Base metal prices have seen substantial gains in the first quarter of 2022, turbocharged by Russia’s invasion of Ukraine.
The price of these metals including nickel, copper, iron, lead and zinc has also been supported by their role in the green energy transformation.
In the nickel sector, concerns about the supply of the metal – which is used for stainless steel and electric vehicle batteries – caused prices to double to a record above US$100,000 a tonne briefly.
Copper also traded near its all-time high as stockpiles in warehouses tracked by the London Metal Exchange (LME) fell back to the lowest since 2005.
Overall, base metal prices, measured by Bloomberg’s base metal spot index, increased by 25% between September 2021 and March 2022.
In the spotlight: ASX base metal stocks
Base metal stocks listed on the ASX are riding the price wave, with a suite of companies active in exploration, development and production.
Blackstone Minerals
Blackstone Minerals Ltd (ASX:BSX, OTCQX:BLSTF) completed a pre-feasibility study for the Ta Khoa Nickel Project (TKNP) in Vietnam during the March quarter.
The outcomes of the TKNP PFS were integrated into Blackstone’s overall development plan to produce Nickel: Cobalt: Manganese (NCM) precursor products.
Highlights of the integrated PFS include:
- Post-tax NPV8 of US$1.99 billion and an internal rate of return of 47%.
- Average annual operating cash flow of US$533 million
- Payback period for the Ta Khoa Project of 1.8 years from first production
Caspin Resources
Caspin Resources Ltd (ASX:CPN) made a breakthrough at the Yarawindah Brook PGE-Nickel-Copper Project in WA during the quarter via the discovery of significant mineralisation at XC-22 Prospect.
Diamond drilling operations at XC-22 prospect.
Drill hole YARC0022 was the first hole to test an AEM anomaly (XC-22) at the northern end of Yarabrook Hill and intersected a sulphide zone over 60 metres thick from immediately beneath the fresh rock interface, only 46 metres down hole.
Caspin’s ongoing RC and diamond drilling will test the extent of XC-22 mineralisation as well as targets in Central Yarabrook areas and Northwest geochemical anomaly.
The company is well funded with a strong cash balance of $11.1 million at the end of the quarter.
Elementos
Elementos Ltd (ASX:ELT, OTC:ELTLF) is an emerging tin producer focused on the responsible development of two high-grade tin projects, in Spain and Tasmania.
The company’s optimisation study for the Oropesa Tin Project in Spain confirmed a 1.25 million tonnes/annum operation and has set the stage for the design of a definitive feasibility study (DFS).
On a base case tin price of US$32,500 per tonne, Oropesa’s optimisation study has confirmed:
- Pre-tax ungeared NPV8 of about A$292 million and post-tax NPV8 of about A$198 million.
- Pre-tax Internal Rate of Return of ~46%.
- Mine life of at least 13 years, payback period of ~2.5 years.
Solis Minerals
During the March quarter, Solis Minerals Ltd (TSX-V:SLMN, ASX:SLM) started its maiden diamond drilling program at the Mostazal Copper Project in Chile, one of the largest copper producing nations in the world.
Results from two holes have confirmed the presence of broadly anomalous copper mineralisation.
Mostazal Copper Project – diamond drill core from MODD001, showing altered porphyritic andesite host rock with disseminated and clotty sulphide mineralisation, including pyrite and chalcopyrite.
Solis intends to target high-grade structures within the broader copper manto mineralisation with the next phase of drilling, aided by information from a detailed surface structural mapping and deeper-penetrating geophysical survey already underway.
Galileo Mining
Galileo Mining Ltd (ASX:GAL) continued to progress with its systematic exploration strategy across its Norseman and Fraser Range projects during the quarter.
The company’s efforts at Norseman are promising with significant palladium, nickel and cobalt results reported during the quarter from first-pass aircore drilling, adding further weight to the area’s potential.
Galileo will now undertake detailed geophysical surveys looking to define the best positions for further drill testing.
