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Lithium Americas’ Reflects Confidence That Cauchari-Olaroz Project Begins Production in Mid-2022

On November 17, Lithium Americas Corp. (TSX: LAC) reached an agreement to acquire Millennial Lithium Corp. (TSXV: ML) in a
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This article was originally published by The Deep Dive

On November 17, Lithium Americas Corp. (TSX: LAC) reached an agreement to acquire Millennial Lithium Corp. (TSXV: ML) in a share-for-share exchange which values that company at $4.70 per share. 

Lithium Americas outbid China battery giant Contemporary Amperex Technology Co., Ltd. (CATL) to acquire Millennial, whose principal asset is the Pastos Grandes lithium brine development project in Argentina. Pastos Grandes is projected to commence production of 24,000 tonnes per year of battery and technical grade lithium carbonate in 2024.

Millennial’s agreeing to be acquired via Lithium Americas’ shares should be considered a positive for Lithium Americas as:

  • 1) the structure preserves cash for completing its flagship Cauchari-Olaroz lithium brine project in Argentina, as well as its 100%-owned Thacker Pass project in the U.S. state of Nevada; and
  • 2) it likely reflects a strong degree of confidence that Cauchari-Olaroz remains on track to begin production in mid-2022, only seven to eight months from now. 

Lithium Americas owns 49% of Cauchari-Olaroz, and China’s largest lithium company Ganfeng Lithium owns the balance, or 51%.  Cauchari-Olaroz is forecast to produce 40,000 tonnes of battery-grade lithium carbonate annually for 40 years.

(in millions of US$) 3Q 2021 2Q 2021 1Q 2021 4Q 2020
Target Date for Cauchari-Olaroz First Production mid-2022 mid-2022 mid-2022 mid-2022
Cauchari-Olaroz Construction Budget $641 $641 $641 $565
Amount of Capex Budget Spent – Period End $519 $471 $426 $388
        % of Budget Spent   81% 73% 66% 69%

A few days ago Lithium Americas reported 3Q 2021 results that support such a bullish view on Cauchari-Olaroz’s progress. As of September 30, 2021, Lithium Americas and Ganfeng have together spent US$519 million, or 81%, of the US$641 million budgeted capital expenditures on Cauchari-Olaroz. 

This compares with cumulative spending of US$471 million, US$426 million and US$388 million as of June 30, 2021, March 31, 2021, and December 31, 2020, respectively. This rapid pace of quarterly capex spending seems consistent with a production commencement target of mid-2022.

Thacker Pass, which may produce 60,000 tonnes of battery-grade lithium carbonate per year for 46 years, has been the subject of lawsuits hoping to block or delay the project. In early September 2021, U.S. District Court Judge Miranda Du refused three tribes’ request for a preliminary injunction that would block trenching and excavation work on the project. The tribes assert that digging would desecrate an area that contains bones and artifacts. 

In July 2021, Judge Du rejected a similar preliminary injunction request by environment groups to stop Thacker Pass excavation. The environmentalists alleged the digging would destroy the habitat for the sage grouse, an imperiled ground-dwelling bird, and other wildlife. Judge Du has pledged to rule on the overall issue of the U.S. Bureau of Land Management’s approval of Thacker Pass before Lithium Americas begins construction at the site in 2022.

Lithium Americas has controlled its costs quite well as the build-out of Cauchari-Olaroz progresses. Its quarterly cash burn rate, defined as its operating cash flow deficit plus Cauchari-Olaroz capital expenditures, totaled only about US$40 million, US$23 million and US$28 million in 3Q 2021, 2Q 2021 and 1Q 2021, respectively. In turn, the company’s cash balance has edged down only slightly to US$482 million on September 30, 2021 from US$514 million on March 31, 2021. Debt rose moderately over that same period, reaching US$173 million at the end of September 2021.

(in thousands of US$, except for shares outstanding) 3Q 2021 2Q 2021 1Q 2021 4Q 2020 3Q 2020
Operating Income ($16,640) ($13,043) ($8,759) ($8,065) ($5,743)
Operating Cash Flow ($16,668) ($8,631) ($11,416) ($7,108) ($7,204)
Cauchari-Olaroz Capex ($23,609) ($14,700) ($16,170) ($14,710) ($9,343)
Cash – Period End $482,142 $505,241 $514,205 $148,070 $71,888
Debt – Period End $172,372 $153,729 $134,961 $121,221 $122,294
Shares Outstanding (Millions) 120.0 119.9 119.9 101.1 91.4

Lithium Americas’ shares have roughly doubled over the last three months as investors have embraced the stocks of electric vehicle (EV) manufacturers and raw materials suppliers to the EV industry. It is of course possible this optimism may ebb, causing the shares to at least partially reverse.

In seven months or so, Lithium Americas’ Cauchari-Olaroz project could begin to generate substantial cash flow, perhaps US$300 million of EBITDA per year according to company estimates. If investors maintain a constructive view of lithium producers, Lithium Americas shares could get a further boost over the coming months as the market continues to factor in the timing of the mine’s opening.

Lithium Americas Corp. last traded at C$47.42 on the TSX Exchange.


Information for this briefing was found via Edgar and the companies mentioned. 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 Lithium Americas’ Reflects Confidence That Cauchari-Olaroz Project Begins Production in Mid-2022 appeared first on the deep dive.




Author: Jim McFadden

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Tossing up ASX-listed African gold stocks? Here’s the ultimate, only guide you’ll ever need

In recent years attitudes towards African mining stocks have arguably changed as investors have become more risk averse and sensitive … Read More
The…

In recent years attitudes towards African mining stocks have arguably changed as investors have become more risk averse and sensitive to both ESG and geopolitical risk.

