Markets settle, catalysts build - here's where we are looking

Chaos quietening down? Sectors where we see some good opportunities...

Read our Saturday Weekender note here.

Our ‘Quick Takes’ on news from our Investments

• ONE became the first ASX listed company to receive ISO 42001 certification for its Virtual AI Assistant tech.
  
  This means ONE can go to market with its AI product a lot quicker now... before this the market launch was targeted for later in the year.
  
• EXR’s new Managing Director Stuart Nicholls updated the market on the latest for its QLD gas project.
  
  Stuart recently joined EXR from Strike Energy. Stuart was Strike’s CEO/MD and took the company from being a small Perth Basin explorer to an ASX200 company (today Strike is capped at >$500M).
  
  An excellent outcome for Strike investors - we are hoping he can transfer those skills and relationships to EXR and once again deliver success.
  
  EXR’s latest presentation runs through what he is planning:

(Watch the presentation here)

• HAR shareholders will vote on the acquisition of its US gold project on the 11th of June.
  
  You can check out HAR’s latest investor presentation covering the new US gold asset here.
  
  Good timing with US assets starting to catch more of a bid in the market. Hopefully we see a rig on site pretty soon after...
  
• GGE signed a non-binding MoU with TSX listed Sage Potash at its US helium project to collaborate and share costs on exploration in and around GGE’s ground.
  
  At the moment, Sage Potash owns the potash rights to the areas that cover the MoU and GGE controls helium and other commodity rights.
  
  Key points are:
  - GGE and Sage will share costs on a 3D Seismic Survey on a 50/50 basis
  - Companies will look to share the costs of an exploration well.
  - GGE and Sage will also discuss the potential to share the costs of infrastructure development.
  
  We think there is still value in this asset so it's good to see GGE working on it in the background while the focus is moving to the offshore Namibian block they are waiting to secure.
  
  If put into effect, the helium MoU should also mean far lower operating costs for that project.
  
• MNB put out a financing update for its phosphate fertiliser project in Angola.
  
  The main takeaway for us was the change to the offtake condition on MNB’s US$14M loan from the International Development Corporation (IDC) of South Africa.
  
  MNB is now expecting to draw down on that loan in July... which means MNB’s project could be fully funded through to production by July.
  
  Here are the latest set of photos from site:

(Source)

• GUE outlined its plans for a 38,000m drill program on its newly acquired US uranium project in Wyoming.
  
  GUE just recently increased its project area by ~85%. There is a chance this drill program sets the basis for a big upgrade to the project's exploration target (and hopefully its eventual JORC resource).
  
  Drilling is expected to start in July and by the end of the program, GUE could have a project as big (and fingers crossed... maybe even bigger?) than the $35BN giant Cameco’s project ~15km away.
  
  Cameco is one of the largest global producers of uranium, a nice regional operator to have near GUE’s asset.
  
• KAU officially got handed the keys to the Henty gold mine on Friday...and with it, the cash flow from ongoing production.
  
  KAU now owns 100% of a producing mine, which based on last quarter's production would be generating ~$10M of profit to its owners. Annualised, that is almost half of KAU’s market cap in profits.
  
  We should see Henty revenues (and costs) start to show up on KAU’s next quarterly.

Deep dive notes we wrote this week

Heavy Minerals (ASX:HVY)

HVY has been one of our best performers over the last 12 months.

The company’s share price is up ~500% over the last 12 months... and looks like it wants to keep going.

We think HVY is reaping the rewards of management putting in the hard yards last year by raising ~$2M via a non-dilutive royalty sale agreement.

(Instead of the usual “quick cash injection band-aid” of a heavily discounted equity raise with free oppies)

HVY is now looking to raise another ~$2M through the second tranche of that royalty deal. This time the market seems to be pricing in a successful, non-dilutive raise by HVY...

HVY is developing a garnet project in Western Australia.

Garnet is an important industrial material specifically used in abrasive sand-blasting to treat and prevent rust on ship hulls, bridges and other large metal structures.

Basically, the more investment that goes into revitalising old ships or infrastructure, the more demand there would be for HVY’s product...

HVY’s pre-feasibility study (where we find out specific mine economics) is due any week now.

HVY’s project is next door to the world’s biggest garnet mine.

We think there is a good chance HVY will improve on the $253M NPV that was announced in its 2022 scoping study...

Read more: ⛏️ HVY: Share price rising ahead of mine economics reveal?

Macro News - What we are reading & listening to 📰

Rare Earths

MP Materials, Maaden to jointly develop rare earths supply chain in Saudi (Reuters)

Our Take:

Think of Ma’aden like the Kingdom’s mining “special purpose vehicle”.

It is a company set up to diversify oil profits into the metals and mining sector (and other sectors).

In late 2023, Ma’aden also invested US$2.5BN in iron ore giant Vale, going after the biggest sector in the mining space (industrial metals):

(Source)

Now Ma’aden is investing in more niche (and more strategic) commodities like rare earths.

We think this deal will be the first of many we see coming out of the Middle East into the resources space... maybe sparking some competitive tension amongst the other hydrocarbon rich gulf countries?

(We can see a world where countries like Qatar or the UAE start doing similar deals...)

Our rare earths exposure is St George Mining (ASX:SGQ).

