The uranium spot price has crossed a major threshold, surging past $100/lb in January 2024 to reach $106.51/lb in early February. This long-awaited milestone marks the first time uranium has hit triple digits since the bull run leading up to the 2008 financial crisis.
The implications of breaching $100/lb are significant for the uranium market. Prices at this level indicate the serious supply and demand imbalances that have characterized the market for years are finally coming to a head. With demand outpacing available supply from mines, traders see uranium poised for further gains still.
The main driver behind January’s price spike was a cut to production forecasts from Kazatomprom, the world’s largest uranium miner. The company stunned the market by announcing lower guidance for 2024 and 2025 due to shortages of a key chemical and construction delays. This reversal came just months after Kazatomprom had planned to boost output to meet rising demand. The supply uncertainty led uranium prices to immediately jump over 8%.
For investors, Kazatomprom’s about-face signals that the supply response to uranium’s bull run may proceed slower than expected. Mine expansions and restarts are lagging, with not enough incentive yet for substantial new production. The supply picture is further complicated by uncertainty around Niger’s uranium exports following a coup there last year.
Junior uranium miners have been the biggest winners from the bullish momentum. With less exposure to long-term contracts than larger producers, juniors are benefiting from the full upside of rising spot prices. Many have announced restarts of idled capacity to take advantage of the favorable pricing environment. Their outsized gains indicate investors see juniors playing a key role in bridging future supply shortfalls.
Reaching the $100/lb mark is a psychological victory for uranium bulls who have waited years for prices to reflect positive fundamentals. Nuclear energy demand is on the rise again amid its role in carbon-free baseload power. With most forecast models predicting large supply deficits opening up over the next decade, there is a growing sense $100/lb is just the beginning.
Past experience shows reaching this triple-digit territory is when utilities truly start getting worried about security of supply. The last time uranium crossed above $100/lb in 2007, it sparked a frenzy of long-term contracting not seen before or since. While contracting volumes picked up last year, they remain below levels to fully cover global reactor requirements.
Many see $100/lb as the price needed to incentivize meaningful new mine production. Bringing large-scale conventional projects online takes over a decade when factoring in permitting and construction. Even smaller ISR operations can take several years to expand. With demand projected to outstrip supply for years to come, prices above $100/lb may be the new normal rather than an unsustainable spike.
For investors, uranium crossing $100/lb should serve as a wake-up call that a structural bull market is unfolding. Uranium has significantly outperformed most other commodity sectors over the past several years. With demand still rising and enormous lead times for new projects, supply shortfalls won’t be reversed overnight.
Now is the time for investors to gain exposure before uranium potentially keeps running toward new highs. Uranium equities offer upside well beyond movements in the underlying commodity price. Juniors in particular stand to see valuations explode higher if they can continue locking in contracts above $100/lb.
While nothing moves up forever, the fundamentals underpinning uranium’s surge past $100/lb look here to stay. Nuclear reactors need reliable fuel supply. Achieving net-zero carbon emissions globally depends on nuclear generation ramping up. With mines struggling to keep pace, all signs point to the uranium bull market having ample room left to run at these levels and beyond.
The mining sector has experienced boom and bust cycles throughout history, but current trends suggest we may be entering a new era of growth and opportunity. With the world transitioning to clean energy and electric vehicles, demand is surging for key minerals like lithium, cobalt, nickel and copper. This creates an attractive investment case for the mining sector.
Historic Trends
Looking back, the mining industry has gone through periods of rapid expansion and painful contraction. During economic expansions and commodity bull markets, mining companies ramp up exploration, development and production to capitalize on high prices. This leads to oversupply and when demand eventually weakens, the cycle turns downward.
We saw this play out in dramatic fashion over the past decade. High prices in the 2000s encouraged massive investment in new mines and supply capacity. But when Chinese growth began to slow around 2012, demand weakened and prices collapsed. The mining sector was forced to drastically cut back on production and capital investment.
Many mining companies barely stayed afloat during this bust period. But this reduction in supply helped set the stage for the next upcycle. Now, after years of underinvestment, mines are depleting reserves faster than they are being replenished. With commodity demand picking up again, conditions are ripe for the next mining boom.
Current Market Trends
Several key trends suggest we are now in the early stages of a new mining upcycle:
Electric vehicle revolution – EV adoption is accelerating around the world, dramatically increasing demand for lithium, cobalt, nickel, copper and other key minerals. Total EV sales increased 70% in 2021 and are projected to rise more than 5-fold by 2030. This will require a massive increase in mineral supply.
Renewable energy expansion – Solar, wind and other renewables are seeing surging growth as countries aim to cut carbon emissions. This further increases metals demand for batteries, transmission lines, wiring and other components.
Supply chain vulnerabilities – The pandemic and geopolitics have exposed risks of relying on a few key countries for critical mineral supply. Governments are now focused on developing domestic mining capacity to ensure supply security.
Decarbonization efforts – Reaching net zero emissions will require a staggering volume of minerals for clean energy infrastructure buildout. Models estimate needing 30 times more lithium and 15 times more cobalt by 2040.
These trends all point to a pending boom in mining investment and production. The demand outlook has fundamentally shifted in a more positive direction.
For investors, this macro backdrop presents an opportunity to capitalize on the coming mining supercycle. Some ways to gain exposure include:
Lithium mining stocks – Lithium prices have skyrocketed 10-fold in the past two years as demand for electric vehicle batteries has soared. Leading lithium miners like Albemarle, SQM and Livent are seeing their earnings multiply. They are investing heavily to aggressively expand production capacity to ride the lithium boom. Their stocks still may have substantial upside given the tight supply and surging demand forecasts.