The words “Tier 1 jurisdiction” are becoming more prominent in the lexicon of gold majors, a turn of phrase that appears to value projects in developed nations like Australia and Canada over “riskier” jurisdictions like Africa and the Pacific.

But with Australian gold miners facing rising costs, a stagnant gold price and struggling to find traction in equity markets, some mid-tier miners in West Africa have punched above their weight in 2021.

According to Euroz Hartleys, the two lowest cost mid-tier gold miners in the September quarter could be found there – West African Resources (ASX:WAF) with its new Sanbrado mine in Burkina Faso and Perseus Mining (ASX:PRU), which recently opened the low cost Yaoure mine in Cote d’Ivoire.

Simon Taylor, the managing director of Malian gold explorer Oklo Resources (ASX:OKU), says investors who count West Africa out could be sleeping on the next major gold discovery.

“It’s been easy to invest in the West Australian gold space and some of the Canadian space over the last four or five years,” he told Stockhead.

“For investors, I think what you’re getting from Oklo and from other companies is huge upside on very large deposits that can be found, and that’s why we’re there.”

 

African gold stocks = incredible value on offer

The next gold producer in line appears to be Tietto Minerals (ASX:TIE), which this week completed an $85 million equity raising to secure funding for the US$200 million Abujar gold mine in Cote d’Ivoire.

Tietto was trading at just 6c a share in early 2019 before a string of high grade, shallow gold hits saw the explorer increase its gold bounty by 146% to 1.7Moz in the space of a couple months.

After two years of sustained drilling success Abujar now contains 3.4Moz, and Tietto plans to produce its first gold bar in the fourth quarter of 2022.

At 42c and a market cap of $195 million Tietto is a long way from where it once was.

But with a post-tax NPV of US$722 million and IRR of 95%, it’s not hard to imagine the market may price the same thing at a higher premium if it were out the back of Kalgoorlie.

“You always need to challenge your biases or your views,” Tietto executive director Mark Strizek said.

“And that’s one of the things that I love explaining is that Africa isn’t what we think it is.

“In some areas, I’d probably say the Ivoirian phone network is better than it is in Australia. So you’ve got to leave your biases and preconceptions behind.

“We know where we stand and we’re really excited about the opportunities and I think that’s where shareholders need to have a look at that as well.

“I think we probably are moving into an area that as the valuations in Australia start hitting the peak, this is where the opportunities lie.

“There is an incredible amount of headroom or uplift to come on valuations from obviously us getting into production and also for the established producers as well.”

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Looking for multi-million ounce potential

As Tietto has shown, new discoveries in West Africa can be large and drilled out at a fast click.

$70 million capped Oklo is not at the same stage as Tietto, but its initial resource for the Seko deposits at its Dandoko project of 11.34Mt at 1.83g/t for 668,500oz should be a launching pad for further resource growth.

It has since enjoyed some high grade hits from its Disse prospect and has started a 9000m drilling program to grow the Seko resource, which will continue into next year.

Dandoko is located within the Kenieba Inlier of west Mali, between B2Gold’s 7.1Moz Fekola mine and Barrick’s world class 17.9Moz Loulo-Gounkoto mining complex.

Oklo secured 500km2 of tenure between the two giant gold mines, and even though Dandoko is further from the famed Senegal-Mali Shear Zone, Taylor says the Australian explorer is finding the same mineralising systems.

With scoping studies and resource drilling both underway, Taylor said Oklo’s aim is to uncover something of million-ounce potential or better.

“Rule of thumb on these projects is a 10-year mine life. If you hit the 10-year mine life, over 100,000 ounces a year, that’s what we want to get to,” he said.

“So that’s that million-ounce mark, which we’re aiming for, and we want to ensure that is constrained and modelled and robust.

“But the ultimate prize from there is to find the multi-million ounce potential which we think the area has, and we know it has from what our neighbours have found over the last few years.”

 

Top African producers deliver on costs

In recent times major mining discoveries in mature mining destinations like the WA Goldfields have increasingly been made under deep cover.

On the other hand, many recent discoveries in the relatively under-explored West African gold fields like the Senegal-Mali shear zone and Birimian greenstone belt have been made close to surface with big oxide components.

Lower pre-stripping and processing costs often mean the early years of new West African mines like Sanbrado are cheaper, providing early cashflow to pay back capex quickly.

Tietto’s Abujar is expected to produce 260,000oz at sector-low costs of just US$651/oz in its first year, and 200,000ozpa over its first six years at an average AISC of just US$804/oz.

While that could come apart in execution, Strizek says recent history has shown some of the cheapest operators are in West Africa.

“I think in terms of the cheapest cost production, it’s obviously WAF and where we’re looking at our first year, and the first six years, we’re right up there,” he said.

“So (Africa’s) very, very competitive. And I think that’s one of the keys that as investors you run the ruler over.

“You’ve got to look at the track records of Perseus and obviously now WAF and at Tietto we’ve tried pretty hard.

“We’ve secured a fantastic build team that we’ve got fresh out of the Sanbrado build working for us and we’re running very, very hard to get this thing up and running for Q4 next year.”

Like Strizek, Taylor believes investors will move into African gold companies when they see the success many are having building large gold deposits.

It was not so long ago that Papillon Resources, an Australian company run by Oklo chairman Mark Connelly, sold along with the Fekola deposit to B2Gold for $600 million in 2014.

Taylor pointed to the $181 million takeover by Ramelius Resources (ASX:RMS) of gold explorer Apollo Consolidated (ASX:AOP) and its 1.1Moz Rebecca gold project near Kalgoorlie as an example of the premiums being offered in WA.

