BPM: Drilling completed at Claw. Gold results due in a few weeks.

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 4,335,000 BPM Shares and 850,000 BPM Options at the time of publishing this article. The Company has been engaged by BPM to share our commentary on the progress of our Investment in BPM over time.

In September, our micro cap gold explorer BPM Minerals (ASX:BPM) made a new gold discovery in WA.

The discovery hole saw BPM’s share price spike by ~200%.

(it has since come back down again...)

BPM’s next step after the discovery hole was to drill deeper underneath, to test if the gold extended 600m below.

BPM has just finished this deeper drilling - 6 RC holes.

...and gold assay results are due in the coming weeks.

Gold is near all time highs - AUD $4,160 per oz.

BPM is capped at $4.7M and had $3.85M pro forma cash in October - that’s almost at cash backing.

So there is plenty of room for BPM’s share price to respond to good drill results in the coming weeks.

BPM will ALSO be drilling again in January/February next year (a few weeks away now).

So there will be a decent flow of material news over the next 6 months too.

BPM has over 20km of strike to the south that's completely untested...

BPM’s drilling contractor has taken its drilling fees in BPM shares.

This same drilling contractor took shares for drilling for De Grey Mining back in 2016 when it was capped at ~$9M.

(De Grey is now getting acquired for ~$5BN)

We are hoping some of their De Grey luck can come to BPM’s drill campaign...

If BPM can follow up its September gold discovery with extensions at depth, we would expect the company’s share price to re-rate...

Or if it can make more new gold discoveries...

In any case, those assay results should land in a few weeks time.

BPM’s gold exploration project sits right across the tenement boundary from the ~$2.8BN capped Capricorn Metals 3.24M ounce Mount Gibson development project.

Capricorn is a gold producer looking to make Mount Gibson a big part of its production portfolio over the coming years.

BPM is chasing the gold trend (proven by Capricorn) south over its ground.

Here is how close BPM’s ground (and recent discovery) is to Capricorn’s ground:

BPM is also going after new targets across the ~600m long anomaly near the border shared with Capricorn Metals.

Capricorn recently raised $200M in cash and has earmarked a big chunk of it on getting Mount Gibson production ready.

Capricorn also committed a significant amount of that cash to exploration at Mount Gibson, meaning they are hungry to see more discoveries... next door to BPM’s discovery.

As a tiny company like BPM, having a giant, well funded neighbour deploying exploration and development capital next door to your gold project, at the same time you are exploring, is very handy.

It means any discoveries that BPM is able to make could be much more valuable...

The major gold producers have been going pretty hard on M&A over the last 12 or so months - think Northern Star’s $5BN De Grey deal, Westgold’s $1.2BN deal with Karora.

We think that IF BPM can make a discovery of serious value, there should be buyers for the asset in the current market.

We noticed a few days ago that Capricorn acquired pre-discovery exploration ground from another junior - so there is a precedent set for Capricorn investing in early stage assets from other companies...

A deeper look at BPM’s drilling

So, BPM has just finished its third phase of drilling at its Claw project in WA.

This round of drilling followed up the discovery hit from September with new drillholes at depth.

That discovery hole spiked BPM’s share price up by ~200%.

Successful extensions of this discovery will likely be good for the company’s share price, and we are hoping that will be maintained over time as evidence builds that BPM might have something bigger.

We will likely find out the results in a few weeks.

Of course - this is high risk exploration investing and investment success is never a guarantee.

BPM is also going after new targets across the ~600m long anomaly near the border shared with Capricorn Metals.

We think that this current round of drilling will be the one where we find out the true size/scale potential of BPM’s existing discovery.

We will also see if BPM is able to make brand new discoveries.

We like that BPM is going for targets (north to south) because it is exactly how the deposits Capricorn have at Mount Gibson are occurring.

Mount Gibson isn't made up of one giant orebody, instead, it's made up of small deposits that run north to south across Capricorn’s ground.

The ancient geology and gold formations don’t care about modern WA tenement boundaries - so it's our hope as BPM Investors that a few more of these small deposits run onto BPM’s ground.

(We got the first evidence of this in September with BPM’s first discovery)

BPM is chasing the gold trend (proven by Capricorn) south over its ground.

As we said above, extensions to BPM’s existing discovery would be big news given BPM’s tiny market cap.

But the big blue sky upside is BPM making repeat discoveries along the ~20km of untested strike to the south.

The current round of drilling is focused on the Louie anomaly, but BPM expects to be drilling the ~8km of the ~20km of untested strike in January/February - which isn't far away now.

What are we looking for in upcoming BPM assays?

With assays results due early next year, BPM will soon know if the mineralisation extends at depth as seen in the image below, which assumes the assays are positive:

Alternatively, exploration risk could materialise and BPM might not hit deeper mineralisation, which would look like this:

And below are the holes which will look to test this depth, along with the intercepts that BPM encountered when it made its discovery:

We think there’s a decent chance that BPM’s drillholes hit further high grade mineralisation too.

Here’s why...

We had a glance at Capricorn’s exploration updates from this year and noticed something interesting.

A number of these mini-deposits have mostly vertically descending ore bodies.

Capricorn has been hitting these ore bodies with AC and RC holes, and in April Capricorn was looking at using diamond drilling to see how far the ore bodies extend at depth.

We think these mini-deposits, and the exploration techniques Capricorn is using on them, share some strong similarities with how BPM’s gold discovery is shaping up:

(Source)

And indeed, when Capricorn did drill deeper holes at this particular “mini deposit” they continued to hit high grade mineralisation all the way down to +700m:

(Source)

Working on this theory that there is a pattern of deep, largely vertical high grade ore bodies north to south, we think this bodes well for BPM as it drills deeper at the Claw discovery...

(remember assay results are due in a few week time... )

What’s next for BPM?

As we have said repeatedly above, in case you missed it - next will be the assays from this third phase RC drill program.

After that we are looking forward to seeing BPM kick off an AC drill program across its regional targets in January/February next year.

RC Drill Campaign at Claw (NOW)

✅ Drilling commenced
✅ Drilling complete

🔄 Assay Results

AC Drill Campaign at Claw (Jan/Feb 2025)

🔲 Drilling commenced
🔲 Drilling complete

🔲 Assay Results

Geophysics/Geochem (20km of untested strike)

🔲 Soil Sampling Complete

🔲 Assay Results

🔲 Targets of interest identified

What could go wrong?

With drilling now complete the main risk for BPM is “exploration risk”.

There is no guarantee the drilling returns any drill results of economic value. This could lead to a re-rate lower in BPM’s share price.

Exploration Risk

BPM's projects are at a very early stage, most are yet to have high-priority drill targets identified, any drilling programs done in the near-term could return no mineralisation.

Source: BPM Investment Memo 2022

Our BPM Investment Memo

In our BPM Investment Memo, you can find:

• BPM’s macro thematic
• Why we Invested in BPM
• Our BPM “Big Bet” - what we think the upside Investment case for BPM is
• The key objectives we want to see BPM achieve
• The key risks to our Investment thesis
• Our Investment Plan