Greater financial flexibility following final MNF repayment

ASX:VN8   Aug 04, 2022 Announcement

Investment Memo: VN8 IM-2022

This morning, our small cap telco investment Vonex (ASX:VN8) reported that it has made the final monthly cash payment to Symbio Holdings Ltd (ASX: SYM) for its transformative $31M acquisition of the MyNetFone Direct Business (refer ASX announcement 7 June 2021).

As a result, VN8’s net cash flow will now improve to the tune of $833k per month, or about $10M annually.

VN8 is now completely unencumbered by deferred acquisition payments, providing greater financial flexibility moving forward. This will be useful for further acquisitions and growth opportunities, or accelerating repayment of the $16M debt facility (of which $14.5M has been drawn).

VN8 delivered a strong financial result in its latest quarterly report, posting record revenues, sales and customer growth. The results come on the back of the telco’s aggressive growth by acquisition strategy, which has also led to record Annual Recurring Revenues (a useful indicator for future ongoing revenue) topping $36M.

We have provided a deep dive into these financial results as well as what is in store for the company in our latest article VN8 following the telco playbook for growth.

Project development and downstream update webinar

ASX:EV1   Aug 03, 2022 Announcement

Investment Memo: EV1 IM-2022

This morning our 2021 Wise-Owl Pick of the Year Evolution Energy Minerals (ASX: EV1) announced the details for an upcoming webinar where the company plans to provide a “project development and downstream strategy update”.

EV1’s Managing Director Phil Hoskins will be running the call at 11:00am AEST (9:00am Perth time) this Friday (5th of August).

For readers who want to tune into the webinar the Zoom registration link is below:

Invictus Awarded Three Carbon Offset Projects in Zimbabwe

ASX:IVZ   Aug 03, 2022 Announcement

Investment Memo: IVZ IM-2022

This morning Our 2020 Energy Pick Of The Year, Invictus Energy (ASX: IVZ) just made a move towards potentially being the first “cradle to grave” carbon neutral oil and gas project.

In this case, “cradle to grave” means that carbon neutrality is secured from exploration through to production and the end of the project's useful life.

Today, IVZ took that first step by being awarded three different carbon offset projects over a ~30 year term over 301,565 hectares of indigenous forests.

The three projects are the Ngamo, Gwayi & Sikumi projects which are classified under the Reducing Emissions from Deforestation and forest Degradation (REDD+) framework.

REDD+ is basically a framework created by the United Nations that aims to reduce carbon emissions from deforestation and forest degradation.

IVZ is 50:50 partnered with the Forestry Commission of Zimbabwe and plans to develop deforestation programs so as to protect the indigenous forests. Under the REDD+ framework, this constitutes emissions reduction programs which then generate carbon credits that can be sold on the open market.

IVZ is now going through the verification process to get the carbon credits recognised up to the point where they are tradable, with the company expecting this to take ~12 months to complete.

With carbon credits forecast to be worth US$80 to $150/tonne in 2035, IVZ has managed to put together a strategy to reduce carbon emissions and work towards developing one of the first ever carbon neutral oil and gas projects as well as make money from the carbon credits generated.


We are waiting to see IVZ update the market with respect to a farm in agreement and, most importantly, mobilise its drill rig ready ahead of next month’s spudding.

88E's $1.55 billion neighbour strikes oil

ASX:88E   Aug 02, 2022

Investment Memo: 88E IM2
Investment Thesis 4 : North Slope in Alaska - one of the most oil rich places on the planet
Investment Thesis 3 : Nearology to Pantheon Resources

Over the weekend London listed Pantheon Resources (capped at $1.55 billion) put out an update on the drilling of its first horizontal production well adjacent to the ground held by our oil and gas exploration Investment 88 Energy (ASX: 88E).

Pantheon’s Alkaid #2 well was drilled to a total depth of 8,950 feet, hitting oil across all three formations it was targeting:

  1. The Shelf Margin Deltaic - Net ~83m oil bearing reservoir encountered which was thicker and of better reservoir quality than pre-drill estimates.

