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Lundin Mining: BMO Lowers Target After Weaker Than Expected Guidance

On November 22nd, Lundin Mining Corporation (TSX: LUN) provided production guidance all the way out to the end of 2024.
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This article was originally published by The Deep Dive

On November 22nd, Lundin Mining Corporation (TSX: LUN) provided production guidance all the way out to the end of 2024. The company also provided cash cost, capital, and exploration expenditures for 2022.

For the cash cost guidance for 2020, copper sits between $1.55 per pound to $1.80 per pound depending on the mine, while zinc cash cost is expected to be $0.55 per pound and nickel will be a ($0.25) cost per pound in 2022. Nickel will be negative due to significant by-product copper credits, the company says.

The capital expenditure is expected to be $630 million for 2022, primarily due to $370 million going to the Candelaria mine. With the $630 million in capital expenditure during 2022, there will be an expected $45 million in exploration investments. With $40 million of the $45 million being spent supporting “significant in-mine and near-mine targets.”

Production Guidance 2022 2023 2024
Zinc 188,000 – 203,000 tonnes 227,000 – 242,000 tonnes 225,000 – 240,000 tonnes
Gold 153,000 – 163,000 ounces 155,000 – 165,000 ounces 153,000 – 163,000 ounces
Nickel 15,000 – 18,000 tonnes 13,000 – 16,000 tonnes 9,000 – 12,000 tonnes

A number of analysts cut their 12-month price target, bringing the 12-month price target down to C$12.24, or a 14.4% upside to the current stock price. Lundin Mining currently has 23 analysts covering the stock with 2 analysts having strong buy ratings, 7 have buy ratings, 13 have hold ratings and 1 analyst has a sell rating. The street high sits at C$16.50 while the lowest comes in at C$8.56.

In BMO’s update, they reiterate their market perform rating but lowered their 12-month price target on Lundin Mining to C$15 from C$16.50, saying that the three-year guidance came in below their expectations.

For the three-year production guidance, BMO forecasted copper and zinc production at the low end of Lundin’s old guidance while nickel and gold estimates were at the high end of their old guidance. With the updated guidance, they are now revising these estimates down. You can see the updated production estimates below.

BMO believes that the first half of 2021 will look light as the company expects both production and sales to be weighted heavily towards the second half of 2022. BMO says that the second half weighting comes from Candelario, Chapada, and Eagle but they believe that Neves-Corvo copper production could help make the first half of 2021 look better than expected.

Lastly, the company also modeled 2022 capital and operating expenses to be lower than guidance. They say the major difference is BMO’s commodity price assumptions in 2022. Below you can see BMO’s updated estimates.


Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Lundin Mining: BMO Lowers Target After Weaker Than Expected Guidance appeared first on the deep dive.







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Author: Justin Young

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Resources Top 5: Hopeful uranium stocks, an important graphite deal, and lots of imminent news flow

Aspiring graphite miner Black Rock invited to finalise agreement with Tanzanian government Cauldron Energy dusts off Yanrey uranium project, despite ……

  • Aspiring graphite miner Black Rock invited to finalise agreement with Tanzanian government
  • Cauldron Energy dusts off Yanrey uranium project, despite government opposition
  • Redstone (copper, cobalt), Latrobe (magnesium) and Empire (gold, copper, nickel, PGEs) up on no news

Here are the biggest small cap resources winners in early trade, Tuesday December 7.

 

CAULDRON ENERGY (ASX:CXU)

(Up on no news)

When the WA state government implemented a ban on most new uranium mines in 2017, CXU stopped work at its flagship ‘Yanrey’ uranium project and began searching for other dirt to play with.

It now has a historic gold project called ‘Blackwood’ in Victoria and a silica sands play called ‘Ashburton’ in WA. It is also poking around Yanrey again, which is a lot more interesting now that uranium prices are on the move.

While government support (or lack thereof) for new mines has not changed, a recent survey uncovered a bunch of “highly prospective targets for follow-up drilling” at Yanrey.

“Our ultimate objective is to explore for uranium mineralisation amenable to extraction by ISR,” CXU exec chairman Simon Youds says.

“Economic deposits of sandstone-hosted, palaeochannel-style uranium can be mined using ISR in the lowest cost quartile of uranium mined globally.”

“This characteristic makes these deposits extremely attractive for mining at any uranium price and necessarily must form the basis of any uranium resource portfolio.”

Yanrey exists within a larger uranium province that is slowly being uncovered, Youds says.

“There is potential here for a scale comparable to the best uranium-endowed province globally and that, with astute leadership, Western Australia is at the threshold of a new energy resources boom.”

At Blackwood, CXU has stumbled upon visible gold in an underground area historically excavated for access purposes only:

“The visible gold observed, coupled with the beautiful sandstone-shale contact and structurally complex geology, provides an exciting new target for drill testing,” Youds said in November.

“The observation of visible gold further increases our confidence in the remaining mineral potential of these historical mines.”

