Australian Mines: Potential Prime Cobalt Player

THE CONFERENCE CALLER: Addressing a crowd of potential investors at the 2018 RIU Explorers Conference, Australian Mines (ASX: AUZ) managing director Benjamin Bell declared the company’s status as the most advanced cobalt-nickel-scandium producer in Australia. By Jack Baker

Australian Mines announced on Monday that it has entered into a $5 billion off-take agreement with Korean company, SK Innovation.

The contract, for up to 13 years, is for SK to purchase 100 per cent of the product from Australian Mines’ Sconi plant in Queensland, totalling roughly $400 million worth of cobalt-nickel per year.

Part of the agreement is for SK to provide funding and to potentially take a 20 per cent stake at a 30 per cent premium.

Bell emphasised that the arrangement was more than a simple off-take relationship.

“The reason why we did this deal with SK, we’ve spoken to a number of companies, car battery manufacturers and the like,” he told the full auditorium.

“It’s not just a buyer seller relationship, it’s a partnership.

“They’ll help build the plant, come onto our board and take the product…it de-risks the project, it means it gets built.

“This is the only one in the country that shows a clear path into production.”

Bell admitted that many cobalt nickel companies have forecast growth in battery-metal demand based on the promise of the electric car but emphasised that Australian Mines is already there.

“Our cobalt-nickel is specifically going into that car,” he said.

“This is not a picture of a conceptual car…it’s going straight into Mercedes-Benz via the SK plant in Hungary.”

The company has constructed a demonstration plant in Perth for investors.

Capable of producing nickel and cobalt sulphate for sale, the plant is also capable of producing scandium oxide for other interested off-take parties.

Australian Mines has additional cobalt projects in the pipeline with the Sconi project essentially completed.

The second is in Flemington where it begins drilling next month with a third near Broken Hill.

Bell said the company would inevitably be compared to Clean TeQ (ASX: CLQ), Australia’s largest cobalt company, but iterated his belief in Australian Mines’ standing as the most advanced.

“In addition to getting ours in production probably first and being able to show a clear pathway to that, you’re also getting the upside for more than one project,” he stated.

 

Website: www.australianmines.com.au

 

Pilbara Minerals Wins 2018 Craig Oliver Award

THE CONFERENCE CALLER: Pilbara Minerals (ASX: PLS) has been awarded the Craig Oliver award on the second morning of the RIU Explorers Conference in Fremantle. By Jack Baker

The award is presented each year at the Explorers Conference in memory of Craig Oliver who was killed when the plane carrying board members of Sundance Resources (ASX: SDL) crashed in the Congo in 2010.

The award is given to the company that is considered to exemplify an all-round excellence in several fields over the past year, including exploration, mining, corporate, market results, environment and community.

Accepting the award, Pilbara Managing Director and CEO Ken Brinsden said it was an honour to be nominated and humbling to win amongst the other esteemed nominees, adding that companies needed to take a leap of faith necessary to succeed in the mining industry.

“Our industry only thrives when people are prepared to take risk, to spend money in the ground and to continue to build resource,” Brinsden said.

“That’s where Pilbara had a fantastic head start, we had our founding directors and, in particular John Young and Neil Biddle, spending money on the ground when it wasn’t sexy to be spending money in Lithium.

“It wouldn’t happen unless they made that original investment, taken that first risk and been prepared to back the quality in the project.”

The emerging Lithium and Tantalum producer is busy bringing its world-class, 100 per cent-owned Pilgangoora project into production as demand for battery metals to power electric vehicles surges.

Brendan Oliver, presenting the award on behalf of the Oliver family, said that Pilbara Minerals ticked every box that Craig Oliver strived for and it is moving forward in a way that all companies in the state and country should aspire to.

The other nominees included Gold Road Resources, Sandfire Resources, Syrah Resources and Xanadu Mines.

 

Genesis Minerals Upgrades Gold Deposit as Drilling Commences

THE CONFERENCE CALLER: Genesis Minerals (ASX: GMD) announced that recent drilling of the company’s Ulysses gold deposit has shown a 55 per cent increase in contained ounces and a 31 per cent increase in average grade. By Jack Baker

Genesis Minerals declared the total Ulysses Mineral Deposit now stands at 321,000 ounces of contained gold from 3.3 million tonnes at 3 grams per tonne gold.

The company described the results of its recent drilling program completed over the second half of 2017 as highly successful.

Genesis said the results had confirmed and extended a number of high-grade gold zones estimated at 1.2 million tonnes at 5.5g/t gold for 215,000 ounces.

