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Ragusa Minerals Limited


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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.


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 (4 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.


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.


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.

Investment Milestones for RAS

Initial Investment: @6.5c
✅ Top Slice
✅ Free Carry
✅ Take Profit
✅ Price increases 300% from initial entry

🔲 Price increases 500% from initial entry
🔲 Price increases 1000% from initial entry
12 Month Capital Gain Discount
🔲 Hold remaining Position for next 2+ years

Investor Presentation

Assays reveal rare earths mineralisation

ASX:RAS Dec 06, 2022 Announcement

Investment Memo: RAS IM-2022
Objective 1: Drilling results from the Halloysite project in WA
Milestone 1: Drilling results

This morning our junior exploration Investment Ragusa Minerals (ASX: RAS) put out assay results from its kaolin-halloysite project in WA.

While assaying for kaolin and halloysite, RAS also confirmed rare earths mineralisation with total rare earths oxide (TREO) grades as high as 0.62%.

RAS also confirmed high grade alumina intercepts averaging ~33.73% with a peak grade of 38.3%.

So far the results are looking promising, especially when compared to peers with similar rare earth & halloysite/kaolin projects.

RAS is now waiting on the remaining assays from the drilling program to be received before it puts together a maiden JORC resource estimate.

We think RAS still has plenty of exploration upside at this project with the drill result covering only ~5% of its total project area.

What’s next for RAS?

Assay results from NT lithium project 🔄

On the 21st of November, RAS completed its maiden drilling program at its NT lithium project.

RAS confirmed that of the 18 RC drillholes completed, 12 intersected pegmatites.

Given RAS’s drilling program was done with an RC drill rig the company hasn't been able to confirm spodumene presence - this is because the RC drill rigs produce RC chips instead of solid drillcores.

Instead, RAS confirmed that it sent the RC chips to the assay labs, meaning we must wait for the assay results to determine if RAS has in fact made a new lithium discovery.

We are hoping to see the results from that program soon.

Maiden lithium drilling program completed

ASX:RAS Nov 21, 2022 Announcement

Investment Memo: RAS IM-2022
Objective 1: Complete due diligence on NT lithium project
Milestone 1: Undertake at least one drilling program

Our exploration Investment Ragusa Minerals (ASX:RAS) just announced that it has completed its maiden exploration drilling program at its lithium project in the NT.

RAS’s drilling was focussed on the same group of outcropping pegmatites that hosts Core Lithium’s (capped at $2.6BN) 18.8mt JORC resource which sits to the north of RAS’s ground.

The drilling program saw RAS drill 18 reverse circulation drillholes of which 12 drillholes intersected pegmatite.

We note that the market reacted relatively negatively to the news with RAS’s share price hitting ~10.5c per share at one point this morning.

We think this is because the market is used to seeing drillcores that confirm whether an explorer has hit spodumene (generally where there is spodumene bearing pegmatites there is lithium). But those drillcores are only available when using a diamond drill rig.

RAS opted to go for a more conventional RC drilling program so we did not get any drillcore pictures or confirmation of spodumene presence.

Instead, RAS confirmed that it sent the RC chips to the assay labs, meaning we must wait for the assay results to determine if RAS has in fact made a new lithium discovery.

RAS has not provided an expected timeframe for these results but we hope to see some results in the next 4-6 weeks.

We’ll know more once the results are in but RAS did say it is “very encouraged by the preliminary drilling observations at our priority targets, noting the scale of the pegmatite zones encountered within our project area”.

This drilling program is part of the due diligence that RAS is undertaking, where it has an exclusive right to acquire these lithium prospective tenements in the centre of a well-renowned lithium district in the NT.

Exploration work should lead RAS to an informed decision on whether to acquire the tenements during its 12 month due diligence period — the primary objective that we wanted to see RAS achieve in the current year.

