Lithium Explorers Rebut Recent Sentiment

COMMODITY CAPERS: Although there has been some pain for lithium stocks of late, it seems the essential battery starter is doing its best to escape from being clumped in with other underperforming commodities.

This week some of the bigger players in the lithium space enjoyed some slight gains with IGO (up 4.9 per cent) and Pilbara Minerals (up 6.3 per cent) on Wednesday helping to lead the mining sector (up 0.5 per cent) higher on that particular day.

There was also plenty of action in amongst the smaller participants during the week who, it seems, are prepared to take on market sentiment and not succumb like their nickel counterparts.

 

 

TG Metals (ASX: TG6) informed the market of an encounter with further lithium mineralisation whilst drilling at the Burmeister prospect within the company’s Lake Johnston lithium-nickel-gold project in Western Australia.

TG Metals reported assays from an ongoing diamond drilling campaign it said had confirmed continued intersections of spodumene bearing pegmatites exhibiting high lithium oxide (Li2O) grades.

Results included

TGRCD0043
23.5 metres at 1.52 per cent Li2O from 127.4m, including 6.6m at 1.55 per cent Li2O from 127.4m and 14m at 1.67 per cent Li2O from 136.5m;

TGRCD0032
10.5m at 1.6 per cent Li2O from 87.2m; and

TGRCD0037
7.6m at 1.37 per cent Li2O from 119.4m and 1.6m at 2.32 per cent Li2O from 97.7m.

“These initial results from the 2024 drilling confirm Burmeister as a significant high-grade spodumene lithium discovery with excellent potential as a near term major deposit,” TG Metals CEO David Selfe said in the company’s ASX announcement.

“This large mineralised system continues to show upside with thick pegmatite intervals intersected up dip from the original discovery holes.

“The drilling program has provided sufficient core sample for our first round of metallurgical testwork which will now begin in earnest.

“The results of this will add to the planning for resource drill out at Burmeister.

“Permitting on the promising Jaegermeister prospect is progressing well with field activities nearing completion.

“In addition, we will be testing wider expanses of the soil anomaly with seismic geophysics to further inform the lithium pegmatite geological model and our drill targeting.

“We look forward to the next round of drilling on Burmeister and the first drilling on our other highly prospective targets at Jaegermeister and Tay.”

TO READ THE FULL TG METALS ANNOUNCEMENT: CLICK HERE

TG Metals CEO David Selfe and Wally Graham at the 2024 RIU Explorers Conference in Fremantle

 

Widgie Nickel (ASX: WIN) may consider a change of shingle having carried out a targeted review of its entire tenement package for lithium-caesium-tantalum (LCT) pegmatites in 2023 following the company’s Faraday lithium discovery in October 2022.

The review identified prospects surrounding Faraday-Trainline, Voyager, Farson4 and other regional targets, which are now being systematically assessed via reconnaissance campaigns.

The latest of these is the Gemini prospect, located 600m north of Atomic 3 and extends the lithium trend to 1.2km from Voyager lithium prospect.

Visible spodumene has been identified in the field supported by high-grade rock chip assays.

“Widgie’s lithium exploration program is starting to paint a bigger picture of endowment,” Widgie Nickel managing director and CEO Steve Norregaard said in the company’s ASX announcement.

“Hot on the heels of the Farson discovery we have identified another new high-grade lithium occurrence at a new prospect named Gemini with indications that there may be a substantial feeder system in close proximity.

“Boots on the ground geology is paying dividends with these additional results from our 2024 field program re-evaluating the whole of Widgie’s tenure for lithium.

“The systematic approach starting with grassroots mapping and sampling has been validated by these high-grade lithium results.

“This is only the beginning.

“Widgie is well positioned to make further discoveries in the highly prospective Lithium Corridor and is ideally set to build on an already established lithium resource base of 13,500 tonnes of contained Li2O and its substantial nickel endowment of 190,300 tonnes of contained nickel.”

TO READ THE FULL WIDGIE NICKEL ANNOUNCEMENT: CLICK HERE

 

 

Asra Minerals (ASX: ASR) extended its lithium exploration tenure by entering an option agreement to add two new tenements to its Lake Johnston project portfolio.

Asra Minerals’ Southern Hub at the Lake Johnston project will expand to 550 square kilometres of land in the southern Yilgarn region of Western Australia some 150km south-west of Kalgoorlie.

The company described the ground as “fertile geological ground for LCT pegmatites”,noting it to be surrounded by several lithium projects.

“Recent lithium bearing pegmatite discoveries, and investment by Rio Tinto into the Lake Johnston area, validates the districts enormous critical mineral potential, and its vastly under-explored status,” Asra Minerals managing director Rob Longley said in the company’s ASX announcement.

“The long term outlook for lithium is strong and new discoveries in Tier 1 jurisdictions like Western Australia are vital to support the growing demand for critical minerals and decarbonisation efforts, globally.

“Recent funding by the Government to assist early stage critical mineral exploration companies to grow end-to-end supply chains with Australia’s International partners is further evidence of the global efforts to encourage exploration and discoveries.

“Asra’s Southern Hub will be expanded as prospective ground becomes available to explore and improve our chances of discovery in the highly enriched and easily accessible southern Yilgarn area of WA.

“We are excited to partner up with the respected Geoscientists at Waree to explore two additional EL’s that adjoin our current holding at Lake Johnston.”

TO READ THE FULL ASRA MINERALS ANNOUNCEMENT: CLICK HERE

 

 

Green Technology Metals (ASX: GT1) announced infill lithium assay results returned from the North and South Aubry deposit located at the company’s Seymour lithium project in Canada.

Green Technology Metals reported an encounter with high-grade long intervals more than 20m thick and with grades up to 2.92 per cent Li20, which it claims to continue to confirm strong continuity of lithium mineralisation at the North Aubry deposit.

The infill results will assist a Mineral Resource Estimate upgrade for Seymour Green Technology Metals currently has underway, enabling improved Resource confidence category levels to feed more tonnes into an upcoming DFS.