Gold

Gold Is Breaking Records — But Junior Developers Remain Deeply Discounted (Smallcap Investor)

Our Take:

We have been talking about the disconnect in valuations of juniors and the current gold price for a while now.

The following from the article sums up that disconnect really well:

Here in Australia, the mid caps are seeing some love, but the sub $100M companies are yet to grab investor attention...

Defence

To Bring Manufacturing Back to the US, Copy China’s Playbook (Bloomberg)

Our Take:

We agree with Bloomberg's assessment of the US manufacturing landscape that tariffs alone won’t fix the US’s manufacturing problem.

But what will?

One suggestion is the embrace of technology and innovation within the manufacturing sector placing less of a focus on creating individual jobs and instead focusing on building efficient technologically advanced manufacturing facilities.

Our view is that for the US to be competitive, domestic manufacturing will HAVE to be underpinned by technological innovation.

It is very hard to see the US run factories which are operated by humans alone... firstly, the US doesn't have a workforce available and second of all it would cost far too much to make the US competitive in global markets.

We think this is an excellent macro backdrop for our Investment AML3D (ASX:AL3) which sells 3D printing systems and software.

AL3 is already selling systems into the US with the US navy as one of its customers. AL3 just recently set up facilities in the US to accelerate that US expansion...

Read our latest AL3 note here: Trump announces tariffs to revive US shipbuilding - AL3 3D prints metal ship parts fast... in the USA.

Biotech

Bupa to open 60 mental health clinics in primary care push (AFR)

Yesterday, the AFR reported that major Australian health insurance company Bupa would open 60 mental health clinics over the next three years within Australia.

This will make Bupa the largest mental health player in the country, a move that follows Medibank dedicating $50M to mental health over the next 5 years.

We are currently leveraged to this macro thematic through our small cap Investment Emyria (ASX:EMD).

EMD is delivering and developing new treatments to improve mental health in physical clinics around Australia.

EMD is focussed on psychedelic assisted therapies, in particular MDMA-assisted therapy for PTSD.

We think that insurance companies like Bupa and Medibank will be extremely interested in supporting EMD’s efforts given the investment into mental health.

Bupa’s global chief executive Inaki Ereno said: “Mental health is the new pandemic but the provision of mental health – the accessibility of that is not clear. The continuity of services is very fragmented, not only in Australia but everywhere.”

EMD is endeavoring to develop a therapy protocol that it can licence out to many clinics around Australia (in a sort of franchise style model), addressing the fragmentation issues highlighted by the Buba CEO.

In its last quarterly EMD said: “The coming months will see the launch of funded pilots with major insurers and government health payers.”

A big payer deal is something we have been waiting for EMD to secure.

Silver

Pan American Silver to Buy Smaller Rival MAG for $2.1 Billion (Bloomberg)

Our Take:

We have previously written about M&A in the Mexican silver sector because it relates directly to our Investment Mithril Silver and Gold (ASX:MTH).

This deal is further evidence that precious metals M&A in the region around MTH is thriving.

Pan America’s US$2.1BN deal for MAG silver is for its project that isn’t very far from MTH...

Adrian Day of Adrian Day Asset Management talks about M&A in Mexico in this interview starting at 6:00:

“The opportunity for a company to go in and start acquiring some good Mexican assets - producing or non-producing - and acquire them relatively cheaply, is probably very compelling”

“Someones going to do that sooner or later”

(Watch the interview here)

The more consolidation that happens in the region the more attractive we think MTH’s project becomes (as there are less and less projects of its size to acquire).

Lithium

Lithium stocks (ASX: CXO, LTR, PLS) rise as Core unveils restart plan (The Australian)

Our Take:

Core is up almost 90% from its lows after that announcement earlier this week.

We mentioned in last week's Weekender that we think the battery materials sector (especially lithium) is very much in that final capitulation stage.

Or is the lithium bottom already in now?

The bounce in Core’s share price is yet another signal to us that we may have actually hit the bottom over the last few weeks...

This was from our weekender last week:

(Source - Our weekend email 17 May 2025)

Copper

Spot copper LME: BHP gets more copper in Argentinian Filo del Sol discovery (AFR)

Our Take:

We think news like this from BHP is good for Argentina and especially good for Argentina’s mining industry.

Our Investment Pursuit Minerals (ASX:PUR), in its most recent updates flagged that it is looking at new project opportunities inside Argentina...

Energy

Rinehart-backed gas explorer Lakes Blue Energy launches capital raise (AFR)

Our Take:

The Lakes Blue story has been an interesting one to follow.

Even though the company is backed by one of the country’s wealthiest people, Gina Rinehart, it's been low on cash for years now and has spent most of the last 5 years in suspension.

We think the news this week is a sign of how tight the east coast gas market is getting now AND how the narrative is slowly shifting towards encouraging more gas exploration on the east coast.

Our exposure to the east coast gas thematic is through Elixir Energy (ASX:EXR) which has projects in QLD’s Taroom Trough. You can read more about EXR higher up in this email.

What else we are watching:

Secretary Bessent Says US and China Agree to Lower Tariffs

Solis Minerals: Copper-gold combo in Peru | RIU Sydney 2025

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Bye for now.