Brokers comparing LRS to $5.7BN capped Sigma Lithium

ASX:LRS Nov 02, 2022

Macro: Lithium

Investment Memo: LRS IM-2022
Investment Thesis 1: Favourable peer comparison

Late last week we saw both Bell Potter and PAC Partners initiate coverage and release research reports on our lithium exploration Investment Latin Resources (ASX: LRS).

Both reports made mention of LRS’s upcoming maiden mineral resource estimate, while also detailing how LRS’s project could grow into a project analogous to that of its $5.7BN neighbour, Sigma Lithium.

Bell Potter said that they “expect that the deposit could notionally support +200ktpa spodumene concentrate operation. A potential analogue of Salinas is Sigma Lithium’s project located around 100km to the southeast”.

An interesting point that we took from the PAC Partners report was a comparison of Sigma Lithium’s rise to where LRS finds itself today.

PAC speculated that LRS’s maiden mineral resource estimate “could be of size range 11Mt to 17Mt with a grade range 1.3% to 1.5%” and that, “For comparison, Brazil peer Sigma’s initial mineral resource estimate was 13Mt at 1.56% in 2018”.

When Sigma announced that resource estimate, its market cap was around the same as LRS’s is today.

Sigma has since defined a total of five different deposits.

In a similar fashion, LRS is now putting together its first JORC resource and has just announced a new discovery, just 500m from its first discovery.

The following chart showing Sigma’s share price and notable events puts LRS’s progress into perspective:

Sigma now trades with a $5.7BN market cap, or 25 times as much as LRS’s $230M market cap.

To see the two broker reports click on the following links:

  1. PAC Partners research report
  2. Bell Potter research report

What’s next:

We want to see LRS’s maiden mineral resource estimate, for which we previously set our expectations as follows:

  • Bull case (exceptional) = >15Mt JORC resource
  • Base case = 5-15Mt JORC resource
  • Bear case = <5Mt JORC resource

Read our latest LRS article to see the reasoning behind our expectations: Lithium deposit getting bigger - plenty more drilling to come

NT Lithium Project Update

ASX:RAS Oct 26, 2022 Announcement

Investment Memo: RAS IM-2022
Investment Thesis 1: Lithium projects along strike to Core Lithium (currently capped at $2.3 billion)

Our exploration Investment, Ragusa Minerals (ASX:RAS) gave an update today regarding the company’s NT lithium project.

So far, RAS has completed eight RC drillholes hitting significant pegmatite interceptions which include:

  • Drillhole 22RC07 - 27m interval from 16m depth
  • Drillhole 22RC017 - 19m interval from 69m depth
  • Drillhole 22RC024 - 15m interval from 49m depth

The key takeaway for us at this stage is that all of these intercepts are coming from shallow depths starting from as low as 16m.

RAS also confirmed that the pegmatites have “apple-green crystals” within them which the company says could represent spodumene crystals.

With spodumene being the host rock for much of the world's lithium production, this would be positive news for RAS if it is the case.

We will need to wait for the assay results to be sure, however.

All up we see this news as a good early result and are eagerly awaiting the assays from this initial (and recently expanded) ~4000m drill program.

RAS intends to drill through the wet season, weather permitting.

It’s an aggressive style of exploration, and comes at a time when the lithium price remains elevated:

McKinsey on Battery Materials Demand

Oct 21, 2022

Macro: Lithium

There’s a really interesting article here from McKinsey on the huge demand EVs will create AND how the battery materials supply chain can meet this demand.

Key takeaways:

  • Lithium and nickel - “the battery industry’s demand for lithium is expected to grow at an annual compound growth rate of 25 percent from 2020 to 2030, while demand for nickel could multiply as battery demand shifts to nickel-rich products”
  • Asia making the batteries and Europe buying - “70 percent of the key equipment suppliers, for both coating and general cell assembly equipment, are based in Asia…companies in North America and Europe may need to consider developing strong international sourcing relationships.”
  • Geopolitics a major factor - lithium is widely abundant, but ~70 percent of current global production is in Australia and Chile, meanwhile the majority of global cobalt production is in the Democratic Republic of the Congo - which has faced criticism over its mining practices

There’s a great chart here too, which shows the demand growth from EVs and the geography and battery chemistry breakdown:

We’re Invested in a broad spectrum of battery materials companies as part of a decade long investment thesis.

