THE CLOCK’S TICKING
CHARGER CHARGED-UP TO MAKE A DISCOVERY IN AUSTRALIA’S TOP END
BATTLE LINES DRAWN ON INTERNATIONAL NICKEL
INDONESIA’S OPEC: A SHOT ACROSS THE SUPPLY CHAIN BOW
ASX CANADA SERIES
Part 2: WAVE OF CAPITAL RISE
THE LIZARD KING PONDERS NERDS AND THE NAMING OF DEPOSITS
5th August 2023
While seeing a fresh discovery come into Australian territory is always enjoyable, I particularly enjoyed it when a nerd named it. When I think of a nerd, I first think of a geologist. They’re the ones who stay late in the office poring over maps while executives head out for their first drinks in the late afternoon. Naming a discovery is one of the joys of being a nerd because, often, the executives still haven’t fully grasped where the place is on the map! In fact, I’m surprised there aren’t more elvish names in Australian exploration, presuming a considerable overlap between geologists and Tolkien dorks (I’m looking at you, Mithril Resources).
Northern Mineral’s globally significant collection of deposits at Browns Range are all named after X-Men, and I’d like to know who at Voltaic came up with names for Akira and Morpheus deposits. Still, I guess noticing them, outs you as having similarly uncool interests.
It’ll be a dark day when they stop naming potentially billion-dollar assets at a whim, especially if Saudi investment picks up and we must start calling them after luxury cars or brands of perfume.
But any golf enjoyer can tell you they can do whatever the hell they want if they invest enough, and you don’t want to be left in the cold like Rory McIlroy holding onto some “integrity”.
Though Saudi investment is presumably better than nationalisation, a hot topic as emerging nations look to see how they can best restrict foreign cash and screw themselves out of the critical minerals race.
Not that a ban on uranium exports to France and the US will hurt Burkina Faso, who announced bans despite not producing an ounce of uranium, but like me claiming a virtue of celibacy, you must admire the moxie!
It sadly looks to be turbulent times in Africa, not just for AVZ, with a coup in Niger drawing lines between the continental powers and allegiances with foreign powers.
I can’t relish in political turbulence, but I have a dark fascination with seeing Joe Biden try and read “Niger” off a teleprompter. But things are friendly and safe in my Australian hole, and I can’t see Albanese raising a red flag over parliament and stealing some mines while Gina Rinehart is distracted in court. He has enough on his plate right now without upsetting the big G and others in her cohort.
Good news for home loan borrowers - interest rates are steady at 4.1%! The RBA is confident inflation will reach the desired range by late 2025, so no need to increase rates for now.
RBA governor Philip Lowe emphasised in his statement released after Tuesday’s board meeting that the central bank is mindful that monetary policy acts with a considerable lag.
Home loan borrowers can rejoice as interest rates remain steady at 4.1%. The inflation rate is predicted to reach the target range of 2-3% by late 2025, allowing the RBA to observe economic activity and inflation closely. In the past, the RBA had raised interest rates to manage soaring prices and achieve inflation’s target range within a reasonable period.
The Reserve Bank of Australia has expressed concern regarding the readiness of certain home loan borrowers to handle unexpected surges in their mortgage payments. Such a scenario could potentially result in a reduction in consumer spending, which may, in turn, lead to economic difficulties.
Australia’s economy may have a soft landing, with inflation decreasing gradually, and the RBA predicts modest growth of around 1.75% in 2024. The labour market should remain strong despite an increase in unemployment to about 4.5% by next year. Bond markets seem to realise that the RBA may not need to increase interest rates as much as expected to control inflation.
Australia’s economy may have a smooth descent with a slow decline in inflation. The RBA predicts a 1.75% growth rate in 2024, and the job market is projected to stay strong, despite a possible increase in unemployment. Bond markets suggest that interest rates may not need to rise as much as expected to control inflation.
But the flip side is that economic activity – and labour markets – are proving more resilient than expected. With the prospects of a global recession receding, markets have become much less hopeful that central banks will soon be forced to cut rates.
Australia’s economy is expected to have a gradual decline in inflation, with a predicted growth rate of 1.75% by 2024. Despite potential unemployment, the job market should remain strong. Interest rates may not need to rise as much as initially thought.
