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Top 4 Small Cap Stocks drilling now (or very soon) | June 2022

Published 30-MAY-2022 11:09 A.M.


5 minute read

So you’re here because you want to learn about the small cap stocks that are drilling right now.

These are companies that have near-term share price catalysts - the results can be spectacular or disappointing, and everything in between. Whatever the outcome, we analyse the results of these catalysts as they are critical moments for the small caps we invest in.

Small cap investing is an inherently risky exercise - and investing in the lead up to share price catalysts is even riskier.

As long-term holders of these companies we’ve Invested well ahead of these events, and provided coverage every step of the way.

Which is why we’re profiling these companies today - these drilling events were many months or years in the making.

What’s a share price catalyst?

A “share price catalyst” is an expected event for a company that could move the share price in a significant way (up OR down), depending on the outcome.

One way to think about a potential share price catalyst is as a “known unknown”.

We may know the subject matter of the event, hopefully a timeframe of when it will occur, but NOT the end result.

The result could be good, or it could be bad, especially when investing in early stage exploration companies that live or die by delivering drilling results.

We know roughly when the drill results are coming - but don’t know if they will be terrible, just OK, good, great or spectacular.

That’s why early stage Investing brings both risks and rewards.

With that said, here’s the 4 drilling events we’re most looking forward to in the near-term.

Click on the Investment Memos for a quick high level summary of the companies.

The 4 Portfolio stocks with near term share price catalysts:

BPM Minerals (ASX:BPM): Lead-Zinc Rumble look alike, Western Australia

BPM is drilling its lead-zinc prospect in the Earaheedy basin close to Rumble Resources recent discovery.

Lead and zinc are two industrial metals that have moved higher due to an inflation-driven commodities supercycle. Lead is mainly used for Internal Combustion Engine (petrol car) batteries while zinc is primarily used for galvanising steel and making alloys.

As fiscal and monetary stimulus increases infrastructure spending - we believe zinc in particular is primed to move beyond its current elevated price to all-time-highs.

Here is our BPM Investment Memo.

Invictus Energy (ASX:IVZ): Elephant-scale gas drilling event, Zimbabwe

We have been waiting nearly 2 years for this one... and it’s finally happening in July.

IVZ is a gas exploration company that is targeting an “elephant-scale” gas drilling event at one of the largest un-tested onshore African gas prospects. Elephant fields are conventional oil or gas fields with a recoverable reserve of 1 billion barrels of oil equivalent or more.

Located in Zimbabwe, our 2020 Energy Pick of the Year has been working for a long time to get to this potentially transformative moment.

Here is our IVZ Investment Memo.

Kuniko (ASX:KNI): ‘Zero Carbon’ cobalt drilling, Norway

KNI is half way through its maiden drilling campaign Zero Carbon cobalt project in Norway, which is on grounds that were formerly the largest cobalt producing region in the world.

Europe is the fastest growing battery market in the world and desperately needs local supplies of cobalt. Drilling began on the 2nd May and results are expected in the subsequent 3 months.

Here is our KNI Investment Memo.

Lanthanein Resources (ASX:LNR) Rare earth near Hastings, Western Australia

While drilling was due to commence in May, this share price catalyst is still close. LNR is exploring for rare earths in the Gascoyne region, WA located in close proximity to Hasting Technology Metals’ advanced Yangibana Rare Earths project. As soon as approvals are in place, we expect LNR to commence drilling (next two months).

Rare earths are crucial for the clean energy transition. As China is by far the world’s largest producer of Rare Earths, there is a strong geopolitical element to the industry as major global powers look to secure domestic or friendly supply of strategic resources.

Here is our LNR Investment Memo.

Summary of our top 4

That’s it - those are 4 of our biggest and closest catalysts that are all drilling right now. We’re aware this information may become out of date quickly as the catalysts roll in.

That’s why you should subscribe to Next Investors - that way you get all our analysis and coverage across our Portfolio. It’s a free service and always will be.

Who are the Next Investors?

We are a small team of ASX small cap stock investors that have been investing in the small cap market for 20+ years.

We have made money, lost money and learned many hard lessons along the way. We use our experience to select and invest in small cap stocks that we believe have a high chance of success, and then share our research, analysis and investment strategy with our readers for free.

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General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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