“The significant gold endowment within these plunging high-grade shoots clearly has the potential to form the core of a significant long-term underground mining operation,” Genesis Minerals managing director Michael Fowler said in the company’s announcement to the Australian Securities Exchange.

“Importantly, we now have a clear understanding of the geometry and controls on the mineralisation, which has allowed our exploration team to focus on the next phase of drilling, set to begin shortly.

“Ulysses is demonstrating all the attributes that we see in many gold systems in the Eastern and North-eastern Goldfields. Put simply, it continues to grow and improve at depth the more we drill.

“We are very excited about the potential to build a very significant gold inventory at Ulysses and we are looking forward to seeing the results from the next round of drilling, which commences later this week.”

The company is commencing 4000 metres of further resource expansion drilling to test potential depth extensions to the Ulysses resource and believe that strong potential exists in the hanging wall to the north of the Ulysses shear.

At the RIU Explorers conference in Fremantle, Fowler elaborated on what the next stage aimed to achieve for the company.

“What we’re looking to do is just expand the current resource between the 100 and 200 reduced level, it’s really just expanding,” he told The Resources Roadhouse.

“We’re really comfortable with what we’ve got in the top 200 metres and we expect it to continue at depth without any issues.

“We’ve done a lot of geological modelling and that shows that mineralisation will extend at depth and there’s no geological reason why that’s not the case.

“We’re pretty confident in being able to significantly expand the resource in the next round of drilling.”

 

Website: www.genesisminerals.com.au

Pioneer Resources Claims Discovery of Microcline in Deposit Overburden

THE CONFERENCE CALLER: Pioneer Resources (ASX: PIO) announced the discovery of a potassium feldspar (microcline) deposit. By Jack Baker

Pioneer Resources claimed the discovery from results of two diamond core holes drilled in the company’s 100 per cent-owned Sinclair Zone caesium deposit in Western Australia.

Pioneer discovered the microcline dominating the caesium deposit’s overburden while moving towards open pit operations for extracting the constrained and high value mineral pollucite.

“The point of the drilling was to quantify very precisely the pollucite, that’s the high value product,” Pioneer Resources managing director David Crook told The Resources Roadhouse on the sidelines at the RIU Explorers Conference.

“Geologically that looks like it’s behaving itself and we’re gaining a lot more knowledge of the pegmatite that coexists with it and the microcline is just a bonus.

“Prior to us realising it was microcline we thought the overburden was waste. That was what we were going to mine and now all of that is a saleable product.”

Pioneer said the deposit was discovered using the low-iron sample preparation technique required for the microcline analysis.

Of the 82 samples submitted from the 2 drill holes, 61 have returned analyses consistent with a published A-grade Microcline specification.

The company also believed it was noteworthy that microcline has been recorded in over 30 drill holes of the Sinclair Zone pit but had yet to be analysed using the low-iron sample preparation technique.

Pioneer’s core focus is to advance the Sinclair Zone Caesium deposit towards development.

Crook said the company aims to proceed with open-pit mining operations to extract the product in mid-2018.

 

Email: info@pioresources.com.au

Website: www.pioresources.com.au

 

Kin Mining Chairman Acknowledges Turmoil

CONFERENCE CALLER: Pitching the investment case for Kin Mining (ASX: KIN) at the 2018 RIU Explorers conference in Fremantle, chairman Trevor Dixon briefly alluded to the company’s recent struggles. By Jack Baker

“Kin Mining is currently going through some growing pains with its business and a lot of you may want to know about that,” was all he said on the recent resignation of the company’s former managing director Don Harper.

The Kin Mining board of directors accepted Harper’s resignation and on Tuesday announced a restructure of the board on the company’s website.

“The company is pleased to announce the appointment to the Board of Mr Brian Dawes as non-executive director,” it said in its ASX announcement.

“The company is also seeking to appoint an independent chairperson, and managing director as part of the restructure and is currently in discussions with suitably qualified applicants and subject to due process; the terms and conditions of these appointments will be advised in due course.”

Dixon will continue as chairman in the interim until a new chairperson and managing director can be appointed.

 

Email: info@kinmining.com.au

Website: www.kinmining.com.au

 

NSX Pitches its Case as an Exchange Alternative

ON THE ROAD: On the opening day of the RIU Explorers Conference, National Stock Exchange (NSX) CEO and managing director Ann Bowering gave her reasoning on why the assembled companies should list with the alternative securities market. By Jack Baker

The NSX believes it can compete with the Australian Securities Exchange (ASX) and among global markets.

NSX recently closed offices in Newcastle and Melbourne and, under a new management team, opened its current head office in Sydney with the purpose of engaging with stakeholders and to demonstrate its role and relevance.

