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Metals Australia Ltd (ASX: MLS) (“the Company”) is pleased to announce that drilling has commenced testing the first of three key exploration projects in Australia1,8, which are highly prospective for gold and critical minerals. All three projects are located along strike from major mineral deposits in world-class mineral fields (see Figure 1).
- An aircore drilling program of up to 6,000m is underway testing gold, lithium-pegmatite and Ni-Cu- Co targets across the Warrambie Project in WA’s northwest Pilbara1. Warrambie straddles the Scholl Shear Zone, which is analogous to the Mallina Shear – host to the nearby, 10Moz, Hemi gold deposit3. The drilling will also test for major lithium-pegmatites, being located just 10km east of the Andover lithium discovery2,5.
- An up to 120-hole aircore drilling program is permitted to follow an extensive soil sampling and gravity program underway at Big Bell North in WA’s world-class Murchison Gold Province, testing greenstone-splay fault hosted gold targets identified from interpretation of imagery from the recently completed aeromagnetic survey1. Big Bell North is located along strike to the northeast of the 5Moz Big Bell gold deposit4.
- Approvals imminent for a substantial drilling program at the Warrego East copper-gold project within the Tennant Creek Mineral Field, which historically produced a world-class 25Mt @ 6.9g/t Au and 2.8% Cu6. Warrego East is directly east of Warrego mine, which produced 6.75Mt @ 1.9% Cu and 1.8g/t Au6. The drilling will test a series of gravity and magnetics defined ironstone hosted copper-gold targets within a corridor which links the Warrego Mine with the Gecko and Orlando copper-gold deposits6,7.
Metals Australia CEO Paul Ferguson commented:
“2024 is shaping up as the most active and exciting period in Metals Australia’s history - with the three aggressive gold and critical minerals drilling and exploration programs launched at Warrambie, Big Bell North and Warrego East in Australia being advanced in parallel with our two gold and critical minerals programs underway in Canada.
“Critically, our projects are all located in world-class mineralised provinces along strike from major discoveries and historical mines.
We believe all our projects have potential for major new discoveries and we look forward to a period of strong news flow and results throughout the remainder of 2024 and beyond - as we look to unlock their potential and build value for MLS shareholders.”
Figure 1: Metals Australia key Critical Minerals and gold exploration projects in world-class mineral terranes (adapted from Geoscience Australia, Australian Mineral Deposits)
Warrambie Lithium-Pegmatite, Gold and Ni-Cu-Co Targets, Northwest Pilbara, WA
An extensive aircore drilling program has commenced testing bedrock lithium-pegmatite targets identified at Warrambie as well as gold and Ni-Cu-Co targets in previously un-explored areas under shallow cover.
Up to 50 aircore holes (up to 6,000m) are being drilled to test targets generated through interpretation of previously acquired detailed aeromagnetics and detailed gravity imagery over the Warrambie project (see Figure 2), including:
- Lithium pegmatite targets associated with northeast-trending fault corridors associated with gravity lows which intersect magnetic mafic intrusive rocks1,8. This is an analogous geological setting to the neighbouring Andover lithium pegmatite discovery (drilling intersections of up to 209m @ 1.42% Li2O2) – which is associated with a 5km wide, northeast-trending structural corridor in mafic intrusive rocks (Figure 2).
- Orogenic gold (and Ni-Cu-Co sulphide) targets associated with magnetic anomalies in the Scholl shear which extend west of the Sabre Resources Ltd (ASX:SBR) Sherlock Bay Project, which hosts a 100,000t Ni-Cu-Co sulphide resource9, where recent drilling produced a significant gold (Ni-Cu-Co) intersection mineralisation (8m @ 1.07 g/t Au, 0.3% Ni, 0.11% Cu in SBDD01010) - see Figure 1. The Scholl Shear is parallel and analogous to the Mallina shear which hosts the world-class, >10Moz, Hemi Gold Deposit (DeGrey Mining, ASX:DEG)3.
