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Tempus Resources Limited

ASX:TMR

Last Price:

$0.061

Our Investment Summary

Date of
Initial Coverage

18-Feb-20

Initial
Entry Price

$0.200

Returns from
Initial Entry

-70%



Investment Memo: Tempus Resources (ASX:TMR) - LIVE

Opened: 28-Jan-2022

Shares Held at Open: 3,432,000


What does TMR do?

Tempus Resources (ASX:TMR) is an exploration company that is focussed on gold in Canada and Ecuador.
What is the macro theme behind TMR?
Gold is considered a safe-haven asset that performs well when the overall market sentiment is negative.
Historically the gold sector outperforms other asset classes in times of increased volatility (i.e bubble crashes, Inflation or geopolitical tensions).
With inflationary pressure popping up all over the world and heightened geopolitical tensions due to supply-chain issues. We think that gold serves as the perfect hedge against an unexpected economic shock occurring.

What is the macro theme?

Gold is considered a safe-haven asset that performs well when the overall market sentiment is negative.

Historically the gold sector outperforms other asset classes in times of increased volatility (i.e bubble crashes, Inflation or geopolitical tensions).

With inflationary pressure popping up all over the world and heightened geopolitical tensions due to supply-chain issues. We think that gold serves as the perfect hedge against an unexpected economic shock occurring.

Why did we invest in TMR?

Fast Pathway to production

TMR’s Canadian assets have had historical production of over 230,000 ounces and comes with a fully permitted mine. The project also has existing processing infrastructure in place so any new discoveries can be quickly put into production, especially if the gold price goes on a run.

Location

TMR’s Gold project in Ecuador is a nearology play, the asset sits adjacent to CA$2.6B capped Lundin Gold’s Fruta del Norte project. A discovery here could lead to a positive re-rate in the TMR share price.

Capital structure

Company highly leveraged to new discoveries with only 125M shares on issue. With a market cap of $15M and $4.3M in cash TMR has an EV of ~$10.7M.

What do we expect TMR to deliver in 2022?

Objective #1: Make new discoveries at the Canadian gold project.

  • High impact drilling with a focus on discovering new gold veins over the project area.
  • In particular further drilling of the areas around the newly discovered Blue-Vein.
More visible gold intercepts, assays coming soon

Milestones

Drilling program commencement

Drilling results

Objective #2: Upgrade the JORC resource at the Canadian gold project.

We want to see TMR complete another round of drilling at the Blue-Vein discovery both infill and extensional. Off the back of these results, we want to see TMR upgrade the JORC resource for its Canadian gold project.

Milestones

JORC resource estimation commenced

JORC resource completed

Objective #3: Re-start exploration at the Ecuador Gold project, and identify drill targets.

  • We initially invested hoping to see TMR aggressively explore its gold project in Ecuador, but with COVID getting in the way, exploration of this project has been difficult.
  • In 2022 we want to see TMR complete a large scale soil sampling program in H1-2022 as part of target generation works which we hope will lead to a maiden drilling program either late in 2022 or early 2023.

Milestones

Soil sampling works completed

Drill targets identified

What could go wrong?

Exploration risk

TMR has no established economic resource, this means the company is dependent on a new discovery being made to make it economically feasible to get its assets into production and producing cash flows. If a new vein or mineralised system is not found at its Canadian project then the project may become stranded.

Financing risk

TMR is doing high-risk high-reward exploration drilling which means they need access to capital that is willing to finance this type of exploration. TMR is heavily reliant on good market conditions and positive sentiment in the gold-space.

Commodity risk

Gold is a commodity that shines in periods of market volatility & negative sentiment. This doesn't happen often and when it does it can be for a very brief period.

Ecuador country risk

In late-2021 a federal election meant a more mining friendly government came into power in Ecuador but there is still a risk that the government and regulators look to make structural changes to the mining industry. The mining industry needs a stable geopolitical environment given it requires long-dated capital investment, there is a risk the government makes changes that deter capital investment and/or make projects uneconomic to explore/mine.

What is our investment plan?

The TMR share price took a beating in the last quarter of 2021, being sold off from its August 2021 high of 29.5c to be now trading at around 12c.

This has been disappointing for us and a lot of long term investors - we have been holding TMR for almost 2 years now, and have not sold a share. Our average entry price is ~18c across four separate investments.

Hitting our above objectives this year combined with a positive gold price should see TMR’s share price re-rate, given the low number of shares on issue (~125M). In 2022 we will look to sell about 20% of our holding if TMR trades above 30c.


Disclosure: The authors of this memo and owners of Next Investors, S3 Consortium Pty Ltd, and associated entities, own 3,432,000 TMR shares at the time of publication. S3 Consortium Pty Ltd has been engaged by TMR to share our commentary and opinion on the progress of our investment in TMR over time.


