LKY: Racing to build the USA’s first antimony mine

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 4,188,878 LKY Shares at the time of publishing this article. The Company has been engaged by LKY to share our commentary on the progress of our Investment in LKY 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.

Okay, that US$191M financing “letter of interest” Locksley Resources (ASX:LKY) received from the US Export-Import Bank 9 days ago makes a lot more sense now.

This morning our US critical minerals Investment LKY outlined progress and next steps on rapidly bringing into production its Desert Antimony Mine in California, USA.

LKY’s Desert Antimony Mine was in production during WW1 and WW2 producing between 100 and 1,000 tonnes of antimony. (source).

It was one of the highest grade antimony mines in the US - which we now know was big and high grade enough for the old timers to mine over 4 underground levels...

This morning LKY announced recent progress (read the full LKY announcement here):

• Development planning for extraction, permitting and financing underway.
• Letters of interest sent to engineering contractors for a possible mine re-start scenario.
• Safe underground access confirmed with an engineering consultant sign off.
• Exploration target: 772K–1.38M tonnes at 2.5–4.9% Sb for ~19,400 tonnes to 67,700 tonnes of antimony metal.
• High-grade antimony samples extracted and tested successfully - producing military spec ingots from bulk samples, AND
• US$191M in potential financing lined up from the US Export Import Bank.

The first thing that caught our eye in this morning’s announcement was the exploration target of a potential 19,400 tonnes to 67,700 tonnes of antimony metal.

An “exploration target” is conceptual in nature, prepared by the company based on preliminary data like old workings, sampling, or geological mapping.

There is insufficient exploration to estimate a Mineral Resource, and it is uncertain that further exploration will result in the estimation of a Mineral Resource.

However LKY’s upcoming planned drilling will give us a much better idea of how much antimony LKY could be sitting on.

The upper end of LKY’s exploration target is getting close to the size of the US “national champion” - $4.3BN Perpetua Resources’ resource estimate of 91,000 tonnes of antimony... .

LKY based its exploration target on LiDar surveys and extrapolated sample grades from veins that had been previously mined.

(this is what we talk about anytime we say “applying modern exploration techniques” to historical mines)

“LiDar” gave us a 3D view of the historical tunnels from the 1920s when the old miners were “following the antimony veins underground”:

(Source)

LKY was able to extrapolate where the previously mined veins could extend:

(Source)

Now that we have an “exploration target” of 19,400 tonnes to 67,700 tonnes of antimony... next step is to start drilling into it to see how much is there.

LKY is going for speed - and has now put itself into a position where we can begin to visualise what a development scenario looks like.

What we liked most about today’s announcement was that LKY now has information on everything it needs to start planning a development case for its project.

LKY has:

• The project mapped with LiDar (light detection and reflection) surveys - these surveys have 3D mapped the underground mining adits over 4 levels now.
• Re-entry potential - LKY has sign off from an engineering consultant that the underground adits are in good enough condition to re-enter.
• Bulk samples - Two bulk samples have been taken for 23.1kg and 325kg. The 23.1kg sample assayed 9.6% antimony and was processed into commercial grade antimony, grading up to 68.1% antimony. The second much larger sample assayed 7.6% and 7.8% antimony.
• Processed into a final downstream product - LKY’s processed its ore into a final antimony ingot that is military spec...

Now, Coming back to that exploration target.

Based on what we know to date, LKY’s estimated (very preliminary) a potential 772kt to 1.38Mt of antimony (grading between 2.5% to 4.9%) for a total of 19,400 tonnes to 67,700 tonnes of antimony metal.

That’s without any drilling - which LKY has planned for late Q4 this year or early Q1 next year.

The USA antimony national champion, the $4.3BN capped Perpetua Resources - has a ~91,000 tonne antimony resource. (source)

ASX first mover, the $600M capped Larvotto Resources plans to produce ~39,000 tonnes of antimony over an 8-year mine life from its construction stage project in Australia. (source)

Here is how the three stack up in terms of overall resources / exploration targets:

Even if LKY can define a Mineral Resource somewhere in the middle of its exploration target it could end up with a project that could produce a similar amount of antimony to $600M capped Larvotto.

(plus LKY’s project is located in the USA, Lavrotto is all the way in Australia)

Let’s not forget, Larvotto is the company that US Antimony Corp (the only refiner of antimony in the US) tried to acquire in a takeover offer of A$723M.... Which Lavrotto rejected.

(Source)

US Antimony Corp recently received a big purchase order from the Pentagon for US$245M.

Then they started scrambling trying to buy a company that is the closest to production to try and backfill feedstock into their refineries...

(Source)

That takeover bid was rejected by Larvotto - so US Antimony Corp hasn’t really scratched its itch in terms of securing feedstock for its refineries to fulfil its Pentagon contract.

Perhaps, after the last few announcements from LKY and today’s exploration target - $1.6BN US Antimony Corp would be looking at a company like LKY...

