TG1-logo.jpg

TechGen Metals Ltd Limited

ASX:TG1

Last Price:

$0.091

Our Investment Summary

Date of
Initial Coverage

07-Apr-21

Initial
Entry Price

$0.200

Returns from
Initial Entry

-55%



Investment Memo: TechGen Metals Ltd (ASX:TG1) - LIVE

Opened: 16-May-2022

Shares Held at Open: 1,250,000


What does TG1 do?

Techgen Metals (ASX: TG1) is a junior metals exploration company currently focused on copper and gold projects in Western Australia and New South Wales.

We are currently most interested in: the newly acquired gold project in New South Wales, copper projects in the Ashburton Basin, its copper/gold project in the Paterson Province.

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.

The Gold sector generally outperforms other asset classes in times of volatility (e.g market bubble crash, inflation taking hold) and we believe gold provides a good hedge to a portfolio of longer term investments.

Why did we invest in TG1?

Well defined gold prospect that has never been drilled

TG1 has just completed the acquisition of a 90% interest in a gold project in NSW where the previous surface trenching returned 160m @1.2g/t Gold. These targets have never been drilled before and could be indicative of an intrusive related gold system.

Well located projects

TG1 has projects in regions that are home to some of the biggest Copper/Gold discoveries in WA. Ashburton Basin - which hosts Northern Star’s Paulsens Gold mine & the Paterson Province - where Rio Tinto recently made the massive Winu discovery.

Copper/Gold prices near all-time highs

Copper is trading at US$4.20/lb just shy of its all time high. Gold is currently trading at US$1,820/oz just shy of its all time high.

Tiny enterprise value (EV) means leverage to a discovery

TG1 has ~53 million shares on issue with ~14 million under escrow. With a market cap of $7.3M (at 14c/share) and cash in the bank of $2.6M (at March 31st 2022), the current enterprise value is only $4.7M. This means TG1 is highly leveraged to any exploration discovery.

What do we expect TG1 to deliver in 2022?

Objective #1: Drilling at the newly acquired gold project

We want to see TG1 get an RC drilling program done over the newly acquired gold project before the end of the year.

Milestones

Drill rig contracted

Drilling commencement

Drilling results

Objective #2: Drill test the Ashburton Basin copper projects:

  • Target generation works through Geophysical surveying from the Mt Boggola and Station Creek projects.
  • Drilling to test geochemical/geophysical anomalies at both the Mt Boggola and Station Creek projects.

Milestones

Geochemical/geophysical survey results

Drilling permitting

Drill rig contracted

Drilling commencement

Drilling results

Objective #3: Drilling at the Paterson Province copper projects:

We want to see the EM targets recently identified at the Harbutt Range prospect drilled in the next 12 months.

Milestones

Drilling permitting

Drill rig contracted

Drilling commencement

Drilling results

What could go wrong?

Exploration risk

TG1’s projects are all considered early stage prospects, this means TG1 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 considered stranded.

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.

Funding risk

TG1 is a very early stage exploration company with zero revenue and is reliant on continuous capital raises 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 TG1, and TG1 is unable to raise capital without significant dilution of existing shareholders.

Market risk

TG1 is an early stage exploration company chasing new discoveries. There is always a risk that a market wide sell off will hurt TG1’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 TG1 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 (late 2022)
  • 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: The authors of this article and owners of Next Investors, S3 Consortium Pty Ltd, and associated entities, own 1,250,000 TG1 shares at the time of publication. S3 Consortium Pty Ltd has been engaged by TG1 to share our commentary and opinion on the progress of our investment in TG1 over time.


Investment Milestones for TG1

Initial Investment @ 20c
🔲 Top Slice
🔲 Free Carry
Increase Investment @ 18c
🔲 Free Carry
🔲 Take Profit
🔲 Price increases 300% from initial entry
🔲 Price increases 500% from initial entry
🔲 Price increases 1,000% from initial entry
12 Months Capital Gains Discount
🔲 Hold position for 2+ years


Investor Presentation

High grade gold from soil samples at NSW gold project

ASX:TG1 Nov 29, 2022 Announcement

Investment Memo: TG1 IM-2022


This morning our junior exploration Investment Techgen Metals (ASX: TG1) put out the first batch of soil sampling results from its gold project in NSW.