“You can see with the recent takeover of Apollo and other assets in WA, if some of these (African) assets were in Western Australia, the market cap and valuation would be a lot higher I think,” Taylor said.

“I think the investment appetite will come back, it always does.

“There’s fantastic geology where we are, it’s very under-explored and you’ve seen some good successes in the last two or three years on companies exploring there.

“The majors are all there and you’ve seen great success stories like WAF, which is now in production and going very well.”

 

What about the political instability?

There have been a number of incidents in recent years that have underlined the risks of operating in Africa.

In the past two years there have been successful coups in Mali and Guinea.

Civil unrest this year in South Africa caused supply chain delays and saw Rio Tinto call force majeure at its Richards Bay mineral sands mine, while resource nationalism agendas can make mining and environmental policies unpredictable.

But the impact of social and political events on mining operations is not always clear cut.

At Abujar, Strizek says Cote d’Ivoire has a modern mining code – just seven years old – and a maturing local industry.

The country has set ambitious targets to increase the share of its GDP that comes from mining.

The Ivoirian Government takes a 10% free carried equity interest in projects like Abujar, but Strizek said it also has a 25% corporate tax rate, well-resourced mining department and sensible environmental approval system.

“They looked around the world and in some instances modelled on the West Australian mining jurisdiction, the good aspects of it,” he said.

“Especially in Cote d’Ivoire you’ve got a mining department that’s resourced, has skilled, professional people that are working for it, and you can get decisions made.

“There’s a very good mix of professionals and good contractors operating in country as well.

“And it’s without the cost pressure and inflationary aspects we’re seeing here, especially in Western Australia, you just don’t have that. There’s a large pool of workers and a large pool of contractors that are eager to do business with you.”

Taylor notes Oklo continued to operate following the 2020 Malian Coup and even after Mali’s previous coup in 2012, Connelly’s Papillon continued to drill Fekola into a world class resource worth over half a billion bucks.

“There was a coup in Mali last year (and) it hasn’t affected any of our operations,” he said.

“It hasn’t affected any of the gold mines. We’re getting on with business as usual.

“And one of the keys to operating in places like West Africa is really good personnel. And we have some fantastic Malian guys involved, in particular our director in country Madani Diallo.”

Outside of Tietto and Oklo there are a number of African gold stocks on the ASX.

We picked out five producers and 13 explorers and three potential IPOs on the lookout for gold on the African continent.

 

PRODUCERS

 

WEST AFRICAN RESOURCES (ASX:WAF)

$1.3 billion capped West African Resources is one of the star gold miners on the ASX right now, and is the poster child for African gold on the bourse, sitting on a 51% gain over the past year.

Having kicked off production at the Sanbrado mine in Burkina Faso in March 2020 at the start of the Covid-19 pandemic, the company is now one of the lowest cost mid-tier gold producers on the ASX.

It is on track to beat the 280,000oz upper end of its production guidance in its first full year of operations in 2021, and has purchased the 6.8Moz Kiaka mine from B2Gold in the hopes of becoming a 400,000ozpa producer by the middle of the decade.

“We’re in this to make money for our shareholders and stakeholders and the two best performing or the two highest margin producers on the ASX right now are West African gold producers in Perseus and West African Resources,” WAF managing director Richard Hyde told Stockhead this month when asked about operating in Africa.

“It just shows you that new projects over there, they generate a lot of free cash flow early on.

“West Africa seems to me that it is kind of where the West Australian Goldfields were at in the 1980s and ’90s when new discoveries were being made.”

 

RESOLUTE MINING (ASX:RSG)

Resolute is one of the oldest gold mining companies on the ASX and is known as a trailblazer for Aussie gold stocks in Africa, having operated there for three decades.

It now owns the Syama mine in Mali and the Mako gold mine in Senegal, purchased via the takeover of Toro Gold in 2019.

Unfortunately for Resolute that portfolio has not performed as planned in recent years, with the gold miner cutting production guidance for 2021 in August from 350,000-370,000oz at US$1200-1275/oz to 315,000-340,000oz at US$1290-1365/oz.

It recently did bank US$90 million from the sale of its mothballed Bibiani gold mine in Ghana, having sold the Ravenswood gold mine in Queensland to EMR Capital and Golden Energy and Resources in January 2020.

$408m-capped, 38c a share, Resolute has lost 80% of its value over the past two years having hit a five-year peak of $2 in August 2019.

 

PERSEUS MINING (ASX:PRU)

While Resolute has been on the decline, fellow West African mid-tier Perseus has been moving in the other direction.

It is now the most valuable primary ASX-listed African gold miner with a market cap of ~$2 billion.

Up almost 200% over the past five years and 25.75% YTD, Perseus has been rewarded for consistent EBITDA growth in recent years.

Its Edikan, Sissingue and Yaoure mines in Ghana and Cote d’Ivoire delivered record quarterly gold production for Perseus of 112,786oz at a weighted all in cost of US$966/oz in the September quarter.

That came after a 2021 financial year which saw the growing gold miner deliver a 1.5c maiden dividend, 9.5 years after declaring commercial production from its first mine Edikan.

Perseus says it is on track to become a 500,000ozpa producer from organic sources, but is also facing questions on whether it will buy out competitors in order to grow faster.

“In terms of the potential to implement step changes in our ambitions by merging Perseus with other companies, this possibility is ever present, and we continue to search for opportunities that will achieve our strict investment criteria and enhance the overall value of our asset portfolio and our organisation,” managing director Jeff Quartermaine said at Perseus’ AGM last Thursday.