Next Investors Investment Milestones

✅ Initial Investment: @20c
🔲 Top Slice
🔲 Free Carry
✅ Increase Investment: @34c
🔲 Free Carry
✅ Increase Investment: @14.5c
🔲 Free Carry
✅ Increase Investment: @17.86c
🔲 Free Carry
🔲 Take Some Profit
🔲 Price increases 500% from initial entry
🔲 Price increases 1000% from initial entry
🔲 Price increases 2000% from initial entry
12 Month Capital Gain Discount
🔲 Hold remaining Position for next 2+ years


Our Past Commentary on Tempus Resources

Date Title
27-Jun-2022 $ 0.083 Market Mood Swings, Price Discovery & Enterprise Value
22-Jun-2022 $ Visible gold to kick off the new drilling season
18-Jun-2022 $ 0.067 Raising cash in a rough market and what to watch out for
06-Jun-2022 $ 0.071 The need for significant investment in rare earths, other critical materials
11-Apr-2022 $ 0.094 Why we invest in IPOs and our investment approach
21-Feb-2022 $ 0.100 Why we invest in Oil & Gas and Precious Metals
12-Feb-2022 $ 0.115 Energy Transition Metals, Raw Materials, McKinsey, Supply and Demand Economics
31-Jan-2022 $ 0.120 Inflation, US Fed Reserve, Bond Yield, Cash Buffer Portoflio
28-Jan-2022 $ TMR’s “Blue Vein” discovery mineralised along strike - Exceeding what we wanted to see.
14-Jan-2022 $ 0.125 How do Fund Managers Invest in Small Cap Stocks?
27-Nov-2021 $ 0.130 New COVID strain, Santa Rally, Market Thoughts
25-Nov-2021 $ TMR’s Blue Vein mineralised at depth - now to see what's along strike.
30-Oct-2021 $ 0.170 The fallout from the VUL short attack explained
26-Oct-2021 $ TMR discovers a new gold vein - with bonanza grades. Now to start drilling it to see how big it is...
02-Oct-2021 $ 0.190 Evergrand, Gold and Traditional Energy
30-Sep-2021 $ 0.175 TMR intersects unexpected visible gold - “accidentally” discovers potential new gold vein
18-Sep-2021 $ 0.210 Why uranium stocks are soaring, one good movie recommendation
13-Sep-2021 $ 0.205 Quick fire commentary on the six stocks making progress today
21-Aug-2021 $ 0.265 Market fluctuations and portfolio news and quick takes
19-Aug-2021 $ 0.250 TMR raises $6.28M at ABOVE current share price. Ten drill results coming next. Drill season is ON.
14-Aug-2021 $ 0.295 Bookmark it, a new Pick of the Year is coming next week
10-Aug-2021 $ 0.260 TMR out of the blocks with Bonanza grade gold hit on new seasons first hole. More expected next few days
07-Aug-2021 $ 0.255 Market swings back up as small caps scramble towards the end of the year
02-Aug-2021 $ 0.190 New geophys survey suggests TMR’s project is a monster.
24-Jul-2021 $ 0.200 Why stocks go into "Quiet Execution Mode", how to spot a cap raise, stock "Confession Season"
21-Jul-2021 $ 0.170 TMR season opening drill results due next week plus recovery rates revealed
03-Jul-2021 $ 0.175 End of Financial Year, and what happened to 88E's share price?
26-Jun-2021 $ 0.185 June tax loss selling is behind us, KNI IPO expected in August
21-Jun-2021 $ 0.180 TMR reveals visible gold, summer drilling campaign has begun
12-Jun-2021 $ 0.180 What did our investments do this week? CPH, ONE, TMZ, 88E and more...
27-Apr-2021 $ 0.210 Our Portfolio Performance from January 1st to March 31st 2021
26-Apr-2021 $ 0.170 We Just Tripled Our Holding in TMR
08-Feb-2021 $ 0.280 TMR returns “Bonanza” Grade Gold results
07-Jan-2021 $ 0.265 Our Stock Picks for 2021
16-Dec-2020 $ 0.230 TMR Observes Visible Gold over a 2 metre Interval - Assay Results to Follow
30-Nov-2020 $ 0.245 TMR’s 6000m RC Gold Drilling Continues – Honing in on Resource Upgrade
09-Jun-2020 $ 0.230 Drilling Set to Commence at TMR’s High Risk, High Reward Ecuadorian Gold Play
04-May-2020 $ 0.175 TMR Now Fully Funded for Canada and Ecuador Next Door to Where Newcrest Has Expanded its Stake
18-Feb-2020 $ 0.220 High Risk, High Reward? This $9M Capped ASX Explorer’s Neighbour went from 30¢ to $40



Investor Presentation

More visible gold intercepts, assays coming soon

ASX:TMR Jul 07, 2022 Announcement

Investment Memo: TMR IM-2022
Objective 1: Make new discoveries at the Canadian gold project.


This morning our gold exploration Investment Tempus Resources (ASX: TMR) released more preliminary drilling results, reporting more visible gold intercepts at the Blue Vein discovery at its Canadian gold project.

This is the second set of visible gold intercepts since TMR started its 2022 drilling program on 30 May 2022.

