RTR - Rumble Resources

[greggles]

This is earlier than expected. Good luck to holders. Hopefully a surprise to the upside on a good day for the ASX.

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Yes, good luck to holders. The fact that it's early does indicate that it could be a surprise to the upside. if it was below expectations they may have waited for further assay results to come in to help firm things up. So there is some cause for optimism.

Earaheedy will eventually be a Super Giant deposit in my view, but the initial MRE will likely be in the range of 60-80MT.

Whatever the case, this announcement will set the tone for RTR for the remainder of 2023. Fingers crossed that it delivers for shareholders.

 

[brerwallabi]

Didn’t expect this so soon thought we would be waiting longer.
My concern is the recent drop to 18 was caused by leaks and this MRE is relatively good as it should be but nowhere near the expectations of some large hands.
Yes it certainly is fingers crossed.

 

[Sean K]

They must think this MRE is pretty good, or have to explain why it's not as good as we thought. Or....

 

[Sean K]

I thought the high grade area might have been a bit bigger. Only 12Mt @4.8%. Not sure about the stuff below 3%. How much capex would there be for beneficiation of the low grade stuff? Might be a lot, but would be interesting to know.

 

[greggles]

I thought the high grade area might have been a bit bigger. Only 12Mt @4.8%. Not sure about the stuff below 3%. How much capex would there be for beneficiation of the low grade stuff? Might be a lot, but would be interesting to know.


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The results aren't spectacular but they are very good and at the higher end of expectations for an initial MRE. It is a world class deposit with a solid high grade component. Management made sure to highlight the future potential of the project with the four statements under the heading, "Exceptional resource growth and Tier 1 scale potential".

The market has reacted positively with RTR back to 24c (up 26.32%) at the start of today's trading.

The drill rigs will be spinning again very soon.

Mr Shane Sikora, Managing Director of Rumble Resources commented:
“This exceptional resource estimate is a major milestone for Rumble, confirming the Earaheedy Project as one of the largest zinc sulphide discoveries globally over the last decade. Achieving a maiden JORC compliant Mineral Resource Estimate of this size and significance in 24 months post discovery is a tremendous effort by the technical team and especially Brett Keillor. Myself and the team are really excited as we believe we have only scratched the surface on the discovery front, and can’t wait to see the drill rigs turning again next month.”

 

[Sean K]

The results aren't spectacular but they are very good and at the higher end of expectations for an initial MRE. It is a world class deposit with a solid high grade component. Management made sure to highlight the future potential of the project with the four statements under the heading, "Exceptional resource growth and Tier 1 scale potential".

The market has reacted positively with RTR back to 24c (up 26.32%) at the start of today's trading.

Yes, has the tonnage and will only get bigger. Good they've defined a certain part of the project, can now probably extrapolate that out to the rest of the strike.

Not sure of the significance of the 462Mt @ 1.3% measurement. I don't think there's any zinc mines under 3%, if any.

But, might be like magnetite IO mines. Once you go through some beneficiation, it's valuable.

Good jump on the open, hopefully there's follow through.

 

[Sean K]

Mr Shane Sikora, Managing Director of Rumble Resources commented:
“This exceptional resource estimate is a major milestone for Rumble, confirming the Earaheedy Project as one of the largest zinc sulphide discoveries globally over the last decade. Achieving a maiden JORC compliant Mineral Resource Estimate of this size and significance in 24 months post discovery is a tremendous effort by the technical team and especially Brett Keillor. Myself and the team are really excited as we believe we have only scratched the surface on the discovery front, and can’t wait to see the drill rigs turning again next month.”

It looks like the overall tonnage should double if the red circles are mineralised, which you'd expect a lot of it to be.

I wonder how much near surface, open pit makes up for lower grade, compared to all those high grade underground zinc mines go? Haven't seen a comparison or discussion on that in my research.

 

[greggles]

Yes, has the tonnage and will only get bigger. Good they've defined a certain part of the project, can now probably extrapolate that out to the rest of the strike.

Yes, that will probably be the next steps. They will need to raise capital this year but some exceptional assay results between now and then will go a long way in supporting the share price in the lead up to the CR.

Not sure of the significance of the 462Mt @ 1.3% measurement. I don't think there's any zinc mines under 3%, if any.

But, might be like magnetite IO mines. Once you go through some beneficiation, it's valuable.

I suspect this is the case. The high grade is the first stuff you go after and then try and make the low grade economic through beneficiation.

Good jump on the open, hopefully there's follow through.

We will see some selling into strength this morning with traders taking control but the afternoon price action will tell the short term story. My feeling is today's announcement will generate a lot of long term position taking and hopefully that buying will push RTR forward after traders have exited their positions.

 

[peter2]

I treat these types of news announcements as an opportunity to sell on the price spike. We knew the resource was big, possibly tier 1. Today's news confirms this. What happens now? Only more drilling, which will take months before results are available. More time for the price to drift lower again. Investor follow up now will be very interesting to watch. I'm not excited by this base metal resource.

There's plenty of time to buy into this company as an investor and there'll be lots short term trading opps too.

 

[greggles]

I treat these types of news announcements as an opportunity to sell on the price spike. We knew the resource was big, possibly tier 1. Today's news confirms this. What happens now? Only more drilling, which will take months before results are available. More time for the price to drift lower again. Investor follow up now will be very interesting to watch. I'm not excited by this base metal resource.

There's plenty of time to buy into this company as an investor and there'll be lots short term trading opps too.

I agree with you that there is plenty of time to buy into RTR as an investor. RTR's fortunes from here will be largely dependent on base metal prices. Short term there is a lot of uncertainty about where base metal prices will go, but I think a lot of negativity and caution is currently priced into the base metal market. Chinese economic growth will be a critical factor.

Price action today is looking positive. The market depth has shifted quite noticeably with three times the amount of buyers now than sellers. Lots of support and at market buying with the share price currently at 23.5c.

 

[greggles]

From Barry FitzGerald's column at the Stockhead website:

 

[Sean K]

It's filled that gap @greggles after initial discovery after about a year of steady decline. Maybe that support line was a bottom? Should be breaking out of this very rough channel around 25c.

 

[greggles]

It's filled that gap @greggles after initial discovery after about a year of steady decline. Maybe that support line was a bottom? Should be breaking out of this very rough channel around 25c.

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In terms of fundamentals I think RTR is significantly undervalued but I do take on board @peter2's comments as well. The resources sector has a very long history of companies with very large deposits being undervalued because economic conditions make mining the deposit uneconomic. There is also a long way to production from here so there are a lot of uncertainties that RTR will face going forward.

But from a long term perspective I think RTR is hard to argue against. Is it likely or unlikely that the reserves at Earaheedy will become larger with further drilling? Is it likely or unlikely that once the current macroeconomic grey clouds have lifted that Earaheedy will not just be economic to mine but very profitable? I think both answers can be answered with "likely", so I believe that RTR will eventually get Earaheedy to production and will do very well out of it.

But could it go lower in the short term? Absolutely.

 

[greggles]

RTR has received heritage clearance to commence dill testing of the Navajoh Southeast Trend. Another roadblock cleared.

This is the southernmost part of the project area and has not been drill tested at all as yet. However, there are strong indicators that mineralisation extends through this area.

"Following a Falcon airborne gravity gradiometry survey completed by the Company in late 2022, Rumble reported a strong association between gravity lows and outlined high-grade Zn-Pb feeder faults (eg. Colorado and Magazine Feeders) within the Tonka and Navajoh Deposits. Additionally, the Company defined multiple new gravity lows along the entire 9km Navajoh Southeast Trend which have been interpreted as potential high-grade feeder faults."

"Partial leach soil sampling completed over an 11km strike from the Tonka and Navajoh deposits to the southeast boundary of E69/3787 delineated a strong and continuous Zn–Pb anomaly."

Rigs will be mobilising in the coming weeks to commence a major RC drilling campaign aimed at targeting the multiple new gravity lows which could represent high-grade feeder faults. This is a very prospective area and its good that it will finally be drilled. No doubt management see this area as potentially adding a lot of value to the Earaheedy Project through expanding the size of the mineralised zone and increasing the overall tonnage.

 

[peter2]

What on earth do we do with Rumble? Price has fallen back to 0.20. The recent low and the low before the MRE was 0.18. I'm going to watch it and wait for more bullish price action before considering a buy.

 

[Sean K]

What on earth do we do with Rumble? Price has fallen back to 0.20. The recent low and the low before the MRE was 0.18. I'm going to watch it and wait for more bullish price action before considering a buy.

Needs the ‘feeder’ bits to add tonnage to high grade starter pits.

Overall grade and POZ killing it.

 

[greggles]

RTR needs a catalyst for it to start looking bullish again. At current prices and in its current situation it only looks attractive to those taking a long term view. Management are doing the only thing they can do right now which is continue to drill in the most prospective areas.

If they keep having exploration success, and as long as base metal prices don't go in the toilet, RTR can only go in one direction in the long term.

 

[greggles]

High Impact drilling to test high grade feeder targets at the Navajoh Southeast Trend has now commenced. The Navajo East trend extends for 9kms and is so far untested.

With this campaign as well as the first deep diamond drill hole planned at Chinook, the second half of 2023 should see further resource growth at Earaheedy.

 

[Sean K]

RTR needs a catalyst for it to start looking bullish again. At current prices and in its current situation it only looks attractive to those taking a long term view. Management are doing the only thing they can do right now which is continue to drill in the most prospective areas.

If they keep having exploration success, and as long as base metal prices don't go in the toilet, RTR can only go in one direction in the long term.

I think the pressure is largely related to Chinese economy and demand for zinc. Once that inevitably turns around post Covid I think RTR will respond. Just a matter of waiting for the turn around.

While the current grade of the deposit is mediocre, the scale will be immense and close to surface. Once they better define the high grade sections around the feeder zones then it will look much more attractive. I think that's almost inevitable.

Perhaps the next MRE with high grades expanded will coincide with China demand recovery and then this will be off to the races.

 

[greggles]

I think the pressure is largely related to Chinese economy and demand for zinc. Once that inevitably turns around post Covid I think RTR will respond. Just a matter of waiting for the turn around.

While the current grade of the deposit is mediocre, the scale will be immense and close to surface. Once they better define the high grade sections around the feeder zones then it will look much more attractive. I think that's almost inevitable.

Perhaps the next MRE with high grades expanded will coincide with China demand recovery and then this will be off to the races.


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I agree. It's hard to know where zinc will bottom out but a lot of negativity is already priced in. The turnaround will be a while coming but by that time we should have a very clear idea of what RTR has under the ground at Earaheedy, which should in turn result in it being eventually re-rated.

The gap at 18c was closed and its been hovering around 20c for a while. I would be very surprised if it got lower than 18c given that the only headwinds it is facing are macro related.