Company name: R3D RESOURCES LTD
The proceeds from recent capital raise will place the company in a stronger financial position achieving cash flow positive status, based on current production levels at Tartana being 4 tonnes per day and ramping up towards 8 tonnes a day.
R3D’s journey and what to potentially expect – a note from the MD:
“The plant has taken longer than expected to refurbish but it is now largely completed so the hard work has now been done. It has been more complex but then it produces a superior quality copper sulphate which we are advised by our offtake, that the market will readily accept and will sell at a premium.
The copper remains in the ponds and heaps ready for production over the first half of 2024”.
We anticipate our first shipment will go out next week although we have been impacted by Cyclone Jasper. However this is only a temporary issue.
Cash flow from operations in the first half of 2024 will be partly directed at restarting drilling programmes including expanding the 45,000 contained copper resource to 100,000 tonnes in the Tartana open pit, also increase our 39,000 tonnes of contained zinc resource at Queen Grade and 415,000 gold resource at Mountain Maid.”
As per recent Chairman’s Address - Critical upcoming milestones include:
- First revenues from Copper Sulphate operation;
- Payments received from recently completed shipments of Zeehan Zinc slag as well as a potential further and final shipment
- Conducting additional resource extension drilling at Tartana to increase our JORC 2012 Copper resource beyond the current 45,000 tonnes;
- Realising the value of the Gold tailings at our Zeehan project, whether that be through divestment or finding a partner to operate the project ourselves; and
- Undertaking further on-ground exploration at projects including Nightflower, Queen Grade, Beefwood, and Mountain Maid.
- The strategy is to create shareholder value with a key focus on exploration. To finance exploration activities, the company is now generating its own cash flow. They have recently completed a refurbishment of the Tartana heap leach – solvent extraction – crystallisation plant for the production and sales of copper sulphate in October 2023. R3D is expecting to be cash flow positive for the December quarter (Q2 FY24)
- Primed for production and cash flow as Kanins (100% Offtake partner) have received R3D’s initial Copper Sulphate production samples and the product has met the targeted specifications. Kanins is the market leader in Copper Sulphate sales in Australia and will be conducting a site visit in November to assess the product quality and propose pricing terms for initial production. Relying on their experience, Kanins will also be supporting a process improvement review as R3D look towards ramping production to 8+ tonnes of Copper Sulphate per day in the coming months. Copper Sulphate contains ~25% Copper and is accordingly priced by reference to the LME Copper price plus a premium dependent on the quality of the product. Premiums can range from $100 per tonne through to over $500 per tonne for Copper Sulphate that is suitable for agricultural purposes. R3D considers its product is of a sufficient quality to warrant a premium on the upper end of that scale.
- R3D is economically positioned to take advantage of the Copper Sulfate market, as it’s projected to grow from ~USD$1.3 Billion 2022 to approximately $2 billion by 2032, reflecting a compound annual growth rate (CAGR) of 5.8% *marketresearchfuture.com. Currently, China, Japan, South Korea, Taiwan and India make up 61% of the world’s copper market, with the agricultural sector’s rising need for copper sulfate and the expansion of the Copper market are key drivers.
- R3D have a portfolio of assets that include
- The Tartana Copper Sulphate Plant: A recently commissioned Copper Sulphate Pentahydrate production plant for which the Company has secured a 100% offtake partner, Kanins International. Now in commercial operation and expecting to be cash flow positive on an operational basis for the December quarter.
- Tartana Copper/Gold: A significant resource totalling 45,000 tonnes of contained Copper at 0.45% using a 0.2% Cu cut-off grade reported in early 2023. Preliminary ore sorting testwork indicates potential for approximate 100% upgrade to Copper grade. Mineralisation remains open at depth with further drilling targeted for 2024.
- Queen Grade Zinc: A resource of 39,000 tonne contained Zinc at 5.29% Zn using a 0.5%n Zn cut-off grade with potential Ag and Pb credits not included reported in early 2023. Mineralisation remains open at depth and similar in style to the nearby King Vol orebody which extends to depths exceeding 500m.
- Mountain Maid Gold: A resource of 415,000 oz Gold at 0.34 g/t Au using a 0.2g/t Au cut-off grade including an oxidised zone of 37,300 koz at 0.35g/t Au at or near surface, reported in early 2023. Mineralisation remains open in several directions.
- Nightflower Silver: A recently acquired Silver project with an exploration target across Northern section of the project of 2.7 million tonnes @ 134g/t Ag for 17 million oz Ag contained to 5.3 million tonnes @ 193 g/t Ag for 23 million oz Ag contained.
- Zeehan Zinc: A Zinc slag project where the Company has been exporting Zinc slag offshore on recently improved margins. As the Zinc is now largely depleted the Company is exploring the sale of the project or the development of a new project extracting precious and base metals including Gold from tailings on site. The Company announced in July 2023 that it was finalising negotiations towards the sale of the project, however these negotiations are yet to complete as terms and deal structure are being reviewed in the context of an increased Gold price.
- Other exploration assets: The Company also owns a number of additional exploration assets including Beefwood, Bellevue, and Cardross.
- Managing Director – Stephen Bartrop, has an established track record of more than 30 years covering periods in both the mining industry and financial sector. With a geology background, Steve has worked in exploration, feasibility and evaluation studies and mining in a range of commodities and in different parts of the world. In the financial sector, Steve has been involved in research, corporate transactions and IPOs spanning a period of more than 20 years, including senior roles at JPMorgan, Bankers Trust and Macquarie Equities. Steve is also a director of Southwest Pacific Bauxite (HK) Ltd, a company developing a bauxite project in the Solomon Islands and Chairman of Breakaway Research Pty Ltd.
- Chairman, Jihad Malaeb, has an established record as a substantial shareholder and director of publicly listed natural resource companies including a run at Critical Resources Limited which saw a significant increase in the market capitalisation during his tenure. He also has a number of other investment vehicles focussing on hospitality, property, and construction. He has also been a significant supporter of the Company and has a material shareholding, in addition to having lent the Company $500,000 to assist production.
- R3D’s highly experienced Board and Management Team, have extensive hands-on operational experience in minerals exploration, mining, production development and commercial strategy in Australia and around the world.
R3D RESOURCES LIMITED (R3D) (to be renamed Tartana Minerals from early next year) is an ASX-listed, significant copper, gold, silver and zinc explorer and developer in the Chillagoe Region of Far North Queensland.R3D owns several projects of varying maturity, with the most advanced being the Tartana mining leases, which contain an existing heap leach – solvent extraction – crystallisation plant nestled between its Tartana (45,000 tonnes Copper) Queen Grade (39,000 tonnes Zinc) and Mountain Maid (415,0000 gold resource)
DISCLAIMER: ‘The information does not constitute personal financial advice. Consult your adviser or broker prior to making any investment decision.
For further information about this company, email – shareholder@pelshare.com.au