To find out what what battery materials companies we hold in our Portfolio click the button below:

RAS approvals allow for significantly expanded drilling program

ASX:RAS Oct 17, 2022 Announcement

Investment Memo: RAS IM-2022

Our small cap exploration Investment Ragusa Minerals (ASX: RAS) has received NT government approval to allow additional drilling sites to be included as part of its current drilling program at the company’s NT Lithium Project.

With a view to defining a maiden mineral resource for the project, RAS is targeting the most prospective pegmatites, which are evident at the Core Lithium Project located to the project’s north.

The updated Mining Management Plan approval now allows for up to 38 drill sites, plus additional drilling in the approved designated areas.

RAS can now enlarge its current drilling program, and is planning up to ~4,000m from the approved sites. It intends to keep drilling until the wet season prohibits further site access and operations, and then re-commence in 2023.

NT lithium project tenement granted

ASX:RAS Oct 14, 2022 Announcement

Investment Memo: RAS IM-2022
Investment Thesis 1: Lithium projects along strike to Core Lithium (currently capped at $2.3 billion)

Our exploration Investment, Ragusa Minerals (ASX:RAS), was granted a further tenement in the Northern Territory today.

The tenement is in the Wingate region south of Daly River, highlighted in yellow below:

The Daly River tenement is adjacent to a Lithium Plus tenement. Lithium Plus is currently capped at $62.5M.

The granting of today’s tenement gives RAS a total of six tenements in the NT “Supergroup” Lithium Project.

We see this as increasing RAS’s optionality when it comes to exploration in this area as it is part of the same geological setting that gave rise to Core Lithium (capped at $2BN).

RAS recently started drilling its NT lithium project — to get a full deep dive on what we expect out of that drilling read our latest RAS note.

More pegmatites mapped - drilling to start next week

ASX:RAS Sep 29, 2022 Announcement

Investment Memo: RAS IM-2022
Objective 1: Complete due diligence on NT lithium project

Earlier this week our junior exploration Investment Ragusa Minerals (ASX: RAS) put out an update on its lithium projects in the Northern Territory next door to Core Lithium (capped at $1.9BN) and Lithium Plus (capped at $57M).

In the announcement RAS confirmed that:

  1. Drilling works would commence next week
  2. More outcropping pegmatites have been mapped with the latest round of rock chip samples returning lithium grades as high as 2.48% lithium.

Going into its first drilling program at its NT lithium project RAS is trading at a market cap of $45.8M.

We think the difference in market caps is mainly due to RAS’s project being at a much earlier stage than its neighbours’:

  • Core Lithium is progressing its JORC 18.9 million tonne lithium resource into production.
  • Lithium Plus has a historical discovery intercept of 12m with lithium grades of 1.42%.

RAS is yet to drill its project and is some time off from defining a JORC resource.

RAS on the other hand has historical rock chip sampling results which returned peak lithium grades of 8.03% lithium and 23.1g/t gold.

More importantly, RAS has also confirmed spodumene bearing pegmatites inside its project area — this is important because spodumene is the host rock for most of the lithium produced today.

We are backing RAS’s MD Jerko Zuvela to do what he did with now $665M capped lithium developer Argosy Minerals, and take RAS’s project from an exploration prospect into a commercially viable lithium discovery.

We covered all of this in our last RAS note which you can read here: Ragusa Minerals Rises

Lithium supply shortage to continue

Sep 26, 2022

Macro: Lithium

The lithium supply shortage is set to continue for at least the rest of this decade and into the 2030s, says a key adviser to the London Metals Exchange and LME lithium committee inaugural chairman Ron Mitchell.

As reported in the AFR this morning, Mitchell said that for lithium production to come anywhere near meeting upcoming demand, a lot of new mines would be needed and that “a lot is going to have to go right if we’re going to get the tonnes we need in the market”.

