Chieftain Chatter
Season 5
Episode 180
On hold..
Not surprisingly Reverand Powell kept interest rates on hold and commented “there are many, many uncertainties left to resolve,” and the Feds rhetoric tempered expectations of a September cut from 65% to 45%.
He indicated that the current rate settings don’t appear to be strangling growth, and this has largely been supported by the latest round of GDP data out of the US and corporate earnings. Both GDP and Jobs openings were stronger than expected during the week thus supporting the Feds stance. Despite a solid 3% quarter on quarter GDP growth result and a recovery in private payrolls two Fed members voted in favour of a rate cut which was the first time in 20 years that members have broken ranks.
With the S & P 500 at all-time highs, largely driven by tech giants earnings numbers, we have also seen the US tech speculative market reignite which raises concerns about the maturity of this cycle and an impending correction. Goldmans run a Speculative Trading Indicator which is running at it’s highest level since the .com boom of around 1998-2001. The indicator monitors volumes in shit (non-profit) stocks, most of which you’ve never heard of including BigBear.ai, Lucid and Plug Power. Meme stocks are also seriously back in favour with the likes of Kohl’s, Open door and GPRO all experiencing unsustainable gains of late. These cycles are also typified by short squeezes where short positions are forced to be covered. "The median US IPO in June rose by 37% in its first trading day, the best month since early 2024 and a top decile return relative to the past 3 decades," Goldmans quoted. As an example, a real time web-based interface design company called Figma listed last week at 3 times it’s issue price valuing the company at US$47 billion.
Probably not surprising there was no mention of Australia as a top 10 mining and exploration jurisdiction from a recent survey carried out by the Fraser Institute’s latest Annual Survey of Mining Companies. Even our woolly neighbours got a mention at position 12 while Western Australia has fallen to 17th a far cry from 3rd in 2023. Finland regained the top spot while the US and Canada dominated the balance of the remaining positions although Canada had two provinces drop out of the top 10 this year which are ranked based on mineral endowment and encouraging policy. Not hard to see where Australia embarrassingly falls over with industry professionals being surveyed on issues such as tax regimes, permitting timelines, environmental regulations, and labour availability. The worst performing jurisdictions overall were Ethiopia, followed by Suriname, Niger, Canada’s Nova Scotia, and Mozambique. The Fraser Institute noted that disputed land claims with Indigenous groups and shifting environmental protections contributed to investor hesitation.
Although ESG is still prevalent it’s not the buzz word it was 12 months ago with miners and market regulators not so vocal (for the sake of it) as they once were. According to an AFR article the regulators are poised to back away from plans to include higher environmental, social and governance standards in the JORC code which has governed the promotion and disclosure of mineral discoveries for the past 35 plus years. Draft changes to the JORC code were disclosed last year suggesting ESG should play a prominent role in the code in ratifying a mineral deposit. Should these changes been approved the level of bureaucracy, red tape and cost would escalate to unrealistic levels for development to proceed. After 12 months of industry feedback the committee are believed to be seriously considering winding back any such proposals for radical change with a fresh version being recently circulated. Although not complete, its believed the ASX provided meaningful pushback on the unrealistic proposals being put forward with an ASX representative suggesting “the JORC code was a “cornerstone” of the national bourse and the proposed reforms had been carefully considered. Our aim is to keep regulation fit for purpose by setting appropriate standards while taking into account the practicalities of compliance. We think that the JORC code works well, and we want that to continue into the future. JORC’s consultation process has been very thoughtful and considered and highly engaged with the market, and we think that it is going to result in real improvements to the way listed mining entities report about their activities.” Our resident ESG expert Anthony Christopher Kenny has made an underwhelming contribution to the cause but ultimately, doing SFA has proved correct.
Quote of the week….
“I’ve been seeing signs of a ‘flight to crap’ recently,” said Steve Sosnick of Interactive Brokers on the renewed speculative boom in US meme stocks.
On the lighter side….
School of hard rocks…
NexGen Energy (ASX:NXG) released another set of solid numbers from drilling at their Patterson Corridor East (PCE) uranium project during this year and last with better intercepts including:
12m at 3.46 % U3O8,
0.5m at 31% U3O8
With the first hole located 100m up dip from where they hit:
17m at 3.85% U3O8
The similarities to their advanced Arrow project are evident with assay’s confirming broad mineralisation with significant grade and continuity. The remainder of the 2025 program will focus on continued growth of the high-grade subdomain, and the overall mineralised footprint of PCE with the deposit open in all directions. NXG also announced it has acquired Rio Tinto’s (ASX:RIO) 10% production carried interest over 39 NXG-owned mineral claims, including those that host the PCE discovery, exercising its right of first refusal by matching an undisclosed cash offer.