“I have said many times, that it is easier to talk about these things than to implement.

“To those who are anxious that Perseus will ‘miss the boat’ in the area of consolidation, let me say that we have not missed any opportunities that we have set our sights on in the past and the results of our selectivity speak for themselves – look no further than the value created for all shareholders by the acquisition of Amara and its Yaouré Project several years ago.”

 

FIREFINCH (ASX:FFX)

Firefinch is up a whopping 239.47% year to date, making the relatively new gold miner a $600 million company.

It was more before a sell-off following the announcement of a Share Purchase Plan on Thursday conducted at 58c, a discount to its 70c price on Wednesday.

That SPP was hardly bad news though, with Firefinch accepting $51 million worth of bids for what was intended to be a $25 million SPP owing to the massive demand from existing sharholders.

That is no doubt a vote of confidence in its plans to return the Morila gold mine in Mali to its former glory.

Firefinch paid just US$28.8 million for the mine, owned by AngloGold and Barrick, which has produced upwards of 7Moz since opening in 2000.

It was once known as Morila the Gorilla for the astonishing grade and scale of the Morila Super Pit, which was at its peak a 1Moz producer.

It is currently producing around 50,000ozpa and rising from satellite pits and tailings, but with Firefinch planning to restart mining at the main Morila Pit next year, it plans to make Morila a 100,000oz producer in 2022 with longer term plans to become a 200,000ozpa mine.

Firefinch is also priced for its giant Goulamina lithium project, which will be developed in a joint venture with China’s Ganfeng through a demerged company Leo Lithium.

 

ANGLOGOLD ASHANTI (ASX:AGG)

Primarily listed in America and Johannesburg but dual-listed in Australia where it runs the big Sunrise Dam and Tropicana gold mines.

AngloGold’s attitude towards its home continent has shifted over the years. Formely the gold division of Anglo American it has now sold out of its costly assets in its homeland of South Africa.

But the world’s third biggest gold producer, which merged with Ghana’s Ashanti Goldfields in 2004, still has an expansive portfolio of African gold mines and JVs that delivered 1.6Moz across five operations in 2020.

These include the 600,000ozpa Geita mine in Tanzania, its share in the Kibali JV with Barrick in the DRC, Iduapriem and Obuasi in Ghana, and the 10Moz Siguiri mine in Guinea.


 

EXPLORERS

 

TURACO GOLD (ASX:TCG)

Turaco Gold is run by Justin Tremain and if his history in Africa is anything to go by, he may develop a company worthy of a big money takeover.

Tremain led Exore Resources ahead of its takeover by Perseus Mining last year in a ~$80 million deal, having previously headed Renaissance Minerals before its takeover by Asian gold producer Emerald Resources (ASX:EMR).

Formerly known as Manas Resources, Turaco has undergone a facelift since Tremain and Co. came on board in November last year, driving a near doubling of the West African explorer’s share price.

Turaco describes itself as a leading Cote d’Ivoire explorer. Its investment case rests on the 8350sqkm landholding it has built on the Birimian Greenstone Belt.

That includes the Boundiali and Ferke projects in the northern part of the African nation, 89% owned JVs with Predictive Discovery where Turaco has made high grade discoveries including 20m at 10.45g/t, 30m at 8.3g/t (Boundiali) and 45.3m at 3.16g/t (Ferke).

The Nyangoubue discovery at Boundiali South presents as a runs-on-the-board opportunity, with a maiden JORC resource likely early next year.

It also owns the Eburnea gold project, where a large scale discovery was declared on the basis of auger drilling last month that delineated 4.5km of strike and saw shallow grades of up to 9.91g/t.

Turaco additionally owns the Tongon North gold project, an expansive near-2000sqkm land package abutting Barrick’s 4.5Moz Tongon mine.

In a recent note Far East Capital analyst Warwick Grigor said to “keep this one on your radar” after its shares dipped following a $10 million placement at 12c a pop.

“There seems to be plenty of gold on its licences, judging by assays so far,” he wrote. “The shares have been quite strong since September, but dipped recently owing to the placement.

“Once this has been digested by the market the impending exploration news should help in the resumption of uptrend.”

 

MEGADO GOLD (ASX:MEG)

Dominated by artisanal miners, Ethiopia’s economic reform agenda has seen gold exports skyrocket in 2020 and 2021.

Around 75% of the country’s gold comes from prospectors, who have been encouraged to deliver into the State-owned trading centres so the value of the commodity to the Ethiopian economy can be quantified.

Renowned as a source of the precious metal for the Pharoahs of Ancient Egypt, Ethiopia is on the cusp of re-emerging as a gold exporter.

One Aussie stock riding this theme is Megado, which listed in October last year in a $6m IPO to chase to explore six gold projects in the forgotten region.

The $4.4m microcap says it has had promising results at its Babicho and Chakata projects.

 

PREDICTIVE DISCOVERY (ASX:PDI)

$334 million capped prospect generator Predictive Discovery is up 308.33% in 2021 after hitting the mother lode at its North-East Bankan find in Guinea’s Siguiri Basin.

The Eureka moment arrived when the company struck 46m at 6.58g/t from its Bankan project in April 2020.

PDI released a maiden inferred resource of 72.8Mt at 1.56g/t for 3.65Moz for Bankan at a “discovery cost” of just $4/oz.

The company subsequently dipped last month amid reports questioning the legality of setting up mining operations at Bankan, which sits within the outer buffer zone of the Upper Niger National Park.

Those concerns have dissipated in the month since, with the stock climbing to multi-year highs upwards of 24c.

