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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.

 

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.”

 

 

Established Addresses Still Provide Substantial Allure

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THE CONFERENCE CALLER: Two Western Australian-based gold focused companies – one a sibling miner and the other an exploration house – are concentrating their field efforts in areas which in the past have yielded some monster discoveries, but nevertheless remained relatively under-explored. By Mark Fraser

In the case of Matsa Resources (ASX: MAT), the focus is on the Lake Carey district in the Laverton region of WA’s Eastern Goldfields, the home of the world class Granny Smith, Wallaby and Sunrise Dam gold mines.

Meanwhile, Prodigy Gold (ASX: PRX) has a significant land holding predominantly in the Northern Territory part of the Tanami Desert, where the 14.2 million gold ounce Callie mine is living proof that this is one of Australia’s most prospective exploration jurisdictions.

Matsa holds 563 square kilometres of real estate and has already generated surplus cash via mining – with the assistance of an ore purchase agreement with Sunrise Dam owner AngloGold Ashanti – at its Red Dog, Red October and Fortitude deposits.

Prodigy Gold, on the other hand, controls some 30,000 square kilometres of real estate, in which it has wholly-owned field projects as well as a number of joint ventures, with two of its partners being Australia’s biggest domestically-owned gold producer Newcrest Mining (ASX: NCM) and the US giant Newmont Goldcorp (NYSC: NEM).

During the recent RIU Explorers Conference in Fremantle, both outfits indicated they had not only been keeping busy during 2019, but were now looking to implement active agendas over the next 12 months.

Matsa executive chairman Paul Poli said his company would continue mining at Red October, bring Fortitude’s stage two operations into place, start mining studies for its Devon deposit and continue drilling at the Fortitude North, Devon and Olympic prospects.

Located about 32 kilometres south-south east of Leonora, the 550 metre deep, narrow veined and structurally-controlled Red October has historically produced around 342,000 ounces of gold from ore averaging six grams per tonne.

As it stands it currently has total indicated and inferred resources of 446,000 tonnes at 6.9g/t for 99,000 ounces, with some 85,000 ouncees of this, at the higher grade of 13.6g/t, being underground.

The deposit also has significant exploration upside, with diamond drilling returning numbers at the Red October Shear Zone like 1.6m at 36.9g/t, 4.32m at 16.3g/t, 2.84m at 15.95g/t and 6.3m at 4.54g/t as well as bonanza grades from the North Decline of 0.91m at 181.5g/t, 1.33m at 40.1g/t and 0.8m at 248g/t .

Between July last year – when the mining of ore started at Red October – and January 2020, Matsa has been building its bank balance via the production of almost 2,600 ounces from 19,912 tonnes of dirt grading some 4.54g/t.

In addition, it generated a $5.4 million cash surplus at its Red Dog mine to the south as well as another $700,000 from the Fortitude trial mine.

Earlier this year Matsa told the market its Fortitude stage two due diligence indicated the company could establish a 54,400 ounce gold operation for $6.6 million to generate a $21.8 million cash surplus over 22 months at an operating cash cost of $1,682 per ounce (assuming an average Australian gold price of $2,150/oz).

Poli suggested this was all possible because of his company’s arrangement with AngloGold Ashanti.

“We’ve got a terrific relationship through a memorandum of understanding that we signed about 18 months ago,” he said.

“But more importantly they are sponsoring us – they are incubating us, assisting us in achieving our goals.

“At Red October we have a five year ore purchase agreement in place … so we’ve got 4.5 odd years of ore delivery agreement in place.

“It’s a fantastic agreement that we have got (and) we are fully exposed to the rising gold price.”

Although the Laverton district was home to some of Australia’s biggest gold mines, Poli suggested that Lake Carey, which sits within the Laverton tectonic zone, still had plenty of exploration upside.

“We think this is a fantastic area to explore,” he told RIU delegates.

“We know that this has been quite poorly explored because of the lake that occupies a fair bit of our ground.

“Last November we embarked on quite a sizeable drill program and that drill program is still continuing today.”

During his RIU presentation, Prodigy Gold managing director Matt Briggs also indicated 2020 would be a busy year in the field for the junior.

The company is aggressively exploring four wholly-owned projects – Bluebrush, Hyperion, Tregony and North Arunta – that sit in the same corridor as the lucrative Callie operation owned by Newmont Goldcorp.

So far Prodigy Gold has established an indicated and inferred resource of 15.7 million tonnes at 2g/t for 1.1 million ounces gold, with 4.93 million tonnes at 1.96g/t for 310,000 ounces being at the Hyperion and Seuss prospects.

It may also on the brink of significantly adding to this inventory via its three Joint Ventures with a trio of successful mining houses.

Newcrest is looking to spend $12 million to earn 75 per cent of Euro, where aircore drilling of large scale targets is anticipated for 2020.