The highlight from today’s announcement was the peak assay from the soil sampling which returned gold grades of 8.56g/t.

The significance of this is that the results come from surface and not from deeper drilling, getting gold grades this high at surface is generally a good indicator of shallow, high grade gold mineralisation.

The ultimate purpose of this soil sampling program is for TG1 to test for extensions to the discovery holes TG1 drilled in August and to rank high priority drilling targets which would be the focus of the next round of drilling at the project.

Of the 611 samples taken, TG1 still has ~157 assays pending, after these results come in we will be looking for TG1 to detail where it will be drilling next.

Below is where TG1’s soil sampling is focusing on overlaid with where its discovery hole was made earlier this year.


Assay results from WA copper project

ASX:TG1 Nov 28, 2022 Announcement

Investment Memo: TG1 IM-2022
Objective 1: Drill test the Ashburton Basin copper projects:
Milestone 1: Drilling results


This morning our junior exploration Investment Techgen Metals (ASX: TG1) announced a batch of assays from one of its WA copper projects at Mt Boggola.

While the drilling results returned nothing worth following up, the three drill results were completed across only a small section of TG1’s project and provides TG1 with valuable information about the project’s geology.

The results came from three RC drillholes that were testing three distinct EM anomalies sitting adjacent to high grade rock chips which returned copper grades of up to 8.7% copper.

When drilling EM anomalies, an explorer is generally looking to verify whether or not the drill targets are mineralised host rock.

TG1 confirmed in today’s release that “drilling intersected a sequence of strongly graphitic and pyritic shales which has explained the source of the EM anomalies being targeted” - this in effect means that the company hit no significant mineralisation that warrants follow up drill testing.

TG1 still however has multiple follow up exploration targets at Mt Boggola including the following:

  1. Other EM anomalies where TG1 has picked up high grade rock chips measuring up to 17.8% copper and 5.08g/t gold.
  2. Follow up exploration on rare earth targets recently found at the project.
  3. Recently identified VTEM (geophysical) anomalies.
  4. Radiometric Thorium and Uranium anomalies.


Option to acquire Pilbara nickel-copper-PGE project

ASX:TG1 Nov 21, 2022 Announcement

Investment Memo: TG1 IM-2022


This morning our junior exploration Investment Techgen Metals (ASX: TG1) entered into an agreement giving the company the option to acquire a nickel-copper-PGE project in the Pilbara, WA.

The project hosts three EM anomalies that could be interesting drill targets for TG1 should it complete the acquisition.

TG1 believes the project could be prospective for nickel-copper-PGE sulphide mineralisation, with historic drilling and rock chip sampling data confirming the right type of geology in the region.

Project's exploration history:

In 1972, four RC drillholes intersected thick sequences of logged ultramafic rock types — a common host to magmatic intrusive style nickel-copper-PGE deposits.

One of those holes returned a 111m hit with nickel grades of 0.2%.

The project then had some geochem and geophysical surveying done with rock chips confirming the right type of geology and highlighting three high priority EM anomalies that warrant drill testing.

Below are those three targets:

What is TG1 paying for the project?

For the option to acquire the project, TG1 is paying $10k upfront.

The remainder of the purchase cost only comes due if TG1 decides to actually proceed with the acquisition. The total to be paid will be $225k, split as follows:

  1. $25,000 in TG1 shares when the acquisition is completed.
  2. $50,000 in TG1 shares if the company hits a drill intercept measuring at least 5m (continuous) at 1% nickel equivalent within five years of the acquisition.
  3. $150,000 in TG1 shares if a JORC resource of at least 5mt at 1% nickel equivalent is announced within five years.
  4. 1% net smelter royalty (NSR) over the project.

