L1M is capped at just $7.3M at the time of writing this Investment Memo. We think L1M’s valuation here is leveraged to exploration success.
$0.027
Opened: 12-Sep-2025
Shares Held at Open: 8,375,696
Options Held at Open: 3,773,077
What does L1M do?
L1M is a junior exploration company with gold-copper projects in Australia and lithium projects Brazil.
What is the macro theme?
L1M has exposure to:
Our Big Bet for L1M
“L1M 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 L1M Investment Memo.
Why did we invest in L1M?
Tiny market cap, leveraged to exploration success
L1M is capped at just $7.3M at the time of writing this Investment Memo. We think L1M’s valuation here is leveraged to exploration success.
Multi-commodity exposure
L1M now has a mix of gold, copper and lithium exploration projects in its portfolio. We like this, especially in a very small explorer, because it means the company can pivot to a project that the market will be willing to re-rate based on the current macro momentum in any particular sector.
Drilling to start on gold projects very soon (short term catalyst)
L1M’s QLD gold project has over 12.5km of strike that hasn’t seen any modern drilling yet. We like that L1M will be drilling the project in the coming weeks.
QLD project has had good gold hits before
Previous drilling on L1M’s QLD gold project has hit 16m at 3.56 g/t gold, 16.0m at 3.60g/t gold and 12m at 6.5g/t gold. We think the market will like results similar to or better than this (IF L1M can deliver them).
QLD project has multiple undrilled copper porphyry targets
L1M also has three copper porphyry targets that have already been identified on its QLD asset. We think these are strong drill targets for a company of L1M’s market cap.
NSW copper-gold asset is in the same region as majors
L1M’s NSW asset in particular, sits next to projects owned by Newmont and Evolution Mining.
Bear market lithium exposure
L1M has lithium ground in Brazil’s Minas Gerais next to heavyweights like Sigma Lithium (60km away) and Pilbara Minerals (20km away). If market interest returns to the lithium sector, L1M’s assets could suddenly become more valuable.
We have had success Investing in Brazilian lithium before
One of our best Investments was Latin Resources, which made a hard rock lithium discovery and was re-rated to a high of ~42c per share—2,332% above our Initial Entry Price.
What do we expect L1M to deliver?
Objective #1: Drilling at L1M’s gold targets in QLD
L1M expects drilling to start the week beginning 15th September.
Milestones
Drilling commenced
Drilling visuals
Assay results
Objective #2: Drilling on L1M’s copper targets in QLD
We want to see L1M drill its three copper porphyry targets right after the upcoming gold drilling is completed.
Milestones
Geophysics
Program of work defined
Drilling commenced
Assay results
Objective #3: Target generation across the QLD, NSW and Vic assets
We want to see soil sampling, geophysics and other geochemical work completed across all of the newly acquired assets.
Ideally, new drill targets will be ranked across all projects ready for drilling in 2026.
Milestones
Geochemical sampling (soils, trenching)
Geophysical surveys
Identify drill targets
Objective #4: Target generation across the other assets
L1M plans to continue working on its Brazilian lithium and WA lithium/gold assets.
We are still looking forward to seeing new targets ranked across these over the coming months. Especially on the lithium which could become interesting again if the macro sentiment changes for the sector
Milestones
Geochemical sampling (soils, trenching)
Geophysical surveys
Identify drill targets
What could go wrong?
Exploration risk
L1M 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 L1M finds no economic mineralisation on its assets - in which case we would expect to see the share price re-rate lower.
Delay risk
L1M plans to drill two parts of its project (the gold targets and the copper targets) all before the end of the year.
There is a risk there is some slippage in these timelines and IF L1M were to have big enough delays it could lead to the market losing interest in the stock.
Significant delays could be negative for L1M’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, L1M 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 L1M’s share price.
We have already seen this happen with the lithium price and what it meant for L1M’s Brazilian assets.
Market risk
Broader market sentiment could deteriorate, and shares as an investment class trade lower, taking L1M’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 plan?
We are Invested in L1M to make a discovery and define a gold discovery.
Our plan is to hold the majority of our position in L1M 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.
Disclosure: Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 8,375,696 L1M Shares and 3,773,077 L1M Options at the time of publishing this Investment Memo. The Company has been engaged by L1M to share our commentary on the progress of our Investment in L1M 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.
Opened: 02-May-2024
Shares Held at Open: 6,360,712
What does L1M do?
Lightning Minerals (ASX:L1M) is a hard rock lithium explorer with projects in Brazil (and also Western Australia, which are quite interesting too).
What is the macro theme?
Lithium is a critical material used in Electric Vehicle (EV) battery cathodes.
We believe battery metals are the most compelling investment theme of this decade with lithium supply deficits anticipated through to the end of 2030.
L1M will be looking to replicate the success of other Brazilian lithium companies like Sigma Lithium and Latin Resources.
Our Big Bet for L1M
“L1M 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 L1M Investment Memo.
Why did we invest in L1M?
We have had success Investing in Brazilian lithium before
One of our best Investments was Latin Resources, which made a hard rock lithium discovery and was re-rated to a high of ~42c per share—2,332% above our Initial Entry Price. L1M is following the same exploration playbook, 20km away.