  2. The Alkaid anomaly - Net ~47m oil bearing reservoir encountered with the interception exceeding pre-drill expectations of reservoir thickness and quality.

  3. The Alkaid Deep anomaly - Reservoir quality encountered was better than pre-drill expectations. Analysis is currently underway to determine net reservoir thickness.

The connection to 88E is that the reservoir that Pantheon is intercepting are the same ones that extend into 88E’s ground to the south.

Interestingly the London markets liked Pantheon’s initial results, with Pantheon’s share price up ~20%, adding a total of ~$300M to Pantheon’s market cap.

Pantheon is now preparing to drill horizontally to get a flow test for the well which will ultimately determine whether or not the project can produce economically.

If Pantheon puts out commercially viable flow rates, we suspect the market will start to show an interest in 88E, speculating on the probability of the reservoirs extending into 88E’s ground.

Widespread elevated helium, gradiometry next

ASX:NHE   Aug 02, 2022 Announcement

Investment Memo: NHE IM-2022
Objective 2 : Target generation to produce two drillable targets
Milestone 1 : Airborne gravity gradiometry (Q2-Q3 2022)
Milestone 2 : 3D seismic (Q2-Q4 2022)
Milestone 3 : Geochemistry survey (Q2-Q3 2022)

Our helium exploration Investment Noble Helium (ASX:NHE) has reported “outstanding” Soil Gas Survey results from the western side of its North Rukwa Basin Helium Project in Tanzania.

NHE got up to 7.3 parts per million (ppm) of helium on the western side of the project from Soil Gas Surveying (part of the geochemical arm of its Tanzanian helium exploration).

This was part of an overall pattern of “widespread elevated” helium levels that NHE found.

That 7.3 ppm result is 35% above background levels which is a promising early sign that there is helium trapped below NHE’s grounds.

NHE is now moving to the eastern side of its project for additional Soil Gas Surveying to be completed by early August and detailed analysis to come in mid-August.

It’s all part of an exploration program that will combine geochemistry with the legacy 2D seismic data, airborne gravity gradiometry and a more sensitive 3D seismic survey to generate two targets for drilling in 2023.

In yesterday’s announcement, it was also pleasing to see that the plane for the airborne gravity gradiometry is due to arrive this week and the survey will commence by this weekend.

NHE will be using a top of the line Lockheed-Martin gradiometry instrument which should contribute to target generation with “maximum confidence.”

It’s good to see NHE sticking to a tight schedule as it goes after a potentially globally significant helium resource.

We’ve updated our milestones accordingly on our NHE Investment Memo:

🔄 Airborne gravity gradiometry (Q2-Q3 2022)

🔄 Geochemistry survey (Q2-Q3 2022)

We also appreciated NHE providing an update on how the 3D seismic campaign interacts with its ongoing knowledge transfer and stakeholder efforts. The survey is anticipated to create 250 jobs and the vast majority of those jobs will be local Tanzanians drawing on their relationship with University of Dar Es Salaam.

What’s next for NHE? In addition to the gradiometry survey and the final analysis of the geochemistry results, the big milestone coming up is the 3D Seismic survey in Q3 2022, right around the corner.

RC drilling aims to unveil an even larger mineralised system

ASX:GAL   Aug 02, 2022 Announcement

Investment Memo: GAL IM-2022 [Archive]
Objective 3 : Cobalt and palladium exploration at Norseman

Following up on its Callisto PGE discovery at the Norseman Project in WA, our long term exploration Investment, Galileo Mining (ASX:GAL) has commenced a 10,000 metre RC drill campaign.

The ~50 drill hole campaign will see GAL begin to test the true extent of mineralisation discovered at Callisto. GAL has five kilometres of untested strike length along with good potential for more mineralisation of the same style.

The drill campaign consists of 50-metre spaced drill holes around the known mineralisation as well as stepping out up to one kilometre to the north of the existing drill holes.

