14 Mining Companies to follow in 2021 (Part II)
We continue our focus on mining companies to keep an eye on in 2021. After Part I, we now focus on the final seven companies to give you a few ideas heading into the New Year.
Companies covered in Part II include : #JAN #KAT #KAV #LND #PALM #SHG #SRES
Jangada Mines
Jangada Mines (LSE:JAN) is seeking to serve growing world demand for platinum through two Brazilian prospects.
Earlier this month the company reported on the early results of the second phase of drilling at its Pitombeiras Vanadium Project in the state of Ceará, designed to confirm an initial resource estimate of 5.70Mt million tonnes at an average grade of 0.51pc vanadium, 10.09pc titanium and 50.42pc iron. The highly encouraging results so far suggest that Pitombeiras’s orebody footprint actually extends further from the existing resource area – more results will follow as they become available.
Jangada also has an interest in the Pedra Branca project in north-eastern Brazil through a a 17.68pc stake in ValOre Metals Corp (TSX-V: VO.V). Comprising 38 exploration licenses, Pedra Branca has a JORC Compliant Resource of 1.52 million oz of platinum, 180 Mlb of nickel, 34 Mlb of copper and 9.2 Mlb of cobalt. The latest drilling results at Pedra Branca – also released this month – indicate near-surface mineralisation and a larger system than original estimates suggest, warranting additional resource expansion drilling next year.
Jangada is aiming to serve a growing world platinum market in which demand is exceeding supply: platinum is in particular demand from vehicle manufacturers and jewellers. With demand expected to reach nine million ounces by 2025 a substantial supply gap is opening up as South Africa, the world’s largest producer, reduces output: South African capital investment in platinum production has fallen from $4 billion to $1 billion over the past few years.
Jangada’s positive progress at Pitombeiras and Pedra Branca, and solid financial position has boosted its share price from 2p for much of the year to nearly 5p and another move up in the New Year looks to be on the cards.
Katoro Gold
Katoro Gold (AIM:KAT) is exploring Blyvoor, a near term gold production opportunity in South Africa, and Haneti, a polymetallic prospect in Tanzania, with potential for nickel, PGMS minerals (platinum, palladium, rhodium and others), copper, gold, lithium and rare earth elements.
Blyvoor, located some 75km south west of Johannesburg, was one of the country’s most prolific gold producers during its peak years in the mid-20th century, with recovered grades averaging more than 14 g/t from 1937 to 2013. Katoro shares a 50/50 interest in the licence with its joint venture partner Blyvoor Gold Operations Pty Ltd. The partners plan to exploit potentially viable deposits of gold and any other minerals from six gold tailings dams, which contain an aggregate JORC Code compliant resource of 1.34Moz of Au at an average grade of 0.30g/t Au. Subject to funding, they are targeting initial production of up to 250,000 tonnes per month of material from the tailings, with the possibility of ramping-up production to 500,000 tonnes per month within two years.
Forecasts suggest Blyvoor may sustain a mine life of 25 years, building to a production capacity of 500,000 tonnes per month and 35,000 ounces of gold production per annum. Total production of 661,171 ounces of gold over 25 years would generate revenue of US$992m. The partners forecast total project capital costs of US$110m across the life of the project, with a peak funding requirement of US$36.4m.
Earlier this month preliminary resource update results from Blyvoor exceeded expectations, recording a 10pc update in the total resource and placing 62pc into the Measured and Indicated category. Some 90 to 94pc of the total diluted resource for TSF 6 and 7 is expected to be marked as a Potential Proven and Probable Reserve.
The polymetallic Haneti prospect, covering an area of approximately 5,000 km2 in central Tanzania, is a joint venture with Power Metal Resources, in which Katoro holds a 65pc interest. The partners have announced details of a planned initial drill programme to enhance their understanding of the project’s geological characteristics, and – possibly – identify the existence of nickel sulphides. Pre-drill rig mobilisation now underway, and a drill contractor has been confirmed.
With a share price that has hovered around 2.5p for most of the year, it’s worth keeping an eye on both of Katoro’s promising prospects, which we discussed in greater detail earlier this year.
Kavango Resources
Kavango Resources (LSE:KAV) has made significant progress this year towards clarifying the promise of the company’s primary asset, the Kalahari Suture Zone (KSZ), a 450km long geological formation in south-western Botswana that studies suggest may be rich in sulphide deposits suffused with copper, nickel and platinum group metals (PGMs).
