Recovery Signs Emerging in Small Caps

A share price moving catalyst next week? Uranium stocks running on Trump rumours. More and more resources M&A...

Read our Saturday Weekender note here: Early signs of a small cap recovery?

• CAY just added a big chunk of cash to its balance sheet. Their biggest shareholder Eagle Eye Asset Management exercised $24.5M in 7c options.
  
  This means CAY should now have more than $30M cash in the bank... and it moves Eagle Eye up to a 54.7% shareholding in the company.
  
  Eagle Eye have been very strong supporters of CAY, and this further investment shows that they believe the project is tracking well.
• EXR just brought onto its team another ex-Strike Energy team member - Kingsley Rudeforth as Chief Operating Officer.
  
  Before this, Rudeforth was the drilling superintendent for Perth Basin gas developer Strike Energy.
  
  This is the second ex-Strike team member to join EXR in the last months.
  
  Is EXR’s CEO Stuart Nicholls bringing the Strike band back together?
  
  If he is then we hope EXR will have similar success to Strike - going from a small cap explorer to the >$500M capped developer it is today.
• TG1 started drilling its WA gold project over the weekend.
  
  The gold price looks like it wants to go on a run again and is still trading really strong at ~A$5,150 so it's a good time to be looking for gold.
  
  TG1 is going into this drill program with a market cap of just ~$4M, so any good news could have an impact on the company’s share price.

🚨NEW INVESTMENT - Island Pharmaceuticals (ASX:ILA)

On Wednesday we announced our newest biotech Investment ILA.

The company is just weeks away from a Phase 2a/2b trial result for its dengue fever drug that could show its drug is effective at preventing AND/OR treating dengue fever.

Dengue fever is a nasty virus that is transmitted in warmer climates by mosquitoes.

There is currently no treatment for dengue fever which affects more than 400,000 people per year.

Since 2021, global cases of dengue have doubled each year.

And really surged up last year...

When it comes to the people backing ILA - it has one of the strongest shareholder registers (major shareholders) we have seen in a while...

Two of ILA’s biggest shareholders and one of ILA’s directors were part of the Race Oncology team that took the company’s share price from ~6.6c to $4 per share.

ILA has also received support from the US Department of Defence through US$625k in grant funding, and the company has an option on a drug that could be stockpiled as a biodefense.

Read our full initiation coverage note including our 9 reasons why we invested in ILA: ILA: Our New Portfolio Addition

Mithril Silver and Gold (ASX:MTH) delivers a new high grade gold (and silver) discovery

MTH announced a new gold and silver discovery this week.

MTH hit 11.5m at 8.61 g/t GOLD, 57.6 g/t SILVER from 44.5 metres at its “Target Area 2”:

(read the MTH announcement here)

And assays are pending that could extend the discovery from drilling 300m to the east...

MTH already has a 373Koz gold and 11Moz of silver JORC resource (529,000 ounces of gold equivalent) at its “Target Area 1”...

(where a second drill rig is at work to try and double this JORC resource)

Can Target 2 be as big (or bigger) than Target 1?

We will see when those assays from the holes to the east come in...

Read more: ⛏️MTH Announces New Discovery: 11.5m at 8.61 g/t GOLD, 57.6 g/t SILVER

Solis Minerals (ASX:SLM) - After a long wait... is finally about to start drilling for copper-gold discovery

SLM is days away from drilling its copper-gold projects in Peru.

SLM has already raised cash ($4.5M at 8.5c) and is funded to deliver two shots at a new discovery all inside the next ~2 months.

SLM is drilling against a backdrop of record gold and copper prices...

AND luckily for SLM an ASX peer has set a precedent for re-rating off good drill results in Peru.

ASX listed AusQuest rallied ~700% off the back of its discovery in Peru.

We think the same can happen for SLM IF we get a new discovery...

We are especially looking forward to the results from SLM’s second target Ilo Este.

Ilo Este has been drilled before AND returned drill results of ~472m at 0.11% copper with 0.09g/t gold grades.

