King River Resources’ Stock Soars On ASX; A look At FY19 Results

Exploration and mining company, King River Resources Limited (ASX: KRR) is currently focused on designing the optimal process route to produce high purity alumina, vanadium, titanium, magnesium and iron. The company intends to produce these high-value products from its 100% owned Speewah Specialty Metals project (SSM), located on the Speewah Dome, in the Eastern Kimberley.

Recently on 6 September 2019, the company released its Annual report for the financial year ending 30 June 2019 (FY19) when it was primarily involved in the advancement of its SSM Project.

FY19 Results

For FY19, the company reported revenue and other income of $0.12 million and a net loss of $0.80 million. The net loss was $66,941 lesser than FY18, demonstrating an improvement of 7.68%. The basic and diluted loss per share was 0.06 cents. At the end of FY19, the company had current assets of $3.16 million and current liabilities of $0.12 million.

In FY19, the company spent $0.99 million of cash for payments to suppliers and employees and received $4,466 as interest, taking the total net cash used in operating activities to $0.99 million. Further, the company spent $3.21 million of cash in exploration and evaluation activities and $13,961 to purchase property, land & equipment, taking the total net cash used in investing activities to $3.22 million.

During the year, the company received around $2.89 million from the issue of shares and paid $0.34 million as share issue costs. At the end of FY19, the company had cash and cash equivalents of $2.966 million.

Company’s Portfolio

The company has established a portfolio of 100% owned tenements covering approximately 2,534 square kilometres with applications pending for 878 square kilometres, in the East Kimberley region in Western Australia. Besides this, the company has also established a portfolio of 100% owned tenements covering approximately 6,618.9 square kilometres, in the Tennant Creek region of the Northern Territory.

The company’s wholly owned subsidiaries include Speewah Mining Pty Ltd, Treasure Creek Pty Ltd, Kimberley Gold Pty Ltd and Whitewater Minerals Pty Ltd. Besides SMM project, the company also owns Treasure Creek Gold Project as well as Mt Remarkable project.

In FY19, SSM Project progressed the Beneficiation-Agitated Tank Sulphuric Acid leaching-precipitation process and precipitated following products from leach solutions:

• High purity alumina 99.99% Al₂O₃ (4N HPA)
• Titanium dioxide 80% TiO₂
• Iron oxide 67% Fe2O3

SSM Project Update

Last month, the company held a meeting in Perth, wherein it adopted a recommendation of Como Engineering to reshape the scale and timing of the SSM Pre-Feasibility Study.

The company believes that the estimated capital costs of constructing a new beneficiation, agitation leaching and metal recovery plant would be decreased to around $524 mn by lowering its start up mining rates, matching to a more standard sized acid plant installation that is capable of producing over 15 MW of annual electricity and 1800 tonnes per day of sulphuric acid.

The company is also investigation a new two-stage acid leaching process route which could further reduce current acid consumption volumes. As a consequence of these implications, completion of the PFS is now expected towards the end of 2019.

Important metallurgical testwork and studies to be addressed in the PFS include:

• Complete heated agitated leach, including two-stage leaching with potential to reduce acid consumption, to confirm the optimum process and conditions;
• Complete hydrometallurgical process flow sheet development trialing solvent extraction, ion exchange, thermal hydrolysis and chemical precipitation methods. Regeneration of sulphur values as sulphur dioxide (SO₂) from the iron product is an important part of the process as it has the potential to reduce the sulphuric acid requirement;
• Options analysis into the capital and operating costs for an on-site Sulphuric Acid Plant compared to importing acid and contract diesel power generation, including the supply, port access and transport of sulphur and sulphuric acid;
• Re-assay RC drill pulps in storage for aluminium and magnesium, plus other rock forming elements, for inclusion in a new resource statement. The drill samples were originally assayed prior to 2012 for V, Ti and Fe;
• Geotechnical studies on drill core to help finalise the pit design;
• Environmental, heritage and marketing studies.

After completing the Pre-Feasibility Study, the company is planning to use that publication of technical and financial information to identify appropriate collaborations that may be interested in jointly funding a Definitive Feasibility study which would include:

Treasure Creek Gold Project Update

The company recently applied for two highly prospective tenements in the Tennant Creek Region, supplementing its existing Treasure Creek Iron Oxide Copper Gold (IOCG) exploration holdings. These two new exploration licence applications (EL32199 and EL316260) are held in the name of Treasure Creek Pty Ltd - a wholly owned subsidiary of King River Resources.

Mt Remarkable Gold Project Update

Recently at Mt Remarkable Gold Project, 6 exploration licence applications were granted. Held in the name of Speewah Mining Pty Ltd, a wholly owned subsidiary of King River Resources, these new exploration licences are covering the primary strike extension of the Whitewater Volcanics.

The company is planning to start a RC (Reverse Circulation) drilling during year-end to follow up on high-grade gold intersections returned in 2018 on the main Mt Remarkable Project while also intends to use the knowledge and experience gained from gold exploration at the Mt Remarkable and Speewah Projects, to identify and test multiple new high-grade gold targets.

Stock Performance: In the past six months, KRR’s stock has provided a return of 17.24% as on 6 September 2019. At market close on 9 September 2019, KRR’s stock was trading at a price of $0.037, up by 8.824% with a market capitalisation of circa $42.45 million.