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This article includes content from Metals Australia Ltd, 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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Metals Australia
Overview
Metals Australia (ASX:MLS) is a mineral exploration company with a high-quality portfolio of advanced battery minerals and metals projects in Tier 1 mining jurisdictions of Western Australia and Canada. The portfolio comprises two critical minerals projects in Quebec, Canada — the Lac Carheil flake graphite project and the Corvette River lithium (and gold) project. The Australian portfolio comprises four projects: Tennant Creek (copper-gold) in the Northern Territory and Warrambie (lithium, nickel-copper, gold), Murchison (gold) and Manindi (lithium, vanadium-titanium, zinc) – all in Western Australia.
The push for net zero targets and the call from policymakers to transition to cleaner energy has intensified the focus on electric vehicles (EVs) and battery storage. The EV automakers and battery manufacturers, rely on essential materials such as graphite and metals, including lithium, nickel, copper and cobalt, to manufacture the batteries that are used in these vehicles and storage batteries generally. This has driven carmakers and battery manufacturers to partner with battery material suppliers under direct off-take agreements. Further, some automakers/battery manufacturers are buying equity stakes in miners, involving them directly in financing decisions for the development of mining projects. This is encouraging for companies such as Metals Australia as it actively advances its projects towards development.
Figure 2 – Graphite is a Critical Mineral required for the mass electrification of auto transportation.
Metals Australia is focused on progressing its flagship Lac Carheil flake graphite project in Quebec, Canada. The project is well-positioned to supply high quality graphite products, including battery-grade graphite to the North American market – including for lithium-ion and EV battery production in the future. The company announced positive sampling results across a 36-km strike length of identified graphite trends at Lac Carheil, including many values over 20% Cg and an exceptionally high-grade sample containing over 63% Cg. The company has planned a drilling program to test new high-grade zones identified from the sampling program, which will form the basis for upgrading the existing Lac Carheil Mineral Resource. An application for the drilling program is progressing with the Quebec regulator. Additionally, the company has recently commenced a Flake Graphite concentrate prefeasibility study with Lycopodium in Ontario and a downstream battery anode plant design with ANZAPLAN in Germany.
Metals Australia is also advancing its lithium, gold and silver exploration project at Corvette River, which is adjacent to Patriot Battery Metals’ world-class lithium project. Further, the company carries out aggressive exploration programs at its other projects, including Manindi, Warrambie & the Murchison in Western Australia and Tennant Creek in the Northern Territory region of Australia.
Metals Australia is well-funded to complete all its planned exploration and project studies. The cash position at the end of Q1 2024 was AU$17.86 million, which we note was higher than the company’s market capital at current share price. Metals Australia benefits from a team of professionals boasting extensive expertise in geology and mining. The appointment of experienced mining executive Paul Ferguson as the CEO is positive for the company. Since joining in January 2024, he has significantly advanced planning and preparation for the exploration, metallurgical test work programs, and design studies required to move its flagship Lac Carheil high-grade graphite project towards development. The Corvette Project has also completed exploration planning and is now fully permitted for drilling and trenching work during the northern hemisphere summer.
Company Highlights
- Metals Australia is rapidly advancing its flag ship Lac Carheil Graphite Project in Quebec, Canada. In addition, the company has a suite of high-quality exploration projects – including Lithium, Gold and Silver in Quebec, Canada and Lithium, Gold, Copper & Vanadium in Western Australia (WA) and the Northern Territory (NT).
- All projects are in Tier-1 mining jurisdictions (Canada and Australia) with world-class prospectivity and stable geo-politically.
- The company has six key exploration and development projects:
- two in Canada: the Lac Carheil high-grade flake graphite project and the Corvette River lithium and gold-silver-copper exploration project, and,
- four in Australia: Warrambie (lithium, nickel-copper, gold), Murchison (gold) and Manindi (lithium, vanadium-titanium, zinc-silver) in WA, and Tennant Creek (Warrego East copper-gold) in the NT.
