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Coelacanth Energy Inc. (TSXV: CEI) ("Coelacanth" or the "Company") announces that it has secured a $52 million bank credit facility and has commenced a 4-well drilling program at Two Rivers East.
TWO RIVERS EAST PROJECT
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Overview
The encouraging growth of electric vehicles (EVs) is having positive effects on the demand for battery metals such as lithium. Global lithium consumption is expected to reach 1,427 kt of lithium carbon equivalent (LCE) in 2025, up from 797 kt of production in 2022, according to a Q2 2023 report from Australia’s Office of the Chief Economist. Recent lower pricing of lithium in the spot market has not changed the underlying global growth of EV’s and the geopolitical supply risks in the supply chain.
EVs are driving the rising demand for lithium-ion batteries resulting in the growth of the market globally. This puts the focus on junior mining companies that are busy developing critical mineral projects around the world especially with potentially lower operating costs long term. With lithium prices experiencing a downward trend, now could be an opportune time for investors to get into the lithium space as it remains a critical element for batteries and electric vehicles. With lithium assets in Tier 1 mining jurisdictions, Australia-based QX Resources (ASX:QXR) offers investors exposure to this rapidly expanding market.
QXR’s lithium strategy is centered around the development of its Liberty Lithium Brine Project in California and a portfolio of lithium projects within the Pilbara region of Western Australia. Liberty Lithium is one of the largest single lithium brine projects in the US with contiguous claims over 102 square kilometres (equivalent to twice the area of Sydney Harbour). The geological setting of the project mirrors Albemarle’s Silver Peak lithium brine deposit in Clayton Valley, Nevada, and major Argentina brine projects. Like Silver Peak, QXR’s Liberty could be a large-scale, producing lithium brine asset.
Downstream producers in the US, including automakers, are in need of securing lithium supply, especially if domestic supply is available. As such, automakers in the US have been making significant investments in lithium projects. The most recent was a $100-million investment by Stellantis into Controlled Thermal Resources, which owns a lithium project in California. It is encouraging to note growing interest from end-users investing directly into projects making Liberty Lithium an attractive opportunity.
The company has an indicative development plan involving drilling, sampling and testwork starting with two permitted drill holes over the main part of the surface lithium anomaly, planned for November-December 2023. The aim is to identify lithium-bearing brine aquifers at depth, which is anticipated to lead to detailed drilling toward an initial resource by mid-2024. QXR has sufficient financial muscle to carry out the drilling and other work, especially with the recent AU$3 million raise via a private placement and access to an additional AU$3 million under an at-the-market (ATM) facility.
QXR intends to collect large volumes of lithium brines and submit them for testwork with various direct lithium extraction (DLE) providers. DLE technologies has the potential to significantly increase the supply of lithium from brine projects given higher recoveries, along with the bonus of sustainability and ESG benefits. A number of proven DLE technologies are emerging and being tested at scale, presenting an opportunity for QXR to find strategic partners.
The company is headed by managing director Steve Promnitz, who has a proven track record in the lithium sector. He successfully transformed Lake Resources, a lithium brine developer, from a $1-million market value private company to an ASX-listed company with an AU$2.1-billion market capitalization upon his departure in 2022. His geology and chemistry background along with experience of working in major mining companies, such as CRA and Rio Tinto, should prove beneficial for QXR.
Company Highlights
- QX Resources is an Australia-based company focused on the exploration and development of battery minerals, with a huge lithium brine project in the US, hard rock lithium assets in a prime location in Western Australia (WA), copper-molybdenum-gold assets in Queensland and a strategic investment in nickel sulphides in Sweden.
- Liberty Lithium Brine Project, located in California, is considered analogous to Albemarle's Silver Peak deposit and is one of the largest single lithium brine projects in the USA with contiguous claims over 102 square kilometres.
- The potentially large-scale lithium brine project located in the US is of significant importance, as participants in the electric vehicle value chain are aggressively seeking to secure domestic battery minerals supply to balance potential supply-side geopolitical risks to the energy transition.
