Resources Top 6: Gold explorers look for proof in the pudding as prices get drill rigs moving

Gold juniors are catching the wave of high prices, drilling down in the hunt for new discoveries as investors catch a case of gold fever.

Drilling is basically mining's version of Steak or Cake. Pic: Getty Images

• Dundas and Kali Metals rise as gold exploration pulls in the punters

• Rusty Delroy favourite Stellar Resources catches the eye

• Koonenberry Gold, Core Lithium and Alliance Nickel lifting on no news

Your standout small cap resources stocks for Tuesday, January 21, 2025.

DUNDAS MINERALS (ASX:DUN)

When it comes to mining and exploration the proof is in the pudding, and that pudding is of course the drillbit. Nothing can really be relied upon as gospel until assay results are returned from the lab.

Rebadged as a gold explorer, the junior has seen its fortunes shaped more positively this time around from some lab assays.

Key to its plans now is the Rockland mining lease at the Windanya gold project, which sits around 60km north of Kalgoorlie and, handily, 15km north of Zijin's Paddington Mill. Operated by its Australian subsidiary Norton Goldfields, the mill is known to be hungry for third party ore – a good wicket for nearby juniors who don't need a standalone discovery to find a worthwhile deposit.

It now has multiple 'high-grade' gold assays across a 1km trend at Rockland, a term which is always in the eye of the beholder.

Some of those highlights from the maiden RC drilling campaign, with assays broken down into 1m samples, include:

• 6m at 3.3g/t gold from 78m, including 1m at 7.5g/t from 78m, 1m at7.1g/t from 83m (24RKRC005)
• 5m at 2.3g/t gold from 109m, including 1m at 8.1g/t from 113m (24RKRC013)
• 2m at 5.6g/t gold from 74m, including 1m at 9.4g/t from 74m (24RKRC015)
• 2m at 2.8g/t gold from 130m, including 1m at 5.2g/t from 130m (24RKRC022)
• 1m at 14.9g/t gold from 80m (24RKRC015)
• 9m at 1.4g/t gold from 69m (24RKRC012); and
• 5m at 1.4g/t gold from 65m (24RKRC019).

The results confirm the findings from 4m samples received in December, and come around two weeks ahead of the expected return of assays from the Baden Powell gold project.

"As indicated by the assay results from the initial 4-metre composite samples, results from these 1- metre samples confirm the presence of wide-spread gold mineralisation within the granted Rockland Mining Lease. In many instances the mineralisation is at relatively shallow depth (100 metres or less), with some very nice high grade results returned in several holes – up to 14.9 grams per tonne," Dundas MD Shane Volk said.

"Three dimensional modelling of these latest results is in progress. The latest drilling results, combined with available historical drill data within the lease will enable us to make an updated interpretation of the mineralisation trend and develop an exploration model to assist with the planning of further exploration both within the highly prospective M24/974 and the broader Windanya gold project area."

The recent drilling is the first to test deeper than 50m at Rockland, which was previously assessed with cheaper, shallower rotary air blast drilling in the 1980s, with only the only substantial modern drilling coming at Windanya North, to the south of the property.

Dundas has an option to acquire the lease outright before October 6 this year via the payment of $100,000 to its current owner Rockland Pty Ltd.

KALI METALS (ASX:KM1)

Kali listed a couple years ago with much fanfare after extracting the lithium exploration tenure from Karora Resources and Kalamazoo Resources (ASX:KZR) in an IPO that collated one of the largest packages of pre-resource lithium tenure in the country.

Now, with lithium prices still in the doldrums, KM1 has turned its focus to gold, where prices continue to threaten record highs at US$2724/oz.

It says an analysis of historical soil samples has increased the scale of a gold anomaly by 80% from 5.1km to 9.5km of unabridged strike at its Marble Bar project in the Pilbara.

Less than 1km of the gold in soil trend has been mapped in the field, though two prospects with gold bearing veins called Tiger and Sherman have been spied with quartz veins measuring up to 7m in width, 120m long and 4g/t gold at surface.

The project is among the ground fully owned by Kali and not covered in a JV with SQM, one of the world's top lithium producers.

Kali's focus has shifted since May last year when Paul Adams stepped into the role of managing director. A former head of research at DJ Carmichael before its acquisition by Shaw and Partners, Adams famously led Spectrum Metals from a micro cap rare earths explorer to a $208m takeover by Ramelius Resources (ASX:RMS) on the back of its high grade Penny discovery in WA's Mid West.

“We are extremely pleased with the gold soil sample assay results," Adams said on Tuesday.

