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Investment Memo:

Solis Minerals Ltd (ASX:SLM)

- LIVE

Opened: 09-Jul-2024

Shares Held at Open: 363,637

Options Held at Open: 1,750,000


What does SLM do?

Shares, options and Initial Entry Price have been updated in accordance with Feb 2024 SLM contract amendment announcement

Solis Minerals (ASX: SLM) is an explorer, focused on making a new metals discovery.

SLM is an early stage explorer that could pivot in various directions towards different commodities, but for now its current assets are in copper and lithium.

What is the macro theme?

Copper is already the third most widely used metal in the world - and with demand set to increase from things such as electric vehicles and semiconductor wiring — we see it as leverage to the global electrification boom and anticipated commodities supercycle over the coming decade.

Meanwhile, lithium is a critical mineral used in Electric Vehicle (EV) battery cathodes.

SLM will be looking to replicate some of the success of Brazilian lithium companies Sigma Lithium and Latin Resources and the Brazilian government is looking to grow its lithium production.

Our Big Bet for SLM Big Bet Tooltip

SLM discovers and defines a large resource, leading to a long term re-rate in the company’s share price by >1,000%

Why did we invest in SLM?

Latin Resources success

We have had success Investing in Latin Resources which made a hard rock lithium discovery in Brazil and re-rated to a peak market cap of ~$1BN. Latin is now being called “Sigma 2.0” due to it following the nearby $1.8BN Brazilian lithium producer Sigma Lithium. In a similar way, we hope to see SLM become a “Latin 2.0”.

Same team as Latin Resources (Latin 2.0?)

SLM is backed by the same team that delivered Latin Resources discovery last year. Latin’s Managing Director Chris Gale is SLM’s non-executive Chairman. Chris Gale has taken Latin from a ~$5M market cap multi-asset early stage explorer (similar to where SLM is now) to a peak market cap of almost $1BN off its lithium discovery in Brazil. Latin is now fully focused on bringing its Brazilian lithium discovery into production.

Latin Resources is SLM’s biggest shareholder

Latin Resources holds ~15.3% of the company (as of 3 May 2024) which should mean they are incentivised to see SLM succeed. We hope that SLM can leverage its Latin Resources connection to deliver success in acquiring valuable projects in South America..

Latin Resources has a big investor following

SLM should benefit from the crowd of investors that follow (and have made money from) Latin Resources (Latin Resources has ~12,900 shareholders).

Copper price near all-time highs

Copper is trading at US$4.60/lb and could push higher as the electrification and decarbonisation macro themes get stronger.

Lithium bear market could throw up opportunities

SLM has publicly stated it is looking at making new lithium acquisitions. With the current bear market in lithium stocks, SLM could find interesting exploration ground at a reasonable valuation.

Tiny enterprise value (EV) means leverage to a discovery

At the time of this memo SLM has an EV of ~$2M, which we think means that the company is highly leveraged to a re-rate in the event of successful drilling results.

What do we expect SLM to deliver?

Objective #1: Geophysical surveys across earlier stage copper projects in Peru

We want to see SLM rank more drill targets across its earlier stage copper assets in Peru.

Milestones

not done Geophysical surveys commence

not done Geophysical survey results

not done NEW drill targets identified

Objective #2: Drilling at least one of its Peruvian copper assets

SLM has two drill ready copper projects and several earlier stage prospects in Peru. We want to see SLM drill at least one of those targets within the next 12 months.

Milestones

not done Drill permitting

not done Drill rig contracted

not done Drilling commencement

not done Drilling results

Objective #3: Acquire a new exploration project

SLM announced on May 9, 2024, that the company “continues to review potential acquisitions in various jurisdictions and commodity spaces with a focus on copper and lithium projects”. We want to see SLM make at least one new acquisition within the next 12 months, to give it another chance of making a discovery.

Milestones

not done New project acquisition #1

not done New project acquisition #2

What could go wrong?

Exploration risk

SLM’s projects are all considered early stage prospects. This means SLM is yet to make a discovery on the projects. Inherently there is a risk that drilling programs return results with no mineralisation and the projects are not considered valuable.

Commodity pricing

Copper is an industrial metal that is reliant on buoyant economic growth, if there is any significant decline in economic activity globally then copper prices are likely to de-rate.

