• Argonaut has delivered its 2023 list of best undeveloped mining projects on the ASX
  • But which 12 exciting projects sat just outside its criteria
  • Lithium, gold, uranium, rare earths and niobium proponents all got a look in

A few days ago we hit up some research from WA stockbroker and mining experts Argonaut, who lifted the lid on the 11 undeveloped ASX (or ASX adjacent) projects they fancied to break the barriers keeping mines from getting off the ground.

In Argonaut’s estimation, these are mines that are attractive enough from an economic perspective to justify development in a world where that is getting harder and timelines from discovery to production are getting longer.

Want to get a read on its 11 top undeveloped projects on the Aussie bourse (technically one is London listed) see that below:

READ: Argonaut says it keeps getting harder to build a new project – but rates these 11 developers to get it done

READ: Barry FitzGerald: 11 undeveloped ASX projects that Argonaut thinks are undervalued – and by how much

There are some strict criteria there.

Argonaut isn’t fussed about projects within the hands of the majors. It puts a $5 billion limit on the market caps of the companies in its coverage — ergo a successfully delivered mine development has the potential to genuinely rerate the stock in question.

It wants to see an internal rate of return — a measure of the project’s profitability — of over 25%, and that it will be profitable across all commodity cycles.

It also views the projects as having a high likelihood of hitting a more than $100 million valuation within 24 months and needs them to be between a scoping study and pre-commercial production.

Behind the stocks and projects that meet these metrics there are a further 12 Argonaut has given special mentions.

These are — of their nature — more speculative. While last year’s BUPs saw a 12-month share price gain of 6% (ranging as high as 82% before the equity markets nose-dived with falling enthusiasm around the global economy) last year’s collection of special mentions dropped 22% in market value.

But many already look like strong projects — even one pre-resource (you probably know who we’re talking about by now) which has every major in the country sniffing around.


AUSGOLD (ASX:AUC) – Katanning Gold Project

Ausgold has over 3Moz of gold — 3.04Moz at 1.06g/t to be exact — down at its Katanning project in the relatively untapped Great Southern region of WA.

Located 40km northeast of the country town in WA and 75km southeast of Perth, Katanning is relatively virgin gold for gold developers.

But Ausgold’s $68m market cap belies the scale of the project, where Argonaut analyst Patrick Streater says a DFS is due early next year.

That could mean some M&A is in order, especially given the attractiveness of mid-tier goldies in 2023 with such events as the takeover by Ramelius Resources (ASX:RMS) of Musgrave Minerals.

“Once permitted, the project looks attractive to existing producers looking for a long-life operation with a 136koz/pa production profile,” he said.


AZURE MINERALS (ASX:AZS) – Andover Lithium Project

It doesn’t take a guru to work out why this one’s included. If AZS hits even the low end of an exploration target of 100-240Mt at 1-1.5% Li2O at its 60% owned Andover project in the Pilbara it will be one of the largest hard rock lithium discoveries in the world.

At the upper end, it would challenge mines like MinRes and Albemarle’s Wodgina and SQM and Wesfarmers’ Mt Holland for size.

While 40% of the deposit is owned by legendary prospector Mark Creasy, a gridlock has now formed on Azure’s register in the wake of a $1.63 billion takeover offer for the Tony Rovira-led explorer.

SQM holds almost 20%, but Gina Rinehart is hot on its heels at 18.9%, MinRes boasts 13.6%, Mark Creasy has 13.2% and Wilhelm Zours’ Delphi and Deutsche Ballaton control around 10.8%.

Where it all lands will be interesting to see, with Andover a potentially significant piece in the game of chess to consolidate power in WA’s world-leading lithium industry.


BERKELEY ENERGIA (ASX:BKY) – Salamanca uranium project

Uranium hopeful Berkeley was knocked down from a spot on the best undeveloped project list to a secondary special mention slot after Spain upheld a decision to reject the construction of a uranium concentrate plant at Salamanca in February.

It’s in an area, Argonaut’s George Ross says, where uranium has historically been mined in Western Spain.

“The Project hosts Mineral Resources containing 89.3Mlbs and Reserves containing 54.6Mlbs of U3O8. Despite facing ongoing permitting challenges, Salamanca is backed by strong underlying technical fundamentals,” Ross said.

Berkeley had $79m in the bank and no debt as of June 30, but will need a change of heart from Spain’s ruling Socialist Workers’ Party, after Pedro Sanchez secured another four year term as Prime Minister after a four-month standoff to form a minority government.

However, moods around nuclear power are shifting and prices for uranium are rising, with Ross saying Argonaut “remain confident Salamanca will ultimately have its day in the sun.”


EMERALD RESOURCES (ASX:EMR) – North Laverton gold project

Once desired by King of the Hills gold mine owner Red 5 (ASX:RED) Bullseye Mining’s North Laverton gold project has long been coveted by ASX-listed miners.

