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The S&P/ASX 200 Resources index is gaining momentum with ASX-listed resource stocks recovering from their recent low as they are simultaneously taking actions to minimise the impact of the COVID-19 outbreak and maintain shareholder’s interest.
The S&P/ASX 200 Resource index has recovered from its recent low of 3,105.50 (intraday low on 23 March 2020) to presently trade at 3,602 (as on 2 April 2020 closing) after rising to a high of 3,719.70 on 27 March 2020), which marks the recovery of ~ 16.00 per cent from its recent low to the present level.
ASX Resource Stocks Under Recovery
- Aurelia Metals Limited (ASX:AMI)
AMI further unearths exceptional high-grade mineralisation at Federation deposit
Post the recent announcement related to its shaft hoisting operations at the Peak Mine, AMI announced that the Company received multiple exceptional high-grade gold intercepts through extensional drilling at the Federation prospect.
The Company initially discovered high-grade base metal mineralisation in April 2019 at the prospect, and since then, has committed significant resources to exploration and evaluation of the Federation deposit, which is located south of the Hera Mine.
AMI has achieved drilling of over 20,000m with at least 70 reverse circulation holes over the prospect, which has defined a polymetallic system along a strike of nearly 500 metres, with mineralisation extending from near-surface to a depth approaching 600 metres.
Some of the exceptional high-grade results received by the Company through the extensional drilling are as below:
- The drill hole identified as FRCD068 intercepted 15.4 metres at 47.4 per cent lead and zinc, 10.7g/t of gold, 21g/t of silver & 0.8 per cent copper from 244.3m, which further includes 2.4 metres at 47.8 per cent lead and zinc, 64.5g/t of gold, 22g/t of silver & 0.3 per cent copper from 249.6m.
- The drill hole identified as FRCD050 intercepted 18.6 metres at 49.2 per cent lead and zinc, 1.1g/t of gold, 18g/t of silver & 1.6 per cent copper from 348m, which further includes 9 metres at 59.5 per cent lead and zinc, 1.9g/t of gold, 16g/t of silver & 2.2 per cent copper from 249.6m.
- The drill hole identified as FRCD066 intercepted 10 metres at 40.5 per cent lead and zinc, 5.9g/t of gold, 13g/t of silver & 0.4 per cent copper from 308m.
- The drill hole identified as FRCD050 also intercepted 42 metres at 16.3 per cent lead and zinc, 0.2g/t of gold, 10g/t of silver & 0.3 per cent copper from 318m, which further includes 13 metres at 25.6 per cent lead and zinc, 0.3g/t of gold, 16g/t of silver & 0.2 per cent copper from 327.7m, and 5.1 metres at 43.5 per cent lead and zinc, 0.2g/t of gold, 17g/t of silver & 0.1 per cent copper from 354.9m.
AMI also suggested that at the Kairos prospect, the second hole returned several modest copper zones with elevated gold near the bottom of the hole, and the Company has completed the second deep surface hole to 1,797m, which has returned similar copper mineralisation with pending assay results.
The market seems to be liking the recent developments, and the stock has traded in the positive territory for the second consecutive session, and the stock has recovered from its recent low of $0.205 (intraday low on 23 March 2020) to the present level of $0.290, which marks a price appreciation of ~ 41.46 per cent.
- OceanaGold Corporation (ASX:OGC)
OGC has recently presented an array of notification for the investing community, including its annual ore reserve statement, JORC classified resources for its Haile and Waihi prospect, and at last the impact of COVID-19 on its Haile operations.
Haile Gold Mine Yet Remains Operational
OGC announced that the Haile Gold Mine remains unchanged and operations are not impacted by this Government of South Carolina directive of shutting-down all “non-essential” businesses from 1 April 2020 for a duration of 14 days, and at the site, OGC is adopting strict protocols and controls to maintain a high standard of health and safety.
So far, there have been no confirmed cases at the operational site, as, over the past three weeks, the Company has only allowed entry to essential employees and contractors, while arranging for work from home for all administrative staff.
Apart from that, OGC has adopted measures like, self-isolation, shifts in smaller groups, regular cleaning of all equipment, to contain the spread.
The Annual Reserve Update
OGC updated its annual reserve estimates at the end of the year 2019 and anticipated the total Proven and Probable Reserves to stand at 5.3 million ounces of gold, 3.5 million ounces of silver and 0.16 million tonnes of copper, which as per the Company, offsets about 50 per cent of 2019 mining depletion.
OGC further suggested that the total Measured and Indicated Resources surged by ~ 0.80 million ounces of gold on a year-on-year basis, net of mining depletion.
On a year-on-year basis, the Inferred Resources surged by 0.7 million ounces of gold, net of depletion. The increase was mainly supported by the first-time reporting of an Inferred Resource of 0.6 million ounces at the Palomino underground deposit at Haile and a further additional 0.3 million ounces from the WKP underground deposit, which is near Waihi.
Proven and Probable Reserves (Source: Company’s Report)
The stock of the Company has recovered from its recent low of $1.455 (intraday low on 24 March 2020) to a high of $1.835 on 26 March 2020; however, the stock tumbled again to mark a low of $1.525 on 31 March 2020, but post these announcements, the stock is trading under a positive zone from two consecutive trading session to currently trade at $1.675, up by 0.90 per cent against its previous close on ASX.
- Western Area Limited (ASX:WSA)
Production Proceeds as Planned
WSA suggested that to date, the various measures adopted by the Company have enabled production from its operations to proceed as planned, and the delivery of nickel concentrate to local and export customers is proceeding normally.
WSA further anticipates that the current increased interstate and intrastate travel restriction would not have any considerable impact on the Company, and the Forrestania Nickel Operation located in Western Australia is currently qualified as an essential service.
In the status quo, the Company is keeping FY20 production guidance unchanged; however, has warned the stakeholders that the operations may be impacted in the future amid dynamic regulatory changes.
WSA further suggested that the Company holds a strong financial position with about $181.4 million cash (as on 31 December 2019), with no debt.
The stock of the Company is showing some good recovery with prices recovering from its recent low of $1.625 (intraday low on 23 March 2020) to the present high of $2.060 (intraday high on 31 December 2020), which represent a price appreciation of ~ 26.76 per cent, and the stock is able to uphold the current with prices hovering near the same level from two consecutive trading session.
