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Australian-listed miner Mineral Commodities (ASX: MRC) has reported a high grade resource of 2.5 million tonnes of 23.5% total heavy minerals at its Tormin mineral sands site in South Africa. The resource has been confirmed following drilling at three new beaches, part of a 44 km prospecting tenure.

The drilling has re-commenced along three sections of the beach that MRC is focusing on. The results were prepared in accordance with the Australian Code for Reporting of Exploration Results.

The delivery of a maiden JORC resource along the new Northern Beaches section that MRC was prospecting will double the beach resource tonnes of the very high grade placer style beach system.

MRC has already been mining further down the beach at Tormin on what is called the Inland Strandline. It has mined over 12.3 million tonnes to date from an original mineral resource estimate of 2.7 million tonnes, testament to the richness of the site. This has included deposits of zircon, garnet, ilmenite and rutile.

MRC said yesterday that it thought the development of the Northern Beaches will be relatively straightforward, commencing with the relocation of its current beach concentrators to Beach 10, where some of the new results have been sourced.

Northern Beaches incorporates 10 beaches adjoining and directly north of the existing MRC operations. Like its existing operation, it is going to be mining a resource that it naturally replenished by the sea.

The Armchair Trader started covering MRC on 30 March, when shares were trading at A$0.18. We liked the fact that it had confirmed rights to prospect along a much longer section of strand than previously, and that the geological team had historic results from previous diamond mining activities to go on. The price has now risen to $0.23.

One of the highest grade mineral sands in the world

Tormin represents one of the highest grade mineral sands operations in the world. MRC said at the end of March that South Africa’s Department of Mineral Resources and Energy is expected to finalise its Section 102 Expanded Mining Right application in June. This will permit it to expand its mining footprint at Tormin.

The company is not a one mine punt, however. It has other operations like flake graphite at Skaland in Norway and is working on the development of a very high grade graphite mine at Munglinup in Australia.

As at 31 March MRC had US$4.8 million in cash plus $14.3 million in trade and other receivables. It had borrowings outstanding of $6.3 million. It owns 50% of the Mineral Sands Resources operation.

The company completed a feasibility study at its Australian graphite site in December, which it published in early January. It said that this facility would become “a crucial asset” in its strategy manufacture and supply battery anode materials that can meet the fast-growing demand in the lithium-ion battery sector.

MRC seems to be very well-positioned to provide many of the materials that are going to be needed as the world shifts over to more electric vehicles. It has mines and production / shipment processes in place. It already seems to have weathered the COVID-19 storm, with much of its operations coming back online.

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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