Sunday Edition: 22nd June

Here in our “Sunday Edition”, we send you a quick summary of what we wrote, read, and watched during the week.

But first...

A couple of hours ago the US entered the Israel-Iran conflict with US warplanes and submarines attacking key nuclear sites in Iran.

(Watch the Trump address to the Nation here)

Monday morning should be interesting for gold, silver and oil...

(Source)

Coincidentally, yesterday in our Saturday edition we wrote about USA based gold, silver and critical military metals projects:

Yesterday’s Saturday Edition

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

Read our Saturday Weekender note here: Momentum Builds for US projects in gold, silver and critical military metals

James Bay Minerals (ASX:JBY)

This week JBY commenced its scoping study for its gold project in Nevada that sits next door to N.G.M’s Phoenix Mine which produces ~240,000 ounces of gold per annum.

The focus of the upcoming scoping study will be JBY’s shallow oxide resource, which represents 385,000 oz of the project’s 1.37 million ounce total JORC gold resource.

See our JBY Investment Memo (including risks) here.

Resolution Minerals (ASX:RML)

We wrote a lot about RML’s USA gold-silver-antimony-tungsten project next door to the US$2BN capped Perpetua Resources yesterday.

RML pursuing US OCT listing with eye on potential future NASDAQ listing

This week RMLupdated investors with its plan to list on the US OTC markets.

The ticker code will be OTCQGB: RLMRF.

Being listed on a US stock exchange gives the company much bigger exposure to US investors - which makes sense given RML’s asset is in the US.

This week RML said its listing process has been fast tracked and is nearing completion, and is a ‘stepping stone’ to a potential NASDAQ listing...

RML building out its US team - close to the White House

This week RML also appointed a Washington DC based advisor to support its US Government engagement efforts and possible application for US Department of Defence funding.

Here is the advisor that RML just hired (Todd Clewett) lobbying for another US-based mining company Jindalee Lithium two weeks ago:

(Source - LinkedIn)

We are hoping that his next photo outside the front of the White House will be with the RML team...

RML’s project has been historically mined for critical minerals such as antimony and tungsten.

RML’s resource could potentially be of interest to the US DoD who has provided multiple rounds of funding and tens of millions of dollars for RML’s neighbour Perpetua Resources.

Speaking of Perpetua, this week the company raised US$425M, which was upsized from the original US$325M that the company originally sought.

We think that this could add extra attention to RML's story, which is already up roughly 300% since we Initiated Coverage less than 2 weeks ago.

Again - more on the Perpetua and RML stories in yesterday’s email - and a list of potential RML risks here.

AML3D (ASX:AL3)

AL3 is a leading provider of metal 3D printing - selling systems to the defense and specialty manufacturing markets (oil and gas, aerospace, etc...).

On Friday AL3 opened its US facility in Ohio.

This facility will be the base for AL3’s North American operations, a huge and strategically important market for the company:

This facility underpins AL3’s push into the US defense supply chain, where the company is already working closely with the US Navy and major defense contractors.

Late last year, AL3 raised $30M to make a big push into the US market where it already has the US Navy as a customer, as well as other sales to major defense organisations such as BAE Systems, Boeing and the USA’s largest public utility (source).

See our AL3 Investment Memo (including risks) here.

TrivarX Ltd (ASX:TRI)

TRI has officially recruited its first patient into a small scale 12 week trial to evaluate if its AI algorithm is effective at using sleep data to screen for a current major depressive episode (cMDE) and sleep disorders.

This trial is in partnership with the US Department of Veteran Affairs and will recruit 30 veterans with suspected sleep apnea over a 12-week period.

So we should know roughly in 12 weeks the results of the trial.

See our TRI Investment Memo (including risks) here.

Techgen Metals (ASX:TG1)

TG1 just kicked off geophysical surveys going after copper-gold-antimony in WA.

This is for TG1’s listing asset that happened to have antimony that got our attention when antimony stocks started moving in January.

(we had to dig through TG1’s company prospectus pretty deep to find these hits though)

TG1 will be running IP surveys over a ~1km squared area where rock chips have returned grades as high as 48.8g/t gold, 27.8% copper and 3.92% antimony.

The survey should take ~10 days with results due shortly after.

What we are looking for here is a juicy EM (Electro-Magnetic) target that TG1 can drill.

See our TG1 Investment Memo (including risks) here.

