Explorers Are Moving Again

• Commentary: Exploration is back? Multiple multi-baggers. Upcoming drilling to watch. Quarterly Portfolio update.
• Quick Takes: KAU, IIQ, SGQ
• This week in our Portfolios: SLM, CAY, GUE

Exploration stocks are back!

Ok, maybe that’s a bit of a stretch...

*takes cold shower.*

But it is very encouraging to finally see a handful of greenfield explorers deliver some mutli-bag share price rises off the back of drill results in the last couple of weeks.

It's been a while, but for the first time in what feels like nearly 3 years... solid exploration results are being rewarded with share prices going up, on huge volumes... and staying up.

An “explorer” is a tiny company that raises money to fund exploration drilling in the hope of making a valuable new mineral/metal discovery.

They are high risk but potentially high reward “rolls of the dice” - and are generally much more fun in risk-on environments.

It’s been a bit of a dark winter for explorers in recent memory - exploration punters had left the building and the whole sector was a bit grim.

“Why would I invest in an explorer? The market isn’t rewarding good drill results or discoveries and they’ll just need to raise money soon too”

Fair enough...

But not one, two, but THREE multi-bag explorer share price runs in the last two weeks has likely prodded many people to question that mentality.

(it certainly has for us)

We have written a couple of times in the past that the market needed to see not just one, but a few big responses to drilling results in close succession to start bringing attention (and money) back into greenfields explorers.

Given gold and silver’s unstoppable price runs over the last 12 months, we also figured that gold or silver would be the sector in which a new discovery would spark the start of interest coming back into exploration.

(to anyone that closely watches gold and silver prices on an hourly basis - how intense was that trading session late yesterday and last night... what a roller coaster especially for silver - something is definitely brewing)

And not only have a few thousand lucky shareholders across these three multibagger explorers been reminded of how incredible it can be to hold a successful explorer that delivers a 5x return in a day...

But many, many more market participants have also witnessed it happen from the sidelines.

Awakening long forgotten memories of positive experiences from exploration results.

And as quickly as that, sentiment in the exploration sector can turn as greed overtakes fear.

Now all we need is an interest rate cut to lock in the risk-on sentiment and we could be back on...

But after many emotionally draining false starts over the last ~3 years, it might be worth getting back into that cold shower.

Here are the three successful explorers that we hope will spark broader interest back into this space:

Caprice Resources was up over almost 300% in a few days off the back of gold exploration results.

The big surprise for us was the volumes... in 3 days Caprice saw almost its entire register turnover.

That has been pretty rare to see for at least a couple of years.

We also saw Kalgoorlie Gold Mining pop by 500% on exploration results.

Not just gold, copper is getting some love too

Peruvian copper explorer AusQuest moved 700% on drill results.

We hope our Investment SLM can deliver something similar with its drilling on the same copper belt in Peru in a few weeks... (read our latest SLM note here)

The key takeaway for us from all of this?

So finally after almost 3 years, exploration results are being rewarded with genuine on market buying.

Buying that re-rates a stock by multiples and manages to protect those gains (and in some cases go even higher).

And on millions of dollars of volume traded....

Not just a couple of people pushing up the price a bit on $30k of volume like we have been seeing recently.

We think it's a combination of bombed out valuations across the explorers starting them off at a very low base AND the market being starved of genuine exploration drilling.

A junior explorer with a market cap of $5M has a lot more room to re-rate into than one with say a $50M market cap.

A move from $5M to $50M on a successful drill result is that coveted 10x return.

And a big drill result can deliver it... in the right macro environment.

Many junior explorers have been risk-off internally, choosing to drill safer “infill” holes instead of going out and doing genuine exploration work.

An “infill hole” is basically drilling close to an existing successful drill hole, or in between two successful holes to confirm mineralisation continues between the holes

Infill drilling gives a higher chance of success, but it’s not taking a risk to add significant extensions to the mineralisation by drilling in farther out areas, which is known as extensional drilling.

It's hard to blame companies for taking the safer route considering the consequences of failure would be a hugely discounted cap raise.

But now, it feels like there is merit to going out, taking a bit of risk and going after genuinely material drill targets where success can multiply the share price.

Over the last 18 or so months, we decided to be a lot more selective with our exploration Investments, but we still hold a fair few.

In no particular order, here are the exploration companies in our Portfolio that are currently drilling (or about to drill).

With the first green shoots of market appetite for big exploration results appearing over the last two weeks, if these companies manage to deliver material drill results it could get the market excited:

Exploration Drilling about to start:

Solis Minerals (ASX:SLM)

Exploration Project: Copper in Peru

Market Cap: $10.1M

Drilling: Q1-2025

SLM has four different copper targets in Peru - the 2nd biggest copper producing country in the world.

