MineLife Resource Report

Coverage stock Melbana Energy Limited (ASX: MAY) is an upstream oil and gas exploration company with its project focus on Cuba. We introduced MAY to our coverage universe during September 2021, based on its maiden exploration drilling program that ultimately identified the Alameda oil discovery, located within the onshore Block 9 PSC. The block comprises a large onshore acreage (comprising 2.1% of Cuba's total area) situated on the north coast, 140km east of Havana. MAY was carried for 85% of the cost of the initial two-well drilling program, whilst retaining a 30% stake. MAY closed up 53% in Wednesday's trade following the release of its field development plans. The Alameda-1 well has significantly exceeded pre-drill expectations, and the Alameda discovery is now being subject a full field development program, maiden commercial oil production expected during Q1 2025. MAY's focus is on the development of new production wells within the shallower Unit 1B reservoir in order to increase the rate of production from the 46 million barrels of Contingent Resource (100% share, Best Estimate) as quickly as possible. To fund this work, MAY will utilise its existing cash reserves ($12.4M cash as at the end of the June Quarter), supplemented by revenue from oil sales. The plan is to truck the oil to oil storage tanks at the Matanzas Supertanker port. #oil #energy #commodities #resources #Cuba #equities

Coverage stock Rimfire Pacific Mining Limited (ASX: RIM) (initiated @ 2.3c in 2016) has provided an important update with respect to exploration activity at the Bald Hill Prospect, located within its Broken Hill Project in NSW. RIM is currently undertaking a 6-hole/1,000-metre diamond drill program at Bald Hill, designed to test the significance of a very strong magnetic anomaly, which is interpreted to be a potential extension to previously drilled high-grade cobalt (Co) and copper (Cu) mineralisation. The Bald Hill magnetic anomaly trends NNE, dips to the southeast, and has a near-surface extent of 450 x 400 metres, extending to a vertical depth of approximately 300 metres below surface. 3D modelling suggests that the anomaly plunges to the southeast, with RIM’s 2023 diamond holes just “clipping” the top of the anomaly. Encouragingly, the first two holes in the program have successfully intersected multiple broad zones (downhole widths) of sulphide mineralisation, 100 – 200m away from previous high-grade cobalt drill intercepts (assays awaited). The project’s cobalt and copper prospectivity are highlighted by the presence of Havilah Resources’ (ASX: HAV) Mutooroo Copper Cobalt Gold Deposit 35km to the southwest of Bald Hill and Cobalt Blue’s (ASX: COB) Broken Hill Cobalt Project 10km to the south. #copper #cobalt #commodities #resources #exploration #mining #ausbiz #equities #NSW David Hutton FAusIMM

Coverage stock West African Resources (ASX: WAF) (initiated @ 8c in 2015, now $1.415) has delivered another strong production and financial result for H1 2024 from its flagship Sanbrado gold mine in Burkina Faso, producing 107,644 ounces of gold at an ASIC (All-In-Sustaining-Cost) of US$1,223 per ounce. Gold sales during H1 2024 were fully unhedged and comprised 101,954 oz at an average price of US$2,199/oz. WAF’s investment case is centred around consistent ongoing production, together with its ability to successfully deliver its next major gold project, Kiaka, and return funds to shareholders when it reaches full commissioning from CY2026. Sanbrado has established WAF’s reputation as a company that can develop mines and become a reliable producer. Site construction activity at Kiaka is undergoing a major ramp up, with the project importantly fully funded to first production. WAF is on the path to becoming a +400,000 ounce gold producer from 2025 to 2032. #gold #equities #resources #mining #ausbiz #commodities #exploration

Interesting to see that New Zealand today has committed to passing laws by the end of this year that will reverse the current ban on offshore oil and gas exploration, and will also take urgent steps to remove regulatory hurdles to import liquefied natural gas (LNG) amid energy shortages. The current exploration ban has been in place since 2018 on activity outside of the onshore Taranaki Basin. #exploration #commodities #resources #oil #gas

As we've previously highlighted, one of the most important factors driving gold's ascent to record levels has been the corresponding growth in global debt. And this is not an overnight phenomenon, in fact over the past quarter of a century (1999 - 2024) gold has risen at an average of 8% annually. Debt meanwhile has grown exponentially, particularly during the post-GFC and post-covid periods. Global debt hit a new record during Q1 2024, increasing by $1.3 trillion in just three months to $315.1 trillion. Since the onset of the covid pandemic, global debt has surged by 21%, adding $54.1 trillion to the global total. In the USA, debt servicing costs are now more than defence spending, and the interest bill is set to rise further. Consequently, the government may need to raise taxes or cut spending in order to tackle its debt. Even more concerningly, about a third of emerging markets have not recovered from the pandemic, with per capita income standing beneath levels seen in 2019. Yet emerging market debt levels are also at a record of $105 trillion, climbing by $55 trillion over the last 10 years. #gold #debt #economy #resources #commodities #investment

