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Explorer Plans More Drilling For 2021: Epithermal Gold Targets in Lineup

Source: Streetwise Reports   09/07/2021

Various targets "continue to emerge in the southwestern portion of Aurania Resources’ Lost Cities–Cutucu…

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This article was originally published by The Gold Report

Source: Streetwise Reports   09/07/2021

Various targets "continue to emerge in the southwestern portion of Aurania Resources' Lost Cities–Cutucu project," a Noble Capital Markets report noted.

In a Sept. 9 research note, Noble Capital Markets analyst Mark Reichman provided an update on current and imminent 2021 drilling at Aurania Resources Ltd. (ARU:TSX.V; AUIAF:OTCQB) Lost Cities–Cutucu project in Ecuador.

"Aurania's exploration program is providing an abundance of drilling targets for a variety of metals and the potential to make multiple discoveries in its large concession package," wrote Reichman.

The analyst noted that Aurania is now drilling the seventh hole of a 10-hole program planned for the Tsenken N1 sediment-hosted copper-silver target; hole TSN1-007 is in progress.

As for the explorer's Tiria-Shimpia target, Aurania completed three holes there but is awaiting results of the third. It is expected to show what the first two holes did, which is multiple mineralized layers but lower-than-expected grades. The company is moving the drill rig to a different spot within Tiria-Shimpia, and once it is there, Aurania will start drilling, most likely sometime this month, September.

Later this year, Reichman wrote, Aurania will commence drilling the epithermal gold-silver systems at Lost Cities, including Latorre C, "while management prioritizes various targets that continue to emerge in the southwestern portion of the project area."

One of Aurania's high-priority drill targets is Tatasham, though drilling it will require building another drill camp. About 3 kilometers in diameter, Tatasham is the largest magnetic feature seen via the geophysical survey done in 2017.

"Management believes the cylindrical core is a [copper] porphyry and the adjacent conductive area is sulphide-rich," wrote Reichman.

Noble Capital has an Outperform rating and a $3.50 per share target price on Aurania, the shares of which are trading at about $1.98 per share.

Disclosures:

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Aurania Resources Ltd. Click here for important disclosures about sponsor fees. An affiliate of Streetwise Reports is conducting a digital media marketing campaign for this article on behalf of Aurania Resources Ltd. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Aurania Resources Ltd., a company mentioned in this article.

( Companies Mentioned: ARU:TSX.V; AUIAF:OTCQB, )

Base Metals

This ASX-listed iron ore developer is well placed to benefit from the shift to high grade ore

Special Report: All eyes have been on the price of iron ore in recent days as volatility in the iron … Read More
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All eyes have been on the price of iron ore in recent days as volatility in the iron ore price has had a big impact on markets.

But while that is where the focus is in the here and now, there remains a story bubbling under the surface about where iron ore is headed in the future.

Increasingly, iron ore experts believe grade will be an important factor for steel mills, as efforts to curb emissions and pollution from steelmaking take centre stage.

Take this comment for instance from Fastmarkets index manager Peter Hannah, who observes iron ore markets for one of the two major price-reporting agencies.

“To succeed in decarbonizing the global steelmaking industry there needs to be a greater recognition of how much the iron ore supply base needs to change,” he wrote recently.

“Vast volumes of existing production will need to be replaced by higher-grade supply, first to meaningfully reduce CO2 emissions from the prevailing BF/BOF (blast furnace) technology, and later to meet the demands of a DRI (direct reduced iron) sector at least an order of magnitude larger than it is today.”

The gap for discounts and premiums in iron ore have soared in recent years. Pic: Supplied

 

As Magnetite Mines (ASX:MGT) showed in a presentation released on Friday, it is one of a handful of iron ore hopefuls able to capitalise on this growing thematic.

Its Razorback mine in South Australia is now in the Definitive Feasibility Study stage leading to decision to mine, planning to start operations around the end of 2024. It would produce a 68% iron magnetite concentrate.

That is well above any commonly quoted indices like the 65% Brazilian index, which already generates an substantial premium compared to the commonly quoted benchmark 62% fines price.

While the 62% iron ore index – used by most of the Pilbara iron ore miners such as BHP –  was fetching US$108.67/t on Friday morning, 65% iron ore demanded US$134.60/t.

In the long run over the past decade the gap between discounted 58% iron ore, 62% product and premium product has trended wider and wider.

“Steelmakers need to adopt best practices that prioritise decarbonisation with existing assets. Some of these best practices include installation of energy efficient technology, optimisation of the blast furnace (BF) burden (e.g. with high- grade ore),” CRU Group says.