Jurisdiction risk/political risk

Despite its abundant resources and established mining industry, Peru has a reputation as having a more complicated permitting process than other countries in South America, despite efforts at reform. If SLM has delays in the drill permitting process this could impact the SLM share price negatively. Or alternatively, changes in the Peruvian political landscape could alter the attractiveness of Peru as a mining jurisdiction.

Funding risk

SLM is a very early stage exploration company with zero revenue and is reliant on continuous capital raises (or attracting a farm in partner) so it can undertake high-risk / high reward exploration programs. There is a risk that market conditions deteriorate and investors shun high-risk explorers like SLM, and SLM is unable to raise capital without significant dilution of existing shareholders.

Market risk

SLM is an early stage exploration company chasing new discoveries. There is always a risk that a market wide sell off will hurt SLM’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 updated Initial Entry price for SLM is 55c, so we need the company to deliver a decent discovery and deliver a 5x return from its share price at the time of this Investment Memo before we consider selling.

We have 1,750,000 unlisted 9c options in SLM too which we will exercise if the price runs back towards 50c on a discovery, which will help bring down our average entry price (these shares are escrowed until May 2025).


Disclosure: Shares, options and Initial Entry Price have been updated in accordance with Feb 2024 SLM contract amendment announcement. The authors of this article and owners of Next Investors, S3 Consortium Pty Ltd, and Associated Entities, own 363,637 SLM shares and 1,750,000 SLM Options at the time of publication. S3 Consortium Pty Ltd has been engaged by SLM to share our commentary and opinion on the progress of our Investment in SLM over time.

Investment Memo:

Solis Minerals Ltd (ASX:SLM)

- LIVE

Opened: 12-Oct-2023

Shares Held at Open: 2,863,637


What does SLM do?

Solis Minerals (ASX: SLM) is a lithium explorer focused on hard rock lithium exploration in Brazil.

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. A lithium supply deficit is anticipated between 2024-2030.

SLM will be looking to replicate some of the success of Brazilian lithium companies Sigma Lithium and Latin Resources.

Brazil is already the world’s second largest producer of iron ore (second to Australia), now the Brazilian government is looking to grow its lithium production.

Our Big Bet for SLM Big Bet Tooltip

SLM discovers and defines a large resource, leading to a long term re-rate in the company’s share price by >1,000%

Why did we invest in SLM?

Lithium hot, lithium in Brazil even hotter

We have written extensively about the broader lithium market and the decade long investment thematic we are in.

Once it gets to full capacity, Sigma Lithium will be one of the world’s largest lithium producers.

Off the back of this, “Lithium Valley” was launched in the State of Minas Gerais with the ultimate view of promoting foreign investment in Brazilian lithium projects.

We think a tidal wave of capital is going to come into Brazilian lithium projects. SLM is an early stage Investment in this sector.

Junior explorers have had success in Brazil

Sigma has gone from a junior developer with a market cap of <$200M to now trade at $6.5BN. Latin Resources has also gone from <$40M to now trade at $470M. Exploration success in Brazil is typically rewarded with a re-rate in a company’s market cap.

Latin Resources success

We have had success Investing in our other Portfolio Company Latin Resources which made a hard rock lithium discovery in March 2022 and has since gone from a share price of ~3.5c to 18.5c per share. Latin is now being called “Sigma 2.0”.

In a similar way, we hope to see SLM become a “Latin 2.0” (while remembering that just because Latin performed well doesn’t mean that SLM will do the same).

Same team as Latin Resources (Latin 2.0?)

SLM is backed by the same team that delivered Latin Resources discovery last year.

Latin’s Managing Director Chris Gale is SLM’s non-executive Chairman.

Chris Gale has taken Latin Resources from pre-discovery to a maiden JORC resource in <12 months and managed to raise $72M along the way.

SLM Managing Director Matt Boyes also holds a country manager role at Latin Resources. He has also had previous success in early stage lithium - overseeing Red Dirt Mining as it grew from a $15M market cap to $200M.

Backed by Latin Resources (more than ~15% shareholder, August 2023)

As of the 8th September, Latin Resources holds 15.25% of SLM shares - which means they are incentivised to see SLM succeed. We hope that SLM can leverage its Latin Resources connection to deliver success in Brazil for itself.

Original asset spinout from a well supported, successful bigger company

The SLM to Latin Resources structure has some similarities to how Kuniko was spun out of Vulcan Energy Resources. KNI had an outrageous run from 20c to touch $3.60 in the peak of the bull market, and has now settled at 40c.

