PUR: Acquires Gold Project in Argentina - Gold price smashing records

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 5,365,105 PUR Shares and 610,356 PUR Options at the time of publishing this article. The Company has been engaged by PUR to share our commentary on the progress of our Investment in PUR 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.

Is there anything that is going to stop the gold price from going up?

Gold is pushing US$3,900 per ounce, remaining near record highs.

With gold on the move again - gold exploration is suddenly very interesting.

What better time for Pursuit Minerals (ASX:PUR) to acquire a large gold exploration asset...

PUR has just acquired 100^km2 of ground in the Santa Cruz Province of Argentina, one of the world’s premier precious metals provinces.

This province is host to ~30 million ounces of gold equivalent discoveries.

PUR wants to make a Tier 1 precious metals discovery here - a new multi-million ounce find.

All the ingredients are here: structure, mineralisation, geophysics, and geochemistry...

And Tom Eadie...

This won't be easy... exploration never is - but the rewards if successful are high.

We are backing the PUR team to swing for the fences here and try to unlock a new gold discovery.

PUR is planning to drill test its new asset this year.

PUR’s Chairman knows his way around these kinds of gold assets - Tom Eadie is the Chairman of another ASX listed gold company Southern Cross Gold.

Southern Cross, for a long time, was misunderstood by the market...

However, Southern Cross has gone from $3.80 to $8/share and a $1.8BN market cap under Tom Eadie’s stewardship.

The market has now come to appreciate the value of projects with high grade, thin gold veins.

(the past performance is not an indicator of future performance)

We think PUR Chairman Tom Eadie sees the similarities between PUR’s new project and his other company Southern Cross Gold...

... and the 8 million ounce Cerro Negro project and mine 100km up the road.

This is why we increased our Position in PUR in the capital raise just completed.

Both of Southern Cross and Cerro Negro are high grade gold assets across multiple thin veins...

... similar to what PUR is looking for on this new asset - and naturally, PUR will be applying the same geological model and exploration strategy that unlocked those finds.

PUR’s Managing Director Aaron Revelle has been operating in Argentina for the last 10 years so is very familiar with how to buy and sell assets and operate mining and exploration projects.

PUR’s project has mapped veins similar to Newmont's 8Moz Cerro Negro gold mine 100km to the north.

Previous drilling on PUR’s project only went down to 170m.

PUR’s theory is that if it drills down to 150-400m it could make a giant gold discovery that was previously missed because of the shallower silica cap that sits on top of the gold mineralisation.

This is exactly how the 8 million ounce, Newmont owned, Cerro Negro was discovered...

PUR will be drilling out the veins marked with a (?) on the map below and soil sample, channel sample and follow up previous hits:

We are looking for PUR to identify a set of thin veins with high grade gold... the type of geology that PUR’s Chairman Tom Eadie is familiar with at Southern Cross.

This is high-risk, high-reward exploration from PUR.

They might not find anything valuable.

Or one good drill hit could unlock the entire project.

PUR will undertake a mapping and geophysics program to better define drill targets, with drilling to come shortly afterwards (PUR is fully permitted to drill).

PUR just raised ~$4M at $0.075 per share (we participated).

PUR will have a market cap of ~$13.9M and an enterprise value of $12.2M post acquisition.

In the current gold price environment we think that is a valuation leveraged to a discovery...

We increased our position in the 7.5c capital raise, and we are backing PUR to make a new gold discovery.

(no guarantees of course)

Why Argentina?

Let’s go macro economic and political for a moment.

Six days ago the Trump administration backstopped Argentina with a US$20 billion currency swap.

Since Javier Milei became president in 2023, Argentina has gone from a disaster to a destination from an investment perspective.

Here is the US Treasury Secretary Scott Bessent on the US-Argentina alliance only a few days ago:

Australia’s largest miner BHP is taking notice of the changes in Argentina...

(and maybe even more now that China just banned BHP iron ore imports)

(Source)

PUR is looking to make a discovery across its project which shares key geological markets and similarities to that Cerro Negro mine - and is located roughly 100km to the south of Cerro Negro.

Two years ago (just before the turn of the gold price), Newmont invested a further $540M into this project...

(Newmont will be pretty happy about that given the gold price has nearly doubled since)

(Source)

The region that PUR is operating in, Santa Cruz Province, hosts more than 50 gold-silver deposits and 8 operating mines...

And exploration companies that are finding gold and silver there are being rewarded by the market...

