Lifting Gold Bars at the 2023 RIU Explorers Conference
THE CONFERENCE CALLER: Wally Graham tries his hand at lifting ABC Refinery gold bars at the 2023 RIU Explorers Conference.
Neometals Capitalising on Dying Batteries
THE CONFERENCE CALLER: Looming European battery recycling regulations have driven Neometals’ (ASX: NMT) pivot away from mining into materials recovery and recycling, managing director Chris Reed told the 2023 RIU Explorers Conference. By Ngaire McDiarmid
“Our aim is to be the leading provider of recycling solutions to the OEMs, be they car makers or cell makers,” he said.
“More of the cars are becoming electric … and as they get to the end of their life, we model 10 years, there will be a tsunami in terms of the number of batteries coming back that need to be recycled.
“So, what we’ve developed is plants that can process the scrap.”
He said recycling was compulsory in the EU, carmakers were faced with declaring their carbon footprint and meeting minimum recycled content requirements, which was why miners like Glencore were getting into recycling.
Neometals is recycling at a 10 tonne per day refinery hub in Germany through Primobius, its 50:50 Joint Venture with the SMS Group.
Aside from producing nickel, cobalt, manganese and lithium, the tailings were ammonium sulphate, a fertiliser product, which Reed said was one of the revolutionary parts of the patent-pending process.
He said 79 per cent of the cost of a traditional lithium-ion cell was in the raw material.
“So, if I’ve got a ton of these batteries … it’s the same as having a ton of ore in front of a concentrator – that’s 15 per cent nickel, 15 per cent copper, 2 per cent cobalt and 2 per cent lithium and at our operation in Germany now, we get paid to take that,” he said.
Reed believes emerging lithium supply was unlikely to meet the growing demand and said by 2040, recycled material would be the main source of lithium.
Neometals also had a flexible business model and would do plant supply, including a partnership with Mercedes Benz, plus technology licences, Reed said.
He pointed to a “catalyst-rich year”, including the Mercedes partnership progressing and advancing a 50tpd plant with Stelco in Canada, with the economics due in the June quarter.
Aside from its core battery materials business units, Neometals has the large-scale Barrambie titanium and vanadium project in Western Australia.
Accelerate Resources Poised to Drill Manganese Project
THE CONFERENCE CALLER: Accelerate Resources (ASX: AX8) announced recent mapping has confirmed the discovery of two large, mineralised manganese corridors at the Woodie Woodie North project, ahead of managing director Yaxi Zhan’s presentation to the 2023 RIU Explorers Conference today. By Ngaire McDiarmid
The new corridors represented “persistently mineralised trends” analogous to the mineralisation at the Area 42 discovery and were extensions of the world class Woodie Woodie mine corridor, Accelerate said.
Zhan told Resources Roadhouse on the sidelines that the news was quite significant and indicated the potential for a large-scale deposit at Woodie Woodie North.
The project, consolidated exactly 12 months ago, is about 70km from the long-life Woodie Woodie manganese mine in Western Australia’s Pilbara.
Recent drilling at Area 42 confirmed the presence of large and well-developed hydrothermal “Woodie Woodie style” zones, Zhan said.
Results included 1m at 50.8 per cent manganese from 1m, within 5m at 33.7 per cent from surface.
The company is planning to start an aggressive drilling program in April ahead of a maiden resource expected before year-end, Zhan said.
“Today’s announcement basically demonstrates that we can potentially … duplicate the success that we’ve had at Area 42 to all the other corridors,” she said.
Accelerate is aiming to become the next Australian manganese producer.
Zhan said manganese was a critical mineral, irreplaceable in steel production and increasingly in demand for the growing battery and renewable technologies sector.
Matsa Resources Aims for 1Moz ‘And Beyond’ at Lake Carey
THE CONFERENCE CALLER: Drilling results announced today give Matsa Resources (ASX: MAT) confidence its Lake Carey gold project will increase beyond 1 million ounces, executive chairman Paul Poli told the 2023 RIU Explorers Conference. By Ngaire McDiarmid
Results included 14m at 2.87 grams per tonne gold and 19m at 3.77g/t from Fortitude North, at the project in Western Australia’s Goldfields.
