A rough old start to the week for the ASX and it wasn’t easy to find good news. That said, despite their share prices falling on the day, both MinRes and Gold Road were happy to talk up their respective operations.
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Perth-based Mineral Resources (ASX: MIN) has revealed a big upgrade in the amount of lithium-rich ore it has at its two WA mines.
The reserves update was released in the middle of an investor tour of the company’s WA lithium mining assets from October 9 to 11.
MinRes has been selling the attractions of its lithium business (in joint ventures with Albermarle) to the market in recent weeks after CEO Chris Ellison mused that the company could get higher valuations for the business if it floated them off in a separate company.
The high valuations for Albermarle were given as an example of the sort of valuations Ellison was wanting to see.
In Monday’s update, MinRes said the Mt Marion and Wodgina mines are in the WA Goldfields and Pilbara, respectively, and currently produce high-quality spodumene concentrate for export or use in the about to come online refinery in WA.
Monday’s announcement is the first time MinRes has released a joint mineral resources and ore reserve statement for Mt Marion and Wodgina.
At the same time, Monday’s announcement also included a the first ever ore reserve for Mt Marion.
MinRes said the Wodgina mine had an estimated indicated & inferred mineral resources of 259.2 million tonnes at 1.17% Lithium Oxide (Li2O).
Wodgina ore reserve estimated at 147 million tonnes at 1.20% Li2O (That’s the best delineated reserve and the basis for MinRes’ mine plan).
Mt Marion had an estimated indicated & inferred mineral resource of 51.4 million tonnes at 1.45% Li2O, while the maiden ore reserve was an estimated 17.2 Mt at 1.56% Li2O (it’s a far smaller but slightly richer deposit).
In Monday’s statement, Chris Ellison said there was “164 million tonnes of Ore Reserves and more than 310 million tonnes of Mineral Resources, across the Mt Marion and Wodgina deposits. The high quality and scale of these Tier 1 assets in Western Australia underpin MinRes’ position as a leading global lithium producer.”
“We are ideally placed to continue the major expansions at both projects to ramp up spodumene concentrate output for lithium hydroxide conversion for many decades to come.”
“Significant opportunity exists to further expand the mineral endowment at both operations through near mine exploration activities.”
MinRes shares fell 1.7% to $US70.81.
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Meanwhile Gold Road Resources (ASX: GOR) says it’s happy with the performance of its 50% owned Gruyere gold mine (with Gold Fields as the other 50% holder) in WA in the September quarter.
In its now usual early synopsis of the mine’s latest quarterly performance, Gold Road said Gruyere had another strong quarter, producing 83,635 ounces of gold (on a 100% basis) during the quarter which was down slightly from the June quarter’s 85,676 ounces but in line with expectations.
Gruyere ore tonnes processed totalled 2.2 million tonnes of ore in the quarter at a head grade of 1.26 grams to the tonne of gold and a gold recovery of 92.3% for the quarter.
“This is the highest average quarterly head grade achieved at Gruyere to date,” Gold Road said.
Gruyere remains on track to meet annual guidance of 300,000 – 340,000 ounces (150,000 – 170,000 ounces attributable to Gold Road) with production in the first 9 months of the year running 34% ahead of 2021’s 178,716 ounces at 240,487 ounces.
A repeat of the performance in the June and September quarter will see the mine hit the middle of guidance at more than 320,000 ounces.
Gold Road said its gold sales totalled 39,524 ounces at an average price of $A2,380 an ounce in the quarter and included delivery of 9,500 ounces at an average price of $1,899 per ounce into forward sales contracts.
Gold Road said its remaining hedge contracts total just 6,480 ounces and will end next month.
Gold Road also completed the recommended takeover of DGO Gold Ltd in August and part of that saw it pick up 14% of De Grey Mining, now built to 19.9% and maintained with the take up of its share of the $130 million funds raising by De Grey last week.
Gold Road said it ended the quarter with cash and equivalents of $91.4 million (v June quarter of $161.3 million) and no debt drawn.
“This cash and equivalents position is after continued strong cash generation at Gruyere, an increase in unsold bullion and doré, $9.0 million in dividend payments and the on-market purchase of 78.4 million De Grey Mining shares during the September quarter.”
Investors gave the update the thumbs down, dropping Gold Road shares by more than 5.5% to $1.31.