Nickel and cobalt miners – Clean energy technologies like batteries require vast amounts of nickel and cobalt. Both metals face looming supply deficits. Miners expanding production such as Glencore, Sherritt International and Giga Metals stand to benefit enormously from surging demand and higher prices over the coming decade. These miners offer some of the best leverage to capitalize on the EV battery revolution.
Copper miners – Copper is essential for global electrification and will be required by the millions of tons for EV charging networks, power grids, wiring and electronics. Leading copper miners like Freeport McMoRan, Southern Copper and First Quantum Minerals offer direct exposure to higher copper prices. Many are expanding production while also paying healthy dividends.
Diversified mining majors – Large diversified miners like BHP, Rio Tinto and Vale mine a broad mix of commodities from copper and iron ore to coal and potash. Their diversification provides stability while still benefiting from the overall minerals boom. These global giants pay some of the highest dividends in the market.
Junior mining stocks – Earlier stage mining companies developing new projects provide extreme upside potential leverage but also greater risk. Conduct thorough due diligence on management track record, finances, permitting status and feasibility studies before investing.
Physical gold and silver – Precious metals like gold and silver can provide a hedge against market volatility. Buying physical coins and bars or investing in ETFs offers exposure. Just a small allocation of 5-10% can help balance a portfolio.
Mining ETFs – Funds like the Global X Lithium ETF (LIT), VanEck Vectors Gold Miners ETF (GDX) and SPDR Metals & Mining ETF (XME) provide diversified exposure to mining stocks and commodities. This simplifies investing in the sector.
With mining poised to boom, investors have many options to position for the coming supercycle. As with any investment, proper due diligence and risk management remain critical. But the macro trends point to a bright future for mining stocks. For investors, now may be the ideal time to position for the coming mining supercycle.
Comstock (NYSE: LODE) innovates technologies that contribute to global decarbonization and circularity by efficiently converting under-utilized natural resources into renewable fuels and electrification products that contribute to balancing global uses and emissions of carbon. The Company intends to achieve exponential growth and extraordinary financial, natural, and social gains by building, owning, and operating a fleet of advanced carbon neutral extraction and refining facilities, by selling an array of complimentary process solutions and related services, and by licensing selected technologies to qualified strategic partners. To learn more, please visit www.comstock.inc.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Receipt of Final Permit. Comstock Metals received conditional approval from the Nevada Division of Environmental Protection for the processing of waste solar panels and photovoltaics in its new materials recovery facility in Silver Springs, Nevada. With the receipt of all required permits, Comstock Metals may now complete the installation of the process equipment, and test, commission, and start up the material recovery facility. The facility includes proprietary technologies for efficiently crushing, conditioning, extracting, and recycling metal concentrates from photovoltaics.
Supplier Commitments. Comstock Metals is receiving waste panels for processing and has commenced commissioning activities. Comstock Metals continues to secure supplier commitments and is experiencing greater than initially expected inquiries from many different sources of waste panels. Decommissioning end-of-life solar panels is accelerating in the southwest region of the United States where solar panels were adopted early. Because Comstock Metals will receive an upfront disposal fee for handling the end-of-life solar panels, Comstock Metals could begin generating cash flow with revenue recognized once the waste is processed and recycled.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
The mining sector has produced enormous wealth for investors who’ve managed to time the boom and bust cycles. Legendary investors like Robert Friedland, Ross Beaty, Lukas Lundin and Rick Rule have built fortunes by profiting from these fluctuations. Understanding their success stories can help guide investors looking to capitalize on the next mining upcycle.
Rick Rule – The Contrarian
Rick Rule pioneered a contrarian approach to mining investment. When others fled during downturns, Rule saw opportunity. He built expertise in natural resources first as a broker and then establishing Global Resource Investments in the 1990s.
Rule made fortunes by financing promising junior miners and explorers when markets were depressed. He helped fund their projects and acquisitions, earning stakes that paid off enormously when prices recovered. Rule exemplified patience in holding assets through slumps and rigor in evaluating companies.
For investors, Rule’s story highlights the potential of a contrarian mindset. The best values often emerge when sentiment is bleakest. Rule continues dispensing wisdom and seeking hidden gems, now as part of Sprott Inc.
Robert Friedland – The Visionary
Few capture the boom and bust nature of mining like Robert Friedland. The self-made billionaire got his start in mining by investing $50,000 to acquire an abandoned mine in Canada. He turned it into the wildly productive Voisey’s Bay nickel project that later sold for $4.3 billion.
Friedland replicated this formula across continents with Ivanhoe Mines, discovering major copper deposits in Asia and platinum reserves in South Africa. His eye for recognizing potential deposits before others has earned him the moniker of the “mining visionary.”
Ross Beaty – The Speculator
Canadian financier Ross Beaty took a more speculative approach to mining fortunes. In the 1990s, he bought cheap silver reserves in Bolivia that would become the basis for Pan American Silver, one of the world’s top producers.
When silver prices spiked in 2011, Beaty cashed out at the market peak – turning an initial $2 million investment into a $1 billion windfall. He replicated this success by speculating early on lithium miners in anticipation of surging electric vehicle demand.
Lukas Lundin – The Empire Builder
As the scion of a famous Swedish mining family, Lukas Lundin seemed destined for the industry. He helped grow the Lundin Group into a billion dollar mining empire through acquisitions and mergers.
Lundin acquired undervalued assets during slumps and consolidated them into larger firms like Lundin Mining when prices recovered. He also partnered with legendary explorers like Robert Friedland to help discover new deposits.