“We didn’t expect to find these types of grades, it’s completely opened up the ground to the north,” Poli told the conference.
The nearby permitted Fortitude deposit holds 489,000oz of the project’s current 886,000oz.
Describing Matsa as “a gold company with a twist of lithium”, Poli said whether it remained a company with two prongs was yet to be seen.
Its second focus is as a lithium “trailblazer” in Thailand.
Poli said Matsa had amassed just under 1,200 square kilometres, pointing to DSO potential at Phang Nga which was “littered with lithium occurrences throughout that pegmatite”.
He was at pains to dispel the misconception that processing lepidolite was difficult.
“I say to all the naysayers, lepidolite is valuable, the proof is here,” he said.
The company had announced a lithium testing agreement this week, for 80kg of its Thai samples, with Yongxing Special Materials Technology, one of China’s largest lepidolite miners and processors.
“We’ve had a bit of fun with our share price this week,” Poli noted.
“It’s up 50 per cent – and little bit of luck, that will continue.”
CSA Fractures the Lithium Goldilocks Zones Fairytale
THE CONFERENCE CALLER: CSA Global Mining Industry Consultants associate partner Ian Stockton shared some tips for Western Australian lithium hunters on the final day of the 2023 RIU Explorers Conference. By Ngaire McDiarmid
He noted exploration for lithium had increased dramatically in recent years in line with the move to electrification and the demand for lithium-ion batteries, creating both supply and exploration challenges.
“We cannot recycle our way out of the shortage,” he said.
“Lithium mines are limited, production is constrained … therefore lithium production needs to catch up with current demand, which can only happen through exploration.”
However, the lithium knowledge base was relatively new for the broader exploration community, making it a steeper learning curve for geologists in the field “which is also quite exciting,” Stockton said.
Drawing on his circa 30 years of experience and input from the CSA team, including principal geologist Ralph Porter, Stockton said greenstone belts were better hosts of lithium than granites or granite gneiss in WA due to greater permeability.
“Beware – pegmatites are very common,” he said.
“In your tenement less than five per cent of your pegmatites may contain minerals of interest and less of these may be large enough to exploit, so therefore it’s important to quickly and accurately target only the most prospective pegmatites.”
The rock temperatures at the time of melt generation were important as it impacted how far the fractionated pegmatite melt could move away from the source granite, he explained.
Stockton spoke of a “Goldilocks” zone – not too hot, not too cold but just right – that worked with porridge not pegmatites.
“There is no magic number,” Stockton said.
“So, keep an open mind and build the mineral system – the pegmatites do come in all shapes and sizes.”
As for whether source rocks were fertile or barren, Stockton’s technical advice included saying using the potassium-rubidium ratio [K/Rb (<30)] was “fairly robust” for identifying potential mineralised pegmatites.
“Fractionation is a relatively simple, but effective approach,” he said.
“Finally, there’s no substitute for time on the ground.”
Oar Resources’ Fresh Look Shows Battery Potential at Oakdale Graphite Project
THE CONFERENCE CALLER: One of Oar Resources’ (ASX: OAR) original projects is coming to the fore as the company reshapes its focus on battery and critical minerals, the 2023 RIU Explorers Conference heard. By Ngaire McDiarmid
Metallurgical test work, announced this morning ahead of CEO Paul Stephen’s presentation, identified ultra-fine flake graphite in historical drill core from Oar’s Oakdale graphite project on South Australia’s Eyre Peninsula.
Ultra-fine flake graphite is increasingly in demand and seeing price growth due to its suitability for producing spherical graphite, used in battery manufacturing, Stephen noted.
Historically jumbo flakes had attracted higher prices so the fine material at Oakdale had made the project less attractive in the past, Stephen told Resources Roadhouse on the sidelines of the conference.
“Let’s go look at the project with different eyes,” he said of the company’s new approach.
