Morning Briefing: Lundin Mining Acquires Majority Interest in Caserones; Liontown Rejects Albermarle Offer

Welcome to Mining Stock Daily. I’m Trevor Hall. And I’m Paul Harris.

Today is Tuesday March 28th.

In a familiar pattern known to keen precious market observers and investors, gold maintained its price proximity to $2000 per ounce during eastern hemisphere physical gold and silver trading hours but was abruptly pounded down from $1990 to as low as $1962 once Asian markets closed for the day and the London and NY paper gold derivatives markets assumed control. The Mining Stock Journal explained that today is the expiration of Comex options on the April gold futures contract and the open interest structure of the put/call open interest report points to a pareto optimal options expiration closing price for April gold below $2000.  Similarly, silver was pounded lower after the Asia closed from  $23.21 per ounce to as low as $22.99. Both gold and silver managed to rebound in the afternoon Globex digital trading session, with gold settling at $1975 and silver settling at $23.21. 

The Mining Stock Journal noted that both gold and silver were trading considerably higher on Monday evening. The mining stocks opened lower on Monday when the NYSE opened but not as much as would have been expected given the degree to which paper gold and silver were slammed in the pre-market hours. Though the GDX closed slightly lower from Friday, the Amex Gold Bugs Index finished with a positive close. The Mining Stock Journal commented that the trading action in the mining stocks suggests perspicacious recognition of reality.

We will get to the news from the miners and explorers in a moment, but first a word about today’s sponsor.

This episode of Mining Stock Daily is brought to you by…Arizona Sonoran Copper.

ASCU is an early-stage copper developer and explorer of the Cactus Mine and its satellite project, Parks/Salyer, both situated on a 4km mine trend on private land in Arizona’s porphyry copper district. Opportunity for significant growth and scale exist along the mine trend, while future capex requirements outlined in the Cactus PEA benefit from significant onsite and nearby access to infrastructure. The Company is led by an executive management team and Board which have a long-standing track record of successful project delivery in North America. For more information, please visit www.arizonasonoran.com.

And here’s what you need to know this morning….

Lundin Mining entered into a binding purchase agreement with JX Nippon Mining & Metals to acquire a 51% interest in Lumina Copper which operates the Caserones copper-molybdenum mine in the Atacama region of Chile for US$950 million. Lundin will pay JX an initial $800 million with $150 million in deferred cash payments over six-years. This includes $50 million in five $10 million annual installments and $100 million in 2029. Lundin will fund the purchase from its $1.75 billion revolving credit facility. Lundin will also have the right to acquire up to an additional 19% interest in Caserones for $350 million to bring its ownership interest to 70%. Caserones produced 109,100t of copper in concentrate, 15,100t of copper cathodes and 3,100t of molybdenum in concentrate in 2022.  (TSX: LUN) news release

EV NICKEL announced high grade nickel intercepts from its 2023 drill program on the eastern extension of the High-Grade W4 Zone near Timmins in Ontario, Canada. Drilling intersected a continuation of the high-grade nickel sulphides 50m east of the 2022 drill program. Highlights included 13.1m grading 1.47% Ni including 4.7m grading 2.77% Ni in hole 2 and 6.8m grading 1.58% Ni including 2.1m grading 3.01% Ni in hole 3. This year's diamond drill hole program was designed to test the eastern edge of the W4 Extension, the mineralized Nickel Zone between 200 to 450m from surface, discovered last year. An Updated Resource Estimate, including the W4 Extension, is to be completed in the June quarter. EV NICKEL (TSXV:EVNI) news release

The world’s top lithium producer, Albemarle, made a $3.7 Billion cash offer for Australia’s Liontown Resources, only to have it rejected. The offer represented a 63% premium to Monday’s closing price of Liontown. After rejecting the offer, shares of Liontown surged to a new record high on the Australian Stock Exchange. Recently, Albemarle has been expanding output and investing in new facilities to meet rising long-term demand for electric vehicle batteries and to help the firm comply with President Joe Biden’s push to ensure suppliers favor production in the US or free-trade partner nations. Albemarle says they are prepared to engage immediately in discussion with Liontown to work toward a mutually acceptable definitive agreement. Albemarle trades in the US with ALB

Sticking with lithium, Standard Lithium said it has, to the best of its knowledge, sampled the highest confirmed lithium grade brine in North America, with a grade of 634 mg/L lithium. In Standard Lithium’s experience, the grade of lithium in brine used for Direct Lithium Extraction (DLE) has a meaningful impact on both capital expenditures and operating costs in connection with the extraction process, with a higher grade typically resulting in lower overall costs. The sampling has come from its East Texas Smackover region. Standard Lithium trades on the TSXV and the NYSE American with SLI. News Release

Heliostar Metals closed its transaction to acquire the Ana Paula Gold Project in Guerrero, Mexico from Argonaut Gold for US$10 million. Ana Paula is permitted for an open pit mine with measured and indicated resources of 1.46 Moz gold at 2.17 g/t gold and 3.27 Moz silver at 4.8 g/t silver. It has reserves of 1Moz of gold at 2.36 g/t gold and 2.3Moz of silver at 5.22 g/t silver. It has existing mine infrastructure including a 412m long decline in place and has received 142,000m of drilling in 333 holes. Heliostar said the acquisition adds advanced gold ounces for significantly less than the cost to drill, define and permit them. Heliostar Metals (TSXV: HSTR) (OTC Pink: HSTXF) news release

Red Pine Exploration reported new drilling results from ongoing exploration at its Wawa Gold Project in the Michipicoten Greenstone Belt of Ontario. The new results continue to indicate that broad zones of gold mineralization exist in the hanging wall of the Jubilee Shear in geological structures that were sparsely tested by historical drilling programs. Highlights included 25.15m grading 3.50 g/t gold in hole 415 in the Minto B Shear located above the Jubilee Shear. The company said high grade gold bearing structures in the hanging wall are proving to be prolific adding credence to its presumption of a revised resource that could include a shallow pit constrained resource. Red Pine Exploration (TSXV: RPX, OTCQB: RDEXF) news release

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