Chatter Chieftain
Buy in May and stay home…
Hope you didn’t take the sell in May and go away advice with the S&P 500 rallying more than 6% in May, which is it’s best performance since 1997 mainly driven by tariff deals largely linked to US/China negotiations which seem to be progressing towards an outcome of sorts.
Although US data has been mixed, it’s far from being disastrous including subdued inflation which is yet to reignite. US earnings surprisingly exceeded expectations with overall earnings growth for S&P500 companies growing at almost twice forecasts at 13.3%. Another kick in AI related stocks saw the NASDAQ put on 9.5% for the month with Nvidia leading the charge yet again with a healthy 24% gain. Nvidia has become the market’s spiritual leader taking the lead as the bellwether for market performance and confidence across the board.
Surprisingly, OPEC+ agreed to a third consecutive monthly output increase by 411,000 barrels a day in July, in their quest to force prices lower. It’s believed the production increases were driven by Saudi Arabia and aimed at those members who have not adhered to previous measures, in particular Kazakhstan and Iraq who have consistently exceeded production quota’s. For reasons unknown the immediate effect was for the oil price to jump 4% as global tensions continued to mount in known hotspots plus threats of further sanctions on Russian oil supply having an impact. With Ukraine ramping up their retaliatory response to Russia it has also been speculated Russian energy infrastructure may come under attack. On the other hand, despite the additional supply Goldman Sachs are forecasting strong demand heading into the northern hemisphere summer as the global economy remains resilient. Goldmans expect OPEC to retain current revised production levels into September at which time they expect to see the real tariff impact on the global economy. Goldman maintained its cautious oil price forecast, projecting Brent crude to average $60 per barrel and West Texas Intermediate $56 per barrel for the remainder of 2025 and softening further into 2026.
An article in Mining.com suggested the copper price will need to double to compel new projects being developed. A study, from a few University boffins across the globe suggested the problem isn’t discovering new copper deposits rather the rate at which companies are developing them due to economics. The current rate of mining can barely keep up with the copper demand that is being driven by our quest for clean energy and general economic growth. However, the study does highlight that in the next 32 years more copper will be produced than has been in history, but this will still fall short of demand from standard population growth. Bottom line they believe 1.75 billion tonnes of copper will need to be mined by 2050 to support current expectations of global growth while clean energy transition will add significant future demand by mid-century.
Another catalyst for the uranium thematic was reinforced with Meta signing a 20-year deal to buy nuclear power from Constellation Energy (NASDAQ:CEG). Beginning in 2027 Meta will purchase 1.1gigawatts of power from CEG’s Illinois facility and Meta is reportedly seeking proposals for up to 4 gigawatts of new US reactors. Following the deal CEG is seeking a 20-year license extension to 2047 which should be supported by the current regime. The deal is the latest in a raft of deals by big tech players, including Amazon, Microsoft and Alphabet to secure enough electricity to support the development of their ever-evolving AI ambitions. CEG is also considering plans to build another reactor at Illinois which already has federal approval and is underpinned by the Meta deal. According to Constellation Chief Executive Officer Joe Dominguez “It’s a logical place for us to talk to Meta, and to others, about potentially building the next generation of assets,” Trump recently signed executive orders to jumpstart the US nuclear energy industry last week, which included ambitions to construct 10 nuclear reactors by 2030 amongst other new nuclear policies.
Quote of the week….
Time to drop the really big bomb, Trump is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT! @elonmusk
Am sure this won’t bother Teflon Don!
On the lighter side….
School of hard rocks…
The latest Canadian listed company trying it’s hand on the ASX was Robex Resources (ASX:RXR) which listed last week at healthy premium following raising $120m at $3.11. RXR is the 85%-owner (15% Guinea Govt) of the Kiniero Gold Project in the Siguiri Basin of Guinea not far from Predictive Discovery’s (ASX:PDI) 5m ounce plus Bankan Gold project. RXR is on track for their first gold pour in December this year with full scale ramp up early in the new calendar year. The company is targeting 150,000 ounces pa of production for 6 years from a conventional open via a 5mtpa CIL processing facility. RXR will retain their TSX-V listing and post the raising and ASX listing will have $135m in cash and a $200m debt facility with Sprott which is drawn to $40m. Pre-production capital expenditure is expected to be around $320m with estimates suggesting over half of this has been spent to date.
