The share price of Hummingbird Resources (LSE:HUM) fell 17pc to 16.75p on Tuesday after the company released production figures for the first quarter of 2019.  Gold poured from the Yanfolila mine in the quarter totaled, 23,807 ounces, an increase on the previous two quarters, while ore mined was slightly under the quarterly average over the past 12 months. What appears to have upset the market is the large increase in costs.  Problems in both the Komana East and West pits required remediation work and restricted access. The additional expenditure required ramped up the All-In Sustaining Costs (AISC) to $1,297 per ounce of gold extracted. This is the second successive quarter whereby the AISC has been higher than the average price received for gold sold. However, the costs were markedly lower in Q1 2019 than the previous quarter when the AISC peaked at $1,677 per ounce.

Another factor weighing on the share price is that the artisanal mining depletion in the Komana West pit is deeper and more extensive than Hummingbird previously estimated in the reserve model. However, in Tuesday’s update, the firm stated that as they progress deeper into the pits ‘the impact of this is expected to reduce significantly in the near term’.

Despite these issues, Hummingbird says it maintains its production guidance of 110,000 to 125,000 ounces of gold for 2019.  The company goes on to warn that the AISC for the year may exceed the previous estimates of $800 to $850 per ounce.

On a more positive front, the construction of a second ball mill at Yanfolila is progressing to plan, with the installation team due to arrive on site during April. Once operational, the second ball mill will increase throughput capacity from 1Mtpa to 1.24Mtpa.

Dan Betts, CEO of Hummingbird, commented: 

"The period under review has seen the Company resume mining to plan, following a period of remediation work on the pit wall, with a quarter on quarter increase in production of 33%.  In the period, production was impacted by ore depletion from the Komana West pit from historical artisanal workings, which was greater than forecast in the reserve model.  We are taking immediate steps to reverse the impact of this dilution through working closely with the mine contractor and as we progress deeper in the pits the impact of this is expected to reduce significantly in the near term as we access areas of expected higher-grade ore." 

"We look forward to receiving the updated reserve/resources report in Q2, which will allow us to publish a new Life of Mine plan for Yanfolila.  It is also pleasing to note the strong progress we have made on the second ball mill project and we look forward to the positive impact that will bring to our process plant capacity once completed."

Author: Stuart Langelaan

The Author holds a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

On Tuesday, Thor Mining (LSE:THR) announced it has started drilling at the Bonya tungsten deposits near Molyhil in Australia. Thor holds a 40pc interest in the deposit via a joint venture with ASX-listed Arafura Resources (ASX:ARU).

The programme will consist of 2,500 metres of Reverse Circulation (RC) drilling of a number of targets including Samarkand, Jericho, White Violet, and Tashkent deposits. Drilling is expected to take around two weeks and Thor expects to update on progress shortly, as well as updating on preliminary on-site XRF analysis. Each of the deposits has outcropping tungsten at surface, and the The Jericho deposit, in particular, has been mined historically, with a surface stockpile estimated at several hundred tonnes of scheelite ore at surface adjacent the deposit. In addition to Tungsten, there are also deposits of copper and vanadium at Bonya.

30km west of Bonya is the 100pc owned Molyhil tungsten project which Thor is developing towards commercial production. The firm completed an updated Definitive Feasibility Study for the project back in August and is now focused on securing project finance to bring Molyhil into production.

Mick Billing, Executive Chairman, commented: "We are very hopeful of positive results from our first drilling and costeaning program on the Bonya tungsten deposits."

"The 13 outcropping tungsten deposits at Bonya, several of which have historical mine workings, have the potential to add considerably to the life, scale, and economic outcomes of the Company's flagship Molyhil project nearby."

"We hope to be able to provide regular updates of progress, including provisional XRF analysis, during the program."

"Despite the licence area being part of a known tungsten "province", it has had no tungsten drilling since the 1970's, and we are very excited at the commencement of this program, and the potential it brings.

Earlier this month, Mick Billing spoke with MiningMaven to discuss Bonya and Thor Mining’s other assets including Kapunda and the more recently acquired Pilbara Goldfields and Hammersley Metals. You can listen to the interview below.

Author: Stuart Langelaan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above.

Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

The share price of Atalaya Mining (LSE: ATYM) was flat on Monday after the firm released an update regarding its operations in the first quarter of this year. In the announcement, Atalaya reiterated its copper production guidance at 45,000-46,500 tonnes for 2019, with production up 8pc compared with the same period last year. However, copper output decreased 9pc quarter-on-quarter, although it’s worth noting Q4 2018 was a record quarter and production for Q1 2019 is still in line with expectations.

The company is looking to ramp up production up to 55,000 tonnes of copper in 2020 as it expands its plant at Proyecto Riotinto to process 15 Million tonnes per annum (Mtpa). The company reports the expansion project has ‘progressed materially’ in the first quarter and expects mechanical completion by the end of Q2 2019. The firm has two ongoing drilling programmes at Proyecto Riotinto underway. The first is targeting massive sulphides and stockwork mineralisation under the Atalaya pit, while lateral extenstions of massive sulphides and stockwork are being drilled at Filon Sur.

Meanwhile, at Proyecto Touro - a copper project in Spain – feedback regarding environmental impact studies has been received from the relevant authorities. Atalaya has an earn-in agreement to own up to 80pc of the Proyecto Touro project.

Alberto Lavandeira, CEO commented: "During the first quarter of 2019 our operations at the Riotinto mine continued to deliver strong operating results. Simultaneously the construction activities for the modernisation and expansion of the plant are expected to meet our self-imposed tight schedule of mechanical completion by the end of the second quarter. Based on the excellent expertise of the teams on site we are confident that the project will be concluded on time and on budget and that we will achieve our full year production guidance."

Author: Stuart Langelaan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

Emmerson (LSE:EML) jumped 11.3pc to 4.3p on Monday after announcing an offtake agreement for 100pc of the potash produced at its flagship Khemisset project. The firm revealed that it has signed a heads of agreement for up to 800,000 metric tonnes of K60 muriate of potash a year over an initial five years.

Although it has not named the party with whom the deal has been made, Emmerson said the business is a leading global fertiliser trading, distribution and marketing company. In particular, it noted the partner has a significant footprint in the Brazilian market, as well as a presence in Africa and North Western Europe. These are areas where Khemisset has a strong transport and logistics advantage thanks to being based in Morocco.

The two organisations have agreed a binding exclusivity period until 30 September to negotiate commercial terms for a binding supply and off-take agreement.

Emmerson added that the deal underpins Khemisset’s ‘forecast industry-leading operating margins’ and reinforced its ‘status as a world-class potash project’ ahead of talks with potential debt-financing partners. A scoping study at Khemisset forecast EBITDA margins of more than 60pc and a post-tax NPV10 of over US$1.1bn, based on industry expert price forecasts.

Emmerson’s chief executive Hayden Locke added that Monday’s announcement represented an ‘important step’ for the business:

‘We believe potash produced in Morocco will be in significant demand for a number of important consuming markets, and this Heads of Agreement reinforces that belief. Our partner's footprint in the fast growing Brazilian and more mature North West European markets makes them an ideal partner for Emmerson as we focus on those markets where we would have a strong transport and logistics advantage.

‘The benefit of location has been clearly demonstrated in our Scoping Study and we continue to expect Khemisset to be among the highest margin potash projects in the world, generating outstanding returns for our shareholders.  Strong sales and marketing partners will be fundamental to supporting our eventual discussions with financing partners and we believe our sales partner will provide significant confidence to all potential lending syndicates for the Project.’

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Canadian cobalt developer Global Energy Metals (TSX-V:GEMC) revealed that it has increased the size of its recently-announced $500,000 private fundraise by $250,000 on Wednesday in response to high demand. On Friday, the firm - which is raising the money to support a phase one exploration programme at its two projects near Tesla’s Gigafactory in Nevada - said it will now issue 16,270,000 units to raise a total of $813,500 in the oversubscribed placing.

Each unit distributed in the non-brokered, private placement will comprise one $0.05 share and one three-year warrant exercisable at $0.10. Upon first announcing the raise last week, Global Energy said it had also approved the settlement of up to $181,500 of debt by issuing shares at $0.05 each to certain creditors.

