Sunday Edition: 1st March

Disclosure: S3 Consortium Pty Ltd and its associated entities may hold direct or indirect interests in securities referred to in this publication and may receive fees or other forms of consideration from entities mentioned. These interests and arrangements may create a potential conflict of interest in the preparation of this material.

The information contained in this communication is provided for general information purposes only and may relate to speculative investments. It does not constitute financial product advice, and has been prepared without taking into account your personal objectives, financial situation or needs. You should consider obtaining independent financial advice before making any investment decision.

Any forward-looking statements are uncertain and not a guaranteed outcome.

Yesterday we wrote about AI’s recent contribution to creating a hard-to-navigate investment environment:

So this week was “AI is taking over everything” heavy in the news and socials, presenting investors with another looming seismic shift in the “world we know” and on which we base our investment decisions.

(as if the rapidly shifting geopolitical world order and threats of WW3 weren’t enough to discombobulate the investment community) - read it here.

Just as we pressed send on that email, the USA and Israel started bombing Iran...

And Iran started bombing back... hitting Israel and nearby US-linked sites in Saudi Arabia, Qatar, Kuwait, Bahrain and Jordan.

...and even taking a few shots at Dubai (including the airport and fancy palm island thing) and Abu Dhabi...

So in the last 24 hours things have gotten pretty messy in the region.

Gold and silver should see another pop tomorrow (investors hate uncertainty, war brings uncertainty, gold and silver are safe-haven assets for times of uncertainty)

And this comes just a couple of months after the USA snatched up the leader of Venezuela.

~6 hours ago the leader of Iran was taken out.

Coincidentally, Iran and Venezuela supply about 15% of China’s oil imports...

(did supply, past tense now...)

Whether deliberate or a coincidence, messing with China’s supply of important resources could step up the tit-for-tat on withholding of critical minerals supply by China - it certainly won’t help.

Nor will any blockade of a key global shipping channel - the Strait of Hormuz.

It is one of the world’s most important oil “chokepoints,” with roughly one‐fifth of global oil and liquefied natural gas exports passing through it.

Because so much energy trade depends on it and there are few alternative routes, any threat to close or disrupt the strait can have major impacts on the global economy and security.

And since the bombing started 24 hours ago, Iran has looked pretty keen to sow some serious regional chaos.

So an interesting week coming up next week, will it be another reason for investors to cycle into resources and precious metals?

On Friday, three of our Investments entered trading halts - SGQ, IVR and PNN.

They should all be back trading again early next week following the release of material news - ahead of that, below we run a quick recap on each of the companies.

Plus further down you can find everything we wrote last week, plus some other interesting stuff we came across on our travels.

Yesterday’s Saturday note: click here to read.

Quick Takes: BMG, WCE, MTH, TG1, GEN

Deep Dives: LKY, VKA, LSR

Back to our three Portfolio companies in a trading halt.

SGQ - resource upgrade on Brazil rare earths asset

SGQ entered a trading halt pending an announcement regarding a “substantial increase to the Company’s Mineral Resource Estimate at the Araxa Project”. (source)

Prior to this new Mineral Resource upgrade, SGQ had already defined:

• 40.6Mt of Rare Earths at grades of 4.13% TREO (total rare earths oxide)
• 41.2Mt of Niobium at grades of 0.63%

In terms of grade, SGQ is already comparable to ~$19BN Lynas’ project.

In terms of size, SGQ is already comparable to ~US$10.4BN MP Materials’ project.

Prior to the trading halt, SGQ was capped at $600M (and had $53M in cash at the end of last year).

So early next week we should see how the resource upgrade impacts the size and position of SGQ’s red ball on the below chart (the other red balls are MP Materials and Lynas Rare Earths cornerstone assets).

(the x axis is resource tonnage, the y axis is rare earths grade.)

(source)

Petra Capital put out a research note on SGQ during the week, where they estimate that the resource size could double from the current 40.63MT @ 4.13% rare earths to over 80Mt. Click here for the full Petra Capital SGQ report.

St George Mining Ltd (ASX: SGQ) - Resource moving to Tier-1 scale (Petra Capital)

IVR - DFS and material capital raising

IVR’s Friday trading halt related to:

• Announcement of a material Definitive Feasibility Study - released Friday - all 128 glorious pages.
• Ore Reserve results - in the same Friday announcement.
• A material capital raising - the last piece of the puzzle before IVR’s trading halt is lifted - we should know more about this early next week.

