20 Mining Companies for 2024 – Part I (A-E)
Mining small caps endured a rough 2023, with base metals the worst-performing commodity sector for the second year in a row.
High interest rates took their toll, pushing up the dollar, in which metals are priced, increasing costs for importers, and discouraging capital investment. Depressed economic conditions hit demand for metals, highlighting the sector’s dependence on the Chinese economy, which has struggled for growth through the year. Aluminium, lead and zinc prices have all been subdued, and nickel has had a particularly bad year, the sector saturated by an Indonesian supply glut.
There have been some bright spots. Revived interest in nuclear power in the wake of of the Ukraine invasion has sent uranium prices soaring by 70pc. Tin prices have risen after mining was suspended in Myanmar, a key supplier. And copper, in ever greater demand as a transition metal, finished the year as the best performing industrial metal, supply hit by mining issues in Latin America. The red metal finished this year up 2.5pc at $8,600 per tonne. Goldman Sachs predicts the price will rise further to $10,000 over the next 12 months, as miners struggle to meet demand and declining interests rates allow for more benign economic conditions.
Gold has also – as so often – been something of an outlier, touching all time highs earlier this month. Many investors have turned to the safe haven metal amidst economic and global unrest has continued, a weakened US dollar – in which most gold is priced – has given buyers more purchasing power, and central banks have continued to buy gold in bulk: sanctions imposed after the Ukraine invasion have encouraged banks in emerging markets to favour gold over US dollars.
Here we look out how a cluster of mining small caps have fared, and how they are positioned for 2024.
Altona Rare Earths
Altona Rare Earths (LSE:REE), a resource exploration and development company focused on Rare Earths in Africa, has spent 2023 advancing its flagship Magnet Rare Earths Project at Monte Muambe in northwest Mozambique to Prefeasibility Study stage.
REE acquired the Project in 2021, since when it has drilled over 7,800 metres, allowing publication of a maiden MRE in September, reporting 13.6 million tonnes at 2.42pc total rare earth oxide (TREO), 58pc of the tonnage in the Indicated category, the rest was in the Inferred category.
After listing on the LSE in June, with a fundraise of £2m, REE published a Scoping Study and CPR in October, covering an open pit mining operation considering an 18-year life of mine, and the extraction and processing of 750,000 tonnes of ore per year. With a NPV8 of $283.3m, an IRR of 25pc, and a life of mine EBIDTA of $1.67bn, the Scoping Study indicates the potential economic viability of the Monte Muambe project. A mixed rare earths carbonate (MREC) will be produced through a two-step process involving comminution and flotation to produce a concentrate, followed by gangue leaching and caustic cracking. The completion of the Scoping Study allowed REE to increase its holding in the Project to 51pc.
Next year’s drilling campaign, focused on increasing the MRE’s tonnage, and degree of confidence to the measured and indicated categories, will involve down-dip drilling at the Project’s Target 1 and Target 4, in-fill drilling and resource drilling on other targets. The increased MRE will be converted into an ore reserves statement as part of the Pre-Feasibility Study. In addition to the Study, next year’s deliverables include a Mining Concession and an increased project holding to 70pc. A Mining Licence application was lodged earlier this month. Work will be supported by a £250,000 loan facility announced earlier this month.
The market for magnet metals is projected to grow five-fold by 2040, and the existing Neodymium and Praseodymium Oxide supply deficit to widen by 90,000 tonnes. Growth will be driven by the world’s green energy transition, which relies on rare earths based permanent magnets as an essential component of wind turbines and electric vehicles.
Although focused on Monte Muambe REE will take advantage of its position in Africa to assess new rare earths opportunities with a view to adding more quality projects to its portfolio. The company’s H1 results stated net assets of £1.9m and cash of £1.1m. The company’s current price is 2p, down on its IPO price of 6p, taking its market cap to £1.9m. At this time REE is something of a slow burner, but worth watching in 2024 as it continues to define the potential of its valuable rare earths prospects.
Andrada Mining
Andrada Mining Limited (AIM:ATM) has made encouraging progress this year defining the potential of a set of assets prospective for lithium located in the south-western African state of Namibia.