- QXR has commenced drilling of the Liberty Lithium Project and secured AU$3 million in funding in late 2023 along with access to an additional AU$3 million under an at-the-market facility. The target is to publish an initial resource on the project by mid-2024.
- Additionally, the fundraise also offers flexibility to ramp up exploration activities across its Pilbara lithium hard rock project which are also very exciting prospects. It has four lithium hard rock projects in the Pilbara Province spanning 350 square kilometres and in proximity to some of Australia’s largest lithium deposits and mines.
- The company's other assets include the copper-gold-molybdenum project in Queensland and a 39-percent stake in Bayrock Resources, which owns a portfolio of battery metals projects in Sweden.
Key Projects
Liberty Lithium Brine Project
QXR has entered into a binding agreement with vendor IG Lithium LLC (IGL) to acquire a 75 percent interest in the Liberty Lithium Brine Project in California. Separately, QXR agreed to purchase a small package of leases adjacent to Liberty Lithium to consolidate the area, requiring payment of US$100,000 cash and QXR shares of the same value to the third-party leaseholder.
The Liberty Lithium Brine Project, located in SaltFire Flat, California, is made up of 1,269 contiguous claims over 102 square kilometres (10,230 hectares). It is one of the largest single lithium brine projects in the US. The project is located near long-life evaporation operations and is well-serviced by roads and power in a region keen to be part of the energy transition.
Project Highlights:
- Promising Geology. The project has a similar appearance to well-known lithium brine projects in Argentina/Chile, increasing confidence in the potential for large-scale lithium discovery. QXR has indicated it is seeing significant local county and regulatory interest in developing Liberty Lithium towards production, driven by the support for battery minerals production in this part of California.
- Strong Sampling Results. Sampling at the project has returned up to 215 mg/L lithium in brine at surface. These elevated lithium results extend over an impressive distance of 10 kilometres, demonstrating the robust potential of the Liberty Lithium Project. Similar nearby brine projects, such as Pure Energy Minerals’ Clayton Valley project just across the California/Nevada border, are advancing to potential economic development on lower grades downhole of 110 to 160 mg/L lithium. Geophysical analysis shows a large basin over 1,000 metres deep and indicating brine aquifer targets at depth.
- Drill Program Underway. QXR has undertaken a diamond drill program with two permitted drill holes totaling 1,000 metres, along with downhole sampling and geophysics, targeted at the centre of the surface lithium anomaly. Drilling began in November-December 2023 and is continuing in early 2024. Bulk volumes of lithium brines will be submitted for testwork with various DLE providers. The aim is to identify lithium-bearing brine aquifers at depth, which is anticipated to lead to an initial resource by mid-2024.
- Future Partnerships. End-users, DLE technology providers, project developers, and battery makers have already intimated interest in participating with QXR once lithium brines are identified in drill holes.
Hardrock Lithium - Pilbara
In addition to its California asset, QXR has a highly prospective portfolio of lithium projects within the Pilbara region of Western Australia, covering a combined area of 355 square kilometres. The portfolio comprises four hard rock lithium projects - Turner River, Western Shaw, Split Rock and Yule River.
Turner River Project
The Turner River lithium project is located about 120 kilometres south of Port Headland and is accessible via the Great Northern Highway. It is located about 12 kilometres south of the Woodgina lithium mine site, one of the world’s largest hardrock lithium deposits.
Rock chip sampling at the Turner River Lithium project returned grades of up to 4.90 percent lithium oxide in samples of lepidolite. Assay results from additional rock chip sampling returned 1.6 percent and 1.1 percent lithium oxide. Pegmatites have been observed in other areas at Turner River, which will be drilled in future drilling campaigns.
Western Shaw Lithium Project
The project spanning 96 square kilometres is located 220 kilometres southeast of Port Hedland in Western Australia with access via the Great Northern Highway. Multiple pegmatites have been identified and sampled in the west and south of QXR’s Western Shaw leases. Pegmatites appeared larger and more abundant in the southern section. Numerous pegmatites returned encouraging lithium results from mobile XRF analysis. Eighteen samples returned between 300 and 600 parts per million (ppm) lithium in pegmatites at Western Shaw.