The market is willing to reward high grade hits in Argentina

PUR is fully permitted for drilling, and will be undertaking a geophysics program to better define its drill targets.

Drilling is planned to begin shortly after - and we think that any good drill results should be rewarded by the market.

Regional exploration peer Astra Exploration (listed on the Canadian TSX-V) has also been drilling for gold in Santa Cruz...

...and the market has been re-rating the company off the back of its most recent drill campaign where it hit 1.4m at 35.3g/t god and 8,356g/t silver:

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.

Later in today’s note we will share our updated PUR Investment Memo, which will cover:

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

But before that, next are the 7 reasons why we increased our Investment in PUR:

7 reasons why we are Invested in PUR?

1. Argentina open for business and underrepresented on the ASX

What was once a jurisdiction of political risk is now one of sweeping pro-market reforms.

Despite its world-class copper, gold and lithium potential, Argentina is under-represented on the ASX.

Companies like PUR with in-country experience can take first mover advantage to develop mining projects in the region.

2. Backing PUR’s management to identify best projects in Argentina

PUR’s Chairman Tom Eadie is also the Chairman of Southern Cross Gold capped at $1.8BN and he was part of the team that made the Syrah graphite discovery in Mozambique.

PUR’s Managing Director Aaron Revelle has operated in Argentina since 2015 and is very familiar with the region.

3. PUR looking for gold, gold pushing all time highs

Gold is pushing to US$4,000/oz... no need to say more.

4. PUR’s project sits on ground to 8Moz Cerro Negro owned by US$92B capped Newmont

PUR’s project has the same mapped veins similar to Newmont's 8Moz Cerro Negro gold mine 100km to the north.

Previous drilling on PUR’s project only went down to 170m.

PUR’s theory is that if it drills down to 150-400m it could make a giant gold discovery that was previously missed.

5. PUR’s project is in a highlight prospective gold mining region of Argentina

PUR’s exploration ground is next to two active mines owned by Pan American and Newmont. The broader region hosts more than 50 known gold-silver deposits, including 8 operating mines and numerous advanced exploration projects.

If PUR makes a discovery and defines a resource it has the option to toll-treat ore at neighbouring plants for potential near-term revenue.

6. Drill ready targets, going for a big discovery

PUR has identified multiple high-grade veins mapped over 5 km of strike. Historic drilling includes 8.92 g/t Au over 1.55m and there has been no drilling below 170m (where two holes ended in mineralisation).

PUR is fully permitted for its next drilling campaign.

7. PUR’s Argentina lithium brine asset is in the back pocket IF lithium sentiment turns

PUR has a 1Mt LCE resource in Argentina’s Lithium Triangle and a 250tpa pilot plant has produced 99.5% technical grade lithium carbonate.

PUR has plans to scale to 17,500tpa and we think that the development-ready project offers leverage to the upside if lithium sentiment turns.

We hope the above reasons help contribute to PUR achieving our Big Bet which is based on PUR drilling and making a discovery:

Our PUR Big Bet:

“PUR 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 PUR Investment Memo.

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

PUR’s new project: On the hunt for Cerro Negro 2.0

PUR’s newly acquired project is roughly 100km away from Newmont’s 8Moz Cerro Negro deposit, and next to two producing active gold mines:

PUR has mapped 5 veins across its 100km^2 district with veins #2 and #4 the most interesting at this stage:

Vein #2 (The Sascha Vein Zone) has delivered rock chips up to 160 g/t gold and trenching returned up to 49.3g/t gold over 0.5m.

Historic drilling includes 8.92 g/t Au over 1.55m.

With the next drilling program, PUR will be testing these ‘shoots’ with a 1,000m drill program to better identify drill targets over the 2km worth of strike:

Vein #4 (The Pellegrini Trend) is most interesting to us because it shares geological hallmarks with Newmont’s 8Moz Cerro Negro mine.

Both the area around Vein #4 (11km^2) and the area where the Cerro Negro deposit was found had this silica cap that was covering the potential mineralisation.

The previous drilling didn’t go deep enough to test underneath the silica cap, and the previous drillers may have ‘missed’ mineralisation completely:

PUR’s follow up drilling will test whether the mineralisation extends at depth into the geophysics anomaly.

Cerro Negro’s resource was discovered by drilling beneath surface expressions the same silica caps and shallow anomalies mapped across Vein #2...

We are hoping that PUR can repeat the same success.