"The cumulative length of the anomaly is exciting at 9.5 km, and so far, we have mapped only 10% of that length in the field. The trend of the main soil anomaly matches the orientation of discovered quartz veins already recorded at both the Tiger and Sherman prospects, giving us confidence in the soil results.

"Now that the Christmas break is behind us, we are scheduled to recommence the field work and continue ground-truthing the entire soil anomaly during Q1 2025. This is expected to identify and define potential drill targets. In light of these promising results, Kali is shifting its primary focus at Marble Bar to gold exploration, with lithium remaining an important but secondary focus.”

STELLAR RESOURCES (ASX:SRZ)

(Up on no news)

If you haven't yet, go check out our exclusive column Counter Cycle with Nero Resource Fund founder and co-manager Rusty Delroy, whose first monthly chat with Stockhead took readers down the rabbit hole of the supply constrained but relatively under-the-radar tin market.

Read: Counter Cycle: Contrarian resources investor Rusty Delroy says 'quiet critical mineral' tin speaks the loudest

His favourite junior in the tin space is Stellar, relatively unsurprising given Nero's roughly 15% stake in the stock, which holds the Heemskirk project near established producer Metals X's (ASX:MLX) Renison Bell mine in Tasmania.

But it's not only Nero in the fray, with a large proportion of the $37m junior's support coming from institutional quarters – Paradice and Regal Funds are backing it from the east coast.

Heemskirk contains a mineral resource estimate of 7.48Mt at 1.04% Sn for 77,870t of contained tin, considered the highest grade undeveloped project in Oz and the third highest grade globally, with a PFS on the way.

“There’s a high quality management team – Simon Taylor, Andrew Boyd and Mark Connolly, that’s the ex-Papillon team – you’ve got an already healthy scoping study, low capex of $70m doing just under 2000tpa of tin,” Delroy said in Monday's interview.

“The NPV was $150m at a US$30,000/t tin price, which is spot today, and the real key here is we think come the dropping of the PFS in the back half of the year we could see this project significantly improve.”

Delroy thinks with the introduction of ore sorting technology and incorporation of higher grade drill results, SRZ could push its production rate to ~3500tpa in the PFS. It remains to be seen how that measures up to the expectations of its biggest investor.

KOONENBERRY GOLD (ASX:KNB), CORE LITHIUM (ASX:CXO) and ALLIANCE NICKEL (ASX:AXN)

(Up on no news)

Koonenberry is in an intriguing position in New South Wales, where the world's top gold miner Newmont, owner of the enormous Cadia mine, is in league with the junior looking for the next major copper and/or gold discovery in the state.

While Newmont has started drilling at the Junee JV, KNB also announced the results of  early field work on its Prince of Wales prospect in the Lachlan Fold Belt, where it's identified a 4km long gold trend.

KNB is attempting to make the 100% owned project drill ready this year.

Stellantis-backed Alliance came out with a DFS late last year on its NiWest project, a large nickel and cobalt laterite located near Glencore's Murrin Murrin, one of only two WA nickel mines still operating after last year's price crash.

Leveraging an ore reserve of 84.7 Mt at 0.94% nickel and 0.06% cobalt, the mine could produce 20,000tpa of nickel metal and 1600tpa of cobalt metal in a sulphate form but at lowest quartile all in sustaining costs of US$4.84/lb over its first dozen years of life. But it would cost around $1.65 billion to build, highlighting the challenges western developers face to enter a market now dominated by partly Chinese backed suppliers in Indonesia.

There have been some positives for nickel stocks in recent weeks, with three month LME prices rising from ~US$15,000/t to over US$16,000/t amid reports Indonesia could cut around 35% of mined supply by restricting the issuing of yearly mining permits called RKABs.

That doesn't mean it will reduce refined supply by the same amount if such an ambitious restriction were to be made. Refiners used stockpiles and imported laterite ore from the Philippines to make up the shortfall in 2024, Macquarie nickel expert Jim Lennon told Mining.com.

Nickel market surpluses have been forecast to fall from 195,000t in 2024 to 60,000t this year by Macquarie.

Also rising late in the trade was Core Lithium (ASX:CXO), which may have drawn some speculative interest after $1.7bn lithium miner Liontown Resources (ASX:LTR) posted a better than expected December quarter result. Core is the next largest Aussie lithium stock on the bourse with realistic mining prospects, having put its Finniss mine in the NT into care and maintenance in 2024.

While spodumene prices have been improving slightly and Liontown generating close to $17m in cash from its operations, Core's Finniss was higher cost and will need incentive prices well beyond current SC6 levels of US$895/t to head back into production.

Originally published as Resources Top 6: Gold explorers look for proof in the pudding as prices get drill rigs moving