 

AFRICAN GOLD (ASX:A1G)

Listed in 2019, African Gold shares popped in September after it announced shallow screen fire assays including a hit of 10m at 123g/t gold from its Didievi project in Cote d’Ivoire.

The Evan Cranston and Tolga Kumova backed ~$25 million small cap has since settled back into the 20c a share range.

It owns a swag of six pre-resource projects across the Ivory Coast and Mali. African Gold has been most active at Didievi, where Glencore, Equigold, Lihir and Newcrest all set foot between 2006 and 2011.

The 391km2 project is located in central Cote d’Ivoire on the emerging Oume-Fetekro Birimian greenstone belt, which hosts Allied Gold’s plus-3Moz Bonikro/Hire (+3Moz) and Endeavor’s 1Moz Agbaou gold mine to the south and the recent plus-2.5Moz Fetekro discovery made by Endeavour to the north.

Follow up drilling is set to take place this quarter at Didievi where African Gold has identified a large 1.5km x 1km gold system at the Blaffo Gueto target that it says is open in all directions.

 

POLYMETALS RESOURCES (ASX:POL)

Chaired by metallurgical engineer David Sproule, Polymetals bears the same name as his successful former private explorer, which went public and merged into the ill-fated Black Oak Minerals with Southern Cross Goldfields.

This Polymetals has a different angle to Sproule’s former vehicle, which ran mines across Australia, and listed this year bearing the rights to two exploration licences covering 112km of Guinea’s Siguiri Basin.

Polymetals’ Alahine and Mansala projects are located near the 10Moz Siguiri mine.

Its exploration activities have been unaffected by the coup that saw Guinea’s military take the capital of Conakry a couple months ago, completing its phase 2 exploration program at East Alahine in the September Quarter, comprising 98 drill holes including 94 aircore and 4 Reverse Circulation holes for a total of 7,320m.

 

GOLDEN RIM RESOURCES (ASX:GMR)

Golden Rim Resources boasts a resource of 2Moz at 1.3g/t gold in its Kouri gold project in Burkina Faso and last year acquired the Kada gold project in Guinea, where it is earning the right to own up to 75%.

The project hosts a non-JORC resource in its oxide profile to around 100m deep, and sits just 36km south of AngloGold’s Siguiri mine.

Kada was previously drilled by Newmont, which sunk 33,857m worth of diamond and RC holes, but was considered too small a target for the world’s biggest gold miner.

That’s all good for $22m capped Golden Rim, which is going to undertake a 6500m resource definition RC drilling campaign with the intention of delivering a maiden resource in January next year.

 

MAKO GOLD (ASX:MKG)

Another Ivoirian explorer on the hunt for high grade gold deposits in the West African nation.

Founded by the husband-wife team of Peter and Ann Ledwidge who led Orbis Gold into its $178 million takeover by SEMAFO in 2015, Mako owns the Napie gold project and the Korhogo project adjacent to Barrick’s 4.9Moz Tongon mine.

Located on the same belt as Tietto’s Abujar, Mako this year reached an agreement to take its share in its Napie JV with Perseus from 51 to 90%.

In exchange the leading African mid-tier has become a 5.1% cornerstone shareholder in Mako.

Four prospects are currently being drilled in an expansive 35,000m RC and diamond program at Napie. Like Orbis, Mako is hoping to find a multi-million ounce resource, with maiden numbers due soon for the Tchaga and Gogbala prospects.

 

MARVEL GOLD (ASX:MVL)

Marvel Gold was a struggling African graphite company known as Graphex before it locked down a suite of Malian gold assets to change course.

Marvel recently spun Graphex’s old Chilalo graphite project into a new ASX-listed graphite company, Evolution Energy Minerals (ASX:EV1), which popped on debut and is now worth $51 million to Marvel Gold’s own $45m market cap. Go figure.

Marvel’s own stake in EV1 was worth $25.5 million as of last week, which added to its $5.4 million bank balance values its own 1Moz plus gold inventory at just $11 million.

MVL is sitting on ~1Moz of gold at its ‘Tabakorole’ project in southern Mali, a region which includes Firefinch’s 7.5Moz Morila gold mine and Resolute Mining’s 7Moz Syama gold mine.

It also has a strong pipeline of regional targets, with a mammoth 15,000m auger and 15,000m aircore drill program now underway.

The company is assessing its options with respect to the EV1 investment “to ensure value is maximised for shareholders”, MVl managing director Phil Hoskins says.

The $45m market cap stock is up 10% over the past month, and 54% year-to-date.

MVL had about $5.2m in the bank at the end of the September quarter which, alongside this $25.5m windfall, gives the company plenty of cash to either return to shareholders or sink into exploration/acquisitions.

 

ARROW MINERALS (ASX:AMD)

Formerly focused on Australian exploration projects, Arrow moved into Africa with the takeover of Boromo Gold in 2019.

That brought Boromo’s impeccably named Howard Golden – a geo involved in the Syama and Oyu Tolgoi discoveries – in as chief executive.

Arrow’s focus is in Burkina Faso, where it controls five gold projects including the Dassa gold discovery, where more than 12,500m has been completed with 60% of drill holes intersecting gold above 1g/t.

Arrow controls an unbroken 80km of strike over the Boromo belt, near Ouagadougou and is currently sinking 6000m of RC drilling into the Vranso project including 50 holes at Dassa, Guido, Semapoun and Bantole.

 

AMANI GOLD (ASX:ANL)

Klaus Eckhof’s tiddler Amani Gold owns the Giro Gold Project, just 35km west of the aforementioned Kibali in the DRC.

Amani chairman Eckhof is intimately familiar with the region, having led Moto Gold Mines ahead of the sale of the 22Moz Kibali gold mine to AngloGold and Randgold and previously chaired DRC lithium explorer AVZ Minerals (ASX:AVZ).

Giro hosts the 4.1Moz Kebigada gold deposit, where Amani plans to run a 3500m diamond drilling program over the December and March quarters.

 

BASSARI RESOURCES (ASX:BSR)

Bassari Resources hasn’t traded on the ASX for over a year.

After a board shake-up that saw former South African and Zimbabwean international cricketer and lawyer John Traicos become executive chairman it has been working to revive its Makabingui project in Senegal.

That is the project that needed to be redrilled back in 2017 to ensure it hadn’t been depleted after the mine wasoverrun by up to 50,000 illegal miners “from all parts of Africa”.

This month it said a settlement had been reached over a dispute regarding a finance facility and an MoU has been signed with the Senegalese Government to allow the company’s operating permit to be renewed beyond its initial five-year term in July next year.

Among the terms and conditions, Bassari’s local subsidiary Makabingui Gold Operation SA is required to “immediately re-commence operations at the Project and carry out preproduction works (civil, earthworks, plant construction, mine site preparation) and commence mining in accordance with an agreed schedule of works towards gold production by August 2022.”

 

THETA GOLD MINES (ASX:TGM)

Unlike the other companies in this list Theta Gold Mines operates in a mature gold field in South Africa.

The former Stonewall Resources owns the TGME underground project in the Eastern Transvaal gold fields, near Johannesburg and around 300km northeast of the famous Witwatersrand Basin.

Theta says it dominates the Eastern Transvaal with a 620km2 tenement package covering 43 historical mines and nine mining rights.

The first phase of the underground project would involve the development of three mines – Frankfort, CDM and Beta – with a probably ore reserve of 419,000oz and 3.5Moz of inferred mineral resources beyond that.

A PFS in April said the mine could produce 60,000ozpa from its third year of operations with a 7.67 year mine life at AISC of US$905/oz and a capital cost of US$79m.

South Africa has become a less predictable place to invest in recent times, and Theta has run into some permitting issues with the SA Minister for Forestry, Fisheries and the Environment declaring a forest nature reserve over an area containing 20% of its potential resource base and the first phase of underground mining last month.

Theta shares hit a 12 month peak of 40c early this year but are now down 48% year to date at 17c.

 

WEST WITS MINING (ASX:WWI)

Another South African gold hopeful, West Wits owns the Witwatersrand Basin Project.

A DFS showed its first stage, the Qala Shadows mine could deliver 663,000oz over a glacial 17-year mine life, with a 5.5-year payback period on its US$50 million development costs and peak steady state production of 53,000ozpa over a 10-year period.

The broader WBP would produce 1.57Moz of gold over a 25-year life of mine, with average steady state production of 80,000ozpa over an 18-year period, according to a scoping study.

$62 million-capped WWI has run afoul of environmentalists, who lodged failed objections to its mining approval this year. The company is planning to begin production from an “early mining initiative” at the Qala Shallows in February.

WWI shares have dropped 56.25% over the past 12 months to 3.5c.

 

CHESSER RESOURCES (ASX:CHZ)

Another Mark Connelly-chaired company chasing riches in West Africa, Chesser also counts Oklo MD Simon Taylor as a non-exec director.

The gold explorer has been banging about for a few years, selling the modest Kestanelik discovery in Turkey to a local conglomerate back in 2014 for $40 million.

That made for happy shareholders after a $33 million special payout and left Chesser hunting for a new calling.

It found that in Senegal’s Diamba Sud, a greenfields gold project located on the rich Senegal-Mali Shear Zone.

Chesser last week released a maiden gold resource for Diamba Sud, four years after acquiring the project, of 15.2Mt at 1.6g/t for 781,000oz. That came around 16 months after making the discovery of high grade gold at its Area D target.

Around 69% of those are in the indicated category and, as is common in West Africa, 95% of the ounces are within 135m of surface.

A 15,000-20,000m drill program is planned to commence in January 2022 target resource expansion.

“We are very pleased to deliver the maiden Mineral Resource at Diamba Sud at a low discovery cost of US$11 per ounce,” Chesser MD Andrew Grove said. “The shallow, high-grade nature of the mineralisation has resulted in a robust resource that we believe will continue to grow with additional drilling.”

Time for a break. Go for walk or take some tea; we’ll be back right after this with upcoming IPOs.
 

 

POTENTIAL IPOS

 

SARAMA RESOURCES (TSX.V:SWA)

Another of Grigor’s picks, Sarama is reportedly keen on returning to its bosses’ Aussie roots by listing on the ASX, though the move announced in October last year has been stalled by permitting issues.

Sarama owns the Sanutura project in southwest Burkina Faso, which between the Tankoro and Bondi deposits has a mineral resource of 2.9Moz, including 9.4Mt at 1.9g/t for 600,000oz in the indicated category and 52.7Mt at 1.4g/t for 2.3Moz inferred.

The gold explorer is led by MD Andrew Dinning, a former WMC man who was COO at Moto Gold Mines, the company which outlined the 22Moz Kibali gold mine in the DRC and flipped it to Randgold (now Barrick) and AngloGold Ashanti for US$600 million in 2009.

Its market cap is just ~C$19m on last count – too low in Grigor’s opinion.

“It is contemplating a a mineable resource in the order of 2Moz at around 2 gpt with low technical risk and high gold recoveries. The target resource across its portfolio of projects is 3-3.5Moz. All the negatives have been factored into the share price, and then some,” Grigor said.