All the ingredients are here: structure, mineralisation, geophysics, and geochemistry.

The deeper target remains wide open, offering genuine discovery upside with the next hole.

Drill deeper into structure and test big discovery potential.

(Source)

Next we want to see PUR identify targets through sampling, trenching and mapping.

Then we want to see PUR drill its highest priority targets.

Our new PUR Investment Memo

With PUR having completed the acquisition of additional gold and copper assets, we think now is the right time to publish a new PUR Investment Memo:

In our new Investment Memo, we cover:

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

Pursuit Minerals Investment Memo #2

Memo Opened: 01-10-25

Shares Held: 5,365,105

Options Held: 610,356

What does PUR do?

Pursuit Minerals (ASX:PUR) has a gold exploration project and a lithium brine development stage project in Argentina.

What is the macro theme behind PUR?

PUR has exposure to:

1. Gold & Silver - a precious metal which is often seen as an insurance against inflation, uncertain markets and as a reserve asset. Gold is trading at all time highs at the time of this memo, and Silver is at 14-year highs.
2. Lithium - lithium is a critical component for lithium-ion batteries, leveraged to electrification, energy storage and electric vehicle update.

Our PUR Big Bet:

“PUR 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 PUR Investment Memo.

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

The 7 Reasons We Invested in PUR

1. Argentina open for business and underrepresented on the ASX
2. Backing PUR’s management to identify best projects in Argentina
3. PUR looking for gold, gold pushing all time highs
4. PUR’s project sits on ground to 8Moz Cerro Negro owned by US$92B capped Newmont
5. PUR’s project is in a highlight prospective gold mining region of Argentina
6. Drill ready targets, going for a big discovery
7. PUR’s Argentina lithium brine asset is in the back pocket IF lithium sentiment turns

What do we want to see PUR do next?

Objective 1: Drilling of highest priority targets

We want to see PUR drill its highest priority Sascha Main, Pellegrini and Estancia targets drilled beyond 150m depths into the ~150-300m depth range where PUR expects to make a discovery.

Milestones

🔲 Drilling commenced

🔲 Drilling visuals
🔲 Assay results

Objective 2: Target generation works

We want to see PUR map and define more drill targets across its project - this could be either through sampling (soil, rock chip and channel) or through geophysics.

Milestones:
🔲 Geophysics

🔲 Program of work defined

🔲 Drilling commenced
🔲 Assay results

Objective #3: Resource drilling

This one is contingent on PUR making a discovery. IF that happens we want to see PUR drill out, extend and then put out a maiden resource on its discovery.

Milestones

🔲 Geochemical sampling (soils, trenching)
🔲 Geophysical surveys
🔲 Identify drill targets

Objective #4: Lithium project

We still think PUR’s lithium project could become valuable in a more bullish lithium market. We want to see PUR keep up desktop works where it can on the asset and hold the project until market sentiment turns in the lithium sector.

In particular, we want to see PUR drill its biggest tenement adjacent to the salar to see if there is a massive lithium brine underneath the alluvial cover.

What are the risks?

Exploration risk

PUR 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 PUR finds no economic mineralisation on its assets - in which case we would expect to see the share price re-rate lower.

Delay risk

PUR plans to drill two parts of its project all before the end of the year.

There is a risk there is some slippage in these timelines and IF PUR were to have big enough delays it could lead to the market losing interest in the stock.

Significant delays could be negative for PUR’s share price as it would burn down the company’s cash balance and bring the company to a position where it needs to raise more capital and dilute existing shareholders.

Funding risk/dilution risk

As a pre revenue explorer, PUR is dependent on capital markets to fund ongoing drilling and development.

That could come at discounted prices and further dilute existing shareholders.

Commodity price risk

The performance of commodity stocks are often closely linked to the value of the underlying commodities they are seeking to extract.

Should gold or copper prices fall, this could hurt the PUR’s share price.

We have already seen this happen with the lithium price and what it meant for PUR’s Argentinian assets.

Market risk

Broader market sentiment could deteriorate, and shares as an investment class trade lower, taking PUR’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.

What is our Investment Strategy?

We are Invested in PUR to make a discovery and define a gold discovery.

Our plan is to hold the majority of our position in PUR into the upcoming drilling program.

We may look to sell up to 20% of our holding if the company delivers on one or more of our Investment Memo objectives and/or the share price materially re-rates in line with our minimum hold conditions.