Cha-ching! The juniors sitting on fat bank balances

Funding can be the hardest part of the game for junior explorers. But not for these cashed up ASX resources small caps.

Finding funding can be the hardest part of exploration. But these juniors already have cash in the bank. Pic: Getty Images

• Half of all ASX juniors are sitting on less than $2 million in cash

• But a handful with fatter wallets are well placed to make deals and drill for new discoveries

• These ASX small caps have the bank balances to outlast their peers

If cash is king, there’s a small group of explorers on the ASX that are worthy of wearing the crown.

According to BDO’s latest Explorer Quarterly Cash Update for the September 2024 quarter, junior resources companies had an average cash balance of $9.5 million, a two-year low.

Most juniors could only dream of having that much cash in the bank, though the numbers are skewed by some of the larger developers.

Companies like Spartan Resources (ASX:SPR), De Grey Mining (ASX:DEG),  Predictive Discovery (ASX:PDI), Chalice Mining (ASX:CHN), Wildcat Resources (ASX:WC8), Bannerman Energy (ASX:BMN), WA1 Resources (ASX:WA1) and Andean Silver (ASX:ASL) are all advancing large projects which have allowed them to raise a truckload of cash.

It’s these companies which drag the average up. In reality, only around half of all juniors have cash balances above $2 million.

However, there’s also a cohort of juniors sitting on a healthy cash pile without having to raise money.

Patronus Resources (ASX:PTN)

Harry Potter-themed Patronus is the product of the mid-2024 merger between Kin Mining and PNX Metals, with Kin bringing nearly $90 million in cash and listed investments to the enlarged company after selling its stake in Dacian Gold and several gold deposits to mid-tier producer Genesis Minerals (ASX:GMD) .

Patronus holds the Mertondale and Cardinia gold projects in WA and the Fountain Head gold project and Pine Creek uranium project in the Northern Territory, all of which it completed work on during the December quarter.

The company was also busy on the inorganic growth front, acquiring 60.7 million shares in Alto Metals, which were swapped for shares in Brightstar Resources (ASX:BTR) after Brightstar acquired Alto.

Patronus also acquired 33.7 million shares in gold explorer Aurumin – a target last year for Brightstar – and subscribed for 500 million shares, or 15.7%, of developer Geopacific Resources as part of an agreement to sub-underwrite Geopacific’s recent $40 million entitlement offer.

Patronus had cash of $70 million and listed investments worth $9 million at the end of the December quarter.

Red Hill Minerals (ASX:RHI)

Low-key Red Hill made its fortune by selling its 40% stake in the Red Hill iron ore project in the Pilbara to Mineral Resources (ASX:MIN) for $400 million in 2021.

The company returned much of the initial $200 million received at the time to shareholders and received the second instalment of $200 million last year when MinRes achieved first production from the project. RHI returned more than $115 million to shareholders in the December 2024 half.

Red Hill closed December with $64 million after receiving $2.7 million in royalties in the quarter from MinRes.

It spent a modest $350,000 on exploration in the December half, comprising reverse circulation drilling at its West Pilbara gold and base metals project and field work at the Curnamona project near Broken Hill as part of a $6.5 million earn-in with Peel Mining.

At its annual general meeting in November, Red Hill said it was actively looking for new projects and investment opportunities.

Leo Lithium (ASX:LLL)

While not currently trading, Leo sits in a strong financial position, following the sale of its 40% interest in the Goulamina lithium project in Mali to joint venture partner Ganfeng for US$342.7 million.

Last week, Leo returned $207.2 million to shareholders, leaving it with a cash balance of $62 million, while it is still owed US$171 million by Ganfeng, plus interest, and is entitled to a 1.5% gross revenue royalty on 500,000 tonnes per annum of spodumene sales from Goulamina for 20 years.

Leo can only resume trading on the ASX if it acquires another business and said recently that shareholders would rather the company spend the tranche two funds received from Ganfeng than receive further unfranked dividends.

Noting that price of lithium assets were at cyclical lows, Leo has already completed more than 80 desktop reviews of projects and has engaged with multiple targets.

It is aiming to progress the acquisition of a lithium development asset in the current half, to avoid being removed from the ASX later this year.

GWR Group (ASX:GWR)

GWR has been sitting on a nice cash pile since selling its Wiluna West iron ore project last year for $30 million plus a royalty.

It then sold its 80% interest in the Hatches Creek tungsten project for $8.6 million worth of shares in Tungsten Mining (ASX:TGN).

Since then, the company has been focused on advancing its 70%-owned Prospect Ridge magnesite project in Tasmania, which it holds in a joint venture with Dynamic Metals (ASX:DYM).

The company held $37.3 million in cash at the end of December, plus $14.3 million in listed securities.

“GWR is actively appraising and undertaking due diligence on potential project acquisitions by utilising its strong balance sheet and to complement its Prospect Ridge magnesite project,” GWR said last week, adding that it was focusing on critical minerals.

