Gold 50 hits highlight 308m at 28.6g/t gallium from surface at Golconda project
First production imminent from R3D Resources’ 45,000t Tartana copper heap leach project
Tambourah Metals up +210% since announcing a tie-up with global lithium producer SQM early July
Here are the biggest small cap resources winners in early trade, Thursday July 27.
GOLD 50 (ASX:G50)
G50 has drilled into gallium paydirt in 11 of 14 holes at the polymetallic Golconda project in Arizona, including a highlight 308m at 28.6g/t from surface.
That’s not true width, and we don’t know if those grades are consistent across the entire intercept.
We also don’t know for sure whether the grades are good or not, because it’s gallium, an obscure metal no one knew existed until a few weeks ago.
Used in semiconductors and other tech, gallium is in the headlines after world’s largest producer China announced export controls starting 1 August.
This is expected to boost prices for the metal, which currently fetches ~US$230/kg.
Gallium is usually produced as a by-product of bauxite or zinc mining.
Golconda was historically mined for lead and zinc, but also contains high grade gold, silver … and now gallium. It is also right next door to a big copper porphyry.
The company says the benefits of this gallium find are twofold: one, it provides a ‘vector’ for base and precious metal mineralisation and two, it represents a significant credit in zinc concentrates.
G50 says higher grades of gallium and indium are expected to be found with the high-grade zinc-lead lodes that it has yet to target with drilling.
“While our core value proposition is exploring for precious metals at Golconda, it is exciting to see the polymetallic nature of the project offer Gold 50 multiple opportunities to extract value for all shareholders,” G50 managing director Mark Wallace says.
“These strong and thick gallium assays from surface confirm and justify our systematic approach and commitment to Golconda.
“We look forward to following up our recent high-grade gold discovery with further drilling to better understand the extensive thicknesses of gallium present in the recent drilling.”
Given that China produces ~94% of the world’s gallium, there is potential for Golconda to reduce the supply chain risk of this key ingredient in many high-tech products, Wallace says.
“We are just beginning to test our large Golconda project area which has very limited historical drilling,” he says.
“Gold 50’s drilling over the past six months has refined our exploration models and these results are guiding focused field work, such as trenching, that is being completed prior to further drilling later this year.”
The $25m capped stock spiked 110% in early trade Thursday, for a year-to-date gain of 60%.
R3D RESOURCES (ASX:R3D)
First production is imminent from R3D’s 45,000t Tartana copper heap leach project in Queensland following the completion of a plant refurbishment.
‘Heap leaching’ involves piling ore on a pad then irrigating it with chemicals to dissolve the metal into a solution.
You can see the ore pile and irrigation lines in the foreground here:
Pic: R3D Resources.
Originally pencilled in for December 2022, first production at Tartana has been steadily pushed back, probably due to delays in the plant refurb.
Tartana operated for around a decade before being placed in care and maintenance in 2014. The plant produced 6,000-7,000tpa high quality copper sulphate pentahydrate, R3D says.
Alongside sales of a low-grade zinc furnace slag/matte from its Zeehan project in Tasmania, Tartana will hopefully generate enough cash to underpin R3D’s exploration activities in the Chillagoe region of QLD, it says.
“Cash flows from copper sulphate pentahydrate sales are expected to be a ‘game changer’ for the company and allow it to achieve its desired self-funding status,” managing director Stephen Bartrop says.
“It also enables the company to turn its attention to expanding existing copper resources in the Tartana open pit.”
TAMBOURAH METALS (ASX:TMB)
(Up on no news)
$12m capped TMB is up +210% since announcing a tie-up with global lithium producer SQM (NYSE:SQM) early July.
SQM will spend up to $3m on exploration to earn up to 70% of TMB’s early stage Julimar North project in WA — a strong endorsement of Julimar North and its lithium potential, TMB says.
“The new relationship will allow TMB to draw upon SQM’s technical expertise in pegmatite hosted lithium exploration while allowing Tambourah to work in parallel on its other lithium and critical mineral projects,” TMB CEO Ralf Kriege says.
US$20bn capped SQM – which made US$1.65bn gross profit in the March quarter – has inked deals with other Aussie juniors, most notably Azure Minerals (ASX:AZS).
In January, SQM paid $20m for a 19.99% stake in the company, which then went on to uncover a potentially monstrous deposit at Andover.
BASTION MINERALS (ASX:BMO)
BMO will exercise an option agreement to purchase three Ontarian lithium properties early after the company was able to negotiate “significantly more favourable acquisition terms”.
The original deal was worth almost 25m shares to the vendors.
However, delayed access to evaluate some of the properties under the heads of agreement (HOA) saw this revised to a substantially lower upfront cost of 9m shares (worth ~$400,000). Bargain.
Another 7m shares will go to the vendors if BMO hits at least 10m at 1% lithium in drilling within three years.
BMO says a Canadian consultant is now undertaking mapping, sampling and geophysics to identify drill targets on the McCombe and Raleigh Lake properties.
McCombe is right next door to Green Technology Metals’ (ASX:GT1) 12.6Mt and growing Root project.
There’s a chance Root lithium extends into BMO’s ground, the company has said.
Further exploration activities across the portfolio will be staggered, “depending on climatic conditions and access to the sites”, it says.
Delays are being experienced by explorers across the region due to the bushfires in Quebec, which have led to an unavailability of helicopters.
$5m capped BMO is up 13% year-to-date. It had $1.2m in the bank at the end of March.
PERPETUAL RESOURCES (ASX:PEC)
(Up on no news)
PEC is up ~170% since mid-July thanks to a Brazilian lithium acquisition.
That deal wasn’t announced until 21 July, but a flurry of activity around the company shares in the lead up, especially on the 19th, prompted a ‘please explain’ from the ASX.
“As far as PEC was aware, at all times the existence and terms of the agreement was kept confidential between all parties until the announcement was released,” PEC says.
“PEC had no knowledge of any breach of confidentiality and therefore had no reason to believe that confidentiality of the information had been lost prior to release of the announcement, or that the increase in the price of its securities was attributable to the Information that had not yet been announced.
“Whether or not [vendor] RTB would enter into the agreement was also not certain as PEC was informed by RTB that it had received numerous competing proposals.”
Which, as an aside, lines up nicely with what Solis Minerals (ASX:SLM) boss Matty Boyes recently told Stockhead that “there are people coming at [project] owners from all angles.”
“The prices are just going exponential as you are trying to close a deal,” he says.
“There is a lot of interest from North America. American juniors, Canadian juniors are throwing big money at assets in Brazil, so you must make sure you have a network in place, people that can get these assets to you ahead of the next guy.”
PEC’s new ground is in Minas Gerais, 20km from the Grota do Cirilo spodumene mine owned by C$5bn capped Sigma Lithium Corp (TSXV: SGML).
Latin Resources’ (ASX:LRS) advanced Colina project is also nearby.
A 60-day due diligence period has now kicked off over the +3000sqkm of greenfields (unexplored) tenure. If PEC likes what it sees, the plan is “rapid exploration in the coming months”.
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