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7 Aluminum Stocks to Buy as Price Hits Decade High

Aluminum is one of the most abundant metals on Earth. It’s also incredibly useful, with applications across industries including aerospace, shipping,…

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This article was originally published by Investor Place

Aluminum is one of the most abundant metals on Earth. It’s also incredibly useful, with applications across industries including aerospace, shipping, beverage packaging and construction, to name a few. Of course, the pandemic initially harmed aluminum stocks, sending prices to lows in May of 2020 as sales slowed. But they have since rebounded, recently hitting 10-year highs

The problem now is that end-users in Europe and North America can’t get their hands on enough supply. Chinese imports of aluminum increased when the nation switched from being a net exporter to a net importer. 

The move was initially one of opportunity. China sought to bolster its stockpiles of the metal on slumping commodity prices. But many believe China will continue to import for the foreseeable future. It could invest in smelting in other nearby Asian countries in an effort to limit carbon emissions. As a result, prices for the commodity could remain elevated. 

As such, companies that utilize aluminum have seen costs rise. According to the Wall Street Journal, Monster Beverage (NASDAQ:MNST) CEO Hilton Schlosberg characterized the price shifts as unprecedented, noting: “I’ve been in this business for a long time…and I’ve never seen aluminum where it’s at right now.”

Producers, though, are seeing boon times with these high commodity prices. What’s more, continued logistical issues like congested port entry, shipping container shortages and stockpiled supplies will keep prices high. 

That means that investing in aluminum stocks is a smart move today. So, let’s look at some of the industry’s producers. 

  • Alcoa (NYSE:AA)  
  • Kaiser Aluminum (NASDAQ:KALU)
  • Vedanta (NYSE:VEDL)
  • Aluminum Corporation of China (NYSE:ACH)
  • Constellium (NYSE:CSTM)
  • Century Aluminum (NASDAQ:CENX)
  • Arconic (NYSE:ARNC

 

Aluminum Stocks to Buy: Alcoa (AA)

alcola stockSource: Daniel J. Macy / Shutterstock.com

Alcoa may well be the most recognizable name among aluminum stocks on this list. This Pittsburgh, Pennsylvania company was founded in the late 1800s and, if you’ve ever spent time at a building site, you’ve probably seen its products. 

The good news for investors here is this: right now, high aluminum prices are filtering through to Alcoa’s bottom line and its share price.

When the company released its second-quarter earnings on Jul. 15, the news was good. In fact, it was a stark turnaround from Q2 a year earlier. Over that period, revenues increased by nearly 32%, reaching $2.83 billion. In Q2 2020, Alcoa had suffered a $197 million net loss when aluminum prices tanked. A year later, though, and the company posted $309 million in net income on rising prices. 

AA stock and Alcoa split from its parent — Arconic, also on this list — back in 2016. This most recent quarter was the company’s strongest since the split. Alcoa is using the boon to reduce debt and is specifically paying down $500 million in 7.00% notes, which are due in 2026. The company had also already directed $750 million toward early redemption of 6.75% senior notes, as specified in its Q2 earnings release. 

 

Kaiser Aluminum (KALU)

stack of aluminum framing construction materialSource: shutterstock.com/happylemon

Next up on this list is Kaiser Aluminum, a company that manufactures and sells semi-fabricated specialty aluminum. Its products have applications in aerospace, engineering, automotive and other specialty industrial sectors. 

For starters, I should provide a note of caution here: when it comes to aluminum stocks, aluminum producers themselves will be in the best position due to the price spikes. Kaiser Aluminum is an end-application firm which uses the metal in its products. Sure, it could see a bump in its business, but probably a more muted one than producers. 

This company has seen a dramatic increase in shipments and sales over the second quarter as well as the first half of 2021. Sales hit $741 million in Q2 2021, up some 168% from $276 million a year prior. Similarly, over that same period, net income increased by 166%, rising from $6 million to $16 million in Q2 2021. Finally, for the first half of the year, sales increased by 65%. All told, Kaiser is in a much better position than it was a year ago. 

