Not just gold shining brightly among emerging Diggers, Dealers
It wasn't just gold, gold, gold at the annual Diggers & Dealers Mining Forum in Kalgoorlie-Boulder, which got underway with first drinks on Sunday night and ended with the high-profile gala dinner on Wednesday.
Over three days of presentations, 50 companies took to the auditorium floor to tell their story while a similar number of companies relied on foot traffic past their booth in the two Diggers marquees. More than 2400 diggers, dealers, investors and media attended, the second highest attendance on record.
Cannings Purple’s Investor Relations team went along for the ride and kept a look-out for some cracking stories among the emerging players in Australia’s mining sector. And it's not just about gold. Here is a summary, in alphabetical order.
Aeris Resources (ASX: AIS): As one of only two copper producers presenting at Diggers, Aeris was always going to attract a lot of attention – not just for the 100kph racing car giveaway at its booth. Executive chairman Andre Labuschagne was bullish on the outlook for production from the Tritton mine in NSW, with a number of underground developments set to maintain production over the coming years. Labuschagne was more circumspect about the Torrens JV project in South Australia, citing drill holes at $1 million a pop as the main reason why it paused the program while it looks for cheaper ways of assessing the more than 20 targets. Hindered by a weaker LME copper price, Aeris closed the week down 0.7c at 6.5c.
Cardinal Resources (ASX: CDV): With the gold price surging through US$1500/oz on Day 3 of Diggers, managing director Archie Koimtsidis was a happy camper, manning his booth that proudly stated the company’s ore reserve of 5.1 million ounces. Just for the record, that is about US$7.6 billion of future revenue when Cardinal’s Namdini project in Ghana gets off the ground. Cardinal owns one of the largest undeveloped gold projects globally, a fact recognised by institutional investors who have piled into the stock over the past year. More than 55% of the share register is held by domestic and overseas institutions. A decision to mine is expected late this year, with Cardinal hoping to be well underway with construction by the time Diggers 2020 rolls around. Cardinal closed the week up 16% at 42.5c.
Core Lithium (ASX: CXO): Having a corner booth location ensured Core had plenty of visitors wanting to find out about Australia's next lithium producer. Despite most of the focus at Diggers on gold, Core's high-grade Finniss project near Darwin attracted investors because of the fast payback and life extension potential. Proximity to Darwin’s port and other infrastructure certainly helps with both start-up capital costs followed by lower operating costs, when compared to some of the logistical challenges of the lithium players in WA. The Stephen Biggins-run Core wants to be in production next year. Its shares ended the week up 0.1c at 4.2c.
Gold Road Resources (ASX: GOR): The ASX's newest gold producer enjoyed an incredible week. After taking more than 60 investors and media on a site visit to the world-class Gruyere gold mine it developed in a 50-50 JV with Gold Fields of South Africa, Gold Road was able to lap up the investor gold buying frenzy at Diggers. The timing of the first gold pour at Gruyere, north-east of Kalgoorlie, at the end of June was therefore perfectly timed. Duncan Gibbs gave his first Diggers presentation as Gold Road managing director, painting a bright future for his company on the back of Gruyere’s production ramp-up and the broader Yamarna exploration belt, while his counterpart at Gold Fields, Stuart Mathews, described Gruyere as “a great investment for us”. Gold Road shares jumped from $1.36 to $1.615 over the week.
Northern Minerals (ASX: NTU): A Diggers highlight has become the annual presentation of Lynas Corp boss Amanda Lacaze. Lynas is one of only two ASX-listed rare earths producers - the other is Northern Minerals - and Lacaze is one of the most engaging presenters doing the rounds. This week was no different as she spelt out the significance of owning and operating the largest rare earths project outside of China. China, of course, dominates the global supply of rare earths, which are being used in permanent magnets in electric vehicles, wind turbines, defence systems and robotics. Having rare earths supply sources outside of China, therefore, is attracting increased investor interest. Northern Minerals has just terminated its offtake agreement with a Chinese party and managing director George Bauk seemed relaxed about inking a replacement deal. Based on Lacaze's Diggers address in relation to global demand for Lynas' products, Northern Minerals may also attract significant non-Chinese interest. Northern Minerals shares closed the week steady at 6.3c.
NTM Gold (ASX: NTM): One of the dominant themes at Diggers was the performance of gold producers – and the fact they are considered ex-growth and have to buy ounces to expand their production profile. Advanced projects and stranded deposits are all of a sudden in vogue. The Andrew Muir-led NTM is exploring in the sweet spot around Leonora and has already identified a 538,000oz resource at its Redcliffe gold project. An aggressive and systematic drilling campaign is underway. There is a plethora of hungry gold plants in the Leonora region, so NTM will be hoping to deliver further ounces with the drill bit before deciding whether to go it alone down the development path or seek a tie-up with a local peer. NTM shares jumped from 3.7c to 4.5c this week.
S2 Resources (ASX: S2R): Mark Bennett is one of Australia’s best-known and most successful explorers, courtesy of the Nova-Bollinger nickel-copper deposit he discovered on the edge of the Nullarbor and turned into the $1.8 billion Sirius Resources takeover target. With new vehicle S2, Bennett’s target has shifted to gold in a more exotic (and cold) area – northern Finland above the Arctic Circle. The informed will realise that S2’s Aarnivalkea project is a stone’s throw from Agnico Eagle Mining’s Kittila gold operation, Europe’s largest with a resource of 55mt at 4.23gpt. Coinciding with Diggers, S2 released results from the first diamond reconnaissance program at Aarnivalkea, including intercepts such as 5.5m at 2gpt and 6m at 5.4gpt. The results were based on assays from 14 of 32 holes. S2 shares jumped as high as 14.5¢ before ending the week at 13¢, off 1¢.
Spectrum Metals (ASX: SPX): The Perth-based explorer headed by well-regarded former analyst Paul Adams turned heads throughout Diggers as its high-grade Penny West gold project wowed brokers and investors alike. The project was originally mined more than 20 years ago, with the open pit producing at a grade exceeding 20 grams per tonne gold. Spectrum has hit the northerly extension of the deposit and been cranking out high-grade results over the past few months - to much market appreciation. One of the highlight stories of the Diggers week, Spectrum shares jumped from 8¢ to 10.5¢ - a year-high.
St George Mining (ASX: SGQ): Nickel has been the most maligned of the LME-quoted metals but there is anticipation that times are about to change. The smarter people in the room understand the significant role that nickel sulphides play in the booming battery market. BHP's Nickel West division, for years on the verge of being shut, is now the talk of the battery town because of the turnaround of its integrated mine-to-smelter-to-refinery business in WA and the imminent start-up of a nickel sulphate plant in Kwinana, south of Perth. Following Nickel West boss Eddy Haegel's bullish nickel address another local nickel miner, Independence Group managing director Peter Bradford, took to the stage to continue the upbeat conversation. Investors are starting to believe, helped by the nickel price jumping 8% to a year-high $US15,490/t during the week while other LME metals faltered. All this excitement has focused attention on where to find the next generation of nickel sulphides. St George executive chairman John Prineas was a busy man at his booth explaining his company's aggressive drilling campaign at the Mt Alexander project near Leonora. High-grade nickel sulphides are confirmed – it just remains a question of how big the mineral inventory at Mt Alexander will get. St George jumped from 12.5c to 15.5c this week.