Gold Surges while Hedgies Turn Bearish Commodities

NexGen capex jumps, Patriot MRE update looms

August 05, 2024

The Pre-Start

  • Magnetic released an economic update to its Ladie Julie gold project PFS, reporting a pre-tax NPV8 of $925m at A$3,200/oz, with slightly higher gold recovered, opex and capex (MAU) Interestingly, a reserve is still yet to be declared at Lady Julie, which is quite unusual for a PFS…

  • Lynas increased its ore reserves to 32Mt at 6.44% TREO, supporting a >35 years life (LYC)

  • NexGen provided updated economics for Rook I, revised capex C$2.2b (up from C$1.3b quoted in 2021), average post-tax net cash flows in Years 1-5 C$1.93b (broadly comparable to the FS where higher uranium prices offset higher opex/capex) (NXG)

  • Centaurus increased its MRE by 27% to 138.2Mt at 0.87% Ni for contained nickel of 1.2Mt (CTM)

  • Patriot Battery Metals are in trading halt pending the release of a resource upgrade and exploration target (PMT) We’re getting serious flashbacks to last year!

  • Strickland hit 90m at 4g/t Au at their Rogozna project in Serbia, 7 rigs continue to drill here and at Yandal (STK)

  • Red 5 shared hits from its Sugar Zone exploration program, hitting mineralisation across its infill targets (RED)

  • Wildcat reported more thick, high-grade hits at Leia, including 67m at 1.9% Li2O (WC8)

  • Meteoric released an update to the Figueira resource at its Caldeira rare earths project, overall MRE now at 740Mt at 2,572ppm TREO (MEI)

  • Meeka appointed Matt O’Hara (who developed Penny for Ramelius) as Senior Site Executive to lead their Murchison gold project (MEK)

  • Larvotto shared a PFS for the Hillgrove gold-antimony project, including capex of $73m, 80kozEq production, NPV8 of $157m & 50% IRR (LRV)

High Grade It

  • Hedge funds have turned predominantly bearish on commodities futures for the first time since 2016 (Bloomberg)

  • Korea seeks Australian lithium to secure US subsidies, sidelining investment in China (AFR)

  • Albemarle said the inability to access IRA subsidies had been a major factor in its decision to slash its workforce & curtail WA investment (AFR)

  • The price of a key Chinese steel product used in construction is on the cusp of hitting its lowest level in more than seven years (Bloomberg)

  • FMG’s internal lawyer instructed private investigators spying on former employees who quit to form their own green iron ore start-up (AFR)

  • BHP’s high-altitude copper bet shows guts, but glory isn’t guaranteed (AFR)

  • Funds haven’t been this disappointed by gasoline demand since the pandemic depths, with speculators cutting net-bullish bets (Bloomberg)

  • Greatland Gold’s chief Shaun Day reckons they are “strongly positioned” to consolidate Havieron (Australian Mining)

  • Australia needs to watch Indonesia’s aluminium push warns Alcoa boss (The Australian)

  • Workers at Endeavour Mining’s Sabodala-Massawa mine in Senegal started a strike on Thursday (Bloomberg)

  • Gold surpassed US$2,500 per ounce (>A$3,800) for the first time in history on Friday (Mining.com)

  • CMOC strengthened its status as the world’s cobalt king, churning out more than 3x as much as better-known rival Glencore (Bloomberg)

  • The first US nuclear plant to ever try reopening after undergoing permanent closure preparation “isn’t fit to restart anytime soon” (Reuters)

  • A Brazilian oceanographer has been elected the next leader of the ISA, a change that could slow the rush to strip-mine deep sea (Mining.com)

Wheelin’ n Dealin’

  • Alumina is officially off the ASX boards, with the acquisition by Alcoa now complete (AWC)

  • Base Resources registered their scheme booklet with ASIC in relation to their tie-up with Energy Fuels (BSE)

  • Anglo’s bankers have been courting Indonesian groups for its coal asset sale, with MACH, GEAR and BUMA all mentioned (AFR)

  • Vitol has agreed to buy the last remaining piece of fallen Asian commodity trader Noble, continuing its deal spree (Bloomberg)

Rattlin’ the Tin

  • Black Cat entered into a credit approved term sheet with Nebari for a 3 year US$20.5m senior secured loan facility (BC8) The restart of Paulsens is now “fully funded”…

  • Meteoric completed its $27.5m placement and launched a $5m SPP (MEI)

  • Dreadnought raised $3.7m to advance niobium and gold exploration (DRE)

  • Infini raised $3.4m to fast track Portland Creek uranium exploration (I88)

  • Another at-the-market raise for Galan, raising $650k for working capital (GLN)

Word on the Decline

  • We were disappointed to not see a “Mega Monday M&A” deal on the first morning of Diggers

  • Rumblings at the Exchange Hotel last night suggest there are quite a few gold deals in the pipeline which we should expect to see surface imminently, Greatland Gold consolidating Havieron and/or Telfer was a recurring theme

  • But for now, there are two goldie “Diggers and Dealers” strutting around Kal with awfully proud chests this week…

Who will join them next?

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In the Weeds

  • Packer & Co’s public letter addressed to the board of Jabiluka owner ERA

  • The Day Oil Went Negative (Bloomberg Originals video)

  • Why Graphite Is The New Gold As Tech Wars Ramp Up (Insider News vid)

  • Did you miss our research note last week on all of the advanced gold projects in Australia? We went deep and did the research that will save you 20 hours if you’re looking at ASX gold juniors (Money of Mine)

Advanced gold projects Australia

Every advanced gold project in Australia, the hard numbers

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Devil’s in the Detail

Introducing the product of one of the most random mergers this year between Kin Mining and PNX Metals, now called Patronus Resources.

While we appreciate the homage to Harry Potter, we’re still rather “stupefy’ied” at the whole deal. They do trade at a c. $8m EV with c. $84m cash and Genesis shares in the tin, so perhaps they’ve got a few spells yet to cast…

Separately, Ora Banda had a howler in its Diggers presentation this morning

Catch up on our latest episode

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Albermarle’s BIG Failure (43 min)

  • 0:01:01 Name & shame

  • 0:07:41 The latest from Cameco

  • 0:13:19 WA gold M&A

  • 0:22:57 Albemarle's big call

  • 0:32:28 The Quarterly Olympic Awards

  • 0:37:35 Stand-outs from the quarterlies

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