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Alchemy Resources Limited (ASX: ALY) (“Alchemy” or “the Company”) is pleased to provide an update on its exploration activities at the 100% owned Bryah Basin Project in Western Australia. Recent work has confirmed the Valley Bore prospect target is highly prospective for Iron Ore. Mapping and sampling by Alchemy in 2008 and 2009 discovered high grade hematite and banded iron outcrops over 2km in strike and up to 66.3% Fe+1 & 2. Recent rock-chip sampling by Alchemy returned similar high grades up to 65.9% Fe. Alchemy believes the combination of high-grade outcropping hematite mineralisation on a granted mining lease near major roads and infrastructure highlights the significant near-term development potential of the project.
HIGHLIGHTS
- Significant high grade iron ore enrichment identified on Alchemy’s Bryah tenement package. Alchemy owns 50% of iron ore rights via wholly owned subsidiary Alchemy Resources (Three Rivers) Pty Ltd.
- High grade rock-chip assays from Valley Bore return grades up to 64.9% Fe with Calcined Fe grades up to 67.4% Fe.
- Total strike length of multiple mapped BIF ridges exceeds 2,000m with new regional areas recently identified with grades up to 65.9% Fe which could extend this further.
- Southern Ridge Target high grade hematite outcrops range from 10m to 80m thickness over a 900m strike.
- Planning for drill testing of the high-grade iron formations underway.
- Alchemy remains well funded with cash on hand of $3.5m as at 31 March 2024.
Figure 1: Valley Bore mapping, showing hematite outcrops and rock-chip assays (% Fe)
Chief Executive Officer Mr James Wilson commented: “Iron ore rock-chip grades above 58% Fe are very encouraging and highlight the DSO potential of the project. It’s an exciting opportunity with our leases surrounded by majors in the sector such as Sinosteel Midwest Corporation to the south. Hematite outcrops are evident over a 900m strike extent at the Southern Ridge target, and we have high grade rock-chip assays from new areas 3km away, so there’s a lot of potential to grow the project. Furthermore, Alchemy has identified a second iron ore occurrence at Old Highway Prospect which has the potential to add further scale. With its proximity to the Great Northern Highway and its advanced Mining Permit status, the Company believes there’s a significant opportunity to rapidly advance this asset in the near term.”
+ Cautionary Statement: The Company cautions investors that the reported historical assay results by Alchemy Resources Limited are from prior public exploration reports. The Competent Person has not done sufficient work to disclose the Exploration Results in accordance with the JORC Code 2012, and it is possible that following further evaluation and/or exploration work that the confidence in the prior reported Exploration Results may be reduced when reported under the JORC Code 2012. The information in the market announcement is an accurate representation of the available data and studies completed to date. All historical information in this release has been compiled from historic data reported by the Company to the ASX on 25 July 2008 – “Assay results of high-grade hematite iron formation at Robinson Range” and a second announcement released to the ASX on 15 May 2009 – “Alchemy enhances potential for high grade iron formation at Three Rivers”. Information is considered as historical by nature, and while all care has been taken to review previous reports, sufficient ground testing and confirmation work is yet to be fully completed.
Click here for the full ASX Release
This article includes content from Alchemy 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.
ALY:AU
Jindalee Lithium
Investor Insight
Jindalee Lithium’s flagship McDermitt Lithium Project (McDermitt) offers investors exposure to a generational, high-margin critical minerals asset. The recently completed Pre-Feasibility Study (PFS) demonstrates robust economics, positioning McDermitt as a key enabler of North America's clean energy transition and a cornerstone of the US critical minerals strategy to de-risk supply chains through increased domestic production.
Overview
Jindalee Lithium (ASX:JLL,OTCQX:JNDAF) is a pure-play lithium company with a strategic focus on the United States. Its 100 percent-owned McDermitt Lithium Project is the largest lithium deposit in the US, boasting a resource of 21.5 million tons (Mt) of lithium carbonate equivalent (LCE).
Backed by a recently released (November 2024) Pre-Feasibility Study (PFS) demonstrating very compelling economics, McDermitt is poised to play a crucial role in meeting North America’s growing lithium demand for battery materials.
As the US continues to transition to clean energy, demand for lithium is expected to exponentially increase. Jindalee’s McDermitt project, located in southeast Oregon, is a game-changer for North American lithium supply, critical for meeting the demands of a fast-growing electric vehicle and renewable energy industries with specific emphasis on developing and de-risking domestic supply chains.