The company, which announced plans to co-list in London earlier this year, will use its placing proceeds to advance its Lovelock and Treasure Box projects ‘immediately’. The two properties are located in Churchill County, around 150km east of the Tesla Gigafactory in Sparks, Nevada.  Lovelock covers around 1,400 acres and is said to have produced 500ts of cobalt and nickel mineralisation between 1883 and 1890 when it was last in operation. Global Energy believes exploration work and modern drilling techniques could unlock a large amount of potential value at the site.

Treasure Box, meanwhile, is adjacent to Lovelock and hosts mine workings from limited copper production, which occurred until early into the 20th century. A historical diamond drill hole at the asset reportedly intersected 1.52pc copper over 85ft, with mineralisation beginning at surface.

Nevada progress

Last month, Global Energy announced that it had made its first option payment towards acquiring an 85pc stake in both Lovelock and Treasure Box. It issued 384,627 of its shares to the projects’ current owner Nevada Sunrise and paid $20,000 to the underlying vendor.

Speaking to MiningMaven in February, Global Energy’s chief executive Mitchell Smith said the acquisition gives the business a low-cost entry to an exciting jurisdiction close to the world’s largest battery factory:

‘Some of the grades at these sites are exceptional. Historically, grades were reported as high as 14-15pc cobalt, which is just unheard of. It shows there is a real opportunity in this significant land package covering two past producing mines. Given our proximity to Tesla, this could really provide us with unique access to the growing demand for domestic cobalt supply in the US.’

In its March update, Global Energy also said it is reviewing exploration plans for Lovelock and Treasure Box. It said its first-stage exploration programme would assist it with an ongoing, extensive review and reinterpretation of historical data at both sites.

‘There has been a tremendous amount of attention placed on the US for it to stop being merely a bystander in the global battery arms race and start developing more domestic supplies of battery metals such as cobalt, nickel and copper to supply its homegrown battery factories, including Nevada-based Gigafactory 1,’ said Smith. ‘The Lovelock and Treasure Box projects are prime examples of US-based battery metal projects that are very prospective and strategically located in close proximity to a domestic end-user with a large appetite for the critical materials used in EV and energy storage technology.’

Global Energy focuses on offering security of supply of cobalt, which is a critical material in the rapidly growing rechargeable battery market. It is building a diversified global portfolio of assets in the sector, including project stakes, projects and other supply sources.

The business’s flagship asset is the Millennium Project in the world-renowned Mt. Isa region of Queensland, Australia. It executed the final agreements to take a 100pc interest in the project in November.

Millennium is a multi-zone, near-surface cobalt-copper sulphide system with several kilometres of potential strike length. It is located near established mining, transport, and processing infrastructure and offers easy access to a very skilled workforce.

The growth-stage site contains a defined zone of cobalt-copper mineralisation.  Here, a 2016 JORC Resource estimate identified 3.1MMts of inferred resources containing 0.14pc cobalt and 0.34pc copper with gold credits.

Global Energy is now looking at ways to increase the size of its deposit. Results from a first phase exploration campaign at two zones called Millennium North and Millennium South exceeded grade and thickness expectations. The firm will now carry out a second phase of drilling to examine both areas further.

Alongside Millennium, Global Energy has acquired two further discovery sites called Mt. Dorothy and Cobalt Ridge.  These are collectively known as the ‘Mt. Isa projects’. The areas expand Global Energy’s Australian land position by nearly twenty times but have yet to be exploited. Exploration to date has returned high-grade cobalt intercepts at both, allowing Global Energy to line up numerous targets for further investigation and test work to define a resource.

Finally, the business currently owns 70pc of the Werner Lake cobalt mine in Ontario Canada. It joint venture partner Marquee Resources is enjoying much success in its ongoing exploration campaign at the asset.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Poland-focused coal player Prairie Mining (LSE:PDZ) sat flat at 21p on Monday after updating investors on its potential tie-up with JSW and various legal disputes.

In a Q1 update, the business reminded investors that – alongside JSW – it has signed an extension to the non-disclosure agreement protecting both firms as they discuss the structure and terms of any co-operation deal. Although this is now in place until the end of September, Prairie said that JSW has reported that it would like to agree on the basic terms of a potential transaction by the end of April.