We like that this deal gives TG1 exposure to an interesting set of EM targets that are yet to be drill tested, and for a relatively small capital outlay of only $10k in cash and the remaining $225k in TG1 shares (only if the deal gets completed).


First batch of assays from WA copper project

ASX:TG1 Nov 16, 2022 Announcement

Investment Memo: TG1 IM-2022
Objective 1: Drill test the Ashburton Basin copper projects:
Milestone 1: Drilling results


This morning our junior exploration Investment TechGen Metals (ASX: TG1) put out the first batch of assay results from the first of its two WA copper drill programs.

Today's results came from the Station Creek project, where TG1 completed 12 drillholes across three main targets.

Of the 12 holes drilled, four returned traces of copper with the peak intercept measuring 7m at 1.23% copper from a depth of only ~20m.

Here TG1 was drilling a cluster of IP chargeability anomalies that sit right underneath high grade rock chips (measuring up to 54.8% copper).

TG1 was effectively drilling to see if these rock chips found at surface and the IP anomaly correlated with a copper discovery underground.

Whilst the drilling results weren't enough to declare a discovery, TG1 mentioned that during the drilling program, the company did some more target generation works, identifying three high priority areas that warrant following up.

The three targets sit on the northwestern border of TG1's ground right next to drill targets that neighbour Norwest Minerals (capped at $16M) interpreted as trending towards TG1's ground.

While we don't expect TG1 to go out and immediately drill these targets, we will be watching to see if anything comes from the downhole EM surveys the company is planning.

We also note that neighbour Norwest Minerals are currently running downhole EM surveys for their targets in this region and we will be tracking these results to see how it impacts TG1.

What's next for TG1?

1) Assay results from its other WA copper project.

TG1 still has assays pending from its Mt Boggola project in WA where it is drilling for copper.

We also note that the company is doing some geophysical surveying at Mt Boggola looking for more drill targets that it can include in future drilling programs.

2) Soil sampling results from NSW gold discovery

TG1 is following up its recent discovery with a detailed soil sampling program, aiming to identify high priority follow-up drilling targets.

Assay results from soil sampling are expected later this month.


Rare earths in rock chips?

ASX:TG1 Nov 14, 2022 Announcement

Investment Memo: TG1 IM-2022


This morning our junior exploration Investment Techgen Metals (ASX: TG1) put out some news detailing the rare earths prospectivity of its copper project in WA.

Today's announcement highlighted that rock chips taken from the project showed rare earths prospectivity with grades as high as 0.1885% total rare earth's oxide (TREO).

TG1 also detailed the thorium anomalies found when re-analysing the geophysical data available over the project - the significance being that thorium anomalies can be an indicator of rare earth's mineralisation.

While TG1's exploration here has mostly focused on copper, news like this isn't uncommon for junior explorers targeting a specific commodity but come across prospectivity for additional materials.

We saw similar activity from junior explorers after lithium became hot in 2017.

One that stands out is the Kidman Resources spodumene hosted lithium discovery, made underneath a multi million ounce gold resource.

Kidman was bought by Wesfarmers in a deal worth ~$776M.

So while today's news doesn't relate directly to our Investment thesis for TG1 we will be watching to see how things develop over the coming months with respect to the rare earths targets at TG1's project.

What's next for TG1?

1) Assay results from WA copper projects

Having recently finished drilling its two WA copper projects (Mt Boggola and Station Creek), assays are expected from both projects sometime this month.

We also note that the company is doing some geophysical surveying at Mt Boggola looking for more drill targets that it would include in future drilling programs.

2) Soil sampling results from NSW gold discovery

TG1 is following up its recent discovery with a detailed soil sampling program, aiming to identify high priority follow up drilling targets.

Assay results from soil sampling are expected later this month.


