Sunday Edition: 24th August

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.

Monday looks set to be an interesting day on the markets with the US Federal Reserve indicating an interest rate cut is on the horizon.

Both gold and silver prices have been up since Fed Chair Jerome Powell's speech on Friday night...

and we will be eagerly anticipating how our gold and silver Investments will trade tomorrow.

We will also be looking closely at LKY who went into a trading halt on Thursday pending an announcement:

"regarding finalisation of a material agreement covering a downstream critical minerals processing and technology partnership in the USA”.

US critical minerals is one of the hottest macro thematics in the small cap market right now.

A great time for LKY to partner on a downstream processing technology.

The US government, through the Department of Energy, has already set aside US$1 billion for critical minerals projects...

with more than half of that set aside for “minerals processing and recycling”.

LKY is expected to come out of its trading halt tomorrow morning with its partnership news...

Keep reading for more on LKY below.

For a longer take on the Fed cut and updates on critical minerals for the week: Fed Fuels Metals Rally: Gold, Silver & Critical Minerals in Focus

Stocks Featured This Week: SGQ, ION, SS1, LKY, TTM, JBY, RML, BPM, ROC, WCE

St George Mining (ASX:SGQ)

Our rare earths and niobium Investment St George Mining (ASX:SGQ) just dual listed on the Frankfurt Stock Exchange (FSE) in Germany.

SGQ will now also trade on the FSE under the ticker ‘S0G’.

We like the move because:

• It makes SGQ easier to access for European investors on the second biggest exchange in the EU (and a popular one for small cap metals/mining companies)
• AND it comes just as rare earths is becoming more topical for investors all around the world (led by the interest in the US).

SGQ’s project has a rare earths JORC resource estimate of 40.6Mt @ 4.13% TREO - which makes it one of the highest grade hard rock rare earth deposits in the world.

The only two with higher grades are producing mines:

(source)

We also noticed SGQ appointed European investor relations advisor Dr Reuter IR to to get the SGQ story out across Germany, Austria, and Switzerland.

Hopefully the good doctor can deliver SGQ some all important liquidity over the coming months.

SGQ is also working on a move into the US... while getting quoted in the NY Times

We also noticed SGQ’s Exec Chairman John Prineas mention that the US is still a big focus for the company in the Frankfurt listing announcement.

SGQ is looking at potential downstream partnerships with niobium/rare earth “end-users” and then would look to leverage those partnerships to “access US capital markets”.

(Source)

The US government has put rare earths in the spotlight after the Department of Defence made a US$400M investment into the only rare earths producer in the US - MP Materials (and Apple followed with its own $500M offtake).

A big part of that deal was to expand magnet production facilities which means MP will need more raw rare earth material supply...

Which is where we think SGQ’s project could come into play.

SGQ is starting to get more noticed in the USA, with Exec Chairman Prineas getting quoted in the New York Times this week in an article discussing the potential of Brazil’s rare earths resources:

(Source)

See our deep dive on SGQ’s US push here: USA signals interest in Brazil rare earths and niobium in potential new trade deal

Iondrive (ASX:ION)

Our critical minerals recycling tech Investment IonDrive (ASX:ION) is now a part of a major European battery recycling consortium.

The consortium includes the likes of Porsche Consulting (a subsidiary of the car maker).

As a consortium member, ION’s tech will now be independently evaluated against other recycling technologies.

This is a chance for ION to show the industry how its tech stacks up against competitors from a sustainability, cost-efficiency, and performance perspective.

ION’s recycling tech is a chemical process that combines “Deep Eutectic Solvents” together with “benign organic solvents”.

Being a chemical process based on biodegradable solvents, ION’s metals extraction technology is NOT energy or acid intensive...

Last week ION received a $3.9M grant (non-dilutive to shareholders) to scale up its tech and commence building their pilot plant for lithium, nickel and cobalt recovery from old batteries.