Two of Brazil’s biggest lithium projects are near L1M
L1M’s ground sits between $545M Latin Resources (20km away) and $2.3BN Sigma Lithium (60km away), both of which are the big pioneers of the lithium industry in Brazil.
Minas Gerais is Brazil’s “Lithium Valley”
The state aims to be the biggest lithium province in Brazil. The “Lithium Valley” concept was launched in the State of Minas Gerais to promote foreign investment in Brazilian lithium projects.
Rio Tinto moving into Minas Gerais in a big way
Rio Tinto has started pegging ground to the north of LRS and Sigma. Could Rio Tinto be setting up for a play on the region as a whole? Rio is already active in Argentina so South American assets are definitely not out of their remit.
L1M’s project sits on similar geology to LRS and Sigma
L1M’s ground sits on top of similar geology to where Latin Resources made its discovery (the Salinas Formation). The projects also sit within similar proximity of the granites in the region & has similar aeromagnetic data running through the ground.
Exploration “roll of the dice”
Our other Investment SLM was trying to find lithium in Brazil, and it ran from ~13c to ~$1.34 per share. Unfortunately it didn’t deliver a discovery (yet, we still hold). We are betting on L1M as another early stage “the next LRS” exploration bet to hold in our Portfolio.
Bear market pick up
L1M is picking up ground in a lithium bear market, which means the likelihood of finding higher-quality, well-priced projects is higher.
There is an existing playbook for success in Brazil
Companies like Sigma have gone from <$100M market cap explorer to a peak market cap >$4BN. Latin Resources has gone from <$20M market cap to a peak of ~$1BN. There is a proven valuation re-rate for companies that manage to make hard rock lithium discoveries in the region.
Tight capital structure
After acquiring the Brazilian assets, L1M will have ~99M shares, which means there aren't many shares on issue. The top 20 hold ~47%, and the board and management hold ~8.7% of the company’s shares on issue.
Low market cap leveraged for a re-rate on a discovery
Post acquisition at 7c per share, L1M has a market cap of ~$6.5M leaving plenty of room to re-rate off the back of a discovery, especially given the peer valuations in the region like Sigma and Latin Resources.
Good deal terms tied to success on the project
Bulk of the consideration being paid for the assets are tied to milestone payments related to defining a JORC resource, NOT the usual “lithium bearing drill intercepts” we see on project acquisitions.
What do we expect L1M to deliver?
Objective #1: Find high priority drill targets
We want to see L1M conduct geochemical and geophysical surveys and determine the best drilling spots at its Brazilian lithium project.
Milestones
Geological mapping
Rock chip sampling
Soil sampling
Define high-priority drill targets
Objective #2: Drill high priority targets
We want to see L1M drill its best targets.
Milestones
Drilling permits
Drilling starts
Drilling completed
Assay results
Objective #3: Exercise option to acquire Brazilian lithium project
After de-risking the project, we want to see L1M exercise its option and acquire the project
Milestones
Exercise the option to acquire the project
Objective #4: Drilling at WA lithium project
We want to see L1M do some more sampling work before drilling one of the priority targets at its WA lithium asset (Dundas)
Milestones
Geochemical/Geophysical surveys
Drilling starts
Drilling completed
Assay results
What could go wrong?
Exploration risk
L1M’s project is an early stage exploration asset. There is always a risk that L1M finds no targets worthy of drilling or that, even after drilling, the company fails to find any economic lithium mineralisation. As a result, exploration risk is one of the primary risks for L1M.
Deal completion risk
L1M’s Brazilian assets are yet to be acquired and will still need to have the “option to acquire” exercised. L1M will also need to get shareholder approvals for the transaction which is never guaranteed to proceed. There is always a risk that the deal isn’t completed and L1M ends up with no asset ownership. In that scenario, L1M’s share price would likely be impacted negatively, and it will likely seek other assets to complement its existing ones, which could take time.
Financing risk
L1M does not generate revenues and relies on raising capital to fund its exploration programs. If the market is unwilling to fund the company, it risks being unable to drill its project or offering large discounts to its share price when raising capital.
Commodity price risk
The lithium price is very volatile, given that the market is still in its infancy. There is a risk the lithium price fails to recover, and the valuations for greenfields explorers or new discoveries aren't as high as they would have been in a stronger price environment. Low lithium prices will impact L1M’s share price in the long run.
Market risk
Investors may shy away from high-risk investment opportunities like junior explorers if the broader market sells off. During market downturns, investors will look to pull capital away from high-risk investments. L1M is a junior explorer and may be impacted by these market-wide sell-offs.
What is our investment plan?
Exploration is high risk and share prices often can swing up and down before, during and after the drilling event.
Our plan is to hold the majority of the position into the drill results (in case L1M can deliver a “Latin Resources style” result), if the drill results are excellent or the price runs in the lead up to drilling we may Top Slice 20% of the position in line with our trading policies which you can read here.
If the drill results do not deliver, we are happy with the cap structure and back the management team to further test the West Australian assets or acquire a new project.