There is some trepidation regarding KALU stock, but for investors who want to look beyond pure production, this one is worthwhile. Prices should continue to rise as supply-chain issues still favor the company for the foreseeable future. 

 

Aluminum Stocks to Buy: Vedanta (VEDL)

close-up of a small rock of aluminum oreSource: shutterstock.com/RHJPhtotoandilustration

Vedanta is an Indian company that engages in multiple areas of the commodities business. For example, the company operates across minerals, oil and gas and also processes both copper and iron ore in addition to aluminum. 

Of course, the reason to consider this pick of aluminum stocks now relates to sky-high aluminum prices. The company recorded its highest-ever quarterly aluminum production in its most recent earnings report on Jul. 26. 

For the period, sales increased 79% on a year-over-year (YOY) basis. Meanwhile, EBITDA gains outpaced increased sales, reaching 150% growth over the same period. 

I see a few reasons for optimism regarding VEDL stock moving forward.

For one, it has been established that China will likely continue to be a net importer of aluminum in the near term — and perhaps longer. Given India’s proximity to China, there is potential for increased revenues. (Yes, I am aware that their political relationship is strained, but the opportunity remains.) 

Further, Vedanta maintains operations that span multiple commodity classes. Those commodities’ respective supply chains may also be facing similar issues to aluminum. That could mean that, for example, something like zinc could pop. 

So, VEDL stock isn’t just an interesting play on aluminum. It’s also a general way to play commodities.

 

Aluminum Corporation of China (ACH)

large stack of aluminum metal cylindersSource: shutterstock.com/Ratchat

Let’s begin our discussion of the Aluminum Corporation of China with raw returns. After all, at the end of the day, that’s what we’re all interested in as investors. And when it comes to ACH stock, the news is good on that front; the stock has more than doubled in price since the beginning of 2021, rising from the $9 level to around $20 per share today. 

If there is one entry on this list of aluminum stocks to pay the most attention to, it’s ACH. Why? The reason primarily relates to the idea that China-based companies are stockpiling and becoming sellers following their strategic moves in 2020. Moreover, this company’s focus on procurement makes it a central player in the aluminum narrative in China. 

Aluminum Corporation of China is a raw materials and commodity producer. However, it wouldn’t be surprising to see it focus more on an import-export role, given that smelting may move to nearby Asian countries on emissions regulations. A few lines from one company filing summarizes ACH well:

“We are a leading enterprise in the non-ferrous metal industry in China. In terms of comprehensive scale, we ranked among the top enterprises in the global aluminum industry. We have benefited from the development of the PRC aluminum market, the world’s largest aluminum market. We refine bauxite into alumina, which is then smelted into primary aluminum.”

There is clear country risk here, given this name’s location. But I get the sense that ACH stock can run a lot higher — and that there is an information lag upon which to capitalize. 

 

Aluminum Stocks to Buy: Constellium (CSTM)

close-up of aluminum cans in assembly lineSource: shutterstock.com/MOLPIX

Next up on this list of aluminum stocks is Constellium, a French specialty rolled aluminum manufacturer that serves the aerospace, packaging and automotive end markets. 

Investors interested in momentum stocks will likely gravitate toward CSTM stock. That’s because it has increased by 47% in price year-to-date (YTD). That steady upward momentum has brought prices from below $14 to above $20. What’s more, this stock’s prices should continue to march upward, if analyst consensus bears out. According to Tipranks, four analysts with coverage give CSTM stock an average target price of $23.75. All four rate it a buy. 

Constellium shipped 406,000 metric tons of aluminum in Q2 2021, up 31% from a year earlier. That increase led to 1.5 billion euros ($1.77 billion) in revenues, representing a 47% increase YOY. And according to CEO Jean-Marc Germain, that momentum isn’t slowing:

“I look to the second half of the year with confidence. Demand from our major end markets, with the exception of aerospace, is at or above pre-pandemic levels. We expect these favorable conditions to continue at least through the remainder of 2021. Based on our current outlook, we are raising our guidance […]”

Constellium now expects adjusted EBITDA of 545 million euros to 560 million euros ($644.1 million to $661.8 million). It also sees free cash flow of at least 125 million euros ($147.7 million) for the year.

