Strickland speaking, the market will catch up to this fast-growing Serbian gold monster – eventually

Keep finding ounces to add to a likely Tier 1 project and the market will come along with you, eventually.

It’s the situation that Strickland Metals (ASX:STK) finds itself in as full market recognition of its now 8.6Moz gold-equivalent Rogozna project in Serbia is taking time to arrive.

Strickland this week delivered a maiden inferred resource for its Gradina discovery, one of four skarn-hosted gold and base metals deposits sitting within a massive system at Rogozna.

The estimate for the gold-dominant Gradina was 12Mt at 3 g/t gold for 1.2Moz. It was bigger than the market was expecting and is what carried Rogozna from the previous 7.4Moz gold-equivalent inferred resource estimate to the 8.6Moz level.

That’s as big as things get on the ASX yet Stickland has continued to plod along at 18.5c a share for a $415m market cap ($A48 a resource ounce in a market where $80/oz to $A100/oz would not be unreasonable given gold continues to shoot the lights at more than $US4,200/oz).

It has previously been noted here that China’s Zijin – now the world’s third biggest-miner and a major copper producer in Serbia – seems to like what is unfolding at Rogozna, as is reflected in it taking up a 3.3% foothold on the register.

Canaccord is also fan of Rogozna judging by its price target on Strickland of 60c a share. In a research note on the Gradina resource estimate, the broker said it reinforced Rogozna’s growing Tier 1 scale.

It noted there was a resource update coming in the March quarter next year for the Shanac deposit, which currently stands at 5.3Moz gold-equivalent.

Canaccord has previously modelled Rogozna as initially shaping up as a development involving a 3.5Mtpa flotation plant processing 2.5g/t AuEq blended material from the Shanac and Gradina deposits.

That could produce 190,000oz of gold-equivalent (163,000oz gold component) for 10 years.

Canaccord’s benchmarking suggests that AISC could average $US1,415/oz over the initial life of mine after capex of $US600m.

“At steady state and under the above assumptions, mines at Shanac and Gradina have potential to deliver $$500m in free cash flow per annum,” Canaccord said.

That’s interesting stuff for a company with a $415m market cap.

Apart from anything else, Rogozna’s full potential is likely to be something bigger still.

Marmota:

South Australia’s re-emerging west Gawler gold province has again put its hand up for attention from investors thanks to Marmota’s (ASX:MEU) release of bonanza-type assays from its Greenewood discovery.

The assays were from the first 1m splits following on from the 4m composite results released in early October and included 95g/t gold from 22m and 94g/t gold from 66m in separate holes. It was enough to drive Marmota shares a stonking 83% higher to 13c for a market cap of $153m.

Bonanza-type grades have now been encountered within 17m to 67m from surface over a 900m length, and occur within thicker intersections at more sedate impressive grades (33m at 10g/t from 22m in the first hole mentioned above, and 22m at 5.1g/t from 49m in the second).

Needless to say, Marmota is chuffed with what is unfolding at Greenewood, noting that the drill results are some of the best seen in the west Gawler since the discovery of the high-grade Challenger deposit in 1995 by the long-gone Dominion Mining.

The remaining Challenger mill is now owned by Barton Gold (ASX:BGD), the 2021 $15 million IPO which has become a $290m company on the strength of its moves towards becoming a 150,000oz a year producer, starting from the end of next year at 30,000oz a year at Challenger,  and later at 120,000oz a year from Tunkillia.

It is of note then in the context of Marmota that its Greenewood discovery is all of 30km north-east of Challenger and 35km northwest of Marmota’s current flagship – the Aurora Tank gold deposit where a heap-leach gold operation is the plan.

What seems clear is that a regional consolidation play is in the offing in the western Gawler. It was notable that Barton shares traded slightly higher in Thursday’s market, outperforming the rest of the gold producers/developers which were getting hit because the gold price fell.

It seems that good news for Marmota is being taken as good news for Barton for reasons which are fairly obvious.

PhosCo:

It is not only the ASX-listed gold, silver and more recently the lithium stocks that have been finishing off the year with a bit of a flourish.

The example is a phosphate stock, PhosCo (ASX:PHO).

Mentioned back here on October 2 when it was a 7.1c stock for a market cap of $32 million, the Taz Aldaoud and Lion Selection (ASX:LSX)-backed company has moved on up to 13.5c for a $62m market cap.

Aldaoud, PhosCo’s managing director, and Lion get named there because they own 19% and 15.9% of PhosCo respectively.

PhosCo is a company plugged into the enduring thematic of there being a need to feed the world thanks to its large-scale Gasaat project in Tunisia. It is the type of project that Lion has said previously could attract the attention of one of the world’s big fertiliser groups.

Apart from the potential for some M & A activity around the stock, PhosCo’s focus now is very much on advancing Gasaat after some nonsense legal action over the project was put to bed.

A commissioned research report by Pitt Street Research said PhosCo was now “well-primed to become a cost-competitive, globally significant fertiliser producer, at a time of mounting supply concerns for phosphate”.

A December 2022 scoping study arrived at a NPV of $US657m, using a 10% discount rate and a $US150/t phosphate price, pretty much where it is now.

It would be very much the start as the study was based on only two of the nine prospects at Gasaat, something which points to the potential for the broader region to become a major new phosphate province.

Pitt Street valued PhosCo at 35c a share in its base scenario and at 56c a share in its bull case scenario.