Disclosure: Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 6,360,712 L1M Shares, 3,180,357 L1M options, and 1,400,000 Bengal Mining shares. The Company has been engaged by L1M to share our commentary on the progress of our Investment in L1M over time.
L1M: First gold drill results deliver 20.4m at 2.4g/t gold
Oct 21, 2025
Oct 21, 2025 |
8 min
Gold is back up near its all time highs again this morning… The media is reporting lines in front of bullion dealers… Our Investment Lightning Minerals (ASX: L1M) just found more gold beneath a 20m deep pit that was producing gold back in the 1980’s and 1990’s.
Micro cap L1M - Gold exploration drilling set for next week
Sep 12, 2025
Sep 12, 2025 |
15 min
The ASX small cap market appears ready and willing to re-rate strong gold exploration results… L1M is due to start up to 1,300m of diamond drilling next week, following up strong historic gold hits
Microcap L1M going for a new discovery… up the road from billion dollar producers
Feb 21, 2025
Feb 21, 2025 |
10 min
Drilling has started. Are we just a few weeks away from a new discovery by a fledgling micro cap stock that re-rates the company potentially by hundreds of percent?
L1M drilling booked in - 2 weeks to go
Feb 6, 2025
Feb 6, 2025 |
7 min
The drill rig is now contracted. The start of drilling is locked in - the week of February 15th. Will it deliver some shiny purple drill cores? And can it repeat the success of one of our all time best Investments?
L1M: Drilling in coming weeks - following up ~4% lithium found in artisanal mine
Jan 17, 2025
Jan 17, 2025 |
12 min
In a few weeks, $7M capped Lightning Minerals (ASX: L1M) is going to drill into a wall of lithium bearing pegmatites they found in an artisanal mine… This is south of the ground where LRS made the discovery that propelled it to a $448M takeover by Pilbara Minerals. L1M’s upcoming drilling in a few weeks is our next “roll of the dice” to find another LRS style 10x return on a big, new lithium discovery in Minas Gerias, Brazil.
L1M raises $2.5M - exploration programs to start early next year.
Nov 29, 2025
Nov 29, 2025 |
1 min
Our exploration Investment Lightning Minerals (ASX: L1M) just raised capital to fund drilling on its QLD and NSW assets.
L1M hits gold across 12km of strike in QLD
Nov 17, 2025
Nov 17, 2025 |
2 min
Our exploration Investment Lightning Minerals (ASX: L1M) just put out exploration results from its gold project in Queensland.
L1M hits more gold below historic pits - porphyry drilling coming next
Nov 10, 2025
Nov 10, 2025 |
2 min
Our exploration Investment Lightning Minerals (ASX: L1M) just put out the second batch of results from the Mt Turner gold project in Queensland.
L1M completes drilling at QLD gold-copper project - assays now pending
Oct 29, 2025
Oct 29, 2025 |
1 min
Our exploration Investment Lightning Minerals (ASX: L1M) just announced that drilling has been completed at its QLD gold-copper-silver project.
L1M drilling results reveal thick pegmatites in Brazil
Sep 26, 2025
Sep 26, 2025 |
2 min
Our exploration Investment Lightning Minerals (ASX: L1M) just announced drilling results from one of its Brazilian lithium projects.
Sunday Edition: 30th November
Nov 30, 2025
Nov 30, 2025 |
15 min
Tomorrow’s market open promises to be a very interesting one for silver stocks after silver’s near 6% surge on Friday night post the ASX closing… (hitting the highest price in its history and delivering a key breakout of a 50 year chart pattern we have been watching…) Here are all the silver stocks we are Invested in and ones to watch on Monday morning, click on the link to read out Investment thesis for each one:
Sunday Edition: 23rd November
Nov 23, 2025
Nov 23, 2025 |
14 min
Only a few weeks til Christmas now. What might it take for a Santa rally to happen this year? (A Christmas miracle after Friday’s broad sell off? At least global markets bounced back on Friday night promising a positive Monday on the ASX) Below is a summary and links for everything else we wrote about last week, along with some other interesting content we found in relation to our Portfolio.
Sunday Edition: 16th November
Nov 16, 2025
Nov 16, 2025 |
18 min
Yesterday we wrote about what the future of war will look like… And the critical minerals needed by countries to quickly build the biggest armies of autonomous robot war dogs and war drones, with the best AI. Our Investment Island Pharmaceuticals (ASX:ILA)’s drug Galidesivir has the potential to defend against bioweapons. ILA says they are coming out of trading halt tomorrow (Monday) morning “pending an announcement by Island Pharmaceuticals regarding US Food & Drug Administration feedback on Galidesivir program”
Sunday Edition: 2nd November
Nov 2, 2025
Nov 2, 2025 |
14 min
Happy Sunday… Below is a summary of every stock we wrote about last week. Without further ado…
Sunday Edition: 26th October
Oct 26, 2025
Oct 26, 2025 |
17 min
Below you can read about every stock we wrote about this week: But first… The most interesting thing we watched this morning is this interview with the US Secretary for Energy Chris Wright: We think the US critical minerals theme is going to be one of the biggest themes of 2026. (and probably remain strong during the remaining 3 years of the Trump administration… and maybe even another term.)