TMR has completed ~2,200 metres of drilling over nine holes targeting the Blue Vein. Assays for the first few holes are pending, with results expected over the next few weeks.

This year’s program consists of up to 30 drillholes (for ~8,500m) focused on the following targets:

  • Blue Vein discovery: 15 drillholes targeting extensions to the previous high grade gold intercepts. (First 9 holes drilled here with two visible gold intercepts to date).

  • Main and West veins: 10 drillholes targeting extensions to both discoveries.

  • Ella Zone: 3 drillholes following up a 2m intercept made last year.

  • Exploration holes: up to 5 drillholes focused on making new discoveries.

With assays pending and another ~21 drillholes to be completed, we are looking forward to the newsflow coming from TMR’s 2022 exploration program.


Visible gold observed along strike of discovery

ASX:TMR Jun 14, 2022 Announcement


Investment Memo: TMR 2022

Objective #1: Make new discoveries at the Canadian gold project


Tempus Resources (ASX:TMR) has provided an update on drilling at its Canadian gold project, reporting that it has intersected visible gold. (The market seems to like it as it’s the only stock in our portfolio that opened higher this morning.)

TMR have completed three diamond drill holes to date, targeting the southern extension of the Blue Vein, for a total of 645 metres.

Our first objective for TMR this year, as outlined in our 2022 Investment Memo was for the company to make new discoveries at its Canadian gold project. Works would include high impact drilling with a focus on discovering new gold veins over the project area, and further drilling of the areas around the newly discovered Blue-Vein.

Today’s announcement works towards that objective, with visible gold observed in drill hole EZ22-03. This is an encouraging sign that the Blue Vein structure and gold mineralisation extends along strike to the south of last year’s discovery drill hole (EZ21-12).

The core from the first three drill holes is currently being cut with samples to be dispatched to the lab this week, so we look forward to those assays.


Geochemical sampling highlights two gold/copper anomalous zones

ASX:TMR Jun 08, 2022 Announcement


Investment Memo: TMR 2022

Key Objectives #3: Re-start exploration at the Ecuador Gold project, identify drill targets.


Yesterday morning our gold exploration Investment Tempus Resources (ASX: TMR) put out the results of its phase 2 exploration program at its gold project in Ecuador.

The Phase 2 program consisted of both rock chip and soil sampling works and was designed as a larger scale follow up program to all of the initial fieldwork done in February 2021.

More importantly though, the results from this program have now confirmed that the gold/copper anomalies picked up with this exploration program directly correlate with the geophysical anomalies that were picked up in 2019.

This now gives TMR a good idea of where it needs to focus its exploration programs in the future.

The anomalies are laid out in the image below inside the red/blue/yellow outlines with the white circles showing where this round of exploration focussed on.


2022 drilling program commenced at Canadian gold project

ASX:TMR May 31, 2022 Announcement


Investment Memo: TMR 2022

Objective #1: Make new discoveries at the Canadian gold project.


This morning our junior gold exploration investment Tempus Resources (ASX:TMR) commenced its 2022 exploration program at its Canadian gold project.

The 2022 drilling program is following up over ~39-holes (9,826m) of drilling that TMR has completed since November 2020.

This year’s program will consist of up to 30 drillholes (for ~8,500m), focused mostly on the following key targets:

  • Blue Vein discovery: 15 drillholes targeting extensions to the previous high grade gold intercepts.
  • Main and West veins: 10 drillholes targeting extensions to both of these discoveries.
  • Ella Zone: 3 drillholes following up a 2m intercept made last year.
  • Exploration holes: up to 5 drillholes focused on making new discoveries.

Below (in green) is where TMR plans to drill as part of the 2022 drilling program.

TMR’s goal for the program this year is to increase the historic resource to support the development of a high-grade mine. The company plans to put out an updated resource estimate on completion of the 2022 program.


TMR: Private placement completed raising $762k

ASX:TMR Apr 06, 2022 Announcement


This morning our gold exploration investment Tempus Resources’ (ASX:TMR) raised $762k via a private non-brokered placement at CAD$0.07 (7.4c).

With TMR currently trading at ~9c per share the placement comes at a ~18% discount to the current market price.

TMR had ~$2.4M of cash left at the 31st of December 2021 and the exploration window in Canada is set to re-open in ~May with TMR expecting to get its drill rigs turning in ~June.

TMR is planning a ~30 hole, 8,500m drilling program for 2022 focussed mainly on expanding the Blue Vein discovery (15 of the 30 holes to target the Blue Vein) as well as the development of other vein targets including the Main Vein, West Vein and Ella Zone.

The ultimate aim of the 2022 drilling program will be to put out an updated NI43-101 (Canadian resource estimation code) Resource estimate for the Elizabeth project following the completion of the 2022 drill program.

Two of the three objectives we set for what we wanted to see TMR achieve in 2022 relate to exploration at its Canadian gold project, to see these objectives and why we continue to hold TMR in our portfolio check out our 2022 Investment Memo here.