Monday witnessed a strong jump in iron ore prices. The appreciation came just before the Chinese National Day holiday from Oct 1 to Oct 7, when the Shanghai Stock Exchange remains closed during the period. The increase percolated down to the small cap stocks as the break usually generates high level of activity. Two such stocks likely to be influenced by this are
Genmin Limited (ASX: GEN)
Genmin Limited closed the quarter by raising $23.4 million and clearing its debts. The company previously secured a twenty-year mining permit for its wholly-owned Baniaka iron ore project.
The company’s primary focus remains on developing the Baniaka iron ore project, aiming for an initial production rate of 5 million tonnes per annum (Mtpa). The project's strategic location adjacent to existing renewable energy and bulk commodity transport infrastructure makes it an ideal exploration site. Genmin has secured long-term access to clean, renewable hydroelectricity for 20 years and an integrated rail and port agreement for 15 years, which will support the transportation and export of its iron ore to global markets.
The company has been emphasizing the environmental benefits of its Baniaka Green® iron ore products to support the green steel transition, particularly in the Chinese market, where it has successfully positioned Baniaka Green®.
Recently, Genmin signed a Memoranda of Understanding (MoUs) with Hunan Iron and Baowu Resources, both prominent vertically integrated enterprises ranked among the top 15 global steel producers. To date, Genmin has secured four MoUs, totaling 19 million tonnes of Baniaka Green® Fines, Lump, and Pellet Feed products over initial terms ranging from two to three years.
GNM is making significant strides with its Baniaka iron ore project, forecasting an initial production rate of 5 million tonnes per annum (Mtpa) with plans to scale up to at least 10 Mtpa over time. Commercial production is anticipated to commence from mid-2025.
The exploration activities being not concentrated on any single commodity provide an opportunity for risk mitigation associated with the fluctuations in commodity prices. Secondly proximity of the site enhances the economic viability of future mining operations. Debt free at this point provides a wider room for the company to allocate more resources towards exploration and future studies. Additionally mining projects in Gabon expands its asset base and revenue streams, which could significantly contribute to long term growth trajectory of the company.
Hawsons Iron Limited (ASX: HIO)
Hawsons Iron Limited has reported significant progress from its drilling programs conducted in H1 2024, building on previous efforts in H1 and H2 2023. The latest results have revealed high-grade mineral resources, particularly in shallow magnetite mineralization within the Fold Zone, situated south of the current mineral resource.
The Hawsons Iron Project has set an Exploration Target ranging from 5 to 18 billion tonnes. This target is in addition to its existing Mineral Resource estimate, which comprises Measured, Indicated, and Inferred resources totalling 4.415 billion tonnes. The estimate uses a 4% recovered magnetic fraction DTR (Davis Tube Recovery) cut-off and is constrained within a pit shell.
Following the recent drilling outcomes which expanded the previous Mineral Resources, Hawsons Iron Ltd is gearing up to launch a comprehensive infill drilling program. This initiative aims to substantially increase the Measured and Indicated Mineral Resources, thereby extending the projected mine life of the Hawsons Iron Project.
The forthcoming infill drill program is expected to enhance the accuracy and confidence in the mineral resource estimates. By focusing on areas with higher potential for economic extraction, the company intends to bolster investor confidence by providing greater certainty in project viability.
These efforts are anticipated to positively impact both the Net Present Value (NPV) and Internal Rate of Return (IRR) of the Hawsons Iron Project. The project's resource base getting further defined and expanded enhances its economic outlook and attractiveness for potential investors and stakeholders.
Source: Company’s Report
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