Emerald is up 115% already year to date on the success of its first gold operation, the Okvau mine in Cambodia.

It holds the bulk of North Laverton’s public unlisted owner Bullseye, but has run afoul of Takeovers Panel declarations, emerging as a road block to gain full control of its 1200km2 holding of Northern Goldfields tenure.

Emerald’s plan is to develop the project as a string of satellite deposits around a central processing facility, with five defined gold deposits located on 36km2 of mining leases and 20,000oz already produced from the Bungarra deposit.


GREATLAND GOLD (AIM:GGP) – Havieron (30%) gold-copper project

Greatland’s London listed but after delaying a run at the ASX boards this year a secondary listing is on the cards in Australia in 2024.

It makes sense for Greatland to have a bit of skin in the game in Australia.

Boss Shaun Day was the Northern Star Resources (ASX:NST) CFO for many years, while the board is littered with Fortescue (ASX:FMG) identities and Andrew Forrest’s Wyloo Metals is a major shareholder.

It will also give Aussie investors easy access to all parts of the Havieron discovery in WA, the saving grace of the ageing Telfer mine held by Newmont (until a couple weeks ago Newcrest).

Newmont (ASX:NEM) holds 70% of Havieron, a large underground deposit that will be the lifeblood of the near 50-year-old Telfer gold and copper operations in WA’s inland Pilbara.

Greatland has 30% of the project, one of the few major gold and copper finds in WA in recent years along with De Grey’s Hemi (9.5Moz) and Rio’s Winu (7.8Moz gold, 2.9Mt copper at a 0.2% CuEq cutoff).

There has long been speculation that Greatland would look to raise cash to acquire the other 70% of Havieron and Telfer with Newmont likely to trim the fat after adding Newcrest and its prized Cadia and Lihir mines to a now more than 8Mozpa global portfolio.

Though on a recent tour of Australia to ring the bell on Denver-based Newmont’s ASX listing, its Aussie-born boss Tom Palmer dulled speculation the company wanted to kick Telfer to the curb.

For Greatland, it remains a key player in a mine likely to be developed as demand for gold and copper runs higher.

“Greatland Gold’s Havieron discovery in the Paterson Region in northern WA has been the real success story of the Paterson in the last 10 years,” Argonaut’s Streater said.

“From the initial discovery hole in November 2018, development progress has been rapid, aided by the participation of major producer Newcrest (now Newmont) who now own a 70% interest in Havieron.

“Newcrest’s August 2022 Resource Statement for Havieron totalled 85Mt at 2.0g/t Au and 0.26% Cut for a total of 5.5Moz of gold and 222kt of copper.

“Completed drilling since then continues to expand the resource at depth at the SE Crescent, Northern Breccia and Eastern Breccia areas.”


LUNNON METALS (ASX:LM8) – Kambalda nickel project

Lunnon is now the only major ASX player in the Kambalda region with its own resources after regional supremo Mincor’s $760 million acquisition by Wyloo.

That deal comes with the live threat BHP (ASX:BHP) could lose access to the tonnes Mincor ran through its Kambalda concentrator from 2025 when an offtake deal runs up and Wyloo could look elsewhere or deliver them to a new nickel refinery in Kwinana it is studying in concert with IGO (ASX:IGO).

That means Lunnon’s assets could be best placed to provide feed to BHP — or another suitor/offtaker with

Lunnon owns the Silver Lake mine — 1.6Mt Kambalda’s original 1966 discovery — the Fisher mine and the Foster and Jan mines.

Falling into the St Ives gold operations run by Gold Fields, Lunnon’s top shareholder, those assets were never reopened in the early 2000s nickel boom when the old WMC sold many of its mines to emerging juniors like IGO and Mincor.

Untapped since the 1980s and 1990s, Lunnon has also made the new Baker discovery, uncovering 929,000t of ore at a classic Kambalda sulphide grade of 3.3% Ni for 30,800t of metal and a probable ore reserve of 612,000t at 2.86% Ni that would underpin a project with a pre-tax NPV of $164m at a build cost of just $18.6m.


METEORIC RESOURCES (ASX:MEI) – Caldeira rare earths project

Did someone say “world leading magnet rare earth project?” Argonaut’s George Ross said just that about Caldeira’s potential.

The Brazilian property contains one of the highest grade clay rare earths resources in the world, making it in Argonaut’s estimation a global standout.

Only the lack of a scoping study keeps the $450 million capped Meteoric from being in the main list. That’s due early next year through Ausenco.

Caldeira boasts 409Mt at 0.26% total rare earth oxides, including a high grade component of 72Mt at 0.46% TREO, with just 20% of the property drilled so far.

Around 24% of the rare earths metals are magnet rare earths like praseodymium and neodymium. Those magnets are used in electric vehicle motors and wind turbines along with defence applications and more, making them critical for future facing energy technology.

The big test of the deposit will be its leachability in weak acids.