Currently trading more than 80 securities totalling over $4.5 billion via participating brokers that include Patersons, State One, Morgans and Macquarie, the NXS has updated its old direct access model and stocks can now be exchanged over an IRIS terminal the same you would with ASX.

“Our strategy is very clear,” Bowering told the large first day audience.

“Build a globally competitive exchange with a vibrant liquid and diverse debt and equity market competing head to head with ASX to attract the best listings in our market.”

Bowering believes the transparency and access of the NSX make it a viable alternative.

She stated that the NSX team works very closely with companies, giving the best chance of a successful listing and opportunity for a higher profile.

A key point of difference between the two exchanges is minimum spread requirements of 50 shareholders, targeted at allowing companies to access capital earlier, with lower cost and without the need to invest in excessive distribution.

She said their status as a dedicated listing and trading venue for equities gave them an advantage: “That’s what we eat, sleep, live and breathe.”

Bowering gave assurances that the corporate governance expectations and prospectus requirements of disclosure are the same no matter what exchange they are listed on.

“It goes to the heart of market integrity and investor confidence which underpins liquidity,” she said.

Australia has had a single stock market for the last 30 years, being the only advanced global market without a second exchange.

Bowering said the fact that the ASX top 200 has remained largely unchanged over the last 10 years showed inefficiency in the allocation of capital.

“On a global basis Australia has the fourth largest pool of investible funds and many fund managers look offshore to allocate their new capital,” she continued.

“It is important that the ASX has competition to facilitate innovation and broaden investment opportunities in the marketplace.”

Bowering said the ASX has made it clear who their target is: companies with a market capitalisation of $50 million to $500 million in the technology sector who come from foreign markets.

Alternatively, the sweet spot of the NSX was described as companies at IPO with market capitalisation ranging from $3 million to $50 million with proven growth potential and investment stories that resonate with potential backers.

Bowering declared that the NXS has put immediate focus on feeling out the resources sector of Western Australia.

“That’s why we’re here in WA,” she said.

“Because we know where Australia grows…we think there’s an opportunity in this sector.”

 

Web: www.nsx.com.au

 

 

Vertical Events Visits Vancouver

CONFERENCE CALLER: Investment conference specialists, Vertical Events manager Doug Bowie reports on the company’s annual trek to Vancouver in January to attend the Vancouver Resources Investment Conference (VRIC).

VRIC is run by Cambridge House International and Vertical Events have been the agent for this conference since 2009.

The VRIC has been running since 1997 and this year attracted over 8500 delegates (mostly investors), 330 Exhibitors, and 60 speakers.

Of these exhibitors there were eight Australian companies exhibiting with two companies giving corporate presentations and two company CEOs appearing as experts on panels.

The Exhibiting Companies were:

Azure Minerals Ltd                         (ASX: AZS)
Blackstone Resources Ltd             (ASX: BSX)
Heron Resources Ltd                     (ASX: HRR)
Polar – X Ltd                                   (ASX: PXX)
S2 Resources Ltd                            (ASX: S2R)
Transatlantic Mining Ltd
White Rock Minerals Ltd             (ASX: WRM)
Xanadu Mining Ltd                        (ASX: XAM)

Held on a Sunday and Monday, the VRIC started early on the Sunday morning with three of the most well-known newsletter writers (Frank Holmes, Rick Rule, and Marin Katusa) facing off with their best company predictions to an audience of over 800 people whilst at least another 200 people were still in line waiting to get in to the conference.

Gold was still and clearly, the major commodity represented in the Exhibition area with copper, uranium and lithium quite a fair way back in numbers but still well represented.

In line with tradition, Sunday at the VRIC is very much retail investment focussed with casual dress the order of the day.

It closed with a debate on Cryptocurrency vs Gold which filled the main auditorium.

In between there were plenty of keynote presentations, company presentations, and panel sessions.

Tony Rovira of Azure Minerals presented on its Mexican operations and left a very positive impact on all the investors that attended.

Wayne Taylor of Heron Resources followed and gave an informative presentation on the company’s Woodlawn project.

Meanwhile in Auditorium one: Matt Gill’s White Rock Minerals were part of the Alaskan panel entitled ‘Alaska: North to Opportunity’.

Overall Day One was highly successful and everyone was kept entertained by the presentations or by the NFL playoffs that were televised at about four exhibition booths at the conference.

Day Two came and the suits were out in force.

Brokers and funds from the BC area as well as the United States and Toronto were in abundance and looking for bargains.

Part of the value options were seen in the Cobalt Panel where Scott Williamson of Blackstone Minerals provided a great overview of its cobalt project in British Columbia.