Below are the target zones around known sulphide mineralisation for the upcoming drill campaign:

Regional drilling up to one kilometre away (off plan to the north) from existing drill holes is also planned within the current program.

What’s Next?

The drilling program is expected to run for twelve weeks with samples will be delivered to the lab weekly and assay results from this round of drilling expected from early September 2022.

GAL also reports that it has signed a diamond drilling contract with that program planned to start in the coming weeks.

Callisto geological section with discovery drill hole NRC266:

$1.05M raised, entitlement offer launched to raise $3.9M.

ASX:TMR   Aug 01, 2022 Announcement

Investment Memo: TMR IM-2022
Risk 2 : Financing risk

Late last week our gold exploration Investment Tempus Resources (ASX:TMR) detailed its latest capital raise.

TMR raised a total of $1.05M via a placement at 5c per share with the shares expected to be issued on 3 August (this Wednesday).

TMR plans to use the cash to finance the ongoing drilling program at its Canadian gold project where the company has already drilled the first 14 of the planned 30 drillholes.

Investors who participated in the raise also got issued one free option for every share purchased. The options expire in three years and are exercisable at 7.5c per share.

We also saw the company announce an entitlement offer of up to $3.9M in new shares for existing shareholders, on the same terms and conditions as the placement.

We especially like that TMR has kept the placement portion of the raise small. and offered almost 4x more in shares to existing shareholders. With the share price trading at ~7c per share, the entitlement offer gives existing shareholders the opportunity to top up their shareholdings at a discount to the current market price for TMR.

Given where the company’s share price is trading, we like that TMR hasn’t solely reserved the placement for sophisticated investors.

The key dates for the entitlement offer are:

  • Ex date 9 August 2022 - This is when TMR shares start trading on an ex-rights basis, meaning the rights will no longer apply if shares are purchased on or after this day.

  • Record date 10 August 2022 - This is the date at which entitlements are calculated, i.e if you are a shareholder in TMR at this date then you get to purchase shares in the entitlement offer.

  • Offer closing date 29 August 2022 - Last day to accept entitlement.

  • Offer issue date 5 September 2022 - This is when the entitlement offer shares are expected to be issued.

High grade manganese confirmed ahead of first drilling

ASX:PFE   Aug 01, 2022 Announcement

Investment Memo: PFE IM-2022
Objective 2 : Drilling at PFE’s Manganese project.

Pantera Minerals (ASX:PFE) has identified multiple high grade manganese targets at its WA manganese project, Weelarrana.

The previously reported 22 rock chip samples analysed by pXRF returned equivalent or improved manganese grades. The assays of crushed and pulped rock samples included grades of up to 44.1% manganese.

PFE expects to commence RC drilling in early October 2022 upon completion of the Cultural and Heritage survey. The survey was scheduled for late May 2022 but was delayed due to rainfall and is now scheduled for late August 2022.

PFE has planned a 1500m RC drilling program at Area 1, while drill planning and permitting is underway for Areas 2 and 3 with drilling expected in Q3 2022.

We look forward to the upcoming drill program as this will be the first time the manganese mineralisation here has been drill tested.

ONE quarterly - more hardware ahead of sales push

ASX:ONE   Jul 29, 2022 Announcement

Investment Memo: ONE IM-2022
Objective 1 : Fast revenue growth and contracted beds in excess of 15,000

Our health tech Investment Oneview Healthcare (ASX:ONE) quarterly report has revealed a significant investment in hardware ahead of a major sales push in Q3.

The outlay on hardware was €500K (~A$730k) which was part of the reason net cash outflows for this quarter were €1.98m (~A$2.9m).

Receipts from customers were down 19% on last quarter from €1.6m to €1.3m (~A$2.3m - $2.8m). We know that ONE sales are lumpy so this isn’t completely out of character for the company.

Other things to note were that the increased sales and marketing spend seems to be having the desired effect with the US Sales pipeline growing by over 100% for the quarter.

Given the share price action today, it seems that for now the market is relatively pleased with the results.

