Morning News Bites – October 14

It was another great day at Diggers with a diverse range of miners presenting. We will give you a snapshot of some presentations, which will include iron ore and nickel.

Mount Gibson Iron (MGX) was the first of the iron ore producers to kick off proceedings with Peter Kerr, their CEO, presenting. With their Koolan Island operations now in full swing the mine is producing the highest grade hematite at 65.2% and on track to export between 1.8 – 2.1Mwmt this financial year.  With cash costs expected to be around $65/Mwmt they will be looking at ways to reduce this in case the price of iron ore comes off its highs in the next year or two.  They are bullish though and looking at ways the mine life can be increased beyond the current five year plan. CAPEX has been high this year and some of that was the building of the new airstrip on the island.

Their Mid-West operations are low grade but the company is making the most of the high iron ore prices and mining continues in this region.  Extension Hill sales will continue into next year and the Shine project is expected to progress to targeted sales in mid 2021. With the company cash flow positive, debt free and providing a dividend, shareholders must be very pleased with how they are positioned in the market.

Fortescue Metals (FMG) presented and their CEO Elizabeth Gaines delivered. Elizabeth is taking the company to new highs and not just in production values. It is how they are achieving those production levels that is of some interest.  But first lets look at the eye watering figures.

178.2mt was shipped in FY19 up a healthy 6% on the previous year. C1 costs were just under US$13/wmt and a healthy dividend of A$1.76 per share was paid to lucky shareholders. Billions of dollars are to be spent on capital works across several projects, but with high prices and low costs you would expect the payback time to be small. The forecasts for production and costs in FY21 are very similar to the last financial year.

Fortescue is investing heavily in its personnel and the diversification of the workforce is opening up opportunities for people that may otherwise find it difficult to obtain work in this sector.  As an example there is a 14% employment rate of aboriginal workers across their Pilbara operations.  For a company of this size it is a credit that they are offering so many opportunities to aboriginal people.  Like other companies they are also experiencing higher participation rates with women in the workforce and currently 19% of the workforce is women.  Who better to lead this company than Elizabeth herself who is overseeing exciting times in the iron ore sector.

Legend Mining (LEG) had Managing Director, Mark Wilson present at Diggers and he was keen about the prospects of this junior nickel explorer. They are currently focused on the Fraser Range area, north of the Nova mine now owned by IGO.  They have some big players supporting them, mainly the Creasy Group and IGO, who have substantial holdings on the share registry.

They have nearly 3,100 square kilometres of land to explore and some early results are promising.  In one hole they have 19.8 metres at 2.71% nickel from about 230 metres below surface. Mawson and Hurley projects are showing a lot of promise and they believe that in these areas the resource will be bigger than what was modelled.  From current visual drill results they believe Mawson is open to the East and West.

The company is bullish on the future of nickel and believe they are in the right sector, with the right resource at the right time to make the most of the EV and battery storage market.

Poseidon Nickel (POS) presented at Diggers with Peter Harold the Managing Director addressing the attendees. It seems that nickel explorers and producers are more upbeat than they have been for a long time and Poseidon is no exemption. The presentation included a quote from Elon Musk which said: “I’d just like to re-emphasize, any mining companies out there, please mine more nickel”, and Poseidon is keen to do just that.

Their current projects include the Mt Windarra mine near Laverton, Black Swan and Silver Swan just outside Kalgoorlie and Lake Johnston near Norseman. A study is currently underway to check the feasibility of recommencing mining at the Emily Ann mine site that feeds into the Lake 1.5Mtpa Lake Johnston Mill.  Historically it has produced nickel at 3.5% and they believe they have a resource there that could produce 52kt.

The Windarra project is interesting because they believe they are sitting on 180,000oz of gold in the tailings from historical mining in the area. If they can turn those ounces into money they believe that it will pay for ongoing exploration and mining activities at the other sites.

Poseidon could be one nickel play to keep an eye on if all the plans fall into pace.

