What the Analysts Say
WHAT THE ANALYSTS SAY: Interesting news and views from across the Resource Analyst universe.
Website: www.breakawayresearch.com
Company: Linclon Minerals Limited (ASX: LML)
Having recently lodged the Mining Lease application, Lincoln is looking towards developing its 100 per cent-owned Kookaburra Gully graphite project located on the southern Eyre Peninsula in South Australia, with production targeted for 2016.
Recent work has included drilling over the nearby historic Koppio graphite mine, and drilling is planned on the Kookaburra Gully Extended prospect, immediately to the south of Kookaburra Gully, supported by a SA Government PACE grant.
The results of this work, and the subsequent resource estimations, are expected to significantly increase the current high-grade resource of 2.2 million tonnes at 15.1 per cent total graphitic carbon (TGC), already sufficient to support a seven year mine life.
The company is now working closely with Chinese partners, including very supportive major shareholders to secure offtake and funding agreements for the estimated $40.4 million project and as part of this is planning pilot plant scale testwork to verify the positive metallurgy and produce concentrate samples to supply to potential customers.
In addition to Kookaburra Gully, the company has a number of other prospective tenements, all located on the Eyre Peninsula of South Australia.
These tenements include Gum Flat, which has a development ready iron ore project and others that have returned positive exploration results for base and precious metals, uranium, additional graphite and iron ore.
Timed to Take Advantage of a Growing Market
The company is in position to take advantage of a forecast growth in the graphite market, driven largely by forecast demand increases for batteries, the expected decrease in supply from China, and the wish of customers to diversify sources of supply.
High Quality Resource, Simple Mineralisation
At a grade of over 15 per cent TGC in flake graphite, Kookaburra Gully is one of the top 10 graphite resources globally, and one of the highest grade resources for ASX-listed companies.
Website: www.beerandco.com.au
Company: Syndicated Metals (ASX: SMD)
Syndicated Metals has over 5.9 million tonnes of Resources containing 83,000 tonnes copper, 27,000 ounces gold and over 400,000 ounces silver in its 2,469 square kilometre tenement package N‐W of Cloncurry in Queesland.
SMD has a JV with CopperChem, a wholly-owned subsidiary of W H Soul Pattinson (ASX: SOL).
On 21 Jan 2015, SMD announced that the JV has decided to expand the feasibility study, to increase the volume of mining inventory so that the plant could be shifted to near the mine, saving US32 cents per pound in cash costs for minimal capital to SMD.
Feasibility Study during September quarter
SMD is managing the Feasibility Study, while CopperChem funds it.
The plan is now to prove a 5 to 7 year mine life to feed a transportable processing facility that will be sited at the Barbara mine site.
A much better project
Beer & Co estimate that the total capital cost will now be $27 million, and that the project will produce about 11,000 tonnes per year of copper for 7 years at an all in cost of $2.12 per pound, or US$1.60 per pound (AUD‐USD = 0.750).
By shifting at least primary processing to the Barbara site, Beer & Co estimate that cash costs are reduced by 14 cents per pound, or $24 million for the Life of Mine, for an incremental $7 million in cap.ex.
SMD fully funded
While SMD is executing the feasibility study, it is being funded by CopperChem as part CopperChem’s earn‐in to 50 per cent of the JV areas.
SMD recently raised $1.996 million in equity through an under‐written rights issue.
These funds provide SMD with working capital and also the funds to drill mineralisation in SMD tenements that are outside the JV area.
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