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It is an often and rightly emphasized fact that Australia is a naturally rich country when it comes to metals, minerals and petroleum. According to the Department of Industry, Innovation and Science, Australiaâs resources and energy export earnings are anticipated to reach a quarter of a trillion dollars in 2018â19, hitting a record high of $252 billion, before falling back to $238 billion in 2019â20.
(Source: DIIS)
Latest on Australiaâs Mineral Front
As per the latest figures of the Australian Bureau of Statistics for June 2019 quarter, the trend estimates for total mineral exploration expenditure, besides petroleum increased by 5.2 per cent or $31.3 million to $629.6 million, with the largest contribution coming from Western Australia. The trend estimates for total petroleum exploration expenditure was up by 2.8 per cent or $8.5 million to $314.1 million, with the largest contribution coming from Western Australia. However, the exploration expenditure on production leases was down by 29.5 per cent or $21.3 million.
In the context of this backdrop, let us look at three ASX-listed stocks, from the energy, metals and mining industry, and acknowledge their recent updates. We would also look at the share price performance of these companies towards the end of the article, but first and foremost, let us understand their area of business:
Companies Under Discussion- CVN, PLS and WSA
Carnarvon Petroleumâs Update on the Buffalo project
On 2 September 2019, the company requested for its securities to be placed in a trading halt, pending an announcement. CVN notified the media and investors that after extensive negotiations with the governments of Timor-Leste and Australia, the company has finally signed a PSC in Dili confirming ongoing title to the Buffalo oil field and the surrounding exploration acreage. This has been done post consultation with the respective government regulators- ANPM and NOPTA. Besides this, the Maritime Boundary Treaty between Australia and Timor-Leste was ratified on 30 August 2019, which brings the revised maritime boundaries between the two countries into force.
Pleased with this advancement, MD Mr Adrian Cook stated that the next phase in the Buffalo oil field re-development has finally been secured and this would enhance the work towards drilling a Buffalo well and achieving first oil in this field as soon as practical, as the company works with the Timor-Leste authorities for it.
CVN now would have a clarity on the way forward for this project, regarding approvals necessary to drill and produce oil in Timor-Leste.
Pilbara Mineral To Announce A Capital Raising
Metal and mining player Pilbara Minerals caught the attention of mining enthusiasts and investors after it notified on 2 September 2019 that it would soon release an announcement regarding a capital raising. With the new placement on the cards, the securities of the company were suspended from quotation immediately under Listing Rule 17.2. The company was in discussions regarding the Placement, which is expected on 6 September 2019. The companyâs shares were previously placed on a trading halt on 29 August 2019, pending the release of an announcement.
Pilbara Mineralâs Updates
On 27 August 2019, the company notified that it would consider an optimised and incremental pathway for the Stage 2 expansion of its Pilgangoora Lithium Tantalum Project, after analysing the conclusion of its strategic partnering process. Presently, PLS ceased to pursue the minority sale process with any potential partner, even though it had a number of credible and interested parties. However, the company would continue addressing new discussions regarding the same with interested parties. Besides this, the technical studies that support an optimised expansion of the Stage II production capacity over time had been completed, with an preliminary upfront capital expenditure of sixty to seventy million. The total capital expenditure is likely to be in the range between Two hundred and twenty to A$220 million and Two hundred and fifty million. The Feasibility Study for the Revised Stage II expansion is most likely be accomplished by December this year.
Pilgangoora Revised Stage 2 Phase 1 â Development Concept (Source: PLSâ Report)
PLS also finalised and executed a binding terms sheet with POSCO to proceed with the formation of an incorporated joint venture in South Korea, aimed towards the development and operation of a 40ktpa lithium hydroxide and carbonate chemical conversion facility. The final agreement is expected to occur in the December Quarter 2019.
Western Areaâs Update on the Mt Alexander Project
The Mt Alexander Project benefits from its location amid the world-class nickel deposits near the Agnew-Wiluna Belt. It is a joint venture between St George Mining Limited (ASX:SGQ) which has a 75 per cent stake and Western Areas Limited (25 per cent). The former is the Project manager while the latter retains its share in non-contributing interest until there is a decision to mine.
On 2 September 2019, St George Mining Limited notified that there had been a new discovery of high-grade nickel-copper sulphides at the Mt Alexander Project. This discovery was made in an area that has never been drilled before. The first drill hole at the Radar Prospect, MAD152, which was drilled to test a new EM conductor identified by EM surveys completed by St George. Massive nickel-copper sulphides were discovered and 7.5m thick mineralised interval from 44.2m downhole in drill hole was recorded. SGQ notified that the follow-up drilling would be prioritised once the downhole electromagnetic survey in MAD152 would be completed.
Drill core with massive sulphides from the interval at the Radar Prospect (Source: WSAâs Report)
Pleased with the discovery, SGQâs Executive Chairman, Mr John Prineas stated that the occurrence of high-grade nickel and copper sulphide mineralisation at shallow depths is rare and the company was delighted to extend the strike of this type of mineralisation along with the Cathedrals Belt to an impressive 5.5 kilometres.
Multiple EM conductors are still to be drilled and the drilling of the EM conductor at Bullets is scheduled to commence next week.
Share Performance on ASX as on 02 September 2019:
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