The drilling achieved the best high-grade drilling intercept returned to date across the company’s portfolio of:

GTDD-23-0446
24.2m at 2.69 per cent Li20 from 235.8m, including 22.2m at 2.92 per cent Li20 from 235.8m.

Current North Aubry Mineral resources are 10.3 million tonnes at 1.03 per cent Li2O, representing part of a Global Resource of 24.9 million tonnes at 1.13 per cent Li2O.

“These recent results from infill drilling at Seymour are some of the highest grade and thickness ever defined, further proving the robust nature and quality of the North Aubry pegmatite which is amenable to both open pit mining and simple dense media separation,” Green Technology Metals CEO Luke Cox said in the company’s ASX announcement.

“The team will now start modelling an updated MRE for Seymour increasing the resource confidence level, that will be used in the upcoming Feasibility study.

“Looking ahead to the second half of 2024, we have plans to expand our regional resource base and look forward to commencing our maiden exploration drilling campaign at the nearby highly prospective Junior lithium project, which sits in the same proven fertile greenstone belt as Seymour.”

TO READ THE FULL GREEN TECHNOLOGY METALS ANNOUNCEMENT: CLICK HERE

Green Technolgy Metals CEO Luke Cox and Wally Graham at the 2024 RIU Explorers Conference in Fremantle

 

 

 

News Aint All Bad for Nickel

COMMODITY CAPERS: It’s been a sad start to the year for the Australian nickel sector after a slump in prices through 2023. By Kristie Batten

Since the start of January, administrators of collapsed junior producer Panoramic Resources have shut down the Savannah mine in the Kimberley region of Western Australia, Andrew Forrest’s Wyloo Metals has suspended its Kambalda operations, First Quantum Minerals announced it would stop mining at its Ravensthorpe operation and IGO put its advanced Cosmos development project on ice.

To say January wasn’t a great month would be an understatement.

But on a global scale, the circa 40,000 tonnes of production that is being removed from the market is barely a blip, accounting for just 1.5% of global mined production, according to Benchmark Nickel Intelligence.

The reason for the 42% nickel price decline in 2023 was a surge in production from Indonesia.

Indonesia accounted for 49% of nickel production in 2023, up from less than 5% just eight years ago.

According to Benchmark project manager Harry Fisher, the 2023 nickel market deficit represented 7% of the global market, the highest since 2015.

Fisher told the Benchmark World Tour stop in Perth last week that the structure of the nickel market was changing and the importance of feedstocks for nickel sulphate for the battery market was increasing.

In 2018, battery demand accounted for just 5% of nickel demand, rising to 16% in 2023.

It is expected to rise to 22% next year, reach 34% in 2030 and 47% by 2040 – all while demand from other sectors, including stainless steel, also increases.

“There’s a huge wave of demand that is coming,” Fisher said.

Global battery capacity was just 60 gigawatt hours in 2015, which surged to 1115GWh in 2023 and is expected to reach about 4000GWh by 2030 and 8 terawatt hours by 2040.

Tesla is expanding its Nevada gigafactory to 140GWh, which alone would require 110,000-125,000 tonnes of nickel per year, representing 23.9% of 2022 global supply.

While Fisher doesn’t see the potential for a “green premium” in nickel any time soon, he said there was the chance of market bifurcation due to ESG and policy considerations.

He noted that less than 20% of nickel units would be compliant with the US’ Inflation Reduction Act in 2030.

While Benchmark forecasts the nickel surplus to increase this year, “we do start to see deficits emerging in the back end of the decade,” Fisher said.

It looks like 2028 could be the tipping point.

Benchmark forecasts US$70 billion will need to be invested in the global nickel market to meet looming demand, a tough ask when existing projects aren’t making money.

So where does that leave nickel explorers?

With some of those big stats and demand forecasts in mind, it’s little wonder that explorers continue to plug away.

In fact, nickel is one of the best represented commodity groups of the 90 presenters at next week’s RIU Explorers Conference in Fremantle.

BHP Xplor, the miner’s exploration accelerator, which has a bias towards nickel and copper, will also be in attendance.

The presenting companies with existing nickel resources, including Chalice Mining, Widgie Nickel, Blackstone Minerals and Lunnon Metals, continue to advance their projects, while companies like Caspin Resources, Dynamic Metals and Legend Mining haven’t given up on making the next big nickel sulphide discovery.

At the end of January, directors of Lunnon showed their faith in the company by spending more than $200,000 on shares via on-market purchases. The cashed-up company is continuing the prefeasibility study on its Baker and Foster projects in Kambalda, despite recent bad news in the region, and is still drilling, albeit at a slightly reduced rate.

Nearby, Widgie has been rolling out the resource updates for its Mt Edwards project as it looks to demonstrate the project could support a standalone operation.

Delegates will also hear from IGO, which has been an aggressive explorer for nickel.

 

Uranium off to a flyer in 2024

COMMODITY CAPERS: After years in the doldrums, uranium was surprisingly the best performer of 2023 and has already outperformed so far in the new year. By Kristie Batten

The uranium price started 2023 as it has started most years in the past decade – languishing at below US$50 a pound but reached $90/lb by the end of December, making it the best-performing mining commodity of the year.

Uranium has made a strong statement so far in 2024, rising by a further 25 per cent and cracking the $100/lb mark on January 12, the highest level since 2007.

Source: Google Finance

Australia’s only dedicated uranium fund manager, Tribeca Global Natural Resources Fund’s Guy Keller, continues to be bullish on the price.

Keller said in November last year, there were uranium contracts being signed at $200/lb.

“The question is what’s going to stop it moving above $100?” he said on a recent webinar.

Keller admitted he got laughed at last year when he suggested uranium could reach $175/lb in 2024.

“Here we are in January and people are saying ‘ooh, maybe that’s conceivable after all’,” he said.

Further tailwinds

There are currently 60 new nuclear reactors being built globally.

