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Published 03-MAY-2021 11:41 A.M.


4 minute read

Today TechGen Metals (ASX:TG1) started drilling for gold at a newly identified greenstone belt that has never been drill tested.

We invested in the TG1 IPO a few weeks ago, and are one of the company’s biggest holders.

We like the small enterprise value, and following the $6M IPO raise, the company is funded for multiple drill programmes over the coming 12 months - this means plenty of share price catalysts to come.

Since listing in April, TG1 has already started two drill programmes - both with potential to deliver early results.

TG1 is now drilling a target at its 100% owned Ida Valley Gold Project in WA.

This project sits in a newly identified greenstone belt between Lawler’s and Mt Ida Mining Districts. This project sits 50km north-east of Kalgoorlie in WA.

Greenstone belts are areas of very old rock that have undergone heat and pressure and eventually been pushed up to the surface - and they are generally very well endowed with metals - especially gold.

To newly identify one is fairly rare these days, which makes TG1’s current drilling notable.

TG1 has planned 1,000m+ of RC drilling to initially test two anomalies of interest.

As we have seen with other exploration companies, share prices can rise in the lead up to drilling results on speculation. TG1 has plenty of drilling planned and results to come in the near term.

The catalyst

TG1’s inaugural RC drilling campaign has started - hitting a newly identified greenstone belt that has never been drill tested.

We liked this quote from TG1’s Managing Director:

“It is rare to find a new greenstone belt of this scale with outcroppingmafics and ultramafic units carrying gold mineralisation in favourable settings between well known mining districts.”

1000m of drilling has been planned in an area where the first ever systematic geochemistry samples were collected just over 12 months ago and returned an impressive peak assay of 884ppb Au in soils and rock chip samples to 6.6g/t Au.

So we have early stage gold anomalies, sitting in a newly identified greenstone belt... hopefully the drill bit can deliver here.

Drilling is expected to only take a week - with results to follow shortly.

What else is happening with TG1?

TG1 recently released assay results of a limited rock chip sampling program (11 samples) completed at the Star Prospect at the Company’s 100% owned El Donna Gold Project in the Yilgarn Craton of WA.

The Yilgarn Craton is another example of a greenstone belt, this one hosts major gold producers including Northern Star Resources’ and Saracen Mineral Holdings’. Saracen owns the 800,000oz-per-annum Super Pit in Kalgoorlie and GoldFields’ 250,000oz-per-annum Agnew mine is here too.

The Yilgarn Craton greenstone belt accounts for two thirds of gold production and most nickel production in Australia. It’s therefore a decent spot for TG1 to be exploring.

Rock chip samples are a nice indication that the drill bit may intercept some decent shallow results.

The maximum high-grade result of 250g/t Au as well as other anomalous results such as 23g/t, 4.62g/t and 0.95g/t Au, bode well for what is to come from TG1’s overall drilling program.

TG1 has now completed a three-hole RC drilling program at this prospect to test for mineralised extensions beneath the historic workings.

All RC assay results are pending from the recently completed drilling campaign at the El Donna gold project and should be delivered shortly.

Why we invested in TG1

  1. Lots of near term news. After its IPO it began its drilling program at its El Donna Gold Project almost immediately, completing it just a week later. RC assay results are now ‘pending’. After today’s drilling announcement at Mt Ida, we will continue to see a steady stream of newflow from both projects.
  2. Low Enterprise Value. We like TG1’s current Enterprise Value (it was $4.5M on ASX listing) - with a strong copper price and buoyant commodities pricing overall, we think this company is leveraged to exploration success over the coming months.
  3. The exploration market is hot at the moment. "Commodities supercycle” has been thrown around a lot in the mainstream media lately.
  4. The original owners of TG1’s projects are now directors and substantial shareholders in TG1. The original owners have a significant, escrowed holding in TG1, which means they are aligned to other long term holders. We are comfortable the TG1 board is in this for a large metals discovery.

TG1 is an early stage exploration company, with no guarantee of success, but we do like the upside here for early stage investors. Remember exploration investing is speculative investing, so only invest what you can afford to lose.

TG1 has so many upcoming drilling campaigns across multiple projects we think that the market will respond well to the rapid stream of newsflow, especially if TG1 hits on something substantial.

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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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