Peru is also where the previously mentioned AusQuest drilled and the share price ran over 700%.

SLM is planning to drill its four different targets all in 2025.

Fun fact* - SLM has the same team behind it that delivered us Latin Resources’ Brazilian lithium discovery and an almost 22x return at its peak share price in the 40c’s.

SLM’s chairman is Chris Gale (ex-managing director of Latin Resources) and this week SLM appointed Latin’s ex-CFO as its new managing director.

New SLM CEO Mitch Thomas has a solid background in Peru and in copper especially - 3 years at Rio Tinto’s 4.32BN tonne La Granja Peruvian copper project.

Mitch also worked at Rio Tinto’s London M&A team with a focus on copper.

SLM also has Mike Parker as its Technical Director - Mike also knows his way around copper projects.

He was the senior country manager for (now $18BN) First Quantum where he was responsible for two major copper discoveries (Lonshi and Frontier Mines). Then between 2011 and 2017 he was First Quantum’s country manager in Peru.

So the team has heaps of copper experience as well as having spent some serious amount of time in Peru.

Below is how SLM’s ground sits in Peru’s prolific copper belt, relative to Ausquest (AQD)’s copper discovery:

Read our latest note: SLM: Micro cap copper explorer about to drill... AusQuest up 700% on copper hit.

Lightning Minerals (ASX:L1M)

Exploration Project: Lithium in Brazil

Market Cap: $8.4M

Drilling: commencing any day now...

L1M is our Brazilian lithium Investment. They should be drilling in a few weeks' time, we are hoping they can repeat the success we had with Latin Resources.

L1M already has:

1. Outcropping pegmatites
2. Confirmed lithium in the pegmatites up to 4.04% lithium
3. Confirmed spodumene hosted mineralisation

The only thing left to do is drill to see if these pegmatites are part of a bigger lithium system.

L1M will be drilling in a few weeks time.

Which is all the more significant given L1M’s location in Brazil’s “Lithium Valley” where we made one of our most successful Investments, Latin Resources.

LRS just got acquired by Pilbara Minerals for $560M.

L1M’s ground sits right in between Brazil’s two biggest lithium players Latin Resources (now Pilbara Minerals) and Sigma lithium.

(Note: above image is accurate as of 17th Jan 2025 - LRS has now been acquired by PLS and L1M is commencing drilling any day now)

BPM Minerals (ASX:BPM)

Exploration Project: Gold in WA

Market Cap: $6.2M

Drilling: Now

BPM’s gold project is right next door to $3.2BN Capricorn Metals’ Mount Gibson gold project.

BPM late last year hit a discovery intercept on its ground, but wasn't able to follow it up with extensional hits.

Just yesterday, BPM kicked off a 6,000m aircore drill program along 8km of strike to the south of Capricorn’s project.

We are hoping BPM finds something that warrants follow up drilling (and a chance at a new gold discovery).

With some other micro cap gold explorers seeing sustained re-rates off the back of good drill results, it's a good time for BPM to be drilling.

Read our latest Quick Take: BPM starts drilling for gold following discovery

Techgen Metals (ASX:TG1)

Project: Multiple exploration projects in Australia

Market Cap: $5.3M

Drilling: TBA

TG1 recently put out a big geophysical target at its copper project in WA.

It's still a fairly early stage and TG1 hasn't given any guidance on when drilling will happen but we like the look of the target and are hoping to see TG1 confirm timing soon.

TG1’s drill target generation work has yielded two big, red, EM conductors that look very interesting to drill for a new copper-gold discovery.

TG1 has rock chips lining up with the red EM conductors...

Rock chips up to 50.5% copper, 18g/t gold right in and around where the big EM targets are.

These EM conductors and rock chip results we think help set up a very attractive “swing for the fences” exploration program at a time when good copper exploration exposure is hard to come by:

Read our latest note: TG1: Reveals new giant copper-gold drill targets at Blue Devil project

JORC Resources, with exploration upside...

High risk, high reward greenfield exploration is traditionally our favourite part of the market.

But over the last 2 years of terrible, risk-off market conditions in the micro end of the market, we have made more Investments in companies that already had a discovery and are looking to define and grow a JORC Resource.

(A JORC resource means a company has already drilled and made a discovery, and done enough further drilling to make an estimate of how much of a metal sits underground - JORC is an accepted standard to report this)

Recently the market hasn’t been valuing existing discoveries with JORC resources and potential exploration upside, so we took a view that there was more value to be found in this space than in pure greenfield exploration.