“We are at the beginning of what we believe will be a multi-year contracting cycle,” Keller said.

“For the utilities … 2025, 2026 is tomorrow for them.”

Keller said there were three rules for utilities.

“Rule number one: don’t run out of fuel. Rule number two: don’t run out of fuel. Rule number three: refer back to rule number one and rule number two.”

There have also been positive developments on the policy front, including an agreement to triple nuclear power by 2050 at the recent COP28 summit.

On December 11, the US House of Representatives passed a bill to ban uranium imports from Russia, paving the way for a Senate vote.

Canaccord Genuity analyst Katie Lachapelle recently said the Senate was more likely to pass the bill if it contained specific funding to support new domestic fuel cycle development, based on her discussions with industry participants.

“Also, who is to say that Russia doesn’t immediately retaliate and ban exports to the US? In our view, this would result in a rapid rise in prices,” she said.

“Our belief is that there is a very high chance of a Russian ban passing, but it is still up for debate whether this will happen with or without funding (US$2.72 billion in domestic fuel cycle funding has been proposed).”

Earlier this month, the US Department of Energy issued a request for proposals for uranium enrichment services to help establish a domestic supply of fuels using high-assay, low-enriched uranium (HALEU), the fuel used in small modular reactors and advanced reactors.

The US’ Inflation Reduction Act will provide up to $500 million for HALEU enrichment contracts.
Lachapelle said that while small modular reactors were still years away, they were designed to have longer refuelling cycles, which could support medium-term demand.

Supply and Demand

“Demand is durable, yet supply is as fragile as ever, and any further supply disruptions could lead to panic buying by utilities, in our view, with both US and European utilities already at low inventory levels,” Lachapelle said in January.

Keller sees a decade-long uranium deficit due to the nature of demand, which he described as long-term and inelastic.

Boss Energy’s Honeymoon restart in South Australia is commissioning but there are very few advanced projects in the pipeline globally.

“There is no wall of supply,” Keller said.

“It’s hard to bring any mine into production – it’s harder to bring a uranium mine into production.”
Keller said challenges included long lead times, permitting, financing and access to experienced people.

Complicating matters is the fact there’s several advanced assets in Western Australia that cannot proceed due to the current Labor government’s ban on new uranium mines.

“Just because we’re at $100/lb, it doesn’t mean we’re going to see a wall of supply,” Keller said.
Juniors

The buoyant market conditions have given junior uranium hopefuls a pep in their step, meaning uranium is sure to be a hot topic of conversation at this month’s RIU Explorers Conference in Fremantle.

Toro Energy (ASX: TOE), which holds the 26.4Mlb Lake Maitland uranium resource in WA, is one of the handful of uranium presenters.

“Advanced assets like Toro’s are few and far between,” Toro executive director Richard Homsany said.
Toro has been “patient and thick-skinned” as it waited for the market to turn.

“You have to be resilient, you have to think of ways to keep going,” Homsany said, pointing to the company’s foray into nickel exploration.

“We’ve got to remain patient again while we convince the WA government they need to reevaluate their policy on this.”

Resources Family Feuds as Fledgling Minerals Mature

COMMODITY CAPERS: Gold, it seems, has become the wayward child of the Australian Resources family as siblings copper, lithium and battery minerals, grab investor attention.

It could be said that Gold is presently demonstrating many ‘oldest child syndrome’ symptoms.

It has demonstrated over-achiever tendencies in recent times with USD prices averaging $1,933 (approx. A$2978) an ounce in the first half of 2023.

The high Australian dollar gold prices resulted in an increase to Australia’s gold exports by 7.6 per cent year-on-year to $13 billion in the first half of 2023.

In the first half of 2023, Australia exported US$4.1 billion worth of gold to China, a rise of 28 per cent year-on-year while exports to other financial hubs, including the US, UK, Switzerland, Hong Kong and Singapore produced a combine worth of US$6.6 billion — a 6.2 per cent increase year-on-year.

It hasn’t all been positive news on the Australian gold front, however, with the local industry producing just 149 tonnes of mined gold in the first half of 2023, down by 2.6 per cent year-on-year, a fall that was mainly attributed to heavy rainfall in the Northern Territory, as well as northern parts of Queensland and Western Australia.

“Production at Newmont’s 15 tonnes per year Tanami project in the NT decreased by 18 per cent year-on-year to 5.9 tonnes in the first half of 2023,” the Department of Industry, Science and Resources (DISR) said in its Commonwealth of Australia Resources and Energy Quarterly September 2023.

“Production at Evolution’s 2.5 tonnes per year Ernest Henry project decreased by 43 per cent year-on-year to 0.7 tonnes in the first half of 2023.

“Production at Newcrest’s 20 tonnes per year Cadia mine in NSW fell by 15 per cent year-on-year to 8.9 tonnes in H1 2023.”

The DISR bean counters, however, are optimistic for Australian gold’s immediate future, noting that Australian gold mine production is forecast to increase over the next two years from 302 tonnes in 2022–23 to 312 tonnes in 2024–25.

This increase is anticipated to be delivered from new projects and mine expansions scheduled to come online.

“Production will continue to ramp up for recently commenced projects, such as Red 5’s King of the Hills project, Pantoro’s Norseman project, and Calidus’ Warrawoona gold project,” DISR explained.

“Bellevue Gold’s 5.7 tonnes per year Bellevue gold mine in WA produced first gold from toll treatment in August, with production and processing onsite expected to come online over the second half of 2023.”

If copper was undergoing therapy, it would be diagnosed as displaying classic middle child attributes of feeling inadequate compared to gold the elder and the younger battery-focused siblings.

The importance of copper was highlighted in May this year when mining powerhouse, BHP acquired OZ Minerals, hoovering up the target’s copper and nickel assets in South Australia.

At the company’s recent AGM, chair Ken Mackenzie explained the acquisition will result in BHP combining the Carrapateena and Prominent Hill mines acquired from OZ Minerals with its Olympic Dam asset and Oak Dam project, to create a new copper province – to be called Copper South Australia.

