- Technology integration is further fostering growth of the already booming high technology markets, wherein High Purity Alumina is used as a precursor material.
- KRR aims to reduce capex and maximise return on its Speewah Project by delivering high-value HPA product through refocusing on a smaller project size.
- Mt Remarkable Project of KRR appears well placed in the current scenario with increasing attractiveness towards gold prospects.
Proficiently navigating its way amidst the COVID-19 turbulence, Australian explorer King River Resources Limited (ASX: KRR) appears to be relishing the booming prospects presented by transformations. The sweeping shift towards technology and altering focus of people have cultivated a new culture that seems to have catapulted opportunities concerning its different projects.
KRR is continuing with ongoing developments at its projects amid COVID-19, placing the Company at a vantage point. In a notable development, KRR successfully achieved the production of >4N High Purity Alumina (HPA) in late-April through a new refining process at its Speewah Specialty Metals (SSM) Project developed by metallurgical consultants TSW Analytical Pty Ltd (TSW). The Company’s other projects - Mt Remarkable Gold Project in WA and the Treasure Creek Gold-Copper Project in Norther Territory also continued to advance substantially.
Declared as essential, the mining industry remained operative during the lockdown. Reopening of Western Australia further ameliorates the prospects, as people’s life gets back on the track. With this backdrop, let us look at how KRR’s key projects are positioned in the current scenario that is reinforcing their attractiveness.
Speewah Specialty Metals Project Placed Well
On its wholly owned Speewah Specialty Metals Project stationed at WA’s East Kimberley region, KRR, following success with production of >4N (Al2O3) HPA, is currently compiling the Prefeasibility Study (PFS). The Company intends to scale the SSM project to HPA production primarily. The output involving TiO2, V2O5 and iron oxide as co-products will be carried out at a later stage but not part of the prefeasibility study. This plan would not only reduce the project size but also has the potential for capex reduction and return maximisation.
King River Resources deemed the greater than 4N HPA production via the new process (sulphuric acid leach) as a "very significant step forward" for the project. Meanwhile, prefeasibility study refocus on a smaller project for high-value HPA product production has streamlined the process flowsheet, which is expected to deliver valuable improvements to the SSM project objectives. The Company under the annual review would analyse the potential for adding titanium dioxide and vanadium pentoxide into the product mix.
Speewah PFS is expected to be finalised following the completion of varying hydrometallurgical tests for HPA that are currently underway. Apart from the product testing at a larger scale and independent umpire assay of >99.99% Al2O3 result, the Company is conducting new equipment trials towards increasing the calcination temperature for ensuring the HPA phase is all alpha-alumina.
The testwork focus lies on increasing the purification efficiency of the stage 2 and confirming HPA is 100% alpha-alumina by an X-Ray Diffraction (XRD) analysis.
Market Opportunities aligning with the efforts
The high-tech boom and close integration in daily lives following the dynamic inclination towards digital convenience in the lockdown have prompted the growth and prospects of high-technology markets.
HPA is used as a precursor material in synthetic sapphire glass and HPA coated separators, which are expected to register strong demand. While the LED lights, semiconductors and laser markets would propel HPA prospects through the sapphire glass industry, increasing adoption of lithium batteries requiring HPA coated separators as the precursor is further boosting the market potential for HPA.
A detailed marketing study, which KRR commissioned from CRU International, indicated that over-the-counter transactions of 4N HPA, which currently commands ~US$24,000/tonne price, is expected to improve in the coming years.
Glittering Prospects for Progressive Mt Remarkable Gold Project
Uncertainty in the current environment provided a strong nudge to the gold market, as people rushed towards the ‘Safe Haven’. Bullion counters have ever since hit it out of the park and gold price have zoomed by more than 12% on the year-to-date basis, as on 9 June 2020. Burgeoning prospects for the yellow metal seem to be favourable for Mt Remarkable Gold Project of King River Resources.
In the March 2020 quarter concerning the Mt Remarkable Project, final assays were returned from the 2019 RC drilling. The Company at the project discovered a new mineralised zone that sits 150 metres east of the Trudi main’s deposit. Drilling program intersected 7 metres at 0.85 grams per tonne of gold including 1 metre at 2.42 grams per tonne of gold in strong quartz adularia veining. Meanwhile, gold mineralisation on a quartz adularia vein set was intersected by three holes at Jennifer North.
Endeavours Targeting Tennant Creek: Treasure Creek Project
KRR’s Tennant Creek Project also appears to be well placed in the robust gold market scenario. The Company in the March quarter made notable developments regarding the project. Two IOCG targets at Tennant Creek that were defined by the geophysical work included Commitment Magnetic Anomaly and Lonestar Trend magnetic anomaly.
The strength of the magnetic and gravity anomalism at both the targets is equivalent to the area’s other known IOCG deposits. The geological and geophysical data of the Tressure Creek tenements are currently being reviewed by the Company, which has already identified several iron oxide copper-gold targets lying with the granted licences. Main geophysical targets are planned to be drilled in 2020.
Stock Performance – The KRR stock traded at $0.056 on 9 June 2020, moving upward by 3.704% from its previous close. The Company has a market capitalisation of $67.43 million and its stock has given a positive return of ~157% on the year-to-date basis.
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