ATM has four mining assets, all located in the Erongo region running along the Namibian seaboard. The company’s headline Uis licence is a fully operational mine producing more than 1,000 tonnes of contained tin each year. With significant lithium and tantalum by-produce, ATM believes the mine has the potential to become a global lithium supplier. The company is working to increase the licence’s current MRE of 138 Mt to at least 200 Mt.
Lithium Ridge and Spodumene Hill, both located within 35 km of Uis, are historic tin and tantalum producers, but also prospective for lithium-bearing minerals including spodumene, petalite, and lepidolite. Brandberg West, a largely under-explored 35,000 hectare licence, was in production during the second half of the last century, peaking at 1,249 tonnes of tin and tungsten in 1978. ATM believes the deposit is open-ended, at depth and along the strike. ATM is looking for a strategic partner with appropriate technical and financial capabilities to help the company accelerate the development of its lithium opportunities on the way to becoming ‘a 10 million tonnes per annum Run Of Mine Company of global significance’.
It raised $22.8m last September to fund exploration campaigns across all of its licences, setting as a key objective for 2023 the commissioning of a lithium pilot plant at Uis able to process at a rate of 20 tonnes per hour and produce at least 2,400 tonnes per year. Such a plant would have the potential to generate annual revenue of $5m, assuming an average grade of 4pc lithium oxide and a petalite price of $2,000. The plant was commissioned last summer, commencing production of lithium concentrate in November.
Following a 7,000 metre drilling programme undertaken last year to expand and increase the main ‘V1/V2’ pegmatite deposit currently being mined at Uis, ATM began 2023 by announcing an updated lithium, tin, rubidium, and tantalum MRE for the mine. The total MRE for the V1/V2 deposit inclusive of mining depletion increased to 81 Mt from 72 Mt, with Measured and Indicated lithium resources up 47pc to 38 Mt. Lithium and tantalum was upgraded to a Measured and Indicated classifications, and the lithium average grade increased to 0.73pc from 0.63pc, with total contained tonnes up by 30pc to 587,000 tonnes. In addition, the mine’s tin average grade increased to 0.15pc from a previous average of 0.134pc, with contained tin metal content of 120,000 tonnes, and a maiden resource was declared for rubidium (used in photocells) of 109,400 tonnes at an average grade of 0.14pc. The company’s off-site pilot test programme to investigate the metallurgical potential of its pegmatites had produced lithium concentrate in the form of a high purity petalite concentrate: the 85pc pure petalite concentrate assayed 4.16pc lithium oxide, sufficient for potential offtakers to indicate ‘that this concentrate composition represents a desirable lithium product’. Production at the pilot plant is planned to ramp up to 250 tonnes per month in Q1 2024.
In parallel, the company has continued to define the lithium potential of its other assets. Assay results for the inaugural drill programme undertaken over pegmatites located within the Spodumene Hill Project, published in July, reported that all drill holes had intersected mineralised pegmatites, indicating continuity at depth. In August ATM reported positive lithium assay results for a channel sampling and geological mapping programme undertaken within the Lithium Ridge licence area. When combined, the weighted average of the 27 highest lithium grade channel lines amounted to 179 metres at 1.20pc lithium oxide.
The company has continued to produce tin, its Q3 operations update reported a 100p year-on-year increase in tin concentrate to 346 tonnes (Q3 FY 2023: 145 tonnes), and similar increase in contained tin metal to 202 tonnes (Q3 FY 2023: 87 tonnes). As at 30 November the company had £23m cash. ATM’s positive year is reflected in its share price, up 20pc to 5.34p, taking its market cap to £85m.
Aterian
Aterian (LSE:ATN) spent 2023 building out a portfolio of critical and strategic metals projects in Morocco and Rwanda. The company now holds 17 copper-silver and base metal projects comprising 60 licences across a project area of 897 km2 in Morocco, primarily targeting critical and strategic minerals such as copper, silver and other base metals. It has a 2.5pc net smelter return (NSR) royalty over each of the licences.
