Resources Top 5: ‘White gold fever’ has big lithium stocks surging

Liontown inks binding lithium supply deal with Elon Musk’s Tesla
Completion of $US240m investment by CATH into AVZ’s Manono project to be “expedited”
Belararox is now the #3 most popular IPO of 2022

Here are the biggest resources winners in early trade, Wednesday February 16.

VALOR RESOURCES (ASX:VAL)

VAL is leading the pack in a fairly strong morning for ASX uranium stocks.

The Tolga Kumova favourite has met its commitments under the farm in agreement over the ‘Hook Lake’ uranium project, 60km east of the Key Lake uranium mine in the Canadian province of Saskatchewan.

VAL can earn 80% of the project by meeting exploration expenditure milestones.

The first-year commitment has now been exceeded, VAL says, so the extra cash spent will be rolled over into year two commitments.

A 2,500m maiden drilling program is currently underway, targeting the ‘S-Zone’ and ‘V-Grid’ prospects as the first two of many targets on the property.

The next 12 months will see further drilling on the property, additional field-based work and an airborne gravity survey planned to commence in April 2022, exec chairman George Bauk says.

“Through the knowledge and experience of each of those involved and utilising the data on the project, we have developed a work program for the coming 12 months to target uranium mineralisation,” he says.

“The funds raised in December 2021 of A$5.4m through the Canadian Flow Through Scheme will enable us to advance the Hook Lake Uranium Project and our other six properties in the Athabasca Basin.”

The $48m market cap stock is up 20% year-to-date.

LIONTOWN (ASX:LTR)

The near-term lithium miner has entered a binding supply deal with Elon Musk’s Tesla.

Tesla will purchase 100,000 tonnes spodumene in the first year, increasing to 150,000 tonnes per year in subsequent years. The initial 5-year term is expected to kick off in 2024.

AVZ MINERALS (ASX:AVZ)

Fellow lithium project developer AVZ says the completion of a $US240m cornerstone investment from CATH Technologies in the monster ‘Manono’ project will be “expedited”.

CATH will shell out the cash for a 24% direct interest, plus another ~$160m to get the ~$US540m project into development.

AVZ now expects the deal to be finalised in March.

“Finalising our agreement with CATH provides certainty of funding to progress development of the Manono Project, pending the award of our Mining Licence and Collaboration Development Agreement from the DRC Government,” AVZ’s MD Nigel Ferguson says.

“We are in close consultation with the DRC Government authorities that are undertaking the Mining Licence assessment and are confident of delivering a favourable outcome for all stakeholders.”

Manono is a global standout.

According to the company, it is:

the biggest undeveloped deposit in the world
the second highest grade undeveloped deposit in the world
in the bottom cost quartile for production globally, and
in the bottom quartile for greenhouse gas emissions

As managing director Nigel Ferguson says – “very, very profitable”.

Like LTR, AVZ has enjoyed parabolic gains over the past few years. The stock is up from 4c to 82c since May 2019 – a gain of almost 2,000%.

SHREE MINERALS (ASX:SHH)

(Up on no news)

In October, SHH identified lithium potential at the ‘Dundas’ project which is interpreted to be along strike from the 14.8Mt ‘Anna’ resource owned by Liontown (ASX:LTR).

SHH’s project was historically targeted for gold; drilling was not assayed for lithium.

The explorer has drilling planned — initially around and along strike of historical drillholes with recorded pegmatite intervals — following completion of statutory surveys.

The explorer also made an application for more ground at Dundas in August 2021.

The $23.5m market cap stock is up 110% year to date. It had $3.1m in the bank at the end of December.

BELARAROX (ASX:BRX)

(Up on no news)

This fresh-faced copper-zinc explorer continues to climb in February.

BRX is now up ~140% on its late Jan listing price of 20c per share, making it the #3 most popular IPO of 2022 behind NiCo Resources (ASX:NC1) and Firebrick Pharma (ASX:FRE).

Its focus is the ‘Belara’ project in NSW, which includes two historical copper-zinc mines: Belara and Native Bee.

~5,600m of drilling will kick off towards the end of February ahead of a resource update mid-year.

Non-executive chairman Neil Warburton says this resource will be “sizeable”.

“… it’s not grassroots exploration, we know at Belara that these resources actually outcrop and historically have been mined for copper and zinc, going back around about 90 years ago,” he told Stockhead.

“It’s been drilled by various parties, so it’s really an advanced exploration project and we expect to extend the current mineralisation.”