Pantera Logo ASX.PFE

Pantera Minerals Ltd Limited

ASX:PFE

Last Price:

$0.135

Our Investment Summary

Date of
Initial Coverage

05-Aug-21

Initial
Entry Price

$0.200

Returns from
Initial Entry

-33%



Investment Memo: Pantera Minerals Ltd (ASX:PFE) - LIVE

Opened: 23-Feb-2022

Shares Held at Open: 2,467,000


What does PFE do?

Pantera Minerals (ASX:PFE) is an early stage minerals exploration company based in Western Australia. PFE has a diverse suite of commodities within its tenements, including Iron-Ore, Lead, Zinc, Silver, Copper and Manganese.

What is the macro theme?

PFE is an exposure to what we believe will be a coming commodity super-cycle leading to sustained high prices across several commodities. With the US & the EU looking to increase fiscal stimulus to spur economic growth, we think decades of under-investment in new mines will lead to higher demand and therefore higher commodity prices.

In particular, iron ore - the primary raw-material for steel - will benefit the most from increased construction and infrastructure activity, which are almost guaranteed through new stimulus programs across many nations worldwide. However, it is the higher grade iron ore that will be even more desired as steel producing nations (in particular China) also look to mitigate greenhouse and environmental issues caused by using lower grade materials.

Why did we invest in PFE?

Nearology

PFE’s Yampi project sits right next door to Australia’s highest grade iron ore operation, Koolan Island (owned by $503M capped Mount Gibson) & all of its deep water port infrastructure. In December 2021 PFE acquired a lead/silver project with nearology to Galena Mining’s Abra project, a globally significant lead/zinc/silver mine currently in development.

Takeover target if a commercial discovery is mad

Any successful discovery made by PFE would make it the ideal takeover target for nearby producers who may seek bolt-on acquisitions to their assets.

Tight capital structure and low EV

Relatively low Enterprise Value with a large portion of the stock in escrow (majority of our holding is escrowed for 2 years) means that exploration success is likely to lead to strong market re-rating.

Click here to see a detailed breakdown of why we invested in PFE

What do we expect PFE to deliver in 2022?

Objective #1: Drilling of the Flagship Yampi Iron Ore project.

Heli-portable rig built and drilling set to commence
First drilling starts next week
PFE intersects 14m of Hematite sandstone on first drill campaign
😔 Inclement weather: Only 3 of 5 planned holes are drilled
Assay Results

[Objective Assessment, 23-Jun-2022] Grade F:

Analysis of results from 60 half core samples from 3 diamond drill holes last year returned only modest grades and widths of hematite (iron ore). This is disappointing, as our initial interest in investing in PFE was the hematite potential at Yampi. The focus now shifts to PFE's other projects including Hellcat and Manganese Project, which we hope will provide a better result.

Objective #2: Drilling of the newly acquired Lead/Silver project.

VTEM surveying leading-up to diamond drilling in Q2-22.

✅ Drilling commences at Hellcat

Objective #3: Drilling at PFE’s Manganese project.

Geochemical sampling program leading up to RC Drilling in Q2-22.

What could go wrong?

Regulatory Risk

As with all other junior exploration companies there is a risk with ELA's that the necessary approvals/agreements like land-access, heritage & native title agreements are not reached and permits can go un-granted.

Exploration Risk

PFE’s projects are relatively early stage exploration assets and the company is still refining high-priority drill targets. With early stage explorers there is a risk that the targets identified return no mineralisation.

Funding Risk

As a junior explorer with early stage projects, the company does not have revenues, meaning it needs to be able to tap the markets for funding in-between major exploration programs. Markets may lose momentum and funding for early stage higher risk exploration like this could dry up.

What is our investment plan?

Our investment strategy for our exploration investments is to take a position during the quiet periods before speculation around drilling results. This is when we typically see share prices run upwards - at this stage we aim to take some profit and possibly free carry, holding the rest of the position into the drilling results.

Our original plan for PFE was to sell 20% prior to the first results IF the share price ran, BUT after the heat came out of the iron ore market, PFE share price didn’t really move as much as we had hoped, so we ended up holding nearly all of (~94%).

Our revised investment plan for PFE is to hold onto 94% of our position into the assay results from the first drilling program at the iron ore project, we will reassess completing the top slice (i.e. taking some profits) going into potential step-out/extensional drilling in 2022.


Disclosure: The authors of this article and owners of Next Investors, S3 Consortium Pty Ltd, and associated entities, own 2,467,000 PFE shares at the time of writing this investment memo. S3 Consortium Pty Ltd has been engaged by PFE to share our commentary on the progress of our investment in PFE over time.


PFE Investment Milestones

Initial Investment: @20c - Majority escrowed for 2 years
Initial Investment: @20c - Non escrowed
🔲 Increase Investment
🔲 Increase Investment
🔲 Price increases 500% from initial entry
🔲 Price increases 1000% from initial entry
🔲 Price increases 2000% from initial entry
🔲 12 Month Capital Gain Discount
🔲 Free Carry - Non escrowed
🔲 Take Some Profit - Non escrowed
🔲 Hold remaining Position for next 2+ years - Escrowed portion


Investor Presentation

✅ Drilling commences at Hellcat

ASX:PFE Jul 04, 2022 Announcement

Investment Memo: PFE IM-2022
Objective 1: Drilling of the newly acquired Lead/Silver project.


