Five Small-Cap ASX-Miners with Great YTD Return and Operational Development

In the face of volatile commodity markets, Australia continued to explore, discover and produce metals and minerals through FY19 period. The industry remains to be an exciting and vibrant one with diverse jobs and opportunities that attract an array of talent and is one of the country’s integral industries. In 2018-19, the Australian mining sector:

  • Accounted for 21% of the total GDP growth;
  • Employed over 247k people (as at May 2019);
  • Accounted for 75% of Australia’s goods exports;
  • China remained the #1 market for Australia’s resources and energy exports ($93 billion).

On the investing side, companies continued to list themselves on the stock market, and investors were noticeably adept to infer their moves amid the protracted trade war and a globally slumped economy.

In this article, we would discuss 7 small-cap stocks (those which have a market capitalisation of less than USD $1 billion), that have generated positive YTD return to date (22 November 2019). These Companies have developed significantly with their operations and delivered positive results, which have built a positive investor sentiment. The below table depicts the stock information after the close of the trade session on 22 November 2019:

Before we begin, it is important to note that historically, small cap stocks have savoured long periods in which they outperform broader indices and larger cap indices. Small-cap stocks are, therefore, seem to be in the higher growth period of their lifecycle.

Red Mounting Mining Awaits Due Diligence Drilling at Mt Kokeby Kaolin Project After Positive Assay Results

On 1 October 2019, Red Mounting Mining Limited (ASX: RMX) notified that it would acquire 100% of two Western Australian located projects- Mt Mansbridge Rare Earths Project and the Mt Kokeby Kaolin/High Purity Alumina Project, which will provide shareholders with an excellent leverage to specialty metal.

The Mt Kokeby Project, ~99 kms from Perth covers a total area of 84 km2, where significant historical work has already been carried out, along with some commercial production. On 19 November 2019, the Company announced the results of its due diligence channel sampling undertaken within the Murray pit area of the Project, wherein nine samples were taken from five locations within the pit area:

  • Exceptional initial results from the pit sampling were received, considered to be high grade insitu aluminum oxide within the silica matrix, with minor gangue minerals;
  • High grade kaolin in raw form is an excellent start to the due diligence work program and gives grounds for the establishment of a DSO operation at Mt Kokeby;
  • The Company looks forward to strengthening its understanding of the deposit and build support for the historical data;
  • Operations Pty Ltd has been appointed to assess the Mt Kokeby Kaolin Ore and its amenability to beneficiation processes for generation of high-grade Alumina products and its potential for High Purity Alumina as part of its due diligence process;
  • As part of the due diligence process, a small drilling program will be undertaken once regulatory approvals are received, likely in December 2019.

Summary of results at Mt Kokeby (Source: RMX’s Report)

Rox Resources Announces RC Drilling Completion at Red White and Blue Gold Prospect, Currans Find

Venus Metals Corporation Limited (ASX: VMC) and its joint venture partner Rox Resources (ASX: RXL) have been successful in extending the strike length of the gold mineralisation at their Currans Find Joint Venture gold project.

According to a report from Rox Resources dated 21 November 2019:

  • RC hole CFRC051 intersected high-grade gold mineralisation, associated with anomalous lead and copper.
  • The existence of the gold - base metals association is substantial.
  • Additional Reverse Circulation drilling work is in the pipeline to explore the gold zone down-plunge and along strike.
  • The gold mineralization continues to be open at a deeper level and warrants additional drilling work aiming at potential high-grade zones down plunge.

Results from the RC drilling (Source: RXL’s Report)

Alicanto Minerals Riding High at The Back of Newly Acquired Project Portfolio

Alicanto Minerals Limited (ASX: AQI) has a newly acquired portfolio of historically producing, high-grade VMS (Zn-Pb-Ag-Cu-Au) projects, Naverberg, Oxberg and Wolf Mountain Projects in the world famous Bergslagen District (Sweden). Besides this, AQI holds a portfolio of gold projects in Guyana, South America (Arakaka Project and the Ianna Gold Project).

The multiple outcrops visited in the Swedish summer of 2019 confirmed + 45km of mineralised limestone ore-horizon trend with High-Grade Cu (11.9%), Zn (11.0%), Au (16 g/t), Ag (56.1 g/t) & Pb (2.11%) rock-chips.

The Company notified on drilling to continue into the new year at Skyttgruvan and Oxberg, targeting high grade VMS Copper, Zinc & Gold. The new targets being developed using modern Geophysics. An IP Survey is currently underway at Wolf Mountain to look under the till and vegetation to see what cannot be seen by the naked eye.

Moreover, 12,000m drilling program is underway at Guyana, fully funded by Nord Gold.

Nickel Mines’ Record Monthly Production from Hengjaya Mine

In its September 2019 Quarterly Activities Report, Nickel Mines Limited (ASX: NIC) notified that at Hengjaya, the nickel production rate was over the nameplate capacity of 1,250t Ni per month and the targeted run rate of 1,375t Ni per month. During the quarter, Hengjaya Nickel produced 5,379.3t of nickel at an average NPI grade of 13.6% at a weighted average cash cost of US$7,523 per tonne.

Hengjaya also recorded sales of US$60.5 million (100% basis) and an underlying EBITDA of US$25.9 million. The underlying net profit was US$23.9 million.

The Company held cash of US$49 million (as at 30 September 2019) and had trade receivables of US$84.5 million, while inventory amounted to US$37.2 million.

Gold Road Underway Developing Australia’s Newest Goldfield- Yamarna Belt

In November 2016, Gold Road Resources () entered into a fifty- fifty partnership JV with Gold Fields Ltd for the Gruyere JV encompassing 144 km2. During June quarter this year, building of the Gruyere Gold Mine had been concluded with the foremost gold bars being delivered, which signlled the beginning of production related work. The 2019 production to date is 1.2Mt at 1.0 g/t Au2.

In 3QCY19, the Company sold 12,461 ounces at $2,052/oz, and the mine has more than 4,600,000 tonnes of ore mined to date. The Gruyere grade increased to 1.25 g/t Au, and drilling work remains in progress.

Ramp-up to nameplate production is expected by initial part of 2020. In CY19, the Gruyere is expected to produce between 75k to 100k oz of gold, and once the steady state production is met with, the average yearly production is likely to be 300k oz.


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