And ION is actively working on opportunities to apply its tech to other critical metals/minerals like rare earths, gold, copper and silver.

Those are the minerals ION has mentioned to date.

Below is a larger list of metals that Deep Eutectic Solvents (which ION uses in its IP protected processing technology) have been tried and tested on in metals extraction and recycling - we’ve highlighted some of the key critical metals:

(Source)

This week’s announcement will see ION’s tech get included in a Life Cycle Assessment (LCA) - which is a study that compares different technologies over their entire useful lives.

Usually an LCA is looking to compare environmental impacts/performance of a project and then benchmark it against its industry competitors.

After the assessment is completed we should get a pretty good idea of how ION’s tech stacks up against other recycling technologies from a cost and environmental sustainability perspective.

With the LCA being independent and completed by a leading “European consortium”, this should result in a boost to ION’s credibility with customers and regulators, improving future licensing, partnerships, funding and commercial opportunities.

Inside the EU, ION is going after a €3.1M grant, so we are hoping this LCA helps improve ION’s chance of getting that funding.

Sun Silver (ASX:SS1)

This week our US silver and antimony Investment Sun Silver (ASX:SS1) put out rock chip sampling results from its project in Nevada confirming high grade mineralisation at surface.

SS1’s project already has a 480M ounce silver equivalent JORC resource estimate - most of which starts from ~200m depths.

For the past 18 months, SS1 has been drilling shallow, high grade extensions in the north-western sections of its resource.

AND earlier this year in March, SS1 announced that there could potentially be a big chunk of near surface mineralisation that hadn’t been included in previous resource estimates for the project.

We covered that March resource deep dive news in a previous note here: SS1 Increases to 480M ounces of silver equivalent resource... and identifies at surface and near surface mineralisation.

SS1’s recent rock chip sampling data backs up the theory that mineralisation might actually start from surface...

The best result was a rock chip with an 86.9g/t silver equivalent grade.

Shallower mineralisation improves commercial flexibility in future economic studies on the project, and with the results SS1 is getting, the resource estimate is now tending toward a “from surface” model.

In the announcement SS1 said that it “aims to incorporate shallow and surface mineralisation into future mineral resource modelling”.

Locksley Resources (ASX:LKY)

While we wait for Locksley Resources (ASX:LKY | OTC: LKYRF) to come out of its trading halt tomorrow, the field team is busy on the ground.

This week our US rare earths and antimony Investment LKY deployed its structural geology team to its project next door to ~A$20BN MP Materials.

LKY’s field team will now work up four priority areas - the closest being ~1.4km away from MP’s mine - the only rare earths mine in the USA.

The work will include mapping, sampling and building of a geological model of the project.

This means we could get some surface sampling newsflow from LKY in the coming weeks.

Any clear, high priority rare earth targets that are close to MP Materials could bring more market interest in the company’s assets.

Here are the area’s LKY will be working up relative to MP’s mine:

LKY increasing engagement with the US government too

We also noticed LKY is increasing engagement with the US government.

Recently LKY has:

1. Lodged an application for a membership with the US Critical Materials Institute (CMI),
   
   
2. Discussions have started with the US Export, Import bank (EXIM) and the Department Of Interior - this one is for financing, permitting frameworks and opportunities “under the Defense Production Act (DPA) and FAST-41”,
   
   
3. Advanced its processing strategy - which fits in well with the news from the Department Of Energy last week (which we covered in our weekender here).
   
   

On that front, LKY also mentioned that it would take part in the Department Of Energy’s Minerals & Materials Supply Chains Workshop which was held this week.

(Source)

Titan Minerals (ASX:TTM)

Our gold and silver Investment Titan Minerals (ASX:TTM) has uncovered two new mineralised zones at its flagship Dynasty Gold Project in Ecuador.

The Dynasty project currently has a JORC resource including 3.1Moz gold and 22Moz silver.