This year ATN developed several projects. Exploration work at the 154.4 km2 Tata Project in the Anti-Atlas Mountains has identified copper mineralisation hosted within Adoudoudian sediments and the Cambrian Tata Group sediments. The Tizert copper deposit is considered the largest copper deposit in the western Anti-Atlas, with resources estimated to be 57 Mt grading 1.03pc copper and 23 g/t silver. An October operations update reported sampling up to 7.02pc copper. A substantial target area remaining unexplored.
The Agdz Project consists of 34.46 km2 covering five prospects, rock chip sampling returning grades of up to 26.5pc copper, 448 g/t silver, and 3.74 g/t gold. 576 metres of reconnaissance trenching has been completed in 13 trenches across two of the five prospects. Preliminary fieldwork has covered 50pc of the 99.3 km2 Azrar Project is situated in the western Anti-Atlas Mountains, with copper and silver mineralisation identified over five separate zones, with several historic hard rock artisanal mining occurrences recorded, with one sample returning 1.41pc copper and 41 g/t silver. The Jebilet Est Project, covering 73.6 km2, has reported high copper grades, including 4.43pc copper and 3.11pc copper returned from outcrop sampling. Rock chip sampling at the 29 km2 Jafra Project has reported high-grade silver and lead values up to 170 g/t silver and 22.2pc.
ATN has three partnerships exploring and developing lithium-tantalum(+niobium)-tin opportunities hosted within intrusive pegmatite dykes and sills in Rwanda. The company has a 70pc interest in the HCK Project covering 2,750 hectares in southern Rwanda. ATN recently entered an earn-in Joint Venture Agreement with Rio Tinto whereby Rio can earn up to a 75pc interest in the project through funding a two-stage $7.5m exploration programme. Work has identified 19 individual pegmatite zones , with the main target HCK-1 having an indicated strike length of some 2,500 metres. The Agreement got the green light from regulators in October, allowing Rio to begin exploring the LCT pegmatite swarm and the 19 identified zones across the 2,750-hectare HCK site and collecting valuable data on the lithium, tantalum, tin, and niobium to generate preliminary resource estimates.
ATN has been building its mining and trading infrastructure, worked to establish a trading facility in Kigali, Rwanda, where concentrate products from small-scale miners and cooperatives can be received, upgraded and cleaned, processed and packaged for export in compliance with international guidelines. It has been building a potential supply chain by visiting and understanding the production capacity of over 30 small-scale mining operations in Rwanda. The company reported a loss of £636,000 for H1 2023 as it ramped up exploration.
ATN’s share price has subsided some 60pc this year, to £0.81p at the time of writing taking its market cap to £7.7m. The groundwork laid this year may serve as the foundation for higher value in 2024.
Blencowe Resources
Blencowe Resources (LON:BRES) has continued to record progress through 2023 towards bringing its Orom-Cross graphite project in Uganda into production.
Orom-Cross has the potential to be one of the world’s largest graphite projects by size and scale of deposits. BRES says the project, for which a 21 year Mining License has already been awarded, is distinguished by three critical inflection points: low percentile capital cost, low percentile operating cost and high purity of end products. BRES took the project through the Pre-Feasibility Study stage in 2022 and is now focused on a Definitive Feasibility Study (DFS) as it moves towards decision to mine. Australian engineering firm CPC Engineering will manage and sign off on the DFS, work for which concentrates on three key areas.
Firstly, work in-country is underway to complete all work necessary to build and operate the mine, including all remaining licenses and permits. Second, pre-qualification testing has been conducted in the US and China to market the project’s graphite to potential buyers. Samples will be given to prospective buyers to conduct their own testing. Once Orom-Cross produce is duly ‘qualified’ offtake contract discussions can begin. BRES is conducting further metallurgical test work in the US to provide evidence that the project’s 96pc concentrate will be suitable for upgrading to the 99.9pc end products sought by the market. Third, BRES is working through a number of different potential funding options to secure the right partnerships for funding both the DFS and the project implementation. Earlier this year it passed a key screening test with the Development Finance Corporation (DFC), a US institution providing funding solutions for projects deemed critical by the US state.