Mackenzie outlined BHP’s decarbonisation and energy transition intentions as it reshapes its current project portfolio to meet future mineral demands.

“This deliberate reshaping of our portfolio, positions BHP to create value for today and into the future,” Mackenzie told shareholders.

“We now have a portfolio that stands to benefit from the increased demand generated from the global megatrends playing out around us.

“Our portfolio includes copper for renewable energy, nickel for electric vehicles, iron ore and higher-quality metallurgical coal for the steel required to build decarbonisation and other new infrastructure.”

It is becoming increasingly difficult though, for gold not to fall into the first-born trap of secretly resenting its younger siblings and the achievements thereof.

Companies exploring for the shiniest of metals are finding it more difficult to hold investor focus as each passing week brings a new lithium discovery to the attention of ASX punters, who are more than pleased to throw their hard earned at any sniff of the essential battery ingredient.

Lithium had already emerged as a market darling before Wildcat Resources claimed a “major lithium discovery” in September based on results from the first drilling program undertaken at the company’s Tabba Tabba lithium tantalum project in the Pilbara, near Port Hedland in Western Australia.

Wildcat Resources released the first assay results from maiden drilling at the Tabba Tabba project which it claimed had confirm high-grade lithium mineralisation from surface in the project’s northern and central pegmatite clusters, demonstrating potential for a large-scale lithium camp.

Most of the excitement stemmed from the central cluster results that included:

TARC086
85 metres at 1.1 per cent lithium oxide (Li2O) from surface (down-hole length), including 59m at 1.5 per cent Li2O from surface and 218m at 0.8 per cent Li2O from 16m; and

TARC089 (down-hole length)
Including 22m at 1 per cent Li2O from 31m, including 23m at 1 per cent Li2O from 152m, including 51m at 1.5 per cent Li2O from 183m to end of hole – estimated true width is approximately 53m.

A second batch of assays quickly followed from the opening drilling program at Tabba Tabba, from which Wildcat claimed confirmation of Tabba Tabba hosting multiple pegmatite clusters containing high-grade lithium mineralisation over broad and continuous intervals.

“The second batch of assay results reinforces our belief that we are onto a terrific lithium discovery at Tabba Tabba,” Wildcat Resources managing director Samuel Ekins said at the time.

“The system is showing it has significant scale, we are seeing impressive intersections at multiple locations and the central pegmatite cluster seems to be getting better with depth.

“We are very excited about the potential and look forward to more results as we continue to aggressively explore the project.”

The ranks of hot lithium exploration companies soon expanded with TG Metals reporting on exploration drilling activities at the company’s Lake Johnston lithium-nickel-gold project in, also in WA.

TG Metals conducted RC drilling designed as an initial test of the Burmeister lithium soil anomaly it had previously defined that covers an area of approximately 4.5km by 1.7km, with the Phase 1 drilling testing a higher tenor area of anomalism.

Drilling intersected spodumene bearing pegmatite with high-grades up to 2.28 per cent lithium dioxide (Li2O).

Better results include:
9m at 1.35 per cent Li2O from 30m, including 1m at 2.03 per cent Li2O from 32m and 1m at 2.21 per cent Li2O from 37m; and

9m at 1.62 per cent Li2O from 87m, including 1m at 2.28 per cent Li2O from 87m.

Just last week, TG Metals had to talk its way out of a speeding ticket from the ASX by providing an update on lithium exploration activities at the Lake Johnston project.

TG Metals informed the market of having conducted infill and extensional soil sampling (400m x 50m spacing) over the area immediately east of the company’s recent spodumene rich pegmatite discovery at Burmeister.

The company said the results from the sampling defined a new area of lithium in soils anomalism, which has been identified as the Jaegermeister prospect that is larger in scale than the Burmeister soil anomaly.

“Since the discovery of the spodumene pegmatites at Burmeister, the deposit models we have been considering have been based on the Earl Grey lithium mine area,” TG Metals CEO David Selfe explained.

“With this in mind, the lithologies at Jaegermeister, were always going to be a target.

“The current drilling at Burmeister, targeting up dip, down dip and along strike of the known high-grade lithium pegmatites, will provide knowledge we can apply to the Jaegermeister area and provides us with another quality drill target for early 2024.

“We are eagerly anticipating the next drilling results from Burmeister.”

The Wildcat and TG Metals discoveries are timely, especially given Australia already leads global lithium extraction, and national mine production is forecast to continue growing.

“Mine production of spodumene is forecast to rise to 3.3 million tonnes (Mt) in 2023–24 and 4Mt in 2024–25, up from to 3.1Mt in 2022–23,” DISR said.

“Rising mine production will be driven by the expansion of existing mines, including Greenbushes, Finniss, Wodgina, Pilgangoora, Mt Marion and Mt Cattlin.

“Greenfield production is also due to commence at Mt Holland and Kathleen Valley over the outlook period.”

Although lithium receives the lion’s share of battery element exposure there are other elements, of which Australia has plenty of that are set to benefit from an expected period of global battery market growth.

Battery technology has been almost deified by market scribes in recent years as everybody talks up the clean energy, electric vehicles, and consumer products revolution.

This battery demand growth is also generating opportunities for producers of not only lithium, but other contributors, including manganese, graphite, cobalt, and nickel.

These minerals are featured in the official US, EU and Canadian critical minerals lists, reflecting their importance in terms of future requirements.

So, how does gold compete?

As far as electronics go, gold is used for such items as light-emitting diodes (LEDs) and in printed circuit boards but is limited in its contribution to modern technology advancements.

Its main markets remain in China and India in the form of jewellery and retail investment in gold bars and coins.

The current great gold irony is that after a strong 2022 and with wars raging around the planet, consumption of the usual safe haven investment in 2023 is forecast to decrease by 9.5 per cent to about 4,300 tonnes.

