Resources Top 5: ASX Mali gold names see interest

Is the worst over for Mali gold miners? Bets today on ASX gold names suggest some investors may think so.

Toubani is down 29% over a month but up 15% on Wednesday. Pic: Getty Images

• Punters lift bets on Toubani and Resolute despite Mali gold drama

• Australian Gold and Copper hits more silver and gold at Achilles

• New Peak and Saturn up on no news

Your standout small cap resources stocks for Wednesday, December 18, 2024.

TOUBANI RESOURCES (ASX:TRE) and RESOLUTE MINING (ASX:RSG)

(Up on no news)

Yesterday, Barrick Gold issued the latest salvo in an ongoing saga between western gold producers and the Malian state.

Run by a military junta, the West African nation has shifted the dial over the past two years, first introducing a mining code that would give the country effective control over 35% of foreign-owned mining projects.

It then ratcheted up the pressure by detaining executives from western miners, notably Resolute Mining CEO Terry Holohan, now on a leave of absence after the London and ASX-listed gold miner agreed to pay US$160 million to "settle a tax dispute".

Barrick, also being chased up for what Mali says are back taxes, yesterday said it had been unsuccessful in arriving at a final resolution "despite numerous good-faith attempts to negotiate and a willingness to compromise beyond its legal rights".

At hand is the fate of Loulo-Gounkoto, one of Africa's largest gold mines.

"Barrick’s proposals toward a Memorandum of Agreement, which included significant concessions, have not been meaningfully considered and have been rejected by the Government of Mali," Barrick said in a statement.

"Even though the 2023 Mining Code has no application to existing operations such as Loulo-Gounkoto, the government insists on forcing Loulo-Gounkoto under the framework of that Code.

"Local operating conditions have deteriorated significantly with employees imprisoned without cause and gold shipments blocked.

"If shipments remain suspended, Barrick will be compelled to suspend operations, further impacting the viability of this critical economic driver for Mali."

According to Reuters a ministry of mines official said the negotiations were continuing. Those negotiations are highly leveraged, given Mali has put out an arrest warrant for Barrick CEO Mark Bristow and, according to Barrick, has imprisoned senior members of its in country team "on unfounded charges".

Where does this game of jurisdictional risk and reward play in for Aussie investors?

If you're betting this is the worst you may have appetite enough to make some very contrarian bets. Whether true or not, the saying does go: it's always darkest before the dawn.

Toubani could be seeing that today. Owner of the +2Moz Kobada gold project, a surefire development prospect if it were across the border in Cote d'Ivoire, by all accounts those in the know like the deposit.

Down 29% over a month as its more advanced neighbours came under pressure from Assimi Goita's junta, $35m capped Toubani's shares lifted 15.4% today as punters bet on the whole thing not getting any worse.

TRE said late last month it was engaging in discussions with Mali on Kobada's development and, not being a producer, had no tax disputes with the state.

Resolute meanwhile appears to be through the worst for now. Up ~8% today, it will move the Syama mine over to the 2023 mining code in 2025. That will see corporate income tax lift from 25% to 30%, fuel duty exoneration expire, and royalties based on a sliding scale, with a 10.5% rate above US$2500/oz.

Ownership of the mine will continue to be 80% in Syama and 20% with the Mali state via a preference share interest.

SATURN METALS (ASX:STN)

(Up on no news)

Stalled after the death of a drilling contractor onsite earlier this month, focus in the market is shifting back to Apollo Hill's resource potential.

Investors are now looking ahead to STN's next resource upgrade, an interim upgrade to the 1.84Moz orebody to be compiled off the back of over 9000m of extensional drilling completed before October 28.

Grading around 0.6g/t, the resource near Leonora is extremely low in grade by WA standards.

But should the economics stand up, the project would be processed via heap leach methods, a cheaper processing technique common for low grade gold resources mined close to surface.

Close to half of the world's gold production, though little in WA, is mined via heap leach methods.

AUSTRALIAN GOLD AND COPPER (ASX:AGC)

Australian Gold and Copper lit up the ASX earlier this year, surging from under 10c to a peak of 56c after announcing the discovery of the polymetallic Achilles prospect in New South Wales' Cobar district.

Like a Guinness awaiting an attempt from a skiving college freshman to Split The G, the froth has subsided somewhat.

At 18c, AGC is trading around a third of its highs, though still 150% up YTD.

The latest results from Achilles included a diamond drill hit of 27m at 1.4g/t gold, 241g/t silver and 1.9% lead and zinc.

The headline says 2.9kg to the tonne of silver, though this is just for a 1m section at 1.6g/t Au and 2910g/t Ag.

AGC does say strong silver, gold and base metals results came from other holes, though these were less impressive than A3DD008.

A3DD007 hit 25m at 0.5g/t Au, 89g/t Ag and 1.4% Pb+Zn, with A3DD005 hitting 28m at 0.2g/t Au and 99g/t Ag. There are higher grades of all those metals in intercepts contained within those hits.

Where Achilles stands is that silver mineralisation has been extended 300m down dip of previously known areas with three more diamond holes to be reported early in the new year.

"The latest diamond results from this area support the exceptional reverse circulation results returned earlier in the year, confirming the presence of a coherent, shallow high-grade zone," MD Glen Diemar said.

"Remarkably, this zone of greater than 10 gram metres gold and greater than 1,000 gram metres silver now extends laterally for over 500m. Achilles is certainly a thrilling high-grade discovery, which is growing with each drill program.

“We are also starting to see some of the deeper holes returning strong silver, which has increased the mineralised vertical extent past 300m. Further to this, the deposit is open laterally and at depth which is very pleasing and sets the growth scene for our next programs starting shortly in 2025."

NEWPEAK METALS (ASX:NPM)

(Up on no news)

NewPeak Metals this month announced a deal to acquire the Allaru vanadium project in the Julia Creek province of Northwest Queensland.

The deal for the project, which has inferred resources on it, is due to be completed in February next year.

But excitement is already evident for players in the region, with Japanese coal mine owner Idemitsu announcing it had spent $75 million to take a majority 51% stake in nearby Vecco Group.

Its own Vecco Critical Minerals Project comes with a $798 million price tag, with Idemitsu hoping to start work in 2026 to construct a new vanadium mine to be operated from late 2027.

Largely used in steelmaking, vanadium use is growing in batteries, with vanadium redox flow batteries emerging as an alternative to lithium ion in grid and household energy storage applications.

Vecco would produce 8700t of vanadium annually along with 4000tpa of high purity alumina and 600tpa of molybdenum over 28 years.

"Fundamental to the energy transition and one of the most strategically important critical minerals due to its applications in energy storage, steelmaking and clean energy technologies, vanadium will catalyse the world’s development of sustainable energy technologies," Idemitsu Australia CEO Steve Kovac said.

"The growing demand for vanadium flow batteries highlights its importance in enabling long-duration, large-scale energy storage and advancing lightweight, high-strength materials that drive the technologies of the future."

Originally published as Resources Top 5: ASX Mali gold names see interest