Resources Top 5: Battle heats up for CZR and its iron ore riches

Competition for the 98.4Mt Robe Mesa project iron ore resource of CZR Resources has heated up with the Robe River Joint Venture led by iron ore giant Rio Tinto joining the fray.

A Rio Tinto-led consortium has joined the competition for the iron ore resources of CZR Resources. Pic: Getty Images

• The Rio Tinto-led Robe River Joint Venture has made an offer for the Robe Mesa project of CZR Resources

• Akora Resources is progressing pre-development work at its Bekisopa iron ore project in Madagascar 

• GreenHy2 has signed a key contract with European technology supplier H2Cor

Your standout small cap resources stocks for Friday, March 21, 2025.

CZR Resources (ASX:CZR)

Competition for the 98.4Mt Robe Mesa project iron ore resource of billionaire prospector Mark Creasy’s CZR Resources has heated up considerably with the Robe River Joint Venture led by iron ore giant Rio Tinto joining the fray.

While the non-binding and conditional offer from the JV is only for the Robe Mesa project, in contrast to offers from Fenix Resources and Gold Valley Iron Ore for all of CZR, it values the project near Rio’s Robe River hub at $75m.

This is above CZR’s market cap of about $66m and would see CZR will retain its Croydon gold project, Buddadoo project and 50% stake in the Ashburton Link project.

This offer is not to be sneezed at and it is little wonder that CZR’s board has determined that this offer is a potential superior proposal and will engage with the JV.

As this engagement occurs, CZR directors continue to unanimously recommend that CZR shareholders accept Fenix’s takeover offer which values CZR at 30c per share.

Since fielding the Fenix offer on February 25, 2025, aimed at combining Fenix’s vertically integrated iron ore business in WA’s Mid-West with CZR’s large-scale Pilbara assets, FEX had accumulated 12.64% of CZR by Thursday afternoon.

Another bid for CZR was received from Gold Valley Iron Ore on March 19 and this non-binding, indicative and conditional offer valued CZR at 31c per share.

The Robe River JV offer certainly throws a spanner in the work as it implies that the current suitors may be undervaluing CZR.

Although iron ore is trading at about US$105.08 per dmt and prices have fallen appreciably since the start of 2024, dropping from more than US$140/t, and the recent half-year reports of many players were somewhat disappointing, there has been plenty of activity on the M&A front.

FMG kicked off the year’s consolidation rush, paying ~$250 million for Red Hawk Miningand its Blacksmith project, a deal that merged two deposits into one and will deliver higher grade ore to its 75Mtpa Solomon Hub and rail network, just 30km away.

Another deal sees Mitsui paying entities associated with descendants of prospecting pioneer Peter Wright US$5.3bn ($8.4bn) for a 40% stake in Rhodes Ridge, the high-grade 6.8Bt deposit Rio intends to make the centrepiece of its Pilbara iron ore network.

Rio will own 50% of the mine with Mitsui holding 40% and the Wrights 10%. At an initial nameplate of 40Mtpa, the Japanese trading giant estimates it will rake in US$659m in cash flow a year, rising to as much as US$1.65bn should the operation later expand to 100Mtpa.

The posturing for CZR shows that it’s also at the smaller end of town where juniors are looking to add scale that will help weather periods of lower prices.

Akora Resources (ASX:AKO)

An iron ore explorer positioned for growth is Akora Resources through its Bekisopa project in Madagascar which has a resource of 10.6Mt at 54.8% iron including a high confidence indicated DSO resource of 6.6Mt at 59.7%, comparable to grades mined at a number of deposits in WA’s Pilbara.

As the next step towards development of the flagship asset, AKO is set for a pre-feasibility report and is confident of positive outcomes.

Madagascar’s economy is heavily reliant on mining and a Revised Mining Code approved in late July 2023 reflects this with royalty rates of 5% for direct shipping ore material, which compares to 7.5% in Western Australia.

Mining is certainly not new for the island nation and its mineral endowment previously attracted major miners with Rio Tinto and the Sumitomo-Korea Resources-SNC-Lavalin consortium notable examples.

AKO was an early mover after acquiring a 75% stake in Bekisopa in June 2014 before gaining the remaining 25% in July-August 2020 and defining a maiden inferred resource of 194.7Mt in 2022 with very low levels of impurities, making it suitable for production of a premium iron concentrate.

This included 110.2Mt at 32% iron in the Southern Zone, which covers the surface weathered zone and the underlying extensive magnetite resources.

Drilling in 2022, 2023 and 2024 led to the definition of the DSO resource with additional exploration along the 6km strike expected to add further to this as less than 50% of the known 6km strike has been drilled.

A 2023 scoping study highlighted that an initial five-year DSO operation producing up to 2Mtpa could deliver an attractive net present value and internal rate of return – both measures of profitability – of US$125m and 64% respectively.

Cash costs were estimated at US$42 per wet metric tonne while payback is expected in 2.1 years.

Bekisopa’s DSO credentials are well-earned. Testwork late last year on 12 representative samples from across the deposit showed that an average 62% iron product was made up of 29% lump product with an average grade of 65% and 71% fines grading 61% iron.

