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Why African gold still glitters for this Bridge Street guru

Gold’s recent subdued run with investors may well present a big buying opportunity, according to Bridge Street Capital analyst Chris … Read More
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This article was originally published by Stockhead

Gold’s recent subdued run with investors may well present a big buying opportunity, according to Bridge Street Capital analyst Chris Baker.

The yellow metal was all the rage in the small cap space earlier in the year but has since seen its fortunes dip as attentions have seemingly turned elsewhere.

It’s a trend that comes despite sustained price strength – after hitting peaks above US$2000 per ounce late last year the commodity has hovered in the US$1700-$1800/oz range for the majority of 2021.

Baker said he felt the shift of investor focus was largely on the back of inflation concerns, with producers locally coming up against higher costs thanks to increased wages and prices, narrowed margins and profit disappointment.

“Despite this, when you look at it the A$ gold price is still strong, which is great for producers, and they are still enjoying strong cashflows,” he told Stockhead.

“When I look at the big picture, one of the things that strikes me is we’re in a relatively high inflation environment with very low interest rates, and the thing that always seems to correlate with gold is negative real interest rates.

“How else do you retain asset value? A lot of people use gold in that sort of environment to do exactly that.

“You have to wonder with what’s happening with COVID, how the second time around with the Delta variant is going to start to impact economies.

“We may see lower real interest rates for longer than we thought, which could be at the very least supportive for gold, and quite possibly encouraging for another gold rally.

“In the meantime, everyone seems to have gone ‘gold stocks? Don’t care. Gold explorers? Super don’t care’.

“A lot of these stocks have lagged broader equity markets, so I think it’s time to have a look at some of these little guys.”

Baker said there were three African gold explorers on Bridge Street’s radar screens that he felt had compelling value packed in.
 

Oklo Resources (ASX:OKU)

Oklo’s recent work at its flagship Dandoko project in West Mali has focused on growing the scale and grade of its holdings, and recent results have proven extremely positive.

The project sits about 30km from B2 Gold’s behemoth 7.1Moz Fekola deposit and 50km south of Barrick gold’s 18Moz Loulo/Gounkoto complex.  The Senegal-Mali Shear Zone is a world class gold province with an endowment of over 60 million ounces of gold.

OKU’s Dandoko project. Pic: supplied.

Handy neighbours to have.

Baker said the combination of region, quality of team and cash in the bank meant Oklo was a company worth a look.

“I think these guys are more than likely close to starting to have a look at a scoping study and doing environmental work,” he said.

“They’re not a point where they’d be pushing the button on a development yet, but they’ll be starting to look at what they need to do to get a project going while also delivering some good drill results.”

Recent drilling at the nearby Disse prospect hit gold at almost 40 grams per tonne suggesting they may be on to a new high grade ore zone.

Gold was also discovered at Sari prospect, where the company had success with follow-up drilling announced this week.

Meanwhile, step-out drilling from the existing 668,500oz Seko deposit – much of which sits in measured and indicated categories – has highlighted potential for additional resource here.

Importantly the grade of the Seko deposits is quite high. Baker said there was potential to start a mine on the back of grades of over 2 grams per tonne.

“I think it’s just a matter of time here. It’s a question of whether it’s a modest operation that they can bring into production – say at 120 to 150,000 ounces per year – or whether they can identify a multiple million ounce deposit.

“That’s obviously the success case, and they haven’t done it. Yet.”



 

Marvel Gold (ASX:MVL)

Marvel is sitting on 910,000oz of gold at its Tabakorole project in southern Mali, in the region of giants including Firefinch’s 7.5Moz Morila gold mine and Resolute Mining’s 7Moz Syama gold mine.

Africa Gold
Marvel’s Tabakorole project in regional context. Pic: Supplied.

The deposit is currently grading 1.2 grams per tonne gold.

“It’s a low grade, but it’s also a relatively low strip ratio, and recent drilling has indicated some really good potential upside to that resource,” Baker said.