 

Razorback a logistical dream

While grade is one aspect of Razorback’s allure, it is not the only reason Magnetite Mines has been so keen to push ahead with a definitive feasibility study after releasing a successful PFS in July.

The mine, which has a resource of 4.2Bt of iron ore, stands to be a logistical dream. Located just 240km northeast of Adelaide, it has access to rail and high voltage powerlines that connect it to the Australian electricity grid.

That is significant from an ESG perspective as well because of South Australia’s high penetration of wind power and other renewables, which met around 60% of the State’s electricity needs last year.

Being in the vicinity of the town of Yunta, Razorback will have a 50km purpose built private all weather haul road and rail siding with access to an existing heavy freight network and iron ore port at Whyalla.

From a mining perspective it is also technically simple. Ore can be mined from surface, saving costs on pre-stripping with a low PFS strip ratio of 0.16:1 and the potential to improve grades with selective mining and or ore sorting.

Razorback is close to key infrastructure like power, rail and ports. Pic: Magnetite Mines

 

Low cash costs underpin long-life operation

Once built, the project is highly competitive.  As reported in Magnetite’s pre-feasibility study in July, the project is expected to generate cash when the 62% iron ore price is above  US$54/t (including the appropriate quality adjustment).  That would still be half the iron ore price on Friday, after the contraction seen in the benchmark 62% fines price in recent weeks.

At US$110/t, around the long-term average iron ore price over the past 10 years, Razorback would carry a post-tax NPV of $700 million and IRR of 20%, generating around $144 million a year in net cash flow after taxes and royalties.

At a production rate of 2.7Mtpa, the project would pay back its estimated $675m capex in 4.6 years, leaving two decades of reserves still to go.

If we were to see another bull run to US$150/t – and remember, at a 68% grade, Razorback’s concentrate would earn a premium on that – that would increase to an NPV of $1.67 billion, with an IRR of 33% and average net cashflow of $241m, something that would see Magnetite pay back its initial investment in just over 2 years.

Key results from the Razorback PFS. Pic: Magnetite Mines

 

DFS activities under way with appointment

Magnetite Mines this week appointed engineering and professional services company GHD to deliver its critical power supply and non-process infrastructure elements of the Razorback DFS, effectively kickstarting the process.

It will build on the power supply option selected from the DFS of installing a 132KV transmission line connecting to the national grid at Robertstown.

“GHD’s appointment is an important milestone for Magnetite Mines as it represents the commencement of the DFS and continues our commitment to delivering a well planned and high quality study for our shareholders,” Magnetite Mines executive chairman Peter Schubert said last week.

The DFS well underway and currently expected to be completed next year, with a decision to mine looking to be at the end of next year.  Project financing and permitting will take place in parallel.  The current schedule sees Razorback in production around the end of 2024, well placed to benefit from a stronger ESG focus in the mining and steel industries.

On the approval side of the ledger, work is well underway. South Australia is a predictable, stable and low risk mining jurisdiction and there is regular consultation between Magnetite and the State Government.

Baseline environmental studies are also well progressed, while the important consultation process with the people of the Ngadjuri Nation, the region’s traditional owners has started, reflecting the company’s acknowledgement of and respect for the traditional owners of the country.

Magnetite Mines is on track with its proposed development timeline. Pic: Magnetite Mines

 

Braemar district fertile for further development

While Magnetite has unlocked an impressive 5.7bt of resources across its Razorback (4.2Bt) and Muster Dam (1.5Bt) projects, that does not tell the full story of just how fertile the Braemar region is for iron ore discoveries and developments.

Of that bounty just 473Mt is included in the Razorback PFS reserve.

That factors in just 8% of Magnetite’s resource, 4% of the Braemar region’s kilometres long strike length and 0.3% of Magnetite’s tenured area.

That suggests Magnetite should have room to grow and expand beyond its initial 25-year project should the numbers stack up.

Its long life and plentiful resource and reserve base should be attractive to lenders, with Magnetite targeting early engagement to allow a collaborative approach to risk mitigation and achieve financial close by the fourth quarter of 2022.

Debt funding is likely to be complemented by a conventional equity raising or other options for equity funding.

Magnetite has $15.3m in the bank to progress its all important DFS, and a market cap of $69m as of September 21.

MGT stock is around 170% up over the past 12 months despite a dip after PFS release, but it has caught some tailwinds in recent days as investors responded well to news about its DFS preparations, rising by almost 29% from 2.1c a share to 2.7c a share over its past three trading days.

This article was developed in collaboration with Magnetite Mines, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post This ASX-listed iron ore developer is well placed to benefit from the shift to high grade ore appeared first on Stockhead.

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Articles

ASX Small Cap Lunch Wrap: Who’s outperforming Warren Buffett today?