Last year the RC rig returned gold intercepts of 2m at 12g/t, 8m at 1.9g/t and 36m at 0.65g/t – with this latter intersection including 20m at 0.95g/t.

So far, the JV partners have defined a 1.4km long gold-in-oxide target.

Meanwhile, Newmont Goldcorp is also looking to pump $12 million into the ground at Tobruk, which sits just 6km south west of its 500,000 ounces per annum Callie mine.

Under the terms of the JV agreement, the gold giant will earn 70 per cent of the project and pay a further $1.5 million at sign on and an additional $1 million if it elects to proceed to the second phase of the project’s development.

At the time of Brigg’s RIU presentation, some 675 soil samples had been gathered from Tobruk for testing.

The junior’s other significant JV is with the Australia mining house Independence Group (ASX: IGO) at Lake Mackay, where RC and diamond drilling is set to test deeper base metal targets during the first half of 2020.

Aside from gold, the project area has also revealed signs of copper, cobalt, manganese and nickel.

Briggs told RIU delegates that the Tanami Desert contained “great prospective ground” with the potential for “major discoveries to be made in that part of the world”.

“Of the 15 deposits that have been discovered in the Tanami, 13 of them stick out of the ground and were predominantly discovered with soil sampling,” he noted.

“In spite of those discoveries with soil sampling, (there has been) very limited bedrock drilling.

Brigg’s said Prodigy Gold’s strategy was to keep the shallower exploration ground for itself and to JV “earlier stage exploration, exploration under cover, and other commodities” to the right partners.

 

 

Metals Set To Energise Future

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THE CONFERENCE CALLER: The mining sector looks set to be a leading force in the looming green revolution as the current crop of explorers seek to establish projects designed to contribute to a low carbon future. By Mark Fraser

During the 2020 RIU Explorers Conference in Fremantle, a large number of companies made it clear that they have a firm eye on issues pertaining to sustainability as they go about developing their respective mineral assets.

In particular, they are looking to help supply the electric vehicle and wind turbine markets with the metals they need as reliance on fossil fuels across the globe continues to dampen.

During his market update at the start of day two, Canaccord Genuity head of mining research Reg Spencer reconfirmed everyone’s suspicions that the prices for some of the metals used in modern cars – including nickel and copper – had bottomed in 2020 but were expected to rally next year.

Then there were the niche minerals, which also look set to have their day over the next decade.

“I think most people will agree that the outlook for lithium and battery materials does remain positive,” Spencer said.

“The reduction of carbon emissions, especially from transport, does remain the key focus for the near term.”

Spencer said Canaccord was surprised at the lack of attention the rare earths sector was receiving from investors – especially as it was forecast that wind energy capacity would increase by 2,500 per cent between 2007 and 2030.

“Rare Earth permanent magnets are critical components for electric vehicle drive chains and wind turbine generators – and market dynamics are evolving significantly, with an increase in desire for ex-China supply and a tighter regulation of Chinese production,” Spencer continued.

“Now we expect demand to grow significantly … demand should more or less double over the next 10 years … and that will be primarily driven by electric vehicles and wind turbines.

“With these factors in play, and the changing dynamics of the supply-demand equation – and the potential for China to lose their tight grip on the rare earths market – we see opportunities for this particular sector over the next couple of years as well.”

During a later presentation, Northern Minerals managing director and chief executive George Bauk also wondered why the investment community seemed to be disinterested in rare earth stocks.

The company is currently developing its advanced Browns Range rare earths project, which straddles the Western Australian and Northern Territory borders in the Tanami region.

“That’s a bloody good question – why invest in Northern Minerals?” Bauk put to his audience.

“We’ve really got to get people back into believing in rare earths and get the equity markets to back it.

“We haven’t had the moment, if you like, to get people interested in it.

“The governments are doing things and working on it – I’m not quite sure what the event has got to be to get people back on the screens and buy rare earth stocks.

“But if you are getting a bit sick and bored with gold stories, come and have a look at Northern Minerals and rare earths.”

Meanwhile, RareX executive director Jeremy Robinson said it was important that another Australian company follow in the footsteps of Lynas Corporation and develop a significant rare earths project outside of China (which has one major mine that currently produces about 80% of the world’s output) to ensure a supply chain remained in place for the West.

Like Northern Minerals, RareX has a project in WA – that being the company’s Cummins Range play in the state’s East Kimberley.

“There is only one major (rare earths) development in the world outside of China and that’s Lynas,” Robinson said.

“And Lynas sells a lot of its product into its own refinery, and into Japan and Europe.

“So what you see is a very risky supply chain there for the West, especially in military operations (which would) all get shut down.

“You see a lot of talk about this in the press and I think you are going to see a lot of action in places like the US and Australia.”

 

2018 RIU Explorers Conference Day Two

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THE CONFERENCE CALLER: The Resources Roadhouse continues its coverage of the 2018 RIU Explorers Conference.