This autumn BRES announced it had successfully completed the pre-qualification metallurgical test work, with commercial scale results confirming the project’s capacity to deliver a high-grade, low impurity concentrate. ‘Significant interest’ had been received from established Chinese industry groups in progressing offtake arrangements. The company also said it had secured a $5m grant from the DFC to cover a substantial part of the DFS costs for the project, and the first $1m mobilisation tranche payment.
Test work has continued to progress. In October BRES completed initial stage spheronised purified graphite (SPG) upgrading, realising SPG values of 99.96pc and 99.99pc in China and the US., proving that ‘Orom-Cross graphite can upgrade into one of the purist SPG products, which will strengthen offtake negotiations and ultimately deliver more value to the project.’ And in December the company progressed the excavation and packaging of an additional 600 tonne bulk sample for processing in China, which ‘will be used to confirm consistency of end products delivered via commercial scale processing’ and ‘provide larger samples of several tonnes to various tier one potential battery off-takers who have requested same for commercial quality testing.’ The company is now proceeding with additional metallurgical test work for other specialised market segments and to consider downstream processing as part of an enhanced project strategy.
BRES’s share price is currently just under 5p, and its market cap £10m, the company’s value holding steady over the past year.
Bluejay Mining
Bluejay Mining (AIM:JAY), an exploration company with projects in Greenland and Finland, pivoted away from Dundas Ilmenite (Titanium) Project in 2023 to focus on an array of other interests.
Disappointing exploration at Dundas, once the company’s headline asset, led to its reclassification as ‘non-core’, and a new emphasis on other projects, notably the Disko-Nuussuaq Nickel-Copper-Cobalt-Platinum Group Metals JV Project and the Kangerluarsuk Zinc-Lead-Silver±Cu-Ge Project in Greenland, and the re-discovery of previously exploited licences like the Hammaslahti Copper-Zinc-Silver-Gold Project, the Enonkoski Nickel-Copper-Cobalt Project and the Outokumpu Copper-Nickel-Cobalt-Zinc-Gold-Silver Project in Finland.
A strategic review earlier this year highlighted Kangerluarsuk and Hammaslahti as the company’s main targets. With historical chip sample results of 41.1pc zinc and 45.5pc lead and grab samples of 9.3pc lead, 1.2pc copper and 596 g/t silver JAY believes Kangerluarsuk to host ‘a major palaeoproterozoic sedimentary basin’. The Geological Survey of Denmark and Greenland has acknowledged Kangerluarsuk as containing the strongest cluster of stream sediment zinc anomalies in Greenland, with samples up to 2,200 parts per million zinc. But ‘unseasonal weather constraints’ prevented the commencement of the field-season as the company would have wished.
JAY was however able to pivot greater operational focus onto brownfield assets in Finland, particularly Hammaslahti, where previous work conducted by the company several years ago delineated the high potential E-lode which is located parallel to historical mine workings. Historically, Hammaslahti has produced a total of seven million tonnes of high-grade copper-zinc-silver-gold ore between 1971 and 1986, with all ore lodes remaining open at depth.
The company commenced drilling at Hammaslahti at the end of May, a 2,000 metre drill programme conducted on the E-Lode confirming the continuity of the high-grade copper-zinc-silver-gold ore lode and the presence of polymetallic mineralisation interpreted to be a partially re-mobilised volcanogenic massive sulphide.
This autumn exploration results intercepted sulphide mineralisation with eight out of eight diamond drill holes targeting extensions of the E-lode mineralisation previously discovered by the company. Future drilling will focus on the possible down plunge and up plunge extensions of the E-lode targeting higher grade ore shoots, and the possible structural repetitions of the ore bodies at shallow levels. The company continues to move towards a maiden MRE, future drilling depending on funding.
Elsewhere in Finland, at Enonkoski 951 metres were drilled out of the planned 1,000-1,500 metre campaign, followed-up by another drilling programme funded by former JV partner Rio Tinto. The JV enabled JAY to significantly advance its knowledge of the project through $4.65m exploration expenditure, opening up potential targets along the Enonkoski belt. JAY increased its licence areas and is now the largest landholder on the prospective Outokumpu belt, that hosts three past producing high-grade, polymetallic mines.
