Chieftain Chatter
Road block…
In a bit of a knee in the nungeries it has emerged that Trumps tariff impositions are unlawful and have been blocked by the US Trade Court. Trump believed he was permitted to implement such levies under “Emergency Law” however the court concluded he exceeded his power under emergency law, not that you would expect him to take much notice of the ruling. Obviously, he will go straight to appeal following the ruling which was issued by 3 judges who sided with the Democrat controlled states and a group of SME’s. The court order puts a halt on most tariffs globally including his flat rate fentanyl tariff on China, Canada and Mexico although has no impact on other tariffs imposed under different orders including levies on steel, aluminium, and vehicles. A White House spokesman commented “Foreign countries’ nonreciprocal treatment of the Unites States has fuelled America’s historic and persistent trade deficits” “These deficits have created a national emergency that has decimated American communities, left our workers behind, and weakened our defence industrial base – facts that the court did not dispute.”. In a late reprieve he received a stay of proceedings on Friday on tariffs pending his official appeal being heard but he is facing a barrage of lawsuits over his many executive orders which will keep the lawyers pockets well lined.
Trump gave the nuclear industry a significant boost signing 4 executive orders to restore the US as the global leader in the nuclear energy space by streamlining the regulatory process with the introduction of:
18-month deadline on new reactor approvals.
Promotion of new builds of existing technology.
Fast tracking new nuclear technologies.
Bolstering domestic uranium production, conversion and enrichment capacity, and integrate nuclear energy into national security and AI infrastructure.
Plans to construct reactors on federal land to meet rising energy demands from AI and data centres.
Reduce reliance on foreign uranium supplier namely Russia and China.
Markets across the nuclear board responded positively to the news although analysts caution that the implementation of these initiatives will require significant investment and coordination…. not one of Don’s strengths! Signing the executive order is one thing but climbing over the regulatory, financial and technical challenges is another. The simple fact is that the US imports 99% of their concentrate (mainly from Russia and China) that fuels their nuclear reactors which is viewed as a security risk in the current geopolitical environment.
Bottom line the uranium market is already in a period of significant structural deficit and if these policies are successfully implemented then this position only worsens and perhaps why some astute forecasters are suggesting a uranium price of US$150 per pound in the near future. Surely all of this will put a rocket up the Shorter’s that continues to see our list of ASX uranium stocks the most shorted on the bourse.
While on the energy sector a recent report from the International Energy Agency titled “World Energy Outlook” not surprisingly highlighted the worlds appetite for energy continues to rise at an above average rate with that demand being met by fossil fuels, nuclear and renewables.
Demand for electricity is rising at the fastest rate due to higher demand for cooling, industrial consumption, electrification of transport and the growth of data centres and AI. Encouragingly, much of this demand is being met by low emission sources with solar leading the charge and renewables and nuclear in general. Gas demand also picked up substantially, while oil and coal consumption increased more slowly than in 2023. Not surprisingly China still has the largest growth in demand in absolute terms while India saw the second-largest rise in energy demand. Oil’s share of total energy demand fell below 30% for the first time ever, 50 years after peaking at 46% with demand for oil rising by 0.8% in 2024, compared with a 1.9% increase in 2023.
Quote of the week….
“It’s an extraordinary amount of complacency…. the last time the country saw 10% tariffs on all trading partners was 1971.… American asset prices, I still think they’re kind of high…. I think credit today is a bad risk” …... JPMorgan CEO Jamie Dimon.
On the lighter side….
School of hard rocks…
Nexgen Energy (ASX:NXG) released some of the more phenomenal grade uranium intersections we have seen in history from their Patterson Corridor East project including:
15m at 15.9% U3O8, which included3m at 47.8% U3O8
17m at 3.9% U3O8 including 3m at 10% U3O8
9.5m at 2.91% U3O8
The second hole was some 200 metres from the first highlighting the continuity of mineralisation from both a grade and scale perspective. Assays for 25% (17 holes) of their 2024 drilling campaign remain outstanding ahead of drilling at PCE resuming at the start of June.
Drilling and gamma data suggests a steeply dipping high grade lens of uranium mineralisation extending approximately 250m x 350m surrounded by a lower envelope running over approximately 500m x 900m.
The uncertainty of tenure in Guinea has been confirmed with the government revoking over 100 exploration permits including Predictive Discovery’s (PDI) Argo and Bokoro leases. Importantly, this does not include their main permits that hosts 97% of their global 5.5m ounce resource but is worryingly close. PDI recently released their maiden resource at Argo of 153,000 ounces @ 1.54 g/t Au and highlighted the significant upside potential to the resource and their commitment to further exploration in the area. According to PDI’s release the applications for extension of these permits were submitted to the Ministry of Mines and Geology in 2021 and 2023 respectively and PDI has not received any formal communication from the Guinean government on the matter until now but intends to work diligently to appeal the revocations in accordance with the Mining Code.
Ivanhoe Mines (TSE:IVN) shares took a significant hit following the withdraw of production guidance from their Kamoa-Kakula copper mine in the Democratic Republic of Congo which is the largest copper operation in Africa.
The ramp-up schedule for a new smelter has also been withdrawn with preliminary signs are that seismic activity has flooded the underground and “could potentially continue for weeks, which would inhibit access to the mine and prolong the temporary suspension of operations at Kakula,” according to Ivanhoe. Underground operations were recently halted due to seismic activity leading to a review of their 520,000 tons to 580,000 tonnes of copper from the massive operation. The Kamoa mine continues uninterrupted and Kakula’s concentrators are processing surface stockpiles.
MAC Copper (ASX:MAC) have been caught up in the M&A web after entering into a binding agreement with Harmony Gold Mining (NYSE:HNY) who have offered $1.6b or $18.88 per share which is around a 20% premium. The flurry of recent corporate activity in the copper sector highlights the difficulty of not only discovering a copper resource of economic and scale but the significant development hurdles of getting into production including permitting and financing. In recent times we have seen New World Copper (ASX:NWC) acquired by Central Asia Metals, Xandu Mines (ASX:XAM) by Bastion Mining and Adriatic Metals (ASX:ADT) confirming they are getting cosy with Dundee Precious Metals (TSX:DPM). There is now a very small pool of ASX listed copper names, all of which will come under the acquisition spotlight form their larger peers.
It has been speculated that Regis Resources (ASX:RRL) have withdrawn from the process to purchase the $2bn Ravenswood gold mine in Queensland. Rumour mongers are suggesting Indonesian based United Tractors as the group that may be firming as the buyer. RRL may now switch its focus to Bellevue Gold (BGL) which has the “for sale” sign firmly planted in the ground. The Ravenswood mine, 130km south of Townsville in Queensland’s Charters Towers region, generates about 200,000 ounces of gold annually. EMR Capital led a consortium that purchased Ravenswood in 2020 from Resolute Mining (ASX:RSG) for up to $300m. It has substantially grown its production profile since, through heavy capex investment was needed for the mine’s life extension to at least 15 years from 2022.
Genesis Minerals (ASX:GMD) has acquired Focus Minerals (ASX:FML)’s Laverton Gold Project for $250m cash which will be funded from existing $372m. Laverton hosts a resource of 4m ounces at 1.7 g/t Au (546,000 ounces in reserves) which they are picking up for the equivalent of $63 per resource ounce with the acquisition bringing GMD group resources to 18.7m ounces and reserves to 4.2m ounces. This is a logical fit to supply ore to GMD’s 3mtpa Laverton mill which lies a mere 30 clicks away and the deal is due for completion by early June. Post-acquisition, GMD retains a strong post deal balance sheet with $350m in available liquidity. GMD will look to undertake a major drill program to de-risk and grow the resource and undertake mill expansion studies for Laverton.
Appointment of Duncan Coutts to the Board is a positive one who was formerly the COO for Ramelius Resources (ASX:RMS) and will play a critical role in further M&A.
Solstice Minerals (ASX:SLS) has reported first ever results from a 2-hole RC program at their Edjudina Range (Eastern Goldfields) project including:
20m at 1.02g/t from 36m
4m at 0.31g/t Au from 56m
Assay results for the remainder of the drill campaign are anticipated soon as part of a significant stream of news flow as rigs are mobilised in the coming weeks. SLS is planning further drilling at the prospect, including step-out RC traverses along strike.
Solstice Minerals’ Chief Executive Officer and Managing Director, Dr Cyril Castleden, said: “Excellent work by the Solstice field team – delivering 20m @ 1.02g/t in a first-ever RC test of a brand-new gold surface – is a terrific result and a validation of the Company’s strategy to go out and test new soil-covered structural targets in the infrastructure-rich Yarri setting. W
SLS maintains a strong cash balance of A$13.6m as of the 31st March.
Vault Minerals (ASX:VAU) has updated open pit reserves and resources at their King of the Hills gold project near Leonora in WA. Reserves now sit at 2.2m ounces which a 30% increase following dropping the cut-off grade and hence overall grade is down 30% to 0.62g/t Au.
This will support an 18 year plus mine life at a strip ratio of 3.4 to 1. The updated resource number came in 16% higher at 3.4m ounces @ 0.91g/t Au (down 24% due to the lower cut-off grade). VAU has committed to their stage 2 plant upgrade to 7.5mtpa which will cost $92m which will follow the stage 1 upgrade (6mtpa) for a total capex of $172m and should be completed by the end of next year. This will be funded by existing cash (and bullion) which currently sits at $624.5m and FY2025 production guidance sits at 390,000-410,000 ounces @ A$2,250-2,450/oz AISC.
When is bad news good news? Well, in the case of Encounter Resources (ASX:ENR) it maybe beleaguered IGO Ltd (ASX:IGO) withdrawing from the Yeneena Copper Farm-in JV and returning 100% of the project to ENR.
Yeneena is located in the Patterson Province in WA and was joint ventured to IGO in 2019 with $15m in exploration completed during the JV period. Potential exists for depth extensions to the BM1 high-grade copper oxide discovery where they intersected:
20m @ 2.0% Cu from 22m
10m @ 6.8% Cu from 32m
18m @ 3.2% Cu from 32m
25m @ 1.4% Cu from 31m
ENR will now collate and assess the substantial body of data generated during the JV period and they expect to drill the extensions chasing the high-grade mineralisation before the years out.
Who’s shaking the tin…
Nordic Resources (ASX:NNL) – $3.5m at 6 cents
Jameson Resources (ASX:JAL) - $3.5m at 3.5 cents
American West Metals (ASX:AW1) - $5.9m at 4 cents (plus1:2 option)
Barton Gold (ASX:BGD) - $3m at 70 cents
Warriedar Resources (ASX:WA8) - $17m at 10 cents
Western Mines Group (ASX:WMG) - $1.287m at 20 cents (plus1:1 option)
Locksley Resources (ASX:LKY) - $1.47m at 4 cents
Copper Search Limited (ASX:CUS) - $500k at 1.7 cents (plus1:2 option)
Victory Metals (ASX:VTM) – $4m at 73 cents
Redstone Resources (ASX:RDS) – $500k at $0.0045 (plus 1:2 option)
Podium Minerals (ASX:POD) – $2.6m at 2.3 cents
Auric Mining (ASX:AWJ) - $6.7m at 18 cents
Tambourah Metals (ASX:TMB) - $946,000 at 2 cents (plus 1:2 option)
Nordic Resources (ASX:NNL) - $3.5m at 6 cents
Agrimin (ASX:AMN) – $2.5m at 6 cents
Flagship Minerals (ASX:FLG) - $1m at 6 cents (plus 1:2 option)
Pacgold (ASX:PGO) – $5.6m at 6 cents
Green Critical Minerals (ASX:GCM) - $7m at 12 cents (plus 1:2 option)
Golden Horse Minerals (ASX:GHM) - $15m at 40 cents
Invert Graphite (ASX:IVG) - $3.5m at $0.003
Tennant Minerals (ASX:TMS) - $550k at $0.005 (plus 1:2 option)
A meeting with…
David Southam, Chairman, Cygnus Metals (ASX:CY5)
Any meeting with Dave always starts with a bit of discussion around golf – now days he is very much on the front foot talking about how he is playing the head of the local Cree in Quebec. A question of whether there were many Lakes around the place bought a quick retort that despite his cart going into Lake Karrinyup he did in fact birdie the two holes before and after the event!! We digress. CY5 have hit the ground running since the acquisition of Dore at the end of Dec’24. As a refresher CY5’s main asset the Chibougamau Cu- Au assets with a long history of production, a 900kt processing plant (only mill within 250km) and a resource base of 10.8mt @ 3.5% Cueq containing 306kt of contained Cu. Whilst Dore had completed a PEA, CY5 were not allowed to disclose this as it didn’t form to JORC/ASX requirements.. go figure?? The PEA showed a project capable of producing ~23kt of Cueq per year at an AISC of US$2.24/lb with development capex of C$180m. At current prices, the pre-tax cashflow is estimated at approximately C$1.3bn. What really attracted CY5 and us to the project was the significant exploration upside with numerous untested targets due to fragmented ownership/lack of $$ etc. Drilling has focussed at Corner Bay (bulk of their resource) with some nice intersections including 7.3m @ 4.6% Cueq along with some historical intersections like 47.4m @ 7.2% Cueq and 34m @ 9.1% Cueq.. Recent drilling has focussed a more gold rich orebody at Golden Eye with an intersection of 7.4m @ 5.7 g/t Aueq and 2.9m @ 10.2 g/t Aueq. This area has never been mined or had a resource put on it, so it looks like some low hanging fruit for the team. So, the key objectives of the team haven’t changed since the acquisition, and these include grow the inventory including converting a lot of the inferred resource tonnes into the indicated category to allow for feasibility studies to be completed. The massive data compilation continues with the digitising of +100,000 scanned hard copy documents (including drill logs), this data sits within a district that has produced >945kt of Cu and 3.5moz of gold. Furthermore, CY5 is well positioned for further regional consolidation as the only mill within a 250km radius. News flow will consist of more drill results culminating in an updated feasibility study probably in Q1 CY’26. After the initial post deal excitement, when the comparison with the success of stablemate FFM was being made, the stock doubled from the capital raising price of 7c to 14c. Since this premature speculation and the company doing exactly what they said they would do, the stock is back at the capital raising price. With two copper takeovers in the past month and the difficulty in finding quality copper exposure CY5 continues to look very interesting.