Chieftain Chatter

Season 5

Episode 185

Gold, gold, gold...

As the prospects of a rate cut in the US continue to gather momentum gold and silver prices surged to record highs with Silver hitting US$ 40/oz for the first time since 2011. Both metals have more than doubled over the past three years as geopolitical risks escalate across the world and trade tensions increase with the implementation of Trump’s tariffs. The September meeting of Federal Reserve members is now running at 90% odds of a 25-point rate cut as the labour market remains under pressure. The prospect of lower borrowing costs has boosted the allure of the non-yielding precious metals, which saw added support from growing safe-haven demand. The true independence of the Fed has been bought into question of late with Trump firing Fed Governor Lisa Cook without notice, however, Cook has appealed via the courts with a decision imminent. Trump has made it fairly clear that the next Federal Reserve Chairman will be a “Captains Call” with current boss Jerome Powell due to depart the role in 2026. In addition, speculation has resurfaced as to the validity of his tariffs with the federal appeals court ruling that global tariffs were illegally imposed under an emergency law, upholding a May ruling by the Court of International Trade. Anyway, all positive for precious metals with gold smashing through US$3,600 per ounce ably assisted by a softer US dollar providing more purchasing power for offshore central banks topping up their vaults. Investors have launched heavily into gold and silver via ETF’s this calendar year leading to additional tightness in the market with total holdings of physical gold held by ETF’s sitting at around 2,900 tonnes.

Further evidence that the labour market in the US is peeling off at a concerning rate was the release of Job Openings & Labour Turnover Survey (JOLTS) with the July report showing the total number of job openings decreased by 176,000 in July to 7.18m. The Fed has highlighted that the although the labour market isn’t having a significant impact on inflation as suggested by this data it does highlight that demand and supply are both on the slide.

 

In a further boost for the uranium price last week Microsoft became the first of the big tech giants to join the World Nuclear Association, which only serves to further highlight the importance of nuclear power to fuel their A-one (AI) ambitions and meet their “good guy” environmental targets. Microsoft like many has long term arrangements in place with Constellation Energy and others to provide nuclear power for their data centres. World Nuclear Association Director General Sama Bilbao y León (Bill for short) commented.

"Microsoft's membership with the Association is a game-changing moment for our industry," said World Nuclear Association Director General Sama Bilbao y León. "When one of the world's most innovative technology companies recognises nuclear energy as essential to their carbon-negative future, it sends a powerful signal to markets, policymakers, and industry leaders worldwide. This partnership will accelerate nuclear deployment at the scale needed to meet both climate goals and the growth in energy demand from data centres."

Quote of the week….

“The Fed should be independent. The Fed is independent, but I, I also think that they’ve made a lot of mistakes.”

Treasury Secretary Scott Bessent said.

On the lighter side…. 

School of hard rocks…

Turaco Resources (ASX:TCG) reported some good hits at the Begnopan prospect as part of their greater Afema Gold Project in Cote d’Ivoire. Better results from a 16-hole program at the Begnopan deposit included:

  • 8m at 6.36g/t from 105m

  • 10m at 3.33g/t from 49m

  • 6m at 5.05g/t from 137m

  • 5m at 3.95g/t from 115m

  • 5m at 3.55g/t from 113m

Mineralisation extends over some 3km of strike, remains open with encouraging metallurgical test work which has resulted in 89% recoveries. Although Begnopan is yet to be included in the Afema Project resource that will be updated following further drilling which may well see the existing 3.6m ounce @ 1.2 g/t break through 4m ounces. A resource upgrade is expected before the years out and TCG sits comfortably with $80m in cash, 5 rigs working and working on a PFS which is due for release before mid-next year.

Canyon Resources (ASX:CAY) released results of their DFS for the Minim Martap Bauxite Project in Cameroon. In a nutshell the key outcomes of the study were:

  • Production 9mtpa (dry), 10mtpa (wet) bauxite production achieved from 2032 for 20 years

  • First production March 2026 2mtpa for the first 4 years before ramping up to 9mtpa in 2032

  • Capex US$446m ($700 rubels) Stage 1 capex to first shipment of US$96m (A$150m)

  • C3 costs of US$49/t vs realised price (CIF China) of US$78/t plus premium of US$11 per tonne for high grade and low silica.