Assay results in soon for gold & copper projects

ASX:TG1 Nov 08, 2022 Announcement

Investment Memo: TG1 IM-2022
Objective 1: Drill test the Ashburton Basin copper projects:
Milestone 1: Drilling commencement


Last week our junior exploration Investment Techgen Metals (ASX: TG1) put out an exploration update across its portfolio of projects.

TG1 has recently completed drilling at its two copper projects in WA and is in the middle of a detailed soil sampling program at its NSW gold discovery, with the following news pending:

  1. Assay results from WA copper projects - having recently finished drilling its two WA copper projects (Mt Boggola and Station Creek), assays are expected from both projects sometime this month.
  2. Soil sampling results from NSW gold discovery - TG1 is following up its recent discovery with a detailed soil sampling program, aiming to identify high priority follow up drilling targets. Assay results from soil sampling are expected later this month.
  3. Soil sampling at nickel/copper/PGE project in WA - TG1 is doing target generation works, and any interesting soil sampling results are likely to be followed up in future drilling programs. The soil sampling program is expected to take two weeks to complete.

We also note that TG1 ran some additional geophysical surveys at one of its WA copper projects (Mt Boggola) and has put together more targets that it thinks are worth following up with drilling.

The targets can be seen in the image below as BT1, BT2, and BT3:

We now await assay results from the copper projects in WA, after which we expect TG1 to detail what’s next for its portfolio of projects.


More target generation works at gold discovery

ASX:TG1 Oct 12, 2022 Announcement

Investment Memo: TG1 IM-2022
Objective 1: Drilling at the newly acquired gold project


Our junior exploration Investment Techgen Metals (ASX: TG1) is doing more target generation work at its new NSW gold discovery.

It's now been just over a month since TG1 confirmed a new gold discovery at its NSW gold project and the company is already back doing target generation works to firm up drilling targets to test with a follow up drilling program.

TG1 is running a soil surveying/mapping program (basically collecting rock chip samples and mapping all the outcrop).

The ultimate aim for the program is to test for extensions to the known gold mineralisation TG1 has to the north and south of its first RC drilling program.

The data gathered will then be used to map the highest priority drill targets that TG1 can include in its “stage 2 RC/Diamond drilling program”.

We are tracking all of the developments TG1 is making at its NSW gold project via our TG1 “Progress Tracker”. To check that slide deck out click on the image below or alternatively click here.


First copper project drilled, second drilling program underway

ASX:TG1 Sep 26, 2022 Announcement

Investment Memo: TG1 IM-2022
Objective 1: Drilling at the newly acquired gold project
Milestone 1: Drilling commencement
Milestone 2: Drilling results


On Friday, our junior exploration Investment Techgen Metals (ASX: TG1) put out an update across its two copper drilling programs in WA.

Our key takeaways from the update were:

  1. Drilling completed at the Station Creek Copper Project with a total of 12 RC drillholes (assays are pending).
  2. Drilling at the Mount Boggola Copper Project has commenced with six RC drillholes planned over three discrete EM anomalies (drilling should take 7-10 days to complete).

With drilling now complete at the first of its WA copper projects (Station Creek) we should soon know what sits underneath the high grade rock chips which returned 54.8% copper and 249g/t silver.

More importantly, we get to see assays from the first ever drillholes into the strong IP anomalies that TG1 found right underneath those rock chips.

Below is an image of the Station Creek targets we are awaiting for assays from:

Below you can see the cluster of EM targets at Mount Boggola where TG1 previously picked up rock chips grading up to ~8.7% copper and where it is currently drilling.


More target generation works at WA copper projects

ASX:TG1 Sep 21, 2022 Announcement

Investment Memo: TG1 IM-2022
Investment Thesis 1: Tiny enterprise value (EV) means leverage to a discovery


Our junior exploration Investment Techgen Metals (ASX: TG1) is now running more target generation work across its WA copper project (Mt Boggola).

The program is being run directly along strike to the south of the previous EM anomalies. More importantly is being done over an area previously untested by airborne EM surveys.

We hope TG1 can bring up more EM targets that it can put into its upcoming drilling program here.