The decline is expected to be mainly driven by lower official sector buying — which will nevertheless remain high in historical terms, at around 750 tonnes.

“World gold consumption is forecast to rise gradually after 2023, to reach about 4,400 tonnes by 2025,” DISR said.

“Demand growth is expected to be largely driven by increasing jewellery consumption, with investment demand and technological usage contributing to a lesser extent.”

 

Philip Crabb Awarded Well Deserved Kings Birthday Gong

If King Charles does nothing else during his reign, he certainly started on the right foot with a notable inclusion to his first round of birthday honours.

Scanning the Kings Birthday honours list one name jumped out at The Roadhouse, that of Philip Crabb (now) AM.

Some might say, and they would be correct, that such recognition should have come Crabb’s way much earlier, especially given his long record of contribution to the Australian mining industry and the greater community.

Mining is genetic to Crabb, born in Kalgoorlie in 1940, he went on to become a fixture of the industry with a list of achievements longer than what our usual word count can cater to.

His roles over the journey have included drilling and blasting contracting and being a senior quarry manager and a mining contractor.

He is mostly acknowledged, however, for his involvement in mining and exploration activities leading to directorships on the boards of both publicly listed and private exploration companies, many of which he was responsible for floating.

At 83 years of age, Crabb shows little sign of slowing down and is currently the major shareholder of Ora Gold Limited (Formally known as Thundelarra Limited) and a founding and major shareholder of TG Metals Limited which only listed on the ASX last year.

Crabb’s mining involvements have not always been about him.

He is a Fellow of the Australasian Institute of Mining and Metallurgy where he has mentored many up-and-coming miners through their introduction to the industry to becoming leaders in the own rights.

He is also a member of the Institute of Company Directors and was a founding member of the Kalgoorlie Mining Hall of Fame.

Philanthropy has also been a hallmark of Crabb’s life working for the community playing leading roles within many organisations, including the State Library of WA, The Salvation Army, and the Cancer Council of WA.

Sport has also been a recipient of his generosity, resulting in Life Memberships being awarded by both the South Bunbury and Claremont Football Clubs.

All we can say is, well done King Charles for handing out the gong, but forgive us here at the Roadhouse if we save our three cheers for the man we consider King of Mining in WA, Philip Crabb.

Hip Hip…

 

Gold Maintains Relevance Despite Influx of New Age Commodities

COMMODITY CAPERS: For some, gold seems to have lost its traditional lustre, however there are still exploration plays out there proving there is life in the world’s oldest currency yet.

Punters completing laps of the exhibition floor at the recent RIU Explorers Conference would be forgiven for reaching the conclusion that the exploration sector has lithium and rare earths squarely in its sights.

The race to accumulate the future facing metals that are set to launch us into a digital lifestyle first presented to us by The Jetsons so many years ago does have wide-eyed and wide-walleted investors filled with FOMO scrambling to get their slice of the electrified pie.

Although it probably wasn’t around as long ago to be squirrelled away by The Flintstones, gold has been the favoured metal for those seeking a ‘safe haven’ asset for thousands of years.

For centuries it has provided an inflationary hedge during times of severe economic stress, and in real terms, 2023 is shaping up to maintain this rule.

The bean counters at the World Gold Council determined that 2022 was a good year for gold with global central banks buying some 1,136 tonnes of gold worth $70 billion, which is the most since records began in 1950.

In its December 2022 Resources and Energy Quarterly, the Department of Industry, Science and Resources reminded us that gold prices averaged US$1,728 an ounce in the September quarter 2022 dues to pressure from increasing bond yields and the strong US dollar.

“A rebound to above US$1,750 an ounce in mid-November followed lower-than-expected US inflation data, which lowered market expectations for further interest rate increases,” DISR said.

According to the report, Australian gold mine production in the September quarter 2022 was 5.4 per cent higher year-on-year at 78 tonnes with production forecast to increase to 329 tonnes in 2023–24, as new projects and expansions of existing projects come on line.

So, let’s follow the yellow brick road for a moment to see what some gold-focused companies have been up to in just the two weeks since the RIU Explorers Conference.

 

In the lead up to the RIU Explorers Conference, Black Cat Syndicate (ASX: BC8) released an updated JORC 2012 Mineral Resource at Paulsens Underground, part of the company’s 100 per cent-owned Paulsens gold operation in Western Australia.

Total gold Resources at the Paulsens gold operation increased 73 per cent to 401,000 ounces at 3.3 grams per tonne gold, including an increase to total Measured and Indicated Resources of 65 per cent to 163,000 ounces at 8g/t gold.

The Paulsens Underground Resource increased to 258,000 ounces at 10.8g/t gold.

This week, Black Cat reported assays from an additional 15 diamond holes recently undertaken targeting underground Gabbro Veins and shear-hosted mineralisation it declared had continued to demonstrate immediate upside to the high-grade Paulsens Underground Resource.

Results included:

22PGRD038
2 metres at 39.9g/t gold from 18.75m and 1.03m at 17.8g/t gold from 51.12m; and

22PGRD004
1.23m at 14.84g/t gold from 28.68m and 1.55m at 6.14g/t gold from 60.68m and 0.86m at 58.5g/t gold from 102.14m.

“The Gabbro Veins continue to deliver impressive grades often with multiple veins intersected in each hole,” Black Cat Syndicate managing director Gareth Solly said in the company’s ASX announcement.

“A second rig will arrive this week as we ramp up drilling in the lead up to a restart decision.

“The Gabbro Veins represent a potential new mining front and host one third of the underground Resource.

“Along with Coyote Central this is one of Australia’s highest grade gold deposits.

“A further two months of drilling has been completed since then and will continue throughout 2023, focussed on Resource growth and discoveries around existing underground infrastructure.

“The next Resource update is planned for May 2023.”

Musgrave Minerals (ASX: MGV) was another to arrive at Explorers with news to tell following the release of assay results from reverse circulation (RC) drilling across multiple prospects, on the company’s 100 per cent-owned ground at the Cue gold project in WA.

