Twelve months fly by. Yesterday, flights from Perth to Kalgoorlie-Boulder were choc-a-block and traffic on the Great Eastern Highway busier than most Sundays as the first wave of an expected 2600 miners, promoters, investors, supporters and media descended on Australia’s gold capital.
Yet it might not be gold that will sparkle brightest when the 2023 edition of the Diggers & Dealers Mining Forum kicks off this morning in the Goldfields Arts Centre with globally renowned economist Linda Yueh as the first presenter.
Nor will it be discussions around the WA Government’s expected scrapping of heritage laws, which will no doubt be a topic of intense chatter over coffee in the Arts Centre courtyard.
Rather it will be the basket of commodities headlined and dominated by lithium and including rare earths, copper and nickel – call them whatever you want: critical minerals, battery minerals, green metals – that will make the big splash over the next three days.
Led by Albemarle’s $5 billion takeover target Liontown Resources (ASX: LTR), lithium producers and wannabees will make up a sizeable portion of the presenters’ program and are expected to capture much of the delegates’ interest.
In that space, Core Lithium (ASX: CXO) stands out – alongside Pilbara Minerals (ASX: PLS) and IGO (ASX: IGO) – as actually producing spodumene concentrate while there will be a plethora of players talking up their discoveries and development plans, comfortable in the knowledge they have not yet had to disclose how easy (or not) it is to generate free cash flows from their proposed mines.
A great half-dozen – not to be missed:
Today 3.50pm – Gold Road Resources managing director Duncan Gibbs
Tomorrow 9.10am – Core Lithium CEO Gareth Manderson
Tomorrow 10am – Dreadnought Resources managing director Dean Tuck
Wednesday 10.25am – Northern Star Resources chief operating officer Simon Jessop
Get your lithium and nickel exploration fix at – St George Mining (booth 111)
Pick up your block of gold-plated chocolate at – The Perth Mint (booth 79)
Liontown hosted investors at its Kathleen Valley mine construction site yesterday but, like with many projects in development, will attract questions this week whether build schedules and budgets remain on track.
If there is one thing the just-completed June Quarter reporting period has told us, then it is that costs have risen fast and are proving difficult to eject from steady state operations.
A bit like surviving Diggers & Dealers itself, building a mine is not a robust and clearly defined plan, constant attention and a good understanding of your ever-changing trading environment.
To use a sporting analogy, take the Matildas, who tonight will be focusing heavily on dissecting Denmark’s defence when the two teams clash in the Round of 16 knock-out game in Sydney. At the same time, the Matildas brains trust will be keeping half an eye on what might await if the quarterfinals are reached. As they say in the classics, you don’t want to peak too early.
In fact, almost every year during Diggers & Dealers a global sporting competition is underway – whether it be the Ashes, the Commonwealth Games, the Olympics or now the Women’s Soccer World Cup – it will add some big-screen evening entertainment in the background as Diggers delegates discuss the winners from the day’s proceedings at the Goldfields Arts Centre.
For Diggers & Dealers, the ultimate goal, of course, is to deliver a gold standard. And even though this year’s line-up of gold stocks might lack some of the sizzle of past years, it remains the big game in town.
Northern Star Resources (ASX: NST) actually is the big game in Kalgoorlie-Boulder and has just hosted investors at its KCGM operation, at the top end of Hannan Street. The tour focused heavily on the merits of the just-announced $1.5 billion Fimiston mill expansion, the first significant wholesale upgrade to processing at KCGM since Alan Bond came up with the idea a few decades ago to combine a few pits into one … Super Pit.
Watching the investors listen to Northern Star’s leadership team it was clear that the penny is slowly but surely sinking in that KCGM – the Mt Charlotte and the Super Pit mining operations – has some significant upside now that it has a committed, growth-focused owner.
The quarterly reporting season showed investors that easy gold is a thing of the past. It requires increasingly hard work and focus to ensure that inflationary pressures do not outdo production and gold price rises.
Northern Star is travelling well, as is Gruyere mine half-owner Gold Road Resources (ASX: GOR), though there has been no shortage of selling-off among ASX-listed gold stocks that have confirmed to the market how tough the going has got.
And this is before looking closely at the gaggle of high-profile gold development opportunities that do not yet have to come clean on actual – versus DFS study – costs.
Speaking of development opportunities, what will be eluding us at Diggers & Dealers this year is a major discovery.
A recurring theme around the mining traps is, of course, how easy it is today to secure a drill rig – in stark contrast to a few years ago – as the majors in particular seem to have pulled back on exploration to free up fleets of rigs for others to hire.
But the compelling drill targets – and cash – still need to be there to justify a high-risk, high-reward punt with the drill bit.
Chalice Mining (ASX: CHN) is long past the glow of a new find, as is Centaurus Metals (ASX: CTM), with both companies examples of those stocks trying to shift from exploration to early stages of a project development – or maybe elicit a takeover proposal.
One of the most active explorers in Western Australia is St George Mining (ASX: SGQ). Best known for discovering high-grade nickel sulphide at its Mt Alexander project not far from Liontown’s Kathleen Valley, St George has also confirmed pegmatites on its landholding.
But for a different kind of excitement, investors are waiting for first results from a maiden drill campaign at St George’s Ajana base metals project, in the Mid West. There can only be upside.
Similarly under the radar is BMG Resources (ASX: BMG), which has slipped back out of the headlines after exciting investors in April with news of a maiden 518,000 ounce resource (at 1.45 gpt) at its Abercromby project near Wiluna.
It was a serious goal kicked by BMG but since forgotten in favour of other, more current stories of excitement.
But goals scored are goals scored – who else can claim a half-million resource yet a market cap of less than $10 million.
Three days of talking – and digging for great investments – lie ahead.