Split Rock Project
The project covers an area of 35 square kilometres and is approximately 200 kilometres southeast of Port Hedland and 180 kilometres north of Newman. It is located along the southeast margin of the Split-Rock Supersuite, which is considered regionally prospective for lithium-bearing pegmatites. The project is easily accessible via an established road network. The proximity to Thor Mining’s (ASX: THR) Ragged Range project, which has reported a number of targets prospective for lithium within its tenement area, is encouraging. The project is likely to also be prospective for base metals including copper, lead, zinc, silver and gold, given the numerous base metals prospects that occur along the north and south margins of its tenement.
Central Queensland Gold Projects
QXR is developing two Central Queensland gold projects (the Belyando and Lucky Break Mines) through an earn-in agreement with Zamia Resources. QXR currently owns 70 percent of Zamia Resources and has the ability to earn up to 90-percent interest by spending a further $1 million on exploration and project development works. Both gold projects are strategically located within the Drummond Basin, a region that has a more than 6.5-Moz gold endowment.
Map of Locations of Zamia’s Exploration Tenements in Australia
In addition to the two gold projects, Zamia owns an advanced-stage pure Molybdenum (Mo) deposit in Central Queensland, the Anthony Molybdenum Project. The project is adjacent to major sealed roads and near rail and energy support. The Anthony Project has a JORC-2012 compliant indicated and inferred mineral resource estimate of 24,700 tonnes (53.7 million pounds) of contained molybdenum in sulphide, transition (partial oxide), and oxide zones from surface.
Bayrock Resources
QXR holds 39 percent of Bayrock Resources, an unlisted public Australian company, which has a portfolio of battery minerals exploration and development assets in Sweden, primarily in nickel, cobalt and copper. The two main projects include the Lainejaur Project and the Vuostok Project within the Northern Nickel Line. Bayrock is fully funded to carry out its planned exploration activities at the Lainejaur Ni-Cu-Co project and the Vuostok project.
The Lainejaur project is an advanced-stage nickel-dominated battery metals asset, where recent drilling (July 2023) has returned 4.7 metres at 2 percent nickel, 1.6 percent copper and 0.1 percent cobalt from 283 metres downhole. The project has an existing JORC 2012 inferred mineral resource estimate of 460,000 tonnes @ 2.2 percent nickel, 0.15 percent cobalt, 0.70 percent copper, 0.68 g/t palladium, 0.20 g/t platinum and 0.6 5g/t gold.
The Northern Nickel Line covers nearly 340 square kilometres comprising five exploration permits over areas favourable for nickel-copper-cobalt in Northern Sweden. The primary focus within the Northern Nickel Line is the Vuostok Project, where a diamond drill program has returned encouraging results, so far. High-grade nickel-copper has been intersected including 6.9 metres at 1.2 percent nickel, 2.2 percent copper from 5 metres downhole, and in another drillhole with 6.2 metres at 1.2 percent nickel, from 11 metres downhole.
Management Team
Maurice Feilich – Executive Chairman
Maurice Feilich has been involved in investment markets for nearly 30 years, commencing his career as an institutional derivative broker at McIntosh Securities in 1998. He joined Tricom Equities in 2000 as head of equities, and in 2010, became a founding partner of Sanlam Private Wealth. Feilich has a track record of success and solid networks in the small resources sector.
Steve Promnitz – Managing Director
Steve Promnitz has significant experience in the resources sector, having worked in the gold sector with major and mid-tier producers as well as across the battery minerals of copper, nickel and rare earths. Previously, he was CEO of small/mid-tier companies and has held senior management roles with global resource companies (Rio Tinto, WMC) and senior corporate finance roles with major banks (Westpac, Citigroup). Promnitz successfully transformed Lake Resources, a lithium brine developer, from a $1-million market value private company to an ASX-listed company with an AU$2.1-billion market capitalization at the time of his departure. He holds a BSc (Hons) from Monash University.