McDermitt also stands to significantly benefit from the US government’s policies and incentives to boost domestic supply of critical resources. In fact, in a move that signifies the US government's support of the McDermitt Project, the US Department of Energy's Ames National Laboratory signed a Cooperative Research and Development Agreement (CRADA) with Jindalee's subsidiary HiTech Minerals to develop cutting-edge extraction methods for McDermitt. Under this agreement the US Department of Energy (DOE) will fund work aimed at reducing costs and improving sustainability outcomes for the Project. The Ames National Laboratory spearheads the DOE's Critical Materials Innovation Hub. Jindalee is also advancing an application for a grant from the US Department of Defense, which has the potential to co-fund a feasibility study and associated work programs at McDermitt.
Key milestones in the US lithium resource space also provide significant insights into the future prospects for McDermitt. Lithium Americas’ (TSX:LAC), has received a US$945 million commitment from General Motors, to fund the development, construction and operation of the Thacker Pass project in Humboldt County, Nevada, located 30km away from and in the same geological formation as Jindalee’s McDermitt Lithium Project. LAC has also closed a $2.3 billion US Department of Energy loan in late 2024 to fund approximately 75 percent of the construction capital cost (US$2.93B).
Another lithium resource developer in Nevada, Australia-based Ioneer (ASX:INR) is expected to receive a total investment of US$700 million through a new joint venture with Sibanye Stillwater, in addition to a conditional loan commitment of US$650 million from the US Department of Energy, both acting to strengthen the development of its flagship Rhyolite Ridge lithium-boron project.
In late 2024, ASX-listed company Patriot Battery Metals Inc (ASX:PMT) announced a C$69 million investment, strategic partnership and offtake agreement with global automotive group Volkswagen which aims underpin the development of Patriot’s upstream lithium project in Quebec, Canada.
These are just a few examples of current market dynamics that point to rapidly accelerating lithium resource development in the US and Canada demonstrating the investment appetite of strategic partners, as well as support from the US government via low-cost concessional debt funding.
An experienced management team, with the right blend of experience and expertise in project development, corporate administration and international finance provides Jindalee with the leadership to fully capitalise on the potential of its assets.
Company Highlights
- Jindalee Lithium is focused on its wholly owned flagship McDermitt Lithium Project, currently the largest lithium deposit in the US
- A PFS for McDermitt – delivered in November 2024 - supports very strong project economics, including a US$3.23 post-tax NPV and a 5 year capital payback period over a 63 year project life
- Jindalee’s McDermitt Lithium Project seeks to assist in the development of US critical minerals supply chains to enable America to meet its energy security and electrification goals
- Jindalee’s wholly owned US subsidiary HiTech Minerals has executed a strategic Cooperative Research and Development Agreement (CRADA) with the US Department of Energy (DOE) as part of the DOE’s Critical Materials Innovation (CMI) Hub
- McDermitt is located in the same geological formation and is of similar size and scale to Lithium Americas’ Thacker Pass Project, which is backed by major investments from General Motors and the US Department of Energy and is currently under construction
- McDermitt is eligible for a wide range of government incentives including tax credits, grants and concessional loans. Jindalee is currently progressing a grant application with the Department of Defense to potentially co-fund a feasibility study at McDermitt
- In collaboration with lead engineer Fluor, Jindalee has produced battery grade lithium carbonate from McDermitt’s lithium bearing ore in metallurgical testwork.
- Experienced management team is focused on maximising the potential of Jindalee’s assets.
Key Project
McDermitt Lithium Project Economics
The economic metrics revealed in the PFS paint a compelling picture of the McDermitt Lithium Project's potential:
Production Capacity: The Project is set to produce 1.8 Mt of battery-grade lithium carbonate over its first 40 years, with an annual output forecast of 47,500 tonnes per annum (tpa) in the initial 10 years, and averaging 44,300 tpa over the first 40 years.
Financial Metrics: The Project boasts a post-tax net present value (NPV) of US$3.23 billion at an 8 percent discount rate, with an internal rate of return (IRR) of 17.9 percent. These figures underscore the Project's strong economic viability.
Payback Period: Investors can expect a payback period of less than five years, a relatively short timeframe for a project of this magnitude.
