Momentum Builds for US projects

Commentary: Precious metals. Military metals. Antimony export controls are starting to bite. Company making announcements in biotechs.

Precious metals in the USA is one of our favourite macro themes right now.

Haranga Resources (ASX:HAR) just completed the acquisition of a USA gold project with 5.8km of ground in the heart of the famous California gold rush “Mother Lode”.

With a 286,000 oz ounce non-JORC gold resource and a 100% owned, fully permitted 350tpa gold processing plant, and near term drilling planned.

Keep an eye on your inbox for more on this early next week...

In the meantime, here is HAR’s latest investor deck with all the info about their new USA gold project.

On Thursday HAR released a post transaction completion, market cleansing announcement - a notice under section 708A(5)(e) blah blah blah...

Boring ASX administrative housekeeping, right?

Not if you read section 3(a):

(Source - June 19th HAR notice under section 708A(5)(e))

These types of announcements let companies inform the market of any new work that happened from when a transaction is announced to when a transaction is completed.

... and it looks like HAR is already well underway with re-assaying ~200 samples from historical drill cores and drilling pulps with assay results due “in the near term”.

So it now looks like we might not be waiting for HAR’s initial drill campaign to get our first look at some HAR USA gold assay results...

At its last traded price of 6.7c, post transaction HAR is capped at ~$20M.

Our bet here is that HAR is able to find more gold and fire up their gold processing plant to sell the gold into record gold prices - noting the potential risks are that exploration fails to find more gold, the gold price tanks or there are issues with the plant.

Precious metals (gold and silver) companies in the USA is one of our favourite investment themes at the moment.

Companies like RML...

Our latest Portfolio addition, Resolution Minerals (ASX:RML), has delivered a ~300% price rise so far after announcing a new USA gold, silver, antimony and tungsten project in Idaho, USA.

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.

Read our RML launch note here: Our Latest Investment: Resolution Minerals (ASX: RML)

We already like gold and silver in the USA.

Antimony and tungsten are critical military metals.

USA based military metals projects are also attracting investor attention as the US moves to onshore critical military supply chains.

The market re-rate was probably helped by the fact that RML’s new project is located directly next door to the biggest antimony (plus gold) project in the USA: $2BN Perpetua Resources.

(Source: RML investor deck)

The working theory is that RML’s rocks might stem from the same intrusion as the 8Moz gold, 6Moz silver and 200M lb antimony resource owned by Perpetua Resources next door:

(Source: RML investor deck - with edits by us)

This week RML’s next door neighbour Perpeuta Resources closed an “upsized” US$425M capital raise from an original US$325M “as a result of excess demand” (source).

And this isn’t the only “new interest” in getting this project up and running ASAP.

US President Donald Trump invoked emergency powers in March to boost domestic production of critical minerals as part of a broad effort to offset China's near-total control of the sector. (Source - Reuters)

Then in May, the US federal government awarded Perpetua a “Fast Track” permit because its mining project had been deemed critical for national security.

Not for the 6M oz gold, not for the 8M oz of silver...

But for the 200M pounds of critical military metal antimony.

(guess the ~US$20 billion of in ground gold is just a bonus?)

We think our Investment RML being directly next door to Perpetua and all the attention and capital flowing into Perpetua will be very beneficial to RML.

Especially if RML can deliver some big drill hits in their upcoming drill campaign - with potential risks being that exploration fails to find any further gold, silver, antimony or tungsten (for more information on potential risks see our RML Investment Memo)

RML’s neighbour Perpetua: A giant USA gold and silver deposit with antimony running through it...

This week, Perpetua's executive team and its largest investor, Paulson & Co, hosted a webinar overview of recently announced financing and project milestones and outline the path forward for the Project:

(watch the Perpetua and John Paulson Investor call)

John Paulson is a billionaire hedge fund manager and the founder of investment management firm Paulson & Co. - and a major shareholder in Perpetua (he owns 45% of the company according to this article)

...and he likes it enough to introduce the company on an investor call.

The US Department of Defence has also been a key financier to Perpetua Resources over the last few years.

Antimony is a critical mineral for various military and battery applications, and the US has no domestic supply.

Good news for Perpetua, should be good news for our Investment next door, assuming that RML delivers some positive drill results (which is not a guarantee, drilling can fail to deliver the desired outcome)

China’s antimony export ban is starting to bite

Last year China announced a ban on antimony exports.

We won’t likely see media reports of the military reporting shortages of antimony.

(don’t let your enemies see that their tactics are working, Sun Tzu’s Art of War and all that)

But antimony also has many non-military uses too.

And this week, private sector users of antimony are making noise about the antimony shortages and surging prices...

(Source: RML investor deck slide 8)

This week commercial battery makers in the US that need antimony declared a “national emergency” over China’s antimony ban.

(Source - Asia Financial)

So it looks like antimony export controls are starting to sting.

Antimony is often found mixed in with gold, silver or copper deposits - and is produced as a by-product of mining gold silver or copper. (Source)

(also evidenced by Perpetua’s 6M oz gold, 8M oz of silver and 200M pounds of antimony deposit... next door to our Investment RML in case you missed it)

Speaking of giant precious metals with antimony in the USA...

SS1: A giant, USA silver deposit that COULD have antimony running through it? Perpetua style?

Last year...

(BEFORE China put export controls on antimony and before antimony “became cool”)

...our Investment Sun Silver (ASX:SS1) announced some surprise antimony grades in its new silver drill hits while drilling to expand its giant (now) ~480M oz silver equivalent resource in Nevada, USA.

But why didn’t SS1’s ~200 historical drill holes that make up its giant silver resource show any antimony?