During 2023 JAY raised £1.3m to fund development at Hammaslahti, the raise followed by a further injection of £600,000 to move the company into 2024. JAY divested some of its assets to a new venture, Metals One, which went public with JAY retaining 29pc. And in October the company was selected to participate in Finland’s newly established Artificial Intelligence in Mineral Exploration (AIMEX) Project, which offers €5.6m to increase the international competitiveness of the country’s exploration and mining industry. The AIMEX consortium brings together leading researchers in mineral prospectivity mapping, machine learning, and sustainable development. JAY will contribute technical expertise and data from the Hammaslahti and Outokumpu projects.
JAY’s price has suffered through 2023 as it has pivoted away from Dundas, its share price falling 85pc this year to 0.6p at the time of writing, taking the company’s market cap to £7.2m. JAY has a long road back, but with a cluster of prospective assets, and a refresh of management earlier this month, may begin to recover value through 2024.
Chaarat Gold Holdings
Chaarat Gold Holdings (AIM:CGH) has had a busy 2023 selling its operating Kapan Mine in Armenia to make room for investment in its Tulkubash and Kyzyltash Gold Projects in the Kyrgyz Republic, estimated to have resources of some 5,377,000 oz gold.
CGH confirmed the sale of Kapan in October for $55.4m, receiving an immediate $5m payable in cash, and continues to move towards a Final Investment Decision in in respect of the Tulkubash Gold Project, which contains JORC-compliant contained gold ounces in Ore Reserves of 647,000 oz and total resources of 1,011,000 oz. CGH proposes an open pit, oxide operation utilising heap leach processing with construction CAPEX of $104m. A relatively short 18-month time horizon to first production is envisaged, and an initial mine life of six years with potential to extend to 15 years. Tulkubash could provide significant cash flow from a 95,000 oz per annum gold operation from 2025 onwards.
CGH is in discussions with potential investors, notably Chinese group Xiwang International, regarding a first phase joint venture investment of $150m. Last month CGH entered into binding conditional agreements for the construction and operation of Tulkubash with Power Construction Corporation of China Limited, including contracts worth $82.8m for engineering, procurement, and construction, $160.1m for five-years mining, and $7.2m for five-years operation and maintenance. With these conditional contracts the company ‘will be able to move expediently to construction of its Tulkubash project as soon as the project funding has been secured’. Earlier this month CGH signed an MoU with the government of Kyrgyz Republic according to which the Republic ‘confirms its commitment to facilitating the development of the Chaarat Projects and to provide collaboration to increase investment into the country’. CGH also raised £1.1m to allow the company to fund costs incurred in funding the Project.
CGH continues to explore Tulkubash, Kyzyltash and Kyrgyz to determine the exploration potential of the wider licence area to help identify potential targets for the future. Last month the company completed its 2023 drilling programme at the Karator oxide gold prospect, a northeastern extension of Tulkubash project ‘which could potentially add significant reserves to the later years of the Tulkubash development’. Highlights included 3.38 g/t gold over 21.5 metres in one prospect and 1.43g/t gold over 95 metres in another. All nine completed drill holes intersected oxide gold mineralisation, confirming Karator’s prospectivity for high quality additional Tulkubash oxide gold resource’.
CGH’s H1 2023 results reported cash of $0.8m and net debt of $33m, reduced by $13.8m in respect of release from Kapan’s liabilities and receipt of the $4.5m cash from the sale. The company’s restructuring is reflected in a dip in its share price, down 50pc this year to 5.7p, taking its market cap to £40m. Securing investment for the Tulkubash Project is a clear value trigger for CGH in 2024.
Contango Holdings
Contango Holdings (LON:CGO) succeeded this year in bringing its flagship Muchesu Project (formerly known as Lubu), a high margin coke venture in Zimbabwe, into production.
CGO has a 70pc interest in Muchesu, a coal asset with a resource of more than 1.3 billion tonnes. The mine is currently being mined from Block B2, which contains an estimated 96 MT of coking coal. The company is now focused on optimising and expanding its operations to become a fully integrated coal producer. By manufacturing coke at site, CGO believes that margins could be increased from $80/t to more than $300/t, with coke sold to the South African ferro alloy and industrial markets. The company has secured an offtake agreement with TransOre International FZE for the offtake of up to 20,000 tonnes per month of washed coking coal from the mine gate.