Our perspective on the ONE quarterly is that while we’d hoped the company was closer to operating cash flow positive, the sales pipeline should see some bigger conversions in the next quarter after the breakthrough BJC Health System deal in May.

That was ONE’s biggest deal ever and we hope it’s a sign of things to come.

Although there was no specific update on total contracted beds (which is like an active user metric for any tech company), we did some back of the envelope calculations based on the information in this quarterly report, and we think ONE is now hovering around the 14.5K contracted bed mark.

That’s mighty close to our #1 objective from our ONE Investment Memo.

What’s next for ONE? We want to see a big deal come through from the sales pipeline and ONE to smash through the 15K contacted bed mark.

Pilot production program commencing soon

ASX:EXR   Jul 29, 2022 Announcement

Investment Memo: EXR IM-2022
Objective 1 : Pilot production program at the gas project

This morning, our 2019 Energy Pick of the Year Elixir Energy (ASX: EXR) put out an update on its upcoming pilot production program for its coal bed methane (CBM) gas project in Mongolia.

EXR report that all of the equipment required for drilling, completion and testing of the two production wells is now in Mongolia, and the extended pilot production program is on track to start towards the end of August.

EXR has engaged the same group of drilling contractors who worked for Rio Tinto on its Oyu Tolgoi mine, located with EXR’s landholding in Mongolia, which we hope will translate into an efficient work program.

EXR expects completing and producing these wells “within weeks of drilling being completed”, with the commercial viability of the wells to be assessed over months by measuring gas flow rates.

This should mean that by early 2023 we will know whether EXR’s wells can commercially produce gas.

The pilot production program is key objective #1 in our 2022 EXR Investment Memo, so today’s news shows that the company is making progress towards starting and completing something we have been patiently waiting for.

To see all the other key objectives we set that we wanted EXR to achieve this year, check out our 2022 EXR Investment Memo here.

New coal bearing sub-basin discovered

ASX:EXR   Jul 29, 2022 Announcement

Investment Memo: EXR IM-2022
Objective 2 : Exploration drilling

This morning, we also got an exploration update from our 2019 Energy Pick of the Year, Elixir Energy (ASX: EXR).

The highlight of today’s announcement was that EXR discovered yet another coal bearing sub-basin at its “Venetian-1” exploration well.

The positive for us here is that EXR continues to discover new sub-basins at parts of its project where we have set no expectations. We see these sub-basin discoveries as almost like free options at growing the size of EXR’s project and make for unexpected positive newsflow.

A bit of a dampener on the positive update today was the mechanical issues EXR is having with its drill rigs, which is, in turn, slowing down the progress of the 2022 exploration program.

Back to back record quarterly sales result

ASX:VN8   Jul 29, 2022 Announcement

Investment Memo: VN8 IM-2022

This morning, our small cap telco investment Vonex (ASX:VN8) produced another strong quarterly result, underlined by revenues increasing 81% year-on-year (YoY) to a new record $10.5M.

The previous record was delivered last quarter, with $10.2M in revenues, obviously a pleasing trend for shareholders.

The robust financial results provide an endorsement of the company’s aggressive acquisition strategy, namely: Voiteck (acquired January 2022), the Direct Business (August 2021), Nextel (February 2021) and 2SG (March 2020). These acquisitions have accelerated customer acquisition and expanded VN8’s national footprint, feeding into the increases in sales and revenue.

Another key metric we track is annual recurring revenue (ARR), which basically indicates the amount of revenue that a company expects to repeat. As at 30 June 2022, VN8 has an ARR of ~$36.2M, up 97% YoY.

With VN8 capped at ~$23M - well below its ARR - and cash at bank of $3.2M at the end of the quarter, we like the prospects for a positive market re-rate in the year ahead.

Also of significance during the quarter, VN8 entered a binding heads of agreement with Commonwealth Bank-backed telco provider, More to become its exclusive provider of Hosted PBX services to new and existing CBA customers.

