Some of the penny stocks on ASX, though in growth phase are already showing signs of good growth potential. Two such stocks are
Aurum Resources Limited (ASX: AUE)
Aurum Resources Limited reported shallow, wide high-grade gold intercepts from its second round exploration diamond drilling at BM Target 1 on the BM Tenement at its Boundiali Gold Project in West Africa. It included 11.46m @ 6.67 g/t Au from 162.54m in MBD049, the best result till date on the BM tenement.
The preliminary gold recovery tests conducted by Aurum Resources Limited on samples from the Boundiali target (BDT1) have shown positive results. The bottle roll tests indicate that the gold mineralization at this site is free milling, with cyanide leach recoveries consistently exceeding 93% for samples with a gold grade of 0.25 g/t or higher. Specifically, oxidized samples demonstrated gold recoveries ranging from 91% to 99%, with an average of 97.5%. For samples with gold grades above 0.25 g/t, the average recovery was 93%. Fresh samples, including various lithologies with sandstone being the most common, achieved an average recovery of 90.3%.
With two new NOCK1300 operational diamond drill rigs, the company is in the process of testing BD Target 1 down to approximately 900m.With six rigs on site, the company targets to achieve 10,000m of drilling per month, thus exploring further potential of the 13km by 3km target zone at BD and other tenements. Focusing on its operation efficiency the company is using a second laboratory. The company is targeting an inaugural JORC resource for Boundiali by late 2024.
AUE with its fleet size of six drills is well funded with cash of $20 million. The new centralized exploration camp progressing on schedule, is expected to be operational by the end of October 2024, improving operational cost and efficiency. The preliminary results have further confirmed that the gold mineralization at BDT1 is amenable to conventional cyanide leaching, which is a positive sign for the potential economic viability of the project.
BCI Minerals Limited (ASX: BCI)
BCI Minerals Limited in its financial results for the year ended 30 June 2024 announced significant growth reporting revenue of $77 million, of which $68.5 million revenue from Iron Valley. Group EBITDA was reported at $7 million. Cash and cash equivalents increased to $259 million from $ 109 million in FY23. Net assets almost doubled to $805 million.
BCI Minerals has completely divested its Iron Valley assets to Mineral Resources Limited in July 2024. With this exit, BCI will receive a final payment of $34.1 million in July 2025 and a $12.5M contingent payment on the commencement of mining at the North Pit.
BCI with its investment of $690 million as of 30 June 2024 in the Mardie Salt and Potash project has completed 44% of the work at the project site and targets to commence the first shipment in Q2 FY27.
The 21-year transhipment service contract with CSL Australia Pty Ltd, valued at $598 million will provide direct, efficient, and cost-effective access to key markets by facilitating the loading of ocean-going vessels up to Newcastle Max size.
The company’s cash and cash equivalents have significantly increased from $41.55 million in 2020 to $258.92 million in FY24. With a liquidity ratio of 3.26 and a debt-to-equity ratio of 14.1%, the company demonstrates strong financial health and manageable leverage. Additionally, an efficient operational cycle, highlighted by quick receivable collection, further underscores its operational efficiency.
BCI’s Mardie Project is projected to become Australia's largest salt project and the third largest globally, with an annual production of 5.35 million tonnes of salt and 140,000 tonnes of SOP. With its excellent location on the Pilbara coast in Western Australia’s key salt production region, the project will attract abundant seawater resources and utilize solar and wind evaporation to produce essential minerals for the growing market. Additionally, it is expected to be the first Australian salt project that will imbibe innovative practices to recycle bitterns from salt operations to produce SOP as a secondary product, enhancing resource efficiency.
The overall outlook for the salt market looks promising. Prices in Asian markets are aligning with expectations, and the market anticipates increasing salt demand coupled with constrained supply growth in the coming years. With a $918m project finance facility in place and $315M of new equity capital to the group, the company has sufficient capital to progress towards its project. The recent Off-take agreements with Wanhua Chemicals in China and Chandra Asri Petroleum in Indonesia highlight strong market interest in Mardie salt. The project's proximity to natural resources and recycling by-products supports environmental sustainability, which can enhance the project’s reputation and appeal to environmentally conscious stakeholders.
Source: Company’s Report
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