DOUBLE DOWN ALERT: We Have Just Increased Our Holdings in this Stock
Galileo Mining (ASX: GAL) is a $39M capped nickel explorer, chasing the next big Fraser Range nickel discovery.
We have held GAL since March last year, and over the last few weeks we have doubled our position in this stock.
We invested in GAL, as we are seeking a return of multiples of our original investment - which is possible if GAL makes a large discovery.
In this article we will explain why we invested, and why we recently increased our holdings.
Fraser Range - The Right Address for a Nickel Discovery
GAL has a number of high value nickel targets in the Fraser Range province of WA.
The Fraser Range was thrust into the spotlight when Sirius Resources made a $1.8 billion nickel discovery in 2012, led by mining entrepreneur Mark Creasy.
This was the first major discovery in the Fraser Range, and is likely to be the first of many, especially if compared to more mature nickel belts in the world.
The Fraser Range has only two deposits with over 150km strike length, and total known resources of 18 Mt. Compare that to the Thompson Belt in Canada, where more than 10 deposits and total known resources of over 146 Mt occur over a similar strike length.
The Canadian belt has seen over 50 years of mining and exploration, meanwhile the Fraser Range has only eight years of mining activity.
The Fraser Range is bound to hold more multi-billion dollar nickel deposits - it's just a question of finding them...
The Right Assets
The man largely responsible for the first multi-billion dollar nickel discovery in the Fraser Range - Mark Creasy, is also GAL’s biggest shareholder, with a 26% holding.
Following the Nova discovery, Creasy retained large swathes of what he thinks is the very best Fraser Range ground to serve up the next major nickel discovery.
GAL’s Fraser Range assets are straight from Creasy himself.
Given he has been involved in some way with every nickel discovery to date in the Fraser Range, if any company can find the next one, we bet its a stock Creasy has a significant stake in...
The Right Management Team
GAL’s Managing Director Brad Underwood is a highly experienced geologist, with a track record of working alongside Mark Creasy, including on the Silver Knight nickel discovery in the Fraser Range - that's a privately held deposit with a 4.2 Mt resource just 50km along strike from GAL’s ground.
By applying methodical exploration processes across the assets, and an intimate knowledge of Fraser Range geology, GAL is able to conduct regular, extensive drilling campaigns every year, and place the company with the best possible chance of making a discovery.
The Right Capital Structure
GAL has a tight capital structure with just 143 million shares currently on issue.
Mark Creasy holds 26.1% of them.
IGO Ltd (ASX: IGO), who bought the Nova nickel deposit from Sirius, owns 8.9% of GAL.
It’s clear that the owner of the only Fraser Range nickel mine also wants exposure to the next Nova-like discovery.
After those two large holders, there aren’t many more shares to go around, which means the share price can move extremely quickly on positive newsflow.
GAL had $7.7M in the bank at September 30 last year, so looks well funded for the upcoming months of exploration.
The Right Time for Nickel
The nickel price is currently surging, with the price breaching $18,000/tonne.
Nickel is something battery makers are chasing, with Elon Musk urging miners to produce more nickel - this would help deliver more electric car batteries and significantly drive the growth of electric car sales.
Nickel makes batteries energy dense, so that cars can run further on a single charge.
As battery metals stocks are seeing a massive surge in investor demand, nickel explorers like GAL could make a discovery in the right place and at the right time.
GAL is kicking off its first RC drill programme of the year in mid-February, and over 1,200m of drilling is planned.
We are expecting an increase in interest in GAL ahead of drilling, and we are looking forward to what this year can deliver for long term holders.
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.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.