Robust margins: Exceptional EBITDA margins of 66 percent over the first 10 years of operations, with C1 costs in the bottom half of industry and 17 percent pre-tax net operating cashflow margins (including sustaining capital) at current bottom of the cycle spot prices (October 2024 spot of US$10,888/t of lithium carbonate)
Significant future upside. Several opportunities identified in the PFS have potential to significantly enhance returns, which includes process optimisation to reduce opex/capex as well as potential for production of by-products. Additionally, there remains significant optionality to further exploit the ore body, with only ~15 percent of the current resource included in the PFS schedule (on contained metal basis).
The PFS estimates a total project cost of US$3.02 billion, which includes a conservative 21 percent contingency provision estimated on P70 basis (70 percent probability total capital cost will be lower), prepared by US headquartered global engineering and construction firm, Fluor Corporation. This substantial investment is expected to provide the platform for a long life, stable supply of domestically sourced battery grade lithium chemicals, which is expected to be highly attractive to partners in the battery value chain.
Project Overview
The McDermitt Project is located in Malheur County on the Oregon-Nevada border and is approximately 35 kilometres west of the town of McDermitt. The 100-percent-owned asset covers 54.6 square kilometres of claims at the northern end of the McDermitt volcanic caldera.
The Project is characterised by its unique sedimentary lithium deposits, primarily composed of lithium-bearing clays, a geological formation that sets McDermitt apart from many other lithium projects worldwide. This sedimentary nature of the deposit offers several advantages, including:
- Consistent grade distribution throughout the ore body
- Potential for large-scale, low-cost mining operations
- Amenability to environmentally friendly extraction methods
The lithium-rich clays at McDermitt are part of a broader geological context that includes volcanic tuffs and sedimentary rocks. This geological setting is indicative of a complex depositional history, which has resulted in the concentration of lithium in economically viable quantities.
The 2023 mineral resources estimate (MRE) for McDermitt contains a combined indicated and inferred mineral resource inventory of 3 billion tonnes at 1,340 parts per million (ppm) lithium for a total of 21.5 Mt LCE at 1,000 ppm cut-off grade. As part of the PFS, a maiden ore reserve estimate was declared of 251 @1,761 ppm Lithium for 2.34 Mt LCE (representing only ~11 percent of MRE)
Project Highlights:
- Rare Sediment-hosted Lithium Deposits: The McDermitt asset supports low-cost mining operations due to its flat-lying sediments. This type of lithium deposit is amenable to low-cost mining operations, while still producing excellent metallurgical results.
- Low cost mining. Ore is soft, free-digging material, located at surface with a strip ratio of only 1.3 over project life. As a result mining costs are relatively low.
- Fluor recommended processing route: In March 2023, US engineering group Fluor reviewed all testwork undertaken at McDermitt and recommended beneficiation and acid leaching as the optimal processing route (similar to that used by more advanced peers in the region).
- Battery-grade lithium carbonate successfully produced: Process flowsheet was validated through PFS test work program, which produced battery grade lithium carbonate in July 2024. This is an important milestone validating all steps of the processing flowsheet for the Project from ore beneficiation and leaching to purification and production of battery-grade lithium carbonate.
- High metallurgical recovery. PFS test work demonstrated exceptional recoveries through beneficiation and acid leaching steps, with an average metallurgical recovery of 84.4 percent over first 40 years, comparing favourably to industry peers.
Management Team
Ian Rodger - Chief Executive Officer
Ian Rodger is a qualified mining business executive with almost 15 years of experience in various roles including as a mining engineer for Rio Tinto across two large greenfield mine developments, before successfully transitioning into mining corporate finance where he held Executive and Director positions at RFC Ambrian overseeing origination and management of numerous mandates across a range of corporate advisory roles. Ian was the project director for Oz Minerals (ASX:OZL) where he made significant contributions to successfully define the value potential of the West Musgrave nickel/copper province through the delivery of a portfolio of growth studies. Most notably, he led technical, market and partnership development workstreams, successfully confirming value potential for producing an intermediate Nickel product for the battery value chain.
Ian holds a Bachelor of Mining Engineering from the University of Queensland, a Masters of Mineral Economics from Curtin University and is also a graduate of the Australian Institute of Company Directors and member of the Australasian Institute of Mining and Metallurgy.