You could basically buy shares in companies that had already found something for (in our opinion) very low prices - less than the cost to do the initial exploration and definition work.

For these companies it takes an exceptional drill result to cause multi-bag price rises, but there is less downside risk given that the resource will underpin the value of the company.

What we want to see from our Investments in the “definition” stage of the Mining Company Lifecycle is to continue to grow and build out the known areas of mineralisation - and in an ideal world deliver some huge extensional drill hits to get the market excited.

James Bay Minerals (ASX:JBY)

Project: Gold in Nevada

Market Cap: $57M

Drilling: Now

We are bullish gold and silver, especially projects located in the USA.

JBY’s gold project in Nevada, USA already has a foreign 1.18Moz gold and 7.6Moz silver resource.

Right now it is drilling below its current resources... This is where it could surprise the market to the upside if more gold or silver is found.

JBY currently has assays pending from the first few holes at depth - we could see those get published in the coming weeks.

Read our latest note: JBY gold hit: 520 metre extension to gold mineralisation?

Sun Silver (ASX:SS1)

Project: Silver-gold-antimony in Nevada

Market Cap: $104M

Drilling: Planning for 2025 drill program underway

Again, we are bullish gold and silver, especially projects located in the USA.

And SS1’s antimony as a defence metal is a bonus.

SS1 spent the majority of last year conducting exploration drilling to the North East of its giant 423Moz silver equivalent JORC Resource, in Nevada, USA.

There are four more assays to publish from its latest drilling campaign and the company is planning its drill program for 2025.

As the company drills further to the North East we want to see if the mineralisation extends and grows larger.

SS1 is expected to publish an JORC Resource Upgrade this year which will include all of the drilling from the 2024 campaign.

SS1 has also been hitting antimony in some of its drillholes which could be another big surprise to the upside...

Read our latest note: Tell me more: SS1 hits +100m of higher grade silver... new high grade extension?

Mithril Resources (ASX:MTH)

Project: Silver-gold in Mexico

Market Cap: $55.3M

Drilling: Drilling now

Back in September 2024 the MTH share price ran by over 700% off one drillhole.

Going into 2025 MTH has over 35,000m of drilling planned and most importantly, is going after regional targets where there is potential for repeat discoveries to MTH’s existing 529k gold equivalent JORC resource.

Any discovery across these regional targets would surely get the market interested and (fingers crossed) deliver a re-rate like the 700% move we saw last year.

Read our latest note here: MTH: More gold and silver hits as gold price runs again - just at the first target of many

Titan Minerals (ASX:TTM)

Project: Gold-Silver-Copper in Ecuador

Market Cap: $117M

Drilling: Drilling Now

Titan is one of our more advanced stage companies with a project that already has a 3M ounce gold, 22M ounce silver JORC resource.

The project is giant already, but TTM is currently drilling to upgrade its resources.

With gold and silver continuing their price rises, bigger is definitely better.

TTM has roughly 5,400m left of drilling at its Dynasty project, and later this year will be drilling regional targets to try and add to the current JORC resource in a big way.

The wildcard for TTM is its copper project.

Last year, TTM signed a US$120M JV agreement with a subsidiary of Gina Rinehart’s Hancock Prospecting.

Hancock is doing 10,000m of drilling and any positive results from that project could be the source for a re-rate in TTM’s share price.

Read our latest TTM note: We will tackle the gold, Gina - you get to the copper

Galileo Mining

Project: Nickel-Copper-PGE’s

Market Cap: $26M

Drilling: Q1-2025

GAL is one of our Portfolio stocks that managed to hit a discovery and delivered a ~10x run from 20c to over $2.

That was way back in April 2022 when the company made the Calisto nickel-PGE discovery.

Since then those commodities have fallen out of favour with the market and despite GAL putting out a resource for its discovery the share price has come off by a lot.

HOWEVER - platinum and palladium have joined gold and silver on their strong start to 2025.

Like gold and silver, platinum and palladium are considered precious metals.

Now, GAL is going after fresh new targets along a ~12km strike zone at its project in WA & has also started working up its other project which is a Joint Venture between GAL and the Creasy Group.

For those who don't know, Creasy Group is the entity controlled by mining billionaire Mark Creasy.

He has had an incredible track record of discoveries including the most recent one - Azure Minerals’ Andover lithium project in WA which was taken over by SQM and Gina Rinehart for over $1.7BN at the top of the lithium cycle.

GAL plans to drill its 100% owned project in February and then the Creasy JV in Q2-2025.

