What the Analysts Say
WHAT THE ANALYSTS SAY: This week our panels of experts cast their respective oculars over Hexagon Resources, and Altura Mining.
Website: www.breakawayresearch.com
Company: Hexagon Resources Limited (ASX: HXG)
Following a challenging period associated with the failed Hengda merger, Hexagon Resources (previously Lamboo Resources), under new management, has now regrouped and has had success in its refocussed efforts on delineating and bringing into production a high-quality graphite resource at its key McIntosh graphite project in Western Australia.
As part of its development strategy the company is also looking at value add opportunities, including spherical graphite production.
Following a VTEM survey in 2014, the new management took a step back and focussed activities on areas that it felt would deliver a quality resource that would provide the basis for a long term mining operation.
The company has now defined such a resource, with scope for future resource expansions.
In addition drilling results have led to a significant resource to be defined at Geumam in South Korea, with the South Korean projects providing blue sky, however given the focus on McIntosh; the Company is considering strategies in relation to the South Korean assets.
Both projects have returned excellent metallurgical results, exhibiting the potential to produce a high-quality flake graphite concentrate, suitable for use in the lucrative and growing battery (and expandable) graphite markets, and which should command a premium price.
Short to medium term price drivers are material progress on development studies which are now to commence at McIntosh and progressing offtake opportunities.
Hexagon Resources is a graphite development company with its flagship project being the McIntosh Graphite Project in the Kimberley region of Western Australia, which it now plans to progress through feasibility.
As part of an overall strategy Hexagon is also investigating the potential to produce value added products, including spherical graphite.
The three South Korean projects are being progressed in parallel – Hexagon is currently considering development options for these projects.
Website: www.beerandco.com.au
Company: Altura Mining (ASX: AJM)
In August 2015. Altura Mining announced the appointment of a general manager for its Pilgangoora project, tasked with progressing the Mining Lease Applications and completing the Feasibility Study.
Altura announced an updated resources estimate, of 26 million tonnes at 1.21 per cent lithium oxide (Li2O), of which nearly 20 million tonnes is indicated, and updated metallurgical testwork results in November 2015.
Publication of the feasibility study is anticipated in March or April 2016, with on‐site construction from July and first project late in 2017.
Altura will produce a concentrate, grading about 7.5 per cent Li2O, which it will sell to battery producers in the Asia region.
Underlying demand growth is strong and product prices are rising, with 7.5 per cent concentrate recently selling for around US$750 per tonne cif (cost, insurance, freight).
Altura simplifying its portfolio and has effectively exited its iron ore operations and has prepared to list its Indonesian Coal on the SGX, which will leave it major focus on Pilgangoora.
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