 

Century Aluminum (CENX)

a roll of aluminum in a factorySource: Shutterstock

Century Aluminum should appeal to investors seeking inexpensive aluminum stocks that cans still capitalize on the current boom. 

On the inexpensive front, there’s quite a bit of good news here: share prices are under $13 currently. That’s much cheaper than some of Century’s larger competitors. Beyond that, CENX stock also carries an average target price of $18, based on one analyst on Tipranks. That implies that there’s more than 40% upside. 

Century Aluminum released its financial results back in early August. The numbers were strong. For example, the company realized per ton prices of $2,155 for aluminum during the period, up $215 from a quarter earlier. Premiums increased as well, owing to the inaccessibility of the metal. That demand spike meant the company commanded a $490 premium in the U.S. Midwest and a $175 premium in Europe on a per ton basis. Altogether, although shipments decreased by a modest 2.45% between Q1 and Q2, sales increased by roughly 19%. 

This company is expanding its operations and CEO Jesse Gary is highly optimistic moving forward, noting strong growth: “This has been especially true in the U.S. and Europe, where we have seen inventories already return to pre-pandemic levels and demand for value-added products, including low-carbon products, near all-time highs.”

 

Aluminum Stocks to Buy: Arconic (ARNC) 

Gray Arconic (ARNC) sign with logo at daytimeSource: Jonathan Weiss

Last up on this list of aluminum stocks is Arconic, another aluminum producer that’s capitalizing on current demand. The company has rebounded from the depths of last year’s low prices very nicely. In fact, Q2 sales hit $1.8 billion, up 52% from the second quarter of 2020. 

In Q2 of 2020, Arconic realized a net loss of $96 million. That loss swelled to $427 million in Q2 2021. Of course, this sounds bad on the face of it. Why should the company’s losses continue to mount if aluminum prices are at a 10-year high? Well, the answer lies in pension obligations and funding. Arconic directed $423 million toward “the partial annuitization of U.S. pension obligations completed in quarter.”

Overall, Arconic reported Q2 adjusted EBITDA of $187 million. The company also updated its guidance for full-year revenue to between $7.3 billion and $7.6 billion, up from $7.1 billion to $7.4 billion. All in all, you could pick worse than ARNC stock.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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4 Top Stock Trades for Monday: PLTR, X, DASH, RDFN

Stocks grinded lower during a “quad witch” expiration day and as we’re more than halfway through September. As we turn our attention to next week,…

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Stocks grinded lower during a “quad witch” expiration day and as we’re more than halfway through September. As we turn our attention to next week, let’s look at a few top stock trades.

Top Stock Trades for Monday No. 1: Palantir (PLTR)


Click to Enlarge
Source: Chart courtesy of TrendSpider

I have been bullish on Palantir (NYSE:PLTR), as the stock slowly but surely grinds its way higher. But slowly sure has been a big part of that equation.

The stock reclaimed all of its major moving averages, but continued to struggle with $25.50. On the plus side, the 200-day moving average was acting as support, as was the $25 level.

Surprisingly, the stock has found some recent bullish momentum, despite the struggles of the overall market. This is known as “relative strength.”

In any regard, let’s see if the stock can now hold the $27.50 level as support, as it broke out over this level on Thursday. On the upside, keep $31 on your radar, which is roughly where the gap-fill comes into play from February.

Top Stock Trades for Monday No. 2: U.S. Steel (X)

Top stock trades for X
Click to Enlarge
Source: Chart courtesy of TrendSpider

U.S. Steel (NYSE:X) was looking so good, but then the stock failed with the $30 level and rolled over.

Shares were trading in a very orderly downward channel, but failed to hold the 10-day, 21-day and 50-day moving averages. It resulted in a break lower out of the channel.