The $11.5m market cap stock is down 6% over the past month, and 30% year-to-date. It had $1.5m in the bank at the end of September.


 

REDSTONE RESOURCES (ASX:RDS)

(Up on no news)

The nanocap, which has partially bounced back from recent losses in early trade Tuesday, is drilling to grow the 38,000t copper, 535t cobalt ‘Tollu Copper Vein’ deposit, part of the ‘West Musgrave’ project in WA.

Tollu hosts “a giant swarm of hydrothermal copper rich veins” in a mineralised system covering a +5sqkm area, ~40km from OZ Minerals’ (ASX:OZL) world-class Nebo-Babel nickel-copper deposit.

A conceptual (theoretical, not real yet) exploration target suggests up to 627,000t of copper may be present, the company says.

Recent portable XRF analysis of new drilling returned hits like 16m at 2.62% copper from a 74m downhole, including 6m at 6% copper from 76m.

These will be confirmed by traditional assay, the company says. Labs are backed up to the hilt, so who knows when that will be.

RDS say exploration will continue “at the earliest opportunity” in 2022 with a deeper RC drilling program at priority targets.

The $12m market cap stock is up 30% over the past month. It had $2.6m in the bank at the end of the September quarter.

 

BLACK ROCK MINING (ASX:BKT)

It’s been a good news week for aspiring graphite miner BKT.

Today it announced it had been invited by the Mining Commission to attend a ceremony in Dar es Salaam, Tanzania on Monday 13 December “to finalise an agreement with the Government of Tanzania”.

Black Rock managing director John de Vries is currently in country and is expected to attend, BKT says.

The company has also just completed a massive 500t pilot plant run – the largest ever, it says — to send off for qualification (testing) to potential customers in North America, Asia and Europe.

This will ultimately support project financing, BKT says.

The company now needs to finalise off-take terms with cornerstone investor POSCO, and secure finance to underpin a $US116m Phase 1 development capex program.

The $183m market cap stock is down 10% over the past month, and up 115% year-to-date. It had $9.3m in the bank at the end of September.

 

LATROBE MAGNESIUM (ASX:LMG)

(Up on no news)

Early works – like fixing fences, site clean-up, contracting — are happening apace at LMG’s magnesium project in Victoria’s Latrobe Valley, with construction on an initial 1,000 tonne per annum magnesium plant due to kick off in Q1 2022.

Production starts up to 12 months later in Q4 2022.

The plant will be expanded to 10,000 tonnes per annum magnesium shortly thereafter, with further plant capacity expansion to be considered once it is operating successfully.

Magnesium has the best strength-to-weight ratio of all common structural metals and is increasingly used in the manufacture of car parts, laptop computers, mobile phones, and power tools.

In November, LMG said current magnesium price was US$6,150 per metric tonne and expected to hold.

“LMG’s revenue estimates are based upon US$3,250 per tonne which was the magnesium price in June 2021, before the China supply shortage commenced in September 2021,” it says.

“If the current price of US$6,150 per metric tonne held long term, it would increase LMG’s estimate of EBITDA for its 10,000tpa plant by some $56m.”

In 2020, world magnesium production was ~1 million tonnes, of which China supplied ~85%.  China has begun a 13-year plan to increase Mg in cars from 8.6kg to 45kg by 2030, requiring an additional 1 million tonnes of new Mg production per annum.

$131m market cap LMG is down 21% over the past month, and up 335% year-to-date. It has raised $11.5m  via placement to help fund the initial $39m 1,000tpa plant.

 

EMPIRE RESOURCES (ASX:ERL)

(Up on no news)

This busy polymetallic explorer has already drilled 13,000m so far in 2021 at the ‘Penny’s and Yuinmery’ projects in WA, with diamond drilling of some juicy gold, copper, and nickel-copper-PGE targets at Yuinmery due to kick off sometime this month.

ERL would’ve drilled even more if not for issues getting hold of a rig, something the company intends to fix in 2022.

“Our exploration plans for 2022 include the lock-in of a core drilling rig and driller for exclusive use by Empire,” chairman Michael Ruane says.

“This should assist in accelerating at least the drilling component of our exploration programs for the forthcoming period. The rig will be particularly useful for the deep drilling required for the promising Yuinmery targets (eg Smiths Well/YT01).”

The rig should be ready for commissioning this month, he says.

The $14.85m market cap stock is up 30% over the past month. It had about $3.5m in the bank at the end of November.


The post Resources Top 5: Hopeful uranium stocks, an important graphite deal, and lots of imminent news flow appeared first on Stockhead.







Author: Reuben Adams

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Met testwork proves Sovereign’s Kasiya will deliver a premium natural rutile product

Special Report: Metallurgical testwork has confirmed Sovereign Metals’ Kasiya project in Malawi will deliver a premium natural rutile product, setting…

Metallurgical testwork has confirmed Sovereign Metals’ Kasiya project in Malawi will deliver a premium natural rutile product, setting the stage for the company’s landmark scoping study.