Some interesting conclusions from independent US energy research consultancy, Thunder Said Energy. Based on their calculations, their estimate of the total cost of ownership for electric vehicles (EVs) remains 40% higher than for Internal Combustion Engine (ICE) vehicles, at US$7k/year versus US$5k/year, based on a data-file that aggregates key pricing and performance metrics for 50 vehicles. The key reasons are: +55% higher vehicle purchase costs, 25% shorter lives, and 30% higher insurance costs, offset by -60% lower fuel/charging costs. For comparison, Thunder Said estimates that EVs are now cost competitive per unit of horsepower (bottom right chart), but remain 2.5x more expensive per km of range (bottom left) and 40% more costly per cubic metre of passenger volume (top right). #electricvehicles #EVs #commodities #resources

As gold continues to trade at close to record highs, the recent intense media focus on the metal suggests that gold's surge is a relatively recent phenomenon. In actual fact, the gold price has been on a generally upward trajectory since just before the start of the 21st century, i.e. since around 1999, when it had bottomed at just below US$270 an ounce. At that time, gold was viewed as an archaic relic in some financial quarters. Australia's Treasurer at the time, Peter Costello, sold two-thirds of the nation's gold reserves at an average price around $US306 an ounce in 1997, followed by the Bank of England selling off half of its gold reserves at an average price of US$276 an ounce between 1999 and 2002. At the time, the gold price was at its lowest level in 20 years, due to an extended bear market. The period itself was ultimately dubbed by some commentators as 'Brown's Bottom', because Gordon Brown was Chancellor of the Exchequer at the time. Since then, the gold price has increased at an average of 8% annually in the 25-year period from 1999-2024, to close to $2500 per ounce in recent weeks. Gold's ascent has been driven by a host of factors – but the key theme has been a background of escalating worldwide debt over the past 25 years, underlined by periods of exponential debt growth during the post-GFC period from 2008, and the Covid and post-Covid eras from 2020 onwards. Global public debt reached a record high of US$97 trillion in 2023. In the US we see that gold priced in U.S. dollars has a 92% correlation to Total Federal Debt Outstanding since Nixon closed the Gold Window in 1971. So rising debt helps boost gold prices. The other key aspect in all of this are the world’s central banks, which have been buying gold aggressively over recent decades, to the point where this buying is now at record levels. Rising debt levels lead to currency weakness, which in turn is seeing global central banks seek out gold as a store of value. #gold #commodities #resources #investment

Junior resource equities are having a tough time of it at present - negatively impacted by global economic uncertainty, political instability, sharemarket volatility, softer commodity prices (with the exception of gold and silver), and a tough fund-raising environment. In fact, market conditions are the toughest for several years. This is reflected in the performance of the S&P/ASX Small Ordinaries Resources Index, which has fallen to its lowest level since April 2021. One of the biggest contributing factors has been the lacklustre performance of the Chinese economy since Covid. China is by far the world's biggest commodity consuming nation, and Australia is therefore heavily leveraged to China as we are one of the world's biggest commodity exporters. The junior sector has been particularly impacted by the downfall in lithium prices, which has drastically affected sentiment amongst smaller companies, which grew dramatically in number as investors clambered for lithium exposure. Whilst medium to long-term commodity demand looks healthy, the near-term outlook is being clouded by weaker than expected global demand, combined with oversupply (especially for lithium and nickel). It will take time for commodity markets to rebalance themselves. #commodities #resources #mining #exploration #investment

The ASX Small Ordinaries Resources Index (AXSRD) has recovered strongly to be trading at its highest level in just over 12 months. The major catalysts have been the gold and copper sectors, where prices for both commodities have reached record highs, which in turn is beginning to generate movement in emerging resource equities. Silver too is trading at its highest level since 2012, whilst uranium has been a strong commodity performer (up 82% over the past 12 months). We've also begun to witness a recovery in nickel prices, up almost 30% since their February lows. This has assisted small companies with their capital raising activities. #gold #silver #copper #uranium #nickel #commodities #resources

Whilst copper's overwhelmingly positive long-term demand - supply fundamentals have been obvious for some time now, it doesn't mean that prices will go up in a straight line (nothing ever does!). The somewhat overlooked elephant in the room when it comes to the fortunes of the copper price is what hedge/investment funds are doing in terms of their positioning in the metal. The graphic clearly shows the magnified impact that underlying movements in hedge fund long/short positioning have on copper pricing. In terms of copper's current rally, funds are strongly positioned in the metal as there are prospects of a major supply side shortfall, as reflected in smelter treatment fees (a gauge of tightness in the ore market) that fell below zero during April - raising the prospect that plants will be forced to cut production to stem losses. #copper #commodities #metals #resources