We like to back a successful management team in sectors with strong momentum. We certainly aren’t expecting anything like this again, but note that the management team does play a role in the market's interest in a company.

We also have a view that a lot of the interest in Kuniko initially came from investors that had success with Vulcan, wanting to follow the Vulcan team’s new venture.

SLM Managing Director built a $200M+ lithium company before

SLM’s MD Matthew Boyes has been there and done it before.

Boyes was the Managing Director at Red Dirt Metals where he oversaw early development of the Mt Ida lithium project - which took Red Dirt’s market cap from ~$15M to in excess of $200M.

Tight capital structure

SLM has only ~87 million shares on issue with the largest position held by Latin Resources.

As of 22 August 2023, Latin Resources held 15.25% of SLM shares and participated in the 55c placement. Latin Resources potentially hold more than 15.25% given the recent share price action on SLM - we expect LRS is continuing to back SLM.

We note there are a relatively low ~9 million options on issue too, with the majority having an exercise price of 30c.

SLM has plenty of room to re-rate if it makes a successful discovery.

Latin Resources has a big investor following

SLM should benefit from the crowd of investors that follow (and have made money from) Latin Resources (Latin Resources has ~12,300 shareholders).

SLM is following a similar style exploration process and so investors who have had success with Latin Resources may look to buy into SLM with the hope SLM becomes “Latin 2.0”.

SLM about to drill a new pegmatite rich project

SLM has an extensive package of tenements across ~25,000 hectares at the Borborema Project which is home to a 2km of known stretch pegmatite outcropping, as well as a minimum of 9 known pegmatite outcroppings across just two of the 24 tenements within the project.

The project has already turned up rock chip samples from a spodumene bearing pegmatite with lithium grades of up to 7.6%.

Adding to that, are grab samples which returned grades of 3.45% and 3.07% lithium from outcropping pegmatites.

We think there are plenty of opportunities for a lithium discovery on the two tenements which SLM is initially focussed on, with optionality to drill other tenements as well.

NOTE: This reason #10 is the only change in our Investment thesis for SLM from our previous Memo

SLM is already listed in the US, Canada and Germany

“SLM” is the ASX stock code and the primary listing, but we also note that SLM is also already listed on the following other global small cap exchanges: TSXV: SLMN 🇨🇦 OTCQB: SLMFF 🇺🇸 FSE: 08W 🇩🇪.

This means that the potential investor pool that can invest in SLM is not just limited to Australian investors, but also much larger pools of investors in the USA, Canada and Germany.

What do we expect SLM to deliver?

Objective #1: Drilling at the company’s Borborema lithium project, in Brazil.

We want to see SLM drill out its Borborema lithium project quickly.

We have set up expectations for the assays as follows:

  • Bull case (exceptional result) = Lithium grades >1.5%.
  • Base case (good result) = Lithium grades 1-1.5%.
  • Bear case (poor result) = Lithium grades <1%.

Milestones

complete Drilling commencement

complete Assay results

Objective #2: Complete due diligence on new tenement at Borborema lithium project (option) in Brazil

SLM has a 12 month due diligence period within which it can acquire its new Brazilian lithium tenement.

We want to see the company run its first drill program and do enough work to justify acquiring its project.

Milestones

cancelled Due Diligence

cancelled Acquisition completed

Objective #3: Acquire new projects in South America/Brazil.

SLM said in its 31 May 2023 announcement that ”Solis’s primary objective is to quickly position itself by acquiring highly prospective underexplored projects in the northeast of Brazil”.

We want to see the company continue to leverage its in-country experience and acquire new projects in South America/Brazil. We expect SLM to continue to acquire promising projects.

Milestones

not done Acquire/apply for new ground across South America/Brazil.

What could go wrong?

Exploration risk

SLM will be drilling a second lithium project and there is always a risk that after drilling the company doesn't find any economic lithium mineralisation. As a result exploration risk is one of the primary risks going into the upcoming drill programs. Even if SLM does hit lithium, if the result is below market expectation the share price might react negatively.

Funding risk

Like most small cap exploration stocks, SLM is not generating any revenue, and is reliant on capital markets to fuel its growth plans. SLM raised $8M (8th June 2023) and should be funded for at least the next few quarters but at some point the company would look to raise more funds to cover the development of its projects. This might be at a lower share price if this round of drilling results do not meet market expectations.

Sovereign risk

Whilst Brazil is a mining friendly country, it is a developing nation, and there is always some risk with regards to investing here.