We now have the stock coming into the 200-day and 10-month moving averages. I would expect this area to provide a bounce, potentially back toward the $24 to $25 area. Any higher and the stock should run back into some of its short-term moving averages.

On the downside, though, I expect $21 to act as support if the two nearby moving averages fail.

Top Stock Trades for Monday No. 3: DoorDash (DASH)

Top stock trades for DASH
Click to Enlarge
Source: Chart courtesy of TrendSpider

DoorDash (NYSE:DASH) keeps powering its way higher, as it logged its fourth-straight weekly gain and eighth daily gain in the last ten sessions.

On Thursday, shares gapped higher into resistance and the 78.6% retracement. As a result, it backed off the session highs, but didn’t exactly roll over. On Friday, it tried to push through these levels again.

If the stock can clear this week’s high at $227.40 and hold above it, we could be looking at a run back toward $250 and the high at $256.

However, below the two-day low, and we may see DASH stock dip back toward $210 and the 10-day moving average. For what it’s worth, this wouldn’t be unhealthy price action by any means.

Top Trades for Monday No. 4: Redfin (RDFN)

Top stock trades for RDFN
Click to Enlarge
Source: Chart courtesy of TrendSpider

We’re rounding off the week with Redfin (NASDAQ:RDFN), which has seen a series of lower highs over the past few months.

Downtrend resistance (purple line) has been squeezing this name lower, but bulls are trying to make a stand now.

Shares have put in a higher low, while we saw the stock reclaim the 10-day and 21-day moving averages on Friday despite a weak overall market. However, this one isn’t out of the woods quite yet.

If RDFN stock loses the 10-day and 21-day moving averages, it’s still technically okay as long as it holds trend support (although it’s better if it doesn’t lose these measures to begin with). However, below $46.70 and this one could roll back over.

On the upside, though, we could see a push back to the 50-day moving average. Above that puts downtrend resistance on the table. Should RDFN stock clear these marks, then $60 is the spot to watch.

On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

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Altiplano Metals Obtains Exploitation Permit at Maria Luisa

Altiplano Metals Inc. (TSXV:APN) is proud to announce that the mining application has been approved by the Chilean Mining Authority (Servicio Nacional…

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Altiplano Metals Inc. (TSXV:APN) is proud to announce that the mining application has been approved by the Chilean Mining Authority (Servicio Nacional de Geologia y Mineria) for the historic Maria Luisa Gold-Copper Mine . The permit gives Altiplano permission to commence underground exploration and development of the mine. 

The project, known as the “Maria Luisa Mine,” is located in the Atacama region, about 100 km south of La Serena, Incahuasi, Chile. Altiplano (TSXV:APN)plans to establish an underground waste system designed to reach mineralized veins through multiple access points at various levels with this permit.

Figure 1: Plan Map of Maria Luisa

Design and Development

The design process involves access to the northwest and southeast mineralized Au and Cu veins by intersecting four separate levels designed to create 8 mining areas (Figure 2). The initial decay system will penetrate into the southwest corner of the property and advance 350 meters southeast to intersect mineralized zones within historical mining areas. 

The development work will be led by surface and underground drilling programs to support future grade control. The Company intends to mine approximately 3,000 tonnes of mineralized gold and copper material at this stage, with future opportunities to expand to 5,000 tonnes.

Construction is expected to take approximately 6 months and Phase 1 funding is estimated at approximately $600,000. During the construction and development phases, the company will have the opportunity to extract mineralized bulk samples from Au and Cu, which will be sold to a nearby processing plant to offset the development costs before full capital improvements. The Company is in the process of completing the review process to select a contracted miner to build and/or develop the project. The review process is expected to be completed in the next few weeks and work will begin.

Figure 2: Underground Mine Model. Source: Altiplano Metals

Altiplano (TSXV:APN) is a Canadian mining company focusing on the acquisition and development of short-term cash flow assets and exploration projects of considerable size. The aim of Companys is to grow into a medium-sized producer of copper, gold and silver, with an immediate plan to generate profits from three cash flow projects by 2021.