Below is a map of the area being surveyed and an image of what the helicopter would look like.

Meanwhile, TG1 is currently drilling its other WA copper project (Station Creek), with the company running a 12-hole RC drilling program targeting four prospects that sit on top of high grade rock chips where grades have come back as high as 54.8% copper and 249g/t silver.

We hope to see this program's initial results over the coming weeks.


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:


$2M raised to fund copper drilling in WA

ASX:TG1 Sep 16, 2022 Announcement

Investment Memo: TG1 IM-2022
Objective 1: Drill test the Ashburton Basin copper projects:
Risk 1: Funding risk


Yesterday our junior exploration Investment TechGen Metals (ASX: TG1) raised a fresh batch of capital which it plans to use on the drilling programs at its two copper projects in WA.

TG1 raised $2M via a placement at 18.5c per share, with the shares expected to be issued on the 22nd of September.

We also noted that all of the directors participated in the placement for a combined total of $50k.

What we found interesting was that the deal was done at a relatively small discount of ~5.1% to TG1’s last traded price, especially given the current risk off sentiment around markets.

Generally, when market sentiment is low, capital raising for junior explorers is done at steep discounts. As shareholders, we think the capital raise was well managed by the company.

TG1 should now have a relatively strong cash balance to complete its drilling programs across its two WA copper projects, with TG1 already actively drilling the first (Station Creek) right now.

We have noted in previous articles the two very distinct IP anomalies TG1 found right underneath high grade copper rock chips with grades up to ~54.8%.

We are hoping that the red anomalies in the image below are full of copper.

To read up on why we think these targets are interesting, check out the “TG1’s Copper/Gold projects in WA are also shaping up nicely” section of the following note we wrote.


Gold discovery in first drill

ASX:TG1 Sep 12, 2022 Announcement

Investment Memo: TG1 IM-2022
Objective 1: Drilling at the newly acquired gold project


TechGen Metals Ltd (ASX:TG1) has confirmed a gold discovery from surface at its John Bull Gold Project, within the New England Orogen in northern NSW.

Assays results released today follow a maiden RC drilling program of 7 holes for 887m — the first drilling ever to be completed within the project area. Completion of this drilling program was a key objective that we wanted to see the company achieve in the current year.

The results revealed another broad zone of mineralisation with high grade intercepts and that the mineralisation remains open in all directions.

TG1 reported that all 7 drill holes of the program returned intercepts of greater than 1 g/t gold.

This included a number of exceptionally broad gold intersections, including 66m grading 1.14 g/t, and 17m at 1.08 g/t gold from 109m (in hole JBRC006).

Previously, on 1 September, TG1 reported that assays from drill hole JBRC001 returned 68m at 1.0 g/t gold from surface. This included a zone of higher-grade gold mineralisation — 23m grading 2.02g/t gold from 39m downhole (in JBRC001).

Grading above 2.0 g/t sees the result fall within our Bull Case expectations for the drilling program.

This cross section view shows the assay results from all 7 holes, the drill hole locations and geology:

As the discovery is from surface, the gold is more easily accessible, meaning it could be amenable to a lower cost open pit mine if developed which is faster and cheaper to build than an underground mine.

This map shows drill hole locations, previous exploration, geology and the JBRC001 intercept:

The maiden drilling program was completed along a single approximately east-west oriented drill line and thus TG1 believes that significant along-strike potential, to both the north and south, exists within the project area.

What’s next? TG1 is now planning further exploration activities to assess the size potential of the mineralised system discovered and to explore the remainder of the project area, which has only had minimal historic exploration.


Copper demand to outstrip supply by early 2030s?

Sep 07, 2022

Macro: Copper


The following article from Bloomberg touches on copper's role in the decarbonisation thematic.

The article highlights the structural shortage expected in the copper market over the coming decade. A thesis that we tend to agree with and have been making Investments based on.