The key metrics from IVR’s DFS are below, showing the project can deliver strong economics based on a US$80 silver price.

(after the release of the DFS on Friday, silver has recently traded as high as US$94/oz.)

(source)

We have been reviewing IVR’s DFS in detail over the weekend and will send our key takeaways on it next week - once we know more about the capital raise and the trading halt is lifted.

PNN - proposed acquisition and capital raise

Then there was PNN which went into a halt pending “a proposed acquisition and capital raising” (source).

Next week we expect PNN to release all the details.

$71BN capped Franco-Nevada did a royalty deal with Minerals 260, a company next door to our WA gold Investment BMG.

A $170M royalty deal and $50M equity investment by Franco-Nevada into the now $1.4BN capped ASX listed Minerals 260 is a big positive sign for our Investment next door, the $14M capped BMG.

The deal provides clear backing for Minerals 260 to aggressively explore and develop its 4.5M ounce gold deposit, whose mineralisation is open to the west. Directly heading into BMG's ground at the Bullabulling project.

Meanwhile, BMG should be about to start a 10,000m drill program on its 518K ounces Abercromby gold project any day now.

WCE hit potential extensions to the north of its high grade Elizabeth Hill silver mine in WA.

Aircore (AC) drilling results confirmed that silver mineralisation extends to the north of the historic high-grade workings and historic mine area.

The drilling returned notable near-surface hits, including 24m @ 28g/t silver and 25m @ 80g/t silver, hosted in a new granite geological setting.

WCE plans to immediately follow up with deeper RC drilling in this northern area with drilling this quarter, intending to incorporate the results into an open-pit resource and scoping study.

MTH (OTC: MTIRF | TSX: MSG) mapped:

• 18x Historic mine shafts
• 44x Historic adits (mine tunnels)
• 134x Historic mine and prospecting pits

Across its newly acquired silver/gold project in Mexico.

The LiDAR survey results uncovered an extensive network of historical workings at its recently acquired La Dura project, located just 15km from its main Copalquin asset.

The survey mapping revealed near 200 areas with historic workings that were hidden by vegetation AND a 1.5km long by 300m wide structural trend that could potentially contain 5 stacked mineralised veins (drilling there should be interesting).

At its main Copalquin project, MTH continues drilling at Target 1 and expects a JORC resource upgrade in the coming months.

TG1 hit visual sulphides on the first drillhole at its WA copper-gold-silver project.

Visual confirmation of sulphides (chalcopyrite) and copper carbonate mineralisation (malachite) occurred on the first hole.

The drill core is on its way to the lab for assaying. Meanwhile the rig has already begun drilling the second hole of the program nearby into the same target, from a different location and angle.

TG1 is following up targets that have been drilled previously by Newcrest and Sandfire - but where all of the previous drilling just missed the IP anomalies on the project.

Early days, but fingers crossed the assays come in.

(Source)

GEN extended an MoU with Baowu Resources for offtake from its iron ore project in Gabon.

Baowu is the world's largest steel producer and now GEN has signed extensions with all four of its Chinese offtake partners.

GEN is currently working towards converting these into binding agreements by mid-year to help bridge the ~US$200M CAPEX funding required to bring the 758.7Mt resource project into production.

Locksley Resources (ASX:LKY)

Over the coming years, whichever country wins the race in artificial intelligence, autonomous robotics and military might will be the global superpower.

About 12 months ago the USA realised that the supply of critical minerals they need for building autonomous robots and important military uses is controlled by China.

And China has started withholding supply.

The USA has almost zero domestic production and is now rapidly deploying funds to bring online domestic supply of these critical minerals, and also create strategic stockpiles.

Antimony is a critical metal used in ammunition (kinda important for the military, right?), tanks and missiles.

Rare earths are a set of niche minerals used in the production of magnets for various military applications, AI and most importantly - autonomous robotics.

We think USA critical minerals is going to be a major investment thematic over the coming years, attracting lots of attention and capital.

Our Investment Locksley Resources (ASX:LKY) has an antimony AND rare earths project in California, right next door to the ONLY rare earths mine in the USA:

(source)

And LKY’s strategy is to move into production as quickly as possible.

This week, LKY announced drilling had started at its Desert Antimony Mine.