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

The post Altiplano Metals Obtains Exploitation Permit at Maria Luisa appeared first on MiningFeeds.

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Renforth’s Surimeau invites comparison with Finnish polymetallic mining district

2021.09.17
Renforth Resources (CSE:RFR, OTC:RFHRF, WKN:A2H9TN) continues to advance its Surimeau polymetallic project in Quebec, adjacent to the Canadian…

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2021.09.17

Renforth Resources (CSE:RFR, OTC:RFHRF, WKN:A2H9TN) continues to advance its Surimeau polymetallic project in Quebec, adjacent to the Canadian Malartic mine, the largest gold mine in Canada, and about 20 km south of Agnico Eagle’s LaRonde mine.

Location map of the Surimeau property. Notice the Canadian Malartic mine to the east and the LaRonde mine to the north.

According to Renforth, information gleaned from drilling and trenching the Victoria West target, along with surface sampling, create an area of interest that includes about 5 kilometers of strike on the western end of a 20-kilometer magnetic anomaly.

The company interprets this anomaly to be a nickel-bearing ultramafic sequence unit, which occurs alongside, and is intermingled with, VMS-style copper-zinc mineralization.

In fact, Renforth considers the style of mineralization to be an “Outokumpu-like” occurrence, referring to a district in eastern Finland known for several unconventional sulfide deposits with economic grades of copper, zinc, nickel, cobalt, silver and gold. About 50 million tonnes of ore averaging 2.8% Cu, 1% Zn and 0.2% Co, along with traces of Ni and Au, were mined from three deposits between 1913 and 1988.

Renforth is fortunate enough to have a nickel sulfide deposit at surface whose secrets it is just starting to reveal to the market.

Just how large this nickel sulfide system is, remains to be seen.

RFR is clearly hoping to find nickel sulphides that when refined would be appropriate for lithium-ion batteries. This would make the project and/ or the company attractive to potential acquirers.

Geology

The Surimeau project occurs within a unique geological setting, where two types of mineralization, formed from completely different geological processes, are “mashed together” in one distinct orebody. Renforth’s Surimeau project is best described as a magmatic nickel sulfide deposit, juxtaposed with a copper-zinc volcanogenic massive sulfide deposit.

The first type of deposit, which may contain nickel, cobalt and platinum group elements (PGEs), is associated with ultramafic rocks. The second type, volcanogenic massive sulfides (VMS), were formed on or near the ocean floor during ancient underwater volcanic activity.

VMS deposits are sought after for mining because they usually contain a mix of base metals such as zinc, lead, copper, and sometimes precious metals including silver and gold. The minerals usually form massive sulfide mounds or layers, making them relatively easy to extract.

At Surimeau, the results from current (2020-21) and historical exploration indicate there is a confluence of magmatic nickel, copper and possibly PGEs (Renforth is still assaying results from a recent drill program and when those are available, the mineralogy will become clearer).

To fully understand what Renforth has at Surimeau, it is helpful to describe the two deposit types and identify analogues.

Ultramafic nickel sulfide deposits

Ultramafic rocks are igneous rocks with a low silica content, rich in minerals such as hypersthene, augite and olivine, formed from very high temperature (~1400oC) melts.

For ultramafic rocks to contain sulfide-hosted (i.e. recoverable) nickel, they must be adulterated by sulfur. When the rocks crystallize, usually the main mineral to form is olivine. If sulfur is introduced into the melt before olivine forms, liquidized copper and nickel sulfide melt separates from the silicate melt like oil and water, with the sulfide liquid sinking to the base and forming Ni-Cu rich sulfide accumulations.

A classic example of an ultramafic nickel sulfide deposit is the Kambalda District of Western Australia. Occupying 400 square kilometers, the Kambalda nickel field is underlain by two sequences of ultramic, mafic, felsic volcanic and sedimentary rock. The ores contain various proportions of massive, matrix and disseminated sulfides.

The key setting is the basal contact between the ultramafic rock hosting nickel mineralization and the underlying volcanic and sedimentary strata. Geologists are looking for the ancient ultramafic lava channels that flowed over the basalt surface. It is at the base of these channels where economic nickel sulfide mineralization can potentially accumulate.

