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.