The newsflow is about to accelerate for our cashed-up, multi-commodity exploration investment Pantera Minerals (ASX:PFE).

This is as drilling is now underway at PFE’s most recent acquisition, its Hellcat polymetallic project in WA’s Edmund Basin. In addition, a maiden drilling campaign is about to begin at PFE’s manganese project, Weelarana later this month.

As we reported in our most recent update on PFE, drilling is typically the period of most excitement for juniors - especially when it is the first drilling program on freshly identified targets.

At Hellcat, a 1,700 metre diamond drilling program is underway, which should be completed in September. The program will test several high priority gravity targets and modelled electromagnetic conductors.

Hellcat is located near to one of the region’s most significant discoveries of the past two decades, Galena Mining’s (ASX:G1A) ‘Abra’ polymetallic deposit. Furthermore, Hellcat shares the same stratigraphic and structural setting as Abra, alongside a similar geophysical signature.

PFE holds an 80% interest in Hellcat.

This fits in with our #2 Objective we want to see PFE deliver this year.

Next up for PFE will be the commencement of drilling at Weelaranna, followed by assay results at both projects.


PFE: Drilling set to commence at Hellcat

ASX:PFE Jun 15, 2022 Announcement


Investment Memo: PFE Memo

General: Exploration activity


Our early stage exploration investment Pantera Minerals (ASX:PFE) is preparing the drill rig for its most recent acquisition.

This morning, PFE announced the completion of a heritage survey at its Hellcat polymetallic project in WA’s Edmund Basin, thus paving the way for its maiden drilling programme. An 1,800 metre diamond drilling program is set to commence early next month.

Hellcat is located ~100km from one of the region’s most significant discoveries of the past two decades, namely the ‘Abra’ polymetallic deposit - owned by Galena Mining (ASX:G1A). The project is currently in construction, with first lead and silver production slated for 2023.

We like that Hellcat has the same stratigraphic and structural setting as Abra, and also shares a similar geophysical signature.

PFE acquired 80% interest in the Hellcat Project in December 2021.

This fits in with our #2 Objective we want to see PFE deliver this year.

Next will be the actual drilling activity next month, followed by assay results, which we will await with interest.


Loyalty offer for existing shareholders

ASX:PFE May 06, 2022 Announcement


Our junior exploration investment Pantera Minerals (ASX:PFE) is entering a busy phase, advancing multiple drilling programmes across its WA projects in the coming months.

PFE has a diverse suite of commodities within its tenements, including iron-ore, lead, zinc, silver, copper and manganese, providing exposure to what we expect to be the coming commodity super-cycle.

On the corporate side, PFE today announced that it was undertaking a 1-for-4 pro rata non-renounceable rights issue to raise approximately $193,750.

Eligible shareholders (anyone on the register as of close of business 5 May 2022) have the rights to apply for options at the issue price of $0.01 each. These options are exercisable at $0.25 each on or before 1 May 2026.

Funds raised are earmarked primarily for advancing its Yampi Project, where geophysics surveys are planned in near term.

Given that PFE already has a healthy cash balance of about $5.8M as of 30 March 2022, and the current rights issue is for a relatively small amount, we believe that this is more to do with rewarding existing shareholders than PFE requiring funding.

The key dates are as follows:

The next key milestones that we’re keen to see are the drill rigs arriving on site at PFE’s Hellcat Polymetallic Project and Weelarrana Manganese Project, which is expected early in the next quarter. More details on these projects, along with our investment plan for PFE, can be found in our PFE Investment Memo.


PFE: Promising manganese results leads to July drilling plan

ASX:PFE May 03, 2022 Announcement


Our junior exploration investment Pantera Minerals (ASX: PFE) today announced plans for its maiden drilling programme at the Weelarrana manganese project in WA.

This comes on the back of promising results from rock chip sampling, with 16 of 22 samples returning high grade manganese (between 11% to 43% grades) supporting previously reported high grade sampling (grades between 32% to 42%).

Three areas of outcropping high grade manganese mineralisation have now been identified, extending the strike length of outcropping mineralisation from 280m to 800m, with large parts of the tenement area yet to be assessed.

A heritage survey for later this month is set to pave the way for a 1500m RC drilling programme in July 2022.

The drilling of PFE’s manganese projects is our #3 objective we want to see executed this year, and so today’s announcement illustrates the progress being made here:

Next up is the upcoming drilling campaign at PFE’s Hellcat polymetalic project that’s expected to start at a similar time to Weelarrana. More details on these projects can be found in our PFE Investment Memo.


PFE: Flagship shifting focus from iron ore to copper/gold

ASX:PFE Apr 29, 2022 Announcement


Our junior exploration investment Pantera Minerals (ASX: PFE) today provided an update on its flagship Yampi Project in the Northern Territory.