Overall, the companies that travelled for the conference were all happy with the VRIC.

“For a first-timer to the VRIC, I did find the format and location ideal,” White Rock Minerals managing director and CEO Matt Gill said.

“With not too many parallel sessions, I was able to attend those I wished to, and still leave room to man my booth and wander the exhibition hall to meet and network with other companies and suppliers.

“With White Rock’s globally significant zinc VMS project in Alaska, and plans to be on the ground this season, the VRIC was held at an ideal time and location for us.

“With over 300 companies and some 8,500 attendees, it provided great exposure and the chance to meet many all in the one location.”

The conference wound up at about 5pm that day and all Monday the Vancouver Round Up run by the AMEBC was in the Exhibition hall next door.

This is another 6000 plus delegate event that looks at the technology and geology behind many projects in Canada and the Americas.

Australian companies featured in the core shed were Solgold on the first two days and Xanadu Minerals and Blackstone Minerals on the final 2 days.

Over the past few years, the week in Vancouver has got bigger and better with many other events evolving including the Metals Investor Forum on the Friday and Saturday before the VRIC featuring over 20 companies and 1000 investors and an event in Whistler later in the week as well.

The general feeling is that the resources industry is alive and well in Canada, but unusually, lagging a little behind Australia due to the confusion in the investment market supplied by Bitcoin and other cryptocurrencies, Blockchain, and Cannabis stocks.

Australian markets have been less exposed to these markets giving the resources market better access to capital and a bigger spotlight.

Long may that continue.

www.verticalevents.com.au

Cobalt Making Its Move On The Technology Circuit

THE CONFERENCE CALLER: Although talk of lithium dominated the Low Emissions and Technology Minerals Conference in Perth, space opened for its lesser cousin, cobalt to take centre stage.

Addressing the conference’s second day audience, CSA Global director Aaron Green said that the trappings of modern life – iphones, ipads, computers, and the soon to be ubiquitous electric vehicles – were bringing cobalt into the spotlight.

“We live in a revolutionary period as we as a planet strive to reduce our carbon emissions and control pollution levels,” Green said.

“In recent years we have seen incredible interest in technology minerals – firstly graphite, and more recently lithium – now the market has realised that cobalt is one of those commodities that will power the next century.”

Lithium’s place in the battery world was assured when technological types decided to name the power packs lithium-ion batteries.

In recent times nickel has enjoyed a moment of glory thanks to Elon Musk identifying its part in the technology, but cobalt too has of late begun to pull focus.

“The importance of cobalt has led the US government to label it a strategic metal and the EU to include it on their lest of critical metals,” Green said.

Historically, the price, production and costs of cobalt has been linked to copper and nickel markets as the commodity is a by-product of the mining of these more traditional metals.

Globally, just two per cent of cobalt production occurs independent of nickel and copper mining.

Most of this is mined in the Democratic Republic of Congo, which raises strong possibilities of geopolitical risk destabilising global supplies.

Ninety-eight per cent of 2016 global cobalt mine production was derived as a secondary by-product from either nickel or copper mining.

Fifty-four per cent of 2016 global cobalt mine production was derived from copper mining in the DRC.

“Historically, nickel and copper economics have dictated cobalt supply and price,” Green said.

“Cobalt has been produced as a by-product with mine recoveries not attuned to maximise cobalt extraction.”

Between 2010 and 2016, a cobalt supply surplus was created by new nickel and copper projects coming online, resulting in refined production exceeding demand.

This led to a period of depressed cobalt prices, in line with nickel and copper prices, and a slow down in world economies.

“Since mid-to-late 2016 we have seen a significant decoupling of the cobalt price from nickel and copper,’ Green explained.

“This has been due to the emergence of electric vehicles and lithium-ion battery demand.

“The cobalt price more than doubled in this period and has risen by, approximately, seventy per cent since January this year.”

Just as the lithium spokespeople before him, Green emphasised the effect the rising demand of the electric vehicle market has had on the commodity’s rise.

“Electric vehicles have been the major driver of recent cobalt demand,” he said.

“A growing number of major jurisdictions are introducing legislation for minimum numbers of electric vehicles, including China and Europe.

“China is now pushing forward with an aggressive zero emission program, targeting eight per cent by 2018 and twelve per cent by 2020.”

Roadshow Provides Punters With Plenty to Think About

 

THE CONFERENCE CALLER: The time frame may have been tight, but the range of commodities and projects covered during the RIU Resources Roadshow as it swung through the eastern seaboard, taking in Sydney and Melbourne this week was as diverse as this week’s NRL Grand Final entertainment.