  • Reserves up 32% to 144m tonnes @ 51.2% Al2O3 and 1.7% SiO2

Encounter Resources (ASX:ENR) have produced further high grade, width intersections from infill and extensional drilling at the Green deposit in the West Arunta. Drilling to the east of Green has also confirmed a 1.5km extension of the carbonatite with assays pending while resource definition drilling returned:

  • 85m @ 1.4% Nb2 O 5 from 38m including 26m @ 2.5% Nb2 O 5

  • 84m @ 1.2% Nb2 O 5 from 42m to EOH including 18m @ 2.7% Nb2 O 5

  • 19m @ 2.2% Nb2 O 5 from 48m

  • 20m @ 2.1% Nb2 O 5 from 86m

These results are consistently higher grade than the existing Green resource of 12.1mt grading 1.63% Nb2O5 and 0.55% TREO which bodes well from a grade perspective while the 1.5km strike extension should result in significantly more tonnes when the resource is next updated. Meanwhile two rigs (aircore & diamond) are hammering away which should now see a more consistent flow of results to feed the beast that is the market. The diamond rig will focus on metallurgical samples at Green while the aircore will continue to exploit regional targets and ENR still has cash of $18m to fund their exploration initiatives.

 

Lotus Resources (ASX:LOT) has officially hit the ranks of producer status after producing their first yellow cake from their Kayelekera re-start project in Malawi on time and budget. The next critical milestone is to secure product qualification from each of the three western converters, followed by targeted first shipment this calendar year. They are targeting nameplate production of 200,000 pounds per month by the first quarter of 2026 for an annual run rate of 2.4m pounds. With political uncertainty in Africa at heightened levels LOT remains steadfast that the forthcoming Malawi elections poses no risk for the project with all of the major parties supporting the mine. Further cost benefits will be delivered from the commissioning of their Acid Plant early next year along with the connection to grid power. LOT has $77.3m in cash at June 30 and yet to be drawn financing facilities of just under $100m. But that obviously wasn’t enough, so they tapped the market for $65m before the tap gets turned off to strengthen the balance sheet and provide additional liquidity to positive cashflow, enabling disciplined offtake strategy, inventory accumulation, and capital optimisation.

 

Mine contractor NRW Holdings (ASX:NWH) emerged from trading halt announcing they has acquired 100% of Fredon Industries who are a provider of Electrical, Mechanical (HVAC), Infrastructure, Technology and Maintenance services. Fredon was established in 1968 and employs around 2,500 workers and delivered $840m in revenue for an EBIT of $38.6m and a solid outlook of secured and potential new work with 70% of revenue coming from repeat long term customers. The acquisition price of $200m will be funded by $122m cash upfront plus $45-$60m of performance payments and up to $18m of deferred consideration. NWH will utilise existing cash and credit facility leaving them with net debt of $350m post the acquisition or a 49% gearing ratio but normalising to 30% over time. NWH have acquired Fredon on a 5.2x EV/EBITDA multiple if all consideration is paid out.

Genesis Minerals (ASX:GMD) have released a raft of results from their Leonora and Laverton projects which they are confident will add significant resources and reserves adjacent to their existing production facilities. Mining at the Jupiter (Laverton) open pit has recommenced and drilling of the sheer zones to the north east returned:

  • 69m @ 3.9g/t,

  • 95m @ 1.7g/t

  • 44m @ 3.2g/t.

Meanwhile drilling is planned at their recently acquired Beasley Creek (Laverton) project which remains open at depth and along strike and they are currently re-interpreting the geology and re-estimating the resource and optimising pits ahead of first drilling in the second half of next calendar year. At the Gwalia underground operation (Leonora) infill drilling of the stope envelope and extensions returned:

  • 2.7m @ 192.9g/t,

  • 6.6m @ 37.5g/t,

  • 4.7m @ 41.4g/t,

  • 3.7m @ 48.2g/t,

  • 7.0m @ 25.2g/t

They also posted some nice extensions at the Admiral open pit in Leonora which will be included into an updated resource, and mine plan and drilling remains ongoing.

GMD plans to spend A$40-50m on exploration in FY2026, more than double the FY1025 spend of about 20 mill.

I own some shares but have NFI what they do (not uncommon) so was encouraged when respected Dimerix (ASX:DXB) CEO Nina Webster joined the board of Imagion Biosystems (ASX:IBX). From a commercial perspective under Websters leadership DXB has executed 4 regional licensing deals that will collectively provide $1.4 billion in upfront and milestone payments. DXB’s lead drug candidate DMX-200 is currently in a phase III trial for focal segmental glomerulosclerosis, a rare kidney disease. IBX continues to execute on its strategic objectives to develop and gain regulatory approval for its pipeline of MagSense molecular imaging technologies. MagSense agents will be the first imaging technology to use targeted magnetic nanoparticles to tag and detect cancers allowing for visualisation using MRI. She commented following her appointment “Imagion’s innovative approach to molecular imaging and potential early disease detection holds immense promise for improving patient outcomes,” “I’m excited to support the company’s mission to bring transformative diagnostic technologies to the clinic and help make a meaningful difference in people’s lives.” She said

Aurum Resources (ASX:AUE) has acquired a 35% interest in local Ivorian company Major Star Plus (MSP) and the right to earn up to 87% in three of MSP’s permit applications. MSP has two advanced gold exploration licence applications covering 213km2 of ground adjacent to AUE’s Boundiali and Napie Projects plus a third licence in Central Cote D’Ivoire over 255km2. The first 35% has been secured for $19,000 plus another $63,000 for administration and ongoing operations with the balance of the interest earned through exploration spend as follows:

  • 51% for US$1.5m within 24 months and US$250,000 AUE shares on 250,000 ounce resource.