Analysis of results from 60 half core samples derived from 3 diamond drill holes last year returned only modest grades and widths of hematite (iron ore) - the initial focus of the drilling campaign.

This is disappointing, as our initial interest in investing in PFE was the hematite potential at Yampi - the project is located down the road from Mt Gibson’s high grade Koolan Island iron ore mine, and drilling was following up promising high-grade hematite rock chip samples. Our #1 Objective for PFE to deliver this year was based on this:

Whilst the iron ore grades have not impressed, somewhat interesting is that several pathfinder elements for porphyry copper-gold mineralisation were encountered - this is of note given Yampi’s proximity to Dreadnought Resources’s Orion Copper Project, with structures that extend well within PFE’s tenements.

The results have warranted PFE to greenlight an aeromagnetic and radiometric survey in May over the majority of Yampi - this will help narrow down where to focus the next exploration campaign to hunt for a possible copper/ gold porphyry.

Our focus now turns to upcoming drilling campaigns at PFE’s Hellcat and manganese projects, expected in the next quarter. More details on these projects can be found in our PFE Investment Memo.


Drilling plans revealed for Hellcat Project, WA

ASX:PFE Apr 28, 2022 Announcement


Our junior exploration investment Pantera Minerals (ASX: PFE) today announced plans for its maiden drilling programme at the recently acquired Hellcat polymetallic project in WA.

Hellcat is located down the road from one of the region’s most recent significant discoveries - Galena Mining’s ‘Abra’ polymetallic deposit, currently in construction for first lead and silver production next year.

Hellcat has the same stratigraphic and structural setting, and shares a similar geophysical signature to Abra, so it will be interesting to see what drilling uncovers - this fits in with our #2 Objective we want to see PFE deliver this year.

Today, PFE announced the Program of Works for the Hellcat drilling program - a precursor to the 4 diamond drill holes planned for July 2022.

In preparation, a drilling contractor has already been booked. Next will be the heritage and cultural clearance surveys, expected for later in May 2022.

PFE has several projects they are advancing - to see the key objectives we set for 2022 and what we want to see the company achieve in 2022, check out our 2022 PFE Investment Memo here.


PFE: Aerial survey helps pinpoint targets for Hellcat campaign

ASX:PFE Apr 06, 2022 Announcement


Our multi-commodity exploration investment Pantera Minerals (PFE) today announced that it had completed a VTEM survey over its recently acquired Hellcat lead/silver project in WA.

VTEM stands for versatile time-domain electromagnetic - it is essentially an airborne survey system that can identify moderate to excellent conductors beneath the surface - which in turn can point to possible mineralisation/ ore bodies underground.

The results of the VTEM survey have helped refine drill targets for the upcoming maiden drilling program at Hellcat, expected later this quarter. This ties in with our Objective #2 that we want to see PFE deliver in the year ahead, as outlined in our Investment Memo.

In particular, high priority gravity targets at the Teano and Yarvi prospects (within the Hellcat project) are coincident with electro-magnetic conductors (as revealed by VTEM), a promising sign prior to drilling.

We like that Hellcat is down the road from one of the world’s next significant lead/zinc/silver operations expected to go into production next year - the Abra mine, a joint venture between Galena Mining and Japanese smelter Toho Zinc. Abra is expected to operate for an initial 16 years, producing 95 ktpa of lead alongside by-products.

Aside from upcoming drilling at Hellcat, we expect PFE to also be drilling at their WA manganese project in this current quarter, and so will be keen to see the results.


Lead-silver exploration now underway

ASX:PFE Mar 21, 2022


Pantera Minerals has commenced field exploration at its Frederick lead/silver project. This comes after PFE last week completed a comprehensive ground gravity survey and an in-depth review of all available surface sampling. Survey results are expected in four weeks.

PFE’s lead/silver projects (the Frederick Project and the nearby Hellcat Project) are located in WA’s Gascoyne region, which is in a similar geological setting to Galena Mining’s globally significant lead-silver project Abra Pb-Ag deposit.

While we didn’t state an objective in our 2022 Investment Memo for PFE to achieve with this project, the field work aligns with its strategy of year round exploration and complements work at the PFE’s other projects — including its main Iron Ore project.

Drilling of the flagship Yampi Iron Ore project remains our main objective for PFE this year. Here we want to see the company delineate a large, high grade iron ore resource, which might one day attract the attention of a bigger company as a takeover target. As mentioned in our last note on PFE, the team is keen to commence the next drill campaign here once the wet season passes, likely in Q2 2022.

Our other objectives for the company this year, along with the risks involved and our own investment plan for the stock see our Investment Memo, here.


EM surveys completed at newly acquired lead-silver project

ASX:PFE Feb 21, 2022


On Monday PFE announced that it had completed EM surveys over the two main target areas at its newly acquired lead/silver project in WA.

The EM survey results are yet to be received but PFE is aiming to analyse the results and prepare a drilling program which is expected to commence in Q2-2022.

Read our deep dive into the newly acquired Hellcat asset, where we discuss why we like the project and where we compare it to Galena Minings' deposit that is currently being put into development.