LKY’s drilling is going to test the theory that the patterns of antimony mineralisation mined during WW1 and WW2 (shown in blue) extend further (shown in pink):

(source)

We will find out in the coming weeks...

Then comes the drilling on the rare earths targets.

Read more: LKY just started drilling for this critical military metal... in the USA.

Viking Mines (ASX:VKA)

The first thing you think about when you hear China, Russia, Iran and North Korea is probably that they are the USA’s key adversaries, right?

Well, these four countries combined also control around 90% of the global tungsten market.

Tungsten is a critical military mineral used mainly in armor-piercing munitions, and is currently trading at all time highs, up 400% in the last 18 months. (source)

(past performance is not an indicator of future performance)

By 1st January 2027 (311 days from today), the US has said it wants to heavily restrict tungsten purchases from China, Russia, Iran and North Korea. (source)

Assistant Secretary of US Defence for Industrial Base Policy - Dr Vic Ramdass said “developing a domestic source for tungsten is one of our top critical and strategic mineral priorities” (source)

70 days ago, our Investment VKA signed a binding agreement to acquire 100% of an asset that produced tungsten in the mid 1950s in Nevada, USA.

Since then the tungsten price is up 125%. (source)

VKA has a strategy to move fast for early domestic USA tungsten production on this project once again.

VKA recently uncovered some historical drilling documents (literally drawn by hand on paper). During the digitisation process this week, VKA released ANOTHER set of previously unknown drill hits:

(source)

Some of those hits, relative to other tungsten projects, are seriously high grade - up to 1.3% tungsten from 12m+ intervals (all from intercepts down to just ~30m depths).

Typically, global tungsten mines operate with grades as low as 0.1-0.2%.

For some context, here are some hits from EQ Resources’ Mount Carbine asset in Australia (one of their main operating assets):

(source)

VKA’s results announced this week are all across thicker intervals, with similar/higher grades.

VKA is currently capped at $40M.

EQ Resources currently trades with a market cap of ~$1.1BN and its share price has been running along with the surging tungsten price:

(source)

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.

EQ’s asset sits in far north Queensland in Australia.

The kicker for VKA is that its project sits inside US borders - which we think adds a strategic angle to its project.

(as we mentioned above, the USA is trying to fix its reliance on other countries for critical materials supply)

VKA will be drilling its USA tungsten project next quarter.

Read more: VKA: Ancient scrolls delivering more hits

Lodestar Resources (ASX:LSR)

A few days ago LSR announced high grade heavy rare earths from its project in Arizona, USA.

Up to 3.7% TREO, with 64% of that being HEAVY rare earths from reconnaissance rock chip samples. (source)

Access to and control over HEAVY rare earths help determine which nations can build, sustain, and upgrade next-generation:

• Artificial Intelligence (AI)
• AI-driven defence
• Autonomous war robots and drones
• Quantum computing, and
• Advanced energy technologies.

Whoever wins these technologies will likely be the next global superpower.

And to build these technologies you need heavy rare earth minerals.

So it's kinda important to NOT be 100% sourcing the heavy rare earths you need to win this race (USA) from your main adversaries (China) who also want to win the race.

LSR is an early stage explorer in the heavy rare earths space in the USA - we want to see LSR make a heavy rare earths discovery.

But the $12M capped LSR has a few more projects its working on -

We noticed in the back of this week’s announcement that LSR is a few weeks away from announcing the result from the first ever drill hole into a greenfield, moonshot, never-been-drilled copper project in Chile:

(source)

As we have seen many times in the past, it's often the “side salad” projects (where there is the least expectation) like this Chilean asset that can deliver for micro cap explorers like LSR.

Particularly when it's a never before drilled project - nobody knows what could be there... not even a clue...

(other than a mysterious anomaly which attracted LSR enough to drill it)

And especially because the copper price just hit new all time highs this week.

Here is a video of LSR’s technical advisor on site at the rig:

Check out the video from LSR’s technical advisor on site

Read more: LSR: high grade, heavy rare earths PLUS result of first drill into never-before-drilled copper project in a few weeks...

FT - Satellite images reveal a massive US fighter jet surge in the Middle East, signaling a potential shift toward a direct conflict against Iran.

Since this was posted nearly a week ago, conflict has begun in Iran within the past 24 hours, uncertainty and volatility are usually good for the gold price... so we await the gold (and silver) price to open tomorrow.