The trenching and channel sampling results today are now showing the market that the areas southwest of the Kaliman porphyry and west of the Brecha-Comanche prospect could actually be where TTM’s current resource extends down into.

At Kaliman Southwest, TTM returned 10.2m @ 3.8g/t gold and 8.3g/t silver (in trench samples).

Above those results, TTM also had historical drillholes that returned 22.5m @ 1.0g/t gold and 2.4g/t silver, but none of the drilling went deeper than 82m...

At Brecha-Comanche West the best trenching results were ~8.6m @ 5.8g/t gold and 115.9g/t silver.

Here are the results sitting just outside of TTM’s current resource estimates outline:

TTM is currently running an infill drilling program with three diamond rigs across its Cerro Verde prospect.

In the short term we are expecting to see results from around those targets:

Just last week, we saw TTM hit 31.6m @ 2.2g/t gold from drilling at Cerro Verde, filling gaps between the Brecha-Comanche epithermal system and the Kaliman porphyry system.

Now with this week’s trenching success, it looks like TTM is starting to expand on a much larger mineralised footprint than what’s currently captured in the JORC resource.

For a general update from TTM CEO Melanie Leighton, also check out this video from 9 days ago:

Titan Minerals CEO on Dynasty results, Cerro Verde and Linderos JV

James Bay Minerals (ASX: JBY)

This week our US gold Investment James Bay Minerals (ASX: JBY) showed us how it can grow its 1.37M ounce gold resource.

JBY’s project is in Nevada - next door to N.G.M (a giant producing gold mine complex owned by Barrick and Newmont).

JBY’s project currently has a 1.37M ounce gold resource split between:

1. Shallow resource of 384k ounces gold
2. Deep resource of 984k ounces gold.

This week’s announcement focused on showing where resource growth on that shallow section could come from - with a focus on the northern/southern extents of the project.

Here were our key takeaways from this week’s announcement:

Recent drilling is hitting stacked structures in the northern half of the project - and we note JBY’s next two holes are planned at the very northern edges of its project area so we could see these get bigger with the next few drill hits:

JBY thinks there could be stacked gold structures in the southern half of the project too - here there is ~520m strike untested, below the current mineral resource where holes are ending in mineralisation. At the moment, none of the drilling has tested those structures at depth:

Resolution Minerals (ASX:RML)

Our US critical minerals Investment Resolution Minerals (ASX:RML) has just completed its dual listing into the US, and is now trading on the OTCQB Market under the ticker code ‘RLMLF’.

This is in addition to the current ASX listing, where the company continues to trade under the ticker RML.

We are watching RML’s OTC trading activity here.

The OTCQB is the premium tier of the US OTC Markets, for established and developing companies that meet higher reporting and compliance standards.

Importantly, RML upgraded from the lower OTC Pink market, meaning more broker-dealer support, higher visibility, and greater access to US institutional and retail investors.

This OTC listing comes at a time of heightened interest in antimony, a critical mineral used in defence, semiconductors, and clean energy, all sectors where the US is seeking to diversify supply chains away from China.

RML’s flagship Horse Heaven Antimony-Gold Project is located right next door to Perpetua Resources’ ($3BN capped as of overnight) Stibnite project in Idaho, already well known to US critical minerals investors.

RML is drilling right now so we are looking forward to getting some drill progress updates and results soon - more on that below.

Resolution Minerals (ASX:RML)

Drilling for gold and critical metals in the USA, next to a $3BN US critical metals “national champion” company, is now officially underway.

US critical minerals is one of our favourite macro thematics right now.

Resolution Minerals (ASX:RML) is now drilling its project for gold, antimony and tungsten in Idaho, USA.

RML will be drilling 3,000m of diamond core in this first phase (9 holes down to ~300m depths) on a part of its project that has:

• Produced antimony during World War 1
• Produced more antimony during World War 2
• Produced more antimony in the 1960s
• Produced tungsten between the 1950-80s
• AND has hit gold in drilling in 1986, 1987, 1994 - none of that old drilling was assayed for antimony or tungsten (nobody cared too much about these military metals at the time).