The audience numbers across the two days signalled A tick of approval to the Roadshow organisers as punters made the most of the morning tea, lunch and post conference drinks to gain face to face time with company directors.

The stalwart commodities were well represented, but of course lithium and cobalt are maintaining their push from boutique to mainstream and with the added allure of the exotic, Argentina focused Dark Horse Resources (ASX: DHR) attracted plenty of attention with news it is about to kick off detailed exploration activities of its Pampa Litio Lithium properties in San Luis and Cordoba provinces.

However, the nickel bulls were also running this week, taking the fight up to the new kids on the block by reinforcing the industry’s latest mantra that the new technological age maybe built on the new, but it also requires a great deal of the old.

St George Mining (ASX: SGQ) managing director John Prineas told attendees “Lithium is all the rage – but don’t forget about nickel.”

Referring to the rise in interest surrounding new battery technologies, Prineas said, “A lot of people have forgotten about nickel components.

“It’s an essential commodity…that is starting to build up a huge demand with electric vehicles.”

Prineas suggested the coming demand would create a large global nickel deficiency alluding to the analyst world predicting a 200 per cent increasing to the nickel price over the next three years.

St George is currently working up its Mt Alexander nickel-copper project in Western Australia, which Prineas said provided investors the opportunity to gain exposure to the nickel space.

Prineas received support in his nickel adoration from Mincor Resources (ASX: MCR) managing director Peter Muccilli.

Muccilli waxed lyrical on his company Kambalda assets, located in the Eastern Goldfields of Western Australia.

He said the company was domiciled in a world-class nickel neighbourhood, a good place to be with the predicted rise in nickel demand.

He suggested the Paris Climate Change Conference in 2015 meant we were now living in a changing world.

“We are in a greatly-revolving green economy,” Muccilli said.

“Clearly the winners are batteries and EVs (electric vehicles), but the real winners are the commodities that support those batteries.”

He reinforced his thesis by providing a few interesting quotes from global movers and shakers.

“China looks at plans to ban petrol and diesel cars… profound changes for our car industry’s”

Xin Guobin -Xinhua news agency Sept 2017

“Ownership costs of EVs Verses combustible cars should reach parity in 2019…. have lifted global 2025 EV sales forecast to ~15M vehicles…. additional ~300- 900ktpa (10 – 40%) of incremental nickel demand”

UBS, July 2017 

“Our cells should be called Ni-Graphite, because primarily the cathode is Ni …[there’s] a little bit of lithium in there”

Elon Musk, CEO Tesla

Gold was also well-represented on the Roadshow with Middle Island Resources managing director Rick Yeates expounding the virtues of his company having the only mill in the village.

The company’s current focus is its 100 per cent-owned Sandstone gold project north of Kalgoorlie in WA.

The project comprises two adjacent fully-permitted mining leases as well as a 600,000 tonnes per annum conventional processing plant.

“The processing plant is a very conventional Goldfields processing plant,” Yeates said.

“The previous limitation that it was only able to treat harder material has long since gone and the refurbishment cost…includes a purpose-designed crushing circuit that will allow the processing plant to treat all ore types.”

“It is the only processing plant for 160 kilometres and there are a number of stranded deposits in the district that certainly could go through this mill.”

One company using the strategy of having its ore toll treated is Southern Gold (ASX: SAU).

The company has completed the open pit mining stage of the Cannon gold mine in WA and is now looking at heading underground.

Southern Gold managing director Simon Mitchell explained the company operating model as being “organic”.

“The Cannon mine, which we have just completed is an excellent example of what we are doing,” he said.

“The essence of it is that we generated a profit to the company just shy of $14 million, which has effectively funded the company for the past three financial years.”

He went on the answer the telepathic question being asked by the audience –  would the company be able to repeat that effort?

“We are looking at the Cannon underground,” he said.

“We just completed an RC drilling program there, which has confirmed extremely high grades.

“We think there is a very good chance this (mine) is going to go for four levels – if not more.

“It’s not the world’s biggest mine – but you know what – it’s going to make a very high margin and more cash is going to come into the company.”

Alliance Resources (ASX: AGS) managing director Steve Johnston provided potential investors plenty to think about by reminding them that gold just doesn’t glitter in Western Australia and that his company has enjoyed recent drilling results from reverse circulation (RC) drilling at the company’s Weednanna gold prospect, part of the Wilcherry project Joint Venture in South Australia.

In just its second year, the RIU Resources Roadshow is quickly cementing itself as one of the must attend conferences to cross off on the calendar.

We’ll be back next year, and hopefully you will be too.