to the North American battery metals market, which is seeing billions of dollars of investment as the United States and Canada seek to build an energy-independent future,” OM1 exec director James Warren says.
“This acquisition marks the start of a very exciting year for the company and we’re looking forward to rapidly advancing the Lac des Montagnes project, with on-ground exploration to begin immediately at the end of the Canadian winter.”
The $6m capped minnow is up 60% year-to-date. It had $2.9m in the bank at the end of December.
(Up on no news)
$60m capped TZN is edging closer to first cashflows from three projects: Bird in Hand (gold), Tala Hamza (zinc), and Kapunda (copper).
The company is awaiting a mining licence for the Bird in Hand project (BIHGP) in South Australia, which boasts a high-grade resource of 650,000 tonnes at 12.6g/t for 265,000oz of gold.
A feasibility study showed that the BIHGP could generate a post-tax NPV8 of $14m with an IRR of 80.5% (that’s high) over ~4 years of production.
The project’s base case projection is to produce ~44,700oz a year at a low all-in sustaining cost of $959/oz.
Ore will be processed down the road at TZN’s mothballed processing plant at the Angas zinc mine, which will be modified to handle gold.
TZN continues to engage with several parties which are interested in funding or investing in the project and is in receipt of several funding offers, the company said 30 January.
“There is strong interest from offtake parties, streaming and royalty companies, financial institutions and other mining companies.”
TZN also has a free-carried 25% interest in the advanced 119,000t Kapunda in-situ copper recovery project in South Australia.
Meanwhile, final regulatory approval is proceeding at the 49% owned Tala Hamza zinc project in Algeria.
Tala Hamza is one of the largest undeveloped zinc-lead deposits in the world, with a resource of 53Mt at 6.6% zinc plus lead.
A 2018 DFS envisaged production of 129,300tpa zinc and 26,000tpa lead concentrates over a 21-year mine life.
The project generates strong returns at current prices, the company says, and would cost ~$US341m to build.
TZN had $5.8m in the bank at the end of December, plus a $28.5m loan facility.
The former copper-uranium explorer has done well since pivoting to lithium October last year, when it picked up an option over two salars in Argentina’s Salta Province.
Maiden drilling has now hit a +30m thick brine aquifer zone from 370m at the Poticos 7 lithium target, with laboratory assay results expected in 7 to 14 days.
A flow test was conducted through a 49mm pipe with a submersible pump and achieved a pumping rate of +2,000lt an hour, it says.
A second hole is being planned.
“We are extremely pleased to intercept brines and have hit a 30m plus aquifer zone at Pocitos 7 and have such a healthy pump rate particularly given the size of the pipe and pump utilised,” C29 director Jeremy King says.
“The team are currently conducting SG measurements on the brine and we await the laboratory analysis to determine lithium content.
“Subject to those results, we intend to continue our exploration program with a view to rapidly establishing a mineral resource estimate at Pocitos 7.”
The $10m capped stock is up 18% year-to-date. It had $2.7m in the bank at the end of December.