Metals Australia Advances Critical Minerals Amid Market Shifts, Faces Key Drilling Milestones

Corporate and Financial Overview

Metals Australia Ltd (ASX: MLS) closed the December 2024 quarter with a cash balance of $14.9 million, down from $16 million at the previous quarter’s start. The $1.1 million net outflow primarily funded exploration, metallurgical test work, and project studies, reflecting the company’s active advancement of its critical minerals and gold exploration portfolio across Canada and Australia.

Lac Carheil Graphite Project: Strategic Expansion and Permitting Milestone

The highlight of the quarter was the awarding of a drilling permit by Quebec authorities, allowing Metals Australia to commence winter drilling aimed at expanding the existing mineral resource at Lac Carheil. This resource currently stands at 13.3 million tonnes grading 11.5% total graphitic carbon (Cg), derived from less than 3% of the mapped 36 km graphite trend. The permit unlocks the potential for a multi-generational graphite supply project, especially significant amid North America’s push to secure domestic critical mineral sources.

Complementing this, Metals Australia tripled its land holdings at Lac Carheil to 233.2 square kilometres through the addition of 234 new claims. These claims not only extend graphite trends but also hold promise for iron ore mineralisation, given their proximity to ArcelorMittal’s Mont Wright Mine, a world-class iron ore operation producing approximately 26 million tonnes per annum.

Advancing Prefeasibility and Metallurgical Studies

Metallurgical test work at SGS Lakefield in Ontario is largely complete, with the process flow sheet for a 100,000 tonnes per annum flake graphite concentrate plant designed by Lycopodium Minerals Canada. Bulk concentrate samples are being prepared for shipment to Germany for downstream processing evaluation, including battery anode plant design. The company is also actively pursuing grant funding in Canada and the USA to support R&D advancing the project from prefeasibility to feasibility stages.

Corvette River Project: Promising Gold and Base Metals Discoveries

Exploration at the Corvette River Project in Quebec’s James Bay region yielded encouraging results from phase 1 trenching and sampling. Significant gold assays up to 4.42 g/t and silver, copper, lead, and zinc mineralisation were identified across three mineralised corridors. These findings, particularly timely given record-high gold prices, have set the stage for a budgeted phase 2 program to further delineate and drill priority targets.

Warrego East Copper-Gold Project: Ready for Field Exploration

In Australia’s Northern Territory, the Warrego East project advanced with the granting of a Mine Management Plan and signing of a land access agreement, clearing regulatory and logistical hurdles for exploration. The project lies adjacent to the Warrego high-grade copper-gold deposit and benefits from recent regional consolidation, notably Pan African Resources’ $82 million acquisition of the neighboring Tennant Creek Mining Group. Field exploration and targeted drilling are planned post-wet season, positioning the project for rapid advancement.

Australian Projects: Mixed Results and Strategic Focus

Drilling at the Warambie project in Western Australia’s Pilbara confirmed shallow nickel-cobalt mineralisation but at sub-economic grades, leading Metals Australia to place further work on hold. Meanwhile, the Big Bell North project in the Murchison Province revealed elevated rare earth element (REE) levels in shallow aircore drilling, though grades are modest compared to world-leading deposits like Mt Weld. No immediate follow-up is planned, with focus maintained on higher-priority Canadian and Northern Territory projects.

Metallurgical test work commenced on the Manindi West titanium-vanadium-iron discovery, targeting high-grade concentrate streams. Concurrently, a review of the adjacent Manindi zinc-copper-silver resource is underway to explore potential project synergies and value enhancement opportunities.

Outlook and Strategic Positioning

Metals Australia’s diversified portfolio spans critical minerals essential for the energy transition and precious metals benefiting from strong market fundamentals. The company’s strategic land acquisitions, permitting successes, and advancing technical studies at Lac Carheil position it well to capitalize on North America’s graphite supply security initiatives. Meanwhile, exploration momentum at Corvette River and Warrego East underscores potential near- to mid-term value catalysts.