Resource Players- GAS, AUL, LKE, MIO

According to the Department of Industry, Innovation and Science, the metals and mining sector accounted for ~ 35 % of the total GDP growth in 2018-19. The exports from this sector in increased over the first quartile of $ 1 trillion, reaching a record high of $ 279 billion in 2018-19, and expected to grow to a new record high of $ 280 billion in 2019-20.

The Resources Sector in Australia continues to be a key contributor to the country’s GDP whilst there has been an evident rise in the number of new projects and expansion projects being undertaken by some of the key resources company.

Let’s take a look how the following four ASX-listed resources company closed the year 2019 and onto a dynamic year ahead.

State Gas Limited (ASX: GAS)

State Gas Limited is engaged in exploration and production of liquefied natural gas. The company primarily serves clients in Australia.

Operational Update: On 13 January 2020, State Gas announced an update on its recent activities at the Reid’s Dome Gas Project (PL 231), and in particular, the early results of the Nyanda-4 production test following almost six weeks of operation.

The company informed that dewatering had commenced on 4 December 2019, and sustained gas flows commenced soon after on 9 December 2019, only 5 days after the commencement of dewatering. In addition to the early success at Nyanda-4, recent successes at both Aldinga East-1A and Serocold-1 have led State Gas Limited to kickstart planning for this year’s pilot testing program. In line with the same, the company has engaged Netherland Sewell & Associates International (NSAI) as its reserve certifier for the 2020 program.

State Gas has also conducted an audit of all results received from the production testing at Nyanda-4 and acquired a Critical Flow Prove to conduct the flow rate audit and ensure the validity of data which identified loopholes in externally specified and supplied metering equipment which had led to incorrect data in previously measured and announced flow rates.

Ultimately, the results of this exercise reconfirmed that gas flow rates have been very positive and increased steadily with a reduction in the water level, although rates were previously overstated. As at 6 am on 13 January 2020, the gas rate was 120 mscf/d.

Austar Gold Limited (ASX: AUL)

Gold exploration and development company, AuStar Gold Limited has a portfolio of advanced high-grade gold projects, along with significant infrastructure such as a strategic tenement footprint, processing plant, as well as current gold production operations.

Centennial Agreement: AuStar Gold announced on 13 January 2020, to have signed an assignment agreement to acquire all of the debt owed by Centennial Mining Limited and Maldon Resources Pty Limited from Mining Lending Pty Limited and the associated security documents and interests. AuStar Gold would be replacing Mining lending as a significant secured creditor of Centennial and Maldon upon completion of the Agreement.

As its planned and approved merger (via DOCA) with Centennial Mining Ltd is completed, AuStar will gain ownership of high-grade gold mining and processing assets within the highly abundant Walhalla-Woods Point gold province whilst also obtaining hold of regionally strategic infrastructure located within the central Victorian gold belt.

Leadership Changes: On 18 December 2019, AuStar announced the appointment of Sue-Ann Higgins as Company Secretary, an experienced legal practitioner, company secretary and director with diversified skills and corporate experience of over 25 years as an in-house counsel and legal consultant.

Lake Resources N.L. (ASX: LKE)

Lake Resources N.L. operates as an exploration and development company with a primary interest in prime lithium basins and pegmatites across Argentina. Over the past 24 months, Lake Resources has undertaken a major amount of business development initiatives to expand its visibility in the battery and electric vehicle (EV) sectors.

Recently on 13 January 2020, Lake Resources confirmed that the company would be able to produce larger battery-grade lithium carbonate samples with 99.9% purity from 20k litres of brine samples at its Lake’s Kachi Lithium Brine Project through utilisation of Lilac Solutions’ disruptive technology in California, United States of America.

The main aim of the company is to produce a high-quality, low-impurity product at Kachi that will be capable of fetching in premium pricing. The Kachi Project ranks amongst the world’s top 10 lithium brine resources, with a maiden resource estimate of 4.4 million tonnes lithium carbonate equivalent (LCE) (Indicated 1.0 Mt and Inferred 3.4 Mt) within a much larger exploration target.

Macarthur Minerals Limited (ASX: MIO)

Macarthur Minerals Limited operates as an exploration company with a key interest in iron ore, as well as explores gold and lithium minerals. It is focussed on bringing its Western Australia iron ore projects into production shortly.

Fourth Quarter 2019 (Q4 2019) Update: On 13 January 2020, Macarthur Minerals announced its update for the last quarter of 2019, outlining an active period of operations in the ongoing development of the Company’s flagship, Lake Giles Iron Project. In addition, the company also stated very positive early exploration results across the iron ore, gold, nickel and cobalt projects in Western Australia.

Q4 2019 Highlights:

  • The Feasibility Study (FS) for the Lake Giles Iron Project is ongoing with the infill drilling program completed in December 2019. Results from the first batch of samples from Reverse Circulation (RC) and Diamond (DD) drilling were also released on 10 December 2019.
  • Macarthur debuted on the Australian Securities Exchange (ASX) on 6 December 2019.
  • The company successfully closed the Offer under its Replacement Prospectus on 28 November 2019 with subscriptions accepted for around 20,032,952 shares at a price of AUD 0.25 each for a total consideration of ~AUD 5.01 million. The funds raised have been indicated to be directed towards advancement of the Lake Giles Iron Project.

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