Minerals 260 (ASX:MI6) have hit the ground running with results from their maiden drill program since acquiring Bullabulling recently and releasing 19 assays.
Better results included:
62m @ 1.1g/t Au from 158m
35m @ 1.3g/t Au from 143m
8m @ 2.3g/t Au from 178m
17m @ 1.1g/t Au from 205m
17m @ 1.0g/t Au from 246m
19m @ 1.0g/t Au from 273m
The drilling was targeting depth extensions below the existing Phoenix resource (26.5mt @ 1.09g/t containing 934,000 ounces) and confirmed consistent grade mineralisation extends at depth. MI6 has completed 70 holes for 15,264 metres of drilling thus far so plenty more assay results pending plus completion of the planned 80,000 metres of drilling across the Bullabulling project. With the overall target of growing the existing 2.3m ounce global resource future extensional drilling will be completed on a 160mx160mm spacing between the Kraken and Bacchus pits. 40% of drilling will be targeted towards infill drilling on 40mx40m spacings to convert inferred material into indicated status. Additionally, a number of regional targets that have been identified but never followed up will have an RC program directed their way.
Strike Energy (ASX:STX) has appointed a new CEO &MD in the form of Peter Stokes who was most recently CEO of LSE listed mining services group Capital Drilling Limited (LSE: CAPD). Peter’s previous roles include President, Global Logistics for Toll Group, CEO of Barminco Ltd, COO at Linfox and management consulting at Accenture. If plenty of bird shit behind his title counts for anything he has completed the Advanced Management Program at Harvard Business School, has an MBA (Bond University) and Master of Applied Science (Geology) (UWA). Although not technical from an oil and gas perspective he has a strong background in management of listed companies across the resources and logistics sectors. The appointment of Peter is the final step before the board articulates the results of their “Strategic Review” which should be as simple as “create competitive tension to shake potential suitors into a bidding war”!
There has been much speculation as to the process and new owner of Queensland’s Ravenswood Gold Mine however it has come to bear that the process has been pulled with potential buyers failing to meet price expectations. Recent press speculation suggested Regis Resources (ASX:RRL) and Indonesian United Tractors were the last two suitors left in the ring but may have balked at the price tag. Owners, PE firm EMR Capital and Indonesia’s Golden Energy wanted more than $1 billion for Ravenswood which sold 179,000 ounces of gold in 2024 and generated $528.3 million in revenue.
EMR chairman Owen Hegarty said “that bidders expressed caution at an imminent rise in capital spending required at the mine” with the partners needing to spend $100m to expand a tailings dam and open up new zones for mining. EMR and Golden Energy would likely attempt another sale in about 18 months or two years’ time when the phase of investment was complete, said Hegarty. However, it posted a $75 million loss after accounting for $52 million of financing costs and the $76 million of earnings that were missed because of long-standing “hedge” contracts to sell gold at low prices. Next stop… Bellevue Gold (ASX:BGL).
Solstice Minerals (ASX:SLS) has announced results from the Phase 2 RC drill program at their Bluetooth Gold Project which lies within the Yarri Gold Project NE of Kalgoorlie.
Some of the better drill results included:
20m @ 2.18g/t Au from 28m
20m @ 2.01g/t Au from 20m
16m @ 2.13g/t Au from 48m.