At the Fraser Range, Galileo undertook its first drill program of the year and will increase its activities as the company continues to develop more targets for drill testing during the year.
Azure Minerals
Azure Minerals Ltd (ASX:AZS) completed a major milestone at Andover Project in the West Pilbara region of Western Australia during the quarter by announcing the maiden resource for Andover Deposit, the first prospect drilled within the project.
The resource is 4.6 million tonnes at 1.11% nickel, 0.47% copper and 0.05% cobalt (1.41% nickel equivalent) for 51,700 tonnes of contained nickel, 21,700 tonnes of contained copper and 2,290 tonnes of contained cobalt at a cut-off grade of 0.5% nickel.
Exploration and resource definition drilling is ongoing with multiple drill rigs continuing to operate throughout 2022.
KGL Resources
During the quarter, KGL Resources Ltd (ASX:KGL) continued the feasibility study (FS) of the Jervois Copper Project in the Northern Territory, with the FS now nearing completion and on target to be released mid-2022.
The company also released the updated resources for the three deposits that make up the Jervois Project - Reward, Bellbird and Rockface.
This resulted in an increase in mineral resource tonnes of 20% to 22.87 million tonnes, a 14% increase in contained copper metal to 465,620 tonnes while maintaining a copper grade above 2%.
St George Mining
St George Mining Ltd (ASX:SGQ) has expanded its high-impact exploration focus with a major campaign to test several priority targets within four regional-scale projects in Western Australia.
The company’s Mt Alexander Project is a significant value driver focused on the discovery of more nickel-copper-PGE mineralisation near surface and, increasingly, at depth.
Complementing Mt Alexander and the emerging Paterson Project, St George has revealed the next phase of work at the Broadview Project in the Wheatbelt and the identification of a major intrusion at its latest project – Ajana in the Mid West.
The addition of Ajana, increases the pipeline of exploration assets to four prospective battery minerals opportunities – at varying stages of advancement – that will be progressed systematically.
Orion Minerals
The March 2022 quarter was a productive period for Orion Minerals Ltd (ASX:ORN, JSE:ORN), with several significant developments across its business which are expected to deliver important outcomes in the second half of 2022.
Key among these was the company’s decision to investigate early production at the Prieska Copper-Zinc Project in South Africa by rescheduling the order of development to bring the open pit construction forward.
This, together with the mining of underground pillars, should allow Orion to produce its first concentrate 14 months earlier than originally envisioned in the 2020 Bankable Feasibility Study.
Poseidon Nickel
WA-based Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) made solid progress during the quarter on the Black Swan Bankable Feasibility Study (BFS) despite delays driven by resource constraints in the Western Australian mining sector.
The Black Swan disseminated resource drilling program, Silver Swan decline rehabilitation and pit dewatering studies were among the important milestones.
During the quarter, Pure Battery Technologies was advised that its proposed development of a battery cathode active material (pCAM) refinery hub in Kalgoorlie, in partnership with Poseidon, is to receive a $119.6 million MMI grant.
Red River Resources
Red River Resources Ltd (ASX:RVR) continued to achieve consistently solid production numbers from the Thalanga Base Metal Operation in Queensland.
The Thalanga Mine produced 4,858 dry metric tonnes (DMT) of zinc concentrate, 1,129 DMT of lead concentrate and 2,302 DMT of copper concentrate during the quarter.
Thalanga quarterly concentrate production.
The company has also received multiple high-grade assays from the Liontown deposit, which is set to be Red River’s third deposit developed for mining at Thalanga.
Sunstone Metals
Sunstone Metals Ltd (ASX:STM) made a significant discovery during the quarter at the highly prospective El Palmar copper-gold porphyry project in northern Ecuador.
The company has another project in Ecuador, Bramaderos, which is a joint venture with Cornerstone Capital Resources.
The high-grade Alba gold-copper porphyry discovery at Bramaderos hosts high grades by porphyry standards and appears to have immense scale.