“You would think the next resource, whenever that is, would come in above a million ounces, and in conjunction they’re consolidating an enormous land package in the area.

“A lot of the basic groundwork is being done – things like geochem, a lot of geophysics, really for the first time in the area.

“I like it because it hasn’t had the eyes picked out of it by other gold producers, and it’s in a region where there’s satellite orebodies potentially waiting to be found.”

The other consideration in Marvel’s favour, according to Baker, is its Chilalo graphite project in Tanzania.

Chilalo is currently being spun out into a new company called Evolution Energy, in which Marvel will hold a 31% stake.

“This is a high-quality project, with a granted mining lease and a compete feasibility study and I believe it’s currently in there for very little,” Baker said.

“Several of the Tanzanian graphite companies are valued at multiples of Marvel, so you are either getting the gold for free, or the graphite for free.”


 

Turaco Gold (ASX:TCG, formerly Manas Resources ASX:MSR)

The owner of the Boundiali, Ferke and Tongon North gold projects in Cote d’ivoire, Turaco is operating in a region Baker believes has been largely ignored by the majors.

In fact, Turaco is now the largest exploration tenement holder in the country, with more than 8400km2 to work with and a management team helmed by former Exore Resources managing director Justin Tremain.

The exploration package was this year acquired from Resolute Mining (ASX:RSG) and Predictive Discovery (ASX:PDI) – PDI maintains an 11% stake in Boundiali and Ferke, while Resolute remains a significant shareholder in the junior with its general manager exploration Bruce Mowat a representative on the Turaco board.

Mowat oversaw the Resolute projects over several years previously.

The company’s three projects are located on the Birimian greenstone belt near a number of major mines and discoveries.

Check out the map.

Africa Gold
Turaco’s landholding in Cote D’Ivoire. Pic: Supplied

Of these, the current exploration focus is Boundiali, where a gold-in-soil anomaly of more than 6km has been detected and is currently an exploration focus.

“This is in a highly exciting part of West Africa, it’s got management with runs on the board and it’s in an area which is highly prospective but is very underexplored,” Baker said.

“I think it’s a good story to follow.”

Drilling is about to start.

While activity may have seemed slow for some West African gold explorers of late, Baker said now was a great time to look into buying in the space.

“There’s usually a bit of a wet season in West Africa, so many places tend to quieten down over August and September,” he said.

“When there’s no information, everyone gets bored – it’s a great time to be buying with plenty of activity ahead.”

At Stockhead, we tell it like it is. While Oklo is a Stockhead advertiser, it did not sponsor this article.

The post Why African gold still glitters for this Bridge Street guru appeared first on Stockhead.

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Drilling kicks off and uranium analysis planned at Benmara battery metals project

Special Report: Resolution Minerals has started drilling at its Benmara battery metals project in the Northern Territory. … Read More
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Resolution Minerals has started drilling at its Benmara battery metals project in the Northern Territory.

The 2,500m RC drilling program is focused on the highest priority targets of 4km and 2km strike length derived from a VTEM survey – and new Geoscience Australia research which identified prospective rock types previously mis-mapped.

The large-scale targets are prospective for sediment hosted battery metals including copper, silver, lead, zinc, and cobalt.

Plus, the targets are on the margin of the South Nicholson Basin and Murphy Inlier on the Fish River fault which is analogous and along strike from Aeon Metal’s (ASX:AML) polymetallic Walford Creek deposits (40 million tonnes at 2% copper equivalent).

It presents the company with strong exposure to the strengthening demand for battery metals – and a tightening market for copper.

And because the targets have no prior drilling, Resolution Minerals (ASX:RML) is confident this underpins the potential to rerate on any discovery made.

 

Fully funded to ramp up exploration

Resolution is fully funded to complete the drilling with existing cash following a recent $1.7 million placement.