The possible link-up was first announced last March and saw Prairie give JSW access to information on its hard coking coal project under the Debiensko-1 concession and its Jan Karski project in the Lublin Coal Basin. JSW has since been conducting an assessment of the feasibility and economics offered by both projects.

This has now completed and has confirmed that Jan Karski’s Lublin deposit contains semi-soft coking coal that it can potentially utilise. JSW’s work has also shown the technical feasibility and potential synergies of accessing initial seams at the Dębieńsko deposit. This would employ existing infrastructure at JSW's adjacent Knurów-Szczygłowice mine and potentially enable the production of hard coking coal within 18 months of permits being granted.

Jan Karski is a large scale semi-soft coking coal project located in the Lublin Coal Basin in south-east Poland. It is situated adjacent to the Bogdanka coal mine, which has been in commercial production since 1982 and is the lowest cost hard coal producer in Europe. According to Prairie, Jan Karski has the potential to produce a high-value ultra-low ash semi-soft coking coal with a coking coal product split of up to 75pc. Meanwhile, the Debiensko nine is a hard-coking coal project located in the Upper Silesian Coal Basin in the south west of Poland.

Elsewhere in Friday’s update, Prairie said it will defend its 50-year mining concession at Debiensko strongly. It added that it will continue to take all relevant actions to pursue its legal rights regarding the Debiensko concession amendment. This includes filing an appeal with Poland's Administrative Court.

The company’s efforts here come after Poland’s Ministry of Environment denied its request to extend the time stipulated in the Debiensko mining concession for the first production of coal from 2018 to 2025. Prairie believes the body’s decision is ‘fundamentally flawed’ and does not comply with Polish, EU and international law.

‘It demonstrates yet further evidence of the discriminatory treatment faced by Prairie as a foreign investor in Poland,’ the firm added on Friday.

On a more positive note, the firm said it remains in a financially stable position, with cash reserves of $8m on hand. However, it added that it formally initiated a legal dispute with Poland’s government in February. In Prairie’s words, this has arisen out of ‘certain measures’ taken by Poland in breach of the Energy Charter Treaty, the UK-Poland Bilateral Investment Treaty and the Australia-Poland Bilateral Investment Treaty.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Shares in Arc Minerals (LSE:ARCM) sat at 2.3p on Friday after the business revealed that it has begun work on its potentially ‘game-changing’ exploration targets in northwestern Zambia.

The firm has started an exploration programme on the targets, identified by airborne geophysical work and follow-up analysis earlier this year at the copper-cobalt licence owned by Zamsort. Arc holds a 66pc equity interest in Zamsort together with a convertible loan that could increase its stake in the private company by a further 5pc.

The targets include Cheyeza West, located around 7km west of Cheyeza East where historical drilling has intersected zones of pervasive copper mineralisation. Chezea West is characterised by a historical EM anomaly that could represent a conductive unit like sulphide-rich sediment as well as well-defined radiometric anomalies.

Another target identified by the work is Lumbeta, which stretches for 11km and is associated with the crest of a fold. According to Arc, these formations can act as mineralisation traps and form high-grade deposits. Upon announcing the discoveries in February, Arc’s executive chairman Nick von Schirnding said they could represent a ‘potential game changer for the business’.

In Friday’s update, Arc said infill soil sampling has begun over the new target areas, with 1,200 samples already completed. This work will reduce the spacing between profile lines from 1km to 200m, allowing for more defined drilling of targets. Arc added that the prospects have continued to exceed expectations to date and will be drilled as soon as weather conditions permit.

Von Schirnding added: ‘I am very pleased to have completed the follow up work on the new anomalies and to have commenced the soil sampling programme early having been able to access Cheyeza West during intermittent dry periods.  As soon as weather conditions allow we shall be deploying rigs to Cheyeza West in the first instance and start our drilling programme. The Cheyeza West and Lumbeta anomalies, as highlighted on the attached map, are around 10 order of magnitudes larger than anything previously looked at in the Zamsort project area - and is a potential game changer for Arc Minerals.’

Friday’s progress comes just days after Arc revealed that it had completed the construction of a demonstration pilot plant at Zamsort’s Kalaba prospect. The business said the plant was completed under budget at its part-owned Kalaba prospect and has been commissioned successfully with the initial production of copper/cobalt sulphide concentrate.