“Let’s look at the grade, let’s look at the potential increase in tonnages and then let’s look at the processing advantages of having a clay-based product, it’s not going to need the capital costs some of the other plants.
“It’s early days, we’ve got a lot of work to do.”
In keeping with its new focus, Oar acquired the Denchi lithium project in Western Australia in the December quarter, divested an iron ore project and was actively seeking partners for its Douglas Canyon gold-silver project in the US.
Time For Tin and a New Nickel Target: Venture Minerals
THE CONFERENCE CALLER: Venture Minerals (ASX: VMS) is excited to start drilling a new nickel target next week at its tenements in northwest Tasmania, managing director Andrew Radonjic told the 2023 RIU Explorers Conference. By Ngaire McDiarmid
The company announced the drilling program today ahead of Radonjic’s presentation.
The target was described as sitting within the same ultramafic belt that hosts the 264,000 tonne Avebury nickel deposit, 25km to the southwest.
Venture has a diverse portfolio, including a Joint Venture with Chalice Mining in Western Australia, the Riley iron ore mine on care and maintenance and the Mount Lindsay tin-tungsten project in Tasmania.
The company was looking to have the second tin mine in Australia, Radonjic told delegates.
“Tin is three times the price of copper [about US$33,000 per tonne],” he said.
“The time for tin is now.”
He said tin was dubbed a spice metal, as it was used in minor amounts but was vital in electronics applications, including mobile phones.
Venture is refocusing its development approach at Mount Lindsay, which also hosts the Reward rare earth element (REE) discovery and the Cruncher REE-tin exploration target.
Lady Colleen Study Exceeds Austral Resource’s Expectations
THE CONFERENCE CALLER: Austral Resources’ (ASX: AR1) Lady Colleen copper project in Queensland is economically viable, according to a scoping study result announced today ahead of the miner’s presentation to the 2023 RIU Explorers Conference. By Ngaire McDiarmid
The study indicated total production of about 44,000 tonnes of copper and a pre-tax internal rate of return of about 38 per cent over five years.
It put the pre-tax net present value (7.5 per cent discount) at A$60 million – ranging from $15 million to $94 million with a median estimated value of $55 million.
In the company’s ASX announcement, managing director and CEO Dan Jauncey said the initial study had exceeded expectations and demonstrated the project’s potential.
He said a mine at Lady Colleen would boost revenue and further cement Austral’s position as both a copper producer and an explorer with a highly prospective project book.
The company recently reported a record revenue month, as production from its Anthill copper mine in Queensland ramped up to 1,003 toones in January, driving sales revenue to $12.6 million.
Exploration manager Ben Coutts told RIU Explorers delegates Anthill’s cathode production enabled Austral’s self-funded exploration program.
“The company had an inventory of 140 mineral assets and had a clear focus on “closing the development gap”, he said.
One of the first projects the company wanted to advance from pre-development was Lady Colleen, Coutts said.
Scene Set for Another Super Cycle: ANZ at RIU
THE CONFERENCE CALLER: ANZ senior commodity strategist Daniel Hynes told the 2023 RIU Explorers Conference Day Two audience that China’s reopening has set the scene for another commodities rally. By Ngaire McDiarmid
The Asia region’s major consumer had weighed on global economic weakness in 2022 due to its zero-COVID approach, but following rare social unrest late last year, China reopened “quite dramatically” in December which Hynes said broadly speaking was a very positive event for commodity markets.
“It’s not all going to be roses,” he told delegates, pointing to fundamental issues in the Chinese economy, in particular the heavily indebted nature of property developers which was expected to continue to restrict activity.
According to Hynes’ presentation, however, the uptick in demand came against a backdrop of constrained supply and record low inventories, setting the scene for a super cycle.
Growing demand
Hynes said China once again stood out as a centre of global growth, compared with Europe emerging from its energy crisis and US interest rate rises expected to weigh on activity in America.
China’s GDP was forecast to rebound 5.4 per cent in 2023, Hynes said, with its manufacturing sector picking up.