Listening to the presentations it is apparent that nickel just could be the new gold.  All the nickel companies that have presented so far have been very bullish on their outlook. Talk of the EV market about to take off, battery storage to be an even bigger market and the price slowly creeping up augers well for nickel miners.  Could we see nickel prices reach the highs of just over a decade ago or will it be a lot more subdued this time around, if it happens?  If I can be parochial, it would be great to see nickel surge and breathe new life back into towns like Kambalda. It is well placed for it to happen and if Kambalda booms, Kalgoorlie rockets.

Gold has been and looks like being a strong performer as well for miners and what were less than optimal projects are being looked at. Depending on who talk to there is still mutterings about gold hitting $10,000 per ounce. Good luck if that happens but I feel that in general the economy will be down the gurgles if that occurred.

Iron ore prices are high and the trifecta of nickel, gold and iron ore will see the WA economy bustle along, even when economies in other states are suffering.  Good luck to all the miners and their projects.  May they prosper and I hope that all of WA will benefit because of it.

Morning News Bites – September 8

In Today’s Morning News Bites for September 8. NSW, VIC and TAS brace for severe winds and dust storms, Victoria hires Salesforce for contact tracing, WA still with below average home builds despite housing grants. 

Legend Mining Limited reported an update from diamond drillhole RKDD023, which was designed to test the 25,000-30,000S conductor at the Mawson Prospect within the Rockford Project, Fraser Range, Western Australia. Legend Managing Director Mr Mark Wilson said: “The discovery of another 12.95m of massive nickelcopper sulphide in diamond drillhole 23, circa 200m from the previously announced massive sulphides, is a quantum boost for the potential of the Mawson Prospect. The nature of the mineralisation suggests we are closer to the intrusive source but we are not there yet. Downhole EM from this hole, which is now underway, is designed to provide data to assist in planning future diamond holes in this immediate vicinity.”

Shree Minerals Ltd has completed an initial desktop review of historical reports relating to Shree’s tenement application in the East Lachlan Fold Belt in New South Wales. The Turondale Project covers an area of 129.9 km² and is located 15km north of Bathurst. It is prospective for orogenic, porphyry and skarn related gold mineralisation. Commencement of exploration fieldwork is awaiting granting of the exploration licence, expected over coming few months. The East Lachlan Fold Belt has a long history of mineral production including gold (80 Mozs), copper (13 Mt), lead, zinc, silver and tin. It contains several large operating copper and gold mines including Evolution Mining’s Lake Cowal Gold Mine, Newcrest Mining Ltd’s Cadia Mine and Alkane Resources Tomingley Gold Mine. Also located within the East Lachlan Fold Belt is Alkane Resources’ 2019 Boda discovery with a reported drill intersection of 502 metres at 0.2% copper and 0.48 g/t gold from 211 metres.

High-grade gold mineralisation at shallow depths in its maiden Reverse Circulation (RC) drill program at the Kashmir prospect, has been reported by Gateway Mining Limited. The reports form part of its Gidgee Gold Project in Western Australia. Grades of up to 8.8g/t Au returned from initial reconnaissance Reverse Circulation drilling within the extensive Kashmir gold-in-soil anomaly, providing an outstanding target for follow-up work. Significant intersections have been returned from structures within both mafic volcanics and veining within the granodiorite. These mineralisation styles are consistent with those observed on the northwestern contact zone of the Montague Dome, which is the focus of Gateway’s exploration activities. Managing Director, Mr Peter Langworthy, said: “Intersecting these sorts of grades 1km apart in our very first drill program within a 1.8km long gold anomaly is an extraordinary result! This shows the scale of the opportunity at Gidgee and highlights the vast range of targets we have across the project – from resource-growth opportunities at Whistler and Montague to vast new gold anomalies such as Kashmir which are wide open for new discoveries.”

ScandiVanadium Limited announced an update on the progress of the Gnama Nickel Project in the Fraser Range of Western Australia. Review of existing geophysical database including 15.1 line kilometres of MLEM and FLEM ground based electro-magnetic (EM) survey data identifies key area for follow up. Planning underway for ground EM survey to test up to 550m depth over historic nickel and copper anomalous drilling. Executive Chairman, David Frances, said “The Gnama Project has significant elevated nickel and copper in previous drilling analogous to Nova and Mawson pre-discovery. The ability to run a higher-powered ground EM over our project compared to previous surveys completed in 2005 allows us to investigate deeper parts of the system that have not previously been tested. We are planning a SQUID survey to test up to 550m depth and potentially identify the source of the 20m thick Ni-Cu-Co anomaly in historic drilling.”

