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Mining
Exploration often gets pushed to the side when you’re a big mining developer but for advanced junior stocks, the discovery phase is where the real opportunity lies.
When it comes to investing in resources stocks, you know you’re onto a winner when you back a junior explorer that unearths a high-grade mineral discovery.
The aim of this year’s Resources Rising Stars Twilight Series was to bring the stories of developing, yet advanced ‘under the radar’ exploration companies straight to investors in three cities – Brisbane, Melbourne, and Sydney.
According to Resources Rising Stars’ Nicholas Read, all six presenting companies have shown, to some degree, that they are onto something big in terms of discovery.
While the commodities, market caps, and executive teams varied, this year’s presenters all had one thing in common – drill rigs currently on the ground, money in the bank, and the ability to make things happen.
Kicking off the event was Minerals260 (ASX:MI6), which came out of the Liontown Resources (ASX:LTR) camp in 2021 for the purpose of spinning-out its non-lithium assets.
MI6 chief executive Luke McFadyen, who started in the role recently, updated investors in a quick, 15-minute whirlwind tour of the company’s projects and latest news.
“There is no doubt exploration is the focus for this company,” he said.
“90% of our expenditure for the next 12 months is all on exploration so value through the drill bit is where we are going to be focused.”
With $17m in the bank, McFadyen says investors can expect regular updates on all three of its projects, which will have drilling completed across all three by the end of the year.
The newly acquired Aston project in WA’s Gascoyne province (located near recent sizzling lithium discoveries by David Flanagan’s Delta Lithium) quickly turned the company from a base metals explorer into a fantastic critical minerals (lithium and REE) opportunity with multiple high-priority targets defined.
“It is very early stage, and a lot of work needs to be done but we will be out there drilling in the next couple of months,” he said.
The company is backed by small-cap whisperer Tim Goyder, the man behind two of the largest explorers on the ASX over the past few years (Liontown and Chalice Mining).
Lithium gets all the attention but news on the street is there’s a heck of a lot more graphite in lithium-ion batteries, more than half in fact.
Most of the graphite comes from or is processed in China but Kingsland Minerals’ (ASX:KNG) promising Leliyn discovery in the Northern Territory could potentially open the door to new Western graphite supply.
KNG managing director Richard Maddocks says the company is proving up the scale of its recently released 200–250Mt exploration target at 8–11% TGC, which is coming to fruition through more drilling.
“The exploration target we have put out is only based on 25% of the total strike length,” he added.
“That gives you an idea of the potential there.”
While grade is a big factor, Maddocks says when it comes to graphite the end product and metallurgy is by far the most important thing.
“Traditionally coarse flake has been the preferred product for industrial uses, and still is – that’s why the jumbo flake gets a premium price.
“But the finer flake graphite is preferred for battery use where a smaller flake size is preferred.
“Petrographic analysis has indicated graphite flake size from Leliyn of up to 160 micron with average an size of 50–80 micron, and more samples will be released in the coming months.”
Kairos Minerals (ASX:KAI) has a growing appetite for critical minerals with both lithium and REE exposure at its highly prospective Roe Hills project.
It’s been a busy couple of weeks for the explorer following the successful $4m strategic placement to Global Lithium Resources (ASX:GL1) – which now holds ~10% of the company – and the completion of a $6.55m non-renounceable rights issue, fully underwritten by Canaccord Genuity.
$10m in the bank puts KAI in good stead to carry out its lithium and REE exploration drilling programs on the Roe Hills project with GL1, which will be sharing its technical and logistical services.
“To give shareholders the best of what we got means we have to drill out these targets and move forward to discovery,” KAI managing director Peter Turner says.
“The 332km2 ground at Roe Hills adjoins GL1’s Manna lithium project, about 100km east of Kalgoorlie, where a new resource estimate was unveiled earlier this week which now stands at 36Mt at 1.13% Li2O.
“We are very encouraged by that; I know Global Lithium is very bullish on Manna.”
