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Global Lithium Resources in Pole Position for Market Turnaround

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THE CONFERENCE CALLER: Global Lithium Resources (ASX: GL1) managing director Ron Mitchell says the company’s Manna project is ideally placed to capitalise on the looming improvement in the lithium market. By Kristie Batten

Spodumene prices dipped below US$1000 per tonne earlier this year after trading as high as US$6000/t in late 2022.

In recent weeks, producers Pilbara Minerals, Albemarle Corporation and Mineral Resources have reportedly sold spodumene cargoes at above spot prices.

“The floor is probably now 4-5 weeks behind us,” Mitchell told the Tribeca Future Facing Commodities Conference in Singapore last week.

“We’re seeing now sustained improvement and consistency in pricing and I’d expect that to continue to improve through the third quarter and leading into the back end [of the year].”

Global Lithium is working on a definitive feasibility study at Manna, 100 kilometres east of Kalgoorlie.
The DFS is advanced and is expected to be completed this year.

“We’re one of only a handful of companies on the planet in lithium at the DFS stage,” Mitchell said.

“This is a ripping project.”

Global Lithium is working with SRK Consulting and GR Engineering Services to review the key inputs to the DFS.

“When we do deliver this project to market it will be bullet-proof and competitive,” Mitchell said.

Manna has a resource of 36 million tonnes at 1.13 per cent lithium oxide, based on just one year of drilling.

A resource update, incorporating 60,000 metres of drilling, is due in the current quarter.

Most of the drilling has been infill.

“What we’ve found is the grade is lifting and we’re getting great continuity, and the resource is still open,” Mitchell said.

“The under cover part of the orebody to the south is showing great potential.”

The 2024 drilling program will begin this quarter alongside the DFS and permitting work.

Mitchell said the company is hoping to receive the “holy grail”, a mining lease, in the September quarter.

“It positions us perfectly for when we do see sustained improvement,” he said.

Mitchell said the company’s three main advantages was that it owned 100 per cent of its projects, had no royalties over the projects, and still had 70 per cent of its offtake uncommitted.

“We’re in no rush to do offtake – it’s a weapon for us,” he said.

Global Lithium also has strategic partnerships with Australian producer Mineral Resources and China’s Canmax, the latter which it has an offtake deal with.

“The reality is in this market, in the next 2-3 years, if you want to make money in the lithium industry, you have to have a toe in China,” Mitchell said.

Global Lithium has A$36 million in cash.

“We’re fully funded all the way through to the final investment decision in the next 24 months,” Mitchell said.

 

 

Argonaut Funds Management Names Top Mining Stock Picks

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THE CONFERENCE CALLER: David Franklyn from Argonaut Funds Management outlined his top themes and stock picks in the current economic climate. By Kristie Batten

The Argonaut Natural Resources Fund has gained 188 per cent since inception and Franklyn gave Day Three delegates at the Tribeca Future Facing Commodities Conference in Singapore an overview of what he’s seeing in the mining space.

Battery minerals including lithium performed strongly in 2022 as the energy transition gathered pace.
“In the past 6-9 months that story has changed,” Franklyn said.

Franklyn said China was exerting its power in certain commodities, including rare earths and graphite.

Another key theme is the reconfiguration of supply chains.

“We’re seeing almost a duplication of supply chains so we can get security of supply,” Franklyn said.

Franklyn also noted that a surge in global defence spending would also be good for metals.

Looking at lithium, Franklyn said Pilbara Minerals’ December half 2023 financial results could be a good snapshot of how the sector could look in the future.

Pilbara produced 320,153 tonnes of spodumene in the period, achieving an average price of US$1645 per tonne.

Revenue was A$760 million and EBITDA was A$415 million for a margin of 55 per cent, which Franklyn said could be an indicator of margins going forward.

Argonaut’s top pick in lithium is Patriot Battery Metals, which owns the Corvette lithium discovery in Canada.

“We’re looking for more tier one development assets,” Franklyn said.

Corvette has a resource estimate of 109.2 million tonnes at 1.42 per cent lithium oxide.

Earlier in the conference, Patriot chief operating officer Blair Way said the company was aiming to report a resource update in the September 2024 quarter.

“It’s likely to grow to 150 million tonnes or more,” Franklyn said.

Former Pilbara managing director Ken Brinsden was chairman of Patriot but recently became MD and relocated to Canada.

“We think that’s pretty exciting,” said Franklyn.

Argonaut is also excited by uranium, which recently hit a 16-year high of more than US$106 per pound.

There are 62 nuclear reactors under construction around the world.

“Uranium is undoubtedly going to grow its market share,” Franklyn said.

“There’s really one company I think is a standout in the sector and that’s NexGen Energy.”

Franklyn cited NexGen’s large, high-grade Rook I project in Saskatchewan and provincial approval (with federal approval expected to follow later this year) as the reasons why the company was a standout.

In copper, newly listed Metals Acquisition is Franklyn’s top pick.

Argonaut head of research Hayden Bairstow has a buy rating on Metals Acquisition and a A$22.80 price target.

“It’s very high-grade, it’s got a very good management team,” Franklyn said.

“We think it will emerge as a key pick in the Australian copper space.”

Franklyn said interest in gold was still lacking from generalist investors despite its recent record price levels.

“We think we’ll see improving demand in that area,” he said.

Argonaut’s checklist for gold stocks is long mine life, production growth, low operating and capital costs, tier one location and strong management team.

Based on that criteria, Argonaut’s top picks in the gold space are Capricorn Metals and Genesis Minerals.

 

CGN Aiming to Make Next Major West Arunta Discovery

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THE CONFERENCE CALLER: Relative ASX newcomer CGN Resources is hoping to make a major discovery in the hot West Arunta region of Western Australia. By Kristie Batten

The company listed on the ASX in October 2023 after a A$10 million initial public offering but has been active in the West Arunta since 2010, making it one of the early movers.

“Now there is no ground left in the West Arunta,” CGN managing director Stan Wholley told the Tribeca Future Facing Commodities Conference in Singapore.

“It’s probably one of the hottest districts at the moment.”

That’s largely thanks to WA1 Resources’ Luni niobium discovery in the region, but IGO, Encounter Resources, Rio Tinto and Tali Resources are also active.

CGN stands for copper-gold-nickel but the company is also looking for critical minerals including rare earths.

Wholley said the West Arunta could be one of Australia’s last unexplored copper provinces and had known iron oxide-copper-gold mineralisation.

“To not have a big red blob [on the map] in this area is unusual and we hope to be the ones to find it,” he said.

CGN has identified six priority targets.

Snorky, Horton, Surus and Tantor are IOCG targets, Shep is a nickel target and Hathi is a rare earth target.

The company just completed induced polarisation surveys at Surus, Shep, Snorky and Horton, which confirmed the presence of gravity anomalies at all four prospects.

Drilling will begin at Surus next month, assisted by A$220,000 in Exploration Incentive Scheme funding from the WA government.

CGN has already spent A$7 million on geological data.

“Which gave us a really great pool of geoscience data,” Wholley said.

The company still has A$8.5 million in cash.

“That gives us enough money to deliver on our project pipeline,” Wholley said.

“We’ve got cash, we’ve got the time, let’s get it done.”

CGN shares hit an all-time high of 32 cents during ASX trading on Wednesday.