Chieftain Chatter
Season 5
Episode 177
Copper time…
The impost of 50% tariffs on copper imports into the US sent COMEX prices north of US$5.50 per pound, however, fortunately for Aussie producers the bulk of our production goes into China and Asia in general rather than the US. Meanwhile, LME copper prices which are seen as the global benchmark fell to US$4.45 per pound and Aussie stocks largely retreated on the tariff news. Estimates suggest the 50% charge could add around US$5,000 per tonne of copper that enters the US and hence why we are seeing such an arbitrage between the two markets as industry continues to stock up ahead of the new charge. Imports of copper into the US for the first six months of the calendar year have already exceeded the usual full year purchasers with US traders lifting stocks in the country 130% this year to 221,000t, while LME-stored copper stocks have sagged to less than 100,000 tonnes for the first time since 2023. Bottom line is that US consumers will bear the brunt of all tariffs and hence why policy makers remain cautious about adjusting interest rates in the short term. The 200% tariff on pharmaceutical imports will have a far greater impact on Australian product manufacturers who have essentially been given a year to relocate their manufacturing to the US.
Like their battery metal counterparts, the nickel price has been in the dunny for an extended period after temporarily peaking at $50,000 per tonne in early 2022 following a massive short position tussle.
What followed was around $12 billion in cancelled trades, lawsuits and a rethink of nickel trading on the LME ensued but the impact was short-lived and it did settle to $30,000 a tonne on the back of EV battery demand but quickly settled back $17,000 territory.
With the EV demand not materialising at the rate that was initially expected at “peak hype” prices have subsequently remained depressed for lithium, cobalt and nickel. What has subsequently emerged is that value of nickel utilised in EV’s has now eclipsed that of lithium despite a shift towards.
Lithium iron phosphate or LPF which doesn’t require any nickel…. riveting stuff!!
The US Department of Defence (DoD) have entered into a partnership with NYSE listed MP Minerals (NYSE:MP) to finance and accelerate the rollout of their magnet manufacturing facility in the US. The package consists of US$150m in debt funding plus US$400m of convertible equity funding which could eventually see the Department emerge with a 15% equity stake if all converted plus MP have secured US$1 billion of external financing. In return the DoD will have full offtake rights for 10 years and importantly for MP they have locked in floor pricing of US$110/kg on NdPr sold as part of the deal which is a significant premium to the current spot price of US$63/kg. This deal has significant implications for the development and financing of rare earth projects globally.
Quote of the week….
"Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff.”
On the lighter side….
School of hard rocks…
As M&A in the gold sector continues to accelerate, speculation has emerged that a couple of groups are having more than a look under Vault Minerals (ASX:VAU) dress with one of the parties believed to be Indonesia’s United Tractors which missed out on securing the Ravenswood Gold operation in Queensland. United have been on the hunt for Aussie (producing) gold operations for some time now so it would not surprise if they emerged as the suitor. According to Euroz they see value here after VAU generated $90m of free cashflow for the June quarter which would have been $170m if not for their “out of the money” hedge book but still have an impressive $686m in cold hard. Now Genesis Minerals (ASX:GMD) may well have something to say about this in the fullness of time, but they are not ones to overpay or getting involved in some pissing match for the sake of it.
AIC Mines (ASX:A1M) followed up their recent successful capital raise with some consistent results from the newly targeted Jolly and Tucker prospects at the northern end of the Jericho deposit. Better numbers included:
7.0m @ 2.4% Cu and 0.4g/t Au from 186m
7.2m @ 2.8% Cu and 0.5g/t Au from 284m
3.1m 3.0% Cu and 0.4g/t Au from 520m
6m @ 1.8% Cu and 0.6g/t Au from 509m
These holes were completed both north and south of the Eloise-Jericho link drive intersection of the deposit and confirm consistent lenses of mineralisation.
Confirmation of grade continuity at Jolly and Tucker provides A1M with additional potential inventory to target within the early stages of mining at Jericho. Following the recently announced commitment to plant upgrade construction and associated funding package, A1M is on track to becoming a 20,000 tonne per annum producer.