20m @ 1.19g/t Au from 48m
16m @ 1.46g/t Au from 20m
These are nice follow up intercepts to the recently reported RC results with further drilling planned for July. These results come hard on the heels of a significant RC drill intercept at the Edjudina Range gold discovery, and assays are awaited for recent RC drilling at Statesman Well. All three prospects are located close to haul roads in the active and infrastructure-rich Yarri Project area of the Eastern Goldfields, where Solstice controls over 1,650km2 of highly prospective geology. With a neat 100m shares on issue the resulting $17m enterprise value does not look onerous. SLS’s main man Prof. Vernon J Castleden III, blurted “Bluetooth is quickly taking shape, with the latest drilling campaign further defining consistent broad zones of shallowly dipping near-surface oxide gold mineralisation. The geometry looks favourable for potential open pit extraction, so we are now planning further drilling to test down plunge on the fold to the north, repeat structures as well as specific tests for underlying fresh-rock mineralisation. Site prep will get underway for the next phase of RC drilling at Bluetooth as well as follow-up RC drilling at the exciting Edjudina Range gold discovery. ...bla bla bla.
First Quantum’s (TSX:FQ) ongoing saga to salvage their massive Cobre Panama copper mine has taken another step in a positive direction with the government approving their proposed maintenance plan.
They were quick to clarify this does not signal a restart of operations and was strictly for environmental protection of the site…pigs bum…they are missing squirrelling massive taxes and royalties! Trade and Industry Minister Julio Moltó said
“Supervision will ensure that this material can be extracted and processed in the best possible way so that it can then be exported,” he added. Cobre Panamá, a $10-billion project and Central America’s largest open-pit copper mine, accounted for about 5% of Panama’s GDP before the shutdown and generated roughly 40% of First Quantum’s annual revenue. Panama President José Raúl Mulino has signalled interest in a new partnership model that reinforces national ownership of the mine, but he cautioned that a full closure could take up to 15 years due to its scale and economic significance.
Develop Global’s (ASX:DVP) Sulphur Springs Copper Zinc project has taken a back seat lately but now their Woodlawn operation is producing and shipping concentrate they can switch some focus back onto Sulphur Springs. The fully permitted Sulphur Springs Project is a high-grade zinc-copper-silver deposit located 140 km south-east of Port Hedland and hosts a resource of 17.4m tonnes @ 5.8% Zn, 1.0% Cu & 21gpt Ag and Reserves of 8.8m tonnes @ 1.1% Cu, 5.4% Zn & 21gpt Ag. They plan to update the DFS which is scheduled for completion by calendar year end and have commenced substantial earthworks on site. In particular access is being established readying for the establishment of a decline to the bottom of the orebody. DVP have rejigged the mine plan following the Woodlawn “bottom up” approach to mining which they believe can deliver strong operational efficiency, reduce ore dilution and potentially deliver 20% higher tonnages. The upfront underground development works should be largely financed by increasing cash flow generated by Woodlawn, and the Bellevue Gold Contract. We estimate $20m of capital expenditures on the underground development by 1H FY26, before the sanctioning of major processing plant works.
Under the radar Canyon Resources (ASX:CAY) has the Minim Martap Bauxite Project in Cameroon, which is one of the world’s richest bauxite deposits, with a reserve of 109m tonnes at 51.1% Al2O3 and 2.0% SiO2 and a total JORC resource of a billion tonnes at 45.3% Al2O3.
Major shareholder Eagle Eye Asset Holdings recently exercised 350m options which injected $24.5m into CAY to take them to 54.7% of the company. In addition, they secured a US$140m debt facility through the AFG Bank Cameroon a subsidiary of Atlantic Group.
Key terms of the debt financing are:
Interest rate of 8% per annum + VAT or about 9.54%pa
Repayable 8 years from first draw.
No new debt or change of control without lender approval.
This replaces an earlier facility provided by Eagle Eye on more attractive terms.
The funds will be used to acquire locomotives and wagons and contribute towards the development of ore transport infrastructure, including rail and port facilities allowing for the first shipment of Bauxite in 1H CY2026.
Who’s shaking the tin…
Caprice Resources (ASX:CRS) - $7.5m at 5.2 cents
Nico Resources (ASX:NC1) - $1.1m at 8 cents
Barton Gold Holdings (ASX:BGD) - $3m at 70 centsNew Frontier Minerals (ASX:NFM) - $1.59m at 1.1 cents
Challenger Gold (ASX:CEL) – $34.5m at 8 cents
Star Minerals (ASX:SMS) - $1.6m at 2.5 cents
Brazilian Critical Minerals (ASX:BCM) - $4m at $0.008 (plus 1:3 option)
Lanthanein Resources (ASX:LNR) - $2.375m at $0.00075 (I’m actually not sure what price that is!)