The KSZ’s structure seems to bear comparison with the prolific copper, nickel and PGM mines at Voisey’s Bay and Raglan (Canada), Jinchuan (China), the Thomson Nickel Belt (Canada), and, most significantly, Russia’s giant Norilsk mine.
Kavango’s 3D modelling has identified four high priority drill targets, around 200 to 600 metres deep, where the most significant deposits might be concentrated. Electromagnetic (EM) surveys to be undertaken over the coming weeks will further define the location and geometry of the targeted areas, allowing a drilling programme to be designed. See our analysis earlier this year interviews with the Kavango team for more details.
The KSZ has always been Kavango’s primary focus. But progress has also been made this year towards realising the promise of its interest in the Kalahari Copper Belt (KCB), a prospect covering part of the DRC-Zambia copperbelt that runs some 1,000km from northern Botswana to central Namibia. In September Kavango agreed a joint venture with Power Metal Resources (LSE:POW) to form a co-owned, privately held company focused on large-scale mineral exploration projects in Botswana. And another update earlier this month announced the start of field exploration programmes on prospecting licences within the KCB held by the joint venture. Sampling and ground magnetic surveys will seek to delineate regional targets for future airborne electromagnetic surveying.
Kavango’s progress towards realising the promise of its assets, together with bull markets for copper and nickel, puts it in a strong position as it enters 2021. The company concluded a fundraise last month for £2m to fund its programme for the new year, and has been further boosted by the easing of Covid-19 restrictions in Botswana, allowing field work to fully resume.
Kavango’s positive run of news has been reflected in a steady rise in its share price, which is now at around 2.65p, up from just over 2p at the start of the year.
Landore Resources
Landore Resources (AIM:LND) owns a cluster of metals and minerals interests across Canada and the US, but its primary focus is the BAM East Gold Deposit in its 100pc owned 30,507 hectare Junior Lake Property in north west Ontario.
Junior Lake is traversed by a highly prospective Archean greenstone belt, some from 0.5 to 1.5 kilometres wide, running from east to west for approximately 31 kilometres, most of which remains unexplored. The current Mineral Resource Estimate for the Deposit stands at 31,083,000 tonnes at 1.02 g/t for 1,015,000 ounces of gold, including 21,930,000 tonnes at 1.06 g/t for 747,000 ounces gold in the Indicated category.
In December Landore reported on a drilling programme aimed at further infilling and extending the defined gold resource, and to test the depth potential of the previously delineated mineralisation. Some 3,620 metres of HQ diamond core, comprising of 15 drill holes, have been completed to date, with all drill holes successfully intersecting prospective mineralised zones. Sample array results are pending, with the programme expected to complete in April 2021.
Landore has a host of other smaller interests in Canada and Nevada, prospective for metals including gold, copper, zinc, nepheline, silver and nickel.
The company completed three placings last year, raising a cumulative £3.3m. Landore’s financial results for the six months to 30 June 2020 showed a loss of £695,406 (2019: loss £697,542), results in line with expectations. Exploration costs were £102,750 (2019: £262,254). The company has no debt but will need to raise further equity in order to carry out its future exploration and development activities beyond the current drilling and exploration programme, and to acquire additional working capital. Landore is funded to complete the current drilling and exploration programme and to meet working capital requirements to the end of June 2021.
Landore’s positive work at Junior Lake has been rewarded by an increase in its share price from 15p to around 20p and worth keeping an eye on as it looks like the move up has only just started.
Panther Metals
Panther Metals (LSE:PALM), focused on gold and metals projects in Canada and Australia, has continued to expand its asset base this year.
The company’s primary focus is the Big Bear Gold Project in north-western Ontario, where it is investigating dozens of targets across an area of 46km2. In September Panther announced that geochemical soil sampling, outcrop mapping and geophysics had delineated five prospective target areas with two targets, Cook Lake East (with a strike length of over 600m) and Big Duck Creek (striking at least 580m) designated high priorities for further groundwork.
Panther expanded its Canadian footprint in July with the acquisition of the Dotted Lake Property located over prospective ground approximately 20km from the Barrick Gold Corporation’s well known Hemlo Gold Mine, which has produced over 21 million oz of gold over 30 years.
In Australia, Panther is pursuing the Marrakai Gold Project, covering an area of 10.1km2, near the Rustlers Roost project, one of the largest gold mines in the region, and the Annaburroo Gold Project, a single licence covering an area of 149.8km2 that has been little explored, and where the company believes gold deposits have been overlooked. In December the company confirmed a $112,500 acquisition of the Merolia Gold Project in the Eastern Goldfields of Western Australia, securing Panther a foothold in the highly prolific Laverton greenstone belt, a well established gold mineralised zone.