The increasing demand from European car makers has driven a steep rise in prices for the key battery ingredient since 2020.

Yet the market still has a lack of price transparency, which was largely behind the reason that the LME joined forces with reporting agency Fastmarkets in mid-2021 to launch a futures contract for lithium hydroxide.

But even with this lithium futures contract, it remains hard to compare lithium to other commodities. Because it is a nuanced specialty chemical, every lithium product is different, making it difficult to trade off a futures index and apply discounts or premiums based on quality.

Mitchell also highlighted the challenges around the shelf-life of the material that make it hard for physical trading as well, explaining that “you can’t just store it in a shed and leave it there for two or three months and then as the price increases bring it to market. There’s risk in doing that.”

Mitchell also commented on the trend of car makers taking equity positions in lithium producers and explorers, such as Toyota with Allkem, Ford with Liontown and Great Wall with Pilbara Minerals. We’d add Vulcan Energy Resources (ASX: VUL) to that list which last year received a A$76M (€50M) equity investment from Stellantis N.V.

Looking ahead, Mitchell expects that trend to continue and it to also extend to producers and explorers of other battery minerals


Critical minerals quickly becoming a priority in the EU

Sep 20, 2022

Macro: Commodities

Readers who follow our Investment Portfolios will know that we have been making strategic Investments in commodities that have made critical minerals lists for the EU, USA, Japan, India and Australia.

These minerals are considered critical to the digitisation and decarbonisation macro thematic and include lithium, graphite, cobalt, nickel and PGE’s, to name a few.

Over the weekend, the following speech from the president of the European Commission, Ursula von der Leyen, gave a speech announcing that the EU would look to pass a “European Critical Minerals Act”.

The aim is to avoid the position Europe finds itself in with oil and gas, where it relies on a single trading partner like Russia.

The act would see the EU put in place:

  1. Agreements with partners like Chile, New Zealand, Mexico, India and Australia for the supply of critical minerals.
  2. Identification of strategic projects across all along the supply chain from mine sites to processing/refining projects.
  3. The act would also see the setting up of strategic reserves of these critical minerals.

All of this bodes well for our Investments across commodities identified as “critical minerals” giving these projects strategic importance on the world stage.

To see a list of all the critical minerals in the Australian Critical Minerals strategy document, check out the following link.

Here is a snippet from that speech:

Lithium prices now trading at all time highs

Sep 20, 2022

Macro: Lithium

The following Bloomberg article touches on the structural supply shortages experienced across the lithium supply chain.

This comes as the lithium price traded at a record high on Friday at US$71,315 per tonne.

For us, it points to just how important it is for the mining industry to make new lithium discoveries match the exponentially increasing demand for lithium.

Without massive investment in new exploration, we simply won’t have enough lithium to catch up with the demand from battery makers.

Last week, we saw a presentation from Benchmark Minerals Intelligence senior lithium analyst Dr Cameron Perks, who touched on the timing differential between building upstream (new lithium mines) and downstream demand (battery manufacturing facilities).

Whilst it could take ~25 years for a new discovery to be put into production, downstream facilities can be built as quickly as <24 months.

As a result, we see the shortage lasting for at least the next five years.

Read the full article here.

Our key takeaways:

  • Lithium carbonate traded at all time highs on Friday (US$71,315/ tonne) - almost 3x higher than this time last year.
  • Price increases coming from higher electric vehicle (EV) sales forecasts which are expected to hit a record 6 million this year, double the 2021 total.
  • Soc. Quimica & Minera de Chile SA (SQM), the world’s No. 2 lithium producer, predicted a “very tight market” in the years ahead.
  • Battery-makers and automakers are rushing to lock in reliable and stable lithium supplies. Still, the lithium price continues to remain extremely high.

We hold investments from the exploration stage up to development ready projects in the lithium space.

