Hammer Hits

Extract of todays article by Barry Fitzgerald on
livewire markets .com


“Hammer hitting copper in Queensland, Calidus eyes first gold as its lithium exploration fires up and gold hunts by Nagambie and Mamba attracting strong interest.

The copper price was doing nicely long before Russia invaded Ukraine, having risen 51% from its (calendar) 2020 average to a 2021 average of $US4.22/lb.

The price has been swept higher in recent days to $US4.65/lb in recognition that on Macquarie figures, Russia accounts for about 4% or 1mtpa of global copper supply, of which about 75% is – or was - exported.

So while copper is not in the same basket as the energy commodities which have shot massively higher in response to the invasion, the copper price is certainly now consolidating in record territory levels.

There isn’t a copper producer or explorer who would not want to see the end of the Russian invasion and take last year’s average price of $US4.22/lb for the long run.

The spike to $US4.65/lb nevertheless has heightened investor interest in the copper producers and explorers.

The leverage to a discovery that explorers can bring to the table means they make can make their own way in a $US4/lb-plus market anyway.

Carnaby (ASX:CNB) has done that with its December high-grade hit (41m at 4.1% copper) at its Nil Desperandum prospect in the Mt Isa region of north-west Queensland. What was a $35m company before the hit is now valued at $260m.

Needless to say that the excitement around Nil Desperandum has rubbed off on other explorers in the region.

Today’s interest is one of them, - Hammer Metals (ASX:HMX), trading at 9c for a market cap of $73m and holding cash of about $8m for a super-active 2022 drilling program.

It is a neighbour of Carnaby’s in the region and recently put its hand up as one to watch when it reported a 10m hit at its Ajax prospect grading 3.5% copper from 27m (subject to confirmation in the assay lab, with results expected within 7 days).

It has been followed up with downhole EM and soil geochemistry, with more drilling planned there after the completion of a drilling campaign at a big IOCG target at the Overlander South prospect which was identified using the same techniques Carnaby had success with.

All up, Hammer has some 14 targets to test in its current drilling program.

It already has a 400,000t copper equivalent resource under its belt in the region across a number of deposits. That’s interesting in itself at the current copper price. Get the resource to 600,000t or so and it would have a hub development on its hands.

Even better, find a big standalone project development from the IOCG hunt and it would be off to the races for the company.“

Goodluck to all holders.

cheers Aussie