Diggers and Dealers is a mining investment forum, held annually in Kalgoorlie, Western Australia. This year was the 34th instalment of the forum and the Wilson Asset Management team including myself, Deputy Portfolio Manager Shaun Weick and Senior Investment Analyst Hailey Kim were in attendance as well as a strong presence from corporates, suppliers and brokers, although investor numbers were noticeably down. Kalgoorlie remained positive across many commodities, with gold at $5200/oz once again taking centre stage.
We attended the Northern Star (ASX: NST) site visit, following a reset of both operating and capital expenditure. Northern Star’s Kalgoorlie Consolidated Gold Mines (KCGM) is set to boost production from 12 million tonnes per annum (MTPA) to 27 MTPA over the next three years, supporting a mine life of 20 years. Construction is on time and within budget, with Primero, a wholly owned subsidiary of NRW Holdings (ASX: NWH), handling the expansion, with commissioning expected in FY2027.
While uranium and rare earth elements captured some attention due to geopolitical factors, lithium discussion was more subdued, with many in the industry believing global markets remain oversupplied. However, the Liontown Resources (ASX: LTR) site visit the week prior attracted significant attention, which was followed by a raising this week, supported by the Australian government through the National Reconstruction Fund Corporation.
Mining services companies are exceptionally optimistic about the outlook, which is the strongest it’s been across many sectors. Global drilling data for July showed a 115% year-on-year increase in capital raisings for junior miners, totalling US$1.17 billion. This sentiment was reflected on the ground, with drilling rig utilisation up across the board. Contractors in equipment and labour hire are noting that the market is tightening, which could lead to higher margins and possibly another round of inflationary costs for miners relying on their services.