Market risk

While lithium is a popular investment theme at the moment, lithium prices have pulled back before and its possible supply/demand dynamics change and in turn impact market sentiment for junior lithium explorers like SLM.

What is our investment plan?

Our Initial Investment is escrowed for the next two years, so we will be holding 100% of this position until June 2025.

Prior to this memo we have not sold any SLM shares and while we participated in the June 2023 placement at 55c and this stock is freely tradable, our plan is to hold until the company has had a chance to deliver some material progress.

If the company materially re-rates from the placement price on the back of positive news we may look to Top Slice some of the placement shares to try and claim back our Initial Investment and be Free Carried on the position.

This is our standard plan across all early stage exploration Investments.

The rest of the Investment plan depends on the outcomes of the company’s drill campaign and will be updated accordingly, and be governed by the 3 to 5 year holding periods as defined in our trading and hold policy disclosure.


Disclosure:

Investment Memo:

Solis Minerals Ltd (ASX:SLM)

- CLOSED

Opened: 08-Jun-2023

Closed: 12-Oct-2023

Shares Held at Open: 2,863,636

Shares Held at Close: 2,863,636

Reason Memo Closed:


What does SLM do?

Solis Minerals (ASX: SLM) is a lithium explorer focused on hard rock lithium exploration in Brazil.

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. A lithium supply deficit is anticipated between 2024-2030.

SLM will be looking to replicate some of the success of Brazilian lithium companies Sigma Lithium and Latin Resources.

Brazil is already the world’s second largest producer of iron ore (second to Australia), now the Brazilian government is looking to grow its lithium production.

[Memo Assessment - 12-Oct-2023]: Sentiment = Unchanged

[Memo Assessment - 12-October-2023]: Sentiment = Unchanged

While the lithium price has cooled again at the time of this memo, our long term conviction that the battery material will continue to be highly valuable remains unchanged.

Our Big Bet for SLM Big Bet Tooltip

SLM discovers and defines a large resource, leading to a long term re-rate in the company’s share price by >1,000%

Why did we invest in SLM?

Lithium hot, lithium in Brazil even hotter

We have written excessively about the broader lithium market and the decade long investment thematic we are in.

Once it gets to full capacity, Sigma Lithium will be one of the world’s largest lithium producers.

Off the back of this, “Lithium Valley” was launched in the State of Minas Gerais with the ultimate view of promoting foreign investment in Brazilian lithium projects.

We think a tidal wave of capital is going to come into Brazilian lithium projects. SLM is an early stage Investment in this sector.

[Memo Assessment - 12-Oct-2023]: Grade = A

Brazil continues to see a wave of mining investment and we note that in February Sigma Lithium has seen an acquisition bid from Tesla, and despite some internal hiccups is still capped at ~$4.8BN.

Junior explorers have had success in Brazil

Sigma has gone from a junior developer with a market cap of <$200M to now trade at $6.5BN. Latin Resources has also gone from <$40M to now trade at $470M. Exploration success in Brazil is typically rewarded with a re-rate in a company’s market cap.

[Memo Assessment - 12-Oct-2023]: Grade = A

Still applies.

Latin Resources success

We have had success Investing in our other Portfolio Company Latin Resources which made a hard rock lithium discovery in March 2022 and has since gone from a share price of ~3.5c to 18.5c per share. Latin is now being called “Sigma 2.0”.

In a similar way, we hope to see SLM become a “Latin 2.0” (while remembering that just because Latin performed well doesn’t mean that SLM will do the same).

[Memo Assessment - 12-Oct-2023]: Grade = A

Even better. LRS has continued to perform even as the lithium price has cooled, a testament to its leadership in Chris Gale and sustained positive progress in developing the project. LRS went as high as ~40c and now sits at ~30c which sees LRS capped at $750M.

Same team as Latin Resources (Latin 2.0?)

SLM is backed by the same team that delivered Latin Resources discovery last year.

Latin’s Managing Director Chris Gale is SLM’s non-executive Chairman.

Chris Gale has taken Latin Resources from pre-discovery to a maiden JORC resource in <12 months and managed to raise $72M along the way.

SLM Managing Director Matt Boyes also holds a country manager role at Latin Resources. He has also had previous success in early stage lithium - overseeing Red Dirt Mining as it grew from a $15M market cap to $200M.

[Memo Assessment - 12-Oct-2023]: Grade = A

Unchanged, however Non-Executive director Jason Cubitt departed.