Ben Jarvis – Non-executive Director
Ben Jarvis has extensive experience in the small resources sector as both a public company director and strategic advisor. Since 2011, he has been a non-executive director of South American-focused gold and silver mining company, Austral Gold (ASX:AGD) which is dual-listed on the Australian Securities Exchange and the Toronto Venture Exchange (TSX-V: AGLD). Jarvis is the managing director and co-founder of Six Degrees Investor Relations, an Australian advisory firm he formed in 2006 that provides investor relations services to a broad range of companies listed on the Australian Securities Exchange.
Roger Jackson – Non-executive Director
A qualified geologist with a career spanning more than 25 years, Roger Jackson has considerable experience in mineral exploration, mine management, mining services and the marketing of mineral concentrates. Jackson is the founding director of a number of companies including Central Gold Mines, Bracken Resources, and Hellyer Gold Mines. He is a long-standing member of the Australian Institute of Company Directors, member of the Australian Institute of Geoscientists, fellow of the Geological Society of London and a fellow of the Australasian Institute of Mining and Metallurgists.
Dan Smith – Non-executive Director & Company Secretary
Dan Smith holds a Bachelor of Arts and is a fellow of the Governance Institute of Australia. He has 14 years of primary and secondary capital markets expertise and has advised on and been involved in a number of IPOs, RTOs and capital raisings on the ASX and NSX. Smith serves as non-executive director and company secretary of a number of companies on ASX and AIM.
This article was written in collaboration with Couloir Capital Ltd.
Assays Confirm High-Grade Manganese Discovery at Wandanya
HIGHLIGHTS
- Significant high-grade manganese assays received for the W2 prospect1, Wandanya located 80 km south of the Woodie Woodie Manganese Mine including:
- 5m @ 33.2% Mn from 4m including 2m @ 48.7% Mn (WDRC032)
- 5m @ 33.2% Mn from 1m including 2m @ 44.1% Mn (WDRC031)
- 5m @ 32.4% Mn from 4m including 2m @ 3G.6% Mn (WDRC027
- 6m @ 27.7% Mn from 3m including 2m @ 42.G% Mn (WDRC013)
- The stratabound mineralisation shows remarkable thickness and grade consistency over 240m of drilled strike and remains open to the east and north where the Company has mapped 1.75km of intermittent high grade outcropping manganese
- W2 is interpreted as stratabound, fault related hydrothermal manganese enrichment representing a significant new exploration model on the eastern margin of the Oakover Basin.
- Metallurgical testwork planned to produce a high-grade Mn concentrate as a feedstock for alloying or high purity manganese sulphate (HPMSM)
Black Canyon’s Managing Director Brendan Cummins said:
“The laboratory-based assay results have confirmed the significant high-grade intercepts for the W2 prospect. I am impressed by the consistency of the grades and thickness of the manganese horizon we have discovered and the higher-grade intervals over 40% Mn. What is really appealing about this target from an exploration and resource delineation perspective is the benefit of a consistent mineralised horizon that is also associated with hydrothermal grades. I am excited by the upside of this new style of mineralisation as we plan our follow-up exploration programs to assess 1.75km of strike to the north and the potential of the manganese horizon to extend to the east.”
Figure 1. W2 Prospect, RC drill bags from WDRC031 in the foreground
W2 Prospect, Wandanya (BCA 100%)
The W2 prospect was drilled on an approximate 40 x 40m grid testing a 240 long x 200m wide target. This drill program comprised 35 holes for 642m of drilling. Drill collar information is presented in Appendix 2.
Expedited Assay Results
Initially, six RC holes were sampled for expedited assays, generating 38 one metre interval samples that were gathered along the eastern boundary of the stratabound mineralisation. Representative holes were sampled from every second line along the drilled strike of 240m. On each drill line, the last two eastern holes were sampled from depths between 4m and 9m, which included stratabound mineralisation and portions of the lower grade footwall and hangingwall.
The results are presented in Table 1, which show consistent zones of mineralisation with the bottom 2m for each intersection typically returning high grade mineralisation potentially suitable for direct shipping (DSO).