The company plans to launch into a 7,000m RC drilling program focused on the Black Cat and Crystal Palace lithium prospects at the end of the next week, before the drill bit turns towards REEs at Blue Jay.
“But I’ve told the exploration manager to start planning for more drilling. If we hit spodumene pegmatites – which we hope are there – then we will be straight in there with a diamond rig,” Turner said.
Moving across to South America, Sunstone Metals’ (ASX:STM) managing director Malcom Norris outlined its large-scale copper discoveries in southern and northern Ecuador.
The company believes it has two globally significant discoveries – Bramaderos, which is a little more advanced and El Palmar, which is earlier stage but holds the potential for STM to join the billion-tonne porphyry club on the same belt as two other great billion tonne deposits.
At Bramaderos, the company is chasing both copper and gold.
“We have two drill rigs active at the Limon discovery where we have higher grade porphyry mineralisation but more recently we’ve drilled a high-grade gold-silver opportunity which will act as a high-grade front end to the development of the much larger porphyry opportunity.”
The company is confident it can deliver a 10M ounce type district for development. It’s so confident in fact that is has gone public with the announcement.
El Palmar, on the other hand, lies on the Toachi Fault Zone which contains the 3 billion tonne Cascabel deposit – owned by Solgold, where the Sunstone team were involved in the early days.
It also comprises the 1bt Llurimagua copper-moly porphyry deposit. “We are absolutely in the right address,” Norris says.
In what might be the biggest turnaround story on the ASX in recent times, Gascoyne Resources (ASX:GCY) managing director Simon Lawson addressed the crowd on its monster Never Never deposit.
The once struggling low-grade producer made the difficult decision to shut down operations at the Dalgaranga gold mine in WA’s mid-west last year, in the vicinity of significant Aussie gold producers like Westgold Resources (ASX:WGX), Ramelius Resources (ASX:RMS), and Silver Lake Resources (ASX:SLR).
After a strategic rethink, the company decided to turn the drill rigs around in a different direction in the low-grade Gilbey greenstone belt and began to reel in hits of up to 59m grading 12.5g/t, 54m grading 6.55g/t and 32m grading 8.58g/t.
More than 400 drill holes later, the explorer is now looking at a resource of 721,000oz at 5.85g/t gold, only 1km away from GCY’s 2.5Mtpa processing plant at the Dalgaranga gold mine.
“We have changed the future of that greenstone belt and have proven beyond any doubt that there is high-grade gold in that region,” he says.
“We’ve had various people throw stones at our ability to produce a high-grade five-year mine – we have a 2.5Mtpa plant and you need a lot of tonnes to fill that up but we are focused on discovering and growing and we want to keep repeating that, it seems to work for us.”
Rounding off our list of presenters is Cygnus Metals (ASX:CY5), one of many ASX players chasing lithium riches in Canada’s exploration hot spot, James Bay.
“CY5 was a very early mover in James Bay Quebec,” CY5 managing director David Southam says.
“I see the James Bay region as the new Pilbara of North America, it is decades behind where the Pilbara is in terms of lithium exploration, but we know there is an absolute abundance of lithium sitting at surface.
“We entered the region not long after Patriot Battery Metals and Winsome Resources and while Patriot gets a lot of the attention with their amazing intersections, we are 12 months in and about to publish a resource at our Pontax project,” he explains.
“This resource has had the least amount of drilling. We’ve put in about one third of what other companies have drilled, which shows the opportunity and huge upside.”
Cygnus also has other emerging lithium assets in its Canadian portfolio at Auclair and Mitsumis, as well as the Sakami project along strike from Patriot Battery Metals’ Corvette discovery.
The company also has an exciting emerging clay-hosted rare earths discovery at Bencubbin in Western Australia.
At Stockhead we tell it like it is. While Kingsland Minerals and Gascoyne Resources are Stockhead advertisers, they did not sponsor this article.
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