Below is a list of our lithium Investments:

Vulcan Energy Resources (ASX: VUL) - Next Investors Portfolio

  • Zero Carbon Lithium, development stage, Germany (European Union)

European Metals Holdings (ASX: EMH) - Wise Owl Portfolio

  • Lithium, development stage, Czech Republic (European Union)

Tyranna Resources (ASX: TYX) - Catalyst Hunter Portfolio

  • Lithium, exploration stage, Angola

Latin Resources (ASX: LRS) - Catalyst Hunter Portfolio

  • Lithium, exploration stage, Brazil

Ragusa Minerals (ASX: RAS) - Catalyst Hunter Portfolio

  • Lithium, exploration stage, Northern Territory

Battery materials demand will need more than 300 new mine

Sep 16, 2022

Macro: Lithium

The battery materials thematic is a major part of our Portfolio.

After a nasty down day for the market two days ago driven by inflation fears emanating from the US, we remain confident that this theme will be part of a decade long trend.

A recent Benchmark Mineral Intelligence report highlights just how much battery materials are needed for the world to reach its ambitious decarbonisation goals.

The report notes that, “At least 384 new mines for graphite, lithium, nickel and cobalt are required to meet demand by 2035.

Here are the companies in our Portfolio that we hold as exposure to each of the four battery materials referred to in the report (click the company name to see our Investment Memo):


Sarytogan Graphite (ASX:SGA) - early stage development, Kazakhstan

Evolution Energy Minerals (ASX:EV1) - late stage development, Tanzania


Tyranna Resources (ASX:TYX) - exploration, Angola

Latin Resources (ASX:LRS) - resource definition, Brazil

Vulcan Energy Resources (ASX:VUL) - development, Europe

Ragusa Minerals (ASX:RAS) - exploration, Northern Territory (recently acquired)

European Metals Holdings (ASX:EMH) - development, Europe


Galileo Mining (ASX:GAL) - exploration, Western Australia (currently in resource definition mode on PGE project)


Kuniko (ASX:KNI) - exploration, Europe (KNI also has a nickel project)

The report also had a great infographic outlining the required tonnages of the various materials which can be found below:

We note that one Barrenjoey analyst recently upgraded their forecasts for the lithium prices for 2023 and 2024 by 36% to and 86% respectively.

As a bellwether of the battery materials space, the lithium price remains strong:

We remain confident in our battery materials Investments now, as well as over a long term +3 year timeframe.

Structural shortage in lithium supply now a bigger problem

Aug 24, 2022

Macro: Lithium

The following Bloomberg article is more proof of how fragile the lithium industry's supply-demand situation is.

A shutdown in a particular part of China can quickly cascade into supply shortages, leading to increased prices and scenarios where end users cannot purchase the amount of lithium they need.

Read the full article here.

Our key takeaways:

  • Sichuan, a city home to more than a fifth of China's lithium production, is experiencing industrial power cuts. This means the already tight lithium market is experiencing more by way of supply shocks.
  • Supply disruptions are expected to lead to increased lithium prices.
  • Rystad Energy analyst (Susan Zou) said the following - "We are estimating the lithium price momentum will last for a while, and the spot price for lithium carbonate will climb to 500,000 yuan per ton (US$73,000 per tonne) shortly,"

Another article highlighting the structural supply shortages in the lithium industry.

For us, it points to just how important it is for the mining industry to make new lithium discoveries match the exponentially increasing demand for lithium.

Without massive investment in new exploration, we won't have enough lithium to catch up with the demand from battery makers.

We hold investments from the exploration stage up to development ready projects in the lithium space.

Below is a list of our lithium Investments:

Vulcan Energy Resources (ASX: VUL) - Next Investors Portfolio

  • Zero Carbon Lithium development stage, Germany (European Union)

European Metals Holdings (ASX: EMH) - Wise Owl Portfolio

  • Lithium, development stage, Czech Republic (European Union)

Latin Resources (ASX: LRS) - Catalyst Hunter Portfolio

  • Lithium, exploration stage, Brazil

Ragusa Minerals (ASX: RAS) - Catalyst Hunter Portfolio

  • Lithium, exploration stage, Northern Territory

Drill targets identified at its Lithium project in the NT

ASX:RAS Aug 11, 2022 Announcement

Investment Memo: RAS IM-2022
Objective 1: Complete due diligence on NT lithium project
Milestone 1: Define high priority drilling targets

This morning our junior exploration Investment Ragusa Minerals (ASX: RAS) announced that desktop reviews had been completed for its Northern Territory lithium project.

RAS has now completed its target generation works and identified the highest priority lithium targets it plans to drill in its upcoming drilling program.

RAS’s project sits in the same region as two much larger capped neighbours, Core Lithium (capped at $2.5B) and Lithium Plus (capped at $62M), sharing similar geological fundamentals.

Similar to its neighbours, previous rock chip samples taken from outcropping pegmatites over RAS’s project area have returned lithium grades of up to 8.03%.

Importantly RAS has also identified what it believes to be spodumene crystals over its project area - the host rock for most of the current producing hard rock lithium projects worldwide.

RAS also confirmed today that it already has an approved work program in place for up to 21 RC/diamond drillholes, and that the company has submitted a variation to this work program to take advantage of the desktop study and drill the best targets.

Our last note on RAS focused primarily on RAS’s newly acquired lithium project and set the context for what RAS is targeting.

To see our deep dive into the project, check out our previous note here: RAS Picks up Prospective Lithium Ground Near $2.3BN Core Lithium.

Noosa Mining Investor Conference round-up

Jul 22, 2022

Macro: Commodities

Spanning three days on the pristine Sunshine Coast of Queensland, the Noosa Mining Investor Conference kicked off its 12th year on Wednesday. Attracting a diverse and large spread of corporates, brokers, retail and institutional investors, this year’s event featured over 60 companies presenting and over 1,000 people in attendance, all hosted within the coastal town's Peppers Resort.

At the event, we caught up with a number of executives from our Investment companies (including AKN, AOU, BPM and PFE) as well as companies of interest, either as potential additions to one of our Portfolios, or to gain expert insight to macro and regional headwinds impacting the markets.

The conference is held in the ideal location to mix work with pleasure, and meet a host of CEOs of ASX juniors. Each day ends with a short ‘business at the bar’ session that quickly morphs into talking tactics about where to eat and drink. On Thursday and Friday nights, many head to the Noosa Surf Club for its networking sessions, enjoying its glassed indoor area and open deck to the beach.

We look forward to providing updates on companies we met with down the road.

Tesla profit jumps, ASX lithium stocks jump

Jul 22, 2022

Macro: Lithium

Yesterday, Elon Musk’s Tesla notched a 57 per cent jump in adjusted earnings per share (EPS) in its latest quarter, a 42% rise in revenue on this time last year and forecasted annual sales growth of 50 for the foreseeable future:

The good numbers out of Tesla were enough to see a number of ASX listed lithium stocks jump on the news, including three of our lithium Investments.

These include the following (with yesterday’s moves):

Vulcan Energy Resources (ASX:VUL) - +8.76%

Latin Resources (ASX:LRS) - +8.33%

European Metals Holdings - +5.33%

What we think is playing out here is perhaps a bit of market pushback against bearish lithium narratives - which in part originated out of Goldman Sachs and Credit Suisse in mid-June.

This, despite the lithium price holding steady at a very elevated level for the last three months:

After tax loss selling in June slowly ground to an end - we’re seeing a bit of life coming back into the market - with potentially a bit of bargain hunting going on.

We remain bullish on lithium’s prospects as part of a decade-long battery metals boom and remain long-term holders of the three companies listed above.

There’s an easy way to see these companies on our portfolio page, along with our other portfolio filters (click the image to see our lithium companies all in one place):

China considering US$1.1 trillion infrastructure stimulus

Jul 15, 2022

Macro: Commodities

China plans to make up to US$1.1 trillion in financing available for infrastructure spending, which we think will increase commodity demand. Read the following Bloomberg article for details.

Read the full article here.

