Mining Licence Application For Advanced ‘Anthony’ Molybdenum Deposit

QX Resources Limited (ASX:QXR or the Company) confirms its intention to commence a formal application for a Mining Lease to advance development at the Company’s ‘Anthony’ Molybdenum (Mo) project in Central Queensland.

HIGHLIGHTS:

• QX Resources intends to commence a Mining Lease application over the advanced-stage ‘Anthony’ Molybdenum deposit in Central Queensland.
• The Anthony Deposit has been previously upgraded to 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.
• Development plans coincide with strong market conditions for Molybdenum prices globally, which traded at US$100/kg (US$45/lb) in February 2023 – a 17-year high
• The application will include an appraisal of several open pit mining and processing scenarios.
• The Anthony Deposit is well located to key infrastructure, adjacent to major sealed roads and near rail and energy support.

In 2021, the Mineral Resource Estimate (MRE) at Anthony was upgraded to JORC Code 2012, with an emphasis on recoverable resources from the near-surface oxidised part of the deposit (refer ASX Announcement 18 October 2021 and Table 2).

• Indicated and Inferred Resources for the Oxide domain (using a 400ppm Mo cut-off) total 17.5Mt @ 520ppm Mo (contained Mo 9,100 tonnes / 20.1 million lbs)
  
• Indicated and Inferred Resources for the Sulphide domain (using a 600ppm Mo cut-off) total 17.4Mt @ 780ppm Mo (contained Mo 13,600 tonnes / 29.9 million lbs)
• Indicated and Inferred Resources for the Transition (partially oxidized) domain (using a 600ppm Mo cut-off) total 2.1Mt @ 790ppm Mo (contained Mo 1,700 tonnes / 3.7 million lbs).
• Total Indicated and Inferred Resource of 24,700 tonnes (53.7 million lbs) of contained molybdenum in sulphide, transition (partial oxide) and oxide zones from surface.

QXR Managing Director Stephen Promnitz stated: “Molybdenum is considered a critical mineral by Queensland’s Dept of Natural Resources and Mines. This development approach is consistent with QXR’s focus on the battery materials and critical materials supply chain. The decision to commence a Mining Lease application followed a detailed review of the existing Mineral Resource Estimate. Anthony is well located, with mineralisation from surface, uniquely placed as an advanced-stage molybdenum project in geographical proximity to major Asian markets. Future progress will focus on development pathways including high grade starter pits.”

QX Resources Chairman Maurice Feilich said: “Molybdenum prices are at the highest level for over a decade due to deep structural supply/demand gaps, so the timing is right for the development of an advanced deposit. The market is looking for molybdenum projects in Tier 1 jurisdictions with good infrastructure.”

Molybdenum

Molybdenum (Mo), commonly referred to as “moly”, has been used primarily in the steel industry, as an alloy to strengthen structural steel industry and in high-nickel stainless steel, and as a catalyst in the chemical industry. There has been a significant increase in infrastructure projects increasing demand for structural steel globally, together with defence applications. Recent demand has also come from renewable energy technologies, where moly is used in wind turbines, with one megawatt of output requiring 130 kg Mo. For example, a typical offshore turbine of 12MW requires 1.5 tonnes of molybdenum. Outside China, there are only two pure moly “plays” in operation, both in Colorado USA, operated by Freeport-McMoRan (NYSE: FCX).

Market trends

Global market conditions for Molybdenum have strengthened significantly recently. Amid a tighter supply environment, benchmark ferromolybdenum prices in Europe rose above US$100/kg¹ (US$45/lb) in February 2023, a 17-year high, and trading continues above US$55/kg (US$27/lb). Asian ferromolybdenum prices also peaked in early February between US$94-$96/kg – the highest level since Platts Asia commenced in weekly pricing index in 1987.

Factoring in the positive macro environment for Mo prices and the upgraded Mineral Resource Estimate, the decision to pursue a Mining License application for the Anthony deposit reflects the increased confidence of the QXR management team that it has an opportunity to bring the project through to development. Analysts have attributed the recent spike in support for Molybdenum prices to several supply and demand factors, as opposed to a single disruptive event.

On the supply side, a lack of new investment has been cited as one such catalyst, where a dearth of planning and approvals activity over the past 5+ years globally has left no new mines in an advanced stage of development. The early-2023 price spike was also exacerbated by production disruptions at large copper operations in South America, especially Chile, where molybdenum is produced as a secondary output.

On the demand-side, major infrastructure projects have increased demand for structural steel and strong oil prices have provided consistent support for moly-bearing carbon steel used in off-shore drill rigs. Recent demand has come from renewable energy technologies, where moly is used in wind turbines, similar to the increased demand for rare earth elements (REE).

Asia-based demand also rebounded strongly in February, where the rebound in Chinese demand was stronger than analysts expected following the Lunar New Year holiday, with broader demand expected to stay strong amid the easing of COVID-19 restrictions.

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