logo
Barry FitzGerald: Kairos picks right time to ramp up Pilbara gold exploration

Barry FitzGerald: Kairos picks right time to ramp up Pilbara gold exploration

News.com.au13-06-2025
'Garimpeiro' columnist Barry FitzGerald has covered the resources industry for 35 years. Now he's sharing the benefits of his experience with Stockhead readers.
Garimpeiro's memory is a bit fuzzy on the exact date he had a coffee with Simon Lill in Melbourne's Bank Place.
But it was likely early 2019 and Garimpeiro remembers being a bit grumpy that the catch-up with the then executive chairman of De Grey Mining wasn't scheduled for the PM rather than the AM so it could have taken place in the Mitre Tavern just down the alley.
Thanks to the cleat head though, Garimpeiro remembers De Grey was trading at less than 10c share for a market cap of about $40 million and that Lill was enthusiastic about growing the company's gold resource at its Mallina gold project in the Pilbara.
His enthusiasm proved well placed. Late in 2019, De Grey made the intrusion-related Hemi discovery which has grown to more than 11 million ounces, making Mallina 13.5Moz all up after the pre-Hemi shear-hosted gold resource is included.
Northern Star Resources (ASX:NST) has just made De Grey and its Pilbara gold riches its own with an agreed $5 billion scrip takeover bid which ended up being a $6 billion takeout due to rising gold prices pushing Northern Star scrip higher.
Lill was there all the way through De Grey's journey from an overlooked junior gold explorer in the then unfashionable Pilbara – for gold at any rate – through to the last day when De Grey shareholders voted through the Northern Star takeover in April.
Any way it is sliced, the De Grey journey over the last six years has been one of the biggest single valuation creation exercises in the ASX gold space. It wasn't a 10-bagger. It was a 150-bagger, if you don't mind.
Lill is the first to say it was a team effort. And it was.
Coming from a stockbroking and capital markets background, his main contribution was bringing in the small licks of capital to keep the lights on during the hungry years, and then the big licks needed to advance the Hemi discovery to the point where Northern Star had to buy it.
Back in black
Garimpeiro would be content after an achievement like Lill's at De Grey to hold court at the front bar at the Mitre and not do much else. But that's not for Lill. He is back as a chairman guiding another Pilbara gold stock – Kairos Minerals (ASX:KAI).
For a couple of years, when the Pilbara conglomerate gold story was running hot, and another couple of years when lithium was the thing, Kairos took its eye off its Mt York gold project. Those distractions left the stock with few followers.
But starting in May 2022 when veteran geologist Peter Turner became manager director, Mt York is now getting the attention it deserves. And now with Lill as non-executive chairman, Kairos is likely on a re-rating pathway.
Mt York deserves attention all right. It stands as a 1.4 million ounce resource in a single pit shell (43Mt grading 1g/t). The mineralisation is of the banded iron formation (BIF) style which makes it different to Hemi, 55km to the north-west.
But as experienced miners will tell you, the style doesn't matter as long as there is plenty of gold to be had. Geological comparisons for Mt York include Karlawinda in the Pilbara and Mt Gibson in the Murchison, the two gold deposits that underpin Capricorn Metals (ASX:CMM) $4 billion market cap.
Major exploration program
Mt York is better grade than both of those but it has a long way to go to catch them in terms of resource ounces.
The biggest exploration program ever undertaken by Kairos is now underway, with a likely first target being to grow Mt York to something more than 2Moz. Helping the cause is pending access for Kairos to a 1500m extension of the mineralisation as it trends into its neighbour's ground – Pilbara Minerals, and its Pilgangoora lithium operation.
An earlier deal between Kairos and Pilbara involved Pilbara agreeing to a $20 million payment for some non-core Kairos tenements. The first $10m instalment is helping fund the record exploration effort at Mt York.
The exploration effort will likely lead to an increased mineral resource estimate update later this year – a sure fire re-rating event.
Kairos could certainly do with a re-rating event. At its mid-week price of 2.8c a share it is has a market cap of $73.6 million. Based on the existing 1.4Moz resource estimate, it has one of the lowest enterprise value-to-resource ounce metrics in its ASX peer group.
That is despite a scoping study in November last year outlining a $276 million project producing 115,000oz annually at an all-in sustaining cost of $2205/oz. Using a conservative $3500/oz gold price, the pre-tax net present value (NPV) was put at $410 million and capital payback was put at 2.7 years.
Gold is now $5100/oz or thereabouts. Plug that into the financial model and Garimpeiro estimates a NPV of around $1 billion and a payback period well short of two years. That makes Kairos' current market look to be on the mean side of things.
That's particularly so when Mt York gets juiced up by the additional ounces expected to come from the big exploration push now underway.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

‘This isn't a novelty or aberration': Female jockeys set up for success in Queensland
‘This isn't a novelty or aberration': Female jockeys set up for success in Queensland

News.com.au

time6 minutes ago

  • News.com.au

‘This isn't a novelty or aberration': Female jockeys set up for success in Queensland