Once steady state production is achieved in Q4 2023 CGO expects its operating costs to be approximately $45 per tonne of washed coal, with larger volumes expected to bring greater economies of scale. CGO has also signed an MoU with a global Multi-National Company (MNC) exploring a larger coke operation at Muchesu, and an additional coking coal offtake. Though focused on the development of Muchesu’s coking business CGO is exploring the possibility of thermal coal production at the site. And it has a second venture, the Garalo-Ntiela Gold Project in Mali, which has potential for a resource of 1.8 Moz to 2 Moz gold.
In October CGO announced a possible asset sale, reporting that the company ‘had received a non-binding proposal for the potential acquisition of its assets which may results in the sale of its assets at the subsidiary level’. The proposal is ‘at an early stage with a number of commercial points under discussion’, with no guarantee that the discussions will lead to a formal offer. Earlier this month CGO said that the interested party had drilled three holes at site as part of its due diligence process and is reviewing the results.
The company also had news regarding the MNC with which it has been in discussions regarding the expansion of operations at Muchesu. The MNC has expressed a desire to enter into an offtake with CGO for an initial 80,000 tonnes per annum of washed coking coal from the Muchesu Project, equating to approximately 6,700 tonnes per month, although there is clear potential to expand on this figure as production capacity increases. CGO will supply 1,000 tonnes of washed coking coal for a formal industrial trial. CGO received £116,000 payment for the sample earlier this month.
CGO raised £7.5m in Q4 2022 to fund ongoing development at Muchescu and this year’s commercial activities. The company reported its first sales in August, and held cash of £200,000 in September. It raised another £1m through existing shareholders by means of a bridging loan earlier this month, pending further sales under the TransOre offtake arrangement and a potential new offtake arrangement should the MNC’s coking coal trial prove successful.
CGO’s share price has taken a hit over the past few weeks as speculation about a significant fundraise rumbled on, which the company has denied, falling to 2.5p at the time of writing, taking its market cap to £11.8m.
Ecora Resources
Ecora Resources (LON:ECOR) relied on strength in depth across its extensive portfolio of royalty-bearing interests during a challenging 2023.
The company has transitioned from a coal orientated royalty business in 2014 to one that by 2026 will be materially coal free, with 90pc exposure to commodities supporting the shift to a green economy. ECOR has streams for cobalt (Voisey’s Bay), steelmaking coal (Kestrel), copper (Mantos Blancos), vanadium (Maracás Menchen), iron ore pellets (LIORC) and uranium (McClean Lake Mill and Four Mile), and a cluster of nickel and copper development projects (West Musgrave, Santo Domingo, Piauí).
Softer prices for steelmaking coal and cobalt contributed to a fall in portfolio contribution in H1 2023 to $44.5m from a record $92.8m for the previous year. The company recorded a loss before tax for the period of $10.2m (H1 2022: profit $130m) reflecting the lower royalty and metal stream related revenue, and sharply reduced revenues from. H1 2023 adjusted earnings were down to $23.4m (H1 2022: $60.1m), with net debt standing at $43.3m (31 December 2022: $36.4m).
The company says it is ‘now entering a two to three year transition period during which it will move away from a dependency on revenue from Kestrel to become a diversified royalty company focused on future facing commodities’. Underground mining activities are ramping up at Voisey’s Bay, which is expected to become a more significant revenue source next year. Construction of a nickel-copper project at West Musgrave is ongoing, with operator BHP continuing to target first production in the second half 2025. At Piauí a small scale PNP 1000 starter plant demonstrated promising commercial viability, with operator Brazilian Nickel continuing to evaluate construction financing options for the full scale project.