This shows the high-grade potential for the DSO from the near-surface weathered zone mineralisation. Lump products generally garner a premium over fines because they do not require a sintering step at the steel mill.

It also supports earlier work investigating rock hardness and abrasion characteristics which found that Bekisopa material has a below average crushability classification meaning it is very easy to crush as well as being either non-abrasive or slightly abrasive.

What this means is that less energy is required to break the rocks, which should result in lower wear on mining and processing equipment, reducing potential operating and maintenance costs and reducing the crushing and screening equipment size.

Greenhy2 (ASX:H2G)

A significant mover has been GreenHy2 which surged more than threefold to 2.5c, a new high of almost two years, on signing a key contract with European technology supplier H2Core.

This will see H2G provide leading edge storage solution technologies as part of a series of new technology negotiations in progress. 

The new technology arrangements provide a significant number of advantages over previous technologies in price and commercial readiness. 

These technologies include new leading edge Supercapacitor Batteries and Hydrogen technologies.

The agreement includes access to advanced battery storage systems and in particular supercapacitor-based solutions that are competitive on a capex basis to traditional Li-Ion batteries.

They have much lower operating costs and significantly longer life of at least five times. 

The new battery solutions utilise Graphene Supercapacitors and are now commercially competitive due to revolutionary low-cost manufacturing techniques. 

The reduction in cost for the graphene-based 100% supercapacitor battery solution provides the benefits of Li-Ion and hydrogen combined without the disadvantages. 

As the batteries are 100% supercapacitor they also significantly outperform hybrid batteries (partial supercapacitor and partial Li-Ion).

Supercapacitor batteries and LP hydrogen storage solutions both have their place in providing storage and where supercapacitors will replace Li Ion solutions, hydrogen is still well placed to provide seasonal energy storage shift due to virtually nil self-discharge rate.

Trigg Minerals (ASX:TMG)

Antimony is a critical element attracting plenty of attention due to its use as an alloying element for which it is increasingly being used in the semiconductor industry.

Additionally, antimony is used in a variety of military applications, including night vision goggles, explosive formulations, flares, nuclear weapons production and infrared sensors. 

Trigg Minerals, which has antimony and gold prospects in northern NSW, is expanding its interests after signing a binding agreement to acquire the Nundle, Upper Hunter and Cobark/Copeland projects, conditional upon completion of due diligence.

Covering 1,039.7km2, these projects will be developed as Trigg’s second flagship exploration asset behind its primary, advanced stage high-grade Wild Cattle Creek deposit. 

It will have two exploration teams advancing these new projects and Wild Cattle Creek simultaneously.

This package includes five historical antimony deposits, with rock chips grading 61% and 9.7% antimony, and 12 tonnes of recorded production, plus a 37% Sb sample collected from 12m down adit indicating potential mineralisation at depth.

The tenements also feature 60+ historical gold mines/occurrences across each tenement with historical recorded high-grade production. 

“The acquisition of the Nundle and other projects marks an exciting expansion for Trigg

Minerals into historically productive goldfields with strong critical mineral potential,” Trigg Minerals executive chairman Tim Morrison said.

“The presence of both gold and antimony in this underexplored region aligns perfectly with our focus on high-value, strategically significant minerals. 

“We look forward to applying modern exploration techniques to uncover new opportunities within this proven mineral province.”

Carnaby Resources (ASX:CNB)

Moelis Australia has given copper-gold project developer Carnaby Resources a ‘Buy’ rating and set a target price of 75c, well in excess of its current price of 32c.

This follows the company’s results for the first half of FY2025 which resulted in EBITDA for the Grand Duchess project in northwest Queensland being adjusted to $4.5m, down from $5.9m, and adjusted NPAT to $4.4m from $6.0m.

Moelis said in its research report that financial results for developers like CNB tended to be of limited significance. 

The variance in EBITDA and Adjusted NPAT was primarily due to marginally higher corporate costs and share-based payments, Moelis said.

“The first half of FY25 was productive, with material progress toward first production at Duchess. The standout development was securing a long-term processing agreement with Glencore, which also saw Glencore take a cornerstone position in the company.

“The other major event in the half-year was the acquisition of Trekelano, which boosts the company’s pro-forma mineral resource to 27Mt at 1.5% CuEq for 400kt CuEq and expands the footprint in a region with significant potential to utilise latent infrastructure, with initial commentary indicating scope to fast-track Trekelano, given minimal permitting hurdles owing to prior operations.”

Moelis concluded that CNB had capitalised a region that had suffered from insufficient investment over the last 20-30 years. 

“Now, the business has outlined a pathway to production and has secured key offtake agreements for a development which will require very modest capital to establish open pit operations (no processing facilities required), with such a development delivering a relatively quick payback (we estimate 77% IRR). 

“In this regard, CNB stands out from peers in a similar stage in development, particularly in an environment where funding new projects from the ground up is becoming increasingly challenging.”

This article does not constitute financial product advice. You should consider obtaining independent financial advice before making any financial decisions. 

Originally published as Resources Top 5: Battle heats up for CZR and its iron ore riches