- The focus is to rapidly advance its flagship Lac Carheil Graphite Project towards development. A drilling program is already contracted to substantially increase the existing JORC 2012 Mineral Resource of 13.3 Mt @ 11.5 percent graphitic carbon (Cg) and test the potential of the many other identified high-grade graphite trends.
- The 2020 Scoping Study on Lac Carheil based on the existing resource, representing only 1km of drilling out of the total 36kms of identified graphite trends, indicates a 14-year mine life with a production of 100,000 tons per annum and a pre-tax NPV @ 8 percent of US$123 million (~AUD$190 million).
- There are multiple catalysts at Lac Carheil in the near term including a pre-feasibility study (PFS) (underway), a scoping study on downstream battery (anode) - grade graphite production, and planned drilling aiming to at least double the resource as well as test other identified high-grade graphite trends.
- Furthermore, other projects in Canada including the Corvette River lithium and gold targets, and exploration in Australia at Manindi, Warrambie, Murchison and Warrego – are all seeing active progress.
- The company is well-funded to complete all its planned exploration and project studies. The cash position at the end of Q1 2024 was AU$17.86 million.
- Metals Australia is led by a seasoned board and management team possessing extensive mining sector experience and a proven track record of successful discoveries and project developments. With funding in place, the company is well-positioned to capitalise on growth prospects.
Key Projects
Canada
Lac Carheil Flake Graphite Project (MLS 100%)
Conceptual 3D Mining layout from February 2021 Scoping Study (Lac Carheil Project formerly named Lac Rainy Project)
The Lac Carheil Graphite Project is located in eastern Quebec, Canada, a tier 1 mining jurisdiction with access to excellent infrastructure, including hydroelectric power facilities. The project hosts an existing JORC 2012 mineral resource of 13.3 million tons (Mt) @ 11.5 percent graphitic carbon, which was announced in 2020 and a scoping study was completed and reported on in early 2021. Battery test work followed, in Germany, and this demonstrated the Lac Carheil Graphite concentrate could be shaped, purified, coated and used in battery applications with excellent results. Given the above work, the company carried out further field work, recently announcing exceptionally high-grade sampling results from 80 samples on 10 identified graphitic trends across the property. This included a sample containing 63 percent graphitic carbon, and 10 samples containing over 20% Cg. The average grade of the sampling was 11% Cg, which is comparable to the current high-grade resource. The combined strike length of the identified high-grade graphitic zones is over 36 kms. This compares to just 1 km of drilling on 1.6 kms of graphite trend that was utilised to obtain the existing resource. The potential for expanding and upgrading the existing resource remains enormous.
Figure 4 –Lac Carheil Graphite Project - Electromagnetic imagery outlining graphite trends and the resource
Additional drilling and development studies are either planned or are already underway, including a pre-feasibility study for a high grade Flake graphite concentrate product – which has commenced and a downstream purification options assessment and a scoping study for a battery anode facility in North America, which has been contracted. The company also announced it is contract ready for its planned drilling program and will fast-track the program as soon as permits are received from the Quebec regulator.
Corvette River Lithium Project (MLS 100%)
Corvette River Lithium, gold and silver Project is located in Quebec’s James Bay region Metals Australia recently announced that it is fully permitted to advance an extensive field exploration program across its holdings which include the wholly owned East Pontois, Felicie and West Pontois projects, situated within Patriot Battery Metals' (ASX:PMT) CV Lithium Trend, as well as tenements at West and East Eade in the company's parallel Corvette River South Trend. A field mapping and sampling program concluded last year and identified large, potentially lithium-bearing pegmatites immediately along strike from Patriot Battery Metals’ world-class lithium pegmatite discoveries. Additionally, the company has flagged significant gold and silver samples from its review of work previously completed across the field as is illustrated in the diagram below.