RML is the first company to drill these targets in decades, and will be the first to assay them for antimony and tungsten...

RML’s project is right next door to the $3BN Perpetua Resources 6.6M oz gold, 200M lb antimony deposit.

Perpetua Resources is one of the critical minerals “national champions”, with major support (almost US$1.8BN in funding support to date) by the US government and Department of Defence.

RML has had a whirlwind start since it acquired this project back in early June...

• A deal with a Trump brothers backed investment bank to list on the NASDAQ came and went - replaced by Roth Capital (who raised money for Perpetua next door).
  
  
• Appointed accomplished Washington based external affairs advisor Todd Clewett, who has worked with Newmont and Fortescue in the past. Check out what he had to say about the US critical metals government attention in the link below, he may or may not have said “Buckle up, much, much more to come”.
  
  
• An ex-Perpetua Resources geologist came on as technical advisor for RML (he has over 12 years experience with Perpetua).
  
  
• Steve Promnitz and Brett Lynch came on as Senior Strategic Advisers. Steve was behind Lake Resources which went from a micro cap capped at $1M to a $3BN company at one point and Brett was behind Sayona Mining which was also once capped in the billions of dollars (at the height of the lithium market).
  
  
• An A$225M non-binding indicative takeover offer (like a RTO to get on the NASDAQ) from NASDAQ listed Snow Lake is currently being negotiated.
  
  

Over that period, the RML share price went from 1.3c to as high as 9c, now back around 5c...

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

But with drilling now started - we can all finally get a first look at the project’s geological potential.

And find out what RML could actually be sitting on with this project...

All of the “edge of your seat” corporate and team activity aside - If RML’s drilling can deliver the goods, we think it will be what gives RML's share price its next sustainable leg up.

The drilling is about to start doing the talking at RML.

Read more: RML now drilling - next door to ~$2.9BN capped USA antimony leader

Rocketboots (ASX:ROC)

Two major banks in two weeks.

This week RocketBoots (ASX:ROC) signed up another paying customer on a trial for its Artificial Intelligence (AI) vision tech.

This time with “one of Mexico’s largest retail banks” which “operates over 1,000 bank branches”...

ROC has delivered a $140k contract for an initial trial. If successful after 3 months (or until Return on Investment is proven), there is potential to roll out ROC’s technology across up to 1,000 bank branches.

This trial contract provides validation of ROC’s international expansion potential.

ROC worked together on this deal with a “multi-national global consulting partner who is engaged with the client [the Mexican Bank]”.

And ROC and this global consulting company are “ working together on a number of other international opportunities”:

(source: today's ROC announcement)

ROC has developed “Vision Artificial Intelligence” technology for giant companies to analyse and respond to in-store customer behaviours.

(this means using AI on live in-store camera footage to analyse customer behaviors, allowing the company to improve operations)

As well as the recent two new paid trials, ROC’s technology is in use by TWO major, Australian household name companies - Suncorp in the banking sector and Bunnings in retail.

(Both Suncorp and Bunnings renewed and expanded their usage of ROC’s AI tech over many years, proving that the product works and is useful).

Last week, ROC added a new “Major Australian Retail Bank” in a paid trial across the six sites (read our update on this deal here).

(its common for major companies to request not to be named in trials or in the early stages of a roll out - especially when it is for tech integrations in security sensitive sectors like banking)

This week, ROC signed on one of the largest retail banks in Mexico, to a pilot trial over a small number of locations (bank branches).

If the trial is successful it could lead to deployment of ROC’s tech across more/all of its sites - which could deliver a material increase on ROC’s Annual Recurring Revenue.

How meaningful could this week’s deal be for ROC if the paid trial is successful?

According to a ROC investor presentation in October last year, the company charges around $3,500 per site.