(those intercepts are pretty strong already)

BUT then in 2022 SLM ran an IP survey over the project and managed to map out where the geophysical anomaly sits at the project.

Looking at the diagram below, all of those old drillholes missed the guts of the IP target...

Which is exactly where SLM will be drilling:

Read more: ⛏️SLM: Set to drill two copper-gold targets in Peru at Chanco Al Palo and Ilo Este. Drill results in ~8 weeks?

EchoIQ (ASX:EIQ) - what happened? Share price went down then right back up again?

Last weekend, EIQ was informed that they would need to resubmit an application for a Category III reimbursement code for its Aortic Stenosis detection technology.

No big deal right?

The problem was that the market found out about EIQ’s unsuccessful initial submission on the American Medical Association website...

... BEFORE EIQ had a chance to make an ASX announcement about it.

(Due to an unread email about the submission decision in an EIQ team member’s inbox who was sick on the day)

So EIQ missed the chance to provide the market with context on the unsuccessful submission and next steps to resubmit the application, that it's only a few months delay and not actually that uncommon to happen.

The market and internet chat rooms, with no context, assumed the worst and EIQ’s share price got smashed from above 30c to touch a low of 22.2c.

Over the next few days EIQ put out an ASX query letter, a clarifying announcement and then yesterday held a webinar to give a blow by blow update on what happened and how EIQ is responding.

Any of the panic sellers would be kicking themselves now with EIQ recovering most of the losses and closing at ~28.5c yesterday:

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.

On Friday, EIQ’s CEO Dustin Haines held a webinar to explain the situation in more detail, which you can watch here:

(Watch the full webinar here)

In that webinar, Haines shared the letter that EIQ received from the American Medical Association highlighting the two reasons why the application was unsuccessful:

(Source: EIQ webinar 23 May 2025)

Dustin provided a really good overview on what information the AMA is wanting to see and said that EIQ had already started working on these ahead of a new application due on the 11th of June.

Read our full take: What's happening at EIQ? Find out today at 11am AEST / 9AM AWST at this webinar

Gold miner Catalyst Metals preps $130m cash call (AFR)

This week, Australian gold mining company Catalyst Metals raised $150M.

Catalyst Metals is the company that sold its Tasmanian gold project to our small cap gold producer, Kaiser Reef (ASX:KAU) and is a 19.99% shareholder of KAU.

As part of the deal, Catalyst Metals and KAU signed an option to form a 50-50 joint venture on KAU’s 350kta gold processing plant in Victoria.

This plant is currently running at just 20-30% capacity and is just 45km away from Catalyst's Bendigo gold project.

In its presentation to Investors, Catalyst highlighted this processing plant as a part of the Bendigo operations.

With a further $150M in the tin for KAU’s partner, we think that Catalyst for the most part will focus on developing its own flagship assets, leaving KAU to bring value from its two producing gold projects.

China Gold Imports Surge to 11-Month High Despite Record Prices (Bloomberg)

It was reported this week that despite record gold prices Chinese banks are still continuing to hit the “BUY” button.

This is good news for gold producing companies like KAU, however we think that the fortunes will soon trickle down to the gold juniors and resource micro-caps.

With the strong gold price, Lion Select Group moved its “Boom-Bust” clock to “5 o’clock”in anticipation of a mining boom for gold juniors.

In its quarterly report Lion Select Group said that “the strongest performance for micro-cap juniors are expected to occur in a boom, which has not yet begun”.

Lion Selection Group “expects the boom conditions to be approaching”.

This is good news for our junior gold explorers: JBY, HAR, BPM, TTM, KAU, SLM.

Guinea repossess 51 mining licences, information minister says (Mining.com)

This week Guinea withdrew 51 mining licences including a number of bauxite ones.

This is the next step in a wave of concerns about Guinea’s bauxite industry.

From the article:

“Government pressure on Guinea’s bauxite industry is building,” said Tom Price, investment bank Panmure Liberum’s head of commodities.