Don't think it's just a one-off. A female jockey will soon create history by winning the Brisbane riding premiership for the first time, but expectations are that it could soon be the rule rather than the exception. As great mates Angela Jones and apprentice Emily Jones have been battling it out for the title, Brisbane Racing Club chairman Richard Morrison has been making plans to cater for the continuation of a trend that is reshaping Australian racing. As part of its broader refurbishment plans at Eagle Farm, Morrison confirmed the BRC is already planning to significantly expand the female jockeys' room to accommodate the growing number of women riding at the top level. 'It's something we're proud to support. We're not just responding to what's happening now, we're preparing for what racing will look like in the future,' Morrison said. 'The growth in female participation is real, it's sustained, and it's only going in one direction.' Morrison, who was elected BRC chairman earlier this year when he replaced long-serving Neville Bell, feels there is a growing wave of female jockeys who are taking racing by storm. 'It's the first time a female rider will win the senior title, but it won't be the last,' Morrison said. 'This isn't a novelty or an aberration. 'It's a reflection of a changing industry and the incredible talent we're seeing from female riders across the board. 'Gone are the days where women were only given rides on outsiders as some kind of token gesture. 'Today, they have the trust of punters and the backing of the leading stables. They're riding the favourites and winning regularly. 'It's not just about the top two. 'Look at the apprentice ranks, there are 21 female apprentices and just eight males currently licensed to ride at provincial meetings in Queensland. 'Across the state, there are more registered female trackwork riders than male and the number of stablehands is similarly skewed. 'Thoroughbred racing across Australia would grind to a halt without the contribution of women.' COBALT MYSTERY Peter Hulbert, 79, has been training for 48 years without any of his horses ever registering a positive swab ... until a recent cobalt case. It is surely one of the cleanest records of any trainer in Australia who has trained over several decades or more. And Hulbert, who trains with son Will, said he is gobsmacked at how former import Dillian tested above the legal threshold for cobalt. 'I've got absolutely no idea,' Peter Hulbert said. 'I will be looking through the (horse) feed and investigating how this could have happened. 'I had to go before stewards on Thursday and that was the first time in 48 years I have been called upon before stewards for a positive swab.' in April and a $5000 fine imposed on its trainers.

Stock Tips: One expert makes a Sigma call, Aussie Broadband connects with another
Stock Tips: One expert makes a Sigma call, Aussie Broadband connects with another

News.com.au

timean hour ago

  • News.com.au

Stock Tips: One expert makes a Sigma call, Aussie Broadband connects with another

It's no easy gig analysing share prices and company performance but somebody's got to do it. Every week two experts from our Share Tips columnist pool give us their recommendations. Toby Grimm – Baker Young Limited BUY Sigma Healthcare (ASX:SIG) Sigma's merger with Chemist Warehouse created Australia's dominant vertically integrated pharmacy group with a high growth outlook given our ageing population and wellness trends. Pinnacle Investment (ASX:PNI) Pinnacle should benefit significantly from the market's rally back to all-time highs with base and performance fees likely to exceed recently downgraded expectations. HOLD South32 (ASX:S32) The company's quarterly production update showed encouraging operational performance, and we note the Hermosa project in the US could be a tier one asset given supportive US critical mineral security policy. Woodside Energy Group (ASX:WDS) Alongside a relatively impressive quarterly output report, Woodside has confirmed key development projects are on track reducing risk and improving free cash flow available for distributions. SELL AMP (ASX:AMP) Recent share price appreciation underestimates continued competitive challenges and continuing investment needs. Combined with sub-optimal bank operations we see risks of setbacks and would be exiting. Helia Group (ASX:HLI) The loss of Commonwealth Bank and potentially ING mortgage insurance contracts (combined worth more than half the business' premiums in 2024) underscores a lack of competitive advantage and growth. Tony Paterno – Ord Minnett BUY Aussie Broadband (ASX:ABB) Remains well placed to grow market share as consumers trend to higher speed tiers and the NBN's fibre upgrade program rolls out. ARB Corporation (ASX:ARB) Australian new vehicles sales increased by 2.4% in Jun-25. ARB's key vehicle sales increased 15.0% in June, with the SUV and LCV market both lifting. HOLD Bapcor (ASX:BAP) After the recent strategy day, the company's key messages are on business simplification, continuing cost initiatives and improving retail operations. It expects operational improvements following headcount reductions and warehouse consolidation. Brickworks (ASX:BKW) Demand for BKW's Industrial property developments remain solid, with further growth in rental income expected. In Australia, recent rate cuts are expected to translate into improved housing activity late in 2025. SELL Evolution Mining (ASX:EVN) EVN delivered a slightly softer quarter result (higher capex), whilst the outlook showed higher costs. Trading expensive at these levels. Lynas (ASX:LYC) We believe the optimistic LYC share price rise since the MP Materials & DoD deal is misplaced. We don't believe they will benefit and the US has gone all-in on its domestic producer.

China's carbon emissions may have peaked thanks to renewables push
China's carbon emissions may have peaked thanks to renewables push

ABC News

time2 hours ago

  • ABC News

China's carbon emissions may have peaked thanks to renewables push

Climate experts say China's carbon emissions may have peaked, which could affect global climate targets, the fight against global warming — and the Australian coal industry. China is currently the world's biggest emitter, accounting for some 30 per cent of global carbon emissions, but a report by the Center for Research on Energy and Clean Air (CREA) found that in the year to May 2025, China's CO2 emissions dropped 1.6 per cent. China policy expert at CREA Belinda Schäpe said the trend had also continued in the months since. Ms Schäpe told the ABC the finding was "really unique" because the only other times the country had recorded a year-on-year decline in CO2 emissions were during times of economic downturn, like the COVID-19 pandemic. "It's really quite a historic result," Ms Schäpe said. "It's due to a really rapid increase in renewables build-out in China that has translated into an increase in power generation coming from clean sources and driving down the coal share in the power mix, and with that, bringing down emissions." She said China led the world in green energy uptake. "In May [2025] alone, China built out 90 gigawatts of solar capacity, which is really huge. It translates to roughly 100 solar panels per second. "We are now at a point where solar and wind capacity is actually bigger than all thermal power capacity. So not only coal, but also including gas, oil and other fossil fuel sectors." Li Shuo, director of the China climate hub at the Asia Society Policy Institute, told the ABC he thought that despite previous emissions fluctuations, the country would continue to reduce its carbon output. "It certainly suggests that after three decades of very rapid economic growth, and also growth in China's emissions, the emission peak point for China has come very close, if it has not happened already," Mr Li said. "We have certainly entered into, if not yet an emission peak, a plateauing period for China's emissions. "We have entered a new phase of China's emissions, a phase that features a stabilisation of China's emissions and increasingly large-scale integration of China's renewable energy power, which, I hope, will actually make the country reduce its emissions from this point on." If the world is to keep global warming below 1.5 degrees Celsius, the amount of emissions released into the atmosphere needs to come down, not stabilise, according to the United Nations Intergovernmental Panel on Climate Change (IPCC). Climate experts say a failure to limit global warming below that figure will result in catastrophic consequences for people and the planet. Despite the rapid installation of renewable energy plants across the country, China is still building new coal-fired power plants. Beijing approved on average two coal-powered projects a week in 2022 and 2023, after power shortages in 2021. Belinda Schäpe said a backlog of these projects was now coming online, but they were using less coal. "There's been a significant drop in coal imports … in June, there was a 25 per cent year-on-year drop in coal imports," she said. "In June, China's power demand growth was actually 70 per cent higher than last year this time around, but solar and wind power generation met 89 per cent of that power demand growth. "That's what we've been seeing over the last six months, really, where renewables, or solar and wind in particular, accounted for 24 per cent of total electricity generation. Chinese President Xi Jinping has pledged to continue phasing down the country's coal consumption in the next five years, between 2026 and 2030. Jorrit Gosens, a climate change and energy policy fellow at the Australian National University, said Australia needed to rethink the future of coal mines. "The writing is on the wall a little bit in the future economic potential of that industry," he said. China imports roughly 30 per cent of Australian thermal coal exports, making it Australia's largest market. Dr Gosens said China's increasing wind and solar power generation, combined with increasing domestic supplies of coal, created a "double whammy" for Australian coal exports. "It should be expected that those export volumes will continue to decrease over the next few years." Other Asian markets of Australian coal, such as South Korea and Japan, would follow suit as they decarbonised, he said. Dr Gosens pointed to the Mt Arthur coal mine in NSW, for which BHP could not find a buyer because of the shrinking demand of coal and its liabilities, like rehabilitation costs. He said local community leaders and the federal government needed to transition communities historically reliant on coal mines into other industries. "Currently, we're still seeing more resistance to change than embracing of that transition, which I think is a risky strategy given the demand for our product is not going to be determined by those local communities or by the federal government," he said. "Our best bet really is to make sure that there are viable alternatives for when it does get to that point." US President Donald Trump's policy agenda has seen green energy subsidies replaced with coal subsidies. Li Shou said it was clear that the two countries were now on different paths. He said some conservative forces within China may use the US's withdrawal from clean energy as motivation "for domestic inaction", but he was confident that it would not change the country's policy direction. "China has over the last decade or so become the superpower when it comes to wind technology — deploying and manufacturing wind, solar batteries and electric vehicles," he said. "This will not change because of what is happening or not happening in the US and if anything, Beijing will just continue with this green path because doing these things is ultimately in the country's long-term economic interest. "There has been a realisation on the Chinese side that they should continue and double down on their climate and environmental agenda, not because of the global situation and the US situation, but just for their own sake, to clean up the skies in major Chinese cities." China is set to announce its new climate reduction targets as part of the Paris agreement later this year. He said that would tell the world a lot about where the global appetite to reduce emissions was at. "Whether China chooses to coordinate with some of the other geopolitical powers will also tell us a lot about where the global climate agenda stands and to what extent countries, including China and Australia and the European Union, can still engage," Mr Li said.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store