Figure 5 – The Corvette Projects in the James Bay region of Canada. Prospective for Lithium, Gold & Silver
Australian Projects
Warrambie Project (MLS 80%)
The Warrambie project is located in the Pilbara region of Western Australia. It is 20 kms west of the Andover Lithium discovery (Azure Minerals (ASX:AZS). Metals Australia has completed geophysical surveys across the area and is identifying targets for further field exploration and drilling.
Warrego East Project (MLS 80%)
Metals Australia acquired the tenements as part of a package purchased from Payne Gully Gold in 2022. The company’s tenements include a granted exploration license (E32725) directly along strike to the east of the Warrego copper-gold deposit, which has a production of 1.45 Million Ounces of gold at 8 grams per tonne and over 90,000 tonnes of Copper at 2%. The Warrego mine operated from the late 1950’s through until 1989. It was found under sedimentary cover. The area and this land package is under detailed review utilizing available geophysical surveys. The company aims to identify further targets hidden under shallow sediment cover.
Big Bell North Project (MLS 80%)
The Murchison tenements were also acquired as part of the Payne Gully Gold transaction. Metals Australia owns exploration licenses at the Murchison gold project, which is adjacent to the >5 million ounces (Moz) Big Bell gold deposit. The company plans to conduct detailed magnetics and gravity surveys to test for extensions and repeats of high-grade gold deposits.
Manindi Project (MLS 80%)
The Manindi project is located in the Murchison District, approximately 500 kms northeast of Perth in Western Australia. The project comprises three mining leases and has an established high-grade zinc mineral resource. The metallurgical test work has located spodumene in samples from a high-grade lithium intersection of 12m @ 1.38 percent lithium oxide, including 3m @ 2.12 percent lithium oxide. The company also made a new vanadium-titanium discovery at the Manindi project.Management Team
Paul Ferguson – Chief Executive Officer
A Mining Engineer, Paul Ferguson has over three decades of experience in the resources and energy sectors across North America, Asia and Australia. He has extensive project development and operational experience working in Canada. He has worked in oil & gas major ExxonMobil across project stages, including feasibility, design, construction, and operation. He has worked in Executive level roles within Australia, including at GMA Garnet and held increasingly more senior roles with BHP (Iron Ore & Coking Coal) and then with Exxon Coal Minerals and Mobil Oil Australia during the early stages of his career.
Tanya Newby – CFO and Joint Company Secretary
Tanya Newby is a finance and governance professional with over 20 years experience in various corporate and commercial roles. She has a strong background in the resources sector and has provided financial advice and assistance to a number of publicly listed entities through exploration, project development through to the production stage. Tanya is a member of the Institute of Chartered Accountants, Member of the Governance Institute of Australia and a Graduate Member of the Institute of Company Directors.
Michael Muhling – Joint Company Secretary
Michael Muhling has over two decades of experience in the resources, including 15 years in senior roles with ASX-listed companies. He is a fellow of CPA Australia, The Chartered Governance Institute, and the Governance Institute of Australia.
John Dugdale – Technical Advisor
John Dugdale is a geologist with over 35 years of experience in the discovery and development of graphite, lithium, gold, nickel and copper projects. His corporate experience includes serving as a director and CEO of several junior resource companies focused on nickel-cobalt, graphite and copper-gold projects. Additionally, he has experience in funds management with Lion Selection Group.
Chris Ramsay – General Manager Geology
Chris Ramsay is a geologist and project manager with over 25 years of experience in the global mining industry. He has been involved in exploration, mine development and operations for mining projects in Australasia, Southeast Asia, and parts of Africa and North America.
Board
Michael Scivolo – Non-executive Chairman
Michael Scivolo has extensive accounting and taxation experience for corporate and non-corporate entities. He was a partner/director at a CPA firm until 2011 and has since been consulting in accounting and taxation. Scivolo is on the boards of several ASX-listed mining companies, including Sabre Resources, Golden Deeps and Tennant Minerals Ltd.