“We are very excited to announce drilling has started on our maiden drill program at the under-explored Benmara Battery Metals Project in the Northern Territory,” managing director Duncan Chessell said.

“The program follows up large scale targets derived from our recent VTEM geophysics survey for sediment hosted stratiform copper and other battery metals.

“With virtually no prior drilling conducted into these large-scale targets, we look forward to the results of this exciting opportunity and accelerating exploration.”

The drilling will take three weeks to complete, with assays expected in early November.

Pic: The company holds the Wollogorang and Benmara copper-cobalt-uranium projects in the NT, which includes the Stanton cobalt deposit.

Assessing uranium upside off the back of strong prices

The area surrounding Benmara is also highly prospective for uranium, with the 51.9-million-pound Westmoreland Uranium deposit nearby.

Additional uranium occurrences have also been mapped within 2km of the Benmara tenement boundaries.

And with rising uranium spot prices close to US$50/lb – a nine-year high – it puts the company in a good position to assess the uranium potential of the project.

 

Wollogorang project potential

Then there’s the company’s Wollogorang project in the McArthur Basin in the NT, which is prospective for sedimentary hosted battery metals: copper, cobalt, and hard rock uranium.

There’s proven mineralisation within the Stanton cobalt deposit of 942,000 tonnes at 0.13% cobalt, 0.06% nickel, 0.12% copper.

And a VTEM survey highlighted the sediment hosted copper potential, identifying 40 conductors.

Plus, drill targets at the Gregjo copper prospect are set to test a chargeable IP geophysical anomaly underlying copper mineralisation intersected in shallow RAB drilling of up to 4% copper.

The project is subject to a $5 million farm-in agreement with OZ Minerals (ASX:OZL) to earn 51% interest, after which the company can retain 49% by participating.

Or at Resolution’s election, OZ has the option to earn 75% interest by sole funding to a final positive decision to mine, with Resolution appointed as operator.

 

 

Resolution Minerals share price today:


This article was developed in collaboration with Fresh Equities, 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 Drilling kicks off and uranium analysis planned at Benmara battery metals project appeared first on Stockhead.

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Bryah nabs strategic exploration ground around namesake project

Special Report: Bryah Resources has expanded its footprint in WA, securing three exploration licences covering 50 km2 around its existing … Read More
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Bryah Resources has expanded its footprint in WA, securing three exploration licences covering 50 km2 around its existing land holding in the Bryah and Padbury Basins.

The Bryah Basin hosts the high-grade copper-gold mines at DeGrussa, discovered by Sandfire Resources (ASX:SFR) in 2009, and at Horseshoe Lights, which was mined until 1994.

It also hosts several historical and current manganese mines including the company’s Horseshoe South mine.

Bryah Resources’ (ASX:BYH) is confident that the new tenements – E52/3848, E52/3898 and E52/3963 – cover prospective and under-explored areas which have gold, copper-gold and manganese exploration potential.

The tenements were acquired for 4 million ordinary shares at an issue price of $0.055/share.

Tenure right next to historic gold mine

The largest tenement (E52/3898) covers exploration ground adjacent to the historic Wilthorpe shallow open cut gold mine.

The mine straddles the boundary of new tenement E52/3898 and an adjacent E52/2059, held by Westgold Resources (ASX:WGX).

It was mined by Dominion Mining from 1993-94, producing 4,650 ounces of gold from 72,817 tonnes of ore grading 2.0 g/t gold.

And there has been limited gold exploration since.

Based on the reported mineral occurrences, Bryah considers the tenement package highly prospective for copper, gold, and manganese.

Pic: Tenement location plan

Exploration planning underway

The company will shortly commence a thorough desktop review of all historical exploration reports as well as its own extensive database.

The data review will support a detailed phase of exploration planning, ahead of ground exploration activities.

In the meantime, reverse circulation drilling is underway at Bryah’s manganese JV, in a 2000m program fully funded by partner OM Holdings.