Testwork continues to demonstrate the world class nature of Sovereign’s (ASX:SVM) Kasiya deposit, with simple and conventional processing delivering levels of 95% to 97.2% TiO2 with low impurities at stand-out metallurgical recoveries ranging from 94% to 100%.

That makes Kasiya competitive on TiO2 grades with some of the world’s largest natural rutile operations like Iluka’s Sierra Rutile and Rio Tinto’s Richards Bay Minerals.

It opens the door for discussions with tier-1 offtakers in the markets for TiO2 pigment, titanium metal and welding, where customers are facing widening supply deficits in a strengthening market.

Additionally, testwork has shown conventional flotation methods can be used to produce a coarse flake graphite by-product from rutile gravity tails with 60% at a coarseness of +150µm, suggesting it will have a high basket value when sold to market.

A program at SGS Lakefield in Canada confirmed simple processing methods delivered a very coarse-flake graphite concentrate at 96.3% TGC.

“Consistently achieving premium rutile specifications with stand-out recoveries via conventional “off the shelf” processing methods reinforces the robustness of metallurgical and processing performance of the Kasiya rutile mineralisation ahead of the upcoming Scoping Study,” Sovereign managing director Dr Julian Stephens said.

“These continued very high-quality product specifications should generate further interest from end-users across the titanium sector as the global structural deficit in natural rutile supply continues to widen.”

Processed rutile being despatched to potential customers. Pic: Sovereign Metals

Kasiya scoping study round the corner

With the results in today’s announcement, Sovereign has now demonstrated the impressive metallurgical qualities of the Kasiya resource in two separate rounds of met testwork.

The testwork also confirms Kasiya will deliver strong recoveries and product specifications based on conventional off-the-shelf processing technology, which bodes well for its future development.

Proving the original results were certainly no fluke and opening the door to interest from Tier-1 offtake customers, they set up Sovereign to release a scoping study in the coming weeks.

With most of the technical disciplines now complete, mining optimisation and capital and operating cost estimations are currently being finalised.

A new indicated mineral resource estimate is also on the way after substantial resource drilling to build upon the world-class inferred resource released in June.

That confirmed Kasiya as one of the largest natural rutile deposits in the world, with an inferred resource of 644Mt at 1.01% rutile and a high-grade component of 137Mt at 1.41% rutile.

 


 

 

This article was developed in collaboration with Sovereign Metals, 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 Met testwork proves Sovereign’s Kasiya will deliver a premium natural rutile product appeared first on Stockhead.



Author: Special Report

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I see you: Red Mountain Mining contacts heavy rare earth elements at Mt Mansbridge

Special Report: Red Mountain Mining’s 1,200m RC drilling program at the Mt Mansbridge project in WA is off to a … Read More
The post I see you: Red…

Red Mountain Mining’s 1,200m RC drilling program at the Mt Mansbridge project in WA is off to a good start, with heavy rare earth elements (HREE) discovered in four holes.

A shortened drill program due to the onset of the Kimberley wet season, hasn’t stopped the company cracking open xenotime (dysprosium) mineral within sample drill chips.

There’s also a pulse-raising 6m mineralized heavy rare earth zone (49-55m) intersected in hole MMRC002 at the Solo prospect and finally drilling has intersected altered peridotite at Déjà vu – prospective for cobalt mineralization.

Red Mountain Mining (ASX:RMX) is already prepped for drilling once the site is accessible again in early 2022.

Solo prospect samples prioritised for assay

The prospect is a +200m NW-SE trending zone of HREE mineralisation initially identified by BHP (ASX:BHP) during uranium exploration in the 1980’s.

Three RC holes for 451m were completed at the prospect during the drilling program, with a 6m zone (49-55m) of xenotime mineralisation identified.

Visual estimations of the xenotime mineralisation ranged from between 1-10% of the total composition of minerals over the 6m zone.

On-site analysis using a portable XRF confirmed the zone as anomalous in both yttrium and ysprosium, and the zone has been prioritized for assay at the laboratory for immediate analysis.

Red Mountain Mining
Rare earth element and nickel-copper-cobalt-PGE prospects at the Mt Mansbridge project

Déjà vu prospective for cobalt

Previous sporadic sampling and assaying at the Déjà vu prospect returned several encouraging cobalt assay results between 70-100m including 0.34%, 0.32% and 0.22% cobalt.

Litho-geochemical studies recently undertaken by geochemical and geological consultants highlighted the cobalt as primary magmatic related (i.e. not weathering enrichment) while the anomalous cobalt values can’t be down to just silicate minerals within the peridotite.

Hole MMRC004 has been drilled to a depth of 75m, with the hole designed to provide further geological information and a comprehensive set of samples around the existing cobalt anomaly.

Samples have been prioritized at the lab for immediate assay, with further deeper drilling and an additional hole to the north and south planned for early 2022.

 


 

 

This article was developed in collaboration with Red Mountain Mining 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.

The post I see you: Red Mountain Mining contacts heavy rare earth elements at Mt Mansbridge appeared first on Stockhead.




Author: Special Report

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