Alexander Biggs – Non-executive Director
Alexander Biggs has over 20 years of experience in the mining and engineering sector. During his career, he has been involved in various activities, including operations, consulting, finance and capital raising. He is currently the managing director of Lightning Minerals (ASX) and was previously the managing director of Critical Resources (ASX:CRR). Biggs is a member of the Australian Institute of Mining and Metallurgy and a graduate of the Western Australian School of Mines.
Rachelle Domansky – Non-executive Director
Rachelle Domansky is an ESG specialist and a consulting psychologist for businesses, governments and educational institutions in the Asia-Pacific region. In addition to Metals Australia, Rachelle holds non-executive board positions at Quebec Lithium and Access Plus WA Deaf.
Basil Conti – Non-executive Director
Basil Conti has been associated with the mining industry for over 25 years. He is a fellow of the Institute of Chartered Accountants Australia & NZ and was a partner/director of a chartered accounting firm in West Perth until 2015.
Up to ~A$25 Million Capital Raise to Support Full Funding of HMW Phase 1
Highlights:
- Galan has received firm commitments to raise A$12 million via a placement at A$0.105 per share (Placement)
- Galan launches up to A$13.3 million 1 for 4 non-renounceable entitlement offer (Entitlement Offer) at the same price as the Placement
- Offtake partner Chemphys to subscribe for US$3 million (A$4.5 million) under the Placement, subject to completion of definitive agreements
- Proceeds of the capital raising together with the planned Chemphys Offtake Prepayment are expected to fund Galan into production
- Funds will be used for further development of HMW, corporate overheads and working capital
In addition, the Company is pleased to announce a 1 for 4 non-renounceable entitlement offer to raise up to A$13.3 million at the same price as the Placement (the Placement and the Entitlement Offer together being the Offer).
Galan’s proposed offtake partner1, Chengdu Chemphys Chemical Industry Co., Ltd (Chemphys) or designated affiliate, has agreed to subscribe for approximately A$4.5 million under the Placement. The investment by Chemphys is subject to completion of definitive offtake agreements.
Galan’s Managing Director, Juan Pablo (JP) Vargas de la Vega, commented:
“We are delighted with the support for the Placement and welcome a number of new investors to the register. In addition, on behalf of the Board of Directors, I would like to thank our shareholders for their ongoing support.
We also welcome the participation of Chemphys in the Placement which further strengthens the relationship between our companies.
The Board has adopted a lower capital intensity Phase 1 development to an initial 4,000 tpa LCE rate in light of market conditions. Funds raised from the Offer and the planned Chemphys prepayment provide the means to complete this development and keep our planned start to production in the second half of 2025.
Amid challenging market conditions Galan is moving forward with the development of HMW. We remain confident about the project economics underpinning the HMW development and the future of the lithium market.”
Placement
The Company has received firm commitments for a Placement of approximately A$12 million at A$0.105 per share.
Under the Placement, excluding Chemphys participation, the Company will issue 69,533,340 fully paid ordinary shares in the Company at A$0.105 per share (New Shares) (41,832,692 being issued under the Company’s ASX Listing Rule 7.1 capacity and 27,700,648 under its ASX Listing Rule 7.1A capacity).
New Shares under the Placement, excluding Chemphys participation, are expected to settle on 16 September 2024 and to be issued on or around 17 September 2024. Chemphys Placement participation is expected to settle within 10 business days after shareholder approval, as applicable, and completion of definitive offtake agreements. The Chemphys investment is subject to a sunset date of 31 December 2024, unless otherwise mutually agreed.
The issue price of A$0.105 per New Share represents a 8.7% discount to the last closing price of A$0.115 on 5 September 2024 and a 16.1% discount to the 5-day VWAP of A$0.125 as at the same date.