“A market capitalisation of only $20m for 2.9 Moz is way too cheap. We expect that once the ASX listing is sorted, and there is another $5m in the kitty, the share price will rise above the long term downtrend in which it is currently imprisoned.”

 

HARANGA RESOURCES

Haranga was chasing up $6-6.5m in an IPO led by CPS Capital Group.

Not to be confused with the delisted iron ore explorer of the same name, it owns the Issia project to the south of Tietto’s Abujar project in southern Cote d’Ivoire.

Issia boasts “extensive” geochemical gold anomalies but no previous exploration drilling despite evidence of ‘artisanal mining’ from local prospectors.

Haranga wants to launch a RAB drilling program in early 2022.

It is also holds or is securing permits for gold projects in the southern part of Burkina Faso, and the Saraya uranium and lithium project over in Senegal.

 

LUKIN RESOURCES

This IPO hopeful recently opened a $7.5 million IPO through Novus Capital seeking cash to explore gold and base metals projects in Queensland and South Africa.

Its South African projects are all located in the Northern Cape Province, including the Koa project 15km south of Orion Minerals’ large Prieska VMS deposit and the 412,000t Bushy Park zinc deposit.

Lukin’s gold interests come at the Vaalkop project, which hosts the polymetallic Salt River deposit.

That contains 440,000oz of gold, 434,000t of zinc and 140,000t of copper.

At Stockhead, we tell it like it is. While Oklo Resources and Firefinch are Stockhead advertisers, they did not sponsor this article.

The post Tossing up ASX-listed African gold stocks? Here’s the ultimate, only guide you’ll ever need appeared first on Stockhead.










Author: Josh Chiat

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Energy & Critical Metals

Best Penny Stocks To Buy Right Now

Penny stocks can sometimes get a bad reputation. On the… Read More
The post Best Penny Stocks To Buy Right Now appeared first on Investment U.

Penny stocks can sometimes get a bad reputation. On the one hand, they can offer tremendous growth potential as young, promising companies. But, on the other hand, they can be failing businesses with no escape plans. Luckily, I will cover the best penny stocks to buy right now and help you avoid a money-drain situation.

To be considered a penny stock, it generally includes assets trading under $5 a share. Although not all companies trade for pennies, they offer immense growth potential for those who find the hidden gems.

Check out this list for the best penny stocks to buy right now.

penny stocks to buy right now

Top 5 – The Best Penny Stocks to Buy Right Now

Penny stocks have gotten a huge boost this year from traders looking to capture the next big thing. For example, GameStop (NYSE: GME), a stock trading for less than $5 around two years ago, is now up over 3,000%.

However, it’s also important to realize these investments still come with major risks. Penny stocks are often more volatile than other types of investments.

Although not every penny stock will perform like GameStop, these businesses are making a name for themselves. With this in mind, let’s take a look.

#5 Invacare Corp. (NYSE: IVC)

  • Market Cap: 115.92M
  • Focus: Health Care Equipment
  • Key Statistic: 5.8% net sales growth in Q3.

Invacare Corp is a newer member of the penny stock club, falling from a yearly high of over $10 a share. But, after experiencing several issues in the previous quarter, the company is lowering its guidance for the rest of the year.

Between labor shortages and freight costs, the company had no choice but to change the growth outlook to -1% – 2%. As a result of the outlook changes, IVC stock is down over 60% this year.

Looking ahead, however, Invacare is in a growing medical equipment segment. The company offers several innovative patient products in categories such as mobility, rest, and patient transfer.

Despite just being surpassed by millennials as the largest generation, Baby Boomers carry the second largest population group. And with the baby boomer generation all being over the age of 65 by 2030, the demand for medical equipment will continue growing.

#4 Denison Mines (NYSE: DNN)

  • Market Cap: 1.31B
  • Focus: Uranium
  • Key Statistic: Q2 revenue grew 58% YOY.

This year, Dennis Mines has been a hot penny stock, with Uranium prices soaring in September, hitting its highest price in seven years. The demand for uranium comes as energy prices are being pushed higher due to supply chain issues brought about by the pandemic.

Additionally, uranium is considered a clean energy source since it doesn’t emit harmful gases. In fact, it provided 52% of America’s clean energy in 2020.

With that in mind, Denison has a growing portfolio of projects with enormous potential. Its flagship Wheeler River project is the largest undeveloped uranium mine, with ‘top 5’ producing potential.

As clean energy becomes more of a priority, look for the demand for uranium to continue climbing. And because of this, Denison earns a spot on the best penny stocks to buy right now list.

#3 Ocean Power Technologies (NYSE: OPTT)

  • Market Cap: 95.47M
  • Focus: Renewable Energy
  • Key Statistic: Q1 revenue growth of 60%.

There’s no denying the movement towards renewable energy sources. And what better way to capture clean energy than from one of the most abundant sources – wave energy.

According to recent insights, wave power has the potential to generate about 66% of the electricity in the United States. As a pioneer in its field, OPTT is developing technology for a cleaner future.

The company just received a U.S Department of Energy award to study next-generation wave energy technology. On top of this, the company is transitioning from research stage to deployment, offering excellent growth potential for investors.

Keep reading to discover the best penny stocks to buy right now.

Best Penny Stocks – #2 IZEA Worldwide (NASDAQ: IZEA)

  • Market Cap: 110.36M
  • Focus: Digital Marketing
  • Key Statistic: Managed services grew 130% YOY.

IZEA is an online platform that connects creators with businesses. The online marketplace makes it simple for companies to partner with top influencers to help promote their brand. The company has been developing the online influencer industry since it was started in 2006.