A hamster in the US has a portfolio up by around 20% since June, outpacing the S&P500 and Warren Buffett’s … Read More
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Ever wished you were as rich as Warren Buffett?

Or perhaps more accurately; sometimes feel like you’re just a hamster running on a wheel?

Some enterprising crypto investors have made that idea work for them, with a unique hamster-based investment strategy.

According to reports, the hamster — Mr Goxx — dutifully runs on his wheel and in doing so, also selects from a range of different cryptocurrencies.

The wheel is uniquely designed for Mr Goxx to choose one of two tunnels, which indicate buy or sell.

And apparently his portfolio is up by around 20% since June, outpacing the S&P500 and Warren Buffett’s Berkshire Hathaway.

So if your fundamental analysis of ASX small caps isn’t bringing returns, there are options…

Elsewhere, the idyllic, resource-rich locale of Perth, Western Australia, has been run over by some rampant demons following Melbourne’s AFL Grand Final victory on Saturday night.

208cm ruckman Max Gawn stayed in game-shape following the financial siren, taking hangers while still dressed in his match guernsey:

On markets, ASX futures markets suggested the local index was going to edge higher (maybe) before the opening bell, but local stocks have beaten expectations as upbeat sentiment permeates through Monday trade.

Just after 12pm EST the ASX 200 was on track for a gain of around 1%, with steady demand across all the major sectors.

Energy stocks kept the ball rolling after last week’s big rally, and the ASX 200 Energy index has now climbed by an impressive 10.6% since last Monday’s selloff.

Brent crude oil is trading at three-year highs above US$78 a barrel, as consensus around a global energy supply crunch continues to build.

Along with the ASX, positive sentiment extended across Asian markets with steady gains across the other major indexes including the Hang Seng (home of Evergrande) which rose by more than 1%.
 

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for Monday September 27 [intraday]:

Stocks highlighted in yellow made market-moving announcements.

Code Name Price % Change Volume Market Cap
NTL New Talisman Gold 0.002 100.0% 1,184,051 $2,792,225
ANL Amani Gold Ltd 0.0015 50.0% 3,911,521 $14,205,197
RRR Revolverresources 0.43 38.7% 2,941,576 $25,380,460
RBX Resource B 0.28 36.6% 5,717,568 $6,959,255
DDD 3D Resources Limited 0.004 33.3% 125,305 $11,641,116
OAK Oakridge 0.002 33.3% 1,080,116 $5,158,939
ARR American Rare Earths 0.22 22.2% 4,175,115 $62,065,499
ARU Arafura Resource Ltd 0.235 20.5% 21,478,573 $302,239,730
AO1 Assetowl Limited 0.006 20.0% 155,000 $4,081,026
RBR RBR Group Ltd 0.006 20.0% 1,030,125 $6,409,900
AJL AJ Lucas Group 0.038 18.8% 966,220 $38,281,172
POW Protean Energy Ltd 0.013 18.2% 1,476,795 $7,156,743
IMC Immuron Limited 0.165 17.9% 937,744 $31,814,523
IXC Invex Therapeutics 0.8 17.6% 237,582 $51,104,617
LEL Lithenergy 0.695 16.8% 3,327,351 $26,775,000
GGX Gas2Grid Limited 0.0035 16.7% 2,054,000 $12,138,306
PEB Pacific Edge 1.52 16.0% 139,756 $955,265,080
POL Polymetals Resources 0.145 16.0% 31,562 $4,852,907
TBA Tombola Gold Ltd 0.044 15.8% 1,546,928 $24,103,240
OZM Ozaurum Resources 0.15 15.4% 292,127 $7,438,080
HWK Hawkstone Mng Ltd 0.046 15.0% 22,265,624 $68,793,777
BMR Ballymore Resources 0.25 14.0% 20,000 $15,725,178
AVL Aust Vanadium Ltd 0.025 14.0% 5,913,983 $72,178,161

 

Recent ASX debutante Resource Base (ASX:RBX) is getting into the rare earths game, where a number of other ASX juniors are running hot.

The company announced that its snapped up 1,380sqkm of ground in the Murray Basin, which is prospective for ionic clay hosted Rare Earth Elements (REE).

Elsewhere among stocks with news, biopharmaceutical company Invex Therapeutics (ASX:IXC) jumped by around 20% after announcing a long-term Collaboration and Manufacturing Agreement with Peptron Inc — a company listed on the Korean Stock Exchange.

The deal will see Peptron use Presendin — IXC’s treatment for neurological conditions relating to raised intracranial pressure — in clinical trials and for commercial use, once Presendin is approved.