Kalaba is a copper-cobalt licence covering nine of 30 high priority targets ranked by a previous JV operated by Anglo American. It is found near First Quantum’s Sentinel and Kansanshi and Barrick’s Lumwana mines. The project has an existing near-surface estimated copper-cobalt oxide resource of 16.59Mt at 0.94pc copper and a historical exploration target of 150Mt. This makes it one of the most significant projects of its type in Zambia.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Canadian cobalt developer Global Energy Metals (TSX-V:GEMC) revealed that it has increased the size of its recently-announced $500,000 private fundraise by $250,000 on Wednesday in response to high demand. The firm, which is raising the money to support a phase one exploration programme at its two projects near Tesla’s Gigafactory in Nevada, said it will now issue 15m units rather than 10m to raise $750,000

Each unit distributed in the non-brokered, private placement will comprise one $0.05 share and one three-year warrant exercisable at $0.10. Upon first announcing the raise last week, Global Energy said it had also approved the settlement of up to $181,500 of debt by issuing shares at $0.05 each to certain creditors.

The company, which announced plans to co-list in London earlier this year, will use its placing proceeds to advance its Lovelock and Treasure Box projects ‘immediately’. The two properties are located in Churchill County, around 150km east of the Tesla Gigafactory in Sparks, Nevada.  Lovelock covers around 1,400 acres and is said to have produced 500ts of cobalt and nickel mineralisation between 1883 and 1890 when it was last in operation. Global Energy believes exploration work and modern drilling techniques could unlock a large amount of potential value at the site.

Treasure Box, meanwhile, is adjacent to Lovelock and hosts mine workings from limited copper production, which occurred until early into the 20th century. A historical diamond drill hole at the asset reportedly intersected 1.52pc copper over 85ft, with mineralisation beginning at surface.

Nevada progress

Last month, Global Energy announced that it had made its first option payment towards acquiring an 85pc stake in both Lovelock and Treasure Box. It issued 384,627 of its shares to the projects’ current owner Nevada Sunrise and paid $20,000 to the underlying vendor.

Speaking to MiningMaven in February, Global Energy’s chief executive Mitchell Smith said the acquisition gives the business a low-cost entry to an exciting jurisdiction close to the world’s largest battery factory:

‘Some of the grades at these sites are exceptional. Historically, grades were reported as high as 14-15pc cobalt, which is just unheard of. It shows there is a real opportunity in this significant land package covering two past producing mines. Given our proximity to Tesla, this could really provide us with unique access to the growing demand for domestic cobalt supply in the US.’

In its March update, Global Energy also said it is reviewing exploration plans for Lovelock and Treasure Box. It said its first-stage exploration programme would assist it with an ongoing, extensive review and reinterpretation of historical data at both sites.

‘There has been a tremendous amount of attention placed on the US for it to stop being merely a bystander in the global battery arms race and start developing more domestic supplies of battery metals such as cobalt, nickel and copper to supply its homegrown battery factories, including Nevada-based Gigafactory 1,’ said Smith. ‘The Lovelock and Treasure Box projects are prime examples of US-based battery metal projects that are very prospective and strategically located in close proximity to a domestic end-user with a large appetite for the critical materials used in EV and energy storage technology.’

Global Energy focuses on offering security of supply of cobalt, which is a critical material in the rapidly growing rechargeable battery market. It is building a diversified global portfolio of assets in the sector, including project stakes, projects and other supply sources.

The business’s flagship asset is the Millennium Project in the world-renowned Mt. Isa region of Queensland, Australia. It executed the final agreements to take a 100pc interest in the project in November.

Millennium is a multi-zone, near-surface cobalt-copper sulphide system with several kilometres of potential strike length. It is located near established mining, transport, and processing infrastructure and offers easy access to a very skilled workforce.

The growth-stage site contains a defined zone of cobalt-copper mineralisation.  Here, a 2016 JORC Resource estimate identified 3.1MMts of inferred resources containing 0.14pc cobalt and 0.34pc copper with gold credits.