With copper already the second most used industrial metal in the world and the electrification boom likely to increase demand by multiples from where it is today we think the outlook for copper demand is expected to outstrip the supply response.

At present, we hold Investments in the following companies as copper exposure:

Kuniko (ASX: KNI) - Next Investors Portfolio

  • Zero Carbon Copper, nickel, cobalt and lithium, Exploration stage, European Union (Norway)

Titan Minerals (ASX: TTM) - Next Investors portfolio

  • TTM recently started its first ever drilling program at its copper porphyry target at its project in Ecuador.

TechGen Metals (ASX: TG1) - Catalyst Hunter portfolio

  • TG1 is currently drilling one of its copper projects in WA (Australia).

Mandrake Resources (ASX: MAN) - Catalyst Hunter Portfolio

  • MAN is currently completing the acquisition of a copper project in Chile.

Auking Mining (ASX: AKN) - Catalyst Hunter Portfolio

  • AKN is currently updating its JORC resource at its project in WA. (Australia).

Click here or on the image above to read the article in full.

Our key takeaways from the article are as follows:

  • Copper is used in wind turbines, solar modules, transmission and distribution lines that carry electricity to consumers, wiring in mobile phones and the motors that power electric vehicles (EVs).
    Energy research firm BloombergNEF thinks Copper demand will increase by more than 50% between now and 2040.
  • BloombergNEF predicts that primary copper production can increase about 16% by 2040, less than the rise in demand. The research firm predicts that by the early 2030s, copper demand could outstrip supply by more than 6 million tons per year.
  • Copper mines are not able to be put into production quickly. No new copper discoveries are expected to be operational in the next three years.
  • Miners are currently mining ore grades of 0.5% copper or lower, grades that are a quarter of what they were 100 years ago. This means the ability of the majors to increase production is limited.


TG1 brings in Rio Tinto as a project partner

ASX:TG1 Sep 05, 2022 Announcement

Investment Memo: TG1 IM-2022
Investment Thesis 1: Tiny enterprise value (EV) means leverage to a discovery
Objective 1: Drilling at the Paterson Province copper projects:


This morning our micro cap exploration Investment TechGen Metals (ASX: TG1) announced a farm-in agreement with mining major Rio Tinto.

The agreement signed today will see Rio Tinto farm-in an 80% interest in TG1’s Paterson province project by funding $3M in exploration over five years.

The key terms of the agreement are as follows:

  • Rio Tinto must complete at least 3,000m of RC and/or diamond drilling.
  • $3M in exploration spending over five years.
  • A minimum of $250,000 is to be spent before 31 December 2023.

We suspect the interest from Rio in TG1’s asset comes as the major miner looks to add ground and satellite discoveries to its massive Winu discovery to the north of TG1’s project.

TG1’s project in the Paterson province makes up key Objective #3 of our 2022 TG1 Investment Memo, where we detailed that we wanted to see TG1 complete some exploration work over the prospect.

With Rio Tinto now liable for the exploration spending over the project, TG1 can focus on its two copper focused drilling programs in WA.

  1. Drilling three distinct EM anomalies sitting adjacent to high grade rock chips grading up to 8.7% copper (Mt Boggola Project).
  2. Drilling a cluster of IP anomalies that sit right underneath high grade rock chips which returned 54.8% copper and 249g/t silver (Station Creek).

Next:

We want to see the remaining assays from the company’s recent gold focused drilling program in NSW, followed by some drilling results from its copper project in WA (Station Creek).


Exploration luck in its corner, TG1 drilling for copper in WA

ASX:TG1 Sep 02, 2022 Announcement

Investment Memo: TG1 IM-2022
Investment Thesis 1: Tiny enterprise value (EV) means leverage to a discovery
Objective 1: Drill test the Ashburton Basin copper projects:
Milestone 1: Drilling commencement


This morning our junior exploration Investment Techgen Metals (ASX: TG1) started drilling its copper project in WA.

TG1 the program will consist of 12 RC drillholes over 2,000m.

