Resources Top 5: Cobar Basin delivers surprise gold find, and nickel’s looking premium in Finland

Eastern Metals finds gold and base metal mineralisation in the first three holes at the new Kelpie Hill target in NSW’s Cobar Basin. Read more in our resources wrap.

Pic: Getty Images

• Eastern Metals hits 7m at 4.3g/t gold at Kelpie Hill

• Nordic Nickel produces premium nickel concentrate in Finland

• Pearl Gull Iron, Black Dragon and Venus Metals Corporation up on no news 

Here are the biggest small cap resources winners in morning trade, Wednesday, October 23. Prices accurate at the time of writing.

Eastern Metals (ASX:EMS)

Explorers like EMS are hustling back into NSW’s Cobar Basin, one of Australia’s major copper-producing regions since the late 1800s, with new tech to delve into historical deposits that haven’t been given a makeover in yonks.

While Australian Gold and Copper’s (ASX:AGC)high-grade Achilles discovery has been causing a ruckus, work at EMS’s Cobar project is proving a success with  reconnaissance drilling returning 7m at 4.3g/t gold in the oxide zone.

As well as gold, the drilling program uncovered base metal mineralisation in the first three holes within the new Kelpie Hill target, indicating the enormous discovery potential.

EMS CEO Ley Kingdom said the high-grade gold zone in the first hole was somewhat of a surprise, given that Kelpie Hill was primarily a base metals target.

“This is an exciting development,” he said.

“While we are still in the process of evaluating the results and working out the geological context and significance of what we have seen in the first three holes at Kelpie Hill, the key takeaway for investors is that this is a highly complex, mineralised system.

"With results pending from the remaining holes, and an IP survey starting shortly, it’s definitely a case of ‘watch this space’.”

Nordic Nickel (ASX:NNL)

Metallurgical results at NNL’s Hotinvaara project in northern Finland have demonstrated that the lower-grade disseminated nickel sulphide mineralisation is amenable to conventional processing and can produce a premium concentrate.

According to the company, a master composite of 11 samples produced a clean concentrate of 18.4 per cent nickel and 0.66 per cent cobalt after Locked Cycle Testing.

On average, NNL said the nickel recovery was 62 per cent during a first pass program, which employed a straightforward, conventional grinding and flotation process, while the cobalt recovery averaged 51 per cent.

Hotinvaara’s metallurgical properties compare favourably with similar lower-grade nickel sulphide deposits currently under development in Canada and bodes well for the rest of the Pulju Belt project area.

Pearl Gull Iron (ASX:PLG)

(Up on no news)

This tiny sub-$5m market capped explorer is up on no news other than Tuesday's notice of an upcoming annual general meeting of shareholders, which will be held on November 21.

In August, the company terminated the acquisition of Huemul Holdings and decided it wasn’t in its best interests to farm-in to the La Marigen rare earth project in Chile due to current market sentiment and headwinds in the market price for rare earth elements.

Rare earth prices fell almost 70 per cent from a peak in February 2022 to August this year due to a glut in supplies.

In early 2022 neodymium-praseodymium oxide prices climbed above $US175/kg. Now the metals used in EV motors, wind turbines, defence and consumer electronics are worth $US59.25/kg, levels at which few producers are making money and largely unattractive for commercial lenders.

La Marigen covered an area of 22,800ha (228sq km) along the coast of Chile in the Maule and Ñuble Coastal regions, about 350km south of the capital Santiago.

These regions have recently been identified as being highly prospective for IAC REEs bearing mineralised systems. NeoRe has been conducting surface exploration and testwork across the region for the past three years.

Black Dragon (ASX:BDG)

(Up on no news)

BDG is focused on building its high-grade, 1.5Moz Salave gold project in northern Spain, where a laborious approvals process is currently underway.

A 2019 PEA – the equivalent of a scoping study – envisaged a ~80,000ozpa operation over an initial 14 years.

Based on a super conservative gold price of $US1250/oz, the mine would yield an after tax NPV (5 per cent, bit low maybe) and IRR of $US230m and 25 per cent, respectively.

At current prices around $US2747/oz those numbers jack up considerably.

Venus Metals Corporation (ASX:VMC)

(Up on no news)

Yet another mining junior up on no news on Wednesday, except for an upcoming annual general meeting of shareholders on November 28.

Last month the $12.36m market cap explorer received an application from the company’s major shareholder, QGold, for 6.4m fully paid ordinary shares to raise $416,000.

QGold is controlled by Christopher Wallin, a Queensland billionaire and former chief coal geologist for the Queensland government before starting his company, QCoal, in 1989 and developing coal mines in the Bowen Basin.

VMC is planning to conduct follow-up ground electrical surveys at the Copper Hills project in WA to test for the potential presence of sulphides before drill testing.