The assay results came from drilling completed in December 2022 at the Amarillo, Big Sky, Big Sky North and East Numbers prospects.

Final assays from this drilling were released this week that Musgrave declared to have identified a potential new high-grade lode around 50m north of the Break of Day deposit.

Drilling including a single RC drill hole testing a new target zone that intersected:

22MORC413
4m at 8.2g/t gold from 50m within 14m at 2.8g/t gold from 50m.

“The intersection north of Break of Day may represent a new, untested high-grade lode and demonstrates the ongoing discovery opportunity within this system,” Musgrave Minerals managing director Rob Waugh said in the company’s ASX announcement.

“This is a positive result as it bodes well for further discovery upside within the favourable Break of Day stratigraphic package.

“More drill testing is required to confirm the strike and dip extent of this new lode.

“In addition, further results from White Heat-Mosaic, White Light and the new Waratah zone all have the potential to add to our resource base as we continue to advance the Cue gold project.”

 

 

Bird in Hand Stays on the Vine

COMMODITY CAPERS: A phrase often used by companies entering and exploring in a region before others is ‘First Mover’, however, being the first exploration/mining company in doesn’t give right to that claim.

Sometimes, we need to be reminded that mining, as important as it is to the national economy, is not the be all and end all of Australian industry.

This was demonstrated this week when the South Australian Department for Energy and Mining (DEM) rejected a Mining Lease Application from Terramin (ASX: TZN) for the company’s Bird in Hand gold project.

Terramin responded by saying it was, “surprised and disappointed by this decision”.

The company explained it had submitted its applications on the back of comprehensive scientific studies that demonstrated its mining activities would have no adverse environmental outcomes.

“These studies were peer reviewed by independent and Government experts over many years,” Terramin said.

“Terramin has not been made aware of any issues with the methodology or conclusions of these studies.”

In its release outlining its decision, DEM acknowledged that Terramin’s proposal satisfied relevant statutory obligations.

The company had done everything it should to satisfy technical matters in detail, however, the Minister for Energy and Mining, Tom Koutsantonis was obliged to consider other relevant considerations, including broader state interests such as potential socio-economic and amenity impacts and the effect on existing industries – including tourism – and the local community.

“While the proposed mine would have had a short-term life, the potential impact on surrounding businesses – including world-class wineries such as Petaluma and Bird In Hand – and associated regional tourism could have longer-term implications,” the DEM statement said.

“The Adelaide Hills region enjoys a well-earned clean, green reputation, and this must be safeguarded.”

Taking aim at the decision, Association of Mining and Exploration Companies (AMEC) CEO Warren Pearce ignored these factors and instead slammed the decision as, “a major blow to the entire industry”.

“This decision is a massive setback for the hopes of growing the mining industry in South Australia and reinforces a widely held view that South Australia isn’t serious about developing new projects.

“It also has major implications for the hopes of South Australia to attract new major project investment.

“Industry and investors will now rightly question whether it is worthwhile investing in South Australia, and whether the South Australian Government actually want mining investment.

“It will now be much harder for South Australia to attract new mining and mineral exploration investment.”

The DEM reminded everybody of its role, explaining that developers across all industries in South Australia must submit proposals for community and government scrutiny.

This meant the Government was required to complete a rigorous assessment of Terramin’s application, taking into consideration its location, the complexity of the proposal, and importantly, environmental, and social factors.

In making such a decision the minister was required to deliberate on whether the prospective mine would fit within the existing character and/or amenity of the area and its existing social values.

“This is not a decision I’ve taken lightly or easily,” South Australia Energy and Mining Minister Tom Koutsantonis said.

“I appreciate Terramin’s cooperation in providing further detail about their proposed operation as requested.

“I’m also acutely aware of community concerns about the proposal, including from nearby wineries, residents and the local community.

“The area of the proposed mine is home to a world-class viticulture industry, producing some of Australia’s best-loved wines.

“Tourism to the region is a critical contributor to the local economy and, on balance, there remains a possibility this proposed short-term mine may adversely affect the established and significant long-term agricultural and tourism industries of the Woodside area immediately adjacent the project areas.

“As such, I am not willing to risk these established local industries against the opportunity this short-term mine may provide, and have decided it is in the state’s interest to decline the Mining Lease and Miscellaneous Purposes Licence applications by Terramin for its Bird in Hand Gold Project.”

Warren Pearce responded by indicating that Terramin had recognised the unique characteristics of the mine’s location and had worked hard to draft plans with the wineries involved to ensure multiple land use could be effectively balanced and sensitively managed.

“If the South Australian Government can’t manage to approve a modest gold mine after five years of extensive assessment, how can it be expected to manage and approve the development of much larger and more complex projects?” Pearce said.

First Mover. Those explorers who get in first and are the ones who take credit for finding and utilising the benefits of the regional geology and topography.

There have been many of these scattered throughout the land, particularly in Western Australia where mining thrives in the goldfields, the Pilbara, Murchison, and other mining centres.

Oddly enough, there hasn’t been too many mining applications submitted for mining of the Margaret River region of WA.

 

 

IPO Report Predicts Poor Listing Numbers for The Year Ahead

COMMODITY CAPERS: Advisory and Accounting Firm, HLB Mann Judd released its annual IPO Watch Report this week, answering many questions while providing plenty of room for more.

If we get into the nuts and bolts of the report first up, we learn that 87 companies listed on the Australian Securities Exchange (ASX) in 2022.

Not bad, however if you compare it to 2021, a startling picture begins to emerge.

A total of 191 IPOs listed on the ASX in 2021, which at the time, was the highest number of new floats for ten years.

The Resources sector is always a strong performer in this sphere, and in 2021 accounted for 107 out of a total of 191 new market entrants.

Of the 87 new listings in 2022, there were 63 from the Resources sector.

“Over the past five years, with the exception of 2019, the Materials sector has been the biggest contributor to new listings by sector,” HLB Mann Judd Partner, Corporate & Audit Services, Perth Marcus Ohm said in the report.