Rueben Hale MarketOpen(ed) EditorCharger boss Aidan Platel has injected a sense of urgency into the Bynoe lithium project on the doorstep of Core Lithium’s Finniss mine in the Northern Territory. In less than five months, Platel, who once lied about his young age to join a mining exploration team, has put three drill rigs to work, testing deeper into the ground in pursuit of higher-grade lithium.
Platel is competitive and loves fishing and pursuing challenging goals with tangible outcomes. He attributes his passion for the thrill of the chase to his high school years and mining industry experience.
“When I was 16, I lied to a mining camp about my age and said I was 18 so I could work for them during school holidays,” he reminisces. “I acquired practical skills that I still use today, but the most valuable lesson I learned was that mining exploration is a team effort.”
Platel’s work in Brazil, particularly in the nickel industry, and his brief stint in Tanzania sparked his interest in battery metals. After consulting overseas, he led critical mineral explorers in Australia and became head of Charger Metals and its Bynoe lithium project. Thanks to his leadership, Bynoe is now showing promising results.
What interests you specifically about battery metals?
It is crucial to prioritise electric vehicle materials and carbon neutrality for the betterment of our planet. The lithium sector is captivating, as big corporations invest in smaller ones for just their potential, which would have once been unthinkable. To delve into battery metals, one must discover new minerals and locate them in unorthodox manners. These dynamic aspects of the battery metals field make it both exhilarating and challenging!
What motivates you personally?
I love the daily excitement and urgency to make significant discoveries before time runs out. The clock is ticking, adding more tension and anticipation to the job.
What lesson have you learned?
We have faced frustration from seed and significant investors due to the two-year timeframe it took to reach our current point. However, I am proud that we completed all necessary licensing and land access when the rain stopped. We persisted in our efforts to commence drilling early, and our hard work has paid off as we now have a strong momentum with things moving rapidly. Additionally, the team has worked hard to acquire all the necessary permits to carry out a comprehensive drilling program, already demonstrating encouraging signs.
What do you hope to achieve with this drilling?
We have hired a highly experienced contractor to work in the challenging Bynoe environment. It is crucial to have expertise in this type of terrain to avoid the risk of significant downtime. Additionally, the site is dry, and we have established clear targets. The team is excited and motivated, having already drilled 8000 metres of ground since announcing drilling had commenced in mid-May.
Have there been any recent noteworthy observations from the site?
We are exploring a large pegmatite field and are confident in making a significant discovery at the Enterprise prospect, which has spodumene pegmatite intersections extending over 500 metres. Although lithium mineralisation in the region typically only spans 200-300 metres, Enterprise has the potential to become a significant discovery in the field, and we need
to keep drilling to understand the extent of this prospect entirely. The spodumene intersections at Enterprise gave us confidence in our exploration efforts, and we are keen to explore as many of the 20 or more priority targets we have defined, including the promising 7Up prospect. What are the objectives of the deeper drilling?
To fully understand the system, we drilled vertically about 250 meters across two sections. Currently, we have two areas covered. Our past programs have taught us that stepping off more than 80 meters could result in missing critical information. Therefore, we are taking baby steps between 40-50 meters and searching for at least two to three hits in each section before proceeding further.
Do you feel pressure to maintain newsflow?
There is persistent market pressure to announce developments regularly. I wouldn’t say I like announcing visual results. It’s always better to wait until you have the numbers before discussing them. Unfortunately, announcing visuals seems to have become the norm regarding market expectations, so you’re damned if you do it and damned if you don’t!
What’s happening at Lake Johnston?
We plan to begin drilling before Christmas, which is our current focus. We have recently completed a soil program, and the results should be available soon for updating the market. We also expect to complete more drilling at Medcalf, where we have previously intersected high-grade spodumene mineralisation and other targets we develop through soil and mapping.
The excitement of a deal grows once land packages are acquired and announced to the market. Analysts consider the project’s location, geologists emphasise the importance of proximity, and management highlights the impact of the acquisition. However, things become more complicated when it comes to payment and understanding the company’s financial status. The payment options are straightforward - all cash, shares, or a combination. But the deal’s details can make or break the value for companies, management, and investors seeking quick profits. I have gathered some valuable insights after analysing around 30 ASX-listed shell companies and examining their deals.
• Companies with cash on books usually preferred paying that way. However, another pathway is the issue of shares.
• There is a clear trendline of the transaction cost vs. land size. The above trend line usually gets justified through the land being on a geological structure or proximity to a significant discovery gets mentioned.