Ramelius Resources (ASX:RMS) produced 73,000 ounces for the quarter leading to annual production of a tad over 300,000 ounces for a slight beat on full year guidance with AISC’s are expected to fall within the lower range of $1,550 to $1,650. Cash generation was again strong with $695m of free cashflow generated for the full year and $810m in cash at June end which was up $153m for the quarter after a maiden interim dividend payment of $26.9m and fleecing’s to the ATO totalling $28.3m. This was the fifth consecutive year they have achieved production and AISC guidance.
The eagerly awaited Bellevue Gold (ASX:BGL) quarterly has been released coming in slightly below the forecast 40,000-45,000 ounces at 38,900 however, this was a 55% increase in quarterly production so hopefully they’ve turned the corner. BGL reported a cashflow result of $67m which was a record and built their cash n bullion to $152m with debt of $100m. Importantly jumbo development metres averaged 311 metres per month per jumbo when 170m per month was forecast. Obviously, the hedge book remains problematic when in kicks back into bite in December…
Following up from their teaser last week Black Canyon (ASX:BCA) fast tracked assays from their recent drilling delivering significant high-grade results for both iron and manganese at Wandanya in WA’s north. Assays have now received from three wide spaced, shallow RC holes and returned:
12m @ 60.1% Fe from 5m (testing the western hematite zone)
8m @ 31.1% Mn from 5m (central iron/stratabound manganese overlap zone)
4m @ 29.8% Mn from 12m test the eastern stratabound manganese horizon)
The results illustrate mineralisation continues at least 2km north of the original W2 discovery and supports the consistent grade and geology of the stratabound manganese horizon which remains open to the north and east. Assays from the remaining 98 drillholes are expected from late July through August and further drilling to extend and delineate these targets is planned for August 2025. Further results pending and drilling will recommence in mid-August with focus on both the Fe mineralisation open to the north and the manganese (testing the full 3km strike potential of the statabound manganese horizon) open to the north and east.
Minerals 260 (ASX:MI6) are further infilling their 2.3m ounce Bullabulling gold deposit, returning higher than resource grade results including:
17m @ 1.3g/t Au from 170m
27m @ 1.6g/t Au from 163m
13m @ 4.1g/t Au from 191m
Meanwhile extensional results at Bacchus included:
4m @ 8.28g/t Au from 174m
22m @ 3.25g/t Au from 162m
There are still 69 holes pending assay which will include a combination of infill and extensional intercepts. Encouragingly drilling between Kraken and Bacchus deposits has confirmed mineralisation is continuous between the two. Plenty more drilling required here to workout a mine plan and further define the grade increasing at depth thesis followed by a resource update before the years out.
Some of the shine has come off Gorilla Golds (ASX:GG8) market cap yet they are still delivering solid results from their Lakeview discovery where the bulk of their exploration capacity is now focused.
Drill results from the King Kong prospect returned:
8m @ 5.8g/t Au from 212m,
3m @ 9.6g/t Au from 129.9m
These results confirm mineralisation continuity down dip and extending along strike and met test work is underway along with other pertinent development studies and permitting.
Lakeview drill activity is increasing and will have 5 rigs operating since being relocating them from their Mulwarrie project with infill and extensional drilling filtering into a resource update.
Capricorn Metals (ASX:CMM) has delivered another solid quarter with 32,000 ounces bringing full year production to 117,000 ounces landing them at the upper end of their guided 110,000-120,000 ounce range. Although AISC’s are yet to be reported they are expected to fall within the guided range of $1,370 to $1,470 per ounce. Cash and bullion at June 30 totalled $356.4m which was down $48m due to $11m of capex at Mt Gibson, $50m hedge book closure and $50m of debt repayment. They also subsequently announced the acquisition of the Claw Gold Project from BPM Minerals (ASX:BPM) for $1.5m in cash n shares plus $1.5m in performance payments. The Claw project lies adjacent to Mt Gibson and consists of about 400km of prospective pasture.
