AIC Mines Increases Jericho Ore Reserves

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THE DRILL SERGEANT: AIC Mines (ASX: A1M) reported an updated Ore Reserve estimate for the company’s 100 per cent-owned Jericho copper deposit in north Queensland.

The Jericho deposit is located just four kilometres south of the company’s Eloise copper mine.

AIC Mines explained the Jericho Ore Reserves increased thanks to the inclusion of results from a drilling program undertaken in 2023 and updated mine designs.

Jericho Ore Reserves now total 3.2 million tonnes at 1.9 per cent copper and 0.4 grams per tonne silver containing 61,100 tonnes of copper and 37,000 ounces of gold.

The update represents an 86 per cent increase in contained copper and an 86 per cent increase in contained gold.

AIC anticipates ongoing drilling to further increase Jericho Ore Reserves.

“We completed the acquisition of Jericho in January last year,” AIC Mines managing director Aaron Colleran said in the company’s ASX announcement.

“We’ve barely owned the deposit for 12 months and in this time we have significantly increased the Jericho Mineral Resource and Ore Reserve, completed mining studies, environmental studies, metallurgical testwork plus an Eloise expansion study.

“It has been an incredibly busy and incredibly successful period for AIC Mines.

“Why are we pushing so hard, moving so quickly? Simple, Jericho is a game changer for Eloise.

“It provides a pathway to expanding annual production at Eloise to over 20,000 tonnes of copper and 10,000 ounces of gold in concentrate.

“Mining at Jericho will be lower cost than Eloise as it is much shallower, commencing below only 50 metres of cover.

“Expansion of the Eloise processing plant will reduce operating costs through economies of scale and smarter equipment.

“Jericho de-risks production by increasing the number of available ore sources.

“The world needs more copper as we transition away from fossil fuels. We are focused on delivering into that demand.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

CGN Aiming to Make Next Major West Arunta Discovery

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THE CONFERENCE CALLER: Relative ASX newcomer CGN Resources is hoping to make a major discovery in the hot West Arunta region of Western Australia. By Kristie Batten

The company listed on the ASX in October 2023 after a A$10 million initial public offering but has been active in the West Arunta since 2010, making it one of the early movers.

“Now there is no ground left in the West Arunta,” CGN managing director Stan Wholley told the Tribeca Future Facing Commodities Conference in Singapore.

“It’s probably one of the hottest districts at the moment.”

That’s largely thanks to WA1 Resources’ Luni niobium discovery in the region, but IGO, Encounter Resources, Rio Tinto and Tali Resources are also active.

CGN stands for copper-gold-nickel but the company is also looking for critical minerals including rare earths.

Wholley said the West Arunta could be one of Australia’s last unexplored copper provinces and had known iron oxide-copper-gold mineralisation.

“To not have a big red blob [on the map] in this area is unusual and we hope to be the ones to find it,” he said.

CGN has identified six priority targets.

Snorky, Horton, Surus and Tantor are IOCG targets, Shep is a nickel target and Hathi is a rare earth target.

The company just completed induced polarisation surveys at Surus, Shep, Snorky and Horton, which confirmed the presence of gravity anomalies at all four prospects.

Drilling will begin at Surus next month, assisted by A$220,000 in Exploration Incentive Scheme funding from the WA government.

CGN has already spent A$7 million on geological data.

“Which gave us a really great pool of geoscience data,” Wholley said.

The company still has A$8.5 million in cash.

“That gives us enough money to deliver on our project pipeline,” Wholley said.

“We’ve got cash, we’ve got the time, let’s get it done.”

CGN shares hit an all-time high of 32 cents during ASX trading on Wednesday.

 

Mr Lithium Sees Price Bottoming

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THE CONFERENCE CALLER: Lithium prices should start to rebound this year after a dramatic 12 months, according to Global Lithium’s Joe Lowry. By Kristie Batten

Lowry, aka ‘Mr Lithium’, told the Tribeca Future Facing Commodities Conference in Singapore that any market that was expected to grow tenfold over 10 years would experience growing pains and volatility.

“I still believe it is the lithium decade – I absolutely believe that,” he said.

Lithium prices dropped by more than 80% last year and have continued to fall in 2024 – though there has recently been signs of stability.

Both Canaccord Genuity and UBS have called the bottom for prices in recent weeks.

“I’m not going to say it has [bottomed] for sure but I think it’s going to happen this year, if it hasn’t already happened,” Lowry said.

Lowry said the lithium narrative was extremely negative.

“I’ve been in business for 34 years and I’ve never seen sentiment this negative,” he said.

“And it doesn’t make sense because even at US$15,000 a tonne, historically, that’s a pretty high lithium price.”