Positioning for the Next Supercycle
With the mining industry potentially on the cusp of a new supercycle, there are lessons to draw from these legends. Rule’s contrarian approach demonstrates the value of investing when others are fearful. Friedland’s discoveries show the vast potential still remaining. Beaty’s speculation reveals the leverage possible with junior miners. And Lundin’s empire reveals the power of diversification across the sector.
Defense Metals Corp. is a mineral exploration and development company focused on the acquisition, exploration and development of mineral deposits containing metals and elements commonly used in the electric power market, defense industry, national security sector and in the production of green energy technologies, such as, rare earths magnets used in wind turbines and in permanent magnet motors for electric vehicles. Defense Metals owns 100% of the Wicheeda Rare Earth Element Property located near Prince George, British Columbia, Canada. Defense Metals Corp. trades in Canada under the symbol “DEFN” on the TSX Venture Exchange, in the United States, under “DFMTF” on the OTCQB and in Germany on the Frankfurt Exchange under “35D”.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Significant milestone ahead. Defense Metals expects to complete a preliminary feasibility study (PFS) in the second calendar quarter of 2024 for which metallurgical test work has been completed. Bench-scale and hydrometallurgical pilot plant test work indicate that the planned acid bake process will deliver approximately 90% total rare earth oxide (TREO) extraction from the mineral concentrate to a mixed rare earth carbonate product. Eleven mixed rare earth precipitate samples from the hydrometallurgical test-work have been sent to potential partners, processors, or end users.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
VANCOUVER, BC, Feb. 13, 2024 /PRNewswire/ – Defense Metals Corp. (Defense Metals or the Company) (TSXV: DEFN) (OTCQB: DFMTF) (FSE: 35D) is pleased to provide an update on the metallurgical work programs, undertaken by SGS Canada Inc. (SGS) and the ongoing Preliminary Feasibility Study (PFS) work by SRK Consulting (Canada) Inc. (SRK) and Hatch Limited (Hatch), for its wholly-owned Wicheeda Rare Earth Element Project located in British Columbia, Canada.
Highlights of Metallurgical Test Work and PFS-related Matters
The metallurgical test work required for the PFS has been completed. Multiple bench-scale flotation and flotation pilot plant test work resulted in the production of a high-grade mineral concentrate containing 50% Total Rare Earth Oxide (TREO) with an 80% recovery rate, which will be included in the PFS for the first 8 years of mine-life.
Bench-scale and hydrometallurgical pilot plant test work shows that the planned acid bake process will deliver approximately 90% TREO extraction from the mineral concentrate to a Mixed Rare Earth Carbonate product.
The PFS plant flowsheets are completed, based on the metallurgical test work, and equipment specifications have been issued to vendors for cost quotations.
The field-based geotechnical, geochemical and environmental test work required for the PFS has been completed and lab-based studies are in progress.
Other PFS tasks, including open pit mine design and tailings storage trade-off studies, are well advanced.
Economic evaluation and cashflow modelling are in progress.
PFS report completion in the second quarter of 2024 is on schedule.
Eleven mixed rare earth precipitate samples from the hydrometallurgical test work have been sent to potential partners, processors or end-users.
Over the past 5 years, Defense Metals drilled 58 core holes totalling 12,073 metres (m; ~39,610 feet) to define the Wicheeda Rare Earth Element (REE) deposit and provide samples for metallurgical test work. This work resulted in measured and indicated (M+I) resources of 34.2 million tonnes, averaging 2.02% TREO1, inclusive of 17.8 million tonnes of high-grade dolomite carbonatite averaging 2.92% TREO, in addition to inferred resources of 11.1 million tonnes, averaging 1.02% TREO. This represents a 260% increase over the Defense Metals initial 2019 mineral resource estimate, and a conversion to M+I of 101% of the prior 2021 mineral resource estimate.
Total expenditures on the Wicheeda REE Project since 2019, including costs for mineral resource estimate definition, all metallurgical test work, earlier studies and the remaining PFS-related costs are in excess of CAD $17.5 million.
Defense Metals has entered into a strategic Co-Design Agreement with the McLeod Lake Indian Band (MLIB), the First Nations community having the traditional territory on which the Wicheeda Project sits.
____________________________________ 1 TREO % is the sum of CeO2, La2O3, Nd2O3, Pr6O11, Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3 and Ho2O3 percentages.
Craig Taylor, CEO of Defense Metals, stated:
“Continuing positive results from our technical studies suggest that our wholly-owned Wicheeda REE Project has the potential to become the next producer of rare earth elements in North America accounting for a significant amount of the rare earths needed for the western world’s future magnet metal production. We look forward to completing and filing the PFS for the Wicheeda REE Project in Q2-2024 and, subject to financing, moving directly into our feasibility study.”
Metallurgical Test Work
Extensive comminution, beneficiation, hydrometallurgical, and environmental tests have been completed and the resulting data have been applied in the PFS. These tests have studied development and optimization of milling and hydrometallurgical processes and the response of twenty-one variability samples representing different REE grades, lithologies and locations within the deposit.
From 2018 to date, about CAD$5 million has been spent on metallurgical test work and the development of the metallurgical flowsheets for the Wicheeda REE Project.
Thirty-one samples of deposit material, flotation and hydrometallurgical products have been subjected to detailed mineralogical examination.
Twenty-one samples have been subjected to Bond milling index and SMC comminution tests.
210 open circuit flotation tests and seven locked cycle flotation tests, of samples ranging from 1 to 12 kilograms (kg), and a 26-tonne pilot flotation operation have been completed.