Backed by Latin Resources (14% shareholder)

Latin Resources hold 17.79% of SLM shares - which means they are incentivised to see SLM succeed. We hope that SLM can leverage its Latin Resources connection to deliver success in Brazil for itself.

[Memo Assessment - 12-Oct-2023]: Grade = A

Unchanged.

Original asset spinout from a well supported, successful bigger company

The SLM to Latin Resources structure has some similarities to how Kuniko was spun out of Vulcan Energy Resources. KNI had an outrageous run from 20c to touch $3.60 in the peak of the bull market, and has now settled at 40c.

We like to back a successful management team in sectors with strong momentum. We certainly aren’t expecting anything like this again, but note that the management team does play a role in the market's interest in a company.

We also have a view that a lot of the interest in Kuniko initially came from investors that had success with Vulcan, wanting to follow the Vulcan team’s new venture.

[Memo Assessment - 12-Oct-2023]: Grade = A

Unchanged.

SLM Managing Director built a $200m+ lithium company before

SLM’s MD Matthew Boyes has been there and done it before.

Boyes was the Managing Director at Red Dirt Metals where he oversaw early development of the Mt Ida lithium project - which took Red Dirt’s market cap from ~$15M to in excess of $200M.

[Memo Assessment - 12-Oct-2023]: Grade = A

Unchanged.

Low EV and tight capital structure

SLM has only ~75 million shares on issue with the majority held by Latin Resources (17.79%).

We note there are ~27 million options on issue too, with the majority having an exercise price of 30c.

SLM has plenty of room to re-rate if it makes a successful discovery.

[Memo Assessment - 12-Oct-2023]: Grade = A

SLM now has 87.8M shares on issue after raising ~$8M via a placement at 55c in June.
There are now ~9M options on issue as of the Annual Report - so SLM’s cap structure remains tight, which we think could help it re-rate.

We Invested in the 55c placement too and still hold all the stock.

Latin Resources has a big investor following

SLM should benefit from the crowd of investors that follow (and have made money from) Latin Resources (Latin Resources has ~12,300 shareholders).

SLM is following a similar style exploration process and so investors who have had success with Latin Resources may look to buy into SLM with the hope SLM becomes “Latin 2.0”.

[Memo Assessment - 12-Oct-2023]: Grade = A

Unchanged - there are 1,519 SLM shareholders as of the Annual Report.

SLM about to drill what we are calling ‘Pegmatite Grand Canyon’

In the photo on the acquisition announcement, you can see the exposed spodumene crystals on SLM’s project.

SLM expects to drill test this area within the 90 day due diligence period and see what kind of high grade intersections it can deliver.

[Memo Assessment - 12-Oct-2023]: Grade = F

With SLM abandoning the Jaguar project, home to the “Pegmatite Grand Canyon” we see this as a straightforward exploration failure. While more time, money and effort may have unlocked the project's potential, we think SLM has made a prudent decision to move onto new targets in the hopes of making a major lithium discovery.

SLM is already listed in the US, Canada and Germany

“SLM” is the ASX stock code and the primary listing, but we also note that SLM is also already listed on the following other global small cap exchanges: TSXV: SLMN 🇨🇦 OTCQB: SLMFF 🇺🇸 FSE: 08W 🇩🇪.

This means that the potential investor pool that can invest in SLM is not just limited to Australian investors, but also much larger pools of investors in the USA, Canada and Germany.

[Memo Assessment - 12-Oct-2023]: Grade = A

Unchanged.

What do we expect SLM to deliver?

Objective #1: Drilling at the company’s newly acquired Lithium project (option) in Brazil

We want to see SLM drill its new lithium project prior to the 90 day project option expiry. SLM expects to be drilling in June 2023.

Once drilling starts we will be watching for the following:

  1. During drilling - We want to see visual spodumene in the drillcores. Spodumene is generally the host rock for high grade lithium, visual spodumene will be a positive first indication of potential economic lithium mineralisation.
  2. After drilling - This will be all about waiting for the assay result — we’ll be looking for lithium grades above a level that is considered typically economic.

We have set up expectations for the assays as follows:

  • Bull case (exceptional result) = Lithium grades >1.5%.
  • Base case (good result) = Lithium grades 1-1.5%.

Bear case (poor result) = Lithium grades <1%.