Global Energy is now looking at ways to increase the size of its deposit. Results from a first phase exploration campaign at two zones called Millennium North and Millennium South exceeded grade and thickness expectations. The firm will now carry out a second phase of drilling to examine both areas further.

Alongside Millennium, Global Energy has acquired two further discovery sites called Mt. Dorothy and Cobalt Ridge.  These are collectively known as the ‘Mt. Isa projects’. The areas expand Global Energy’s Australian land position by nearly twenty times but have yet to be exploited. Exploration to date has returned high-grade cobalt intercepts at both, allowing Global Energy to line up numerous targets for further investigation and test work to define a resource.

Finally, the business currently owns 70pc of the Werner Lake cobalt mine in Ontario Canada. It joint venture partner Marquee Resources is enjoying much success in its ongoing exploration campaign at the asset.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

SolGold (LSE:SOLG) sat flat at 37.7p on Wednesday after revealing further drilling progress at its Cascabel project in Northern Ecuador. The firm said it has now carried out nearly 190,000m of diamond drilling at the project, with work on the greater Alpala trend this year providing further growth to the size of its resource.

Elsewhere, it has discovered previously unknown, high-grade and medium-grade mineralisation within existing low-grade inferred resources areas at the site. The business said these highlight the ongoing upgrades to its existing resource base in both the indicated and inferred categories at project areas called Trivinio, Alpala North, Alpala Northwest, and Alpala South.

Alpala lies upon the northern section of the prolific Andean Copper Belt, the base for nearly half of the world’s copper production. According to SolGold, the project area hosts mineralisation of Eocene age, which is the same age as numerous Tier 1 deposits along the belt in Chile and Peru. SolGold owns an 85pc interest in Exploraciones Novomining S.A, an Ecuadorean company that in turn owns 100pc of Cascabel.

The business will now commence geotechnical, hydrogeological, and sterilisation drill testing at the asset ahead of releasing a preliminary economic assessment report.

The company’s chief executive Nick Mather said: ‘The drilling campaign continues to deliver to our expectations with these latest results revealing previously unknown mineralisation and providing a clear indication of the growth potential that exists through the extension of the Alpala resource.’

Wednesday’s update comes after SolGold’s said it was ‘surprised and disappointed’ by Cornerstone’s swift dismissal of its takeover bid in February. The firm said Cornerstone – which owns the remaining 15pc of Cascabel, lodged its response fewer than three hours after SolGold’s approach, raising questions around how well it had considered the potential offer.

SolGold had proposed the conversion of each Cornerstone share into 0.55 of a SolGold share, equating to an immediate 20pc premium for Cornerstone holders at the time. It added that the consolidatory move would benefit Cornerstone shareholders significantly by removing the company’s ‘funding challenges’ concerning Cascabel’s development.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

African Battery Metals (LSE:ABM) has been on something of a roller coaster ride over the last few months. After its shares were suspended at the end of 2018, in the face of financial uncertainty, a successful refinancing programme allowed the company to return to trading in February with no debt and a healthy cash runway. Alongside this newfound financial security, the organisation has also undergone a significant management restructuring that has seen Paul Johnson and Andrew Bell both become executive directors. 

In the first part of our interview with Johnson, the AIM veteran discussed Bell and his reasons for approaching African Battery and their plans for the outfit’s existing portfolio. Here, he discusses the pair’s recent deal with AIM-listed Katoro gold and their plans to make the most of today’s ‘very poor’ funding climate for early-stage resource opportunities as they line up African Battery’s future.

Haneti opportunity

Johnson and Bell revealed African Battery’s first foray into new territory under their leadership last month, announcing an investment and option agreement with Katoro Gold (LSE:KAT). Under the contract, African Battery will be able to purchase up to 10m shares in Katoro at 1p each with three-year warrants attached. It also has the right to purchase up to 35pc in Katoro’s 100pc-owned Haneti nickel project in Tanzania, for a total consideration of up to £125,000.

Haneti comprises tenements covering an area of around 5,000km2 prospective for nickel, platinum-group-elements, cobalt, copper, gold, and lithium. Previous work has identified grades of up to 13.6pc nickel at the project, and an exploration programme this year will aim to confirm the existence of disseminated or massive sulphide mineralisation in the area. Alongside Haneti, Katoro owns a further two gold projects in Tanzania called Imweru and Lubando. Together, these host a JORC-compliant resource of 754,980oz gold.