Sixty-three static acid bake tests, sixteen short-duration acid bake kiln runs with associated water leach tests were completed. Additionally, SGS completed a total of 15 days of continuous kiln operation (in one 5-day and one 10-day segment) as part of a fully integrated hydrometallurgical pilot plant operation that processed 560 kg of flotation concentrate.
Approximately 40 bench-scale impurity removal tests were done as well as about 40 rare earth precipitation tests and results incorporated in the integrated hydrometallurgical pilot plant operation and the project process design criteria.
Many other small-scale tests examined water recycle options and other aspects of the metallurgical flowsheets.
The liquid-solid separation characteristics of the flotation plant products and those of the hydrometallurgical plant have been determined through appropriate thickening and filtration tests.
____________________________ Technical Report for the Wicheeda Rare Earth Element Project, British Columbia, Canada, dated October 27, 2023, with an effective date of August 28, 2023, and prepared by APEX Geoscience Ltd. is filed under Defense Metals Corp.’s Issuer Profile on SEDAR+ (www.sedarplus.com) and on the Company’s website at www.defensemetals.com.
PFS Plant Design
Results from the metallurgical test work have been used to develop flowsheets for the planned comminution, beneficiation and hydrometallurgical plants. These flowsheets have been completed, reviewed and used to generate major equipment specifications for grinding mills, kilns, etc., which have been issued to equipment suppliers for quotes.
The metallurgical process design, engineering and costing is on track to allow completion of the PFS in Q2 of 2024.
Optimization of Open Pit Mining
Geotechnical investigation work for the mine design and pit optimization was performed by SRK and completed in December 2023. This work included sixteen geotechnical drill holes totaling 225.5 m, and twenty excavated overburden geotechnical test pits. Within the Wicheeda REE deposit pit shell, six diamond drill holes totaling 1,182 m were completed, inclusive of 4 open pit geotechnical drill holes totaling 920 m, and in-pit exploration holes totaling 262 m.
Pit design work is underway, incorporating the latest geotechnical information provided from the 2023 geotechnical drilling program.
Community Engagement
Defense Metals entered into a Co-Design Agreement with the McLeod Lake Indian Band (MLIB) (see news release dated January 17, 2024), thus solidifying a joint commitment to the successful advancement of the Wicheeda REE Project. The Co-Design Agreement emphasizes a joint planning approach, empowering MLIB to play an integral part in the design and decision-making process in the technical, social, engineering and environmental aspects of the Wicheeda REE Project. This agreement expands upon the Mineral Exploration Agreement Memorandum of Understanding previously entered into with MLIB.
The McLeod Lake Indian Band purchased an equity stake in Defense Metals, signalling their long-term commitment to the success of the Wicheeda REE Project.
Infrastructure and Tailings Management Studies
Tradeoff studies are being performed on the various options being considered for tailings management and infrastructure locations are being determined.
The Wicheeda REE Project has excellent infrastructure and logistics, which are expected to allow for lower operating and capital costs, including:
The future mine site and beneficiation plant will be located:
along a permitted Forest Service Road approximately 38 km east from the paved John Hart Provincial Highway at the community of Bear Lake.
~37 km from the Canadian National Railway mainline.
~36 km from the main natural gas distribution pipeline..
~34 km from high-voltage powerlines that supply BC with abundant green hydroelectric power.
~ 110 km from an international airport in Prince George
British Columbia has a long history of mining and its industry participants are recognized worldwide as expert in open pit mining and mineral processing.
Prince George is a major industrial center supplying both the mining and wood products industries. Most of the equipment that will be required for the mining operation will be supplied by companies already established in the area.
Multiple options exist for location of the hydrometallurgical plant site close to reagent supply.
Easy access to the year-round port of Prince Rupert, the closest North American port to Asian markets.
Environmental Test Work and Field Studies
Environmental and geochemical test work has been performed on both flotation and hydrometallurgical plant products and mixtures thereof. Data have been used by SRK in the design of facilities.
Surface water sampling and field investigations commenced in 2022 and will continue through 2024. The results of these and future environmental investigations will be used to inform siting, design, and mitigation planning as well as to prepare technical data reports to support Environmental Assessment and permitting processes.
Qualified Persons
The scientific and technical information concerning metallurgy and processing contained in this news release as it relates to the Wicheeda REE Project has been reviewed and approved by J.R. Goode, P.Eng., a metallurgical consultant to the Company and a “Qualified Person” as defined in NI 43-101. This news release has also been reviewed and approved by Kristopher J. Raffle, P.Geo. (B.C.), a technical consultant to the Company, a Principal and Consultant of APEX Geoscience Ltd. of Edmonton, Alberta, and a “Qualified Person” as defined in NI 43-101.
About Defense Metals Corp. and its Wicheeda Rare Earth Element Project
Defense Metals Corp. is a mineral exploration and development company focused on the development of its 100% owned, 8,301-hectare (~20,534-acre) Wicheeda REE Project that is located on the traditional territory of the McLeod Lake Indian Band in British Columbia, Canada.
The Wicheeda REE Project, approximately 80 kilometres (~50 miles) northeast of the city of Prince George, is readily accessible by a paved highway and all-weather gravel roads and is close to infrastructure, including hydro power transmission lines and gas pipelines. The nearby Canadian National Railway and major highways allow easy access to the port facilities at Prince Rupert, the closest major North American port to Asia.