The program will target a cluster of four prospects that sit on top of high grade rock chips where grades have come back as high as 54.8% copper and 249g/t silver.

More importantly though, right underneath the rock chips, TG1 has two high priority geophysical anomalies to go after.

This means that the company now has both geophysics and geochemical works pointing at the same spot across two targets (TA1 & TA2).

This type of correlated data usually increases the likelihood of drilling being successful, however, nothing is certain until the assays are in.

Drilling will target TA1 to TA4 in the image below with TA1 and TA2 being the highest priority targets (where the geophysical anomalies and high grade rock chips are).

We are looking forward to results from this program and are hoping those red anomalies can translate to a new discovery.


NSW gold project drilling completed - Assays pending

ASX:TG1 Aug 15, 2022 Announcement

Investment Memo: TG1 IM-2022
Objective 1: Drilling at the newly acquired gold project


This morning our micro cap exploration Investment TechGen Metals (ASX: TG1) completed its maiden drilling program at its newly acquired NSW gold project.

TG1’s drilling program involved seven RC drillholes over ~887 metres.

Importantly, drilling intersected quartz veining varying from 1 to 40% - which is a positive sign the company may be onto something here.

TG1’s drilling program was primarily targeting the geophysical anomaly located right beneath rock chip samples grading as high as 18g/t gold and right below a surface trench where gold mineralisation averaged 1.2g/t over ~160m.

TG1’s drilling program marks the first time these targets are being tested at depth. Assays are expected to be received in September.

In our last TG1 note, we set up some expectations for what we wanted to see from this drilling program, especially considering the drilling program would be the first time this project has been drilled.

Our expectations are as follows:

  1. Bullish case: TG1 intercepts high grade gold mineralisation. Grades >2g/t gold.
  2. Base case: TG1 finds enough gold mineralisation to warrant follow up drilling.
  3. Bearish case: TG1 hits nothing - finds no gold.


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.


Company presentation - Three drilling programs back to back

ASX:TG1 Jul 20, 2022 Announcement

Investment Memo: TG1 IM-2022


This morning our micro cap exploration Investment TechGen Metals (ASX: TG1) released a new investor presentation.

The presentation laid out what looks like a busy second half of the year full of drilling for TG1.

TG1 outlined its plan to drill THREE of its projects over the next five months, starting with:

  1. NSW (Jackadgery) - Drilling for gold.
  2. Ashburton Basin, WA (Mt Boggola) - Drilling for copper, gold and silver.
  3. Ashburton Basin, WA (Station Creek) - Drilling for copper, gold and silver

What's especially interesting is that TG1 is drilling three projects, testing high priority targets that have NEVER been drilled before.

With a market cap of just $6.1M, ~$2M in cash (as of 31 May 2022), TG1 is trading with a tiny enterprise value of just $4.1M.

If TG1 makes a new discovery at any of the three upcoming drilling programs, we think its tiny EV leaves the company with plenty of room to re-rate off the back of drilling success.

To check out the updated investor presentation, click here. Alternatively, click on the image below:


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.


Rig secured, drilling at newly acquired gold project in July.

ASX:TG1 Jun 28, 2022 Announcement


Investment Memo: TG1 2022

Key Objective #1: Drilling at the newly acquired gold project


This morning our junior exploration Investment Techgen Metals (ASX: TG1) confirmed that it has secured an RC rig for its upcoming drilling program at its gold project in NSW.

With the RC drilling rig secured, TG1 expects its drilling program to commence on 15 July 2022.

We covered the various targets TG1 has identified at its gold project in our most recent TG1 note which you can read here: Microcap TG1 pinpoints gold drill targets.

TG1’s gold project has historic surface trenching results which returned results of 160m @ 1.2 g/t gold including higher grade intervals of 5m @ 18.0 g/t gold and 5m @ 7.1 g/t gold.

After reprocessing some historic IP survey data, TG1 has also identified IP chargeability anomalies right below this surface trenching work.