Lowry admitted that he never expected lithium carbonate equivalent prices to reach US$40,000/t, let alone US$80,000/t.

But he pointed out that there wasn’t one single lithium price.

“The China spot price is not the lithium price. There are a range of lithium prices,” Lowry said.

“So, when you talk about lithium price bottoming, there’s going to be multiple bottoms because there’s multiple prices.”

Lowry said there was a misconception that he was a “wild lithium bull”.

“I think it’s pretty much a balanced market until the end of the decade where I think it’s going to be hard to get to three million tonnes of supply,” he said.

He noted that lithium projects were always late and the current fall in prices had disincentivised new production.

Even the biggest lithium bears at Goldman Sachs had forecast a deficit in 2030.

“I think there’s going to be market tightness and that’s going to put prices back up,” Lowry said.

“The real question is how high will price go? And I believe what the last cycle over the last 18 months has showed us is that there is swing supply, the lepidolite and the grinding up ceramic material and bringing in DSO from Africa.

“If you get if you haven’t another run up above US$40,000, all of that’s going to come back into the market and it’s going to come back in quickly.

“So, I think we have found that there’s a natural cap on a price run. I’m not saying prices will never go to US$80,000 again, but if it goes there it’s not going to be there for very long.”

Lowry said the most transparent reporter of lithium prices was Chilean producer SQM in its quarterly reports.

SQM reported a realised price of US$16 per kilogram of LCE in the December 2023 quarter and Lowry believes for the March quarter, it will be “at least US$16/kg”.

“My point is, if this is the low, it’s three times higher than the last low,” he said.

Canaccord forecasts LCE to average US$16/kg this year, while UBS is at US$15/kg and Macquarie is at US$20/kg.

“All things kind of lead to higher lithium prices – how high they go, I don’t know,” Lowry said.

“My thought is this year the price gets into the low US$20s, probably in Q4.”

Goldman is once again bearish at just US$11/kg.

“I don’t think it’s possible for them to be right,” Lowry said.

Lowry said there was a chance LCE could jump back to US$40,000-50,000/t but he hoped that didn’t happen.

“I’d rather see a stable environment.”

 

ASX Mining Stocks Regaining Momentum: Argonaut

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THE CONFERENCE CALLER: The worst is over for mining stocks, according to Argonaut head of research Hayden Bairstow. By Kristie Batten

The year started poorly for equities but Bairstow told the Tribeca Future Facing Commodities Conference in Singapore that green shoots were emerging.

“We are seeing a little bit of a glimmer of hope,” he said.

Of the 50 or so presenting companies at the conference this week, roughly two thirds had experienced share price gains over the past month.

Bairstow said momentum was building and encouragingly, it was across most commodity groups.
“We’re seeing a decent recovery across the board,” he said.

“We are off the bottom and it’s all looking quite positive.”

Lithium was the worst-performing commodity in 2023, but Bairstow believes the price has “probably” bottomed.

Pilbara Minerals and Albemarle Corporation have auctioned lithium cargoes at prices above spot in recent weeks.

“Those sort of negative momentum stories are slowing and in fact, have turned to the positive,” Bairstow said.

Still, share prices of lithium producers had outperformed price.

While prices fell by more than 80% in 2023, Pilbara and Mineral Resources were down by around 20% each since the peak, while IGO and Arcadium Lithium were down 50%.

“The intriguing thing is the market at the big end is happy to look through the lithium price fall and the trough,” Bairstow said.

So far in 2024, the shining lights in the mining market have been uranium and gold.

“In terms of importance in the Australian market, gold really does dominate,” Bairstow said.

The merger of Newcrest Mining and Newmont Corporation late last year pushed the size of the ASX gold space to beyond A$100 billion.

Meanwhile, uranium prices rose to more than US$100 per pound in January, driving a strong performance in equities.

Bairstow said most uranium stocks were up 100-150% over the past 12 months.
“It’s been nothing short of extraordinary,” he said.

 

 

Dreadnought Resources Scores Drilling and Geophysical Results from Tarraji-Yampi

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THE DRILL SERGEANT: Dreadnought Resources (ASX: DRE) supplied assay and geophysical results from RC and diamond drilling at the Tarraji-Yampi project, located in the Kimberley Region of Western Australia.

Dreadnought Resources took receipt pf assays and downhole EM (DHEM) results have been received for 11 RC holes and two diamond holes drilled at Tarraji-Yampi in late 2023 that has delivered additional mineralisation and geological understanding for the project.

Two EIS co-funded diamond holes (KMRD056 and KMRD057) intersected laminated, brecciated and semi-massive sulphides extending mineralisation at the Orion deposit a further 100m down dip remaining open at depth and along strike.

Intercepts include:

KMRD057
4.2 metres at 1 per cent copper, 15.1 grams per tonne silver, and 0.01 per cent cobalt from 213m and 0.42m at 1.1 per cent copper, 2.7 per cent zinc, 80g/t silver and 4.1g/t gold from 257.82m; and

KMRD056
1.35m at 1 per cent copper, 0.01 per cent cobalt from 198.6m.

Dreadnought’s modelling of DHEM results from KMRD056 has demonstrated a conductive horizon that sits within a larger (300m x 230m) and highly conductive horizon that extends to the 500m depth of the Orion geophysical anomaly.

“The 2023 drilling program in the Kimberley was challenging and cut short due to unseasonable weather, bush fires and rig breakdowns,” Dreadnought Resources managing director Dean Tuck said in the company’s ASX announcement.

“However, the program still delivered an extension to the Orion mineralisation and confirming mineralisation and or identifying significant off hole conductors from many of the holes drilled.

“And, thanks to the GSWA’s co-funded Exploration Incentive Scheme diamond holes drilled at Orion, there has been significant advancements in the understanding of the mineral systems active at Tarraji-Yampi including that Orion is a copper-gold-VMS system, similar to Degrussa in the Bryah Basin, which will improve our targeting and follow up programs.

“The program remains largely incomplete as originally intended and we look forward to applying our learnings and prioritizing targets for testing in 2024.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Galan Lithium Increases HMW Resource to 8.6Mt LCE

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THE DRILL SERGEANT: Galan Lithium (ASX: GLN) managing director JP Vargas de la Vega eventually flew into Singapore in time for the company to announce an increase to the JORC (2012) reported Mineral Resource estimate for the company’s’ Hombre Muerto West project located in Catamarca Province, Argentina.

Galan Lithium has now increased its 100 per cent-owned Mineral Resources to 8.6 million tonnes of contained lithium carbonate equivalent (LCE) at 859mg/L lithium (previously 7.3Mt LCE @852mg/L Li).

The company has declared this to now be one of the highest-grade resource estimates in Argentina.

“This latest significant upgrade in the high grade, low impurity HMW Resource highlights the potential enormity of the brine resource that sits within Galan’s 100 per cent-owned tenements in Argentina,” Galan Lithium managing director Juan Pablo (JP) Vargas de la Vega said in the company’s ASX announcement.

“The initial HMW resource in March 2020 was 1.08 million tonnes LCE at 946mg/L lithium, upgraded in May 2023 to 6.6 million tonnes LCE at 880mg/L lithium.

“This has now been increased a further approx. 20 per cent to a tier one size of 8.6 million tonnes LCE at 859mg/L lithium, with the inclusion of our Catalina tenements.

“Coupled with our Candelas resource, Galan has a very solid foundation, and more importantly has delivered a further validation that its Hombre Muerto Salar resources fully support our four-stage lithium production target of up to 60,000 tonnes pe annum LCE.

“The HMW Project is robust and underpinned by strong financial metrics as illustrated in its Stage 1 and Stage 2 DFS results.

“We constantly evaluate opportunities to increase the value of the HMW Project in parallel with continuing to construct Stage 1 as we look forward to first commercial production in 1H 2025.”

The updated HMW Mineral Resource was supported by new core porosity data from Santa Barbara, Casa del Inca III and Del Condor tenements.

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Palladium Making a Comeback: Chalice

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THE CONFERENCE CALLER: Chalice Mining managing director Alex Dorsch says palladium is a misunderstood critical mineral. By Kristie Batten

“Palladium is in a very weird position because people perceive it as a metal not needed for the energy transition,” Dorsch told the first day of the Tribeca Future Facing Commodities Conference in Singapore.

The key driver of palladium demand is plug-in hybrid electric vehicles (PHEV) and internal combustion engine vehicles.

Dorsch said consumers were favouring PHEVs over battery electric vehicles due to their lower cost, longer range and the lack of charging infrastructure.

While the sale of EVs in February were down 15% year-on-year, the sale of PHEVs jumped 25%.

“That’s not the narrative the media is telling you right now,” Dorsch said.

“There’s a perception that palladium demand is going to be destroyed by EVs but that is absolutely not true.”

Prices for palladium have been at cyclical lows but are creeping higher.

Palladium supply has been decreasing, while demand remains “robust”.

Chalice estimates about 50% of the global palladium market is underwater at current prices.

In 2022, 78% of global palladium supply came from Russia and South Africa.

Chalice’s proposed Gonneville project would be in the second quartile of global palladium projects on a cost basis.

“We’re going to out-compete South Africa,” Dorsch said.

Gonneville hosts a resource of 16 million ounces of palladium-platinum-gold, as well as 860,000 tonnes of nickel, 520,000t of copper and 83,000t of cobalt.

It is the world’s largest undeveloped palladium resource.

“The Western World has had a capex holiday and a discovery holiday,” Dorsch said.

Chalice is working on a update to its high-grade resource, after which it will update its scoping study.
Earlier this month, Argonaut head of research Hayden Bairstow pointed out that Chalice’s share price had underperformed against the rebounding palladium price.

“We retain our bullish outlook for palladium, with our base case assuming a further 6% in FY25 from current levels and circa 20-30% in the medium-term, with our long-term price US$1300/oz 22% above current spot prices,” he said.

On that basis, Bairstow upgraded his price target for Chalice by 9% to $2.40. Chalice shares closed at $1.03 on Tuesday.

 

 

‘Dangerous’: West Needs to Act on Battery Materials

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THE CONFERENCE CALLER: Benchmark Mineral Intelligence’s Henry Sanderson has warned Western nations to stay focused on critical minerals in order to challenge China’s dominance. By Kristie Batten

Sanderson, who is also the author of the book Volt Rush, told the Tribeca Future Facing Commodities Conference in Singapore today that countries including Australia, Canada, Indonesia and Argentina had become very important to the energy transition.

“But at the heart of this transition is China and the US and the relationship between these two superpowers,” he said.

“In many senses, a lot of these other countries are trying to find their place in this new cold war between China and the US.”

Canada has moved to ban Chinese investment in its lithium sector.

“But countries like Indonesia, Argentina, Chile, they’re much more open to Chinese investment and supply,” Sanderson said.

Early days

Sanderson said the energy transition was still in its early stages.

In 2023, battery demand was about 1 terawatt hour but is expected to reach 20Twh by 2050.

“And the implications on raw materials are really quite significant,” Sanderson said.

“With lithium, around 12 million tonnes, up from around 1 million tonnes at the moment.”

Benchmark’s rough calculation is that more than 300 new mines would be needed to meet demand by 2035.

Sanderson said there would be shortages of lithium, nickel and cobalt due to long lead times for mines.

“There’s a fundamental mismatch between the time it takes to develop mines and the other parts of the supply chain,” he said.

“In China, they can build chemical processing cathode and battery cell manufacturing in about a year, so they can really build these plants extremely quickly.

“But it’s the mines that is the sort of limiting factor in terms of the time it takes to develop them.”

‘Hostile world’

Sanderson said China was dominant on the processing side, cathode and anode production and battery cell production, but it was still quite reliant on imports for the raw materials.

“So if you think of China’s perspective, they need to secure these raw materials outside their borders and they face an increasingly hostile world,” he said.

“As I said, Canada has stopped Chinese companies from investing in lithium and we’re probably going to see more of the same, so they need these raw materials to feed the industrial sectors that provide the jobs and economic opportunity in China.

“So that’s why we see Chinese investment in African and Argentinean lithium etc and also the development of domestic lithium within China.

“China is really thinking of energy security, as is Europe and the US.”

On the flipside, Sanderson said where the West was vulnerable was on the processing side and the cathode and anode side.

Sanderson said China had “excessive dominance” in rare earths and graphite.

“China’s dominance is set to remain throughout this decade into the early part of next decade so I think if the West wants to de-risk, it should really focus on these areas where China’s dominance is 90-plus percent,” he said.

US ‘back in the game’

Sanderson said the US Inflation Reduction Act was a significant piece of legislation.

“And what we see in the IRA is very protectionist measures and very, very similar to how China has developed this clean energy industry so it’s like the US is trying to do a China,” he said.

Under the IRA, companies can receive grants or tax if critical minerals are mined or processed in the US.

“Foreign entities of concern cannot be involved in this supply chain – China being the most significant entity of concern,” Sanderson said.

But Sanderson pointed to the fact that Western companies like Albemarle Corporation and Arcadium Lithium could build downstream capacity in China for a 10th of the cost of the US.

“These IRA restrictions are coming in, but the costs are increasing for a lot of projects in the West. So how do we compete with China?”

Sanderson said innovation, hydropower and government subsidies could make the West more competitive.

But he warned it wasn’t as simple as it sounded.

“The Inflation Reduction Act caused a lot of backlash in Europe as a lot of investments that were going to be made in Europe have gone to the US, so there are tensions in this arrangement,” Sanderson said.

“If all these countries get together, there is enough to create new supply chains and really focus on the task.”

Sanderson said when it came to the energy transition, geopolitics was of high concern and were worth following closely.

“Because in Western democracies, we need to get buy-in from populations for this project of de-risking from China and building out the supply chains,” he said.

“Because China is so dominant, we’re already seeing voices coming out against EVs, because they say it will lead us to reliance on China, so we’re in a very dangerous area where, in the West, we need to maintain this vision and this strategy that we’ve embarked on.”

 

 

Mining Finance Model Needs a Shake-Up: Tribeca

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THE CONFERENCE CALLER: The mining finance model needs to change if the industry is to compete with the technology sector, according to Tribeca Investment Partners Singapore’s Scott Clements. By Kristie Batten

Speaking on the first day of the Tribeca Future Facing Commodities Conference in Singapore, Clements said the three key investment themes for 2024 were the energy transition and decarbonisation, onshoring supply chains and artificial intelligence and big tech.

However, he pointed out that investment flows had been narrowly focused to date.

Clements said the thing that was being missed is that all three investment themes would create increased demand for power and for the raw materials that fed into supply chains.

He used copper as an example, with new demand for mined copper from artificial intelligence data centres set to surge at a time of declining production from operating projects.

“That supply gap in 2030 is about 7 million tonnes globally,” Clements said.

For perspective, the world’s largest copper mine, BHP and Rio Tinto’s Escondida in Chile, produces about 1Mt of copper per year.

“You potentially need seven of those,” Clements said.

Clements said the current extractive industry model was far too slow, citing S&P Global Intelligence figures stating that the average time from discovery to production for a deposit was 15.7 years.

“Any first-year finance student could tell you if you’re pitching a project that doesn’t achieve cashflow for 16 years, it’s a pretty hard sell,” he said.

Complicating matters is the challenged finance model for early-stage resource companies.
Clements said there needed to be a new model, closer to the venture capital model.

“In my view, that probably needs to be led by governments and end users,” he said.

“Governments need to lead the way.”

According to Clements, the most significant thing governments could do was streamline the permitting process.

He said there was too many conflicts between federal governments and state/territory/provincial governments in many cases.

“There also needs to be more accountability on timeliness,” Clements said, adding that could be achieved without compromising environmental regulations.

At the same time, Clements said miners could be doing a better job on public relations.

He said the public only really heard negative stories about mining and pointed to an ABC headline which stated that federal taxation revenue from mining covered the salaries of all of Australia’s teachers and police.

“Those things aren’t widely known,” he said.

Miners also needed to do more to appeal to young people, according to Clements.

“The industry is typically populated by white guys in their 50s,” he said.

There are still only two mining companies in the S&P 500 – Newmont Corporation and Freeport-McMoRan – and the market capitalisations of the 10 largest battery materials miners is still less than one 10th of the 10 largest tech companies.

Clements used Andrew Forrest and Gina Rinehart as examples of the value that could be generated by mining.

“It can generate extraordinary wealth,” he said.

A more recent example he used was Azure Minerals, which had risen 10 times since its appearance at the same conference in Singapore a year ago, thanks to its Andover lithium discovery.

Azure is set to be acquired by Rinehart’s Hancock Prospecting and Chile’s SQM for A$1.7 billion next month.

Azure managing director Tony Rovira made his final presentation for Azure at the conference today before he “rides off into the sunset”.

He said if someone had invested A$10,000 in Azure a year ago, it would be worth A$112,000 today.
“Azure Minerals is an example of what you can achieve if you invest in the right company,” Rovira said.

Caspin Resources Confirm New Brassica Prospect Drill Targets

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THE DRILL SERGEANT: Caspin Resources (ASX: CPN) has identified two new conductors having run a moving loop electromagnetic (MLEM) survey at the Brassica prospect within the company’s Yarawindah Brook project in Western Australia.

Caspin Resources ran the survey over an area of five square kilometres, comprising 454 stations, across a large nickel-copper-PGE mineralised mafic-ultramafic intrusive complex along the stratigraphic extension of rocks hosting Chalice Mining’s Gonneville deposit.

The company said it had been encouraged by the geological context of the new conductors adding that supporting datasets have indicated potential for the conductors to be related to a mineralised magmatic sulphide source.

“This is a significant development for the Yarawindah Brook project, as it confirms the prospectivity of the Brassica Shear Zone, which has been only lightly explored compared to the company’s efforts at the Yarabrook Hill prospect,” Caspin Resources managing director Greg Miles said in the company’s ASX announcement.

“The recognition of EM conductors within what was already a conceptually prospective geological setting is highly encouraging.

“There are now several independent datasets that indicate excellent potential for nickel-copper-PGE mineralised sulphide.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE