Amid a tight market to raise cash for new mining and exploration projects, these ASX explorers are sitting pretty with a piggy bank primed to help land their next big fish or accelerate current projects.

 

During market routs, junior explorers with leverage to a ‘meaningful discovery’ or a project which boasts a clear line of sight on economic viability tend to capture investor interest.

While the idea is that a good discovery will spark a share price spurt regardless of what the broader market is doing, the nature of the speculative end of the market means some explorers won’t ever make a single dollar of profit.

Those that buck this trend, however, have put in the hard yards even when the market is tough, proving up their resources, getting drill rigs on the ground, and moving their projects further along the development pathway and up the value curve.

Some companies will advance their projects to such a stage before selling it off down the track in a bid to simplify the portfolio, generate some cash and carry out exploration elsewhere.

 

Iron ore juniors turn it up

Typically, companies try to spin off non-core assets into IPOs on the belief that it will be more profitable as an independent entity.

But when the market is down, as it is right now, ASX companies could go as far as to sell their flagship projects to interested parties, which was the case with both  Strike (ASX:SRK) and CZR Resources (ASX:CZR) earlier this year when they entered into deals with Chinese buyer Miracle Iron.

As prices surged above US$140/t towards the end of 2023, Miracle Iron narrowed in on two development-ready assets in the Pilbara, the first being Strike’s Paulsen East iron ore project.

The agreement will see SRK sell Paulsen East for $20.5m as it looks to advance the 269Mt Apurimac iron ore project in Peru, where it has exported two shipments of “Apurimac Premium Lump” DSO product grading ~65% iron.

According to its latest quarterly, SRK plans to resume DSO mining operations at Apurimac and is looking into further shipments from Peru.

With promising drill results like 154m @ 62% iron, Strike believes there’s potential to delve much deeper given the deposits are open at depth and along strike.

Now read: As iron ore prices run hot, Creasy’s CZR banks $102 million Pilbara pay day

 

CZR follows suit

A week after SRK revealed its sale, CZR announced the $102m divestment of its 85% stake in the 33Mt Mesa F, which resulted in a more than doubling of its $47m market cap in early January.

Although no immediate decision has been made on how the proceeds will be spent, it is assumed funds will be poured into the company’s exploration ground along strike from De Grey Mining’s (ASX:DEG) multi-million ounce Hemi gold discovery and Wildcat Resources (ASX:WC8) Tabba Tabba lithium project.

This latest ramp up in deals within the ASX junior iron ore space follows GWR Group (ASX:GWR) selling its Wiluna West iron ore asset in the Goldfields to privately owned miner Gold Valley for $30m as well as a $2 per dry metric tonne royalty.

GWR says it will use the cashflow to investigate and fund new acquisitions and has already started that process.

 

Goldies taking the plunge

When divestment is matched up to heightened investor interest because the gold price is in strong territory, all the better.

S2 Resources (ASX:S2R), the spinout of Mark Bennett’s Sirius Resources, announced the sale of its Finnish gold projects to Victorian explorer Outback Goldfields Corp earlier this month, just after the gold price hit a one month high at US$2,050.   

Much of S2R’s focus had been on its unique ground positions in the Central Lapland Greenstone Belt until it pipped a host of juniors when it secured one of four exploration blocks alongside one of Australia’s highest-grade gold mines in the 160-year-old Bendigo gold field, Fosterville.

That block, now known as the ‘Greater Fosterville project’, has now become S2R’s main game.

Under the deal, Outback will grant S2R an option to earn an interest in Outback’s Glenfine, Silver Spoon, Ballarat West and Yeungroon gold projects, which hold exploration synergies with S2R’s Greater Fosterville.

Strickland Metals (ASX:STK) is another goldie looking to explore a bunch of new prospects at its Earaheedy and Yandal projects after pocketing a tidy $61m from the sale of its Millrose asset in WA’s Yandal Greenstone Belt to Northern Star Resources (ASX:NST) last year.

The transaction, which more than doubled STK’s total investment in Millrose, placed the company in a highly envious position of having one of the strongest balance sheets in the junior exploration space at the time.

While Millrose now serves as a low-cost supplementary feed source for NST’s Jundee mill, STK believes it could be onto a Millrose ‘lookalike’ at its Yandal tenure with recent first pass aircore drilling uncovering a new gold structure at the Celia South prospect.

 

GSM’s war chest

Dual focused gold and lithium explorer Golden State Mining (ASX:GSM) finished the December ’23 quarter with a $2.5m war chest to spend across its portfolio of projects in WA’s Murchison and Pilbara regions.

The junior explorer has potentially opened the door to an entirely new lithium province at Paynes Find after identifying a series of outcropping pegmatites over its 1,300km2 of ground.

Up to 8,000m of AC/RC drilling is planned for the project, which is expected to kick off later this quarter.

Over at Yule, GSM is hunting for both Tier 1 gold and lithium discoveries just 13km from De Grey Mining’s (ASX:DEG) Hemi gold deposit.

But while early stage exploration work continues, GSM managing director Mike Moore told Stockhead the company is also keeping its out eye out for potentially lucrative opportunities.

“In this market, you want to do sensible deals with projects that are little more advanced, something that shareholders don’t need to use too much imagination to visualise,” he said.

“It may well be something that’s already got a resource, something that has had some drilling, or perhaps a second-tier project for another operator that we can get our teeth into.”

 

Cashed up juniors share prices today:

 

At Stockhead we tell it like it is. While Golden State Mining is a Stockhead advertiser, it did not sponsor this article.

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