The benefit of “ionic” clay rare earths is they can be mined without blasting and processed through leaching at ambient temperatures, meaning energy intensive and environmentally sensitive processes like cracking and flotation used to process hard rock deposits like Lynas’ Mt Weld mine can be bypassed.

But not all clay rare earth deposits share those qualities, and some require more aggressive leach methods to liberate the metals from the ore.

“Ongoing metallurgical test work programs have achieved an average leachability of 70% from oxidised clays (grade range of 0.14-1.0% TREO) utilising an ammonium sulphate wash at pH 4.0,” Ross said.


PATRIOT BATTERY METALS (ASX:PMT) – Corvette lithium project

Much like Prince’s Little Red Corvette, TSX and ASX listed Patriot was much too fast earlier this year as the stock charged higher to almost $2 ahead of a resource release that placed the Corvette discovery in the James Bay region of Quebec among the 10 largest hard rock lithium deposits in the world.

Now we’ll see if it’s going to be a love that’s gonna last for those investors as their little red love machine looks to head back into the green and find a development pathway for the Corvette find.

Some of the geological data came under the microscope ahead of the maiden inferred resource of 109Mt at 1.42% Li2O issued in July, which preceded a C$109 million ~5% investment from the world’s biggest lithium producer Albemarle.

“Some cross sections did show tight pinching and swelling of the pegmatite host however reasonable continuity was demonstrated with the drilling completed to date,” Streater said of the $1.25 billion explorer.

“More clarity around the geometry of these pegmatites will come in time through further drilling but for now, in Argonaut’s view, the geological interpretation holds up to support the large tonnage reported in the MRE.”

Chaired by legendary former Pilbara Minerals boss Ken Brinsden, Patriot is now trying to go about permitting Corvette, which sits on top of a lake system.

It has a 2028 start date in mind, but there are uncertainties around the regulatory environment in what is a relatively new lithium market with unique environmental characteristics.


PREDICTIVE DISCOVERY (ASX:PDI) – Bankan gold project

PDI has discovered 5.4Moz at 1.66g/t at the Bankan project in Guinea, which sits in the Outer Buffer Zone of the Upper Niger national park.

Mining would need the special approval of the Guinean Government, currently the junta which ousted former president Alpha Conde in a coup in 2021 given the sensitivity of the area, a hotspot for chimpanzee conservation.

Argonaut analyst Ben Crooks said it is optimistic PDI “is well prepared to navigate this hurdle” after a site visit.

A PFS is scheduled to come out in the first quarter of next year, with an exploitation permit target in mid-2024.


SPARTAN RESOURCES (ASX:SPR) – Never Never gold project

Spartan Resources was, once, Gascoyne Resources, which had an invidious reputation on the back of its Dalgaranga gold project, where operators could never really make its low grade dirt work.

Instead the new management team led by former Northern Star geo Simon Lawson have targeted the high grade Never Never find, which now tallies 721,000oz at 5.85g/t.

An underground component contains 630,000oz at 7.64g/t and the once battered and bruised goldie is now up 282% YTD.

Argonaut’s Streater said the Never Never deposit will be able to provide baseload feed to restart the Dalgaranga Mill near Mt Magnet at a ‘scaled back’ capacity of 1.6-1.7Mtpa.

“Spartan’s current focus is drill testing several Never Never “look-a-like” targets along strike of Never Never,” he said.

“Additional discoveries along strike will enable Spartan to
operate at multiple production fronts assisting in keeping the Dalgaranga Mill fed.

“Spartan are scheduling a Restart Study for CY24 to outline what a Never Never mining scenario will encompass.”


WA1 RESOURCES (ASX:WA1) – Luni niobium project

After drill results like 40m at 3.% niobium pentoxide, Argonaut has modelled the Luni discovery on WA’s border with NT at 20Mt with a grade of more than 2.6% Nb2O5, a deposit Ross describes as having the hallmarks of global significance.

A single Brazilian company called CBMM controls 85% of the market for niobium, a critical metal in steel and battery technology.

If Luni stands up to Argonaut’s expectations it could help customers put a dent in that virtual monopoly.


WIA GOLD (ASX:WIA) – Kokoseb gold project

Down 38% in the past year, $28.5m capped Wia Gold is the smallest player on Argonaut’s list after delivering a maiden resource of 41Mt at 1g/t for 1.3Moz at its Kokoseb gold project in Namibia.

It’s located in the Damaran Belt, not too far from TSX-listed African gold leader B2Gold’s 2.6Moz Otjikoto mine, along with two significant development assets held by Osino Gold, the 3.1Moz Twin Hills and 900,000oz Ondundu.

Argonaut’s Streater said Wia had placed five rigs onsite in the past couple months to drill out the discovery further.


Argonaut’s special mentions for best undeveloped project


At Stockhead we tell it like it is. While Spartan Resources and Azure Minerals were advertisers at the time of writing, they did not sponsor this article.