Bonanza hits raise hopes Catalyst has found an extension of the historic Bendigo goldfield
Australia’s richest person Gina Rinehart has been celebrating 30 years at the helm of Hancock Prospecting (HP), as well as her 69th birthday.
Part of the celebrations is a random draw of 41 prizes – the number matches the number of years Ms Rinehart has worked at HP – worth $100,000 for each of the lucky members of the Hancock workforce, tax implications taken care of too.
What about gifts going the other way? And what do you buy someone that the Financial Review’s Rich List has probably under-done with its $34 billion net worth estimate?
Chris Ellison’s Mineral Resources (ASX:MIN) and now Strike Energy (STK) have done their bit by calling it a day in the shoot-out for Perth Basin gas player Warrego Energy (ASX:WGO), with HP’s $440 million takeover winning the protracted shootout.
But how about going one better and delivering Ms Rinehart something golden.
A piece of jewellery wouldn’t do for Australia’s richest. How about a “new” Bendigo, the old goldfield known around the world for its historic high-grade production of some 22 million ounces back in the day.
Maybe just maybe, such a “gift” is possible thanks to the hard yakka of Catalyst Metals (ASX:CYL, trading at $1.30 for a market cap of $128m) in the hunt for a new Bendigo beneath Murray Basin sediments to north of the historic goldfields.
HP is a player in it all as it has long been a supportive 12.7% shareholder in Catalyst, and is a 50:50 partner with Catalyst in the Four Eagles exploration project, the most advanced of the projects in Catalyst’s new Bendigo hunt.
Catalyst has just released results from eight holes drilled into the Iris Zone which sits below the known gold mineralisation at shallow depths at the Boyd’s Dam prospect, part of the broader Four Eagles project area.
It likes what came back from the assay lab. Best results included – 5.6m grading 54g/t gold, 1m at 150g/t, 1.3m at 77.9g/t, 55m at 10.4g/t and 5.4m at 5.2gt.
As mentioned here previously, it is exciting stuff because the old Bendigo goldfield was “easy” to find because it “daylighted” in outcrops, stubbing the toes of the oldtimers. Finding high-grade gold across an initial 350m strike length hidden beneath Murray Basin sediments is something else altogether.
Catalyst’s technical director Bruce Kay is not one prone to hyperbole. He said that the Iris Zone results were a “pivotal breakthrough in our hunt for the extension of the Bendigo goldfield”.
“We have always suspected that there would be stacked gold zones (Bendigo style) below the shallow Boyd’s Dam mineralisation but previous drilling had not been done with then optimal orientation,” Kay said.
“This Iris Zone appears to be very consistent and visible gold is always exciting.’’
Kay’s career spans more than 40 years and has included lead geologist positions at the long-gone Normandy Mining and worldwide exploration for Newmont, the world’s biggest gold producer, and bigger still if it secures Newcrest (NCM) with its $24 billion takeover bid.
The Iris Zone is one of a number that sit in close proximity to one another. “These areas of stacked, repetitive mineralisation have the potential to change the project’s economics and could eventually be mined from the one access tunnel,” Kay said.
The old Bendigo was known for its unique style and the scale of faulting which resulted in the repetition of orebodies (500,000 ounce/40g/t shoots in its heyday) down to depths of more than 1km.
As it is, Catalyst has applied for approval to drive a 3.5km decline between the seven high-grade zones outlined to date. No mine just yet but certainly heading in the right direction to become one in the ongoing revival of Victoria’s old goldfields.
One of the interesting bits to come out of HP’s bidder’s statement was that at the end of FY2022, it had cash and cash equivalents of $17.7 billion.
So Ms Rinehart could buy just anything she so desires.
As it is, she told the Financial Review’s intrepid Brad Thompson during the week that HP would continue to seek out Tier 1 assets, with the preference to “have the vast majority of our investment in Australia”.
“Investment in Australia is what enables our high living standards. However, we must be mindful of government policies that make investment and development unattractive,” Ms Rinehart said.
Fair enough, and interesting given HP was sheeted home this week home as a buyer of a $60m-plus block trade in Chalice (CHN), owner of the Tier 1 Julimar nickel-copper-PGE deposit on Perth’s doorstep.
A $60m purchase of stock in a $2.4 billion company (which has flagged it would consider a strategic partner taking up a minority strategic position in Julimar’s development) is not a big deal in itself.
But if the buyer goes on buying, things will get interesting very quickly. And it goes without saying that if there was more buying by HP, the group’s $17 billion or so firepower makes Chalice at its current market cap look like a bit of a snack.
But there would be plenty of competition. Discoveries on the scale of Julimar are rare and the thing is made for the metals-intensive energy transition. Interestingly, another iron ore magnate, Andrew Forrest, was reported late last year to be bidding Tim Goyder for his stake in Chalice.
In addition to the block trade, chatter in broking circles suggests someone has accumulated a large derivative holding in Chalice.
The talk has further fuelled rumours that Chalice could become the subject of a shoot-out between HP and Forrest, with BHP also being cited as a possible interloper.
MinRes founder Chris Ellison also qualifies as an iron ore magnate even if the $17.3 billion company’s lithium interests are assuming greater overall importance, maybe even more if Perth talk is right.
The Perth market is convinced that MinRes has being buying up stock in the Canadian/Australian dual-listed Patriot Battery Metals (PMT on the ASX, PMET in Toronto) which could now be just under the 5% disclosure threshold in this market.
Patriot is the one that has had a spectacular rise to a market cap of $C1.48 billion in response to stunning exploration results from its Corvette lithium discovery in Quebec.
Corvette has been drawing comparisons with the best lithium operation in the world, the Greenbushes operation owned by a joint venture between the IGO/Tianqi partnership and US heavyweight Albemarle.
It is the one that every lithium major in the world will want to own should it shape up as expected. Former Pilbara Minerals boss Ken Brinsden, who cancelled a sabbatical after leaving Pilbara to become Patriot’s chairman, waxes lyrical about Corvette’s potential.
MinRes could well just be building a portfolio position to benefit from the eventual shootout by industry players for Corvette. Or it might want Patriot for itself to juice up a likely spin-out of the lithium business.
Pilbara and Rio Tinto are familiar names expected to take part in any shootout in Patriot. But the list goes on and on.
And given the cash build inside the major lithium players, things could get heated. One last thing, Fortescue has flagged an interest in lithium, and HP’s cash kitty means it could outshoot any rivals if it wanted to. There’s that iron ore money again.
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One of Australia’s leading business journalists, Barry FitzGerald, highlights the issues, opportunities and challenges for small and mid-cap resources stocks, and most recently penned his column for The Australian newspaper.
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