• A$120 per hectare is an average of all the transactions we have analysed of land vented into ASX shells over the last 16/18 months.
- ASX: CRR Critical Resources is one of the earliest ASX shells. Which vended land in Ontario at - A$130 per hectare, around 18 months ago
- ASX: WR1 Winsome Resources acquired Jackpot land package at A$380 per hectare.
- ASX: CY5 is one of the latest added “additional” Auclair land packages to its existing portfolio at A$58 per hectare.
All good things come to an end. In investment cycles and for the ASX shells, it’s a capital raise. Investors are ok with a capital raise as long as funds go into the ground and field work exploration. However, the timing and structure of the capital raise are more critical. Usually, this is either a game-changer or a game-breaker.
Companies with solid hits tend for an early capital raise while the share price moves upwards. Others take advantage of Canadian flowthrough while it’s on a premium. Then there are others whose timing becomes completely wrong and who raise capital when the price is low, and no action is made on the ground, while an average investor
The excitement of a deal grows once land packages are acquired and announced to the market. Analysts consider the project’s location, geologists emphasise the importance of proximity, and management highlights the impact of the acquisition. However, things become more complicated when it comes to payment and understanding the company’s financial status.
The payment options are straightforward - all cash, shares, or a combination. But the deal’s details can make or break the value for companies, management, and investors seeking quick profits. I have gathered some valuable insights after analysing around 30 ASX-listed shell companies and examining their deals.
• Companies with cash on books usually preferred paying that way. However, another pathway is the
issue of shares.
• There is a clear trendline of the transaction cost vs. land size. The above trend line usually gets justified through the land being on a geological structure or proximity to a significant discovery gets mentioned.
• A$120 per hectare is an average of all the transactions we have analysed of land vented into ASX shells over the last 16/18 months.
- ASX: CRR Critical Resources is one of the earliest ASX shells. Which vended land in Ontario at - A$130 per hectare, around 18 months ago
- ASX: WR1 Winsome Resources acquired Jackpot land package at A$380 per hectare.
- ASX: CY5 is one of the latest added “additional” Auclair land packages to its existing portfolio at A$58 per hectare.
What Next: A Capital Raise!
President Joko Widodo announced a marketdisrupting plan to create a new international battery metal cartel to world leaders at the G7 Hiroshima Summit.
“It is time to establish an OPEC-like group for other products such as nickel and palm oil,” the Indonesian President stated.
“I hope G7 countries can become a partner in these industrial downstream policies.”
The plan seemed to have gained little traction but was thrust back into the spotlight after Indonesia Investment Minister Bahlil Lahadalia said talks were now underway with multiple countries.
“There are three countries whom we already have been intensely communicating with,” Mr Lahadalia said.
While refusing to name names, he claimed the parties agreed it was a great idea in principle but they still needed to hammer out details of the proposal.
Given that OPEC countries control their reserves through nationalised organisations and not the individual companies contributing the bulk of Western output, it makes a cartel-style operation far less achievable.
“In OPEC, oil production is essentially a ‘country’run business. Production can be increased or decreased by a relatively small group to influence the global situation,” Wood Mackenzie analyst Andrew Mitchell said.
“In nickel, it’s more disparate – although Indonesia obviously controls a lot of output, there are large producers elsewhere.”
And Benchmark Mineral Intelligence analyst Greg Miller said that the lines drawn between national alliances would further impede an OPEC-like operation.
“Geopolitics is starting to play an outsized role in the development of the battery supply chain, with Indonesia largely falling into the Chinese sphere and Canada in the U.S,” Mr Miller said. “I sense geopolitical considerations would override the influence of any OPEC-style organisation.”
But one name stands out on the list of significant producers as a potential nickel ally for Indonesia.
Indonesian dominance in the sector is followed by the US-aligned Philippines, with Frenchowned New Caledonia, Australia, Canada, and China all in the mix as significant producers.
Indonesia, now the world’s largest nickel producer, says it’s in discussions with multiple other major producers to create an OPEC-style cartel to control prices of the essential battery metal.
But at number three, even with falling output, comes Russia.
The under-siege power’s ruling party submitted legislation for approval by the lower house of parliament on nationalising assets of the foreign companies which exited in response to the invasion of Ukraine.
Norilsk Nickel President Vladimir Potanin has previously quashed the idea, saying that confiscating assets from companies that have left Russia would have dire long-term consequences.