Defense Metals Corp. trades on the TSX Venture Exchange under the symbol “DEFN”, in the United States, trading symbol “DFMTF” on the OTCQB and in Germany on the Frankfurt Exchange under “35D”
Defense Metals is a proud member of Discovery Group. For more information please visit: www.discoverygroup.ca .
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Cautionary Statement Regarding “Forward-Looking” Information or Statements
This news release contains “forward–looking information or statements” within the meaning of applicable securities laws, which may include, without limitation, statements relating to completion of the PFS and the expected timelines, the completion of additional work and studies and the expected timelines, advancing the Wicheeda REE Project, completing the PFS and progressing towards a feasibility study, the technical, financial and business prospects of the Company, its project and other matters. All statements in this news release, other than statements of historical facts, that address events or developments that the Company expects to occur, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the price of rare earth elements, the anticipated costs and expenditures, the ability to achieve its goals, that general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed and on reasonable terms. Such forward-looking information reflects the Company’s views with respect to future events and is subject to risks, uncertainties and assumptions, including the risks and uncertainties relating to the interpretation of exploration and metallurgical results, risks related to the inherent uncertainty of exploration and development and cost estimates, the potential for unexpected costs and expenses and those other risks filed under the Company’s profile on SEDAR+ (www.sedarplus.com). While such estimates and assumptions are considered reasonable by the management of the Company, they are inherently subject to significant business, economic, competitive and regulatory uncertainties and risks. Factors that could cause actual results to differ materially from those in forward looking statements include, but are not limited to, continued availability of capital and financing and general economic, market or business conditions, adverse weather and climate conditions, failure to maintain or obtain all necessary government permits, approvals and authorizations, failure to maintain or obtain community acceptance (including First Nations), risks relating to unanticipated operational difficulties (including failure of equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of personnel, materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters), risks relating to inaccurate geological, metallurgical, engineering and pricing assumptions, decrease in the price of rare earth elements, the impact of Covid-19 or other viruses and diseases on the Company’s ability to operate, restriction on labour and international travel and supply chains, loss of key employees, consultants, officers or directors, increase in costs, delayed results, litigation, and failure of counterparties to perform their contractual obligations. The Company does not undertake to update forward–looking statements or forward–looking information, except as required by law.
Texas-based Diamondback Energy announced Monday that it will purchase Endeavor Energy Partners, the largest privately held oil and gas producer in the prolific Permian Basin, in a cash-and-stock deal valued at approximately $26 billion including debt.
The deal represents one of the largest energy sector acquisitions announced so far in 2024 and highlights the ongoing consolidation in the Permian as companies seek scale and improved efficiencies. Once completed, the merged company will be the third-largest producer in the basin behind only oil majors ExxonMobil and Chevron.
“Diamondback has proven itself to be a premier low-cost operator in the Permian Basin over the last 12 years, and this combination allows us to bring this cost structure to a larger asset base and allocate capital to a stronger pro forma inventory position,” said Travis Stice, CEO of Diamondback, in a statement.
The combined company is projected to pump 816,000 barrels of oil equivalent per day (boepd), with Diamondback estimating $550 million in annual cost savings. Diamondback shareholders will own approximately 60.5% of the new entity, while Endeavor owners will hold the remaining 39.5% stake.
The Permian Basin is located in West Texas and southeastern New Mexico. Technological advances in hydraulic fracturing and horizontal drilling have transformed the Permian into the most prolific oil field in the United States, responsible for about 40% of the country’s crude output.
Endeavor operates in the Midland sub-basin on the Texas side of the Permian, with its acreage located adjacent to existing Diamondback properties. This geographic overlap should allow for significant synergies as the companies integrate operations, infrastructure and drilling inventory.
Diamondback management highlighted Endeavor’s status as one of the Permian’s lowest-cost producers as a key rationale behind the acquisition. Folding Endeavor’s assets into Diamondback’s portfolio should lower overall expenses and boost cash flow on a per-share basis.
The merged company will hold approximately 1.1 million net acres in the Permian Basin and control over 2 billion barrels of recoverable oil equivalent resources. This expanded footprint provides enhanced scale for Diamondback to fund further development.
“This combination allows us to bring this cost structure to a larger asset base and allocate capital to a stronger pro forma inventory position,” noted Stice.
While offering enticing synergies, the partnership also carries risks if oil prices decline significantly from current levels near $80 per barrel. Diamondback is assuming roughly $7 billion of Endeavor’s debt as part of the transaction.
However, the substantial cost efficiencies and expanded production capacity position the newly merged business well for strong free cash flow generation, even in a lower price environment.
The deal is expected to close in Q4 2024 after customary approvals. Shares of Diamondback were up nearly 3% in Monday morning trading on news of the acquisition. The transaction continues the consolidation wave among Permian Basin independents as companies strive to improve margins and gain scale.
For Diamondback, the bold bet on Endeavor represents an opportunity to solidify its status as a Permian leader, while acquiring premium assets that should drive growth for years to come. The combined corporation will boast immense resources, significant capital flexibility and a management team with a proven track record in the basin.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Excitement builds around Hopedale. The district-scale 100% owned Hopedale property in Labrador covers a 43-kilometer strike length of the Florence Lake greenstone belt. The company is targeting greenstone hosted orogenic gold and komatiite hosted nickel. To date, eight occurrences have been identified reflecting multiple mineralization styles, including orogenic gold, magmatic nickel sulfide, copper-silver vein, and zinc-rich volcanogenic massive sulfide. Labrador Gold released results of its 2023 exploration program which underscored the property’s prospectivity and resource potential across a variety of metals.