As well as giving African Battery exposure to a new nickel project and a new jurisdiction, Johnson says he and Bell felt that Katoro’s looked undervalued:

‘Like all resource firms, Katoro has suffered recently. Its market cap currently sits at just £1m, which is unbelievably low considering that it has a large amount of gold in its portfolio, a potentially high-impact nickel project, and cash in the bank. We see plenty of upside on the stock, and think its market cap could go substantially higher.’

Johnson also highlights parallels between Katoro and Haneti’s previous owner Kibo Mining (now Kibo Energy), into which Metal Tiger entered a joint venture in 2014 when he was chief executive. Shortly after Metal Tiger made a £150,000 equity investment and launched the 50:50 project focused on its uranium-prospective portfolio in Tanzania, Kibo’s shares shot up from below 1.5p to more than 10p in intra-day trading.

This rise, which occurred very quickly, came after Metal Tiger’s investment supported Kibo in the delivery of a highly positive definitive mining feasibility study at its Rukwa coal to power project. With the deal earning Metal Tiger a significant profit in short order, Johnson hopes that alongside having an option over Hanet, African Battery can make a lot from its Katoro shareholding.

Broadening horizons

Alongside the Katoro deal, March also saw Johnson and Bell lay out their plans for African Battery’s future in a strategic and operational plan. The company said that the funding climate for early-stage resource opportunities is still ‘very poor’, thanks to depressed market conditions. As a result, it believes vendors are willing to undertake transactions on unusually reasonable terms. Using some of its remaining cash balance, the firm plans to take advantage of this by reviewing and – if appropriate – acquiring new opportunities that complement its existing portfolio and provide additional risk diversification.

In the update, African Battery said it has already received direct approaches from third parties with assets in battery metals, precious metals, and other commodity groups. As well as looking at new commodity groups, the firm said that, although it intends to remain focused on Africa, it would be willing to enter new jurisdictions if an attractive enough opportunity arose.

‘We are obviously very focused on reviewing what we can do with the existing portfolio,’ says Johnson. ‘However, we are also considering investment opportunities that can boost our balance sheet, bolster our financial strength and expose us to strategically attractive areas for future business development. For example, it would be good to get diversification across a wider geographical spread in Africa, rather than focusing solely on the West of the continent. There are a number of attractive opportunities out there in stable jurisdictions before offered at good valuations.’

Aside from maintaining and expanding African Battery’s portfolio, Johnson said another core goal for Bell and himself is to restore value for long-term shareholders. He highlights his stints at Metal Tiger, Greatland Gold, and Thor Mining as evidence of his ability to implement a successful business turnaround strategy.

‘African Battery has been through a period of difficulty, and it is now down to us to restore confidence in the company. There are a lot of people with personal money invested that have suffered a large capital loss. So, alongside making money for the investors that entered alongside us, we have got to try and make back as much of that cash that long-term shareholders have lost on paper as possible,’ he says.

Both Andrew Bell and I have enjoyed turnaround success at numerous businesses over the years, with good examples being Thor Mining, Metal Tiger, and Greatland Gold. We enter African Battery in a far more comfortable position than many of these examples. The company has no debt, a good strong cash balance, and some existing interests with value that can be taken forward. What’s more, we are at the bottom of the market, or at least close to it. That is the scenario you want if you are going to make a recovery. It is really a case of doing the same thing as we have done before: maintaining our strong core business model and grabbing new opportunities as and when they become available.’

Where next?

With one asset left to review and new projects on the agenda, the next few months are likely to see African Battery deliver plenty of newsflow for investors. What’s more, by a revitalised balance sheet devoid of debt and replete with cash complements this forward momentum. If the business’s two experienced bosses can strike the right chord with the retail market by meeting all of their strategic and operational goals, then the company could be poised for exciting growth.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The article expresses the views of the Author solely and does not necessarily express the views of MiningMaven.com and Catalyst Information Services Ltd or their connected parties who are not responsible for its content or accuracy

News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance. Readers are recommended to seek the advice of appropriate professionals when considering investments in small capital.

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