Future Metals Positioning for PGM Rebound

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THE CONFERENCE CALLER: While platinum and palladium prices are trading at cyclical lows, Future Metals (ASX: FME) says it will be ready when prices eventually recover. By Kristie Batten

Future Metals owns the Panton project in Western Australia’s Kimberley region, which has a resource of 92.9 million tonnes at 2 grams per tonne palladium equivalent for 6 million ounces of contained palladium equivalent.

Its current operational plan is based on a resource of 37.2 million tonnes at 3.3 grams per tonne palladium equivalent for 3.9 million ounces, including a high-grade component of 10.8Mt at 7g/t palladium equivalent for 2.4Moz.

“You simply do not find grades this big in the Western world,” Future Metals executive chairman Patrick Walta told the RIU Explorers Conference in Fremantle.

“That grade … is massive and it affords us a lot of flexibility and the ability to get a big operation up and running in a tier one jurisdiction.”

There has already been more than $50 million spent at Panton, including a 500 metres decline, which Walta said shortened the time frame to production.

A scoping study outlined capital costs of $267 million for an operation producing 117,000 ounces per annum of platinum group metals, as well as 1200 tonnes per annum of nickel and 134,000tpa of chromite, at all-in sustaining costs of US$789 an ounce over nine years.

That would make Panton a top five PGM producer in the Western world, which Walta said made the company and project “investable” and gave it credibility.

“At the moment, PGM prices are low but that’s fine – we don’t want to be a producer right now,” he said.

“In fact, we’re quite happy to see production coming out of the market.”

Under the base case scenario, the scoping study returned a post-tax net present value of $153 million, internal rate of return of 21% and a payback period of 4.1 years.

Using a five-year average PGM price case increased the NPV to $311 million, the IRR to 31% and the payback period to 3.2 years.

Palladium is currently trading at around a six-year low and consultancy Metals Focus expects prices to remain under pressure this year.

Last week, ANZ noted that platinum looked inexpensive against the backdrop of a growing market deficit.

The bank is bullish on platinum and neutral on palladium, but said it expected palladium prices to recover.

Walta said that at the current PGM basket price, 40% of producers were underwater.

“The top quartile is haemorrhaging cash, supply is being stripped out of the market,” he said.

“A lot of that top quartile is old, deep, South African mines that were really propped up by really high prices over the past couple of years – they shouldn’t be in production, and they won’t be.

“The curve will change; supply will be stripped out of the market.

“It’s a story as old as time – the cure for low prices is low prices.

“We will be ready for that price rise.”

 

Hamelin Gold Excited by Multiple Tanami Prospects

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THE CONFERENCE CALLER: Greenfields explorer Hamelin Gold (ASX: HMG) is hopeful of making the next major discovery in Australia’s elusive Tanami province. By Kristie Batten

Hamelin Gold’s 3500 square kilometres of ground makes it the dominant landholder on the Western Australian side of the Tanami.

Its ground sits directly along strike from Newmont Corporation’s 20 million ounce Callie mine, part of the world-class Tanami operations.

“It’s odd in an orogenic belt to have such a giant and not a string of 2-5 million ounce deposits within the same province and that’s the sort of scale opportunity we believe that Hamelin Gold has,” managing director Peter Bewick told the RIU Explorers Conference in Fremantle last week.

The reason, Bewick suggested, that another giant had not yet been found, as due to there being little to no outcrop in the region and extensive sand cover.

“You could hide pretty well anything under there,” he said.

“Given Callie has such a small footprint, we think there’s ample opportunity to hide a few Callies in 3500 square kilometres.”

Bewick said exploration is in Hamelin’s DNA.

Given the difficulty and expense of exploring in the Tanami, Bewick acknowledged the company had to be good at prediction and detection.

“Without going broke drilling holes all over the place,” he added.

The company has turned to technology to assist.

Use of CSIRO’s “groundbreaking” Ultrafine soils technology has already yielded results, identifying two large soil anomalies in the Sultan gold corridor.

Initial drilling returned an “outstanding” 7.6m at 3.2 grams per tonne from 326.2m, including 1.1m at 15.9g/t gold.

“One thing we generated was a beautiful 1km gold anomaly under sand cover with a 700m-long bedrock gold anomaly underneath,” Bewick said.

“We’re super excited to get an RC rig out here.