Bardoc Gold Limited announced that recent Reverse Circulation drilling at the Excelsior Deposit, part of the company’s 3.02Moz Bardoc Gold Project located 40km north of Kalgoorlie in WA, has intersected broad zones of gold mineralisation which confirm the existing resource model and highlight strong potential for future growth and upside at the cornerstone deposit. The latest assay results from the 320koz Au Excelsior Deposit are from areas of lower confidence material outside the current Ore Reserves. The results demonstrate the mineralisation remains open down-plunge at depth below the current open pit design, highlighting future growth opportunities at this large-tonnage, low strip ratio deposit.

Morning News Bites – August 14

Supplied by Illuka

Morning News Bites as earnings season continues.

Clive Palmer is set to head to the high court with his battle against the Western Australian government. NAB cash earnings for the third quarter drop 7% and Woolworths appoints a Chief Medical Officer.

Middle Island Resources has announced it’s Two Mile Hill open pit Mineral Resources is up 13% and has taken the total for the Sandstone Gold Project to 657,500oz.This announcement follows on from a 52% increase last week for Middle Island’s Shillington Mineral Resource. Further resource estimates are due for five new satellite open pit deposits are still to come.

Newcrest Mining recorded gold production of 2.2 million ounces for its FY20. The darling of Newcrest in Australia, Cadia mine in New South Wales delivered 843,000oz of gold, with 96kt copper and 575koz silver. According to Newcrest Managing Director and CEO Sandeep Biswas, “Drilling results from Havieron and Red Chris continued to expand the known mineralisation with high grade intercepts. Our ownership of Havieron over the year increased to 40% as we track towards 70% underpinning the future of Telfer. We are in the unique position of having three outstanding growth options from which we expect to add new production ounces to our portfolio in due course.” A final dividend of US17.5 cents per share (100% franked), taking full year dividend to US25 cents per share. Newcrest also announced its biggest profit in eight years.

Significants nickel copper sulphides have been intersected from diamond drilling at Legend Mining’s Mawson prospect. Highlights included 9.3m of heavy disseminated to net-textured sulphide from 132.2m – 141.5m downhole and 15.35m of net-textured, heavy disseminated and semi-massive sulphide from 219.1m – 234.45m downhole. Managing Director of Legend Mining Mark Wilson said “Geologically we have now intersected significant mineralisation several hundred metres to the east north-east of our previous discovery and our geophysical advice is that we probably have not hit the best part of this conductor.”

First pass gold hits have been delivered to Golden State Mining at its Yule South target. Target 1 returned best intercept of 8m @ 0.92g/t Au from 96m incl. 4m @ 1.81 g/t Au from 96m, while Target 5 returned best intercept of 19m @ 91ppb Au from 46m incl. 4m at 350ppb Au from 58m. These results were from reconnaissance Aircore drilling based on aeromagnetic interpretation. Managing Director Michael Moore said “We are pleased with the calibre of these first pass gold results, having drilled gold intersections in just our first two targets of an essentially untested regional project area in an emerging gold district. To drill a gold intersection of 8m @ 0.92g/t Au from 96m including 4m @ 1.81 g/t Au from 96m in only the second drillhole of the 199 hole program speaks volumes about our targeting and strategy up at Yule.”

Iluka Resources returned a solid net profit after tax of $113 million from its half year results to June 30 2020. This is despite the Mineral Sands revenue being down due to COVID-19 on the world markets. Managing Director Tom O’Leary said the impact of COVID-19 lead to a decline of 20% in mineral sands sales volumes, but appeared pleased with the position Iluka are in Tom O’Leary, said “Iluka has recorded a solid first half result given the impact of COVID-19 on zircon and titanium markets and the global economy broadly. Given the volatility experienced throughout the world over recent months, we’re pleased with the earnings and cash position we’ve delivered.