“In terms of geographical spread, 46 of the Materials listings in 2022 were based in Western Australia, as it continues to be the primary location for new market entrants from this sector.

“A total of 63 per cent of all listings in the year were WA-based and the state has the overall highest number of new listings over the past five years.”

This fall in IPOs did take market watchers by surprise because 2021 had ended with a wet sail facing a healthy pipeline of companies looking to list in early 2022.

By the mid-year point of the 2022, there had been 59 new listings overall, which when compared to the 61 listings at the same stage in 2021 had companies looking to list, licking their lips in anticipation.

But then, suddenly, the IPO market all but dried up in the second half of the year with no single month from June onwards recording double-digits for new listings.

This malaise was reflected in the total funds raised in 2022 that reached $1.07 billion.

This would be okay for Telethon, but when compared to the record-breaking amount raised in 2021 of $12.33 billion it does tend to look insipid.

What is even more worrying is that the monies amounts raised were also well below 2020 ($4.98 billion) and 2019 ($6.91 billion), years that both recorded fewer listings – 74 and 62 respectively – than in 2022, which had fewer contributions from large cap listings than in these prior years.

“The market factors and weaker investor sentiment impacted company subscription targets,” Ohm explained.

“In total, 70 per cent of listings achieved their target amount, a notable fall from 87 per cent in 2021 and below the five-year average of 81 per cent.

“New entrants overall struggled to maintain and grow their share price in the period, despite average first day gains of 16 per cent.

“At the year end, gains for many new entrants were down and, on average, listings posted a loss of 2 per cent against IPO price.”

Economically speaking the New Year started well with commodity prices enjoying a jump and the temperature of China’s cold diplomacy warming while US inflation was reported to have dropped in January to 6.5 per cent for the 12 months through to December 2022.

On the back of these indicators, the ASX enjoyed a buoyant January clocking up a four-week run of gains, hitting a nine-month high in the process.

All eyes are most likely on the Board of the Reserve Bank of Australia (RBA) and where those funsters may decide on what sort of fiscal ride to take us as inflation remains high, leading many analyst to consider another rate rise is on our way in February.

HLB Mann Judd believes the slowdown in IPO activity in the second half of 2022 is likely to continue into 2023, with only 10 companies having applied for listing to the ASX, at this stage.

“Nine of these companies have listed mining or mineral exploration as their principal activity, indicating 2023 is likely to once again be dominated by the Materials sector,” HLB Mann Judd said.

“Three of the proposed IPOs hold lithium projects and three listings have gold projects, indicating these will again be popular commodities for proposed listings in the year.

“Other primary projects held by companies in the pipeline include cobalt and hydrogen.”

The performance of the IPO class of 2022 raises a very important question: Are punters prepared to support stocks once they are up and trading?

Back to the IPO Report stats – 48 companies, or 55 per cent of those that listed in 2022, posted a first day gain, slightly less than 2021, when 60 per cent of listings recorded a first day gain.

The average, and we do mean average, first day gain across all listings was 16 per cent, with only five listings recording a first day gain of over 100 per cent.

Heading this pack was Lithium Plus Minerals (ASX: LPM) giving punters their best first day gain for the year at 180 per cent over issue price, highlighting the strong investor sentiment in battery metals.

The Materials sector had four of the top five listings with the sole interloper being Firebrick Pharma Limited (ASX: FRE), an entrant in the Pharmaceuticals, Biotechnology & Life Sciences sector, producing a first day gain of 165 per cent, taking second place on the first day gain listings.

“Market entrants struggled to maintain their year end share price following their first day gains, with 65 companies experiencing a fall in share price following first day trading,” HLB Mann Judd observed.

“The largest falls were recorded by three of the five new listings that recorded first day gains over 100 per cent.

“This activity reflects how quickly circumstances can change in the current market.”

Yes, circumstances can change, but one thing doesn’t – the thirst for profits.

Perhaps next year the bean counters preparing the Report might want to take note of the share trading volumes on these first days.

It would be a worthwhile wager that day one would be the busiest as those with the shares, armed with the ability to pump them up to eager buyers sell off quickly, thus providing a healthy wad of cash in the bank for when these companies come around for their first capital raisings at five, perhaps seven cents, that can quickly be sold off again at nine cents.

Get in and get out quick seems to be the IPO axiom at present and there is no sign punters are prepared to stick it out for the long haul.

Maybe those who get out early, taking their profits with them are the same ones who buy back in at seven or nine cents, hoping the original dream they shared with the Board of Directors, one day comes true.

Or is there just not enough money around for investors to leave it there and be able to find more for further flutters?

WA Government Removes False Teeth to Put Bite on Climate Change

COMMODITY CAPERS: The Western Australian Government has decreed it will be introducing legislation to provide a framework for Western Australia’s climate response by formalises the State Government’s goal of net zero emissions by 2050.

In a media release, the McGowan Government said it intends this year to introduce climate change legislation to establish a framework for responsible emissions reductions to meet Western Australia’s goal of net zero by 2050.

The announcement didn’t go into any great detail, as you would probably expect from the first tidbit to be released, however it did supply a string of bullet points aimed to excite journalists, as follows.

“This legislation will also formalise our ambitious aim to reduce Government emissions by 80 per cent below 2020 levels by 2030.”

Exactly what “Government emissions” are has yet to be fully outlined, but no doubt these will become clearer closer to the time.

“It will provide a framework for the State’s climate change response and give industry, business and investors certainty and stability.”

“Certainty and Stability”, again, no great detail, but we have 27 years to gain some insight.

“The legislation will create statutory requirements for the State Government to set interim emission reduction targets and develop strategies to adapt to the impacts of climate change.”

A nice way of saying that they have climate change and the effects thereof in mind, but at this stage they’re not overly sure of what they should be doing.

“It means WA will have clear and necessary policies to reduce emissions, helping to mobilise private sector capital for the net zero transition and enhance climate resilience.”

