Resources Top 5: Two near-term miners and a game-changing lithium deal

Jadar becomes second ASX explorer to ink lithium deal with China chemicals producer Yahua
Greenwing hits promising lithium concentrations in Argentina
Iris (gold), Black Rock (graphite) and Globe (niobium) up on no news

Here are the biggest small cap resources winners in early trade, Thursday December 2.

GLOBE METALS AND MINING (ASX:GBE)

(Up on no news)

GBE says its ‘Kanyika’ project in Malawi will be the first niobium mine in 50 years when it comes online.

Over 90% of niobium is used in the manufacture of high strength alloy steels. Intensity of usage is rising rapidly as markets, and in particular China, moves towards the manufacture of higher quality steels, GBE says.

A feasibility study envisaged an initial 23-year mine life producing 3,250t of niobium and 140t of tantalum for average annual cashflow of $US225m. The payback period is just 1.5 years, the company says.

With advanced project studies and government approvals in the bag, GBE is now looking for:

Offtake deals
Financing (debt funding) to help cover the $US250m project capex, and
A Mine Development Agreement from the government of Malawi.

The $60m market cap stock is up 4% over the past month, and 212% year-to-date. It had $1.9m in the bank at the end of September.

JADAR RESOURCES (ASX:JDR)

With production expected to more than double by 2025, $7.7 billion market cap lithium chemical producer Yahua needs spodumene. A lot of it.

Beyond that it is looking to find the mines of tomorrow, teaming up with explorers to acquire and develop lithium projects around the world.

In September, it inked a deal with Eastern Iron (ASX:EFE). First cab off the rank could be the ‘Trigg Hill’ lithium tantalum project, ~70km from Pilbara Minerals’ (ASX:PLS) ‘Pilgangoora’ operation.

Today, it was JDR’s turn. Under the terms of the non-binding deal (to be binding within 6 months) JDR will sell 100% of the lithium concentrate from the lithium projects it controls to Yahua.

“The MOU provides a potential mechanism for both the development of our current lithium assets as well as an avenue for further growth in the portfolio through acquisition,” executive director Adrian Paul says.

JDR’s ‘Shaw River’ project in the Pilbara is at early stages of exploration, with initial reconnaissance encountering “a considerable number of individual pegmatites” that were sampled.

It also holds 80% of the ‘Weinebene’ and ‘Eastern Alps’ lithium projects in Austria, with the remaining 20% of the projects owned by European Lithium (ASX:EUR).

The projects are next door to EUR’s advanced ‘Wolfsberg’ deposit.

BLACK ROCK MINING (ASX:BKT)

(Up on no news)

POSCO-backed BKT wants to bring its advanced ‘Mahenge’ graphite project in Tanzania into production.

Mahenge’s 212 million tonne graphite resource makes it the fourth largest in the world. BKT says it has lowest peak capital expenditure per annual tonne of production of any development stage global graphite project, and would enjoy a high AISC margin of 63.1% once in production.

The company now needs to finalise offtake terms with POSCO, complete a 500t pilot plant run to send to other potential offtake partners, and secure finance to underpin $US116m Phase 1 development capex.

The $160m market cap stock is down 17% over the past month, and up 90% year-to-date. It had $9.3m in the bank at the end of September.

IRIS METALS (ASX:IR1)

(Up on no news)

The recent gold listing is doing very well, up 150% since its September debut.

It holds a handful of gold projects around Kookynie and Leonora in WA.

During the last quarter it completed a 6,000m drilling program at Kookynie, targeting three historical gold prospects. Assays are pending.

It is currently planning a drill program at Leonora.

GREENWING RESOURCES (ASX:GW1)

The stock formerly known as Bass Metals had previously struggled to make a go of its marginal ‘Graphmada’ graphite operation in Madagascar – but times are changing.

The mothballed project is expected to fire up again in 2024-2025, producing 40,000t of graphite concentrates per year.

The stock has also added lithium projects its portfolio, as well as an “advanced materials” R&D team.

Today, it announced high lithium concentrations from brine samples at its recently acquired ‘San Jorge’ project in Argentina.

Lithium concentrations reached a maximum of 285mg/l in the centre of the salt lake – a positive indicator of its potential, GW1 says.

A geophys survey also suggest the mineralised ‘basin’ may extend to a depth of up to 600m in the south of the salt lake, significantly deeper than the initial estimate of 300m.

A drilling program is being designed to follow up these “highly encouraging” initial results, GW1 says.

The $56m market cap stock is up 30% over the past month, and 155% year-to-date. It had $4.4m in the bank at the end of September.