“This is the sort of footprint that could be sitting over a major gold system.”

However, it’s not the gold potential that caught the eye of the world’s largest miner.

Hamelin drilled a hole into a “rather weird-looking magnetic anomaly” called Hawkeye.

“What we got was not what we expected,” Bewick said.

The hole hit magmatic nickel-copper sulphides.

“It’s the first time this style of mineralisation has been identified in the Tanami,” said Bewick.

It was that result which prompted Hamelin to apply for BHP’s exploration accelerator Xplor.

Last month Hamelin found out it was one of six successful applicants out of a total of 529 companies and prospectors who applied.

As part of the program, Hamelin will receive up to US$500,000 of non-dilutive funding from BHP and receive mentoring and technical support.

There’s also the potential for additional investment and partnerships down the road.
“We’re pretty excited they’re excited,” Bewick said.

“If it’s of interest to BHP, it could be fascinating for our shareholders.”

Hamelin is well-placed for a junior explorer. Aside from the interest from BHP, global major Gold Fields and ASX 200 producer Silver Lake Resources each hold 15 per cent of the company.

Hamelin’s current market capitalisation of $11.9 million and healthy cash balance of $5.2 million (at December 31), gives it an enterprise value of just $6.7 million.

Now’s The Time to Shop for Lithium Stocks: Southam Says

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THE CONFERENCE CALLER: Lithium explorers are feeling down and out due to a slump in prices but one managing director says that’s the perfect time to buy. By Kristie Batten

According to Bell Potter Securities, most lithium stocks were down 30-40% in January.

Cygnus Metals (ASX: CY5) is one of those, down 42.5% in January.

But managing director David Southam has seen this all before, having been a director of lithium success story Kidman Resources before it was sold to Wesfarmers in 2019 during the last “lithium winter”.

“If there’s ever a time to be looking at lithium stocks, now is the time to look into it,” he told attendees of the 2024 RIU Explorers Conference in Fremantle.

Cygnus has a market capitalisation of just $20 million but is quietly working to tick off milestones at its three lithium projects in Canada.

A key achievement last year was the announcement of a 10.1 million tonne at 1.04% lithium oxide maiden resource at the Pontax project.

Southam pointed out the resource was delineated after just 10,000m of drilling.

“We’ve got 44 kilometres of strike and we’ve really only tested a couple [of kilometres] so there’s plenty more to be found there,” he said.

“We’re drilling there now.”

Pontax is just 30km south of Arcadium Lithium’s James Bay project, which is North America’s largest lithium deposit.

Cygnus says the almost identical mineralogy between the two deposits indicates the same or similar source granite.

The company also owns the earlier stage Auclair project, which is 60km from the 55.7Mt Whabouchi deposit.

Spodumene-bearing pegmatites have been confirmed over a 6km strike length.

Further field work, including soil sampling, is underway across the large land package.

“It’s not necessarily sexy, but with 416 square kilometres, it’s how you pinpoint where to explore,” Southam said.

Cygnus’ third James Bay lithium project is Sakami, which is just 44km from Patriot Battery Metals’ Corvette discovery.

The project has never been explored for lithium and initial work was cut short by last year’s wildfires in the region.

Cygnus’ 823 square kilometre landholding in the James Bay lithium district makes it the largest ASX-listed landholder in Quebec.

“We’re also next to large deposits,” Southam said.

“All the major companies are in the region but exploration is something which is missing in all of their portfolios.”

Cygnus has also made a clay-hosted rare earths discovery at Bencubbin in Western Australia.
“This is really flying under the radar,” Southam said.

The company has discovered large-scale rare earth element enrichment over a 22km strike length and is now awaiting metallurgical test work from ANSTO.

 

Spartan Onto ‘Something Special’ at Never Never

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THE CONFERENCE CALLER: Spartan Resources (ASX: SPR) was feeling the love at the RIU Explorers Conference after announcing visible gold in its deepest hole to date at the Never Never gold deposit in Western Australia. By Kristie Batten

On a down-day for ASX gold stocks, Spartan shares jumped nine per cent.

Drilling hit 20.5 metres of what the company described as “typical” Never Never-style mineralisation, with indicative heavy silicification and biotite-chlorite alteration from 871.5m down-hole.

The core included small specs of visible gold at 878.7m down-hole.

