Chieftain Chatter
Season 5
Episode 158
Let the war(s) begin…
Love him or hate him Trump seems to get results with immediate effect following the imposition of tariffs on China, Canada and Mexico.
The threats were enough to bring the relevant parties to the table with Canada agreeing to place 10,000 frontline personnel on the border, appoint a fentanyl czar, list cartels as terrorists and launch a Canada-US joint strike force. Likewise, the Mexicans agreed to immediately reinforce the U.S.-Mexico border with 10,000 members of the National Guard to prevent drug trafficking from Mexico to the U.S., particularly fentanyl. Trump has given both Canada and Mexico a 30 day reprieve to strike a commercial deal and it’s believed the Chinese are willing to come to the table and have a chat. “It was a very friendly conversation wherein she agreed to immediately supply 10,000 Mexican soldiers on the border separating Mexico and the United States” he wrote on social media. Based on 2022 figures the 3 nations are the three largest trading partners with the US supplying a respective US$536bn, $455bn and $437bn of goods. Now, obviously the Chinese wield a tad more clout than the other two so their response was rapid imposing tariffs on US imports. This consisted of a 15% impost on US coal, LNG imports and raising the levies on crude oil, agricultural machinery, and certain vehicles. They also added several metals to an export control list which effectively restricts the US access to key minerals to manufacture semi-conductors, missile systems and solar cells. The proposed 10% tariff on Canadian Energy imports including uranium may have a significant impact on energy prices for US consumers. Canada accounts for around 30% of the US’s uranium supply and is their largest supplier by volume providing some 13.2m pounds in 2023. These arrangements are under long term supply contracts and will continue and the US consumer will suffer in the form of higher electricity prices. It should also be noted that Cameco were able to fend off Trump tariffs on uranium in his last term and any new contracts signed in the past few years with U.S. clients, Cameco has specified that in the event of U.S. tariffs, those costs would be passed on to the customer. This all has a way to play out before tariff implementation.
Well, knock me over with a feather, it must be election time again as the WA Labor Government promises to fast track mining approvals for projects. The amount of companies and projects that get grid locked in the various supposedly under resourced government departments has always been a stumbling block and cause of frustration for a raft of projects. Under the “Mining Approvals Reform Initiative” the WA Mines Minister has promised to simplify the approval process for projects that pose minimal environmental risk and do not exist in sensitive areas. Excuse my sarcasm but it seems every project has an element of both but fingers crossed the Eligible Mining Activity (EMA) trial does have the desired effect.
Capital raisings for the junior resources sector across the globe fell 12% in 2024 to $10.27 billion which is the lowest level in 5 years. Surprisingly, raisings for gold exploration companies fell 28% in December alone to $375m and the largest and only raise above $50m was Spartan Resources (SPR) successfully tapping the market for $220m at $1.32 in December 2024. The number of capital raisings for non-gold and base metals companies was also down by 45% in December to $234m perhaps due to a $428m being raised in November for these basket of companies. Conversely, funds raised for speciality commodities rose by 63% in December to $281m with lithium and uranium raises leading the charge with Vulcan Energy Resources (VUL) $154m being the largest transaction.
Quote of the week….
“Anyone who wishes to work remotely must be in the office for a minimum of 40 hours per week or depart Tesla”
Succinct email from newly appointed DOGE leader and Tesla boss Elon Musk in 2022 to staff.
On the lighter side….
School of hard rocks…
That wily board rider Nick Casteleden’s Solstice Minerals (ASX:SLS) have acquired 100% of the Nanadie Copper-Gold Project from Cyprium Metals (ASX:CYM) which lies within 130km2 of granted Mining Lease and Exploration Licence tenure in the Murchison region. SLS’ will pay the following consideration to CYM:
$1m cash
3,000,000 shares in SLS on completion, 50% locked for 6 months, 50% locked for 12.
3,000,000 in deferred consideration on announcement of an MRE >250kt of contained Cu using a cut-off grade >0.20% Cu.
Nanadie has an existing MRE of 40.4Mt @ 0.4% Cu and 0.1g/t Au for 162kt Cu & 130koz Au that sits in a zone up to 150m wide by 900m long and remains under explored at depth and along strike.
Previous historical drill intercepts include:
107.8m @ 0.91% Cu and 0.24g/t Au from 80.3m
76m @ 0.85% Cu and 0.39g/t Au from 25m
122.3m @ 0.61% Cu and 0.15g/t Au from 155.9m
81m @ 0.79% Cu and 0.23g/t Au from 16m
Encouragingly, all of these zones contained significantly higher grade sections of up to 2.94% Cu and SLS will target extensional drilling to increase the resource tonnes and grade.
Great optionality on a positive copper price outlook and SLS has $13m in the bank to exploit this opportunity and others.
According to Barrick Gold Corp. CEO Mark Bristow the company is making progress in its dispute with Mali’s military regime, but the advances haven’t come as fast as expected.
A new mining law in Mali that raises taxes and seeks to hand over big stakes in assets to the state and local investors will need to be loosened up if gold companies are to invest in new projects there. The new rules compel companies operating in Africa’s second biggest gold producer to divest a 35% share of new projects to Malian investors – up from 20% previously – and raise royalty taxes to 10.5% from around 6%.
Barrick recently suspended operations at the vast Loulo-Gounkoto complex in Mali after the government started removing gold from the nation’s biggest mine in the latest escalation of a months-long dispute.
“Mali has got itself in a position where it is really trying to shake out some short-term cash out of the industry, and this industry is the very foundation of the economy,”
Bristow said. “We’re making progress, not as fast as I would expect, but I’m sure everyone is a little cautious.”
Caspin Resources (ASX:CPN) are about to crank up a drilling project at their recently acquired Bygoo Tin Project located in NSW following the receipt of the relevant permits and approvals.
The purpose of the campaign is to validate and extend the historical thick, high grade tin intersections which included:
35m @ 2.10% Sn from 43m
35m @ 1.71% Sn from 94m
The 1,500m RC program will also test a number of high priority discovery targets that have never been drilled and the campaign will be extended if results warrant.
Aurum Resources (ASX:AUE) released new high-grade intercepts from drilling at the Boundiali Gold Project in Côte d’Ivoire as they look to build on the existing 1.59m ounce maiden resource released in December.
Better results included:
23m @ 2.0g/t Au from 118m
4m @ 4.2g/t Au from 142m
3m @ 50.6g/t Au from 124m
2m @ 63.6g/t Au from 11m
1m @ 58.4g/t Au from 71m
True widths estimated at 70-80% of downhole lengths and further drilling is required to prove up the best zones and determine continuity. They plan to drill 100,000 metres in 2025 with two additional rigs to commence asap with views of having a pre-feasibility study completed by year end. AUE has $22m in the bank which will be depleted at a rate of approx. $1m per month with resource upgrades expected mid and year end.
Westgold Resources (ASX:WGX) hit the market with a significant production downgrade guiding that FY2025 production will be 330,000 to 350,000 ounces which is about a 20% downgrade.
To add insult to injury they also updated AISC’s to be in the range of $2,400 to $2,600 which is a 13% to 20% increase . The new guidance is a result of slower than anticipated ramp-up at Beta Hunt (ventilation, mine pumping upgrades) and Bluebird-South Junction (ground support upgrades ) with engineering issues constraining mine output. WGX has also reduced it’s FY25 capex forecast to A$200m from A$235m, due to the focus on the highest returning projects at Beta Hunt, Bluebird-South Junction and Great Fingall.
FireFly Metals (ASX:FFM) reported a busy 3 months to December at their Green Bay copper project in Newfoundland highlighted by a 42% increase in their copper dominated resource.
Of the 59mt at 2% Cu equivalent resource it’s dominated by 1m tonnes of Cu, 550,000 ounces of Au and 5.4m ounces of Ag. Phase 2 drilling is now underway targeting the high-grade copper-gold VMS zones which will underpin the next round of resource growth with 4 rigs going hammer n tong underground . Phase 1 returned high grade foot wall and VMS results including:
86.3m at 3.7% CuEq
76.3m at 2.9% CuEq
7.9m at 3.8% CuEq
21.0m at 1.8% CuEq
50.9m @ 1.7% CuEq
They also completed the acquisition of Tilt Cove which consists of 115km2 of highly prospective exploration ground immediately adjacent to Green Bay that they will apply their minds to with their 80 odd mill of cash reserves.
Predictive Discovery (ASX:PDI) received a share price rocket following a strategic investment by Lundin and Zijin Mining to raise a healthy $69.2m at the market price of 26.5 cents.
The deal equates to a 10% stake in PDI of which the Lundin Family now holds 6.5% ($45.1m) and Zijin 3.5% ($24.1m) and thus diluting Perseus Mining’s (ASX:PRU) holding from 19.9% to about 17.9%.
This leaves PDI with $98m in cash for ongoing exploration, permitting and completion of DFS which is due late this year and the exploitation (I think that means “mining”) permit within 6 months which could be the catalyst for a bidding war! The Bankan Gold Project (Guinea) is a quality project with large-scale open pit and underground operations planned with a production rate of 269,000 ounces per annum at an AISC of US$1130/oz for 12 plus years of mine life and pre-production capex of US$456m. The Lundin Group has a consolidated market cap. of C$24 billion consisting of development and operating projects. While Zijin has producing operations globally with a market cap. of A$93 billion and therefore deep pockets to fund Bankan’s development capex.
Beach Petroleum (ASX:BPT) is still dominated by SELL recommendations from the various brokers who cover the stock following a reasonably robust first half result. BPT’s underlying NPAT was $237m which was a 37% increase and ahead of consensus. However, guidance has been narrowed to 18.5m to 20.5m barrels of oil equivalent (previously 17.5-21.5MMboe) and capex is expected to be in the range of $700 to $800m. According to Canaccord BPT benefited from some “pay it forward” LNG swap arrangements and will have to repay around four cargoes in the future. Waitsia Stage 2 remains on track for first gas sales in the June 2025 quarter and their balance sheet remains strong with net debt of $387m and net gearing at 10%. Their 3 cents per share dividend was below their targeted payout ratio which could suggest they are preserving their balance sheet for potential M & A activity in the Perth basin which could result in a bidding war with Hancock for the likes of Strike Energy (ASX:STX)!
Who’s shaking the tin…
Whitebark Energy (ASX:WBE) - $ 2m at $0.0065 (plus 1:2 option)
Savannah Goldfields (ASX:SVG) - $14m at 1.5 cents
Bryah Resources (ASX:BYH) - $1.1m at $0.003 (plus 1:1 option)
Medallion Metals (ASX:MM8) – $6.5m at 10 cents
Predictive Discovery (ASX:PDI) - $69.2m at 26.5 cents
Infini Resources (ASX:I88) - $3.4m at 54 cents
Akora Resources (ASX:AKO) - $1.318m at 10 cents
AXP Energy (ASX:AXP) - $1.25m at $0.0015
Battery Age Metals (ASX:BM8) - $1.5m aqt 8.2 cents
WA Kaolin (ASX:WAK) - $7m at 4 cents (plus 1:2 option)
Dreadnought Resources (ASX:DRE) - $4.1m at 1 cent
Cosmos Exploration (ASX:C1X) – $1.25m at 5 cents
Adelong Gold (ASX:ADG) - $1m at $0.004
Polymetals Resources (ASX:POL) – $35m at 80 cents
Bayan Mining and Minerals (ASX:BMM) - $750k at 4.7 cents (plus 1:2 option)
Elixir Energy (ASX:EXR) - $7m at 3.5 cents (plus 1:2 option)
Adelong Gold (ASX:ADG) - $1.173m at $0.0042 (plus 1:2 option)
A zoom with…
Rich Bevan (Ex Chairman) and Gavin England (Technical Director) Narryer Metals (ASX:NYM)
One of the world’s smallest books is ‘successful junior mineral sands producers’ think MZI Minerals, Mineral Deposits, Strandline Resources etc so it was with some trepidation that we had a call with the NYM boys to discuss their recent results in a JV with Petratherm Ltd (ASX:PTR). PTR announced its first results in mid-November with some stunning results showing three mineralised zones with results such as 22m @ 19.1% HM, 20m @ 8.9% HM with analysis showing that >95% of the HM is Valuable heavy Mineral with rutile grades of 25.3% and average TiO2 grades of 93%. Since then, drilling PTR has drilled 45 holes, over 15 sqkm and a strike extent of 8km comprising of 6 traverses. The grade appears to be remarkably consistent and high grade. Importantly for NYM, two of these traverses were completed on their ground where PTR are earning a 70% interest. PTR has gone ballistic and basically 10x since this November to get to a $130m mkt capitalisation in Jan. On Thursday, PTR announced a further 45 holes showing the mineralisation extends into the JV ground.. NYM hit a high of 7.5c whilst PTR was steady at 40c until someone came along and sold a truckload with the stock closing down 30% on the day.. a bit perplexing for the simpleton that I am!!.
Our back of the envelope numbers suggests this could be a >250mt resource at a grade of say 7-8% HM – whilst the word ‘world class’ is bandied around far too frequently for our liking, this does have many of the hallmarks.. We still need metallurgy to be signed off – in particular grain size and further work on the mineral suite but if this stacks up then I don’t think they are the rightful owners of this asset. NYM is capped at a mere $10m with a couple of $m in the bank. They are funded for the time being before they need to contribute. The boys were pretty excited on the call and rightfully so.. maybe one day the old Rosewood deposit will add another chapter to the small book and prove all the sceptics wrong .. I hope so because I do own a couple!!