Surefire’s Resource Base And Exploration Potential Well Supported By Positive Commodity Outlook

  • Dec 12, 2019 AEDT
  • Team Kalkine
Surefire’s Resource Base And Exploration Potential Well Supported By Positive Commodity Outlook

With exploration assets in Western Australia, the base metals focussed company Surefire Resources NL (ASX: SRN) seeks to focus on a rigorous approach for project development through the application of the experience of the Company’s management team.

The Company owns multiple projects for exploration and has been actively making exploration efforts for the advancement of its vanadium project at Unaly Hill, multi-element Kooline project, along with vanadium and gold exploration at Victory Bore.

Encouraging Vanadium Resources

Surefire’s recently acquired Victory Bore gold - vanadium project is anticipated to significantly drive its vanadium resource base and exploration potential, with the following attributes:

  • In conjunction with the Company’s Unaly Hill vanadium project, the Company has a combined Inferred Mineral Resource of 237 Mt grading ~0.42- 44% V2O5 with a contained V2O5 content of 102,900 tonnes making it one of the largest vanadium resource holders in Australia.
  • The Company’s previously established substantial JORC vanadium resource at Unaly Hill is presented in the table below:
  • The substantial increase in the Company’s vanadium resource after the acquisition of the Victory Bore project is tabulated below:

  • The recently released RC drilling results (29 RC holes drilled for a total of 2,256m with a maximum depth of 96m downhole) exhibited several vanadium bearing magnetite units, as tabulated below:

Significant RC Drilling results at Victory Bore Gold Targets

Surefire Resources revealed encouraging highly anomalous gold assays during RC Drilling at Victory Bore, as summarized below-

Having known the Company’s internal strengths of such strong mineral resources for vanadium and gold, let us ponder on the industry outlook for the mineral and resources sector.

Commodity Outlook

According to the Government stats, Australia’s resources of critical minerals such as vanadium, lithium, cobalt, manganese ore, tungsten and etc., all rank in the top five globally.

The Resources and Energy Quarterly (REQ) for September 2019 states that while the trade tensions have led to a weaker outlook for Australia’s base metal (a common metal that is not considered precious and includes aluminium, copper, lead, nickel, tin, zinc) and energy exports, Australia is benefitting from the investors’ flight to safety as the world’s 2nd largest gold producer.

Additionally, REQ states the following positive outlook:

  • The resource exports are likely to hold up in 2019–20, despite unpredictable commodity markets,
  • Fresh projection of $282 billion in exports in 2019–20, shaving mere $3 billion from June 2019 Oil Resources and Energy Quarterly projection.

Figure 3Base metal prices (Source: Resources and Energy Quarterly, Australian Government)

  • Gold earnings expected to surge by one third to $25 billion in 2019–20.

Moreover, the impact of escalating US-China trade tensions is expected to be set off by the growth in the earnings from gold export and the depreciation of the Australian dollar.

More generally, with the fall in the US dollar commodity prices arising due to US-China trade tensions, the Australian dollar has also witnessed a drop, holding up the returns for the Australian resource and energy commodity producers.

According to the REQ’s research, the mining investment in Australia has turned the corner, with mining companies planning to:

  • raise their yearly spending on building new mines and wells, and
  • broaden and replacing their fleet of plant, machinery and equipment for the first time in six years.

The research by REQ indicates significantly stronger productivity in major parts of the Australian mining sector as compared to the traditional measures, while productivity as a factor under control in globally uncertain times comes to be increasingly important.

More importantly, the escalating investment in technology-centric industries like electric vehicles and energy storage enhances the prospects for several emerging commodities, compensating the impact of international trade concerns.

SRN believes that its licence areas containing several magnetic anomalies are deprived of drilling and therefore plans to assess the potential that exists within them for improved resource tonnage as well as larger zones of higher-grade mineralisation.

Bottomline

SRN is backed by a management team with sturdy experience in resources and other areas of management.

Lately, the Company received results from the maiden RC drilling program at Victory Bore and is hopeful of the outstanding potential along the Youanmi trend to generate additional gold mineralisation and drill targets.

Moreover, additional work has been warranted for better defining these targets while also expanding the resolution of the anomalies via further geochemical sampling.

On 12 December 2019, the SRN stock closed the day’s trade at a price of $0.002 with a market capitalisation of $1.26 million.

To learn about SRN’s September Quarter Results, click HERE.


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