The company completed two placings this year to sustain its momentum. £823,000 was raised when it moved from the NEX market to the LSE in January, and a further £300,000 came in earlier this month. Panther’s interim results to 30 June reported cash reserves of £261,786 (since bolstered by the December placing).
Panther’s directors are open about the need for ongoing fund-raising to sustain the company’s exploration and acquisitions, but a steady rise in the company’s share price, from 6p at the start of the year to just under 13p, bears witness to continued investor confidence.
Shanta Gold
Through 2020 Shanta Gold (LSE:SHG) made further progress towards its longer term aim of looking beyond its long-time focus on Tanzania.
Production continued at its flagship asset, the New Luika Gold Mine located in the Lupa Goldfield, Tanzania’s second largest after the Lake Victoria field. The mine, now successfully transitioned from a surface to underground operation, has consistently produced 80-88k oz of gold per year since 2014. Production is due to continue to at least 2024, but there is potential for more: the current mine plan excludes an additional 531k oz of resources, and only three of seven potential deposits are currently in production.
Elsewhere, Shanta has started constructing its near-surface mine at Singida, an advanced stage exploration and development project. The mine is due to be commissioned in 2022, targeting 32k oz production per year. A further 664k oz of gold resources are estimated to be available beyond the current seven-year mine plan.
In August Shanta completed the acquisition of the West Kenya Project from Barrick Gold Corporation, paying $14.5m for an asset with an estimated 1.182m oz of resources – with an unusually high average gold grade of 12.6g/t – that has generated $55m through historical exploration. New resource estimate and construction decisions are expected within 36 months. An October fundraise brought in £32.2 million to support plans for planned infill drilling, expansion drilling, and technical studies over the period.
With the West Kenya project Shanta now has total gold resources of 3.2 million oz grading 3.58 g/t across all three of its assets in Tanzania (JORC 2012 compliant), and Kenya (NI 43-101 compliant). The company’s Q3 production and operations update stated an unrestricted cash balance of $6.7m, and net debt of $5.1m, down by more than $44m since 2017. A new Hardman & Co research note gives Shanta a provisional valuation of 31.7p based on NPV valuations for NLGM, Singida and West Kenya, and an expected long-term gold price of $1,700/oz.
Shanta’s strong progress this year is reflected in the sharp rise in its share price, from less than 10p at the start of the year to around 16p today.
Sunrise Resources
Sunrise Resources (AIM:SRES) offers a rare opportunity to invest in pozzolan and perlite, materials allowing a more environmentally sustainable cement mix than conventional carbon-heavy Portland cement.
Pozzolan, deriving from naturally occurring volcanic ash and pumice, doesn’t require the carbon-intensive mix of materials necessary for Portland cement. Perlite is a glassy volcanic raw material which when heated expands into a pale low density material used in various household and industrial applications, such as garden pots, insulation and fire proofing, and plaster and concrete fillers.
Sunrise’s primary asset is the 100pc-owned CS Project in Nevada, highly prospective for both minerals, and where preparations for drilling are well advanced. Perlite samples are being sent to five prospective customers for testing in their commercial facilities. A mobile crushing and screening plant is being constructed onsite to process the 100-ton bulk sample, a prototype for the first production facility planned by the company. Sunrise also wants to build a grinding facility to produce a fine ground pozzolan ready for sale.
The company is moving forward with detailed engineering and financial planning with a view to beginning commercial production next spring. Targets have been set for 14.5 million tons of pozzolan, starting at rate of 100,000 tonnes per year climbing up to 500,000 tonnes per year, and 1.3 million tons perlite starting at minimum rate of 20,000 tonnes per year climbing up to 100,000 tonnes per year.
The company is ideally located to address a particularly acute shortage affecting the west coast’s pozzolan and perlite markets, caused by the closure a coal-fired power station in Arizona that has taken 500,000 tonnes per year of high-quality fly ash off the market. Sunrise is well placed to meet the supply gap. Opportunities are also opening in the US perlite market. Perlite is a particularly effective medium for the cultivation of cannabis, a rapidly growing market in North America and beyond: the global legal cannabis market was worth an estimated $12.2 billion in 2018 and is projected to grow at a compound annual rate of 26.7pc.
The company is fully funded for all of its planned work programmes, with a £750,000 placing this August following £200,000 and £350,000 fundraises in February and last November. Sunrise has a clear plan to serve a clearly-identified market, and with a share price that has risen steadily this year, but still cheap at levels around 0.25 to 0.3p.
