Resources Top 5: Takeover whispers add lift to cashed-up goldie PDI

Gold hunter PDI climbs on $69.2m placement amid reports of the company’s large M&A appeal.

Pic: Getty Images

• PDI climbs on $69.2m placement 

• WA1 shares surge on first conversion testwork results 

• ASE finds new zone of lithium at Red Mountain 

Your standout small cap resources stocks for Tuesday, February 4, 2025.

Predictive discovery (ASX:PDI)

West African gold play PDI has received a boost in confidence from two heavyweight investors – the Lundin Group family and Zijn Mining group – following a strategic $69.2m private placement to advance the Bankan gold project.

The Bankan asset is already West Africa’s biggest gold discovery in a decade with 5.38Moz defined to date across the NEB and BC deposits.

A 2024 pre-feasibility study outlined a 269,000oz per annum mining operation over 12 years, as well as a maiden ore reserve estimate of 3.05Moz.

The Lundin family will invest $45.1m to acquire a 6.5% stake while China’s Zijin Mining will invest $24.1m to gain a 3.5% stake.

PDI’s managing director Andrew Pardey said the capital raise provides a strong financial platform for the company as it moves its definitive feasibility study towards completion.

“PDI will be fully funded through to a development decision and will also be able to conduct selected early works and continue our regional exploration programs,” he said.

Canaccord placed a ‘speculative buy’ recommendation on PDI last month after the company received approval of the Environmental & Social Impact Assessment (ESIA), marking a key de-risking step for the asset.

The financial services firm believes the Bankan project boast large M&A appeal, given Perseus Mining owns 19.9% of the stock.

“Approval of the ESIA and granting of the Exploitation Permit only serves to heighten M&A appeal,” Canaccord analysts Paul Howard and Reg Spencer said.

“We suspect that there are other groups waiting in the wings for these approvals and expect potential takeovers to become competitive in 2025.”

While granting of the exploration permit over Bankan remains outstanding, the two believe it will occur before the end of the March quarter.

Apollo Minerals (ASX:AON)

(Up on no news)

Apollo Minerals is one of several ASX companies presenting at 121 investor forum, previously a competing side event to the main Indaba conference and is typically a must attend for any ASX-listed miner or explorer with a project on the African continent.

The company owns the Salanie gold and Kroussou zinc-lead assets in Gabon.

Drilling at Salanie during the December quarter returned exceptional results in an area that has seen no exploration or modern drilling in 70 years, with shallow high-grade gold intersected at the A1 prospect and returning 11.7m at 4.3g/t gold from 9.6m.

AON believes there is significant potential for an emerging gold discovery across the 12km-long, highly prospective Salanie greenstone belt.

The Kroussou project covers 2,363.5km2 within the Ngounié Province of Western Gabon, featuring shallow, flat-lying, broad sections of zinc rich mineralisation over more than 135km of strike length.

AON has already defined 23 identified zinc-lead target prospects, only six of which have been drill tested to date.

WA1 Resources (ASX:WA1)

West Arunta explorer WA1 has received the first conversion testwork results carried out on refined concentrate from the Luni deposit.

The ferroniobium sample delivered 65.7% niobium and 24.3% iron, demonstrating the final stage in a conventional process flowsheet and completing proof-of-concept test work to produce ferroniobium.

A broad range of metallurgical testwork and studies are ongoing across the beneficiation, refining and conversion processing stages, along with testwork to assess the production of other high-value niobium products.

WA1 managing director Paul Savich said the company is also progressing beneficiation testwork on drillhole samples from a broader area of the northeastern focus zone with the aim of defining an envelope of mineralisation that supports its development ambitions.

Medallion Metals (ASX:MM8)

(Up on no news)

While capital raisings are typically part of the recipe for improving share prices, when a major player increases its already significant stake in a smaller company, conventional wisdom tends to fall apart.

Alkane (ASX:ALK) pumped in >$1m in MM8 under the latter’s $6.5m raising at 10c per share, taking its interest in the junior up to 6.3%.

Funds will be used to complete a bankable feasibility study, as well as progress permitting activities for the development of MM8’s Ravensthorpe gold project.

Ravensthorpe has a resource of 1.6Moz gold and an exclusivity deed with IGO to repurpose its concentrator from the mature Forrestania nickel mines, which shut due to low prices and falling reserves.

Astute Metals (ASX:ASE)

Recently completed geological mapping and rock chip sampling at the Red Mountain lithium project in Nevada, USA, has unearthed a new zone of lithium bearing clay-rich rocks with lithium grades of up to 2,100ppm.

The asset now boasts two  priority rocks units for future drilling targeting, Unit J – a claystone and siltstone dominated rock type located in the west of the project area – and the newly defined Unit O.

ASE said the continuous nature of Unit O will underpin a maiden exploration target for the project and inform the drill targeting strategy for the first half of 2025.

The identification of a new high-grade lithium-bearing unit increases the project’s potential, paving the way for a maiden resource estimate in the second half of the year.