ECOR extended its interests in the summer, acquiring a 0.25pc NSR over the Vizcachitas copper project in Chile, operated by Los Andes Copper, for a cash consideration of $20m. A ‘large scale, low cost, and long-life project in an established mining jurisdiction’, Vizcachitas is expected to produce an average annual copper production of 183 kt in the first 8 years and an average of 153 kt over a 26 year reserve based mine life with extension potential. ECOR’s fifth copper royalty, Vizcachitas brings the company’s total acquisitions over the past 24 months to more than $400m: ECOR ‘remains in a strong position to continue its growth trajectory with over $150m in undrawn borrowings and other liquidity’.
The company’s most recent trading update, for the period 1 July to 30 September 2023, reported a portfolio contribution of $5.8m (Q2 2023: $14.7m) due to continued decline of revenues at Kestrel and maintenance at Voisey’s Bay. ECOR closed out the year with positive news, reporting that Australian courts had. upheld a judgement favourable to ECOR in the company’s dispute with Quasar Resources Pty Ltd, the owner and operator of the Four Mile uranium mine over which the Group has a 1pc NSR royalty. Following the initial ruling ECOR received a settlement payment of approximately AUD$6m. The upheld appeal is expected to release AUD$2.3m of accrued income in Q4 2023.
ECOR’s price has dipped by a third this year, down to 96p at the time of writing, taking its market cap to £254m. The company’s broad portfolio may position it to recover from a recovery in commodity prices in 2024.
ECR Minerals
Mineral exploration and development company ECR Minerals (AIM:ECR) is engaged in a radical reassessment of an extensive portfolio, mainly in Australia.
Until the past 15 months or so ECR was best known for its fully owned Bailieston and Creswick gold projects in central Victoria, Australia. But its share price has tumbled over the past couple of years as exploration has failed to yield the transformative breakthrough its Victoria assets seemed to promise, and it has been caught up in the wider downturn within the small cap natural resources sector.
In September the company announced significant board and management changes, Nick Tulloch and Mike Whitlow coming in as Executive Director and Chief Operating Officer respectively: Mr Tulloch the founder and CEO at Aquis listed Voyager Life plc, and a former CEO of Zoetic International plc; and Mr Whitlow, known to many small cap investors under the Doc Holiday persona, has more than 20 years experience investing in and financing start-up companies, and overseeing natural resources projects.
An update soon followed promising ‘a comprehensive review of all exploration activities currently being undertaken’. At the time these included the Lolworth Project, where an extensive fieldwork campaign of soil sampling and rock chips has already been successfully completed; the Hurricane Project, where the company was awaiting sampling programme results; and the Blue Mountain Project, prospective for a gold discovery. Though under review ECR still believed its Creswick and Ballieston assets in Victoria had considerable value. The company was also reviewing its Tambo Project, also in Australia, and the Danglay Gold Project in the Philippines. It has several royalty assets, including the Fosterville South Exploration Ltd where it has the right to receive up to AUD$2m in payments subject to future resource estimation or production, and the SLM gold project in Argentina, where it holds a royalty potentially worth $2.7m.
Changes were soon afoot: later that same month ECR submitted an application for an Exploration License at Kondaparinga, a 120 km2 area within the Hodgkinson Gold Province in North Queensland. If granted a proposed exploration programme will aim to verify historic stream results and if successful, a detailed survey programme will follow. The following month ECR took the market by surprise, announcing the termination of its option to acquire the Hurricane Project, three tenements in North Queensland well publicised in the company’s previous communications. ECR said that ‘Although preliminary results from ECR’s due diligence show promise … the potential value to ECR of the Hurricane project cannot be justified against the previously agreed acquisition terms.’
The company is however continuing to pursue its exploration permits at Lolworth Range, a relatively unexplored 946 km2 area in North Queensland located some 120 km west of the well known Charters Towers gold district. Early exploration last year ‘exceeded expectations across all metrics’, sampling returning multiple gold anomalies with a 14pc visible gold strike rate, together with significant levels of tantalum and niobium. ECR believes ‘the mineralisation at Lolworth is becoming ever more valuable and diverse’, and ‘could be host to significant Gold, Niobium, Tantalum and REE discoveries’.