The agreement is “exclusive, applies globally and provides a defined price per dose for the supply of Presendin for clinical studies, and for the first ten years following the first commercial sale,” IXC said.

Get the wrap of the rest of today’s resources winners here.
 

ASX SMALL CAP LOSERS

Here are the best performing ASX small cap stocks for Monday September 27 [intraday]:

Stocks highlighted in yellow made market-moving announcements.

Code Name Price % Change Volume Market Cap
AJY Asaplus Resources 0.04 -33.3% 20,000 $8,160,000
ACB A-Cap Energy Ltd 0.085 -26.1% 2,448,518 $100,266,760
NPM Newpeak Metals 0.0015 -25.0% 992,527 $13,654,870
BDC Bardoc Gold Ltd 0.045 -21.1% 28,783,076 $98,909,670
EN1 Engage:Bdr Limited 0.004 -20.0% 1,999,249 $12,764,763
YPB YPB Group Ltd 0.002 -20.0% 100,000 $12,479,551
AEE Aura Energy 0.21 -17.6% 2,317,954 $101,784,941
SCN Scorpion Minerals 0.052 -14.8% 108,000 $15,800,903
CUL Cullen Resources 0.018 -14.3% 1,368,921 $7,852,271
EVE EVE Investments Ltd 0.0035 -12.5% 2,082,615 $15,372,568
TOE Toro Energy Limited 0.029 -12.1% 37,032,041 $128,612,292
OZZ OZZ Resources 0.19 -11.6% 212,469 $5,795,674
WFL Wellfully Limited 0.155 -11.4% 915,577 $36,718,582
VMY Vimy Resources Ltd 0.1775 -11.3% 4,532,779 $210,299,732
EL8 Elevate Uranium Ltd 0.56 -11.1% 777,573 $143,780,897
RD1 Registry Direct 0.033 -10.8% 184,545 $13,037,813
AGE Alligator Energy 0.068 -10.5% 42,201,863 $212,357,592
LME Limeade Inc. 0.71 -10.1% 17,193 $197,294,227
AGR Aguia Res Ltd 0.046 -9.8% 98,089 $17,031,064
PEN Peninsula Energy Ltd 0.23 -10.0% 6,774,820 $253,984,637
BBX BBX Minerals Ltd 0.19 -10.0% 365,091 $96,184,510
AMO Ambertech Limited 0.29 -9.0% 208,389 $24,622,932
COD Coda Minerals Ltd 0.79 -9.0% 69,456 $79,566,922

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Energy & Critical Metals

LEL reckons its Burke graphite deposit suited for lithium battery applications

Special Report: Lithium Energy’s teamed up with CSIRO for optimisation testwork for its Burke graphite project in Queensland. … Read More
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Lithium Energy’s teamed up with CSIRO for optimisation testwork for its Burke graphite project in Queensland.

The research agreement with CSIRO covers further testwork, including attempting spheronisation and purification of the natural graphite particles.

Essentially, the graphite is shaped into ‘potato-like’ structures with the objective of easier processing of Burke natural graphite flakes into electrode materials to reduce capacity losses and enhance cell efficiency.

The idea is to demonstrate to potential graphite purchasers the benefits of the natural flake graphite within the deposit.

The project will be 50% funded by the CSIRO Kick-Start Program and is expected to take four months to complete.

Lithium Energy (ASX:LEL) is confident the deposit presents an opportunity to cater to the growth in demand for graphite in lithium-ion batteries.

Encouraging electrical storage capacity

Burke has a JORC inferred mineral resource of 6.3 million tonnes at 16.0% Total Graphitic Carbon (TGC) for 1,000,000 tonnes of contained graphite – including a high-grade component of 2.3 million tonnes at 20.6% TGC.

Its high grade and low impurities make it particularly attractive for use in lithium-ion batteries.

In previous test work, Burke graphite cells had generally higher levels of capacity compared with control coin cells when repeatedly (50 times) charged and discharged over a 10-hour cycle time.

The company considered this electrical storage capacity highly encouraging and it was the driving force to undertake the further testwork required by battery manufacturers looking to acquire graphite for use in their battery manufacturing operations.

Pic: Total Graphite Content (TGC) comparison of ASX listed company graphite projects

Potential offtake partners

The company is planning to re-engage with Chinese and Japanese parties who have previously expressed a strong interest in the graphite from the Burke Project.

Lithium Energy said that companies in China are increasingly looking outside of the country for stable supplies of high-quality graphite concentrate – due to increasing environmental concerns as well as grades being typically lower in the country.

Once the latest round of testwork is complete, the company will pursue discussions with the aim of forming binding commercial off-take and development agreements.

 


 

 

This article was developed in collaboration with Lithium Energy Limited, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

 

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