Strickland Metals (ASX:STK) now has 8 rigs turning at their Rogozna Gold & Base Metals Project in Serbia, the 7.4m ounce gold equivalent project has had some outstanding results recently and has around $40m in cash to continue to exploit this opportunity. Recent results from their flagship Shanac deposit included:
244m @ 1.3g/t AuEqfrom 342m
133m @ 1.4g/t AuEq from 362m
Meanwhile their 100% owned Gradina Project also returned some significant intercepts including:
34.4m @ 2.6g/t Au from 329m
13.1m @ 1.7g/t Au from 466m
23.2m @ 0.8g/t Au from 286m
35.9m @ 1.2g/t Au from 521m
Strickland’s Managing Director, Paul L’Herpiniere, said: “This latest batch of results from Gradina continues to demonstrate the continuity of the gold-dominant system towards the northern end of the deposit. Importantly, the spatial distribution of these intercepts confirms our current geological model, indicating that the geometry of the mineralisation zone is consistent.
Who’s shaking the tin…
Argosy Minerals (ASX:AGY) - $2m at 2.5 cents (plus 1: 2 option)
EQ Resources (ASX:EQR) - $4m at 3.5 cents
Orion Minerals (ASX:ORN)?- $5.8m at 1.1 cents
Polymetals (ASX:POL) - $15m at 80 cents
Kincora Copper (ASX:KCC) - $4m at C$0.30 (plus a warrant or 3)
Native Mineral Resources (ASX:NMR) - $10m at 16 cents
Emperor Energy (ASX:EMP) - $3.7m at 3.1 cents
Ausgold (ASX:AUC) – $35m at 57 cents
Laramide Resources (ASX:LAM) - $12m at 60 cents
Mithrill Silver & Gold (ASX:MTH) – $11,5m at 36 cents (Canadian)
Diablo Resources (ASX:DBO) - $396k at 1.2 cents (plus 1:2 option)
Vulcan Energy Resources (ASX:VUL) - $53.6m at $3.40 (lazy 40% discount)
Moab Minerlas (ASX:MOM) - $141k (yes 141 grand) at $0.001
A zoom call with....
Paul Cronin (Chairman) and Bevan Jones (MD) True North Copper (ASX:TNC)
We have always kept on eye on TNC since it listed with much fanfare in Nov’20 with some pretty smart backers including Tembo (of Spartan fame) and others with a suite of Copper assets in the
Mt Isa inlier. The strategy of getting into small scale production from the Great Australian Mine to self-fund exploration etc didn’t really appeal and unfortunately was a lot more difficult than anticipated resulting in the company going into the dreaded VA in Oct’24. Fortunately, they were able to recapitalise company, raising $50m in Nov’24 with some $27m used to repay debt, and $12m repayment of a bridge facility, leaving the company with about $16m for exploration. It also reduced the acquisition cost for Mt Oxide from $15m to $7.5m payable in Dec’26. A new management team went in headed by Paul Cronin (Chairman) of Adriatic Resources (ADT) fame. He was MD at ADT at the 20c IPO and left in Aug’24 after building the Vares mine in Bosina. ADT is now the subject of a ~$5.50 bid from Dundee Resources. We also like the fact he has bought stock in the market recently paying $350k for another 0.92m shares. So, with a change in mgt and strategy it’s always good to cast aside prior prejudices and take a new look. The new strategy is all about the drill bit and targeting the highly prospective Mt Oxide project and targeting mine extensions opportunities at its Cloncurry project. The Mt Oxide project has a current resource of 15mt @ 1.46% Cu in a Mt Isa style sediment hosted Cu-Co-Ag system. In 2023, TNC completed 12 holes to confirm historical high-grade intersections and test for depth extensions. A cracking result of 66.5m @ 4.95% from 234m successfully achieved this. There is some 10km of underexplored prospective trend and the team sees real similarities with Capricorn Copper project (62.2mt @ 1.8% Cu and 9 g/t Ag). First pass drilling at its Aquila prospect (4km NW of the current resource) returned some excellent results including 30m @ 2.45% Cu from 20m and a lower zone of 98m @ 0.61% CU from 57m plus 53m @ 1.18% Cu and 16m @ 1.25% Cu. A further two holes are in the lab and then the plan is to expanded IP and then get the rigs back in. It already looks like they have defined a nice blob of copper mineralisation, but the really exciting thing is this is just one of six undrilled targets that is currently part of an 8,000m RC program. There is no doubt the potential for consolidation in this area is high with several other companies with resources etc and an underutilised mill at Mt Isa. Who knows how it plays out, but we certainly came away thinking TNC is cheap with an EV of $35m and a very competent team behind them and the dearth of decent copper exposures just adds to the appeal.