Lindsay Dudfield - Executive Director
Lindsay Dudfield is a geologist with over 40 years of experience in multi-commodity exploration, primarily within Australia. He held senior positions with the mineral divisions of Amoco and Exxon. In 1987, he became a founding director of Dalrymple Resources NL and spent the following eight years helping acquire and explore Dalrymple’s properties, leading to several greenfield discoveries. In late 1994, Lindsay joined the board of Horizon Mining NL (Jindalee Lithium’s predecessor) and has been responsible for managing Jindalee Lithium since inception. Lindsay is a member of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists, the Geological Society of Australia and the Society of Economic Geologists. He is also a non-executive director of Jindalee spin-out companies Energy Metals (ASX:EME), Dynamic Metals (ASX:DYM) and Alchemy Resources (ASX:ALY).
Wayne Zekulich - Non-executive Chair
Wayne Zekulich was appointed to the board as Chair on 1 February 2024. He holds a Bachelor of Business and is a fellow of the Institute of Chartered Accountants. Zekulich is a consultant and non-executive director who has substantial experience in advising, structuring and financing transactions in the infrastructure and resources sectors. He was previously the head of Rothschild in Perth, chief financial officer of Gindalbie Metals Limited, chief development officer of Oakajee Port and Rail and a consultant to a global investment bank. Currently, he is chair of Pantoro (ASX:PNR) and non-executive director of the Western Australian Treasury Corporation. In the not-for-profit sector, he is the past chair of the Lester Prize and is a mentor in the Kilfinan program.
Darren Wates - Non-executive Director
Darren Wates is a corporate lawyer with over 23 years of experience in equity capital markets, mergers and acquisitions, resources, project acquisitions/divestments and corporate governance gained through private practice and in-house roles in Western Australia. Darren is the founder and principal of Corpex Legal, a Perth-based legal practice providing corporate, commercial and resources related legal services, primarily to small and mid-cap ASX listed companies. In this role, he has provided consulting general counsel services to ASX listed company Neometals (ASX:NMT) since 2016, having previously been employed as legal counsel of Neometals. Darren holds Bachelor's degrees in Law and Commerce and a Graduate Diploma in Applied Finance and Investment.
Paul Brown - Non-executive Director
Paul Brown has over 23 years of experience in the mining industry, most recently with Mineral Resources (ASX:MIN) where he was chief executive – lithium, and chief executive – commodities. Paul has held senior operating roles with Leighton, HWE and Fortescue (ASX:FMG) and has a strong track record in technical leadership, project/studies management, and mine planning and management. Paul is currently CEO of Core Lithium Limited (ASX:CXO). He holds a Master in Mine Engineering.
Brett Marsh - VP Geology and Development (US)
Brett Marsh is an AIPG certified professional geologist and a registered member of the Society for Mining, Metallurgy and Exploration (SME) with over 25 years of diverse mining and geological experience. He has worked for and held senior leadership roles for Kastan Mining, Luna Gold, Kiska Metals, Newmont, Freeport-McMoRan, Phelps Dodge, ASARCO and consulted to deliver numerous NI 43-101 technical reports. Brett has demonstrated the ability to deliver results in culturally diverse and geographically difficult environments, such as Brazil, Peru, Chile, Democratic Republic of Congo, Ghana, Tanzania, Indonesia, Australia, and has also worked in remote areas of Alaska. He has managed all phases of the mining lifecycle including greenfield and brownfield exploration, project development (including preliminary economic assessments, pre-feasibility and feasibility), project construction, mine operations, and environmental. He successfully led multi-cultural teams to develop business processes and implementation plans for many mine development and operational projects.
What is the January Effect? (Updated 2024)
In this article
What is the January effect?
The January effect is a theory based on a pattern that analysts have seen year after year: stocks seem to fare better during January than they do during other months of the year. Generally, small-cap companies are affected the most by the January effect, as large stocks are typically less volatile.
The first report of the January effect came in 1942 from Sidney Wachtel, an investment banker from Washington, DC.
Since then, experts have debated possible causes for this phenomenon. Many believe the January effect is triggered by tax-loss selling in the month of December. Tax-loss selling, or tax-loss harvesting as it is sometimes called, is an investment strategy in which individual investors sell stocks at a loss in order to reduce capital gains earned on investments. Because capital losses are tax deductible, they can be used to offset capital gains to reduce an investor’s tax liability on their tax return.