Not so Greatland Gold (ASX:GGP) had their first hiccup following a disappointing quarterly gold production number which fell well short of expectations. GGP reported 78,300 ounces of production for the quarter which although was below expectations saw annual production (198,000 ounces) hit guidance of 196,000 to 210,000 ounces with Q4 AISC’s falling at $1,736 per ounce. The result was somewhat offset by higher than expected copper production of 3,700 tonnes however FY2026 guidance has been softened from 300,000 to 340,000 ounces to 260,000 to 310,000 ounces and AISC guidance increased to $2,400 to $2,800 per ounce. Capex guidance for Telfer and Havieron of A$230m-260m and A$60-70m respectively is also higher than most pundits had forecast for both projects, as is the exploration budget of A$55-60m. Overall the result had a definite negative bias with the market knocking 25% off their market cap.
What stood out in Wildcat Resources (ASX:WC8) PFS for their Tabba Tabba Lithium project was capex of $687m which included $144m in pre-strip and a contingency of $66m. The key metrics were:
Stage 1 production 295,000 tpa SC5.5 increasing to 565,000 tpa
Throughput of 2.2mtpa expanding to 4.5mtpa
AISC’s US$658 per tonne
Post tax NPV $1.19b
17 year mine life
The large pre-strip surprised most analysts and hence as did the LOM overall strip ratio given the shallower Chewy, Han and Hutt pegmatites have been assumed as waste in the PFS. WC8 still has $55m in cash to progress to a DFS and with the lithium price on the (short term) improve this project is well positioned to participate in any further upside.
Emyria (ASX:EMD) has announced they are opening their first clinic for the delivery of their psychedelic therapies for mental health conditions. Psychedelic-assisted therapy is an emerging mental health treatment that combines psychedelic compounds – such as MDMA or psilocybin – and traditional psychotherapy (i.e., “talk therapy”), to help patients access and work through deeply rooted emotions or trauma. The initial deal is with Brisbane based Avive Health who run a 63-bed hospital and follows a recent approval from Medibank to cover the cost of their PTSD therapies for its 4 million members. As a guide EMD charges between 20 and 30 grand to run these programs so the Medicare tick is a major milestone given some 800,000 Australians suffer from PTSD. EMD is the first (and only) company in Australia to have the regulatory approval and the backing of a major health insurer to deliver psychedelic assisted therapies. Following full regulatory approvals EMD to expect to rollout their services later this calendar year. Our resident analyst Dave from Mullingup commented “yo bro get on board where headin to the moon”
Boss Energy’s (ASX:BOE) latest quarterly admission saw around $1 billion wiped off their market cap as it became apparent that nameplate production was unlikely to be met. As a result, the life of mine production expectation has been reduced from 36m pounds to 24m while operating costs are expected to be at the higher end of guidance. FY2026 production and cost guidance has now been set at 1.6m pounds at an AISC of US$41 to US$45 per pound which was substantially higher than expected and sustaining and project capex is forecast to beUS$36 to US$40m. BOE has flagged challenges that may arise in achieving nameplate capacity at Honeymoon, ’largely due to the potential for less continuity of mineralisation and leachability’. In the absence of further clarity on FY27 and beyond, the market has clearly taken a sell now, ask later response to this. The result follows the announcement of MD & CEO Duncan Craib’s transition to NED effective as of 1st of September 2025, to be succeeded by COO Matt Dusci.
to this outlook statement, with the stock down -43% intraday at the time of writing. An independent review will commence shortly to determine the extent to which these challenges impact EFS assumptions, for which a definitive timeline wasn’t provided.
Develop (ASX:DVP) reported their maiden production quarter at Woodlawn achieving a throughput rate of 850,000 tpa with ramp-up to steady state on track. First shipments of 12,689 tonnes of copper, zinc and lead concentrate were delivered during the quarter comprising of:
969 tonnes of Cu;
2,340 tonnes of Zn;
545 tonnes of Pb;
68,000 ounces of Ag; and bitta gold
Diamond drilling is expected to commence in the September 2025 quarter, initially focusing on a grade control program for the I and D lens, before testing mineralisation extensions later this year. Meanwhile development of the planned decline at Sulphur Springs is happening this quarter and engineering works have commenced for the processing facility while the Updated DFS is due for release in December. Mining services delivered revenue of $51m for the quarter taking full year revenue to $212m which is ahead of guidance and more work in the pipeline and DVP ended the quarter with cash of $57.7m (~$230m pro forma), drawn debt of $105m and equipment financing of $50.0m, for a net debt position of $97.6m ($74.3m pro forma net cash).
With technology and innovation playing a significant role in exploration drilling, Index’s (ASX:IMD) latest acquisition positions them nicely to capture further market share in the space. Hence, they have acquired Norway based Earth Science Analytics which has a Digital Orebody Tech EarthNET, a cloud based, AI-driven geoscience platform. IMD have paid $26m for an 80.5% interest with the balance to be acquired over 4 years for a minimum of $7m plus hurdle payments. In layman’s terms EarthNET is tech (software, algorithms AI, machine learning) that enables the ingestion and integration of vast sets of old and new data to enable machine learning models to transform industrial data into real-life business value. This is a nice to fit into IMD’s existing capabilities and is expected to significantly reduce time-to-market for orebody knowledge solutions. As illustrated in the announcement this can deliver up to a 90% reduction in analysis and interpretation time for geophysical data.