Much of the nickel produced from the Kambalda District came from a few very large (>100,000 tonnes) nickel mines, all of which are located around the Kambalda Dome, where nickel has been mined from seven ore systems including Otter Juan, the largest producer in the district.

A Canadian example of nickel-bearing ultramafic orebodies that RFR thinks is similar to what Renforth has at Surimeau are deposits in the Thompson Nickel Belt of northern Manitoba.

The Thompson nickel deposits occur over a 130-km north-northeast trending interval, 660 km north of Winnipeg.

The Thompson Nickel Belt hosts over 18 nickel deposits and is estimated to have produced over 5 billion pounds of nickel since 1959. The nickel deposits are within the Opswagan Group, a sulfide-rich package of rocks infused by ultramafic intrusions. The nickel deposits are located within the ultramafic sills or in the metasediments close to the sills (a sill is a flat intrusion of igneous rock, that forms between pre-existing rock layers).

VMS deposits

Between the Mid to late Archean and the Holocene — the current geological period — volcanogenic massive sulfides (VMS) formed and are forming today on the ocean floor during underwater volcanic activity. Where the Earth’s crust was thin, magma boiled up, forming volcanoes which have associated very hot (>380oC) seawater plumes (“black smokers”) that contain zinc, copper, and some lead, silver and gold that spewed into the ocean.

Minerals precipitate from “black smokers” forming Zn-Cu-Fe sulfide precipitate as mounds on or near the seabed. Eventually with the movement of tectonic plates, these mineral deposits ended up on land that was once underwater. VMS deposits usually contain abundant iron sulfides (pyrite or pyrrhotite) and lesser amounts of chalcopyrite, the copper mineral, and sphalerite, the zinc mineral. They are major sources of zinc, copper and lead, with gold and silver by-products.

We can see where the term “volcanogenic” come from, since the deposits are formed by underwater volcanic processes. The “massive sulfides” refers to the large accumulations of sulfide minerals that form on or below the ocean floor.  

VMS deposits contain mostly base metals and may have lesser amounts of precious metals such as gold, silver and platinum. They are often major sources of zinc, copper and lead, with gold and silver by-products. Cobalt, tin, barium, sulfur, selenium, manganese, cadmium, indium, bismuth, tellurium, gallium and germanium may also be found in VMS deposits.

VMS deposits consist of a massive or semi-massive stratabound sulfide lens. Most are underlain by a sulfide-silicate stockwork vein system. Individual massive sulfide lenses can be over 100 meters thick, tens of meters wide, and hundreds of meters in strike length. VMS deposits range from 200,000 tonnes to more than 150 million tonnes and most often occur in clusters.

VMS deposits are estimated to have supplied over 5 billion tonnes of sulfide ore. They currently account for 22% of the world’s zinc production, 9.7% of the lead produced, 6% of copper, 8.7% of silver and 2.2% of gold.

An estimated 900 VMS deposits are found worldwide, averaging about 17 million tonnes each. As noted above they are still forming, mostly along extensional ridges where plate movements form cracks in the Earth’s crust — allowing a conduit for mineralizing fluid to travel up as hot liquids and be deposited, through billowing white and black clouds, onto the sea floor.

VMS deposits in Canada include Flin Flon, Bathurst, Snow Lake and Noranda. The Kidd Creek mine in Ontario near Timmins, the deepest base-metal mine in the world, is a VMS deposit that has been in production since 1966.

VMS deposits in Canada include Flin Flon, Bathurst, Snow Lake and Noranda. The Kidd mine in Quebec, the deepest base-metal mine in the world, is a VMS deposit that has been in production since 1966.

VMS deposits have long been recognized, by both majors and juniors, as potential elephant country — and because of their polymetallic content these types of deposits continue to be one of the most desirable because of the security offered against fluctuating prices of different metals.

Canadian VMS mines have deposits ranging from five million tonnes to 20 million tonnes, although the Bathurst No. 12 mine dwarfs them all at over 100 million tonnes.