This will most likely make it easier for the Government of the time, whatever persuasion they may be, to rely on the private sector to lead the way.

“The legislation will ensure accountability and transparency requiring the Minister for Climate Action to report annually to Parliament on WA’s net emissions and progress towards reduction targets.”

“Accountability and transparency” need we say more?

“Climate change is the greatest challenge of our lifetime,” According to Reece Whitby the WA Minister for Environment; Climate Action; Racing and Gaming,

“We need to take decisive action this decade.

“This legislation will help accelerate our transition to net zero emissions in a responsible and achievable way.”

The climate winds don’t blow favourably for Western Australia at present with the it being the only state which has recorded an increase in emissions on 2005 levels.

The targets set by the legislation still lag the eastern states with NSW is targeting a 70 per cent reduction by 2035, and Victoria and South Australia hoping to achieve a 50 per cent cut over that period.

Fronting a phalanx of reporters, Whitby said WA was a state which has a lot of fossil fuel companies and a lot of mining companies.

“That means we have high emissions, so we’ve got a particular challenge in Western Australia.”

As vague as the Government’s ambitions are at this stage, they were still given a warm reception from environmentalists who thought they could have had a stronger bite at the cherry.

“A net-zero 2050 target is a good starting point but the key to this new legislation will be setting adequate five-yearly interim emissions targets,” the Conservation Council of WA’s Maggie Wood was reported to have said.

“We cannot allow for a model which permits unsustainable amounts of pollution right up until 2050, polluters must be compelled to make meaningful cuts to their emissions as quickly as possible if we are to avoid the worst extremes of climate change.”

 

BHP Providing Much Needed Leg-Up to Juniors with new Xplor Program

COMMODITY CAPERS: Mining giant BHP has opened its doors to aspiring exploration companies, especially those in the hunt for copper, nickel and other critical minerals.

The major’s new BHP Xplor initiative is a simple way for the company to outsource grassroots exploration by financing juniors with a good tale to tell, but nobody to listen.

According to the BHP web page Xplor is, “dedicated to accelerating innovative, early-stage mineral exploration start-ups to find the critical resources necessary to drive the energy transition”.

A smart move to get in early and being in the room should any of these minnows hit something of potential, thereby removing any possible bidding wars with any other super-miner that may be interested.

The choice of commodity is also interesting, given BHP’s long track record with coal and iron ore.

Now it seems it wants to move with the agenda many juniors have set in motion years ago.

“We are searching around the globe for the next generation of explorers that are ready to think about the earth’s minerals systems differently to unlock copper, nickel and other critical mineral deposits,” BHP said.

Companies selected to join the program receive a one-off, non-dilutive grant of US$500,000.

This combines with other important non-tangible assets, such as mentorship, and networking opportunities with industry and investors and connections.

ASX-listed juniors taken in the 2023 draft included Nordic Nickel (ASX: NNL), Impact Minerals (ASX: IPT) and Kingsrose Mining (ASX: KRM).

Nordic Nickel indicated it would be spending its US$500,000 on a recently commenced 2023 drill program.

The funds will pay for deeper holes to test known EM targets the company says appear to be located near the base of the ultramafic cumulate layer at the Hotinvaara nickel prospect, for ‘Sakatti-style’ massive sulphide accumulations.

“We are excited to have been selected to participate in the BHP’s Xplor cohort for 2023,” Nordic Nickel managing director Todd Ross said.

“This validates the quality and potential of our flagship Pulju nickel project in northern Finland, where we are targeting the potential for Tier-1 nickel discoveries in an under-explored greenstone belt with proven geological potential for large-scale critical mineral deposits.”

Impact Minerals has earmarked its BHP Xplor funding to identify new target areas for copper and other energy metals around the company’s Broken Hill project in New South Wales.

Impact Minerals has been busy around the Broken Hill area, adding to its ground position over the past few years.

Impact believes untapped exploration potential still exists at Broken Hill for copper mineralisation and has been working on a new model for copper associated with mafic intrusions that are part of the Broken Hill Group rocks.

“We are thrilled and honoured to be one of first-ever participants of the prestigious BHP Xplor program and to partner with the world’s largest mining company in our exploration,” Impact Minerals managing director Dr Mike Jones said.

“This is a testament to Impact’s innovative thinking over the years and we are looking forward to working with them to accelerate exploration at Broken Hill and also upgrading our skills company-wide by gaining access to their global network.”

As a part of the BHP Xplor program, Kingsrose Mining has developed a strategy of regional target generation for nickel massive sulphide deposits, applying modern mineral systems concepts and generative exploration methods across two highly prospective but underexplored geological belts in Finland and Norway.

“We are delighted to have been selected to participate in BHP Xplor, and to collaborate on our concept for nickel discovery in the Nordic region,” Kingsrose Mining managing director Fabian Baker said.

“It is by developing and testing new exploration concepts, and building positive relationships with stakeholders, that major discoveries of critical metals required for the energy transition will be made, and BHP Xplor allows Kingsrose to increase the odds of discovery success.”

Four other candidates make up the cohort of seven selected to join the BHP Xplor accelerator program for 2023.

These include:

Tutume Metals – a private, junior exploration company in Botswana with secured ground searching for new magmatic nickel, copper systems in southern Africa;

Asian Battery Metals – a junior exploration company focused on finding economic deposits of critical minerals in the Asia Pacific region;

Red Ox Copper – a private minerals exploration group in Australia, specialising in generating grassroots, greenfield conceptual plays with potential for tier 1 ore deposits; and

Bronzite Corp – an early-stage exploration for copper in northern Canada. Spearheaded by Prof. James Mungall, experienced field and economic geologist at Carleton University, Ottawa.

“We are amazed by the diversity and quality of the submissions we reviewed and selected,” BHP Xplor vice president Sonia Scarselli said.

“We are confident that the BHP Xplor program will support the companies chosen to accelerate their concepts and ideas, to help take them to the next level.”