L1M: First gold drill results deliver 20.4m at 2.4g/t gold

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 8,375,696 L1M Shares and 3,773,077 L1M Options. The Company has been engaged by L1M to share our commentary on the progress of our Investment in L1M over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs.

Gold is back up near its all time highs again this morning...

The media is reporting lines in front of bullion dealers...

And the market is starting to reward exploration success again...

All signs to us that the market wants to see new discoveries get made and brought into production...

Our Investment Lightning Minerals (ASX:L1M) just found more gold beneath a 20m deep pit that was producing gold back in the 1980’s and 1990’s.

(source: L1M announcement)

L1M hit a 20.4m intercept with 2.4g/t gold grades (and 14.3g/t silver)... just 63m below the ground.

Which tells us there is more gold... below the pit that was mined in the 80s and 90s...

That original pit was only ever mined to depths of ~20m - and we know there is gold down to ~63m depths.

What we don't know (but want to find out with more drilling) is if it extends even deeper AND just how far along strike it goes...

(“along strike” basically means the gold extends horizontally not just vertically).

Here is us trying to visualise it by overlaying the two images from today’s announcement in 3D (as best we could).

L1M already said planning is underway to test the best targets after all the assay results come back.

IF L1M can show with (further drilling) that there is more gold at depth and along strike it could justify restarting production from the pit...

Similar to what was mined for gold back in the 1980s and 1990s did with the very near surface stuff:

(Source)

All of that old mining was down to max depths of ~20m - which is very shallow...

There hasn’t been much (if any) drilling on the project below 100m depths.

L1M is the first company to come back with a diamond rig and start drilling below those old starter pits...

Today we got results from the first 3 holes, drilling is still ongoing with 8 out of a total 9 holes completed so far.

So we should see more assays from the gold targets over the coming weeks.

We also noticed L1M mention two holes had been drilled on the “cobar line”, “south of the porphyry structure”...

Targeting “primary gold and silver”.

(Source)

That drilling definitely wasn’t a part of the initial plan for this first round of drilling so L1M must like what they are seeing there...

Any big silver/gold hits there could surprise the market to the upside.

Here is where that “Cobar” target sits relative to the old gold pits L1M is drilling below:

(Source)

And here are the old pits L1M is drilling below:

(Source)

By the end of this round of drilling we should know which of those old pits should be where L1M focuses its next rounds of drilling...

L1M also has three undrilled copper targets:

... and then later this year, L1M is planning to put the first drill holes into three copper porphyry targets that sit to the east of the gold targets. (Source)

(Source)

Previous geophysics has already mapped these targets across ~16km^2 (which is massive for any drill target) and all three targets are drill ready.

We think the market could re-rate L1M higher simply off the back of drilling getting closer on these targets...

Especially after what happened to another junior copper explorer on the ASX last week.

Copper explorer Litchfield Minerals drilled its project in the Northern Territory and went from ~20c to $1.20 in under a week of trading.

All of that was off sulphides in visuals and handheld XRF readings from the company’s 10th hole on its project.

(Source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

L1M will have three cracks at doing something similar when it starts drilling its project (scheduled for Q4-2025 which is this quarter).

(Source)

With L1M trading at a market cap of $9.8M we think the stock is leveraged to a re-rate on positive exploration results.

What we are looking for over the next 3 months from L1M

Over the next 3 months we think L1M’s share price will largely move with the results from its exploration programs.

We will be looking out for:

• Assay results from the drilling at its gold targets - ultimately we think this is what will get the L1M share price moving (assuming results are good). Here is where L1M will be drilling on the map:
• Soil and rock chip sampling along the ~12.5km of strike to rank new follow up drill targets for the project - the market should like new targets being announced, especially if the first round of drilling comes in.
• Testing of undrilled copper targets:

(Source)

Ultimately, we are hoping L1M can make a discovery that re-rates its share price in line with our Big Bet which is as follows:

Our L1M Big Bet:

“L1M discovers and defines a large resource, leading to a long term re-rate in the company’s share price by >1,000%”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including development risk, country risk and commodity price risk - just some of which we list in our L1M Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

What’s next for L1M?

Diamond drilling on gold targets 🔄

Given L1M will be running a diamond drill program, it is possible we get some visuals fairly soon with drilling having started.

So we could see results start to trickle in fairly quickly from L1M.

Soil sampling program alone ~12.5km fault line 🔄

L1M mentioned in the recent announcement that soil sampling would also form part of this program to rank more drill targets.

L1M said in today’s announcement that the soil/rock chip sampling program had been completed so we should see results from this soon.

Here is the ~12.5km of strike that we want to see the soil sampling be done on:

(Source)

What are the risks?

In the short term the key risks for L1M are “exploration risk” and “funding/dilution risk”.

Given L1M is drilling right now, there is always a risk the next batch of holes find nothing that is considered economic or worthy of following up.

In that case the L1M share price could re-rate lower.

Exploration risk

L1M is still a long way from a discovery, and even further from defining a resource.Like all micro cap minerals explorers, the risk is that L1M finds no economic mineralisation on its assets - in which case we would expect to see the share price re-rate lower.

Source: “What could go wrong” - L1M Investment Memo 12-Sep-2025

L1M is running a diamond drill program which will obviously cost money to complete.

Diamond drilling gives an explorer the most information (visual drill cores and a better idea of the rocks underground) which makes it the most expensive form of drilling for any explorer.

And so there is always a chance L1M have to raise capital to fund the next round of exploration on the project.

Funding risk/dilution risk

As a pre revenue explorer, L1M is dependent on capital markets to fund ongoing drilling and development. That could come at discounted prices and further dilute existing shareholders.

Source: “What could go wrong” - L1M Investment Memo 12-Sep-2025

Other Risks

Like any small cap exploration company, L1M carries a high degree of risk.

The company’s projects are early stage, and there is no certainty that ongoing exploration will lead to an economic discovery or a commercially viable resource.

L1M’s valuation is closely tied to sentiment in the gold and copper markets. A sustained downturn in either commodity could materially affect project economics, funding access, and share price performance.

As a pre-revenue explorer, L1M relies on capital markets to finance exploration and development. Any future capital raisings may dilute existing shareholders, and there is no guarantee funding will always be available on favourable terms.

Delays to drilling, assays, or permitting could reduce market momentum and increase costs. Exploration programs often take longer or cost more than initially planned.

While operating in Australia, regulatory or environmental changes could still delay progress or impact project development.

Operationally, the company is dependent on contractors, equipment, and site conditions, all of which can affect timelines and results.

M&A or joint venture activity may form part of the company’s growth strategy, but such transactions are complex and outcomes uncertain.

Finally, broader market sentiment and small-cap liquidity can significantly influence L1M’s share price, regardless of exploration progress.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our L1M Investment Memo

You can read our L1M Investment Memo in the link below.

We use this memo to track the progress of all our Investments over time.

Our L1M Investment Memo covers:

• What does L1M do?
• The macro theme for L1M
• Our L1M Big Bet
• What we want to see L1M achieve
• Why we are Invested in L1M
• The key risks to our Investment Thesis
• Our Investment Plan