Fire Ant and Rusty Ridge. High grade gold grab samples containing up to 106 grams per tonne were discovered at a new occurrence, Fire Ant, that has been traced over a strike length of ~200 meters and brings the number of significant gold occurrences on the property to five. Labrador extended an anomalous nickel area at Rusty Ridge to 550 meters and identified a new anomalous nickel area, Last Resort, over a strike length of 1.6 kilometers.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
TORONTO, Feb. 08, 2024 (GLOBE NEWSWIRE) — Labrador Gold Corp. (TSX.V:LAB | OTCQX:NKOSF | FNR: 2N6) (“LabGold” or the “Company”) is pleased to announce the results of the 2023 exploration program at its 100% owned Hopedale Project in Labrador. The district scale Hopedale property covers a 43km strike length of the Florence Lake greenstone belt which has characteristics typical of greenstone belts around the world but has been underexplored by comparison.
Highlights
Fire Ant gold occurrence
high-grade gold up to 106g/t with 20.4g/t Ag in rock grab samples
mineralization traced over approximately 200 metres strike length
Rusty Ridge and Last Resort nickel occurrences
anomalous Ni area at Rusty Ridge extended to 550m
rock samples up to 0.28% Ni and soil samples up to 0.23% Ni
Identified a new anomalous nickel area (Last Resort) over a strike length of 1.6km coincident with a significant magnetic high
Jasmine zinc occurrence
anomalous zinc zone identified over 400m at Jasmine with values up to 0.97% Zn in rock and 0.22% in soil
Jasmine also shows high copper and gold values indicating potential for volcanogenic style mineralization
Thurber Boundary copper occurrence
highest copper in soil value (3,493 ppm) found on the property to date identified in a 400m anomalous trend
Eight occurrences identified on the Hopedale project to date reflecting multiple mineralization styles including orogenic gold, magmatic Ni sulphide, copper-silver vein and Zn-rich volcanogenic massive sulphide
Significant gold and silver in rock grab samples was found in the Rusty Ridge area with a high of 106g/t Au and 20.4 g/t Ag, 3.7g/t Au and 4.9g/t Ag and 2.9g/t Au and 4.7g/t Ag. This newly discovered mineralization named the Fire Ant occurrence, is hosted in gossanous felsic volcanic rocks close to the contact with ultramafic volcanic rocks and has been traced over a strike length of approximately 200 metres.
Work during 2022 found significant nickel anomalies in soil and rock at an area named Rusty Ridge. The anomalies occur in ultramafic rocks indicating potential for magmatic nickel style mineralization. One of the goals of the 2023 exploration program was to follow up and extend these anomalies. A total of 14 grab samples of rock assayed over 0.1% Ni and included values up to 0.28% Ni while nickel values in soil up to 2,271ppm (0.23%) show a significant northeast-southwest trend extending the anomalous area over 550m. Approximately 1.2km south of Rusty Ridge, anomalous nickel in soil samples was outlined over a 1.6km strike length and is coincident with a significant magnetic high. Six of the samples assayed over 1,000ppm (0.1%) Ni with a high of 2,271ppm (0.23%) Ni. Limited rock sampling showed assays of 0.28%, 0.17% and 0.16% Ni in grab samples in this area named Last Resort.
The highest copper value in soil (3,493ppm) on the property to date was recorded at Thurber Boundary, where it forms a northeast-southwest trend over approximately 500 metres. The location of the soil anomaly is in a similar stratigraphic location, close to the contact of mafic and ultramafic volcanic rocks, as the high grade (3.31% Cu over 0.76m and 1.55% Cu over 1m in channel samples) Kaapak copper occurrence approximately 3 kilometres to the south.
In addition to the copper, nickel and gold found during the exploration program, anomalous zinc was found in soil samples (up to 0.22%) and rock (up to 0.97%) in the Jasmine area. The anomalous zone extends over approximately 400 metres and is coincident with a contact highlighted by a change from magnetic high to magnetic low. The Jasmine area is also known to have high copper and gold values indicating potential for volcanogenic massive sulphide deposits.
“Our 2023 exploration program over the district scale Hopedale property confirmed the significant prospectivity of the Rusty Ridge area for nickel associated with ultramafic rocks and identified a new area, Last Resort, with similar potential for magmatic sulphide type mineralization,” said Roger Moss, President and CEO of Labrador Gold. “The highest grade gold found on the property to date, 106g/t Au and 20.4g/t Ag, was sampled at a new occurrence, Fire Ant, in the Rusty Ridge area and brings the number of significant gold occurrences on the property to five. Potential for zinc-rich volcanogenic massive sulphide was identified at Jasmine as well as a significant copper in soil anomaly at Thurber Boundary. Work conducted by LabGold at Hopedale demonstrates that the Florence Lake greenstone belt contains many of the same mineralization styles seen in some of the most productive greenstone belts elsewhere in the world.”
Figure 1. Location of the nickel, copper, gold and zinc occurrences on the Hopedale Property.
Figure 2. Highlights of nickel in soil and rock samples over Rusty Ridge and Last Resort Occurrences.
Figure 3. Location of high-grade gold mineralization at Fire Ant occurrence.
Table 1. Highlights of rock samples assays from 2023 exploration program. Note that grab samples are selective samples and may not be representative of the mineralization found on the property. n/a = not assayed.
