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KNI Drilling 18 Days Away, Cobalt Targets Firmed Up


Published 14-APR-2022 13:44 P.M.


3 minute read

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 2,673,167 KNI shares and the Company’s staff own 7,500 KNI shares at the time of publishing this article. The Company has been engaged by KNI to share our commentary on the progress of our Investment in KNI over time.

Our battery metals exploration investment, Kuniko (ASX:KNI), is just 18 days away from drilling a trio of big cobalt targets in Norway.

With the countdown to drilling underway, and Europe desperately needing cobalt for their EV push, KNI has now firmed up its targets using a down hole geophysics survey.

As announced today, KNI has applied modern downhole geophysics to historical drill holes at its cobalt project to identify conductive anomalies.

One of these targets was completely missed by the previous owner, while a second target was only grazed.

This means KNI can target the “bullseye” of the prospective cobalt mineralisation with its drill program starting 2nd May.

This is an added bonus as we think it will lead to a more precise drilling campaign. And the market also liked the news — the stock opened 30% higher this morning.

In this short note, we’ll share a bit on what that down hole geophysics survey turned up today, and re-emphasise how this drilling campaign fits in with our key objectives for our Investment in KNI.

This is why we hold KNI in 2022, drawn from our KNI Investment Memo:

Why did we invest in ASX:KNI

More on today’s announcement

ASX:KNI Investment Memo

KNI has now completed Key Objective #1 and is on the cusp of commencing work on Key Objective #2, on schedule.

There’s also a bit of new information in this announcement regarding the work of a geophysics consultancy, GeoVista AB.

GeoVista had a look at how historic drill holes correlated with down hole geophysics anomalies, which produced the following visual:

GeoVista Visual

Old drilling by the previous tenant came close to the conductor that KNI identified, but ultimately, completely missed it.

We cover previous attempts by a company called Berkut to drill this target back in 2017 before the cobalt price crashed, and how they "just missed" hitting it in this article.

Now, with better data from modern exploration techniques in hand, KNI knows where to drill.

What has KNI done so far?

Below is a complete list of our previous coverage of KNI in chronological order since our portfolio initiation:

24-Aug-2021: Introducing Kuniko (ASX:KNI): Zero Carbon Copper, Nickel and Cobalt

28-Aug-2021: Recap of the KNI IPO and share price run

15-Sep-2021: KNI commences EM surveys - will they find EM conductors? Find out next month...

11-Oct-2021: Fast start for KNI with more news on Zero Carbon Battery metals

08-Nov-2021:KNI delivers multiple conductors on copper and cobalt - Drill targets next

06-Dec-2021: KNI Geophysics Unveils EM Conductor Under Historic Cobalt Mine

21-Jan-2022: Modern exploration methods lead to additional drilling targets

15-Mar-2022: EU urgently needs ESG grade cobalt for EV transition - Russia and DRC supplies are ruled out

Our view is that KNI has done everything they said they would so far, and we’re glad they were able to get all the necessary pieces in place for the drilling program which commences in 18 days (2nd May).

As long-term holders we’ve identified the follow risks:

ASX:KNI Investment Risks

We think that after today’s announcement, exploration risk has been reduced due to the increased confidence KNI has in hitting cobalt mineralisation at their project.

As for funding risk, KNI has $5.7M as of 31 December, so we think they have enough cash to complete their maiden drilling campaign.

Regarding market risk, the cobalt price is still looking strong:

Cobalt Prices

And below you can find our KNI Investment plan:

ASX:KNI Investment Plan

Our 2022 KNI investment memo

In our KNI Investment Memo you’ll find:

  • Why we invested in KNI
  • Why we continue to hold KNI in 2022
  • The macro theme behind KNI’s project
  • Key risks involved in our KNI investment
  • Our KNI investment plan
KNI Investment Button

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.