Encounter Resources (ASX:ENR) have reported they are about to drill their now 100% owned Yeneena Copper project in the Patterson Province. During the joint venture with IGO about $15m was spent on exploration however depth extensions at the oxide BM5 discovery were never followed up and IGO withdrew from the project. ENR have now planned a 6 hole “all or nothing” drill program which will commence in October targeting the BM5 anomaly that returned an aircore intercept of 15m at 22g/t Ag, 0.17% Cu with sniffs zinc and cobalt. Although to the novice (myself) this seems like SFA they believe this could be leakage from a deeper source that warrants the lie detector giving it a prod. This is definitely elephant country and we all know what you can find in these parts…Elephants!
Who’s shaking the tin…
Vertex Minerals (ASX:VTX) - $3.9m at 21 cents
Viridis Mining (ASX:VMM) - $11.5m at 91 cents
Pinnacle Minerals (ASX:PIM) - $1.76m at
Sky Metals (ASX:SKY) - $5m at 6.5 cents
Astute Metals (ASX:ASE) - $5.5m at 1.5 cents
Cosmo Metals (ASX:CMO) - $2m at 1.8 cents
Strategic Energy Resources (ASX:SER) - $2m at $0.005 (plus 1:2 option)
Manhattan Corp (ASX:MHC) - $2.2m at 2 cents
IRIS Metals (ASX:IR1) – $4.267m at 8.5 cents
Syrah Resources (ASX:SYR) – $70m at 26 cents
Stavely Minerals (ASX:SVY) - $2m at 1.4 cents (plus 1:2 option)
Blue Star Helium (ASX:BNL) - $4.5m at $0.005 (plus 1:2 option)
Locksley Resources (ASX:LKY) - $5.3m at 9.5 cents
Nagambie Resources (ASX:NAG) - $1.2m at 1.3 cents (plus 1:2 option)Enova Mining (ASX:ENV) - $500 grand at $0.007, (plus 1:2 option)
Chilwa Minerals (ASX:CHW) - $9m at $1.05
Firetail Resources (ASX:FTL) - $5m at 8 cents
Silver Mines (ASX:SVL) - $30m at cents
Laramide Resources (ASX:LRM) - $12m at 60 cents
A site visit to....
King of the Hills, Vault Minerals (ASX:VAU)
I had to reread the site visit email at least three times - were we really expected to get to the airport at 4.30am... surely this was a typo? but no it’s all to do with plane slots especially coming back and not getting shifted to 8pm if you miss your slot... They promised to have us back by 4pm… wishful thinking I thought. So, we arrived in balmy Leonara (about 2 degrees) bright an early as the sun was coming with two planes of around 28 interested punters. Lenny and Kurt did an excellent job in shepherding us through the quick induction (tick) and getting down to business. Breakfast was a toss up between the ham and cheese toasties or the more exotic breakfast wrap. I did the correct thing and had both. Key takeaways were they boys inherited a bit of shit show a year ago and it’s has taken them this long to implement some basic mining practices into the company. These practices include a shed load more grade control drilling – i.e. 2 x RC rigs going 24/7, more resource geologists – increase from 1 to 4... better control on blasting practices to actually know where the ore is post blast etc and a real focus to reduce dilution etc. So, you got the feel VAU were well aware the grade was going to fall compared to the RED5 open pit reserve grade of 1.1 g/t Au and really, it’s all about economies of scale now. This includes the open pit mining contract which is up for renewal at the end of Dec’26 – lots of options include owner mining, lease equipment etc so that will be interesting. The KOTH operation does offer long life with 18 yrs of baseload feed over 5 stages. Whilst the average strip is 3.4:1, the stage 2-4 is 2.7:1 with 75% of metal contained within these pits. The infamous northern slip which occurred under Sons of Gwalia ownership in 2004 will be taken in Stage 4 in 2029. A drive around the mill (oh how I miss climbing 8 floors for the view from the top) showed the Stage 1 plant expansion is to 6mtpa is well underway – adding in 4 additional tanks and slated to come online in June Q FY’26, Stage 2 to increase to 7.5mtpa is centred around a 9MW ball mill in the grinding circuit and expected to be operational by mid FY’27. The mill is the lower cost facility in the Leonara area with combined costs of around $20/t (includes Darlot ore). We also took a little trip underground and despite only three geological units ... gee the structure can be complex where the thickness of veins can vary considerably within a couple of metres. Some deeper drilling has intersected mineralisation 300m beyond the limits of the resource with some nice intercepts including 3.8m @ 30.1 g/t Au,3.4m @ 26 g/t Au pointing to the potential for a much longer U/G operation that originally planned. This area will be infilled over the next year. A quick lunch with the obligatory pies and sausage rolls were much appreciated before we left for the airport... Fortunately, some quick manoeuvring from our pilot saw us push ahead of the actual FIFO workers and we landed back ahead of schedule at 3.45pm. – Well done boys. It was a very good day and I certainly gained a greater appreciation of the asset and the potential opportunities ahead. The looming Diggers and Dealers next week saw me decline a cleansing ale and I was safely ensconced on the couch in time for the Doggies slaughter of the ‘Orange Tsunami'.