QA/QC
Rock samples comprise grab samples, which are selective samples and not necessarily representative of mineralization found on the property. Samples were securely stored prior to shipping to analytical labs for assay. Rock samples were assayed at Eastern Analytical Laboratory in Springdale, an ISO/IEC17025 accredited laboratory for gold by standard 30g fire assay with atomic absorption finish as well as by ICP-OES for an additional 34 elements. Additional samples were sent to SGS Canada for whole rock assays by borate fusion XRF and ICP-MS/AES. Soil samples were submitted to SGS for gold by standard 30g fire assay with atomic absorption finish as well as ICP-MS for an additional 48 elements. The company submits blanks and certified reference standards amounting to 5% of each sample batch.
Qualified Person
Roger Moss, PhD., P.Geo., President and CEO of LabGold, a Qualified Person in accordance with Canadian regulatory requirements as set out in NI 43-101, has read and approved the scientific and technical information that forms the basis for the disclosure contained in this release.
The Company gratefully acknowledges the Newfoundland and Labrador Ministry of Natural Resources’ 2023 Junior Exploration Assistance (JEA) Program and the Atlantic Canada Opportunities Agency’s Critical Minerals Assistance for its financial support for exploration of the Hopedale property.
About Labrador Gold Labrador Gold is a Canadian based mineral exploration company focused on the acquisition and exploration of prospective gold projects in Eastern Canada.
Labrador Gold’s flagship property is the 100% owned Kingsway project in the Gander area of Newfoundland. The four licenses comprising the Kingsway project cover approximately 12km of the Appleton Fault Zone which is associated with numerous gold occurrences in the region. Infrastructure in the area is excellent located just 18km from the town of Gander with road access to the project, nearby electricity and abundant local water. LabGold is drilling a projected 100,000 metres targeting high-grade epizonal gold mineralization along the Appleton Fault Zone with encouraging results.
The Hopedale property covers much of the Florence Lake greenstone belt that stretches over 60 km. The belt is typical of greenstone belts around the world but has been underexplored by comparison. Work to date by Labrador Gold show gold anomalies in rocks, soils and lake sediments over a 3 kilometre section of the northern portion of the Florence Lake greenstone belt. Four gold occurrences lie along this trend, three of which Thurber North, TD500 and Thurber South were discovered by LabGold. Anomalous gold in soil and lake sediment samples also occur over approximately 40 km along the southern section of the greenstone belt. LabGold’s recent exploration has also demonstrated the potential for the critical metals copper, nickel and cobalt in the belt.
The Company has 170,009,979 common shares issued and outstanding and trades on the TSX Venture Exchange under the symbol LAB.
For more information please contact: Roger Moss, President and CEO Tel: 416-704-8291
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release .
Forward-Looking Statements: This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties. Many factors could cause our actual results to differ materially from the statements made, including those factors discussed in filings made by us with the Canadian securities regulatory authorities. Should one or more of these risks and uncertainties, such as actual results of current exploration programs, the general risks associated with the mining industry, the price of gold and other metals, currency and interest rate fluctuations, increased competition and general economic and market factors, occur or should assumptions underlying the forward looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, or expected. We do not intend and do not assume any obligation to update these forward-looking statements, except as required by law. Shareholders are cautioned not to put undue reliance on such forward-looking statements .
The biggest publicly traded oil companies in the West had a clear message for investors this earnings season: We’re going to keep paying you billions in dividends and stock buybacks, no matter how much our profits fluctuate.
BP, Chevron, ExxonMobil, Shell and TotalEnergies doled out over $111 billion to shareholders in 2023, an all-time record for the group, according to a Reuters analysis. This lavish payout comes even as the companies’ combined net profits sank 37% from 2022’s windfall heights of $196 billion.
It’s a calculated move to reassure investors, particularly major institutional shareholders like pension funds, that the oil supermajors still deserve a place in their portfolios despite LAST year’s stark reminder of the sector’s persistent volatility.
For over a decade, Big Oil has seen its status as a stalwart, dividend-paying pillar of investors’ portfolios slowly erode. The energy sector’s weighting in the S&P 500 index sat at just 4.4% in January, down dramatically from 14% in 2012.
Several factors catalyzed this decline: poor capital discipline leading to wasted spending and subsequent dividend cuts, huge swings in oil and gas prices, the rise of the tech sector, and growing concerns about oil’s role in climate change.
But Russia’s invasion of Ukraine in 2023 sparked an unexpected fossil fuel rally, with Brent crude prices averaging over $100 per barrel and natural gas prices skyrocketing. The oil giants cashed in with their highest profits ever, starkly highlighting the sector’s persistent upside potential.
Now with economic headwinds buffeting energy markets, their mammoth payouts to shareholders seek to underscore oil’s reliability versus more speculative investments. “During a time of geopolitical turmoil and economic uncertainty, our objective remained unchanged: safely deliver higher returns and lower carbon,” said Chevron CEO Mike Wirth after announcing a 6% dividend increase.
Besides dividends, oil majors are channeling these record buybacks to shareholders. Exxon Mobil alone spent $35 billion last year snapping up its own shares, while Shell has vowed “complete predictability” around shareholder returns.
This focus on payouts over production indicates Big Oil has absorbed the lessons of overspending on large-scale projects with uncertain demand outlooks. After former CEO John Browne spearheaded a failed push for aggressive growth at BP, lease write-downs of $60 billion soon followed.
Now with the transition to cleaner energy casting further uncertainty over long-term oil demand, companies are tightly rationing investment. Bernstein analyst Oswald Clint said investors “absolutely remember the sins of the past investment cycles and are pretty determined not to repeat those.”
While Exxon and Chevron are still expanding oil output, others like BP and Shell plan to cut production over this decade as part of their climate strategies. But all are aligning around far greater capital discipline and what they call “high-grading” their portfolios.