Click here for the full ASX Release
This article includes content from Black Canyon, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Gallium Mineralisation Discovered in Rock Chip Samples from the May Queen South Bauxite Project, Queensland
Highlights
- Significant levels of the semiconductor elements gallium (Ga) and germanium (Ge) identified within the May Queen South Bauxite resource.
- Significant elevated gallium results returned averaging 67.59 g/t Ga over 12 random samples with an assay high of 145.5 g/t Ga.
- The May Queen South Bauxite Project (EL 16260 and EPM 16261) has a JORC (2012) Inferred Mineral Resource Estimate of 54.9Mt at 37.5% total Al2O3 and 5.2% TiO2 and 7.9% Rx SiO2.
- The project is located <55km from existing rail infrastructure with connections to the Port of Bundaberg.
Market summary
Gallium prices have surged in recent years, primarily due to increased demand in the electronics and semiconductor industries (Graph 1). Uses of Ga include the manufacture of compound semiconductor wafers that are used in integrated circuits and optoelectronic devices including laser diodes, light-emitting diodes (LEDs), photodetectors, and solar cells. Gallium's unique properties, such as its low melting point and ability to form useful compounds, makes it a critical element with applications spanning various industries, particularly in advanced technology and electronics.
The global gallium market is heavily dominated by China, with other countries playing much smaller roles. Currently China produces approximately 98% of the world's supply of raw gallium1.
Recent market disruptions including the entry of price inelastic demand 2 and Chinese export controls in August 2023 has seen a doubling of prices since 2021 when gallium was priced at $422.70 per kg, the current price represents a 115.12% increase3
Graph 1. Gallium price worldwide from January 2018 to January 2024 (Source: www.statista.com)
May Queen South Bauxite project
The May Queen South Bauxite project is located in central Queensland, within a short trucking distance of a rail system leading north to the Port of Bundaberg. It is also located within close proximity of the main Queensland Rail network heading south towards the Port of Brisbane.
Figure 1. Location of EPM 16260 and EPM 16261 shown together with theCompany’s adjacent May Queen gold tenements (EPM19419 and EPM27746)
The Project has a JORC 2012 Inferred Mineral Resource estimate of 54.9Mt at 37.5% total Al2O3 and 5.2% TiO2 and 7.9% Rx SiO24 (refer to announcement dated 30 May 2023).
Click here for the full ASX Release
This article includes content from Australasian Metals Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
8500N Paleochannel Drilling Commences
- ~3,000m Reverse Circulation (RC) drill program at the 8500N Paleochannel (8500N) has commenced targeting shallow high-grade mineralisation where legacy and recent drill intersections include:
- 2m @ 46.7 g/t Au from 13m incl. 1m @ 92.6g/t Au from 14m (SPRB0064)
- 3m @ 10.7g/t Au from 16m incl. 1m @ 29.0g/t Au from 16m (SPAC0204)
- 2m @ 22.4g/t Au from 15m incl. 1m @ 43.5g/t from 15m (SPAC0261)
- 1m @ 51.1g/t Au from 16m (SPAC0068)
- 4m @ 8.99g/t Au from 12m incl. 1m @ 34.7 g/t Au from 13m (SPAC0279)
- 13m @ 1.59g/t Au from 11m incl. 4m @ 3.49g/t Au from 11m (PCRC003)
- Staged infill RC drill program designed to improve geological confidence of the 8500N Paleochannel while testing along strike and mineralisation extending into the underlying saprolite zones.
- 8500N is located on granted mining tenements, with significant mine infrastructure and completed environmental Flora and Fauna baseline studies, reducing the mine approval timeline.
- 8500N Paleochannel represents a low-cost, low-risk production opportunity due to its shallow high-grade gold mineralisation (average 15m below surface) and free-digging qualities of the mineralised paleo gravels and overburden material.
The first stage of the drill program consists of ~100 RC holes (~3,000m) designed to improve the geological confidence of the shallow paleochannel, while testing for potential extension of mineralisation in the saprolite zone beneath the paleochannel, as identified during the initial drill program (ASX announcement 18 September 2024). Several drill traverses will also be undertaken to test for extension along strike to the south (Figure 1). The complete drill program is designed to be completed in several stages to ensure optimal drilling effectiveness.
