Any day now, MacPhersons Resources (ASX:MRP) will be reporting the latest drill results from its Boorara gold project, all of 10km east of Kalgoorlie’s Golden Mile. To say that the results will be closely watched is a bit of an understatement as previous results from a re-orientated drilling campaign suggested by consulting structural geologist Gerard Tripp have already got pulses racing, even for MacPhersons managing director Jeff Williams.
Williams won’t mind being called a veteran of the mining and exploration game. A mining engineer who has seen it all before in a 40-year career, Williams said with misty eyes this week that the previously reported 163m hit grading 1.94 grams of gold a tonne (with a top-cut to 24 g/tonne) was the best drill hole he had ever seen.
A couple of more drill holes since have continued to add to the story, with Tripp’s advice of drilling perpendicular to the north-west dipping quartz veins continuing to excite as the structural controls are similar to that at the six-million-ounce Mount Charlotte underground mine over at the Golden Mile.
The similarities with the Mount Charlotte-style of mineralisation are strong enough for one wag to suggest that if he didn’t know otherwise, the Boorara hits could well have come from the Mount Charlotte core shed.
All that has been reflected in MacPhersons’ share price getting a wriggle on. What was an 8c stock at the start of the year is now a 26.5c stock, valuing the company at $82m. It is what might be expected for an early-stage Mount Charlotte look-alike.
But Boorara needs to be more than a look-alike before convincing the broader market that MacPhersons is on to something special. Key questions remain. Will it go on at depth and are the special results reported to date repeatable in step-out holes.
That’s what the current drilling is all about, and it’s why the release of the latest results - any day now – will be pored over, not just by the share punters, but by the owners of the big and hungry gold treatment plants in the region.
Cheering on the drilling program is New York private equity resources fund Orion Mine Finance (19 percent shareholder), and Kalgoorlie accountant and pub owner Ashok Parekh (12 percent).
Ever-generous, Parekh – a long time dabbler in the gold space - could well be in the mood to shout the bar at Diggers & Dealers in August should more drilling continue to take Boorara down the pathway of being something special.
Reading the lithium tea leaves
The ASX-listed lithium space has all of a suddenly got interesting again, in more ways than one, and all thanks to Greenbushes partner, US group Albemarle.
First up, Albemarle let it be known that Greenbushes, the world’s biggest lithium source and a joint venture with China’s Tianqi inside a state forest, had set out to double production at the West Australian operation.
Fair enough. But with Albemarle reportedly in market for another WA deposit because of the rise and rise of the lithium-ion battery story, one interpretation of the Greenbushes announcement was that it had a dual purpose of pulling the rug on the value of the WA lithium developers who will be competitors, in what is a tightly controlled market, if left to their own devices.
That becomes a particularly interesting interpretation when it can be said that while Albemarle was singing about the Greenbushes expansion and pulling that rug, it was also widely reported – without denials – that it had spent a couple of months in the data room for a possible bid for Kidman Resources (ASX:KDR), owner of the world-class Earl Grey lithium project near Southern Cross.
Neither Albemarle nor Kidman would comment. What is more certain is that news of a doubling of production at Greenbushes was most likely a key factor in Kidman’s recent share price weakness, ignoring yesterday’s 6 percent share price pop to 43c. So Kidman is a cheaper potential target than it was.
But for how long? Kidman revealed yesterday that its metallurgical study into Earl Grey is due next week. It is pretty much the last bit of de-risking the project.
Assuming market gossip – and that is all it is – that Earl Grey should come through the study with flying colours is on the mark, any would-be buyer of Kidman will have wished they had moved earlier, Albemarle included.
A 3D take on the eastern states gas crisis
The ever-mercenary market has been casting around on how best to profit from the Eastern states gas crisis.
Peter Strachan from StockAnalysis has done everyone a favour by bundling the most likely stocks to benefit from the crisis – or the massive stuff-up as Strachan puts it – into a neat table of 10 or so stocks.
All of them are the usual suspects, but among the explorers, Strachan settles on Noel “Ray-Ban’’ Newell’s 3D Oil (ASX:TDO). It is a thinly traded 3.6c stock with a market cap of about $8.3 million, and it has cash of about $3m.
Its attraction is its now 100 percent ownership of the T-49-P exploration permit in the offshore Otway Basin, not far from the biggest producing gasfield out there owned by others and in water not as deep as you might think.
On the basis that more gas is the answer to the gas crisis, 3D’s best estimate of a total prospective resource (and that is all it is at this stage) is 6.8 trillion cubic feet, with upside potential for (North-West shelf-sized) 20Tcf if the imagination is let loose, comes into the frame big time.
In the north of the permit, 3D has worked up the Flanagan prospect (1.38Tcf potential) as a ready to drill prospect, with marketing underway to find a partner with deeper pockets than 3D’s to put it all to the ultimate test with the drill bit.
It was interesting enough when domestic gas prices were around $4 a gigajoule. Now prices are over $10 and beyond - as those LNG chillers up in Queensland soak up every molecule they can get for export - it becomes a whole lot more interesting for the lightly capitalised 3D, noting the capitalisation is not in keeping with the technical nous inside the company.
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.