Twenty economically viable VMS deposits were discovered in the Noranda District over 85 years, including Noranda’s Horne mine in northern Quebec which produced 11.6 million ounces of gold and 2.5 billion pounds of copper from 1927 to 1976, and Agnico Eagle’s flagship LaRonde mine just north of the Surimeau discovery.

Located 20 km north of Surimeau, LaRonde is the Canadian company’s oldest mine, with production starting in 1988. Its 2.2-km Penna shaft is the deepest single-lift shaft in the Western Hemisphere. The 7,000-tonnes per day mine and processing facility has produced over 6 million ounces of gold plus by-products, and still has 3 million ounces of gold in proven and probable mineral reserves (15.2 million tonnes grading 6.12 grams gold per tonne) as of December 31, 2020.

Agnico-Eagle describes LaRonde as a gold-rich volcanogenic massive sulphide deposit with significant silver, zinc and copper credits. LaRonde lenses were formed mainly by sulphide precipitation from hydrothermal fluids on the seafloor and by replacement below lenses.

Another appropriate Canadian analogue to Surimeau’s VMS mineralization is the Ring of Fire. The 180-km-long greenstone belt, running under the James Bay Lowlands of northwestern Ontario, hit the radar of mining companies and explorers in the early 2000s, when copper-zinc rich VMS mineralization was discovered at McFaulds Lake. Since then, exploration companies have unearthed resources and reserves of chromite, magmatic nickel-copper-PGEs, copper-zinc VMS, and well over 70 occurrences of multiple commodities.

One of those explorers, Toronto-based Noront Resources, currently finds itself at the center of a bidding war between two rival Australian mining heavyweights, Wyloo Metals and BHP, over Noront’s Eagle’s Nest project in the Ring of Fire.

Noront describes Eagle’s Nest as a magmatic Ni-Cu-PGE sulfide deposit hosted within a sub-vertically plunging bladed dyke-like body composed principally of peridotite. The Eagle’s Nest deposit is associated with an ultramafic sill complex situated at the contact between a large tonalite body to the northwest, and a volcanic sequence to the southeast. At over 15 km in strike length and up to 1.5 km in thickness, this sill complex is believed to consist of at least two individual sills known as the Double Eagle Intrusive Complex and the Black Thor Intrusive Complex. Both contain an ultramafic keel and/or feeder dyke with attendant Ni-Cu-PGE mineralization, overlain by crudely layered accumulations of dunite, peridotite and chromitite and capped by pyroxenite and gabbro.

Claimed by Noront to be the largest high-grade nickel discovery in Canada since Voisey’s Bay, Wyloo and BHP are each hoping to grab control of the advanced-stage nickel project, which is currently in the permitting phase.

Wyloo, a 37% shareholder of Noront, in May announced it intended to take over Noront for $133 million. However two months later, BHP surfaced with a $325 million offer.

The bidding war shows the degree of interest by mining majors in sulfide nickel deposits that can be converted into battery-grade nickel used to store energy in lithium-ion batteries.

Outokumpu District

As mentioned, Renforth’s Surimeau project is best described as a sulfide nickel magmatic sulfide deposit, juxtaposed with a copper-zinc massive sulfide deposit. The nickel-containing ultramafic orebody has been fused with the VMS deposit alongside it, giving it a unique geological flavor. 

This style of mineralization is rare, however, it is known to occur in the Outokumpu District of eastern Finland. Outokumpu contains sulfide deposits with economic grades of copper, zinc, cobalt, nickel, silver and gold. Mining extended from 1913 to 1988 and involved exploitation of three major deposits — Outokumpu, Vuonos and Luikonlahti — with total production of around 50 million tonnes of ore.

Geologists believe that Outokompu’s unconventional deposit type first originated through deposition of copper-rich ore on the sea floor around 1,950 Ma. Some 40 Ma later, disseminated nickel sulfides formed through chemical interaction between massifs (blocks of rock) and adjacent black schists.