8500N Paleochannel
The 8500N Paleochannel is located within a granted mining tenement, between the Company’s Wattle Dam Gold Mine and the underlying 8500N gold deposit (Figure 2). Paleochannels are remnants of ancient rivers or stream channels that have been buried by younger sediments. Paleochannels can contain concentrations of high-grade alluvial gold that accumulate over millions of years and are generally shallow and flat-lying with free-digging qualities (not requiring drill and blasting) of the mineralised paleo gravels and overburden material, which can provide significant economic advantages.
Maximus’ 8500N is situated within the Lefroy Paleodrainage System, a significant ancient drainage network in the Eastern Goldfields region that contains several well-known paleochannel gold deposits such as Neptune, Africa, and Mandilla. The mined Neptune and Africa paleochannel deposits, part of Gold Fields Limited (JSE:GFI) St Ives Gold Camp, had a reported mineralised thickness of 1-3 metres recovering ~87,000 oz at 3.32 g/t Au. Similarly, Astral Resources’ NL (ASX:AAR) Mandilla paleochannel, which is situated ~2 km east of 8500N (Figure 2), was mined between 2006-2007, producing approximately 23,000 oz at 7.5 g/t Au from a ~600-metre long paleochannel with a mineralised thickness of 1-4 metres. The proximity of the 8500N Paleochannel to these established deposits, highlights the prospectivity of the region, as paleochannels within the Lefroy Paleodrainage System have consistently proven to be productive sources of gold.
The shallow 8500N mineralisation is located between 5 and 20m below the surface, gradually dipping to the south along two separate interpreted trends, with a strike length of approximately 450m. Legacy drilling across the flat- lying paleochannel has shown known mineralisation thickness ranges from 1 to 4m, with several key markers of the paleo gravels to assist in effective mining.
Currently, no JORC-compliant gold resources are defined for the 8500N paleochannel. However, recent drilling has revealed gold mineralisation extending beyond the limits of legacy drilling, indicating strong potential for significant expansion of the previously defined mineralised zone (ASX announcement 18 September 2024).
Figure 1 – Maximus’ 8500N Paleochannel mineralisation wireframes with the phase 1 (Black) and planned phase 2 (Grey) drill collars.
A third party has held the 8500N Paleochannel area under a Special Prospecting License (SPL) (Figure 2), which has restricted Maximus from assessing the potential of the 8500N gold resource and 8500N paleochannel. No exploration work, excluding a small scout drill program, has taken place in the 8500N area since 2014. On the surrender of the SPL (ASX announcement 5 September 2024), Maximus can now progress unencumbered to re- evaluate the mineral resources of both the Paleochannel and 8500N deposit.
Click here for the full ASX Release
This article includes content from Maximus Resources Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Coelacanth Energy Inc. Announces $52 Million Revolving Bank Credit Facility and Fall Drilling Program
Coelacanth has commenced drilling on the 5-19 Pad at Two Rivers East with the first well spud on September 1st. The complete program consists of drilling and completing 3 Lower Montney wells, completing 1 previously drilled Upper Montney well, and drilling a Bluesky disposal well for a total cost of approximately $36 million. The 4 pad wells are scheduled to be completed starting late October 2024.
As previously released, the three 5-19 Lower Montney wells drilled in 2023 had tested at a per well average of 1,338 boe/d for a combined rate of 4,014 boe/d (54% light oil). The program above will be additive to this once the Two Rivers East facility is constructed and on-stream in April 2025. The Upper Montney has not produced in the immediate area but has been very prolific in the greater region. Management is looking forward to proving up the commerciality of this zone in the area as well as establishing expected oil/gas production mix.
Strategic benefits of this program are as follows:
- Accelerating the growth profile of the overall company
- Adding material drilling inventory through proving commerciality of Upper Montney
- Reducing risk in processing and transportation commitments
- Minimizing disruptions on start-up of new facility by having wells completed in advance
- Increasing financial and operational flexibility in 2025 capital program
- Creating additional production certainty for future decisions on third-party processing and build-out of additional facilities
Also as previously released, Coelacanth obtained all regulatory approvals to construct a new battery facility ("Facility") at Two Rivers East designed for gas compression/dehydration, oil treating and water handling, plus gathering and transport lines to connect from the 5-19 Pad through the Facility to a mid-stream gathering line. Construction of the pipelines and the facility site have already commenced and estimated to be operational in April 2025.