Especially with LKY’s project being inside US borders...

AND with LKY having shown it can take its ore and produce antimony ingots suitable for US military specifications...

Here is the antimony ingot that LKY produced last month, the first 100% USA sourced and processed antimony in decades:

(source: LKY announcement)

US Antimony Corp also has every incentive to show they can deliver that purchase order.

The initial deal with the Pentagon only accounts for ~1/8th of annual demand in the US.

(Source)

LKY is also a processing tech option...

LKY also has a processing “X factor”.

LKY is working on technology with Rice University using Deep Eutectic Solvents (green, bio-degradable, non-toxic solvents) to process its antimony concentrates and turn them into a final product.

LKY could potentially have this tech developed with Rice, that is not only applicable to its own project but also other antimony projects across the US (which would be valuable on its own).

LKY put out an update on that partnership a few weeks back, where:

1. The initial processing parameters have been established to develop a pilot plant to test higher volumes of material.
2. Research so far has shown potential for selective dissolution (extracting only what is wanted) from the antimony ore.

AND NEXT that LKY would start testing ore samples from its own Desert Antimony Mine to form the basis for design of a pilot plant.

4x major catalysts that could play out for LKY over the next 6-9 months

Between now and the end of the year, we think that LKY could re-rate higher off one of the four catalysts:

1. Drilling results from the antimony prospects that show the potential for an economic mining operation.
2. A rare earths discovery right next door to (or inside of) MP Materials’ ground, the only rare earths mine in America.
3. A tech breakthrough with Rice University to develop US-based, environmentally friendly antimony processing tech.
4. Another surprise funding announcement where LKY receives a commitment for non-dilutive funding to advance either exploration on its projects or its downstream business.

No guarantees of course, this is speculative small cap investing..

Ultimately, our Big Bet for LKY is as follows:

Our LKY Big Bet

“LKY to re-rate to $200M market cap on the back of strong drill results and maiden resource, plus continued interest and capital flows into the USA critical metals thematic”

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 LKY Investment Memo.

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

What’s next for LKY?

Drilling (this quarter) 🔄

LKY expects drilling to start in late Q4 (December) this year. (Source)

With the antimony drill program, LKY plans to test for the extent of mineralisation near and extending out from the historical antimony mine, testing along the recently seen antimony workings from the LiDAR program results showing the existing adits.

(Source)

With the rare earths drill program, LKY plans to test areas where a number of high grade rock chip samples were found, grading 1.20% to 6.87% TREO (rare earths).

Here is where LKY’s initial drilling program is scheduled from a broader view released earlier in the year (antimony in top section, rare earths in the lower):

(Source)

We are especially looking forward to seeing if LKY can prove whether or not the mineralisation found at the Desert Antimony Mine extends over the entire 1.2km of strike mapped earlier in the year...

(Source)

Secure licence agreement with Rice University and production MOU with Hazen 🔄

Now that LKY has signed a partnership agreement with Rice University, the next stage will be to secure a larger licence deal over whatever technology is developed from the R&D agreement.

This will take some time to work out the IP sharing and mutual development of the technology.

With Hazen (a leading metallurgical company), LKY recently signed a MOU to develop for processing of its antimony ore.

Between the two partners, LKY is working on:

• Pilot plant design and metallurgical test work
• Production of representative samples for US industrial and defence qualification
• Commercial analysis and process optimisation

What are the risks?

LKY hasn’t started drilling yet so the main risk in the short term is around “market risk”.

LKY’s valuation is where it is today because of the interest in US critical minerals stocks.

Any drops in market sentiment toward the macro thematic could impact LKY’s valuation negatively.

Market risk

Broader market sentiment could deteriorate, and shares as an investment class trade lower, taking LKY’s share price with it. Alternatively, there could be further sector specific pain ahead where junior explorers suffer a lot more than the broader market.

Source: “What could go wrong” - LKY Investment Memo 01-Aug-2025

For the full set of risks we have identified and accepted in making our Investment in LKY, see our LKY Investment Memo below.

Other Risks

The company's primary asset is a pre-discovery antimony and rare earth elements exploration project in California, and it is possible that LKY makes no economic discovery despite the proximity to the producing Mountain Pass mine.

LKY is highly sensitive to fluctuations in antimony and rare earth element prices.

While current geopolitical tensions have supported these prices, any easing of US-China trade restrictions or alternative supply sources could materially impact the project's economic viability and the market’s interest in exploring the project.

While LKY does have current drilling approvals in place, there is no guarantee the expanded plan of operations the company recently submitted is approved. There is also no guarantee of timely regulatory approvals which could mean delays for the planned drilling program.

Finally, despite high-grade surface samples (up to 12.1% TREO and 46% antimony), these results may not be representative of broader mineralisation at depth, and the company has yet to conduct any drilling to verify continuity.

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

Our LKY Investment Memo

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

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

Our LKY Investment Memo covers:

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