Interactive Investor

Six mining companies to follow in 2024

We spoke to industry experts and analysts about the big issues affecting the sector, and small-cap mining focused companies having an interesting 2024.

25th March 2024 10:46

Lee Wild from interactive investor

At the recent Mining Indaba in Cape Town, South Africa, we spoke to industry experts and analysts about the big issues affecting the sector. We also talked to half a dozen small-cap mining focused companies having an interesting 2024.

Andre Liebenberg, CEO, Yellow Cake: Yellow Cake Ordinary Shares (LSE:YCA) is a corporate vehicle that was listed in London in 2018. And it really was set up to give investors a means of investing in the uranium commodity without all the other activities related to mining, geology, project risk processing risk. Uranium is not a commodity that you or I could easily invest in. It's very, very regulated. You can only store the commodity in three places in the West. There's one in France, one in Canada, and one in the US. 

You need to go through a huge bunch of regulation and open up accounts. The storage is not cheap. So we created this entity that holds physical uranium and so investors can play the uranium price through our share price. If you look at our balance sheet, we own £22 million of uranium, more or less. And we've got $30 million of cash. When we IPO’d in 2018, we raised $200 million. We bought £8 million of uranium at $21 a pound. Today, the uranium price is $106 a pound and we've got two £22 million and our in-cost is in the low 30s.

So, it's a capital appreciation vehicle and the commodity price has done, in a sense, what we'd hoped it would do. More than hope, we did a lot of fundamental analysis on supply and demand. And we think that the uranium price still has a way to go because supply is going to lag demand. 

Julien Bosche, vice-president EMEA, Trident Royalties: Trident Royalties (LSE:TRR) is a metals and mining royalty company. We're listed on the AIM market of the London Stock Exchange. We invest in all commodities, excluding coal, all metals and mining commodities, excluding coal. And to that end, in our portfolio today, we have gold, silver, lithium, copper zinc, mineral sands and iron ore. And we're looking to continue to build on that. We are very much growth oriented. In the last year, we've acquired four royalties over, again, gold, silver, copper, and zinc which is quite exciting. All without using our cash balance, so no incremental shares were issued for those transactions.

And we've also recently refinanced a less flexible term loan with a very flexible revolving credit facility with BMO and CIBC which should facilitate that growth going forward. And what's nice with the royalty model is that you have quite a lot of asset diversification. So where one mining company of our size might have one, maybe two mines. We have quite a few assets. So we have 21 assets of which 13 are cash flowing.

George Bennett, CEO, Rainbow Rare Earth: At the moment, we're developing two rare earth projects, one in Palabora in South Africa, a flagship project, and one in Brazil called Uberaba with Mosaic, the big multinational fertiliser business. So this is in New York. So it's been a very, very good year for Rainbow. Last year we attracted a 50 million dollar commitment from the US Government by the DFC into the project at Palabora as development equity. And that shows a lot of confidence by the US government in Rainbow Rare Earths Ltd (LSE:RBW) as they've done their own DD. on us and on our process. 

We've also announced that we've started our two pilot plants, the front end at Mintek in South Africa, where we producing a serum depleted mixed with carbonate. This mixture of carbonate has been derived from phosphogypsum at Palabor, which is the rarest phosphogypsum. And we are extracting the roots out of this phosphogypsum and producing a mixture with carbonate, as I mentioned. We’re then shipping that carbonate to a facility in Florida, in Lakeland, where they're doing the final downstream separation, which is to produce separated root oxides.

And we've got the four key permanent magnet roots known as neodymium, praseodymium, terbium and dysprosium. So we are busy with that in Florida, as I've mentioned. We made an announcement this morning. Our initial separation has been very, very positive using the KTEC technology, which is an RP developed by the American company called KTEC. And as I've mentioned, our first separation results have been very positive. And we'll end up doing three stages of separation to get to our final purity level, which is 99.5% purity of separated oxides, which then feeds a metal business. 

A metal business, it turns into alloy and that alloy then gets fed to the permanent magnet manufacturer. So there's still a couple of chains in the strategic supply chain for RirAs that have to take place after we produce separated RirA oxides.

Darren Bowden, CEO, Metals Exploration: Metals Exploration (LSE:MTL) is a gold miner listed on the AIM Exchange and our operations are in the Philippines. Last year we produced 85,000 ounces of gold with a net free cash of 73 million. The company started badly. I took over in 2019 and we basically restructured the business, got the business up and running. And now we've got a very profitable little mine that is doing very well. I think the reason why our share price, our ICF share price is undervalued is we are looking at a company that's always been highly leveraged with debt. 

It used to have a bad history. We've turned that history around, the debt will be paid off by April and our future is in some new prospects in the Philippines. We've done a little bit of work over those prospects. One looks to be a significant copper find at surface between 1% and 16% copper across multiple areas. It's about 8 square kilometres of copper at surface. And the other is epithermal gold. So with a narrow vein, but a highly prospective for gold opportunities in that same region. So looking at the future, we have a bright future with a lot of cash in the hand and we look forward to growing the company.

Shaun Bunn, managing director, Empire Metals: Empire Metals Ltd (LSE:EEE) is London listed. We're on the AIM but we are 100% Australian focused. It's a company with a pretty decent portfolio. We started with – well, we're working with about four different exploration camps over 2000 square kilometres. The most interesting of which is this pit field project. And that's the one that's taking up all of our time and attention now. That's where we made a maiden discovery back in April last year. A massive titanium mineral system that now we're looking to bring into development. 

The next step for us is to really understand what we found. We've been working on this for less than 12 months. We drilled the maiden drill holes, 21 holes in April, May last year. All 21 holes hit this this fantastic mineralisation. We went back in with diamond drilling late last year. Did three big diamond drill holes, 400 meters down. Every hole, from surface to the end of the hole, every metre, high grade titanium. So we suddenly realised the scale of this. We saw some really good grades coming to surface. 

Our latest drill programme, just completed before Christmas, was 6,000 metres, 40 holes, near surface high grade sandstones that were full of titanium. Again, 40 holes, every hole from surface to the end of the hole in high grade. It's just an amazing geological anomaly. So next, work on the processing, work on the minerals and work on working out what the value of this titanium deposit really is.

Neil Herbert, chair, Atlantic Lithium: Atlantic Lithium Ltd (LSE:ALL) is developing the Ewoyaa Lithium Project in Ghana. This is a near-term project with low-cost characteristics. The project has an overall size of 35 million tons today at 1.25 lithium content. We believe there's significant possibility to increase that size over time. But the real characteristics of the project are that it's a very straightforward project. It's a relatively low capex, and for the mining industry, 185 million capex is not a big number. 

We are looking to complete the permitting of the project this year, having last year achieved some very significant steps. First of all, we agreed with the government, the mining lease, which we did at the end of October. We also agreed a significant investment by the Sovereign Wealth Fund of Ghana, MIF, where they're making their first investment now at the Atlantic Lithium level. And what we'll see by mid-year, I hope, is an investment of nearly 28 million into the project itself. So it's an important project for Ghana, and it's an important project for shareholders.

In the current lithium environment, this project fits very well on the cost curve. So it's very important to be able to produce at relatively low costs. So all in sustaining costs as stated at $675 and the C1 cash costs are around $370. Those are very strong numbers in the industry today. 

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