As an example of tax-loss selling for tax savings, imagine if an investor bought 1,000 shares of a company for US$53 each. They could sell the shares and take a loss of US$3,000 in the event that the shares declined in value to US$50 each. The US$3,000 loss from the sale could then be used to offset gains elsewhere in the investor’s portfolio during that tax year.
For more information about the strategy, plus the deadlines, check out our guide to tax-loss selling.
It’s worth noting that tax-loss selling or tax-loss harvesting is a trading strategy that generally involves investments with huge losses, and, because of this, these sales generally focus on a relatively small number of securities within the public markets. However, if a large number of sellers were to execute a sell order in tandem, the price of the security would fall.
Central to the January effect idea is that once selling season has come to a close, shares that have become largely oversold have an opportunity to bounce back. For example, investors who have sold losing stocks before the end of the year may be driven to repurchase those stocks, although they would have to wait for 30 days to pass, as required by the superficial loss rule.
Regardless of whether you’re buying or selling, Steve DiGregorio, portfolio manager at Canoe Financial, recommends that you act swiftly and aggressively during this time of year as “liquidity will dry up.” He has earmarked the second and third week of December as the ideal window to sell or buy at a low point. This is ahead of the “Santa Claus rally,” the trading days around the last week of December when stocks tend to rise ahead of a healthier market in January.
These circumstances have given rise to the alternate notion that stocks get a boost in January because many people receive holiday bonuses in December, providing them with greater investment income. Perhaps it’s one or the other — or perhaps, as with most things, a combination of drivers produces the January effect.
Is the January effect real?
While some say that the January effect was once an efficient market hypothesis that is now fading some mutual fund managers, portfolio managers and institutional investors say it isn’t real at all now. Goldman Sachs (NYSE:GS) first heralded the death of the January effect back in 2017, pointing to two decades worth of analysis that showed returns diminishing in the month of January compared to historical figures going back to 1974.
Those in the “not real” camp claim that while this event may have been tangible back in the 20th century, recent data looks much more random.
Illustrating this, the graphs below from US Global Investors compare the S&P 500’s (INDEXSP:.INX) average performance by month from the 30 years through 1993 and the 30 years through 2023. While January came in first during the first period with average gains of 1.85 percent, since 1993 it has averaged gains of 0.28 percent, putting it in eighth place.
Chart via US Global Investors.
Investopedia's more recent analysis continues to support the "January no-effect" position. Looking back three decades since the 1993 inception of the SPDR S&P 500 ETF Trust (ARCA:SPY), investment advisor and global market strategist James Chen points out that in the last 31 years "there have been 18 winning January months (58%) and 13 losing January months (42%), making the odds of a gain only slightly higher than the flip of a coin."
The past two years, the markets have performed strongly in January. January 2023 saw the S&P 500 jump 5.8 percent over the course of the month after falling at the end of December. However, markets fell back down through February and March, making the rally short lived.
In January 2024, the S&P 500 dipped slightly at the start of the month but ultimately closed January up 2.12 percent higher than its open. Unlike the previous year, the index continued that upward trend through the end of March, at which point it was up 10.73 percent from the beginning of the year.
How can investors capitalize on the January effect?
It can be easy to get swept up in hearsay, and with debate still in play, the January effect is a risky business. Use your judgment, or the judgment of a professional, and don’t get sucked into chasing prices. It’s best not to base your investment strategy on the potential of a seasonal market mantra that reliable evidence shows no longer holds true.
For investors looking to capitalize on a potential rally due to the January effect, here are a few strategies to consider.
- Invest early — One approach is to invest in Q4 of the calendar year in order to essentially place your bets in anticipation of the January effect. If you’re inclined to participate in tax-loss selling, then you could time your buying period for the end of December and hope to harness both phenomena.
- Buy stocks with small market caps and micro caps — This can be a good strategy because these are the stocks that typically see the most movement during this period. As noted, larger companies are typically more stable. Still, that stability comes paired with lower risk, so risk-averse investors should stick with larger stocks.
- Buy dips in stocks you know well and feel confident will return to higher prices — It’s often a good plan to go with what you know, and it’s possible that stocks already in your portfolio will wobble due to tax-loss selling, presenting a lucrative buying opportunity. Just be sure to avoid buying stocks you sold at a capital loss during the prior 30 day period as discussed earlier, as the IRS will view that as a wash.
This is an updated version of an article first published by the Investing News Network in 2018.
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Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.