VN8 will also deliver a new hosted PBX and IP telephony enablement platform for More's new and existing small to medium enterprise (SME) customers. We expect this to positively impact ARR through new license fees, hardware and call carriage.

The quarterly results bodes well for our key objectives we’d like to see VN8 achieve this year:

Following today’s results, we plan to provide a more detailed update on VN8 in early August.

DXB Quarterly Reveals FSGS Patient Numbers

ASX:DXB   Jul 28, 2022 Announcement

Investment Memo: DXB IM-2022
Objective 4 : Progress the Phase III Clinical Trial for Rare Kidney Disease (FSGS)
Milestone 6 : Patient Recruitment Updates

The Dimerix (ASX:DXB) quarterly report released yesterday morning gave us a good look at how the company is tracking, in particular with our “main bet,” the FSGS trial.

FSGS or focal segmental glomerulosclerosis is characterised by a dysfunction in the part of the kidney that filters blood.

11 patients (or 15% of the target 72 patients) have now been recruited to the company’s DMX-200 phase 3 trial for FSGS and 60% of the 75 sites for the trial are now activated.

This is the primary reason we are Invested in DXB.

DXB also said that it expects the remaining 40% of clinical trial sites to complete protocol training and activation in the next 4-6 weeks.

This marks the first update on patient recruitment:

🔄Patient Recruitment Updates

DXB flagged cash outflows of $7.2M, leaving the company with a cash balance of $9.6M.

We’re mindful that clinical trials are expensive to get up and running and the start up costs represent the largest chunk of clinical trial costs, so we’re expecting the cash outflows to be significantly reduced next quarter.

We were glad to hear DXB reiterate that it is on track for the first interim analysis for the FSGS trial, which will be released in the first half of 2023.

Quarterly report - advancing multiple clinical trials

ASX:BOD   Jul 28, 2022 Announcement

Investment Memo: BOD IM-2022

Our long-term Wise-Owl cannabis investment, BOD Australia (ASX:BOD) released its quarterly results earlier today.

While the company improved in several financial metrics that we track on a quarter-vs-quarter basis (total quarterly sales up 46% to $943,608), it declined on a previous-corresponding-period last year basis ($1,173,498).

This is partially explained by the company now focussing more on its R&D pipeline with the hopes of unlocking several growth opportunities (and future revenue sources) in the year ahead.

Bod holds $3.67M cash at bank as of 30 June 2022, which we think likely means the company doesn’t need to raise capital for the rest of the year, unless a significant new investment/ growth opportunity arises.

Capped at ~$10.5M, Bod’s enterprise value (EV) is now under $7M.

That said, as per our Investment Memo, we are more interested in how Bod’s numerous clinical trials are advancing.

On this front, we like the progress being made. During the quarter, BOD dosed the first patients for the following two trials:

  1. Insomnia (Phase IIb) - for an over-the-counter (OTC) treatment available at pharmacists
  2. Long-COVID (Open label, “Proof of Concept”)

These both address substantial markets, and hence successful outcomes on either trials could ultimately lead to new products and potentially prosperous revenue sources. Typically this is when significant market re-rates can occur.

Of interest, Bod is planning to launch a new low dose cannabidiol product through Australian SAS-B channels (i.e. via a prescription from a medical practitioner), providing the company with another sales channel and additional delivery format for consumers ahead of any OTC launch.

We will provide a more detailed analysis on the progress of the clinical trials in August.

More assay results on its way to a JORC resource

ASX:LRS   Jul 27, 2022 Announcement

Investment Memo: LRS IM-2022
Objective 4 : JORC resource at the Brazilian lithium projects
Milestone 1 : 25,000 metre infill resource definition drilling
Milestone 2 : Assay results (ongoing)

This morning Latin Resources (ASX: LRS) put out an update on its resource definition drilling program at its Brazilian lithium project.

LRS is now ~25% of the way through its 25,000m drilling program, after which it hopes to put together a maiden JORC resource.