 


 

 

This article was developed in collaboration with Bryah Resources, 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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Mining battery metals from the sea floor – could it soon be a low-impact reality?

Low-impact sea mining could become a reality for one ambitious company with the arrival of a 228m ship in Rotterdam … Read More
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Low-impact sea floor mining could finally become a reality for one ambitious company with the arrival of a 228-metre ship in Rotterdam earlier this week, heralding a critical milestone in its plans to become a producer of battery metals sourced from the deep ocean.

Named the Hidden Gem, the vessel is the key to The Metal Company’s (NASDAQ:TMC) vision of developing the world’s largest source of battery metals from the ocean floor with commercial production plans targeted for 2024.

TMC’s strategic partner, Allseas, will be converting a former deep-sea drilling vessel into a subsea mining vessel, retrofitting the ship with equipment to gather polymetallic nodules on the seafloor within contract areas held by TMC in the Pacific Ocean’s Clarion Clipperton Zone (CCZ).

The Hidden Gem. Pic: Business Wire

These potato-sized polymetallic nodules contain high grades of critical minerals such as nickel, manganese, copper and cobalt, which are integral to the manufacturing of electric vehicle batteries and other renewable energy technologies.
 

Enough to power 250 million EVs

Back in April 2020, TMC acquired its third seabed contract area to explore for polymetallic nodules from Tonga Offshore Mining Limited (TOML), which opened it up to a further 74,713km square block of exploration rights.

The third contract area comprises an inferred resource of 756 wet tonnes of polymetallic nodules, meaning its expanded footprint now contains enough nickel, copper, cobalt and manganese to build more than 250 million electric vehicle batteries.

Speaking to the TOML acquisition, TMC’s chairman and CEO Gerard Barron said the project will enable The Metal Company to bring more critical minerals to market to break through the bottleneck and shift away from fossil fuels.

“Our research shows that ocean polymetallic nodules can provide society with these metals at a fraction of the environmental and social impacts associated with land-based extraction.”

Pic: Supplied

 

Environmental concerns about sea floor mining

The environmental concerns which surround mining of the ocean’s floors are well documented, with several jurisdictions and regulatory bodies imposing bans and strict regulations on subsea mining due to the lack of understanding around the environmental impacts and growing fears about the irreversible effects these practices may have on the fragile ecosystems that we know very little about.

Many scientists believe that far more resources have been spent researching ways to mine the ocean floor rather than studying the impact this type of mining might have on the underwater environment.

TMC, however, believes that the Hidden Gem subsea vessel, which will deploy a 4.5km riser to collect the nodules off the seafloor without drilling, blasting or digging, can avoid much of the environmental disturbance associated with traditional sea floor mining methods.
 

Past failures

Planning to mine the oceanic crust’s wealth of mineral resources is a well-trodden path that’s seen many companies fail to deliver on their promises of production due to regulatory and financial hurdles.

Companies such as Nautilius and its high-grade Solwara 1 copper-gold project off the PNG coast is one recent example.

Nautilius had plans to turn its Solwara 1 project into the world’s first underwater copper-gold mining operation but wound up delisting from the TSX and going bankrupt in 2019.

The Canadian company had developed three undersea robots to mine hydrothermal vents on the ocean floor before funding issues became a problem midway through construction.
 

On the road to meeting deep-sea battery metals goal

There are examples of successful mining ventures in the ocean such as in Indonesia’s tin industry, diamond extraction in Namibia, and gold mining off Alaska’s coast, however these ventures are often heavily scrutinised by environmental lobby groups and constantly face the risk of being shut down due to increasing global environmental awareness and a trend towards greener policies from the governments who licence them.

While there is still plenty of obstacles and work to be done, TMC, with the help of Allseas and their new vessel, which is expected to be the first ship classified as a sub-sea mining vessel under American Bureau of Shipping, are much closer than many of their peers to realising the goal of supplying the market with battery metals from the seafloor.

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