The intercept is located down-plunge and more than 170m below the current Never Never resource of 952,000 ounces at grading 5.74 grams per tonne gold.

Spartan managing director Simon Lawson told RIU delegates the deposit was now the height of the world’s tallest building, the Burj Khalifa in Dubai.

“We’re pretty confident it keeps going,” he said.

“The consistency of this deposit is unlike anything I’ve ever seen in my 20 years of experience.”

Spartan has five drill rigs on site at Never Never ahead of a resource update due mid-year.

Lawson said the company’s focus for 2024 was drilling to de-risk the project.

“I’m not going to apologise for that,” he said.

“We will continue to de-risk the project.”

Spartan is no stranger to risk after having to suspend the Dalgaranga gold plant in 2022, which was processing circa one gram per tonne dirt.

What followed was a difficult recapitalisation in early 2023.

“We didn’t have a lot of friends back then,” Lawson said.

But the struggling company drilled just 600m from the plant and discovered Never Never, which proved to be a game-changer.

“It’s substantial vindication for why we made those tough calls,” Lawson said.

Other new high-grade results reported today included 15m at 6.06g/t gold from 358m, including 3m at 23.65g/t outside the resource at Four Pillars, and 23.8m at 2.44g/t gold from 379m, including 5m at 5.23g/t at Sly Fox.

A new exploration target for the project is due by the end of the month.

Spartan is targeting a reserve estimate of at least 300,000 ounces at more than 4g/t gold, which will put it on the path to achieve its goal of a minimum five-year high-grade mine plan.

 

Odyssey Gold Increases Tuckanarra Mineral Resources

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THE DRILL SERGEANT: Odyssey Gold (ASX: ODY) released an updated Mineral Resource Estimate (MRE) for the company’s Tuckanarra project in the Murchison Goldfields of Western Australia.

The updated MRE incorporates a new MRE for the Highway Zone based on results from diamond drilling completed in November 2023.

The Tuckanarra MRE now totals 5.14 million tonnes at 2.5 grams per tonne gold for 407,000 ounces of gold (above a 0.9-2.0g/t Au cut-off).

The new MRE for the Highway Zone comprises and Inferred resource of 0.79 million tonnes at 3.8g/t gold for 97,000 ounces of gold.

Recent drilling at the Highway Zone highlighted underground potential with a high-grade shoot intersected over 150m of strike, including:

7.35 metres at 9.5g/t gold, 11m at 7.8g/t gold and 12m at 6.5mg/t gold.

“This resource upgrade demonstrates the potential for continued growth of shallow oxide resources and also the addition of high-grade underground mineralisation,” Odyssey Gold director Matthew Briggs said in the company’s ASX announcement.

“We have increased our overall resource grade to 2.5g/t gold, and the maiden underground resource for the Highway Zone contains a substantial 65,000 ounces at 5.8g/t gold.

“This underground resource grade is double the grade of underground resources being mined nearby.

“Targeted drilling at Highway Zone highlights the predictability of the high-grade shoot and 150m of strike.

“Additional drilling is planned to delineate continuing extensions of the resource along strike and at depth.

“Odyssey will continue to systematically unlock the value and true potential of this asset through further targeted drilling programs as we aim to build on this very solid foundation.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Accelerate Resources Confirms Strong Prinsep Lithium Mineralisation Continuity

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THE DRILL SERGEANT: Accelerate Resources (ASX: AX8) recently completed an infill and extensional rock chip sampling program at the company’s 100 per cent-owned Prinsep lithium project in Western Australia.

Accelerate Resources reported that results from the sampling program had confirmed the continuity of lithium mineralisation across the mapped width extent of the main northern pegmatite to 60 metres, and increased the eastern strike extent of known mineralisation by an additional 300m to 1.5 kilometres northern pegmatite trend.

The company describes the Prinsep lithium project as an advanced drill-ready exploration project just to the south of Karratha and a stone’s throw (35km) from Azure Minerals’ (ASX:AZS) Andover lithium discovery.

“We continue to be excited by the high-grade lithium results from our recently completed sampling activities at the Prinsep project, which is located in the Karratha-Roebourne hard-rock lithium belt that also hosts Azure Minerals’ Andover lithium discovery,” Accelerate Resources CEO Luke Meter said in the company’s ASX announcement.