Kingsrose Mining (ASX:KRM)

Thanks to its former life as a small-scale gold producer in Indonesia, Kingsrose has been a well-funded explorer for several years, with cash of just over $27 million at December 31.

Last year, the company inked two exploration alliance agreements with BHP over its copper and nickel projects in Norway and Finland.

BHP (ASX:BHP) can sole fund up to US$20 million of exploration over four years across belt-scale areas and can select targets to become defined projects, after which it can earn up to 75% by sole funding up to US$36 million over seven years.

Kingsrose received $3.3 million from BHP during the quarter to fund exploration and is also advancing its Råna and Penikat projects in Scandinavia, which sit outside the alliance.

The company is also assessing business development opportunities.

“The acquisition of new assets remains a key focus for Kingsrose,” the company said in its December quarterly report.

Indiana Resources (ASX:IDA)

Indiana won a six-year international legal fight against the Tanzanian government following the cancellation of its Ntaka Hill nickel licences, with the government agreeing to pay US$90 million to settle the claim.

Indiana entered 2025 with $23 million in cash after returning $32.6 million to shareholders last month.

It is expecting a further US$30 million to come in the door in March, the final instalment of the settlement, which it plans to return to shareholders in May.

The funds put the company in a strong position to advance its projects in South Australia’s Central Gawler Craton, where it holds 5713 square kilometres of ground.

The current focus is the Minos project, where it recently hit high-grade gold.

Indiana CEO Lindsay Owler recently told Stockhead the company is planning to move to resource definition this year, as well as testing some of the project’s many underexplored targets.

Strickland Metals (ASX:STK)

In 2023, Strickland sold its Millrose project in WA to Northern Star Resources (ASX:NST) for $61 million in cash and shares.

Last year, the company acquired the Rogozna project in Serbia from Ibaera Capital for A$37 million in cash and shares.

With a resource of 5.44Moz of gold equivalent, it made Strickland the holder of one of the largest undeveloped gold resources on the ASX.

Since then, Strickland has been aggressively drilling Rogozna and to a lesser extent, its Yandal project in WA.

Strickland had $13.68 million in cash at the end of December after receiving $3.46 million in proceeds from the sale of Northern Star shares. It still holds more than 1.3 million Northern Star shares, worth $15.44 million as of December 31.

The company is set to kick off a large drilling program at Rogozna in early March, using six diamond rigs.

Solstice Minerals (ASX:SLS)

Solstice was spun out of OreCorp, the Tanzania-focused gold developer which was last year acquired by mid-tier producer Perseus Mining (ASX:PRU).

The company, which held $17 million in cash on listing in April 2022 and has not had to raise cash since.

It finished December with $15.2 million cash after selling its Hobbes project to Northern Star for $10 million last year.

Solstice is focused on advancing its Yarri gold project, comprising 1650 square kilometres in WA’s Eastern Goldfields.

The company spent just under $1.3 million on exploration in the December half, which yielded results including 10m at 3.61g/t gold in composite sampling at Bunjarra and 36m at 1.55g/t at Bluetooth.

Solstice said its strong financial position gave it flexibility to “expand and refine its asset base”.

“The company continues to review a number of advanced and greenfield gold and/or copper opportunities,” it said last week.

Yesterday, Solstice announced the acquisition of the Nanadie copper-gold project from Cyprium Metals (ASX:CYM) for $1 million cash and up to 6 million shares.

And a few to watch…

The clock is ticking on CZR Resources' (ASX:CZR) $102 million sale of the Robe Mesa iron ore project to China’s Miracle Iron Resources.

The transaction has been dragged out due to delays in receiving Foreign Investment Review Board approval, with the current deadline February 28.

CZR said it was in discussions with Miracle Iron and other parties regarding other funding and transaction structures if FIRB approval wasn’t received.

Lithium Energy may have closed December with only $1.6 million in the bank, but it is progressing the US$63 million sale of its Solaroz asset in Argentina to CNGR Advanced Materials Co.

The company’s shares are suspended from trading but it plans to look for new opportunities in the battery minerals space.

Back in the Pilbara, Kairos Minerals (ASX:KAI) had $12.3 million in cash at the end of December and is set to receive a further $10 million from Pilbara Minerals this year from the sale of non-core tenements.

The company is progressing the Mt York gold project but said it continued to explore new opportunities.

Finally, Alicanto Minerals (ASX:AQI) is in discussions with potential strategic partners regarding its Greater Falun polymetallic project in Sweden.

A member of the Steve Parsons stable of companies, which includes 2024 success stories FireFly Metals (ASX:FFM) and Andean Silver, Alicanto recently appointed geologist and former Macquarie banker Ben Palich as head of corporate development, who is leading the charge on assessing base and precious metals acquisition opportunities.

At Stockhead, we tell it like it is. While GWR Group, Indiana Resources and Kingsrose Mining are Stockhead advertisers, they did not sponsor this article. 

Originally published as Cha-ching! The juniors sitting on fat bank balances