The Placement is not underwritten.
Entitlement Offer
The Company is pleased to announce a 1 for 4 non-renounceable entitlement offer at A$0.105 per New Share to raise up to approximately A$13.3 million. The record date for the Entitlement Offer is 13 September 2024.
Indicative Timetable
*These dates are indicative only. The Company reserves the right to vary the dates without notice. Note the Company and Chemphys have the right to mutually agree an extension to the Sunset Date for settlement.
Petra Capital Pty Limited acted as Sole Bookrunner and Joint Lead Manager and Barclay Wells Limited acted as Joint Lead Manager to the Offer. Alpine Capital acted as Co-Manager to the Offer. Terry Gardiner is a Director of Galan and is also an Executive Director of Barclay Wells Limited.
Click here for the full ASX Release
This article includes content from Galan Lithium, 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.
Clarification to Chariot’s ASX Announcement dated 30 August 2024
As disclosed in the Original Announcement:
- Each of Pan American Energy and POWR decided not to make the required payment of claims maintenance fees to the U.S. Bureau of Land Management (“BLM”) and to surrender their respective interests in the mineral claims constituting the Horizon Lithium Project and the Halo Lithium Project (together, the “Projects”). Both have cited current lithium market conditions as the principal reason for terminating their respective property option agreement.
- Mustang completed a capital raising of US$250,000 through the issue of convertible notes and has used the funds raised to pay the maintenance fees to the BLM to maintain its interest in the Projects.
Chariot disclosed the mineral resource estimate stated in Figure 1 (the “Horizon NI 43-101 Mineral Resource Estimate”) in relation to the Horizon Lithium Project in the Original Announcement which was prepared by Pan American Energy in accordance with Canadian National Instrument 43-101 (“NI 43-101”) standards. This mineral resource estimate is considered a “foreign estimate” for the purposes of the ASX Listing Rules (“Listing Rules”) as it relates to a “material mining project” that the Company is reacquiring an interest in and therefore is required to be reported in compliance with Chapter 5 of the Listing Rules (particularly Listing Rule 5.12). The purpose of this announcement is to include the requisite disclosures required by Listing Rule 5.12 in respect to the Original Announcement.
Pan American Energy reported the Horizon NI 43-101 Mineral Resource Estimate to the Canadian Securities Exchange on 20 November 2023 and subsequently released an NI 43-101 compliant technical report on 4 January 20241.
Table 1: Horizon Lithium Project Mineral Resource1
Effective Date 15 November 2023, reported by Pan American Energy Corp. Resources are reported above a cut-off grade of 300 ppm Li.
A “mineral resource” is as defined in the JORC Code (“Mineral Resource”) and the “competent person” is as defined in the JORC Code (the “Competent Person”).
The Horizon NI 43-101 Mineral Resource Estimate contained in this announcement and the Original Announcement has been prepared in accordance with NI 43-101 standards and has not been reported in accordance with the JORC Code.
Investors and other users of the Horizon NI 43-101 Mineral Resource Estimate are cautioned that, as is the case with any Mineral Resource, reported tonnages and grades obtained from sparse points of observation, are subject to change as further data that adds to knowledge of the Mineral Resource are received and interpreted. The reported Mineral Resource may also be subject to variation when compiled by a different Competent Person, reflecting differences in interpretation of available data and previous experience with the commodity and style of mineralisation being reported.
The reported tonnes and grades have been reported and classified in compliance with the CIM Definition Standards for Mineral Resources and Mineral Reserves (CIM, 2014). The CIM Definition Standards are closely comparable with the JORC Code.
The Competent Person for this announcement has yet to complete sufficient work to classify the foreign estimate in accordance with the JORC Code.
However, the Competent Person confirms that the information contained in this announcement and the Original Announcement is an accurate representation of the available data and studies for the Horizon Lithium Project.
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This article includes content from Chariot Corporation, 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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