Rather than chasing growth, new projects must meet stricter hurdles for returns, emissions, and regulations. Tobias Wagner of Moody’s Investors Service expects only minimal investment increases industry-wide in 2024 given the cautious outlook.
So even as society decarbonizes, the oil supermajors are making a case that their stocks can still reward shareholders through the transition. Yet it remains to be seen whether investors who have fled the sector for greener pastures like clean energy and tech will find these guarantees compelling enough to return.
General Motors (GM) announced Wednesday its largest investment yet to lock up critical raw materials needed for its ambitious electric vehicle (EV) production plans. The Detroit automaker said it will spend $19 billion over the next decade to source cathode materials from South Korean supplier LG Chem.
The materials—including nickel, cobalt, manganese and aluminum—are key ingredients for the lithium-ion batteries that power EVs. Under the agreement spanning 2026-2035, LG Chem will ship over 500,000 tons of cathode materials to GM’s joint battery cell plants with LG spinoff Ultium Cells in the United States.
GM stated this is enough supply for approximately 5 million EVs with an estimated range of over 300 miles per charge. The materials will come from an LG Chem plant currently under construction in Tennessee.
For GM, signing a long-term purchase agreement helps mitigate risks around securing sufficient future EV battery supplies amid intensifying competition. As automakers collectively invest billions to shift their lineups to mostly EVs by 2030, critical mineral shortages could constrain production plans.
“This contract builds on GM’s commitment to create a strong, sustainable battery EV supply chain to support our fast-growing EV production needs,” said Jeff Morrison, GM vice president of global purchasing and supply chain.
The LG Chem deal ranks among the largest—if not the largest—EV supply contract inked by GM to date. It highlights an urgency by the company to lock up raw materials as the global auto industry accelerates its electric shift. GM aspires to exclusively sell EVs by 2035.
However, the 14-year LG Chem agreement also implies GM may be adapting its EV strategy to account for adoption happening slower than anticipated. The original pact was scheduled to expire in 2030, but GM extended it another five years.
After initially forecasting aggressive EV sales growth, GM has pulled back on targets amid steeping battery costs and strained consumer budgets. “We’re also being a little bit prudent about the pace at which the transition occurs,” said CEO Mary Barra.
Nonetheless, GM remains laser-focused on its EV future. It recently announced a $650 million investment to expand production of its profitable full-size SUVs—but as electric versions only by 2024. “We have the manufacturing flexibility to build EVs at scale,” said Barra.
For investors, GM’s major bet on EVs represents an opportunity to capitalize on the immense growth projected in the electric vehicle market over the next decade. Research firm IDTechEx forecasts the EV market will balloon from $287 billion in 2021 to over $1.3 trillion by 2031 as adoption accelerates globally. GM’s plan to phase out gas-powered cars and transition to an all-electric lineup positions it as a leading EV player in this booming new automotive era.
Meanwhile, LG Chem said it aims to “bolster cooperation with GM in the North American market” through the expanded cathode materials agreement. The supplier has jockeyed with China’s CATL for the title of world’s top EV battery maker.
For both LG and GM, ensuring cathode supply security with a US-based plant mitigates geopolitical risks. President Biden’s Inflation Reduction Act requires automakers to source critical minerals domestically or from allies to qualify for EV tax credits.
While the road to an all-electric future remains bumpy, GM’s huge bet on sourcing vital battery ingredients shows its commitment to phasing out the internal combustion engine. As Barra stated, “We’re on our way to an all-electric portfolio.”
Haynes International, Inc. is a leading developer, manufacturer and marketer of technologically advanced, nickel and cobalt-based high-performance alloys, primarily for use in the aerospace, industrial gas turbine and chemical processing industries.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Haynes to be acquired by Acerinox, S.A. Haynes International entered into a definitive agreement to be acquired in an all-cash transaction by Acerinox’s wholly owned U.S. subsidiary, North American Stainless, Inc. Acerinox is a leader in the manufacturing and distribution of stainless steel and high-performance alloys and will acquire all the outstanding shares of Haynes for $61.00 per share valuing Haynes at an enterprise value of approximately $970 million and a fully diluted equity value of $798 million. The shares are trading close to the proposed transaction price per share.
Closing is expected in the third calendar quarter. The transaction has been unanimously approved by the board of directors of both companies and is expected to close in the third calendar quarter of 2024, subject to the satisfaction of closing conditions, including receipt of regulatory approvals and approval by Haynes stockholders. Because the Haynes shareholder meeting is tentatively planned for April 2024, we think the transaction could close sooner than later.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Feasibility study expected in the first quarter of 2024. Century’sClayton Valley lithium project is among the most advanced pre-permitted lithium projects in North America with the third largest deposit in the United States. In2023, the company focused on pilot plant operations with the project feasibility study (FS) expected to be complete in the first quarter of 2024. Production will be consistent with the earlier preliminary feasibility study (PFS) although the company is examining the benefits of a phased approach to full scale production.
Feasibility study expectations. While weexpect the feasibility study to reflect higher capital and operating costs, the economics may improve relative to the PFS due to several factors. These include: 1) a higher base case pricing assumption for lithium carbonate equivalent that could be in the range of US$22,000 to US$25,000 per tonne compared to US$9,500 per tonne used in the PFS, 2) a potential economic benefit from the by-product sales of sodium hydroxide, 3) the leaching process will be based on using hydrochloric acid instead of sulfuric acid, and 4) the project will likely incorporate lower cost renewable solar or geothermal power. Based on improvements to the process flowsheet since the publication of the PFS, we expect a compelling feasibility study.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