“We should not try to ‘slam the door’ but endeavour to preserve Russia’s economic position in those markets which we spent so long cultivating,” Mr Potanin said.
“It would take us back 100 years to 1917, and the consequences, a global lack of confidence in Russia from investors, we would feel for many decades.”
Norilsk, the world’s largest producer of palladium and refined nickel, was the first company allowed to keep its foreign listings through the war, and the Russian Government has previously shown reluctance to get involved with past conflicts at the company.
But there are signs of a shift to Asia for Norilsk, with Russia’s biggest miner now notably earning virtually half its revenue in Asia after declining European sales.
Chinese nickel output is flagging, having slumped near twenty-year lows, and the BRICS nations are snapping up gold reserves in the wake of
sanctions, and are even deliberating a new global currency backed by the gold standard. And as electrification continues, companies may choose between environmentally cleaner and ESG-approved Western production, or the allure of a cheaper but dirtier product.
Using acid under intense heat and pressure conditions to separate nickel has long been considered too damaging by most producers. Still, over $1 billion has been invested in an Indonesian facility to use the technology, bordered by the rainforest and blue oceans. The process makes it especially dangerous to transport and store the hazardous waste product it creates. It remains untested in Indonesia, where the high frequency of earthquakes, rainfall and landslides makes logistics particularly dangerous.
Andrew Forrest has made considerable investments in the future of nickel, and through Wyloo parent company Tattarang has acquired Mincor Resources as a critical objective to capitalise on nickel sulphide production from Kambalda and provide the market with a choice. “Wyloo has targeted nickel sulphides as they are the greenest and cheapest option for battery manufacturing: they have the best economics, can be processed into battery grade nickel with the lowest environmental footprint and are fully recyclable,” Mr Forrest said.
“We are going to give the market a choice between clean nickel and dirty nickel.”
A cure for Parkinson’s disease is closer than ever. Argenica Therapeutics’ treatment to reduce brain tissue death has been shown to significantly lessen the cellular uptake of alpha-synuclein protein, known as the ‘Parkinson’s Protein’, aggregates by 84 per cent.
An international research breakthrough earlier this year confirmed that analysing the essential neurodegenerative protein can accurately detect the disease even in asymptomatic patients. Since then, ARG-007 has proven effective in preventing uptake and aggregation. ARG-007 has confirmed efficacy, reducing brain tissue death by up to 70 per cent after a stroke. The softened impact of traumatic brain injuries propels the next round of trials with the reinforced potential to treat a wide range of neurological impairments.
Regener8 Resources have confirmed a wide spread of critical metal targets at its East Ponton Future Metals Project within the newly acquired territory at the Seven Sisters tenements.
Geophysical review and desktop studies confirmed the potential for lithium, IOCG deposits, gold, and, most importantly, carbonatite-hosted rare earth deposits.
The project is in an area with high potential for rare earth minerals alongside two of Australia’s most promising targets. However, the development of Ponton Dyke and the Cundeelee Intrusion has been restricted due to their location within a nature reserve. BHP has identified the intrusion as one of the world’s largest untested carbonatites, and Regener8 has also identified anomalous targets in the area that are ready for exploration.
Lunnon Metals is exploring a possible by-product opportunity at the Kambalda Nickel Project due to high palladium recoveries and platinum and palladium grading in the nickel concentrate. Ongoing metallurgical testing has produced similarly high results from across the project, demonstrating the production of a top-quality nickel concentrate with high levels of copper, cobalt, palladium, and platinum credits, pleasingly with low levels of arsenic.
A new chapter is underway at Kambalda. Lunnon is looking to take up more than a few pages, standing ready to deliver boosted resources as it looks towards the potential of an updated PFS and renewed production from the famed nickel district.
After an activist short report called out the lack of an established resource at Patriot Battery Metals’ Corvette Project, the Australian lithium darling fired back with a resource standing as the largest in the Americas. sure the share price took an initial tumble on the day of the grand reveal, but it hardly deterred lithium giant Albermarle, who became Patriot’s largest shareholder with a $123 million investment. The 109.2Mt at 1.43 per cent lithium oxide resource is the eighth largest lithium pegmatite resource in the world, coming from a firing Canadian lithium space attracting new attention from the world’s most eminent miners, and Patriot sees plenty of meat left on the bone from both the CV5 pegmatite and several more spodumene clusters.