Across both projects, GAL is chasing NEW discoveries.

(would be great if we could see something similar to the share price run in April 2022).

Quarterly Portfolio Update

Transparency is a key pillar of Next Investors.

We have our Portfolio share holdings published on our website, which is continuously updated - you can check it out anytime here.

Every quarter we announce category movements in our stock Portfolio.

Key movements from the last quarter:

A quick word on a couple of stocks.

After reviewing MEG and TEE’s new projects and most recent cap raise terms, we decided not to Invest further and have now put these companies into our “Bottom Drawer” Portfolio.

NHE announced more delays to drilling its helium project due to inclement weather. This was disappointing for us, but again we will maintain it as a current Investment until we see the results of the drilling program.

PRL we are still waiting for the company to hopefully re-list with a new project. In the latest quarterly PRL said it was looking for various gold projects in Australia and abroad. PRL had ~$9.2M in the bank at the end of the quarter.

Finally, shout out to our Past Investment ARN that made a significant niobium discovery. Although we no longer hold shares in the company, we are happy to see ARN shareholders get a win.

What we wrote about this week 🧬 🦉 🏹

Solis Minerals (ASX:SLM)

Two weeks ago a micro cap ASX stock made a copper discovery in Peru that delivered a ~700% return.

Our very own micro cap copper explorer Solis Minerals (ASX:SLM) is aiming to drill for a discovery in Peru this quarter.

Same country, similar geology, targeting the same metal, valued at a similar level pre drill...

Read: ⛏️ SLM: Micro cap copper explorer about to drill... AusQuest up 700% on copper hit.

Canyon Resources (ASX:CAY)

There’s nothing like an experienced deep pocketed major shareholder committed to bringing a company’s development stage asset into production quickly.

That's what Canyon Resources (ASX:CAY) has in major shareholder Eagle Eye Asset Management, who has a ~41.72% stake in CAY.

48 hours ago we saw an article claiming that Eagle Eye is in talks to buy a stake in or acquire Cameroon’s state aluminium company which owns the Edea Aluminium smelter.

That smelter is INSIDE Cameroon...

Read: ⛏️ CAY: More than meets the eye - look closer

Global Uranium and Enrichment (ASX:GUE)

On Wednesday this week, GUE announced that the prospect of a strategic partner has emerged to take Ubaryon forward and invest in the technology.

GUE expects that strategic partnership inside the next 4 months...

GUE’s Ubaryon is targeting a transaction “with selected organisations involved in the Nuclear Fuel Cycle production industry” which have “expressed interest in reviewing technology and potentially investing”.

Read: ⛏️ GUE: Ubaryon uranium enrichment technology AND US based uranium...

Quick Takes 🗣️

KAU hits high grade gold at A1 Mine

BPM starts drilling for gold following discovery

IIQ establishes highly respected scientific advisory board

MoU: St George and Shandong Xinhai Mining Technology & Equipment

Macro News - What we are reading & listening to 📰

Defence:

Tungsten miner says clients in shock as China chokes supply (Mining.com)

• China’s export controls on tungsten have sent Almonty Industries’ stock soaring 41% as supply concerns grow.
• CEO Lewis Black warns the situation will worsen, with the U.S. heavily reliant on China, Russia, and North Korea for tungsten.

Europe must respond to Trump ‘electroshock’, says Macron (FT)

• Macron urges Europe to strengthen its defense and economy, reducing reliance on the US after Trump’s return.
• He stresses that Europe must take responsibility for Ukraine's security and avoid dependency on the US.

Gold:

South Korea’s Mint Halts Gold Bar Sales as Supply Tightens (Bloomberg)

• South Korea’s mint halted gold bar sales due to supply shortages and surging demand.
• Global gold markets face tightness as traders rush bullion to the U.S. ahead of possible tariffs.

Gold price hits another record as investors eye $US3000 (AFR)

"Big Short" trader Danny Moses sees few short opportunities but is betting on gold.

Gold is surging toward $3,000/oz, driven by inflation fears, central bank buying, and trade risks.

Lithium:

Chinese lithium mine restart triggers ASX sell-off (AFR)

• CATL’s lithium mine restart in Jiangxi raises oversupply fears, hitting Australian lithium stocks.
• UBS expects lithium prices to rise short term but warns of a potential drop in Q2 with more supply.

Are you a s708 sophisticated investor?

If you qualify as a sophisticated investor and would like to see “s708 only” sophisticated investor opportunities: Subscribe to Next Cap Raise.

You will need to send us a valid certificate from a qualified accountant confirming you qualify as a sophisticated investor.

Have a great weekend,

Next Investors