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Mining
Welcome to Part 2 of Stockhead’s guide to cheap goldies with resources over 1Moz.
But first, a quick lesson.
In mineral exploration and development, especially gold, there aren’t many sayings more ubiquitous than ‘grade is king’.
This well-worn proverb infers that higher grades are important above all else to the economics of a potential mining operation.
Of course, all else being equal higher grades are king. But things are never equal between mining operations.
Factors like orebody depth, metallurgy, size, and mineralisation style differ wildly and play a massive part in measuring all in sustaining costs (AISC) – that’s the amount it costs an operation to produce one ounce of gold.
And companies only figure that out once they start economic studies.
READ: When it comes to gold deposits, grade is NOT king
Another 13 advanced +1Moz ASX gold exploration stocks, in no particular order. You can read part 1 here.
Ounces: 2.1Moz
Market Cap: $100m
Titan owns five large exploration projects in mineral rich Southern Ecuador.
The current focus is ‘Dynasty’, a large, high grade ~2.1moz and growing epithermal gold project, which also contains 16.8Moz of silver.
The mineralisation at Dynasty – which runs +9km long and +1km wide — remains open in all directions says TTM.
All up, only 50% of the tenure has been explored.
Ounces: 1Moz
Market Cap: $18m
AWV’s historical Big Springs project in Nevada produced ~386,000oz between 1987 and 1993, when mining ceased due to the gold price environment.
In 2014, a 1Moz JORC resource was established, which included a 415,000oz high grade component (ore grade of 4g/t).
AWV believes there is a lot more to find here.
The project is 20km north of the ‘Jerritt Canyon’ gold mine, which has produced over 10Moz since 1981 with a remaining resource of 1.2Moz.
A late 2021 drilling program hit paydirt at the ‘Crusher Zone South’ and ‘Beadles Creek Fault’, which represent the first new discoveries at Big Springs in the last decade.
Results included thick and shallow hits like 27.43m @ 2.39g/t from 21.3m. Decent grade, too.
More drilling designed to add ounces is due to start in Q3.
Ounces: 1Moz
Market Cap: $29m
MVL is sitting on ~1Moz of gold at its ‘Tabakorole’ project (70% ownership) in southern Mali, a region which includes Firefinch’s 7.5Moz Morila gold mine and Resolute Mining’s 7Moz Syama gold mine.
It also has a strong pipeline of regional targets including ‘Lone Wolf’, where drilling pulled up 14m at 4.9g/t, including 4m at 16.3g/t fropm 33m.
This is the best intercept by Marvel outside of the Tabakorole resource, the company says.
An “expansive” exploration program across the portfolio is ongoing, with results to come.
Ounces: 4.4Moz
Market Cap: $35m
ANL is drilling hard at the 4.4Moz Giro project in the DRC, around 35km away from Barrick and AngloGold’s 16Moz Kibali gold mine.
It’s a nice change of pace from the explorer which, until a recent diamond program, hadn’t drilled the project since 2019.
This drilling has now pulled up a highlight ~60m long intersection grading 2.35g/t from 100m (hole GRDD039), announced early June.
“We are very excited about the shallow high-grade zone confirmed by GRDD039,” ANL CEO Conrad Karageorge says.
“The confirmation of this mineralisation has the potential to improve the overall feasibility of the Giro project.”
Amani has now completed four of the eight diamond drillholes (extensional and infill) planned at the main deposit.
Ounces: 6.1Moz
Market Cap: $45m
This advanced South African gold explorer currently has 6.1Moz in the bag at an ore grade of 4.17g/t.
Its focus is the TGME underground project.
The first phase of the project was going to involve the development of three mines – Frankfort, CDM and Beta – with a probable ore reserve of 419,000oz and 3.5Moz of inferred mineral resources beyond that.
A PFS in April 2021 said the mine could produce 60,000ozpa from its third year of operations with a 7.67-year mine life at AISC of US$905/oz and a capital cost of US$79m.
However, the company is looking to supersize that to 160,000oz per annum within five years from seven production units
With a forecasted operating cost half the current gold price (~$US900/oz), TGM would “become the lowest cost producer in South Africa”.
A project DFS is due out soon.
Ounces: 2.9Moz
Market Cap: $24m
TSX-ASX listed SRR owns the ‘Sanutura’ project in southwest Burkina Faso, which between the Tankoro and Bondi deposits has a mineral resource of 2.9Moz.
Funds from the recent ASX IPO will be used for first major drill program in five years, with 50,000m of mostly extensional drilling planned in the next 12 months.
The gold explorer is led by MD Andrew Dinning, former COO at Moto Gold Mines, which outlined the 22Moz Kibali gold mine in the DRC and flipped it to Randgold (now Barrick) and AngloGold Ashanti for US$600 million in 2009.
Ounces: 1.28Moz
Market Cap: $67m
In late 2021, the WA gold mine developer snubbed a 16c per share takeover offer from miner and major shareholder St Barbara (ASX:SBM), and instead raised $7m to advance the flagship 1.28moz ‘Cardinia’ gold project on its own.
The company says a target of 1.5-2Moz must be reached to pull the trigger on a standalone development, which probably won’t be a problem.
Aggressive exploration to grow the resource to an initial ~1.5Moz has already uncovered several new discoveries within short distance of known deposits.