Last month ECR announced results from pan concentrate stream samples suggesting an extension in the size of the gold footprint south of the Reedy Creek area into Butterfly Creek. Results from Flaggy Creek and Reedy Creek West soil sampling are due soon, with interpretation of these results determining the next steps to be taken. Follow-up investigations targeting other Niobium and REE stream anomalies are also in progress. The company is also pursuing drilling at Creswick, exploring prospects that have previously provided evidence of gold mineralisation from soil analysis and rock chip sampling. Assay results are anticipated to be available midway through the first quarter of 2024.
ECR is supporting its current work through £580,000 raised in September by way of a direct subscription with high net worth individuals and institutional investors. The funds will be allocated ‘to fast track ECR’s Queensland projects’ and ‘a number of new opportunities on the table that the Board may decide to progress once the appropriate due diligence has been undertaken’.
Commenting on the company’s ongoing programme Mr Whitlow said : ‘In less than 12 weeks, the Company has gone through a complete step change in approach. We have sufficient resources and budget for activities that will take us well into 2024, and whilst it’s exciting to be drilling, it’s more encouraging to be a part of a multifaceted approach which we believe will create shareholder value.’ The company’s price has been in the doldrums during a transitional year, falling some 67pc to 0.24p at the time of writing, taking its market cap to £3.76m. The price has however been on the turn this month.
Empire Metals
Exploration and development company Empire Metals Ltd (AIM:EEE) has enjoyed a remarkable year, rocketing in value by more than 550pc after making what appears to be a exceptional mining discovery in Western Australia.
Exploration through 2023 at the company’s Pitfield Project has yielded cumulative evidence of a giant titanium-enriched mineral system within a 40 km long magnetics anomaly. A maiden drilling campaign in March 2023, consisted of 21 drill holes totalling 3,206 metres, confirmed a high-grade titanium deposit composed of a layered succession of thick, titanium mineral rich sedimentary beds extending over a kilometre-wide area. Titanium mineralised beds consistently grading between 4pc and 10pc titanium, were identified in all but one of 21 holes drilled, starting at or very near surface and with nearly a quarter of the holes still ending in high titanium values of up to 154 metres depth. Anomalous copper values were also reported for 60pc of the drill sample intervals, averaging 131 ppm copper and peaking at 605 ppm copper, representing over 25 times higher than the background copper-in-soil, indicating that the fluids that formed this giant mineral system were copper-rich.
In July EEE announced that titanium enrichment (greater than 1pc titanium) in surface geochemical samples had been confirmed over virtually the entire 40km length of the regional magnetics anomaly, highlighting the prospect’s potential to develop into one of the largest primary titanium mineral deposits ever discovered. Further study confirmed the presence of ilmenite, an important economic titanium-iron oxide mineral. Furthermore, an airborne survey indicated significant potential to discover additional titanium mineralisation and/or zones of new economic minerals within the high-density core. EEE is currently exploring the core through a drilling programme designed to confirm the system’s and yield more information about key parameters such as mineralogy, grades, tonnage potential and geological controls on the thicker, higher-grade mineralisation.
Last month lab results from geochemical analysis of samples from the first of three diamond core drill holes confirmed strong titanium mineralisation throughout the hole to a vertical depth of around 350 metres. An extensive programme of the high-grade target areas is underway, with approximately 18 drill holes completed to date out of the total of 40 holes planned. Earlier this month results from the first five drill holes identified additional shallow high-grade bedded titanium mineralisation. Mineralogical studies have now commenced to carry out a detailed assessment of rock chip samples collected from drilling.
EEE has other projects. It was granted an Exploration Licence for its Walton Project in April, located in the under-explored Yerilgee greenstone belt in Western Australia, a prospective area for copper, gold and lithium. The company expects to begin maiden exploration in 2024. It is also planning for 2024 airborne geophysical surveys at its Stavely Project, located in the Stavely Arc geological belt of Victoria.
EEE’s last interim results reported a loss of £1,037,128 and cash of £1m, but the company raised £3m through a September placing to fund continued exploration. At the time of writing the company’s price was 9.22p, taking its market cap to £52.6m. As the scope of the Pitfield discovery becomes ever clearer EEE’s value may rise yet further in 2024.