Below are our key takeaways:

  • China is making 7.2 trillion yuan ($1.1 trillion) in funds available for infrastructure spending.
  • According to Citigroup, infrastructure investment in 2022 is likely to rise by 7.7% versus 2021.
  • President Xi Jinping has called for an “all out” effort to increase infrastructure spending this year to fuel economic growth and meet a GDP growth target of around 5.5%.

The Bloomberg article touches on the impacts of China’s COVID induced lockdowns on the domestic economy.

With economic growth tipped to slow, the Chinese government is getting ready to lean on fiscal stimulus through infrastructure investment to spur economic growth.

We think this type of fiscal stimulus is likely to become a common theme in China and the West, with macro themes like decarbonisation requiring massive CAPEX.

This infrastructure spending forms part of our “commodities supercycle” investment thesis, where we see increased fiscal stimulus and CAPEX investment spurring higher demand for commodities already facing supply shortages.

China considering US$220Bn in infrastructure stimulus

Jul 08, 2022

Macro: Commodities

The following Bloomberg article highlights China’s plan to spend up to US$220 billion to spur economic growth through infrastructure spending.

All of this new infrastructure will require more commodities.

Read the full article here.

Below are our key takeaways:

  • China’s Ministry of Finance is considering US$220 billion of infrastructure funding aimed at shoring up the country’s beleaguered economy.

  • The funding is to be brought forward from next year’s quota, marking the first time the issuance has been brought forward due to concerns around the dire state of the world’s second largest economy.

  • The funding would primarily be used on infrastructure spending to boost an economy hit by Covid lockdowns and a housing downturn.

  • Commodities rallied in European trading hours following the news, with copper moving 3.6% higher on the London Metal Exchange.

For over two years, we have been writing about an upcoming commodities supercycle brought about by infrastructure spending, following decades of underinvestment in the “real economy”.

All this investment in the “real economy” requires raw materials, which is why we think the macro backdrop for commodities over the next decade is strong.

The Bloomberg article highlights the readiness of the Chinese government to lean on fiscal stimulus to spur economic growth at a time when the Chinese economy is slowing down.

Generally, governments would try to respond to slowdowns in economic growth by cutting interest rates. With this tool exhausted after the COVID pandemic, we think infrastructure spending will become the new policy of choice for governments worldwide.

Again, this infrastructure spending will increase demand for commodities which we expect will take commodity prices higher.

VW CEO breaks down batteries and supply chain issues

Jul 08, 2022

Macro: Commodities

The following Bloomberg article showcases the moves major carmaker Volkswagen is making in the batteries industry.

Read the full article here.

Below are our key takeaways:

  • VW is pressing forward with investments along its battery supply chain, commencing construction at a new cell factory in Salzgitter, Germany, one of five facilities in Europe under the carmaker’s PowerCo subsidiary.
  • Salzgitter is home to VW’s main motor factory, and it is where the company last year opened an $80 million facility to research, develop and test EV batteries.
  • Roughly $2 billion will be invested in the new cell factory, where production is scheduled to begin in 2025.
  • VW expects its battery business to generate €20 billion in revenue by the end of this decade.
  • VW CEO Herbert Diess said, “We are invested in some startups and we are looking forward to a joint venture together with Bosch for the machine tools and equipment for those plants, so we’re really gearing up to become one of the bigger battery cell producers”.

The news is just another sign that downstream investment in battery supply chains is showing no signs of slowing down.

VW is one of the world's largest carmakers and is heavily investing in downstream production capacity. It expects this part of its business to generate over €20 billion in revenues by the end of the decade.

This is a situation where investment in midstream/downstream (manufacturing/battery industry) is far ahead of upstream investment (mining), this leads to the supply/demand imbalances for the raw materials required to produce batteries only becoming worse.

The imbalance comes from the timing of these mega projects. Building a downstream / midstream facility could take 1-4 years whereas it takes around 7 years on average to bring a new resource discovery into the production stage.

As a result, we think that raw materials prices will remain high for at least the next decade whilst the mining industry catches up to demand.

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.