Despite being up over 200% since last year, IZEA stock is still down from its highs of $7.45 per share.

But, the company is starting to gain some traction growing its user base to over 850K registered creators. On top of this, the company has worked with major brands like…

  • Chipotle
  • Pepsi
  • Harley Davidson
  • And Planet Fitness

If the company can continue growing its user base with solid brands, it has a real chance of capturing a sizable position in the potential +$785 billion digital marketing industry.

Best Penny Stocks – #1 Energous Corp. (NASDAQ: WATT)

  • Market Cap: 112.36M
  • Focus: Wireless Charging Tech
  • Key Statistic: +50% YOY revenue growth in each of the last five quarters.

Another innovator, Energous Corp, is developing next-generation wireless charging technology. The company was started in 2012 and is making significant developments as of lately.

Currently, the company has +200 patents for its first-of-a-kind WattUp Technology. What’s more, Energous just received FCC approval for its unlimited distance over the air wireless charging tech.

The company is making strides to bring its product to the mainstream, a market that can be worth over $2.5 billion by 2028.

With that in mind, WATT stock is down 13% in the past year, currently sitting just under $2 a share. The innovative product, value, and potential market land Energous number one on the best penny stocks list.

Best Penny Stocks to Buy Right Now – Is Penny Stock Investing Right for You?

When it comes to investing in penny stocks, it’s essential to know the risks. Penny stocks are highly volatile and can change prices significantly in a matter of seconds. Even the best penny stocks can experience drawdowns at times.

It’s crucial to do your due diligence before investing in penny stocks. These can often be newer companies with little known about them.

But, with that said, they can also offer investors a chance to get in on the ground floor of some of the most innovative companies. If you decide to invest in penny stocks, stay up to date with the company as things can change often.

Most importantly, investing in penny stocks can take years for meaningful returns to develop. Make sure you believe in the company and its mission.

And lastly, for more of the best penny stocks to buy right now, join Trade of the Day. This free newsletter comes packed with investing tips, tricks, and resources designed to make you a better investor. Invest with the best and sign up today!

The post Best Penny Stocks To Buy Right Now appeared first on Investment U.




Author: Pete Johnson

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Energy & Critical Metals

New Lithium Miner, Snow Lake Resources, Completes IPO

On November 18, Manitoba-based Snow Lake Resources Ltd. (NASDAQ: LITM) issued 3.2 million shares in an IPO led by ThinkEquity
The post Snow Lake Resources,…

On November 18, Manitoba-based Snow Lake Resources Ltd. (NASDAQ: LITM) issued 3.2 million shares in an IPO led by ThinkEquity at a price of US$7.50 per share. The company hopes to develop the first renewable energy-powered mine that can produce battery grade lithium. 

Snow Lake’s planned Thompson Brothers Lithium Project encompasses 13,828 acres about 20 kilometers east of Snow Lake, Manitoba, which is generally considered a mining-friendly jurisdiction.

While Snow Lake’s business plan touches on some of the hottest buzzwords in the investing world today – battery grade lithium and renewable energy – and a gigantic volume of 24.6 million of its shares, or 125% of fully diluted shares outstanding, traded on November 19, we urge investors to exercise caution on Snow Lake stock. Admittedly, lithium stands to be in great demand in the battery cathodes of electric vehicles (EVs) for many years to come, and the cash proceeds from the IPO will allow the company to engage in necessary resource development activities and complete technical studies.

The above calculations were based on a presumed US$7.00 IPO price and did not assume that underwriters would exercise their over-allotment option.

However, the company does not plan to begin mining activities until 1Q 2024, around 2 ½ years from now. Investors who are bullish on lithium’s prospects may want to focus on companies poised to begin production in the nearer term. Moreover, a substantial amount of work must be accomplished over the next 30 months in order for mining — and cash flow — to commence. 

A Preliminary Economic Assessment is nearing completion, but permitting and environmental studies must also be finished, as well as at least 20,000 meters of drilling, during that time.

Source: Snow Lake Resources Free Writing Prospectus, dated November 12, 2021.

After factoring in the total 3.68 million shares sold in the offering, Snow Lake’s fully diluted shares outstanding are about 19.4 million. (On November 24, IPO underwriters exercised their full 480,000-share overallotment option.). At Snow Lake’s current share price of US$6.49, the company’s stock market capitalization is around US$126 million, and its enterprise value is roughly US$99 million. Snow Lake’s enterprise value reflects pro forma net cash of around US$27 million from the IPO.

An Australian-based company, Nova Minerals Limited (OTC: NVAAF), will own about a 60% stake in Snow Lake after the IPO share issuance, down from 74% pre-IPO. Snow Lake management owns around 8% of current fully diluted shares.

It is of course possible that Snow Lake’s Thompson Brothers project proves to be a huge find and that both the permitting and ultimately the mining processes proceed more smoothly and quickly than expected. In that case, the stock could perform well over the longer term.

Snowflake appears to check many boxes that have investors’ intense attention: anything related to electric vehicles (EV) and renewable energy.  Nevertheless, no cash flow seems likely for at least 2 ½ years. It seems to us that investors’ current available capital might be better channeled to EV-related companies that could generate cash in the nearer term.

Snow Lake Resources Ltd. last traded at US$6.49 on the NASDAQ.


Information for this briefing was found via Edgar and the companies mentioned. 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 Snow Lake Resources, A Prospective Lithium Miner, Completes IPO; No Cash Flow Likely Until 1Q 2024 at the Earliest appeared first on the deep dive.




Author: Jim McFadden

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