A resource upgrade is due out soon.
Ounces: 2Moz
Market Cap: $70m
In just four years BC8 has gone from a junior explorer with 80km2 of ground and no resources to a “multi-project near term gold producer” at Kal East (1.3Moz) and the near finalised acquisitions of Coyote and Paulsens (~700,000oz) from Northern Star Resources (ASX:NST).
The explorer has shelved development plans for Kal East – despite some solid base case production numbers — until “labour availability conditions improve”.
They can’t find anyone to build the thing, in other words.
Which is okay, because they now have the company-making ‘Paulsens’ and the ‘Coyote’ projects (including mill infrastructure) to keep them busy.
“Those assets are no longer meaningful or of a size that would move the needle for Northern Star – but those same assets in Black Cat can be company-makers,” says Shaw and Partners WA state manager Davide Bosio, who is also a shareholder.
“There’s lots of exploration upside, both along strike but also regionally around that Paulsen’s mine.
“You’ve got infrastructure in place, it’s in very good condition, it’s all permitted and if Black Cat are able to exploit another repetition of that system, or even find new ounces that were not exploited by Northern Star, that could turn into a company-maker.”
Bosio also flagged the “excellent” management team at BC8 which includes Paul Chapman and Les Davis who are both founders of Silver Lake Resources (ASX:SLR).
“[Black Cat] could go from having three exploration projects now to having three potential development/production projects, and if they can get them into production there’s no reason why they can’t be another Ramelius or Silver Lake.”
Ounces: 1.1Moz
Market Cap: $57m
MEK is in the home stretch to its major pre-feasibility study for the 1.1Moz Murchison gold project, which includes the high grade ‘Andy Well’ mine.
Andy Well produced 350,000oz at ripper grades of more than 8g/t for Doray Minerals between 2013 and 2017 before its merger with Silver Lake Resources.
A new round of drilling will target extensions to high grade results at the nearby ‘St Anne’s’, where no mineral resource has been completed to date, and on the western flank at the 610,000oz ‘Turnberry’ deposit, chasing up significant gold strikes outside the current resource estimate.
Assay results are due July. The PFS is slated for release in September.
A scoping study last December gave the project an NPV and IRR of $124m and 46% respectively.
The mine would generate pre-tax undiscounted cash flow of $182m at an A$2400/oz gold price, with life of mine EBITDA of $457m from production of 422,000oz of gold over eight years at all in sustaining costs of $1655/oz.
Ounces: 1.5Moz
Market Cap: $46m
STM’s recently upgraded ‘Apollo Hill’ deposit has a resource of 76Mt @ 0.60g/t gold for 1.469Moz.
It has now added 964,000oz to the Apollo Hill resource in just over four years from listing with 128,924m of drilling.
That is over 7.5oz added for every metre drilled, the company says.
While there’s strong potential to continue growing the resource, the Apollo Hill deposit has reached critical mass “and development and optimisation studies have commenced”, STM says.
Meanwhile, drilling continues across STM’s +1000sqkm land package with several significant intersections returned at nearby discoveries including ‘Bob’s’, ‘Calypso’, ‘Hercules’ and ‘Artemis’.
Ounces: 2.6Moz
Market Cap: $33m
The Colombian explorer recently released a maiden 1.3Moz resource for the ‘Tesorito’ Gold Porphyry.
That takes the wider ‘Quinchia’ project to a total combined resource of 2.6Moz at 1.02g/t.
But that’s just the start; by mid-March quarter five rigs were operating across multiple targets.
“…with that ramped up activity, the Company anticipates more frequent drilling updates will begin to flow in from early May,” the company says.
Meanwhile, LCL intends to commission a Preliminary Economic Assessment (the first proper look at the economics of building a project) at Quinchia.
Ounces: ~1.7Moz
Market Cap: $37m
GBZ has ~1.6Moz combined gold resources in the flagship Drummond Basin project in QLD across the ‘Yandan’, ‘Mt Coolon’ and ‘Twin Hills’ assets.
The aim of ongoing drilling is to define between 2-3Moz to “support GBM’s transition into a mid-tier Australian gold company”.
Recent drilling results have looked good and include a highlight 49m at 5.18g/t from 310m at Twin Hills.
GBZ also holds a 50% interest in the ‘Malmsbury’ Project (JV with Novo Resources Corp) in the Victoria goldfields (current resource: 104,000oz) and a small cash making heap leach operation called ‘White Dam’ in South Australia.
Gold production of 396oz at White Dam during the March quarter provided revenue of $1,038,000.
Ounces: 1.15Moz
Market Cap: $40m
Listed in March this year, FEG boasts a 1.15Moz and growing gold resource at the ‘Wonogiri’ project in Indonesia.
There’s also ‘Trenggalek’, where more than 17,700m of drilling has been carried out to date, and ‘Woyla’, a project previously held by Barrick Gold and Newcrest.
FEG has just got environmental permission to drill Woyla – “one of the most highly prospective undrilled copper gold projects in South-East Asia” — for the first time in the project’s history.
FEG also has a bunch of earlier stage projects in Australia.
Cumulatively, over $40m has been spent across the portfolio to date, it says.
At Stockhead we tell it like it is. While Meeka, GBM and Titan are is a Stockhead advertisers, they did not sponsor this article.
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