Rome, Kodal, Blencowe & a First Class Metal?

Good Thursday MINING AIM and welcome to your thought of the day.

Rome hits the ground running

Rome Resources is now actively drilling with three diamond rigs; two at Kalyai and one at Mont Agoma across the Bisie North tin project. 

The third drillhole from the first rig is in progress at 107m at Kalayi, the second rig is targeting the same drill line as KBDD006 in which an impressive tin zone was announced on 27 August 2024 and will target the zone roughly 50m below the initial mineralised intersection.

The third rig, at Mont Agoma, is targeting near surface tin and a deeper level copper/tin/silver zone, southeast of previous drilling.

CEO Paul Barrett enthuses that 'The positive results we are receiving support the initial work undertaken at the Project which indicated it has the potential to be an exciting, high-grade tin deposit. With demand for tin increasing, and disruption continuing at some of the world's largest suppliers, Bisie North could be a key element to filling the anticipated supply shortfall of this critical metal.'

Tin is a volatile metal, but is clearly moving up. Fitch Solutions unit BMI has revised its tin price forecast for this year up from $28,000 per tonne to $30,000 for 2024 - the price hit $32,500 last week - driven by supply chain issues as Myanmar production remains effectively halted. For perspective, the August 2023 production ban instituted by the Wa militia has been lifted, but the country's Man Maw Mine remains offline (and is responsible for nearly all of production in the country).

Indonesia is also seeing tin supply issues; the government has delayed approvals of mining companies' annual work plans - driving refined tin exports from the country down by more than 50% in the first half of the year.

Indonesia is the top tin exporter in the world; Myanmar in the third largest producer. BMI expects tin to hit $45,000 by 2033 with the tin market in a deficit from 2028 onwards, driven by semiconductor demand, solar panels, EVs, and Japanese domestic needs. 

Meanwhile, inventories continue to fall - and few quality projects are coming online meaning competition for ore will increase.

Rome wants a mineral resource within a few months, and if the assays are as expected, this thing will roar. And there's good chance that Mont Agoma will find solid copper too - this is the DRC.

Also in the news

Kodal Minerals is continuing to argue that it will be commissioning first production at Bougouni in Q4 (by the end of December).

The first two shipments from China carrying the critical long lead equipment items and structural steelwork for the plant buildings have arrived at Côte d'Ivoire and offloading is ongoing. The first trucks with plant equipment loaded are at the Bougouni customs post and are awaiting final clearance for delivery to site.

Civils are now 85% complete, and open pit mining at the main Ngoualana pit continues - the overburden is being removed and  three blasts of exposed hard rock and pegmatite bodies have been completed - meaning there will be ore aplenty when the plant is ready to go.

I remain of the view that this is a wildly ambitious timescale, though on the plus side, even with lithium prices where they are, Bougouni can produce profitably.

This stock will continue to jump around on the road to production; but if they commission by the end of the year, management deserve medals.

Blencowe has signed a Memorandum of Understanding with Singaporean graphite sales and marketing specialist Triessence Limited and a leading Asian SPG and Anode material producer. 

The partnership is designed to 'establish Joint Venture (JV) for a graphite beneficiation facility in Uganda producing 99.95% purified graphite for lithium-ion batteries. This venture will set Blencowe apart from competitors focused solely on producing graphite concentrate and provides a life-of-mine offtake partner near the Orom-Cross Project.'

I continue to be impressed with both (a) the project and (b) the careful balancing act BRES continues to perform between the US and China to develop its own interests. For reference, the project benefits from $5 million of grant funding from the US Development Finance Corporation (the lending arm of the US government), but has also signed an MoU for 15,000 tonnes of large flake per annum with Jilin New Technology Graphite (one of the largest graphite players in China).

It speaks volumes that this new JV (which has huge commercial advantages as the 96% graphite will be upgraded to battery ready 99.95%) has been signed with a Singaporean company - Singapore is the Switzerland of Asia and a neutral player. Indeed, may international contracts are signed under Singaporean law for this reason.

Triessence will fund 50% of capital costs for the SPG facility, and purchase all end product. It's likely to be sold to OEMs outside China via Triessence, with the DFS for the SPG facility to be integrated with Orom-Cross DFS.

Yes, as an ex-China producer of uncoated SPG this would see a price premium from OEMs worried that the Chinese graphite export controls will be tightened in the wake of the recent antimony news, but at some point Blencowe will have to pick a political side.

For those confused how the MoU with Jilin works with this new JV, the upgrading facility focuses only on upgrading the lower value small flake concentrate (half of Orom-Cross's output) while the more valuable large flake concentrate will continue to be sold into traditional graphite markets (like to Jilin).

First Class Metals is finally properly hunting down the source of its '19 grammer' at the Dead Otter trend in Ontario, Canada. Stripping and channel sampling at three locations along the 3.7 km strike has been completed, with 'extensive channel sampling at the 19 grammer location.'

18 channels have been cut for 70 samples, with these now being analysed at Thunder Bay - first assays are due within the month, with subsequent batches of additional results to be received over the coming weeks. In addition, 27 coarse residues from the highly successful 2022/23 sampling programs were submitted for Photon assay.

CEO Marc Sale enthuses that 'the exploration work on the Dead Otter trend continues to deliver positive results, visually the channels cut show that the 19 grammer is potentially not an isolated high-grade occurrence. The anticipated results from the stripping / sampling will allow a decision to drill specific locations and to expand the footprint of the mineralised structure with additional stripping along strike.'

I guess we will find out soon, but at the current market capitalisation, it's a good value risk play.

Have a great mid-week.

- Charles Archer, 5/9/2024