KGL Resources Quarterly Activities Report - 30 June 2024
KGL RESOURCES LIMITED (KGL) Share Update July 2024 Wednesday 31st
KGL Resources Announces Significant Updates in Quarterly Activities Report
KGL Resources Limited (ASX: KGL) has released its quarterly activities report for the period ending 30 June 2024, highlighting significant updates in mineral resource estimates, exploration results, and corporate developments.
Instant Summary:
- Updated Mineral Resource Estimate (MRE) at Reward, with 67% Measured, 32% Indicated, and 1% Inferred resources.
- High-grade copper intersections at Rockface Deeps and Reward.
- Feasibility Study update expected by Q3/Q4 2024.
- Appointment of Philip Condon as CEO.
- Current cash & cash equivalents at $6.48 million.
- Entitlement Offer to raise up to $15.1 million.
Updated Mineral Resource Estimate
KGL Resources has announced an updated Mineral Resource Estimate (MRE) at the Reward open cut and underground resources, improving confidence in the resource. The updated Reward resource, combined with the Bellbird resource, gives JORC Measured Resource within two planned open pits at the Jervois Project: 67% Measured, 32% Indicated, and 1% Inferred.
Exploration Program and Drilling Results
The 2024 drilling program aims to increase confidence in the resource, extend the resource, and increase mine life, which can add materially to the value of the project. At Rockface Deeps, high-grade copper intersections have increased confidence in the mineral resource model. Rockface has not been closed off at depth by drilling, and DHEM geophysics indicates that conductive mineralization continues substantially below the level of current drilling. Significant intersections of high-grade copper were also confirmed in the upper Marshall and Reward Main lodes within the planned open pit.
Feasibility Study Update
An update of the Feasibility Study, initially issued in November 2022, is expected to be released by the end of Q3 or the beginning of Q4 2024. The update includes technology selection and design of the processing plant, resulting in a nominal capacity of 2Mtpa, a 25% increase from the previous feasibility study. Open cut and underground mine pit and stope design have been finalized, with scheduling and reserve updates underway. Civil works and tailings storage facility redesign and costing are progressing, along with updates to ancillary infrastructure, including power supply, camp, and airstrip.
Corporate Developments
KGL Resources has appointed experienced mining executive Philip Condon as CEO, effective 29 July 2024. Condon previously served as GM Projects with responsibility for completing the Feasibility Study. As of 30 June 2024, the company had cash and cash equivalents of $6.48 million. Additionally, a non-renounceable pro-rata Entitlement Offer to raise approximately $15.1 million was announced on 8 July 2024 and will close on 31 July 2024.
The updates in the mineral resource estimates and the high-grade copper intersections are likely to positively impact KGL Resources' stock price as they increase the confidence and potential value of the Jervois Project. The upcoming Feasibility Study update and the appointment of a new CEO with extensive experience in the copper industry are also positive developments that could boost investor confidence. However, the company's current cash position and the need to raise additional funds may be a point of concern for some investors.
Investor Reaction:
Analysts are likely to react positively to the increased confidence in the mineral resource estimates and the high-grade copper intersections. The upcoming Feasibility Study update and the appointment of Philip Condon as CEO are also expected to be well-received. However, the company's current cash position and the need to raise additional funds may lead to mixed reactions among investors.
Conclusion:
Investors should monitor the upcoming Feasibility Study update and the progress of the drilling program at Rockface and Reward. The appointment of Philip Condon as CEO and the successful completion of the Entitlement Offer will be crucial for the company's future plans. Staying informed about these developments will help investors make well-informed decisions regarding their investments in KGL Resources.