News

Buy when others are selling. It’s one of the oldest pieces of investment advice and its one that Karl Simich and Andrew Forrest put into practice this week with copper and nickel deals.

Buy when others are selling. It’s one of the oldest pieces of investment advice and its one that Karl Simich and Andrew Forrest put into practice this week with copper and nickel deals. Simich, chief executive of Sandfire Resources, took the WA-based company he leads into Spain via the $1.2 billion acquisition of the Matsa mining complex. Forrest, chairman of Fortescue Metals Group, boosted his private stake in a Canadian nickel explorer to 37.3% through the conversion of a loan into shares in what could be the knock-out blow in a fight with BHP for Noront Resources.

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Sandfire Resources has boosted the economics of its proposed Motheo copper project in Botswana after establishing a maiden reserve for its A4 deposit and outlining an expanded production profile (reports The West Australian).

The Karl Simich-led company this morning announced a 114,000t copper reserve at A4 that it said would allow it to boost throughput at Motheo from 3.2 million tonnes per annum to 5.2Mtpa. The results of a pre-feasibility study on the expanded Motheo hub showed it would lift production from 30,000 tonnes per annum to more than 50,000tpa over a 10-year mine life.

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A bunch of juniors are about to follow-up a test hole drilled by Geoscience Australia which revealed strong potential for IOCG copper-gold deposits near Tennant Creek. Greenvale, Inca and Strategic Energy among those about to try their luck at the big time. And Nexus defies gold gloom with some bumper results. It goes without saying that there is a strong appetite for copper exploration with some big upside potential now that the price of the red metal has well and truly consolidated around the $US4.20/lb level.

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Sandfire Resources says it is cashed up and has an ideal launching pad to build a new copper mine in Botswana and replace its ageing DeGrussa operations in WA as the push to decarbonise sparks demand for copper (reports The Australian Financial Review))

The company reported record profit and revenue and declared its biggest final dividend on the back of strong copper prices and a jump in earnings from DeGrussa as the mine enters its twilight. However, the results were weaker than analyst expectations and there was little new information on the company’s growth projects. Managing director Karl Simich said Sandfire was in a strong position to pursue its growth options, with updates just weeks away.

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Battery metals, led this week by nickel, continued to outperform the rest of the resources sector while gold took a peek above $US1800 an ounce but faded as U.S. investors turned their focus on interest rate settings ahead of a key central bank meeting

Battery metals, led this week by nickel, have continued to outperform the rest of the resources sector while gold took a peek above $US1800 an ounce but faded as U.S. investors turned their focus on interest rate settings ahead of a key central bank meeting. The gathering of bankers in the Wyoming ski resort of Jackson Hole could be the setting for the Federal Reserve chairman, Jerome Powell, to reveal his plans for winding back monetary support for the U.S. economy.

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Any doubts investors might have had about the power of environment, social and governance (ESG) issues to dictate corporate decision making were blown away this week when BHP caved into activist pressure to quit the oil and gas business.

The deal, which will see Woodside Petroleum acquire BHP Petroleum, has not been well received on financial markets, with both companies sold down and some big BHP shareholders indicating they will oppose the transaction when put to a vote next year. But whether BHP and Woodside achieve their desired marriage of convenience is not the big issue for investors. The more important point is that ESG considerations have now been elevated to a company-making (and breaking) level.

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The gold price itself had 12 months of consolidation. Now we are entering a new stage of a bull market which Barry Dawes of Martin Place Securities believes “will take it much, much higher” (reports Stockhead).

In the big scheme of things, the pullback we have seen over the past 12 months is ‘small beer’, Dawes told the Virtual Gold Conference earlier this week. “Now everything is aligned up for gold prices in the decade to be very strong,” he says. “The short and medium term looks very good; the long term looks very good.” Punters should look to the big gold stocks in the US – they are the ones that matter, Dawes says.

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Former OZ Minerals head of exploration Richard Holmes has recently joined Sandfire Resources to drive the next phase of the company’s growth in the discovery space (reports MiningNews).

Sandfire is planning to spend A$50-60 million on exploration this financial year after spending $64 million in FY20. While Botswana's Kalahari Copper Belt will get the biggest proportion of funds ($23 million), the company has not given up on making another discovery in the Doolgunna region of WA and will allocate $16 million. The DeGrussa mine will reach the end of its life next year, but Sandfire is still keen to leverage off its existing infrastructure. The Doolgunna region will be split into two focus areas - gold in the west and deep drilling in the east.

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