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Pursuit Minerals

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- Pursuit Minerals
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Investment Memo:

Pursuit Minerals (ASX:PUR)


Opened: 14-Dec-2022

Shares Held at Open: 25,133,333

What does PUR do?

Pursuit Minerals (ASX: PUR) is developing an advanced lithium brine project in Argentina.

PUR’s project is located inside the South American ‘lithium triangle’, a region home to ~ 50% of the world's lithium production and lithium majors like SQM and Albemarle.

What is the macro theme?

Lithium is recognised as a critical raw material by the USA, European Union, India, Japan and Australia because of its importance in the lithium-ion battery supply chain.

These batteries are required to power electric vehicles (EVs) AND to store energy for managing the ongoing global energy crisis.

With lithium brines responsible for almost half of the world's lithium production, PUR offers us exposure to a strong macro theme with a differentiated project style.

Our Big Bet for PUR Big Bet Tooltip

PUR increases the size and scale of its lithium project to a level that warrants putting it into production. We are hoping this re-rates the company to a market cap of >$1bn (similar to what peer company Argosy achieved).

Why did we invest in PUR?

Project sits inside an already giant resource

PUR’s project sits inside an already established foreign resource estimate of 2.1mt lithium carbonate equivalent. PUR’s ground covers ~9,260 hectares inside and on the perimeter of the larger Rio Grande salar (salt lake) in Argentina which measures ~27,500 hectares.

Exploration upside

Most of the drilling in the Rio Grande salar (salt lake) has been down to depths of ~100m. Lithium mineralisation is interpreted to extend down to depths of ~500m in depth leaving plenty of exploration upside for PUR to chase.

Strong management team

Team includes the founding chairman of $1.7BN Syrah Resources - Tom Eadie, and Kyle Stevenson was also the founder of Millennial Lithium which was eventually sold for CAD$491M.

Located inside Argentina’s “lithium triangle”

PUR’s project sits in a region home to ~50% of global lithium supply, dubbed the “lithium triangle” of Argentina. The region also hosts majors like Allkem (capped at $8.3BN), Albemarle (capped at $45BN), SQM (capped at $39BN) and Rio Tinto ($172BN) hold lithium projects. This brings with it potential future consolidation opportunities.

Low market cap relative to advanced peers

Post acquisition PUR will have a fully diluted market cap of ~$31M, which is low compared to other lithium brine players Argosy Minerals ($828M).

What do we expect PUR to deliver?

Objective #1: Drilling program to establish maiden JORC resource estimate

  • We want to see PUR drill to depths of ~500m where mineralisation is interpreted to extend to.
  • The ultimate aim of the drilling program will be to establish a maiden JORC resource estimate for its project.

Our bull/base/bear case expectations for the maiden JORC resource is as follows:

Bull case = >100kt lithium carbonate equivalent.
Base case = 50-100kt lithium carbonate equivalent.
Bear case = <50kt lithium carbonate equivalent.


complete Drilling program commencement

in-progress Drilling program results

not done Maiden JORC resource estimate

Objective #2: Pilot plant construction to show recovery potential

We want to see the company build and operate a pilot plant to show that it can produce lithium carbonate from its project efficiently.


complete Pilot plant construction commenced

complete Pilot plant construction completed

not done Pilot plant operating results

Objective #3: Complete either a definitive feasibility or bankable feasibility study (DFS/BFS)

We want to see the company advance the feasibility studies for its project from where it is now (scoping study) to either a Definitive Feasibility or Bankable Feasibility study level.


not done Feasibility study commencement

not done Feasibility study completion

What could go wrong?

Commercialisation risk

Lithium brine projects are highly dependent on different variables like weather, flow rates to surface and the variability of grades in the brines. There is always a risk that PUR’s project doesn't meet the levels required for its project to be operated commercially.

Resource risk

PUR’s ground sits inside an area where another company has already defined a foreign resource of 2.1mt lithium carbonate equivalent. This does not mean PUR will be able to define a resource of its own, there is always a chance that the ground PUR holds is considered uneconomic and no resource estimate is produced.

Market risk

There is always a risk that market sentiment impacts PUR’s ability to raise capital. Given the company is yet to commence producing any cashflows the need to raise capital may weigh on the company’s share price.

Commodity price risk

Lithium is currently trading at all time-highs. There is always a risk that the market interest for lithium decreases and in turn appetite to invest in companies like PUR decreases.

What is our investment plan?

We have been holding a position in PUR for over 2 years now, and after a failed attempt at drilling in the Julimar province we are happy with this new advanced lithium acquisition (pending DD and shareholder approval expected in January 2023).

We participated in the $2M PUR cap raise (December 2022). We have also been following the private Argentinian lithium asset being acquired by PUR since October this year, and also have an interest in this company after participating in a pre-listing capital raise, which will convert to PUR shares post transaction.

It’s very early in PUR’s new project, but as always we may look to de-risk ~20% in the next 12 months in line with our trading policy, if the price materially re-rates on key milestones.

Read our trading policy here.

Disclosure: Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 25,133,333 PUR shares and 10,000,000 PUR Shares on Trilogy Class B Con Note conversion at the time of publishing. The Company has been engaged by PUR to share our commentary on the progress of our Investment in PUR over time.

Our Investment Summary

Date of Initial Coverage


Inital Entry Price


Returns from Initial Entry


High Point


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