“We suspect Guinea’s government is consolidating the number of foreign bauxite miners, and forcing the reformed industry to invest in local downstream processing capacity,” he added.

Given that 70% of Chinese bauxite supply comes from Guinea, we suspect that China will be looking to diversify its bauxite supply.

Our bauxite Investment Canyon Resources (ASX:CAY) is based in Cameroon and ready to fill this supply gap.

With the eighth largest bauxite resource in the world, and a recent investment of $24.5M from major shareholder Eagle Eye Asset Management, CAY is targeting first bauxite shipment in 2026.

OMA proves Canyon oil and gas potential (The Australian)

This week Omega Oil & Gas published the logging results from its oil & gas discovery in the Taroom Trough.

These logs improved upon the initial logging campaign indicating a ticker and higher-quality pay interval.

Any good result from Omega helps to add to the lookthrough value to the Taroom Trough region where our Investment Elixir Energy (ASX:EXR) is developing its own oil and gas projects.

Earlier this year EXR announced a deal to farm in to 50% of Santos’ ground in the region, bringing its total 500,000 acres (the largest in the basin) and 2.6 TCFe of 2C Contingent Resource.

EXR’s will now be led by ex-Strike Energy management Stuart Nicholls (see above for more on that).

What does a Copper Deposit Discovery Look Like? (Samso)

As Solis Minerals (ASX:SLM) launches its copper exploration program in Peru, we have been brushing up on what to look out for when identifying a new copper discovery.

Discoveries are few and far between, but because of this, the prize is big.

In this article Samso provides a good framework for understanding copper discoveries and deposits including:

• Looking for long intercepts
• The grades to watch out for
• Visuals in cores
• Geological context

Also, in the article it is highlighted that Latin America is where most major copper discoveries exist because it is “blessed with the perfect geology”.

Can Big Oil turn the US into a lithium giant? (FT)

This is a good read for anyone who wants to know why the Smackover in Arkansas, USA is drawing attention from the world’s biggest oil players.

Exxon and Equinor have both made Smackover the centre of their lithium business.

AND Exxon has plans to be producing lithium inside the next 2-3 years.

We are Invested in Pantera Minerals (ASX:PFE) the only ASX listed company with ground in this part of the USA.

This quote from Andy Robinson (a co-founder of Standard Lithium) sums up the opportunity in the Smackover.

“DLE could do for the US lithium industry and economy what fracking did for the US oil industry almost 20 years ago.”

PFE is our exposure to what might become the centre of the US lithium industry.

Infographic: How much of the battery recycling industry does China control? (Benchmark Minerals)

It is clear that China dominates the recycling industry, including pre-treatment and refining.

In the European Critical Raw Materials Act (CRMA) that came into force in February last year, Europe is targeting 25% consumption of battery metals through recycling.

To support this, Europe has flagged a ban on exporting black mass to China.

(black mass is basically old, shredded up batteries and the the key input for recycling)

Our small cap Investment Iondrive (ASX:ION) is developing a novel recycling technology to extract critical minerals from old discarded technology products.

And with the dominance by China in this space, it is clear that Europe will need to make some significant investments if it wants to achieve its 2030 goals set under the CRMA.

ION is looking to construct a pilot plant in Europe this year.

Silver Companies Merging to Gain Scale in Rising Market

(Good discussion here on Pan-American Silver's $2.1 billion acquisition of MAG Silver in Mexico, right near MTH’s ground.)

What makes Island Pharmaceuticals (ASX:ILA) an enticing investment proposition

(Hear from ILA major holder Jason Carroll who owns ~14% of ILA. This video is from a shareholder’s perspective who has been following the story for a while, and why he personally likes the company)

Paydirt’s Critical Battery Minerals Conference | Embassy of Peru

(Listen to Vitaliano Gallardo from the Embassy of Peru discuss the region as a promising place for mineral exploration and investment. We are currently Invested in SLM, who is drilling right now for gold and copper in Peru).

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Bye for now.