Turns out the previous project owners tested the ~200 drill cores ONLY for silver and gold - and probably didn’t want to spend the money to test for antimony too.

(and why would they? Back then, nobody cared about antimony at all)

So does SS1’s US based, 480 million ounce silver equivalent resource have antimony running through it?

SS1 has been working for the last 12 months to find out. Early signs look very good... but more work is still required. (source).

To test this theory, last year SS1 chose FIVE historical drill holes to test for antimony.

To get a sense of how far the antimony might be spread out across their silver deposit, they chose far apart historical holes to test:

(Source: Image from SS1’s announcement on 10 September 2024, with additional markups by us)

SS1 is currently drilling and we should see more drill results soon.

Read our SS1 update note from this week here: SS1: The biggest pre-production silver project in the USA also contains antimony?

With the silver price breaking out over the last three weeks to new 13 year highs of $US37 per ounce, SS1’s 480 million ounce silver equivalent resource by itself is becoming a major market story.

But we think If SS1 is also able to define a giant antimony resource inside its giant silver resource it could be a “company maker”...

What is a “company making” announcement anyway?

The term “company maker” is thrown around a lot in relation to small cap company announcements, typically by particularly excitable CEOs and stock brokers.

Genuine “company makers” are hard to come by - but they do happen.

A “company making” announcement for a small cap stock is a major development that has the potential to fundamentally transform the company’s valuation and trajectory.

This could be a mineral discovery, a biotech clinical trial result or a major commercial deal (including customer contracts, farm-in deals or M&A).

A few weeks ago we wrote our list of upcoming catalysts that could be “company makers” for the Investments in our Portfolio (if they are successful of course) - and this week one was delivered.

Emyria (ASX:EMD) delivers “company making” deal with Medibank

EMD is the first company in the world to use psychedelics (MDMA) to treat patients with PTSD in a commercial clinic setting.

And this week EMD signed a deal with the largest health insurance company in Australia - Medibank. (Source)

Medibank will cover the cost of EMD’s service for any of its ~4 million members who are eligible for the PTSD treatment.

EMD presented this landmark agreement in the US this week at the largest psychedelics conference in the world - Psychedelic Science 2025, joining over 7,000 industry stakeholders and potential investors.

(Source)

The EMD / Medibank news also hit mainstream media in Australia, with coverage across a number of mastheads:

(Sources: Google News)

So in summary...

In 2023 Australia was the first country in the world to legalise the use of psychedelics to treat mental health. (Source)

In 2024 EMD was the first company in the world to use psychedelics (MDMA) to treat a patient in a commercial clinic setting under these regulations. (Source)

And this week EMD signed a deal with Medibank to scale up this clinical offering nationally. (Source)

This “company making” deal underpins EMD’s strategy - but now the real work begins, and it is on EMD’s team to execute.

EMD is up around 30% on the back of the news, and had the two largest volume trading days following the news, since we first initiated coverage in 2023.

Read our EMD update note on this news here EMD: Medibank agrees to fund EMD’s MDMA-assisted therapies

Staying in the medical space...

Inoviq (ASX:IIQ) delivered “company making” results with ovarian cancer trial

There was another “company making” announcement in our Next Biotech Portfolio from Inoviq (ASX:IIQ) a few weeks ago.

IIQ published data from its exosome-based diagnostics trial on ovarian cancer. (Source)

The trial had no missed diagnoses and showed that IIQ’s tool has the potential to evolve into a mass market screening tool for all women to test for ovarian cancer.

No such mass market tool exists, and IIQ’s data was incredibly strong: 99.96% specificity (almost no healthy people misdiagnosed) and 77% sensitivity (very few sick people missed).

These are basically ideal results for an early stage cancer screening tool.

Here is some mainstream media coverage of the news:

(Watch Now - Channel 7)

We think that these results take IIQ from a “multiple shots on goal” company to having a clear winner from its portfolio of assets that it can build a company around.

Hence, “company making” news.

Read our IIQ full take on this news here: IIQ: Breakthrough Result - Mass Market Cancer Test Next?

But once the news is announced that is when the real work begins, it is now all about executing on the next phase and conducting a larger trial (hopefully with a larger partner).

Which takes us to another biotech Investment of ours...

Island Pharmaceuticals (ASX:ILA) on the path to a company making Phase 2 or 3 trial for wild dengue fever?

Last week ILA published results from its anticipated Phase 2a/b clinical trial on its dengue fever drug, ISLA-101. (Source)

“Results show that ISLA-101 demonstrated clinically meaningful anti-dengue activity, which included a material reduction in viral load and symptoms.”

The goal of Phase 2a was to establish if its drug was effective as a preventative.

(take the pill when you are healthy but you are in a high risk dengue location)

The goal of Phase 2b was to establish if the drug was effective as a treatment.

(take the pill if you have already contracted dengue)

Dengue fever infects around 400 million people each year.

It kills ~40,000 people each year.

ILA’s Managing Director Dr. David Foster talked through the detailed results in a company webinar this week:

(Watch the video here)

Importantly, ILA will continue to evaluate the results of the Phase 2b trial and use these to set up for a larger Phase 2 or Phase 3 trial that will test if its drug works with “wild dengue”.

Positive results from ILA in this next trial would certainly be a “company maker”.

Read our ILA results update note here: ILA clinical trial achieves anti-dengue activity in humans

Whenever new data is presented, or a commercial deal comes out of blue, the trajectory of a company changes.

A key risk is mitigated, and hopefully this is reflected in a sustainable re-rate in the company’s share price.

But that is where the hard work begins, and the company needs to continue to execute and deliver success.

Have a great weekend,

Next Investors