“We’ve seen a couple countries move back into expansionary territory, in particular China in January, which is quite promising given the surge in new COVID cases during the month and certainly leading up to the Chinese new year,” he said.
Another issue was major consumers moving to address security of supply.
“China is particularly keen to build up its own import growth as a result of that,” Hynes added.
Hynes identified other evidence of growth, including a strong pick-up in retail sales and vehicle sales.
“Registrations for new vehicles…in the week just prior to this were up about 200 per cent year-on-year, so clearly, you know after being restricted and being scared to travel across the country, consumers there are quite active,” Hynes said.
“Already we’ve seen some key commodities record some relatively strong growth rates and imports after a pretty weak 2022.
“We certainly think that something that’s going to go to continue in 2023.
“On the metals side, we’re seeing some really positive signs already.
“Our China copper indicator here shows that we’ve already seen a pick-up and I suspect that’s only going to get greater as we see those real drivers of copper demand kick in.”
He said one driver was the growing investment in China’s power grid which had been inhibited by a lack of inter-provincial connectivity.
He noted renewable energy was heavily reliant on copper and said there was a “significant build-up of capacity in that country as well”.
In terms of electric vehicles, Hynes said China was now the world’s largest market, with more growth forecast.
“We did see a fall-off in January but that was more related to subsidies which came off at the end of last year, but foot traffic through some of those showrooms at the moment show that that’s going to continue for the foreseeable future,” he said.
“But even if we do have some weakness, we’re expecting to see export driven demand really pick up – certainly the demand for EVs in Europe and the US is growing quite strongly and I think China is really earmarking itself to fill the gap in there.”
Moves to build energy storage capacity, which boded well for the vanadium and lithium sectors, were “accelerating quite sharply,” he said.
Falling supply
The pick-up in demand comes as inventories dwindle and there was relatively low growth in supply, Hynes said.
He told Resources Roadhouse on the sidelines that there had been a level of copper restocking ahead of the expected pick-up in manufacturing activity.
“But when you look at it on a longer-term scale, my initial chart showing 20 years of inventories on a days of supply consumption, which is more critical, we’re actually at record lows,” he said.
“It does feel like we’re setting ourselves up for another commodity rally,” he told delegates.
“The strong demand coming from China initially, then the advanced economies, against the backdrop of low inventories and relatively low growth and supply, so we think that commodity rally is really setting the scene for further gains over the near-term.”
RIU Told Gold Could Reach US$2,470 an Ounce
THE CONFERENCE CALLER: ABC Refinery global head institutional markets Nicholas Frappell held delegates’ attention at the 2023 RIU Explorers Conference as he provided a positive but tempered gold outlook. By Ngaire McDiarmid
“Predicting market direction is always a chance to get things wildly wrong,” he cautioned.
“Russia’s invasion of Ukraine will continue to reverberate through 2023 and large offensives are likely…with consequences that will reshape the kaleidoscope frequently, so obviously bear that in mind in terms of the macro outlook that I make.”
Referring to the Ichimoku Cloud, a data-fuelled technical analysis that charts support and resistance levels and trends, Frappell said it indicated a return to the positive in the medium and long-term.
“Gold price projections going forward, very simplistically, over a monthly chart…[given] the huge double top that we’re aware of at $2,075, suggests a follow up to $2,470,” he said.
In terms of the long-term chart for silver, Frappell said the next upside projection was $28/oz.
The precious metals are currently worth about $1,855/oz and $22/oz respectively on the spot market.
“In summary, now that the US dollar uptrend seems to have reversed, gold appears to have every chance to extend its rally,” Frappell said.
“Beware over-optimistic beliefs around monetary easing – there is scope for more tightness to come and since this presentation was prepared, there’s more evidence to support that.
“The Bank of Japan ending the yield curve control is perhaps the most significant monetary event of the year, I suggest you try and keep wise to that.
“It’s probably more important than changes in the federal reserve expectations.
“Market volatility – not going away anytime soon.
“Gold price targets are remaining ambitious on the upside, and plausible above the 2022 lows of $1,620.”