S2 Resources (ASX:S2R) - $2m at 7.2 cents (plus 1:2 option)
Firefly Metals (ASX:FFM) - $100m at 96 cents
A Sermon from…Resources Day at Argo’s
I just found a new definition of contrarian – hosting a bunch of lithium companies for institutional investors prior to a site visit to Greatland Gold - especially after the underlying commodity price had fallen a further 20% for the month to take it well into the cost curve. But full credit to Argonaut for putting on a really interesting group of preso’s, dominated by the aforementioned Lithium companies. As they say – you always learn something and if you don’t then you shouldn’t be in the game.
Pilbara Minerals were first to kick off – basically strategy unchanged – has great balance sheet flexibility and the big capex phase is now behind them. June Q is all about optimisation and then delivery into FY’26. Whilst questions were asked about whether they might move to campaign style treatment this was quickly quashed with Dale talking about how disruptive this is on the business and with $1.1bn in cash they can definitely survive, the implication is there a lot more companies hurting at these prices than them. He also stressed that they were disciplined during the boom times – no stupid M&A and asset bidding etc (not sure who he was referring to here …) and waited for the right opportunity in LRS. There was lots of talk re demand and prices with demand still very good but thinks potentially some market manipulation with CATL and BYD wanting to keep price low for the upcoming IPO of hence make upstream margins looks strong. This could explain the bringing back of the Chinese lepidolite production. Dale remarked he does get asked by shareholders why he isn’t buying back shares… Hhhmn, if you are asking that question you probably shouldn’t invest in the equity market!
Big Tony O from LTR was next up and he was his normal enthusiastic self... Reality is they guys have done a brilliant job in commissioning this operation and he showed some nice photos of stopes with the faces 100% spod pegmatite grading >1.5%. The mill has been performing very well and able to treat like >10% contaminated ore compared to 5% at most other operations. The underground started in April with first stope paste filled over the weekend. Excellent ground conditions etc and ultimately some of the bigger stopes will deliver 80-90kt of ore. Similar view to PLS on the market – price is unsustainably low with SQM pumping volume from the brines prior to the deal with Codelco coming in for 50% (makes sense). No one is making any money at these prices... Greenbushes maybe at site but add in other costs and not sure how much free cash it generates.
Ken B from PMT zoomed in from Canada and reiterated the strong demand and was very much in the camp the Chinese were manipulating price by accepting high-cost production to make $$ downstream. I think if anyone knows then Ken would. He thought the market was underestimating the Energy storage demand etc. Project, wise I hadn’t realised the caesium potential of the project with some very high-grade intercepts up to 22% CS2O. Need to do further work but potentially a real value add by product credit etc. Project wise still targeting a 2yr permitting window and aiming to be in production in 2029. We then moved onto Copper in Newfoundland Canada with Stevie P from FFM. A bullish preso with some 7 rigs going at the moment and delivering some excellent high-grade results from both the VMS zone and the footwall copper stringer zones. Potentially, the stringer zones are getting better at depth so that is exciting. He had just returned from Nth America roadshow, hence the good market support and after he finished, I thought they would raise capital within the month... I was wrong... it was the next day for $100m!!! We then had Marie who is Chief Development Officer Lithium at IGO. To be honest it was hard to get too excited about the prospects. Optimising Greenbushes, stripping out costs and improving recoveries and ideally no more capital spend at Kwinana. Exploration still a focus but have chopped 50% of the workforce and will be much more targeted/gated... Nova finishes at the end of the year and Cosmos on care and maintenance. The old De Beers database got a mention – I remember Chris Bonza raving about this many years ago and the talk of what AI could potentially throw up in due course. We then had to shoot through as my colleague was getting hungry ... a good morning and hopefully we have seen the bottom of the Lithium price, and we can look back in a year and say… That was the time!!!