Importantly, none of these targets have been drilled before, and TG1 will be the first company to drill test the structures beneath the surface trenching work.


IP anomalies right under high grade copper rock chips

ASX:TG1 Jun 07, 2022 Announcement


Investment Memo: TG1 2022

Key Objective #2: Drill test the Ashburton Basin copper projects


This morning our junior exploration Investment Techgen Metals (ASX: TG1) put out the results from some geophysics work done over its copper project in the Ashburton Basin, WA.

Importantly both of the chargeability highs sit right on top of the high grade copper rock chips where TG1 returned grades as high as ~54.8% copper and 249g/t silver.

This means that the company now has both geophysics and geochemical works pointing at the same spot across two targets (TA1 & TA2).

TG1 also confirmed in the announcement that approvals were in place for the drill testing of these targets to commence in the coming months. We are hoping those red anomalies can translate to a new discovery.


New gold project acquisition completed

ASX:TG1 Jun 06, 2022 Announcement


Investment Memo: TG1 2022

Key Objective #1: Drilling at the newly acquired gold project


A few weeks ago we covered our junior exploration Investment Techgen Metals (ASX: TG1) new acquisition of a drill ready gold project in NSW.

After a ~3 week due diligence process TG1 today announced that it had completed the acquisition of the project.

The project has never been drilled before and has drill ready targets where surface trenching has returned 160m @1.2g/t gold with higher-grade intervals including 5m @ 18.0 g/t gold and 5m @ 7.1 g/t gold).

TG1 also confirmed that its maiden RC drilling program is now planned to “commence in mid-2022” which means we won't be waiting too long for drilling to start.


Directors purchasing shares on market

ASX:TG1 May 20, 2022


Investment Memo: TG1 2022

General: Director Buying


Earlier this week we covered our junior exploration Investment Techgen Metals (ASX: TG1) acquisition of a drill ready gold project in NSW.

The market's response so far to the acquisition has been relatively muted with the share price moving from 13c per share to now trade at ~14c per share. We suspect this has more to do with general market sentiments especially considering the S&P 500 is having days where the index is down 2-4%.

The positive news is that since the acquisition both directors Andrew Jones and Ashley Hood have gone onto market and purchased a combined $15k in shares at ~15c per share (a premium to the current market price).

The purchases aren't massive but it's always nice to see the company’s directors go on market and start buying shares.

With drilling programs being prepared across the company’s copper/gold prospects in WA and at the newly acquired gold project in NSW, TG1 is moving into a relatively busy drilling season where the company will be taking a number of shots at new discoveries.

To see all of the key objectives we want to see TG1 achieve in 2022, the reasons why we continue to hold TG1 in our portfolio and the key risks to our Investment thesis, check out our 2022 TG1 Investment Memo here.


High grade copper and silver in rock chips

ASX:TG1 Mar 30, 2022 Announcement


This morning TG1 announced that it had returned 54.8% copper and 249g/t silver in rock chips from recent fieldwork at its Copper project in the Ashburton basin in WA. Below is an image of the copper filled rock chips.

Interestingly the rock chips were taken from right above a northeast to southwest trending splay fault.

Our armchair geologist interpretation is that the fault-lines and intersections between them often mean an increased probability of mineralisation occurring below the ground, which comes about from thousands of years of rock-movements well below the surface.

TG1 have now confirmed that they will start to overlay these rock chip samples with some ground based IP surveys (Geophysical surveys) to see if there are any anomalies worth drill testing below the ground.

Basically, TG1 has run through the typical target generation works process from Geochemical sampling (Rock chip sampling) to then moving into Geophysical surveys before putting together a list of high priority drill targets.

We are yet to launch our 2022 Investment Memo for TG1 but will be looking forward to the results from the geophysical surveys and incorporating these into the “what we want to see the company achieve in 2022” section of our memo.

What’s next for TG1: We want to see the results from the geophysical survey above. At the same time we are waiting for heritage surveys to be completed at the Mt Boggola copper project.