  • 80% for US$3m within 48 months and a swag of shares based on resources.

  • 90% on completion of PFS and further tranche of shares

The acquisition strategically enhances AUE’s tenure and lies adjacent to the existing Boundiali resource of 2.41m ounces at around a gram while the company has $30m in cash, $17.5m in Montage Gold (TSX.MAU) shares and owns their rigs of which 10 are currently drilling.

Who’s shaking the tin…

  • Dateline Resources (ASX:DTR) - $25m at 21.5 cents

  • Golden State Mining (ASX:GSM) - $2m at $0.008 (plus 1:1 option)

  • iTech Minerals (ASX:ITM) - $1.5m at 5 cents

  • Black Rock Mining (ASX:BKT) - $10m at 2.1 cents (plus 1:1 option)

  • EQ Resources (ASX:EQR) - $22.5m at 3.2 cents

  • FMR Resources (ASX:FMR) - $3m at 36 cents

  • Verity Resources (ASX:VRL) - $3m at 2.4 cents (plus 1:3 option)

  • Peregrine Gold (ASX:PGD) - $3m at 22 cents (plus 1:2 option)

  • Black Canyon (ASX:BCA) – $10m at 42 cents

  • PolarX (ASX:PXX) - $5m at 1.5 cents

  • Lotus Resources (ASX:LOT) - $65m at 19 cents

  • Argent Minerals (ASX:ARD) – $4.85m at 2.1 cents

  • Cavalier Resources (ASX:CVR) - $2.1m at 23 cents

  • Coda Minerals (ASX:COD) - $6.25m at 10 cents

A meeting with....

Matt Yates (NE Chairman) and Nick Castleden (MD) of Solstice Minerals Ltd (ASX:SLS)

It’s always good to catch up with genuine, non spivy mining executives that have a passion for their craft and who have delivered excellent outcomes for shareholders in their past working lives. Matt was previously MD of OreCorp (ORR) which Perseus Mining (PRU) acquired for $280m a few years ago whilst Nick was MD of Apollo Consolidated (AOP) that Ramelius Resources (RMS) acquired about 3 years ago. SLS was spun out of ORR in May’2022 after raising $12m plus $5m from ORR to give a $20m mkt capitalisation with $17m in cash. The idea behind raising a decent chunk was to have enough $$ for at least 2-3 yrs to explore and hopefully find the big one!! Its key project was the Hobbs project which it drilled out, defined a resource (177koz), and sold to NST for $12.5m – an excellent deal. Its attention then turned to the Edjudina Range and Cosmo area for some genuine early-stage exploration on promising structural targets. After working up some targets they have had some success at Bluetooth with some nice near surface oxide mineralisation – intersections such as 32m @ 1.68 g/t Au, 29m @ 1.58 g/t Au with a bit of strike and potential of say +100koz. Further south is the Statesman Well project with intersections of 8m @ 7.94 g/t and 12m @ 1.44 g/t Au. Work is progressing here and at Edjudina Range which has a 1km mineralised trend beneath some 20m of cover. Then in Feb’25, SLS acquired the Nanadie Copper-Gold project from Cyprium Metals (CYM) for total consideration $1m cash on completion, 3m SLS shares and another 3m SLS shares if a resource of >250kt of contained Cu is found within 4 years. It has a current resource of 162kt of Cu at a grade of 0.4% Cu and a modest Au credit at 0.1 g/t Au. What attracted the SLS team was the real potential to grow this resource as the boundaries of mineralisation have yet to be found. In addition, there is a multitude of higher-grade zones including 107.8m @ 0.91% Cu and 0.24 g/t Au from 80m, 76m @ 0.85% Cu and 0.39 g/t Au and 122m @ 0.61% Cu and 0.15 g/t Au. Drilling is slated to begin in Q3 this year and the target to double the current resource looks like a reasonable chance. The good thing about this teams is you know they have done the work and are very tight with cash they have. So, a market capitalisation of $33m with cash of $15m gives an EV of $18m which on any exploration success could see this rip on either the gold or copper or ideally both!!!

Harriet Meagan