Minbos Resources (ASX:MNB)

This week MNB approved the order of long lead items for the Stage 2 construction of its fertiliser plant in Angola.

Stage 2 of the project will more than double MNB’s capacity from 187,000tpa to 400,000tpa of phosphate rock fertiliser.

While Stage 1 is about selling into the domestic market in Angola, stage 2 is all about export markets.

Right now MNB is in the thick of the “construction phase” of its project, publishing an update last week to the market on its product qualifications that has been ongoing for 12 months.

Securing sales and offtake agreements is an important part of MNB’s business with the company now so close to production.

The results from the trials demonstrated that MNB’s phosphate fertiliser improved crop yields over and above the results from previous trials.

(that is some pretty lush looking crops)

See our MNB Investment Memo (including risks) here.

Inoviq Ltd (ASX:IIQ)

This week IIQ published very promising data from its pre-clinical trials.

IIQ was able to demonstrate in a test tube that its CAR-exosome platform is able to destroy 88% of triple-negative breast cancer and non-small-cell lung cancer cells.

This data sets up IIQ nicely for mice studies later this year.

We have seen what can happen off the back of mice data alone with another company in our Portfolio Arovella Therapeutics up from 2 cents to 20 cents on the back of positive mice data.

However IIQ there is a risk that IIQ can’t replicate this result in mice or humans, and the past performance of Arovella should not be taken as an indicator of future performance of IIQ.

See our IIQ Investment Memo (including risks) here.

Emyria (ASX:EMD): Medibank agrees to fund EMD’s MDMA-assisted therapies

This week EMD announced a world first...

An agreement with a major insurance company to fully fund its members to use EMD’s “psychedelics for mental health” treatment.

EMD has cut this agreement with none other than the largest private health insurance company in Australia, Medibank.

Medibank will cover all of the costs of EMD’s psychiatrist-led PTSD therapies for any of its eligible ~4M members...

This is around $30,000 per patient for EMD’s treatment.

...and is uncapped for the number of Medibank’s members to use it.

Here is Medibank’s press release on the news:

(Source - Medibank)

The news was also picked up in a number of mainstream media outlets:

(Sources: Google News)

While this news is what we would call a “Company Maker” for EMD and good news for investors in the company (you’ll have to read our Saturday weekender for our argument as to why) it’s also very important to recognise the impact that this service will have on patients suffering with PTSD.

Here is an anecdote that we found on LinkedIn from a first responder and former soldier, in relation to EMD’s treatment and the positive impact it has had on them:

(Source - LinkedIn)

We think that this Medibank agreement underpins EMD’s entire business strategy. Now it is on the team to execute.

Read more here: EMD: Medibank agrees to fund EMD’s MDMA-assisted therapies

For our full EMD Investment Memo (including Risks) click here.

Sun Silver (ASX:SS1): The biggest pre-production silver project in the USA also contains antimony?

SS1 has the largest pre-production silver project in the USA - a 480M million ounce silver equivalent JORC resource.

Our bet back in early 2024 was that SS1 would materially re-rate if the silver price kept rising.

Earlier this week the silver price was trading above US$37 - it’s up by US$5 per ounce over just the last ~60 days.

(as of today its trading at ~US$36/oz)

And over the last 15 days the silver price looks like it wants to keep going higher.

The materially rising silver price is the exact scenario we wanted to see start playing out for our Investment in SS1.

You can do the maths on what every US$1 per ounce increase in the silver price means for the in ground value of SS1’s 480 million ounce silver equivalent resource.

At last traded price of ~83c SS1 is capped at $121M.

What we did NOT predict as part of our original SS1 Investment thesis is that SS1 could have antimony running all through its giant, USA silver deposit.

Antimony is a critical defence metal, USA has no domestic supply, the antimony price is up 300% over the last 6 months and ASX stocks with US based antimony projects have been delivering price runs on volume.

We are waiting on results from SS1’s current drill campaign which could return even more silver hits WITH antimony AND waiting on re-assay results of ~200 historical drill holes that were never assayed for antimony (only for silver and gold) (source and source).

(SS1 discovered and started work on antimony last year, before anyone cared about antimony, so they have a nice head start)

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 more here: SS1: The biggest pre-production silver project in the USA also contains antimony?

Chevron Enters Lithium Race with Major Arkansas-Texas Acquisition (Oil Price)

Another oil and gas supermajor just entered the Smackover region in Arkansas, USA...

... Next door to our Investment, ~$6M capped Pantera Minerals (ASX:PFE).