A 2007 geological paper states that mixing of these two “end-member” sulphides, i.e., the primary Cu-rich proto-ore and the secondary Ni sulphide disseminations, resulted in the uncommon metal combination of the Outokumpu-type sulphides. Late tectonic solid-state remobilisation, related to the duplexing of the ore by isoclinal folding, upgraded the sulphides into economic deposits.

As for just how closely Renforth’s Surimeau deposit resembles size and qualities of the Outokumpu District in Finland, it is too early to say, however the scale of the district is encouraging (up to 50Mt of ore has been mined in Finland) and we also know that Outokumpu is enriched with palladium, a high-value metal currently worth more than an ounce of gold (current spot Pd = $1,964/oz) – Renforth has yet to assay for PGE’s.

Moreover, the Finnish deposit contains a confluence of elements that yields a large suite of base metals. If Renforth can delineate a similar mix, there is a good chance they can be mined as a single unit like at Outokumpu, and processed into separate concentrates.

Geological map of the Outokompu District in Finland.

2021 exploration

The 260 km2 Surimeau property hosts several target areas for gold and base metals (nickel, copper and zinc) located south of the Cadillac Break, a major regional gold structure in Quebec.

In July, Renforth completed a four-hole drill program at the 5-km-long nickel, copper and zinc mineralized Victoria West target.

Victoria West is one of six polymetallic target areas on the Surimeau property historically documented as hosting mineralization.

It is located at the western end (5 km) of a 20-km-long magnetic anomaly that hosts proven mineralization at either end, with the Colony target at its eastern end.

The first drilling at Surimeau by Renforth occurred in October 2020 with 2.5 short holes completed. A total of 15 holes for 3,456m of drilling were completed during the 2021 program, drilling off 2.2 km of strike within the approximately 5 km-long Victoria West target. Another four holes totaling about 1,000m were drilled this summer.

The company plans to return to the field this fall to conduct surface stripping, to expose on surface a portion of the Victoria West mineralized system. Renforth also intends to fly a detailed magnetic survey of Victoria West using drones. Assays are pending for the bulk of the 2021 drilling at Surimeau.

Conclusion

Surimeau shows some promise of becoming a district-scale mining project, given its unique geological similarities to the Outokumpu District in Finland, as well as being analogous to a number of current and past-producing Canadian VMS deposits, some of which, like Kidd and LaRonde, are still in production decades after mining started.

Renforth is currently focused on the Victoria West target, but this target area is only 5 km of the 20-km magnetic anomaly. The strike is long and from what we know so far, it has a decent width, pinching and swelling on surface from between 80 and 450m.

You would not expect continuous mineralization over the whole 20 km but the fact remains Surimeau is a confluence of elements that gives you a large suite of base metals. These base metals could be synchronously mined as a single unit as they do at Outokumpu, producing concentrates for the various elements – nickel, zinc, copper, with potential PGE’s (from the nickel) – and smelting them separately.

Without copper the current global drive to electrify and decarbonize our transportation system does not happen. Nickel is used in lithium-ion batteries for electric vehicles.

Two of the most recent drill holes undercut holes drilled earlier in 2021. Visibly coarse pentlandite, and better chalcolpyrite, would seem to indicate to your author things are getting better as they go deeper, hole 2 ended in mineralization at 145 meters indicating some depth to the deposit.

Surimeau is a sulfide nickel magmatic sulfide deposit, juxtaposed with a copper-zinc volcanogenic massive sulfide deposit. These deposit types are effectively squeezed, or squashed together, and that’s what they have been mining at Outokumpu for over 50 years.

How big, how rich is Renforth’s Surimeau? Only time will tell, but the possibility of a Canadian junior having an Outokumpu type deposit is an exciting possibility and it’s why I own shares.

Renforth Resources
CSE:RFR, OTC:RFHRF, WKN:A2H9TN
Cdn$0.07 2021.09.16
Shares Outstanding 251m
Market cap Cdn$18.3m
RFR website

Richard (Rick) Mills
aheadoftheherd.com
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