At 1,000 sites that is up to $3.5M in potential recurring revenue from just this one customer.

(This is just our back-of-the napkin calculations on potential revenue. It’s no guarantee to eventuate. It doesn’t account for any potential changes to ROC’s pricing structure over the past 10 months or into the future, nor discounts on bulk purchases, and if the trial is successful we don’t know how many of the 1,000 branches might deploy ROC’s technology)

Read more: ROC: Second Major Bank in two weeks... this one is overseas validating international expansion potential.

BPM Minerals (ASX:BPM)

Why has the BPM Minerals (ASX:BPM) share price been edging up every day over the last 9 trading days?

Hard to say...but it might be because of this:

Back in early July, BPM acquired an option on a gold exploration project to the south of the 8M+ ounce Tropicana gold deposit in WA...

(and BPM reckons they will be drilling it next month)

This week, rumours have been circulating that the $3.3BN Regis Resources is looking to buyout its partner AngloGold Ashanti’s share of Tropicana for $2.5BN.

On Wednesday this week the Fin Rev amplified the rumour:

(Source)

The Tropicana discovery in 2005 was one of Australia’s most significant gold discoveries, uncovering what eventually became an 8 million ounce plus deposit in a previously unexplored part of WA’s Fraser Range.

Tropicana produces around ~310,000 ounces of gold each year.

Regis already owns 30% of the asset, having paid ~A$900M for it back in 2021...

And this week, the AFR reported that Regis was considering dealing on the remaining 70%.

IF the deal does end up happening, the look through valuation for the Tropicana asset would be ~$3.6BN (on a 100% basis).

Regis provided a pretty wishy-washy denial this week (as expected when a deal is in early negotiation) via miningnews.net (read it here), but we suspect there is much more to play out.

A large transaction in the region (or even rumours of one) will likely put attention on smaller players - like BPM.

BPM has an option over ground along strike from Tropicana on similar rocks (geology) with previous hits that returned visible gold...

BPM plans to be drilling the project this quarter (subject to heritage approvals which can take some time).

This will be the first large scale drilling program on the asset since ~2009...

The last group to drill the project was actually (70% Tropicana owner) AngloGold back in the late 2000s, right after it made the Tropicana discovery...

Read more: BPM: Creeping up on rumours of WA gold M&A nearby?

West Coast Silver (ASX:WCE)

High grade silver starting 5m below the surface...

On Friday West Coast Silver (ASX:WCE) hit a 17m silver pod with average grades across that whole section at ~858g/t silver...

(Source)

And it starts ~5m below the surface - almost shallow enough to dig out with a shovel...

(ok fine, probably a bobcat... wait maybe some other construction machine that can dig down to 5m... look we aren’t tradies - the point is this silver is very shallow, so its low cost and relatively easy get to)

AND there was a bonus 1 metre 11.1g/t gold intercept too... we weren't expecting that.

Friday’s hits came just north of WCE’s Elizabeth Hill mine, which produced ~1.2M ounces of silver from (at average grades of ~2,194g/t) over a 12 month period 25 years ago.

That production run happened between 1998 and 2000 and was abruptly stopped when the owners had a disagreement and the silver had fallen to US$5 per ounce...

Today, a hard and fast production run like that would be worth ~US$46M (at US$38.10 per ounce).

(which is exactly what we want to see WCE do - find easy to reach high grade silver, quickly mine and sell it, into a surging silver price - we think the silver price is going a lot higher - but that is no guarantee)

And remember, that previous production run was all done by underground mining methods. - which are usually more expensive but more suitable for high grade ore that is deep below the surface.

These drill hits start from just 5m depths and have grades that are almost 20x the average silver grade in most silver mines around the world.

If WCE hits more shallow high grades like this they could decide to just dig a hole and start pulling out the rocks with high grade silver (this is what mining folk call ‘open pit mining’).