A$400BN Chevron is the third supermajor to pick up ground in the region following in $120BN Equinor and $757BN Exxon Mobil.

One thing we noticed in the Chevron announcement was that the acreage position was for ~125,000 net acres split across South West Arkansas and North East Texas.

Here is the specific section from the Chevron media release:

Being split across the two states tells us that Chevron’s ground is likely to be to the west of our Investment PFE:

Now PFE is totally surrounded by the oil and gas supermajors:

PFE actually pegged its ground before Exxon, Equinor and Chevron entered the region - which is why it's got such prime ground in between all of these major companies.

We think that as more major companies enter the region the tiny ~$6M capped PFE will become more and more of an attractive takeover play.

A takeover of PFE would be great but this is just speculation on our part - and no takeover may ever happen.

Here is lithium industry veteran known as “Mr Lithium” Joe Lowery’s take on the Chevron entry into the Smackover:

(Source - LinkedIn)

FDA to Issue New Commissioner’s National Priority Vouchers to Companies Supporting U.S. National Interests(FDA)

This week the US Food and Drug Administration announced Priority Review Vouchers for companies that are developing drugs “supporting US national interest”.

There were four broad categories that were identified by the FDA as “US National Interest”:

• Addressing a health crisis in the U.S.
• Delivering more innovative cures for the American people.
• Addressing unmet public health needs.
• Increasing domestic drug manufacturing as a national security issue.

While these categories don’t necessarily give a specific direction to the market as to which types of drugs will be eligible, the prize is big.

FDA Priority Review Vouchers can either be used for the specific drug that the company is seeking to be approved OR be used on the next drug that the company is looking to develop (like a bonus ‘thank you’ for getting approved).

The priority review reduces the review timeframe from 10-12 months down to 1-2 months.

This is significant for all biotech development programs.

A similar review voucher system has been used as an incentive for "neglected tropical diseases” and “rare pediatric diseases"; these PRVs are transferrable and have sold for as high as US$350M.

Our biotech Investment Island Pharmaceuticals (ASX:ILA) would likely be eligible for this PRV if it gets its dengue fever drug through to Phase 3.

Here is where we wrote in more detail about ILA’s potential PRV eligibility - keep in mind a PRV is no guarantee and ILA may not get one.

Read our ILA Investment memo including potential risks here.

If the PRV system is expanded to encompass more companies it could drive significant investment into drug developers (particularly those in the Phase 3 of their clinical trials).

Our early stage biotech Investments developing drugs include: IIQ, ALA, DXB, NTI and ILA.

STO ASX: Abu Dhabi sets up test for Labor with $36b Santos takeover bid (AFR)

This week Abu Dhabi’s national oil company made a big bet on the future of gas with a $36 billion bid for Santos.

This is the largest cash deal ever seen in the global energy sector.

We could be seeing the start of a wave of M&A activity in the energy sector, similar to what we saw with gold over the last 18 months.

With gold M&A there was one big deal that was the straw that broke the camels back, leading to a wave of M&A in the sector.

We are talking about the Newmont-Newcrest A$26B merger in November 2023.

Shortly after that deal the gold price went on a massive run, and there were many deals in the sector:

Gold Field’s / Gold Resources for $3.9B, Northern Star / De Grey Mining for $5B, Ramelius / Spartan $4B merger, etc...

We think that this Santos deal could be the start of M&A wave in the energy sector.

According to the Lion Select Boom-Bust Clock, M&A activity is still the early in the cycle, and this is where we think the energy sector could be:

We have a number of energy companies in our Portfolio with existing hydrocarbon discoveries that could be primed for M&A activity: EXR, IVZ, 88E.

We also have two very early stage exploration energy companies that may be soon looking for a bigger partner to help fund a high-risk, high-reward drilling program: GGE, CND

(click on each company name for our full Investment Memo and potential risks)

This Santos deal puts a big spotlight on the whole sector, and could be the start of a golden period for energy M&A, just like we’ve seen with gold over the last 18 months.

Island Pharmaceuticals (ASX:ILA) Webinar: Combatting Urgent Viral Disease Threats

Gold 'Effectively The Reserve Currency' Says Nassim Taleb (Full Interview)

Sun Silver (ASX:SS1) Managing Director and Co-Founder Andrew Dornan

Webinar: Perpetua Resources Unlocking the Stibnite Gold Project

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Bye for now.