Ragusa Minerals Ltd Logo

Ragusa Minerals Limited

ASX:RAS

Last Price:

$0.084

Our Investment Summary

Date of
Initial Coverage

05-Jul-21

Initial
Entry Price

$0.065

Returns from
Initial Entry

29%



Investment Memo: Ragusa Minerals (ASX:RAS) - LIVE

Opened: 23-May-2022

Shares Held at Open: 2,610,000


What does RAS do?

Ragusa Minerals (ASX: RAS) is a junior exploration company focused on its hard rock lithium project in the Northern Territory.

RAS also holds gold prospects in the USA and a halloysite project in Western Australia.

What is the macro theme?

Lithium is one of the most critical raw materials that go into producing lithium-ion batteries. These batteries are specifically required to power electric vehicles (EV’s). Lithium is considered a critical material for the transition away from fossil fuels by the USA, AUS, India, EU and Japan.

Halloysite has traditionally been used in ceramics and the energy sector. Halloysite is expected to be a critical mineral in up and coming technologies including – energy storage, batteries, supercapacitors, carbon capture, and cancer therapeutics.

Gold has historically outperformed during times of market volatility (e.g market bubble crash, inflation taking hold). We believe gold provides a good hedge to a portfolio of longer term investments.

Why did we invest in RAS?

Lithium projects along strike to Core Lithium (currently capped at $2.3 billion)

RAS holds ground along strike Core Lithium’s hard rock Finnis deposit which has a 15mt JORC resource with lithium grades of 1.03%. RAS’ project also sits next door to explorer Lithium Plus’s (Currently capped at $61M) NT lithium projects.

Gold projects neighbouring ~16 million ounces of gold resources

RAS holds a portfolio of gold projects which sit next door to Nova Minerals (currently capped at $116M) ~9.6m ounce gold resource as well as GoldMining Inc’s (currently capped at $234M) 6.5+ million ounce gold resource in Alaska, USA.

Halloysite next door to Latin Resources

The company’s Halloysite project in WA borders Latin Resources’ Cloud Nine Halloysite-Kaolin deposit which has a 207 million tonne inferred mineral resource. We think the Cloud-Nine deposit extends into RAS grounds.

Low enterprise value (EV) means leverage to a discovery

Company has 125 million shares on issue with ~2.2 million currently escrowed. With a current market cap of $10M and $3.2M cash in the bank, the enterprise value is only $6.8M. This makes the stock highly leveraged to any discovery.

What do we expect RAS to deliver in 2022?

Objective #1: Complete due diligence on NT lithium project

RAS will have a 12 month due diligence period over these projects. In that time we want to see the company do enough exploration work to be informed enough to make a decision on whether or not to proceed with the acquisition.

Milestones

Geochemical mapping

Geochemical sampling

Define high priority drilling targets

Undertake at least one drilling program

Complete due diligence and proceed with farm in agreement

Objective #2: Drilling results from the Halloysite project in WA

With drilling recently completed (4th May 2022), we want to see the results from the drilling program confirm that Latin Resource’s deposit does in fact extend into RAS’ grounds.

Milestones

Drilling results

Objective #3: Define a maiden JORC resource at its WA halloysite project

Pending a successful drilling program, we want to see RAS put together a maiden JORC resource estimate at its WA halloysite project. This will be contingent on Objective #2 being successfully completed.

Objective #4: Drilling at the company’s Alaskan Gold project

Initial desk-top studies leading to sampling and other target generation work early in 2022 hoping to see the assets drilled in Q3-4 2022.

Milestones

Desktop studies

Geochemical sampling/geophysical surveys

Define high priority drilling targets

What could go wrong?

Exploration risk

A large part of the investment thesis in RAS is based on “nearology” with little in the way of exploration drilling conducted to date. This means the company’s assets are all highly speculative at the moment. There is a risk that once further drilling is completed, RAS may make no discovery & the valuation of the company goes down as a result.

Commodity risk

Lithium markets are still in the relatively early stages of growth, with demand mostly based on electric vehicle (EV) uptake. The price of lithium could stay volatile as end user markets continue to evolve. Halloysite is considered a mineral for the future. If the use-cases don't scale there is a risk that halloysite deposits are not considered important by the markets and RAS’s project is not of interest to investors.

Funding risk

RAS is a very early stage exploration company and is reliant on continuous funding of high-risk exploration programs. There is a risk that market conditions deteriorate and investors shun high-risk explorers like RAS.

Market risk

RAS is an early stage exploration company chasing new discoveries. There is always a risk that a market wide sell off will hurt RAS’s share price the most, given investors will look to withdraw capital from the high risk high reward investments in their portfolios first.

What is our investment plan?

Our investment plan for RAS is the same as for all our early stage, exploration investments:

  • Invest early (way before the main, initial drilling event)
  • Patiently wait till the drilling event approaches
  • Free carry and take some profit prior to the initial drill results
  • Hold a position into the result
  • Reassess the plan based on the initial results.

Disclosure: Disclosure: The authors of this article and owners of Catalyst Hunter, S3 Consortium Pty Ltd, and associated entities, own 2,610,000 RAS shares at the time of publication. S3 Consortium Pty Ltd has been engaged by RAS to share our commentary and opinion on the progress of our investment in RAS over time.



Investor Presentation

WA Halloysite drilling program completed

ASX:RAS May 04, 2022 Announcement


This morning Catalyst Hunter junior exploration Investment Ragusa Minerals (ASX:RAS) announced that it had completed its maiden drilling program at its halloysite project in WA.

RAS’s WA halloysite project sits right along the border of our other Catalyst Hunter portfolio company Latin Resources’ defined halloysite resource, one of Australia’s largest kaolin/halloysite deposits with a 207Mt JORC kaolinised granite resource.

RAS’ grounds sit right next door to Latin Resources’ project and RAS was drilling against a ~400m strike zone along the border it shares with Latin.

The ultimate aim of the drilling program was to try and quickly delineate a maiden JORC resource and prove that Latin Resources’ halloysite deposit does in fact extend into RAS’s ground.

Today RAS confirmed the following:

  • The drilling program intercepted several significant white kaolinized granite up to 28m in thickness, from as shallow as 2m depth. Drilling now indicates that mineralisation remains open in all directions.
  • Assays pending and are expected to be received during the next quarter which will form the basis for a maiden JORC resource estimate for the project.

Today’s news now means that RAS has ticked off key objective #1 of our 2022 RAS Investment Memo, and positions the company well to achieve objective #2 within the next quarter or two.

To see all of the key reasons we continue to hold RAS in our portfolio, all of the objectives we want to see the company achieve in 2022 and the key risks to our Investment thesis, check our our memo by clicking on the image below.


Halloysite drilling to commence this week

ASX:RAS Mar 21, 2022



Today, RAS announced that its maiden air core drilling program would commence at its WA halloysite project, right next door to Latin Resources’ Halloysite-Kaolin deposit which has a 207 million tonne inferred mineral resource.

The 60 hole, ~1,750m drilling program is set to be done on a ~400m strike zone right along the border of RAS and Latin Resources’ grounds. The ultimate aim of the drilling program will be to delineate a maiden JORC resource over RAS’s grounds.

Drilling is expected to commence on Wednesday (23 March).

We set the drilling of RAS’s halloysite project as objective #1 in our 2022 Investment Memo for what we want to see RAS achieve this year. With drilling now expected to commence in the coming days we will be watching to see the results.

To see what else we want to see RAS achieve in 2022 and why we continue to hold RAS in our portfolio, check out our 2022 Investment Memo here.


Lithium projects applied for in the Northern Territory

ASX:RAS Mar 15, 2022


Yesterday, RAS announced that it had successfully applied for three exploration licences prospective for lithium next door to Core Lithium (capped at $1.8 billion) in the Northern Territory, AUS.

The exploration licence applications sit next door to Core Lithium's Finnis hard rock lithium project which has a JORC resource of ~15 million tonnes (Mt) at 1.3% lithium oxide.

RAS’s grounds sit on similar geological structures which adds another project into the RAS stable with neurology to much bigger companies, although given the project is made up of exploration licence applications it is still far too early to tell what RAS has on its hands.

The acquisition sits outside of our 2022 Investment Memo which is focussed on RAS’s WA hallyosite project and its Alaskan gold project.

We will however be watching to see if the lithium project throws up any interesting exploration targets, and we are pretty happy with the concept given how hot the lithium market is and how well Core Lithium has performed.


Desktop reviews completed at RAS’ Alaskan gold project

ASX:RAS Mar 01, 2022


RAS announced today that it had identified four historical gold-copper prospects which could be priority exploration targets at its Alaskan gold project.

The four targets came about as RAS completed initial desktop reviews across the entire project area.

The key targets seem to have been identified by RAS based on historical rock chip samples and a combination of regional magnetic surveys. The targets are at a really early stage and look to us like RAS will need to further develop these with more detailed geophysical and geochemical surveying.

Our focus for us in the short term with RAS is on its upcoming halloysite drilling program with strong neurology indications, this is the #1 objective in our 2022 investment memo for RAS.

To see all of the other objectives we want RAS to deliver in 2022 check out our 2022 Investment Memo here.