The previous owners of WCE’s asset had estimated a non-JORC compliant resource estimate for the leftover remnant ore underground of ~46.8kt @ 2,700g/t silver for 4.05Moz of silver (source)

After Friday’s high grade shallow hit results, it’s looking like there is a chance the 1990s “old timers” (is 25 years ago really that old?) left a lot of silver untouched near surface, as well as underground...

Read more: WCE hits 2m at 10,049g/t silver

Watch more: Don Durrett and John Feneck Analyze Gold & Silver Stocks, Interview West Coast Silver ($WCE): West Coast Silver (ASX:WCE)

Sprott Gold Report - A Cure for Financial Dementia - (Sprott)

Every 20 years or so, the market will build up, euphoria grows and eventually a bubble pops (and then we go through the market cycle again)...

Sprott calls this Financial Market Derangement Syndrome, a collective amnesia where investors keep buying up risk while ignoring the lessons of history.

(We have seen it just this week with a ~10% retraction in the US markets on AI tech stocks)

So how does Sprott avoid being swept up in the hype?

Defensive positioning, which includes exposure to real assets and above all, gold.

The gold spot price has already climbed 25% the year, however Sprott believes that there is still alpha to be generated in developing gold miners.

Despite gold’s rally, miners remain cheap with profit margins doubled in the past 12 months yet the market hasn’t priced it in.

ETF flows into bullion are strong, but gold miner ETFs like GDX and GDXJ still show weak participation with investors remaining cautious, which often sets the stage for outsized moves.

At the same time, majors like Newmont are launching multi-billion buybacks and Agnico Eagle is returning cash to shareholders, which is a strong signal of confidence at the top.

Analysts are still behind the curve and their forecasts haven’t caught up to current gold miner margins which leaves room for surprise upgrades and potential re-rates for explorers advancing projects.

We have Invested in several gold mining projects on the ASX across the mining lifecycle stages:

Production:

• KAU - Kaiser Reef (ASX:KAU) is a high-grade gold producer and explorer with projects in Tasmania and Victoria. KAU’s projects combined are on track to produce >25k ounces of gold per annum.

Definition Stage:

• JBY - 1.37M ounce gold JORC resource estimate in Nevada, USA - Next door to Nevada Gold Mines (producing gold mine Joint Venture between Barrick and Newmont)
• HAR - Holds the centre of the Motherlode region in California which was the centre of the Californian gold rush.
• MTH - As well as silver, MTH also has gold in its resource. MTH’s project has a current 373k ounce gold, 11m ounce silver JORC resource estimate.
• TTM - 3.1M ounce gold, 22M ounce silver JORC resource estimate in southern Ecuador. TTM is currently drilling to upgrade its resource.

Exploration Stage:

• RML - RML’s project is next door to Perpetua Resources’ 6M ounce gold project. RML is looking to make an analogous discovery, and is drilling now.
• BPM - Early stage explorer with ground in the same region as the >8M ounce Tropicana gold deposit owned in a joint venture between majors Regis Resources and AngloGold.
• L1M - Early stage explorer with a newly acquired gold-copper project in Queensland, drilling in the coming weeks.

Locksley Resources (ASX: LKY) - Initiation of Coverage (Peak Asset Management)

Global Uranium & Enrichment (ASX: GUE) - Pine Ridge Drilling Underway (MST Access)

Antimony - A Market Under Severe Stress (RFC Ambrian)

This report is about 6 months old but it is a really good insight into the antimony market - relevant for all of our critical minerals stocks SS1, RML and LKY.

Locksley Resources: El Campo REE up to 12.1% TREO and antimony up to 46% | Julian Woodcock: Locksley Resources (ASX:LKY)

Why Grade Beats Size in Silver Mining | Frank Basa - Nord Precious Metals

Dollar Decline Is the Plan: Gold & Bitcoin to Compete as Neutral Reserve Asset | Luke Gromen

“We’re on the brink of World War III” shares Doomberg (start at 21m45s)

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.