Milestones

complete Drilling commencement

in-progress Assay results

[Memo Assessment - 12-Oct-2023]: Grade = D

The drill program did not go well - while SLM was able to deliver visual spodumene in cores, given SLM has abandoned this project we think that the company quickly discerned that the project was not going to be economic without significant time, money and effort.

SLM noted in the 2023 annual report that, “delays have necessitated a re-negotiation of the due diligence period for the Jaguar acquisition to allow for proper systematic evaluation of the Project’s potential.”

And earlier in September SLM said in an update on the Jaguar project and the Borborema project, that it was considering the costs and benefits of pursuing the Jaguar project. Given the abandonment of the project the negotiation over the extension of the due diligence process may not have met the cost benefit analysis and SLM acted in the interests of shareholders.

Objective #2: Complete due diligence and acquire Brazilian lithium projects

SLM has a 90 day due diligence period within which it can acquire its new Brazilian lithium projects.

We want to see the company run its first drill program do enough work to justify acquiring its project.

Milestones

in-progress Due Diligence

not done Acquisition completed

[Memo Assessment - 12-Oct-2023]: Grade = A

SLM did complete their due diligence on the project and ultimately abandoned it which would have been a tough decision, but we think it is the right thing for the company to do, given the large potential US$3.7M (~$5.6M) payment to exercise the option. It is also worth noting that an extension to the due diligence process was not able to be negotiated on satisfactory terms with the vendor of the project.

Objective #3: Acquire new projects in South America/Brazil

SLM said in its 31 May 2023 announcement that ”Solis’s primary objective is to quickly position itself by acquiring highly prospective underexplored projects in the northeast of Brazil”.

We want to see the company continue to leverage its in-country experience and acquire new projects in South America/Brazil.

Milestones

not done Acquire/apply for new ground across South America/Brazil

[Memo Assessment - 12-Oct-2023]: Grade = A

SLM has expanded its footprint at the Borborema project via the acquisition of new ground in the announcement today. We’re looking forward to what this ground and the project more generally can turn up.

What could go wrong?

Exploration Risk

SLM is yet to have drilled its lithium project, there is always a risk that after drilling the company doesn't find any economic lithium mineralisation. As a result exploration risk is one of the primary risks going into the upcoming drill programs. Even if SLM does hit lithium, if the result is below market expectation the share price might react negatively.

[Memo Assessment - 12-Oct-2023]: Risk = Materialised

Risk materialised

Funding Risk

Like most small cap exploration stocks, SLM is not generating any revenue, and is reliant on capital markets to fuel its growth plans.

SLM just raised $8M (8th June 2023) and should be funded for at least the next few quarters, but at some point the company should look to raise more funds to cover the development of its projects.

This might be at a lower share price if initial drilling results do not meet market expectations.

[Memo Assessment - 12-Oct-2023]: Risk = Unchanged

We will monitor the expenses involved in drilling SLM’s Borborema project closely.

Sovereign risk

Whilst Brazil is a mining friendly country, it is a developing nation, and there is always some risk with regards to investing here.

[Memo Assessment - 12-Oct-2023]: Risk = Unchanged

Market risk

While lithium is a popular investment theme at the moment, lithium prices have pulled back before and its possible supply/demand dynamics change and in turn impact market sentiment for junior lithium explorers like SLM.

[Memo Assessment - 12-Oct-2023]: Risk = Unchanged

While lithium prices increased as SLM was drilling its first project in Brazil, prices have now returned to the low point seen just before it began drilling.

What is our investment plan?

Our Initial Investment is escrowed for the next two years, so we will be holding 100% of this position until June 2025.

We just have participated in the placement at 55c, this stock is freely tradable but our plan is to hold until the company has had a chance to deliver some material progress.

If the company materially re-rates from the placement price on the back of positive news we may look to Top Slice some of the placement shares to try and claim back our Initial Investment and be Free Carried on the position.

This is our standard plan across all early stage exploration Investments.

[Memo Assessment - 12-Oct-2023]: Grade = A

We have stuck to our Investment Plan and have not sold any SLM shares and have ridden the sell-off down, awaiting results from the new drilling program announced at the time of this memo retrospective.


Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 2,863,636 SLM shares at the time of writing this memo. The Company has been engaged by SLM to share our commentary on the progress of our Investment in SLM over time.

Our Investment Summary

Date of Initial Coverage

31-May-23

Inital Entry Price

$0.550

Returns from Initial Entry

-68%

High Point

144%

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