BANK CREDIT FACILITY AND FINANCIAL UPDATE
Coelacanth secured 2 revolving bank credit facilities for a total of $52 million from its primary lender. The facilities are backed by reserves at Two Rivers West plus a $45 million Letter of Credit from a third party. The commitment from the third party is for a 2-year term. During the term, Coelacanth expects that the lending value of producing reserves at Two Rivers East will allow for the credit facility to be renegotiated and the Letter of Credit to be returned.
Coelacanth had also previously secured a commitment for approximately $22 million from a Mid-Stream company to finance a pipeline connecting Coelacanth facilities to the Mid-Stream Company's gathering system.
With over $60 million cash and no debt at the end of Q2 2024, Coelacanth estimates it will have approximately $40 million net debt plus the mid-stream commitment once the drilling program is completed and the facility is operational. Once operational and pending drilling success on the above program, Coelacanth's production should stabilize at over 6,000 boe/d until additional wells are drilled in the summer of 2025.
SHARE PURCHASE WARRANTS
As part of the $80 million bought deal financing completed in November 2023, Coelacanth had issued 33.3 million share purchase warrants ("Warrants") with a strike price of $1.05 per share that expire November 15, 2024. Coelacanth's Board of Directors has determined that extending the Warrant expiry date to June 30, 2025 is in the best interest of the Company and management will start the regulatory process to extend such Warrants.
Proceeds of the Warrant exercise, if any, would be used for additional pad drilling at Two Rivers East scheduled for summer of 2025.
FOR FURTHER INFORMATION PLEASE CONTACT:
Coelacanth Energy Inc.
2110, 530 - 8th Ave SW
Calgary, Alberta T2P 3S8
Phone: 403-705-4525
www.coelacanth.ca
Mr. Robert J. Zakresky
President and Chief Executive Officer
Mr. Nolan Chicoine
Vice President, Finance and Chief Financial Officer
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Oil and Gas Terms
The Company uses the following frequently recurring oil and gas industry terms in the news release:
| Liquids | |
| Bbls | Barrels |
| Bbls/d | Barrels per day |
| NGLs | Natural gas liquids (includes condensate, pentane, butane, propane, and ethane) |
| Natural Gas | |
| Mcf | Thousands of cubic feet |
| Mcf/d | Thousands of cubic feet per day |
| MMcf/d | Millions of cubic feet per day |
| Oil Equivalent | |
| Boe | Barrels of oil equivalent |
| Boe/d | Barrels of oil equivalent per day |
Disclosure provided herein in respect of a boe may be misleading, particularly if used in isolation. A boe conversion rate of six thousand cubic feet of natural gas to one barrel of oil equivalent has been used for the calculation of boe amounts in the news release. This boe conversion rate is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Product Types
The Company uses the following references to sales volumes in the news release:
Natural gas refers to shale gas
Oil refers to tight oil
NGLs refers to butane, propane and pentanes combined
Liquids refers to tight oil and NGLs combined
Oil equivalent refers to the total oil equivalent of shale gas, tight oil, and NGLs combined, using the conversion rate of six thousand cubic feet of shale gas to one barrel of oil equivalent as described above.
Forward-Looking Information
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "should", "believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward-looking statements or information.
More particularly and without limitation, this document contains forward-looking statements and information relating to the Company's oil, NGLs and natural gas production and capital programs. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the availability of capital to undertake planned activities and the availability and cost of labor and services.
Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. The forward-looking statements and information contained in this document are made as of the date hereof for the purpose of providing the readers with the Company's expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. The Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Test Results and Initial Production Rates
The C5-19 Lower Montney well was production tested for 5.8 days and produced at an average rate of 736 bbl/d oil and 2,660 mcf/d gas (net of load fluid and energizing fluid) over that period which includes the initial cleanup where only load water was being recovered. At the end of the test, flowing wellhead pressure and production rates were stable.
The D5-19 Lower Montney well was production tested for 12.6 days and produced at an average rate of 170 bbl/d oil and 580 mcf/d gas (net of load fluid and energizing fluid) over that period which includes the initial cleanup where only load water was being recovered. At the end of the test, flowing wellhead pressure and production rates were stable.
The E5-19 Lower Montney well was production tested for 11.4 days and produced at an average rate of 312 bbl/d oil and 890 mcf/d gas (net of load fluid and energizing fluid) over that period which includes the initial cleanup where only load water was being recovered. At the end of the test, flowing wellhead pressure was stable, and production was starting to decline.
A pressure transient analysis or well-test interpretation has not been carried out on these four wells and thus certain of the test results provided herein should be considered to be preliminary until such analysis or interpretation has been completed. Test results and initial production rates disclosed herein, particularly those short in duration, may not necessarily be indicative of long-term performance or of ultimate recovery.
Production Rates
Any references to peak rates, test rates, IP30, IP90, IP180 or initial production rates or declines are useful for confirming the presence of hydrocarbons, however, such rates and declines are not determinative of the rates at which such wells will continue production and decline thereafter and are not indicative of long-term performance or ultimate recovery. IP30 is defined as an average production rate over 30 consecutive days, IP90 is defined as an average production rate over 90 consecutive days and IP180 is defined as an average production rate over 180 consecutive days. Readers are cautioned not to place reliance on such rates in calculating aggregate production for the Company.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/225700
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Highly Anomolous Samples Confirm Drill Ready Targets
HIGHLIGHTS
- Highly anomalous values have been returned across the majority of areas sampled. Significantly, neodymium, praseodymium (magnetic rare earth elements) as well as niobium and titanium, are well above background values.
- Importantly, geological analysis of the surface samples, including all the previous work undertaken at Wabli Creek, has confirmed that niobium and REE mineralisation has been determined to occur within the alkaline granite and its contact with associated N/S trending pegmatites/dykes.
- A total of 74 surface samples have been returned from the Company’s latest detailed mapping and sampling program and provides the final step toward defining priority drill targets.
- Mapping and surface sampling focused on granite/dyke contact zones and identified large anomalous zones of total rare earth oxides (TREO) with values up to 7060 ppm from surface samples (Figure 1 & 2, Table 4).
Surface samples were taken specifically to refine the Company’s understanding of granite/dyke contact zones identified by geochemical and geophysical analysis previously completed. As mineralisation has been established in the Pelops zone, the purpose of this exercise was to confirm anomalous mineralisation exists in additional zones, prior to the definition of priority drill targets.
Approximately 7 km2 of the 15 km2 E 09/2377 tenement has now been geologically mapped.
FIGURE 1: Niobium current & historical, Wabli Creek (ASX Announcements 18 March, 28 May, 12 June, 7 August, 2024)
FIGURE 2: TREO current & historical, Wabli Creek (ASX Announcements 18 March, 28 May, 12 June, 7 August, 2024)
Reach CEO, Jeremy Bower stated,
“These latest surface sample results have certainly enhanced our confidence at Wabli Creek. The key for the exploration team has been to understand and try and replicate the Pelops Prospect, where rock chip samples from bedrock have returned assays up to 17.65% Nb2O5.
Our exploration team led by Nick Revell and Principal Geologist, David Tsiokos, now have a strong understanding regarding the genesis of mineralisation which has enabled them to confirm drill ready targets. The confirmation of anomalous mineralisation in other zones in addition to Pelops is the final confirmation we needed to de-risk the next stage of exploration.
Not only is there the potential for niobium and titanium but also significant levels of magnetic REE particularly neodymium and praseodymium. Of major importance is the thesis that the central alkaline granite is host to much of the rare earth mineralisation, in addition to its contact with the N-S trending dykes. This provides a much larger target area which is very exciting”
Click here for the full ASX Release
This article includes content from Reach Resources, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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