“Results from the four north-south rock chip sample traverses over the Prinsep northern pegmatite, as well as extensional sampling, have now extended the known mineralisation at Prinsep beyond 1,500 metres.

“Importantly, these latest assays continue to clearly demonstrate the continunity and potential scale of the Prinsep lithium discovery in the West Pilbara, which gives us great confidence and momentum as we advance towards our maiden drilling program scheduled for early Q2 this year.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Experts Provide Crucial Tips for Juniors to Heed in 2024

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THE CONFERENCE CALLER: Experts at the RIU Explorers Conference in Fremantle have offered some advice to juniors for the year ahead. By Kristie Batten

The market for juniors has deteriorated since the start of January, though the strong turnout at the conference is a sign there’s still plenty of interest.

ANZ relationship manager – junior resources Tim Robertson said there was one word to sum up the year ahead: volatile.

The bank forecasts little upside in battered lithium or nickel.

For lithium, ANZ expects production to rise by 40% this year, while demand will only increase by 25%.

“We could see further lithium projects being deferred or existing projects curtailed,” Robertson said.
On the macroeconomic front, the US election will be a key theme of 2024.

“The $64 million dollar question is this: what would a second Trump presidency look like?”
Robertson posed.

While there’s speculation Trump would repeal the Inflation Reduction Act, Robertson noted that two thirds of the IRA money to date has gone to Republican districts.

“You could mount an argument that Republicans, rather than Democrats, are benefitting from the IRA,” he said.

“It poses a conundrum for Trump.”

Interest rates and inflation will be another area to watch in 2024.

Robertson warned juniors with decent cash balances to manage them carefully.

“For juniors with cash balances, unfortunately interest rates coming down is not so good,” he said.

Geopolitical turmoil and reducing interest rates are likely to benefit the gold price and Robertson said ANZ expected the price to average above US$2000 an ounce.

BDO corporate finance partner Adam Myers said there should be a pick-up in merger and acquisition activity, based on the number of inbound inquiries being received.

Already during the conference, Horizon Minerals and Greenstone Resources have announced a merger and Hammer Metals and Carnaby Resources have confirmed merger discussions.

Hamilton Locke partner, corporate Jeremy Newman warned juniors to get their market compliance and disclosure right.

“If you get the little things right, it improves your reputation with investors and the regulator and makes the big things easier,” he said.

“The ASX is particularly active in a quiet market so we can expect a more interventionist ASX in 2024.”

Newman said areas of focus for the ASX was visual mineralisation estimates, production targets, scoping studies and acquisitions.

The inclusion of the term “bag of dicks” in the JORC tables of Great Boulder Resources’ announcement last week led Newman to his final piece of advice.

“A gentle reminder to proof-read your tables.”

 

 

Hot Lithium Stock Kali Metals Debuts at RIU Explorers Conference

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THE CONFERENCE CALLER: ASX newcomer Kali Metals (ASX: KM1) announced its highest-grade lithium results yet ahead of its first presentation as a listed company. By Kristie Batten

Kali Metals listed on the ASX on January 5 after a heavily oversubscribed initial public offering that closed within hours, raising $15 million.

“And we could have raised that several times over,” managing director Graeme Sloan told the RIU Explorers Conference in Fremantle.

A spin-off of Kalamazoo Resources and Toronto-listed Karora Resources, Kali attracted attention when ASX 100 lithium and iron ore producer Mineral Resources invested in the IPO.

MinRes held just under 10% of Kali when it listed and has increased its stake to 14% since via on-market purchases.

Kali owns ground in the Higginsville lithium district, just south of MinRes and Ganfeng Lithium’s operating Mt Marion mine and to the northwest of MinRes’ newly acquired Bald Hill mine.

The company had reported rock chip samples grading up to 3.69% lithium oxide at its Spargoville project but bettered that today with a rock chip grading 5.05% from the Flynn-Giles prospect.

“They’re some big numbers,” Sloan said.

Flynn-Giles sits within a 2km-long soil anomaly.

Other new results reported today included 2.64% lithium oxide at Flynn-Giles and 2.57% at the Parker-Grubb anomaly to the west.

“This area is certainly looking very good for us,” Sloan said.

At the Widgiemooltha project, the company also reported rock chip results of more than 2% lithium oxide at two separate prospects.

