An iron ore surprise

QX Resources Limited (ASX:QXR) Managing Director Steve Promnitz discusses iron ore results from the company's assets in the Pilbara.

Paul Sanger: I'm Paul Sanger for the Finance News Network, and today I am talking with QX Resources (ASX:QXR). QX Resources is focused on exploration and development of battery minerals, with hard rock lithium assets in WA, lithium brine assets in the USA, copper/moly/gold assets in Queensland, and a strategic investment in nickel sulphides in Sweden. We welcome back QX Resources' MD, Steve Promnitz. Steve, great to have you back, buddy.

Steve Promnitz: Thank you very much.

Paul Sanger: Now, let's start off with talking about your recent announcement that you found rock chip samples from your Western Shaw Project in the Pilbara have returned 58 per cent iron ore grades. Tell us about these results.

Steve Promnitz: We've been reviewing four projects in the Pilbara for pegmatites, and, as part of that process, we came up with some rock chip samples which were elevated. But that can happen from time to time. So then, during January, we reviewed all the previous data. We actually saw that this was quite a significant extent of enriched iron oxides at surface, and some of the past drilling, which was more than 15 years ago, had had elevated numbers, but everything seemed to be getting better as we got to the south. That's where our best numbers were. There's more than three kilometres. It's never had a drill hole even close to it, and you only need those sorts of numbers, 56, 57 per cent iron, and you can have DSO-type (direct shipping ore) potential.

So, look, it's early days, but it was just great that, doing a whole data review, we thought, "All right, we're reviewing this for lithium pegmatites, that's slightly further to the west, and this area here, enriched iron over BIF (banded iron formation)." So, a very positive and a pleasing surprise.

Paul Sanger: Steve, were you surprised to see these iron ore grades show up, or were you expecting this given the company had been targeting pegmatites?

Steve Promnitz: It was known to have iron in the area. It's just that I wasn't expecting such consistent good numbers. So, that's why we've got a plan in place now to go and do further rock chip traverses. That'll be followed up with trenching, and so we can actually define a proper target. Now, we're also talking to others in the industry, but it's interesting now, in iron ore, for a while there were a lot of juniors, now they've almost evaporated, you've got a few majors and very little else. So, I think it's actually quite a good time, despite iron ore prices being off a little bit, they're still quite strong.

Paul Sanger: Okay, so you've got a clear plan going forward about exactly what you're going to do with this discovery. That's good to hear. Now, let's close up today. Let's get an update on the company's other projects in Queensland, Sweden, and the US. How are they all progressing?

Steve Promnitz: Well, the first thing that we're waiting for, both our company and investors generally, is the results from our US brine project. The great thing about investments in the US is even though lithium prices are down, the US desperately wants to support any sort of battery material supply. I'm hoping to have those numbers soon. I don't have them yet, but certainly the aquifers and the geological setting was very encouraging.

Secondly, on our nickel investment in Bayrock in Sweden, we're talking to some interested parties there at the moment and looking to advance that project quite soon. I hope to have some news coming up.

And in Queensland and also in Western Australia on the hard rock, we've got a plan there to do work in Queensland. We're waiting for it to stop raining on the gold copper projects. And then Western Australia, we're just waiting for the temperatures to come down to something reasonable so we can do some work.

We were quite well-financed at the end of December, and I think we're going to have quite an interesting spread of news flow.

Look, at the moment, commodity prices are down. And so, because of that, share prices are down across the board, both ours and others. So, it's actually a good time for investors to bulk up on their investments because these sorts of prices won't be repeated. Perhaps not in all commodities, but we know that lithium is going to go back up regardless. You can't get the supply that's required when people are turning off mining projects. So, watch this space. I hope to have some pretty exciting news coming up.

Paul Sanger: And you could also argue that, with the price of nickel, multiple projects being canned or switched off, that will have an impact on the nickel price at some point in the future, yeah?

Steve Promnitz: Indeed. Look, it's a commodity cycle. You name it, iron ore, copper, nickel, lithium. When you're turning off projects, that is a market signal that it's unsustainable. And the rebound, sometimes it's a number of weeks, sometimes it's a lot of months, but it's a signal that if we're not at the bottom, these are certainly getting close to it, and they're key signals in any market. I'm just quite excited because we specifically looked at lithium in the US, because we know that regardless of the market, they're keen for that. And it's the same for the nickel investments in Sweden. We know that the EU wants battery minerals. So, almost regardless of the market, that's a market where they want this sort of product.

Paul Sanger: Steve, thank you for your time today. We look forward to hearing from you soon with a further update on progress across the company's businesses. Have a great day.

Steve Promnitz: Thank you so much.