Bloomberg - Gold climbed above US$5,200/oz on February 27, driven by failed US-Iran talks and massive ETF inflows, marking a resilient recovery from January’s price collapse.

Instagram (@hughhendryofficial) - We came across this from Hugh Hendry (someone who we like to listen to), trying to make sense of the silver price action of late.

NY Times - The Pentagon plans to spend $153 billion in one year on ships, AI, and a missile shield, accelerating modernization amid rising tensions with China and Iran.

X (@ColbyBadhwar) - for an unpaywalled breakdown of the US$153BN Pentagon spending.

Reuters - The Trump administration is planning to mandate Pentagon-wide AI integration while launching a 50 nation minerals block with price floors to end the impacts of Chinese market manipulation and secure supply of these materials.

Trading Economics - We came across this indium price graph. When we made our Investment into AW1 back in August, a large part of our Investment in AW1 was that it held the largest indium resource in the USA.

We thought that indium could generate similar market attention and reaction in 2026 like we have seen other critical minerals such as antimony, tungsten and rare earths experienced last year.

So far this year the indium price is up near 100%:

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.

Reuters - US aerospace and chip industries are facing worsening rare earth shortages as China tightens export permits, forcing defense contractors to tap stockpiles despite the recent trade truce.

LinkedIn (MP Materials) - MP Materials announced "10X," a $1.25B Texas campus to produce 10,000 tons of rare earth magnets annually, securing a domestic "mine-to-magnet" supply chain for defence and EVs.

Bloomberg - Energy expert Fereidun Fesharaki warned that oil could hit $100 as the US and Iran move toward a war he deems inevitable following failed nuclear diplomacy.

X (@uraniuminsider) - A post on the shift to long term contracting as utilities race to secure supply, amongst a Western push to bypass Russian uranium, with the East (particularly China) swallowing up remaining supply.

Bloomberg - Anthropic has rejected a Pentagon ultimatum to lift AI guardrails on autonomous weapons and surveillance, so is now facing threats of a Defense Production Act takeover or being labelled a security risk.

Island Pharmaceuticals (ASX: ILA) - Fully funded with regulatory clarity (RAAS)

The RIU Explorers conference was on the week prior and the company presentations have now been put up.

Here is a link to the YouTube page of presentations and a link to the programme if you would like to check who presented.

Two of our Investment’s presented at the conference, links below:

CAY - Canyon Resources Ltd- RIU Explorers Conference 2026

IVR - Investigator Silver Ltd - RIU Explorers Conference 2026

Here are the usual presentations released by our companies this week:

VKA - Securing America's Tungsten Future, High-Grade, Past-Producing Assets in Nevada, USA

AL3 - Build faster, stronger and greener with ARCEMY®

And the half yearly reports lodged:

AL3 - Half yearly report

EIQ - Half yearly report

EMD - Half yearly report, Additional commentary

ION - Half yearly report

PKP - Half yearly report

ROC - Half yearly report

Lodestar Minerals (ASX:LSR) Rare earth momentum and drills turning in Chile | Speaking with Lodestar Minerals

And there was another from LSR where Coraline was interviewed amongst the recent RIU conference - Lodestar Minerals’ big year ahead: Copper, gold & rare earths | On the Floor at RIU Explorers

Resolution Minerals (ASX:RML | OTC: RLMLF) CEO Craig Lindsay provided a brief update from the streets of New York where he has been busy with meetings ahead of an additional listing onto the NASDAQ, he goes over a few interesting items

ROC’s European expansion lead Andrew Corrigan shared some posts from Euroshop (The world’s number 1 trade fair), which included ROC’s CEO Joel Rappolt in attendance (on the right of the left image below).

LSR was active this week with a few video interviews and will be at PDAC in the coming week, on the back of strong heavy rare earth sample results from its US project and posted a video of drilling underway for copper in Chile.

A word of caution...

While we aim to highlight developments in the small cap space, investing in early-stage and small cap companies - like those we cover - is inherently risky.

These companies often face funding challenges, regulatory hurdles, and market volatility. Announcements may reflect aspirations more than guaranteed outcomes.

Things can, and often do, change.

Just because a company has signed a deal, released drill results, or appointed a new director doesn’t mean success is assured.

Always assume delays, cost overruns, or results that don’t pan out.

We’re here to share insights, not offer personal financial advice - so please do your own research and speak with a licensed adviser before acting on anything mentioned.

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Bye for now.