Soil sampling will continue across eight prospects at Higginsville with reverse circulation drilling to begin at Spargoville later in the current half.

Kali also has ground in the Pilbara, a region Sloan describes as “the land of the giants”.

Its DOM’s Hill and Marble Bar projects are adjacent to Pilbara Minerals’ Pilgangoora and MinRes and Albemarle’s Wodgina mines.

Those projects are subject to a joint venture with Chilean lithium giant SQM, which can earn 70% by spending $12 million over four years.

On the east coast, Kali has tenements in the Lachlan Fold Belt.

All up, the company holds 3854 square kilometres of ground, in what Sloan describes as one of the best hard rock lithium exploration packages in Australia.

“If you want to take something away, it’s that massive land package.”

 

 

Rox Resources Identifies High Priority Mt Fisher-Mt Eureka Gold Targets

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THE DRILL SERGEANT: Rox Resources (ASX: RXL) will have an orderly queue forming at its booth at the RIU Explorers Conference this morning after announcing results from recently completed geophysical Gradient Array Induced Polarisation (GAIP) surveys at the company’s Mt Fisher and Mt Eureka projects in Western Australia.

Rox owns 100 per cent of the Mt Fisher gold project and the 51 per cent gold rights (rights to earn up to 75%) of the Mt Eureka gold project, both of which are located in the Northern Goldfields of WA.

The projects are at an advanced exploration stage with an existing gold Mineral Resource of 187,000 ounces of gold defined at Mt Fisher – Mt Eureka with much exploration upside identified across the broader tenement package.

Rox completed six Gradient Array Induced Polarisation (GAIP) geophysical surveys at the projects.

Each of the GAIP surveys were designed to advance the project exploration pipeline by defining potential sulphide-rich chargeability anomalies that represent drill-ready targets along the known gold mineralised trends.

The geophysical surveys identified multiple walk-up drill targets, located along strike from known gold mineralised trends that are characterised by high-sulphide content consistent with the causative geology of GAIP anomalies.

“The geophysical surveys conducted recently at Mt Fisher and Mt Eureka have highlighted a number of walk-up drill targets,” Rox Resources managing director Robert Ryan said in the company’s ASX announcement.

“The surveys have detected potential sulphide-bearing structures, which could host gold mineralisation as seen elsewhere in the tenement package.

“The 1,150 square kilometres tenement package represents a district-scale exploration opportunity for both gold and nickel sulphides, that Rox will continue to advance in order to generate value for our shareholders.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Hammer Metals Welcomes Sumitomo JV Continuation

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THE DRILL SERGEANT: Hammer Metals (ASX: HMX) should be taking questions without notice at the RIU Explorers Conference this morning after announcing it is in confidential discussions regarding a potential merger with Carnaby Resources (ASX: CNB).

Hammer Metals said discussions at this stage remain confidential and incomplete and are at a relatively early stage, adding that there is no certainty that a transaction between the companies will eventuate.

The company released another announcement regarding recent exploration activities and the status of its Mount Isa East Joint Venture with Sumitomo Metal Mining Oceania (SMMO) in North Queensland.

Hammer explained that SMMO has reached a milestone $6 million of exploration expenditure under the JV and has now elected to continue funding the joint venture.

However, Hammer signalled its intention to dilute its interest in the JV in order to preserve capital to focus on its 100 per cent-owned prospects.

“We are very pleased that our partner in the Mount Isa East Joint Venture, Sumitomo Metal Mining Oceania, has elected to continue to fund the JV after reaching the $6 million earn-in milestone,” Hammer Metals managing director Daniel Thomas said in the company’s ASX announcement.

“This is another important and positive milestone for our Mount Isa exploration efforts and secures the continued support of Sumitomo Metal Mining as a valued strategic partner in this part of our portfolio.

“Importantly, this will ensure that we have ongoing funding for exploration activity within the JV, with the first cab off the rank being the start of drilling in early March at the high-priority Shadow South IOCG target.

“This is a large and compelling IOCG target with significant geophysical, geochemical and geological characteristics.

“We are looking forward to seeing what this drilling can deliver.

“We have also now received all of the assay results from drilling completed late last year across multiple prospects within the Mt Isa East JV.

‘The results included several relatively narrow but very high-grade and broad spaced mineralised intercepts, several of which are considered to be worthy of further follow-up.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE