0Strickland Metals Gains Attention in Serbia, Aura Energy Eyes Uranium Surge
Canaccord Genuity (CG) has initiated coverage on Strickland Metals (ASX:STK) with a SPECULATIVE BUY rating, setting a price target of 16 cents, signaling strong potential within the gold and base metals sector.
At the time of writing, STK is trading at 8 cents.
The company’s standout asset is the Rogozna Gold & Base Metals Project, located in southern Serbia, which has recently drawn significant investor interest. Situated in a mineral-rich region, the project is surrounded by major industry players such as Zijin Mining and Rio Tinto.
Rogozna boasts a large-scale magmatic hydrothermal system, with substantial gold and copper resources spread across four key prospects: Shanac, Copper Canyon, Medenovac, and Gradina.
The Shanac deposit, in particular, stands out, holding a JORC inferred mineral resource of 130 million tonnes at 1.1 grams per tonne (g/t) AuEq, equivalent to approximately 4.63 million ounces of in-situ metal.
Canaccord Genuity highlighted that with ongoing drilling activities, resource expansion is highly probable across the entire project area.
CG has presented two potential mining scenarios for Shanac:
- Longhole Open Stope (LHOS) Method – This approach focuses on higher-grade material and could produce 96,000 ounces per year at an average all-in sustaining cost (AISC) of US$1635 per ounce, with an initial capital requirement of US$250 million.
- Sublevel Cave (SLC) Method – This larger-scale mining method could yield 126,000 ounces annually, but requires an upfront investment of US$450 million and an AISC of US$1675 per ounce.
Both scenarios indicate significant value within the project, according to CG’s analysis.
In 2025, Strickland plans to provide updated resource estimates for Shanac and a maiden resource for the Medenovac prospect.
As of September 2024, Strickland’s strong cash position, with $17.1 million in the bank and investments worth $26 million, alongside zero debt, positions the company for growth. Despite being in the early stages of exploration, the company’s drilling campaigns have the potential to unlock substantial value.
“With gold, copper, and promising exploration upside, STK is a company to watch closely,” CG noted.
Speculative Buy on Aura Energy’s Uranium Prospects
On a related note, Argonaut has also maintained its SPECULATIVE BUY rating on Aura Energy (ASX:AEE), with a price target of 35 cents. At the time of writing, AEE is trading at 14 cents.
The broker highlighted Aura’s significant progress at its Tiris uranium project in Mauritania, with notable potential for increased production.
Aura recently announced a 49% increase in its uranium reserves at Tiris, now totaling 62.8 million tonnes at 243 parts per million (ppm) U3O8, amounting to 33.6 million pounds of uranium.
The company has outlined two expansion scenarios for the project, which could increase production to as much as 4 million pounds per year, greatly improving the project’s economics.
These expansion plans also promise to reduce AISC to approximately US$32 per pound, down from the base case of US$36 per pound, enhancing the project’s margins.
All permits and licences are in place, and AEE is targeting a final investment decision in early 2025.
Once approved, construction will take 18 months, with first production potentially starting in 2027. At full ramp-up, production could reach 2.25mlbpa by 2030, said Argonaut.
The key to Tiris’ viability is its beneficiation process, which upgrades ore from around 246ppm to 1500-2000ppm, improving profitability.
However, as Argonaut points out, there is risk at scale, and successful implementation of beneficiation will be crucial.
To fund this growth, AEE has raised $9m through an equity raise at $0.14 per share. Full development, however, will likely require $350m in debt and $150m in equity.
While Argonaut has lowered its price target by 13% to $0.35 due to increased dilution and lower uranium spot prices, the broker remains positive on Aura’s growth.
The major risks to the valuation, Argonaut said, are uranium price fluctuations and potential delays in construction or ramp-up at Tiris.