Some of the notable intercepts from today’s release were:

  • Drillhole 17: 13.86m at 1.33% lithium from 173m.
  • Drillhole 18: 9.16m at 1.68% lithium from 133m.
  • Drillhole 19: 11.96m at 1.64% lithium from 206m.

Given these results are from an infill drilling program, the lithium intercepts are expected by the market, and we think the reason why there was limited share price movement on this news today.

These results continue to prove out LRS’s lithium deposit, and with the arrival of a fourth diamond drill rig on site, LRS is moving quickly to establish a maiden JORC resource estimate for its new discovery.

We think that this will be LRS’s next major catalyst, allowing the market to compare its deposit to larger peers with established JORC resources.

We set the following expectations for LRS’s JORC based on peer comparisons in the lithium sector.

  • Bullish case (Exceptional) = >15Mt JORC resource
  • Base case = 5-15Mt JORC resource
  • Bearish case = <5Mt JORC resource

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

Presentation at Metals and Mining conference

ASX:GTR   Jul 27, 2022

Investment Memo: GTR IM-2022

This morning we noticed that our US uranium exploration Investment GTI Energy (ASX: GTR) would be presenting the virtual Metals and Mining conference powered by OTCMarkets.

GTR’s Executive Director Bruce Lane will be presenting at 11:30 pm AEST tonight.

For readers who want to stay up late and view the presentation, they can do so using the following link:

Non-binding term sheet signed for US$25M debt facility

ASX:MNB   Jul 12, 2022 Announcement

Investment Memo: MNB IM-2022
Objective 1 : Definitive Feasibility Study and Project Financing
Risk 2 : Funding risk

This morning, our fertiliser and green ammonia/hydrogen Investment Minbos Resources (ASX:MNB) made more progress towards financing the development of its Angolan fertiliser & green ammonia/hydrogen projects.

In addition to a $25M capital raise, MNB also confirmed that a non-binding term sheet had been signed for a $25M debt facility.

The term sheet was signed with the same group of investors who cornerstoned the capital raise for a total of $15M (syndicate of investors led by the chairman of the world’s largest battery anode producer).

The term sheet is non-binding meaning the debt facility hasn’t been put in place as yet, this just means that MNB have interest from a group of financiers and should the company wish to take out the facility they can go back and negotiate a final agreement with them.

The specifics of the term sheet are set out in the announcement as follows:

  • Facility size: US$25 million available in tranches of US$5 million
  • Term: 5 years
  • Interest rate: Market interest rates with potential equity participation
  • Use of proceeds: CAPEX for MNB’s phosphate (fertiliser) project.
  • Conditions: MNB needs to complete a DFS, secure offtake agreements and the financiers have a right to complete due diligence.

The significance of this term sheet is that it encompasses most of the CAPEX requirements that MNB had estimated in its 2020 scoping study.

The 2020 scoping study had estimated that MNB’s phosphate (fertiliser) project could be put into production at a low upfront CAPEX cost of only US$22-28M.

Given that the debt facility covers US$25M and potential equity participation in the future, MNB now have a non-binding commitment from a group of investors.

With the non-binding term sheet backstopping its project, MNB confirmed in today’s announcement that MNB that a DFS is to be delivered and construction expected to begin Q3-2022.

$25M capital raise secured with $15M cornerstone investment

ASX:MNB   Jul 12, 2022 Announcement

Investment Memo: MNB IM-2022
Objective 1 : Definitive Feasibility Study and Project Financing
Risk 2 : Funding risk

This morning our fertiliser and green ammonia/hydrogen Investment Minbos Resources (ASX:MNB) came out of a trading halt after completing a capital raise.

MNB managed to raise $25M via a placement at 11c per share with a $15M cornerstone investment from a syndicate of investors led by the chairman of the world’s largest battery anode producer.

The syndicate is led by Hong Kong based Mr. Liang Feng who is also founder and chairman of Shanghai listed “Shanghai Putailai New Energy Technology” which has a market cap of US$18 billion and is the world’s largest anode materials maker for lithium batteries.

We also noticed that MNB’s directors and management team are also participating in the capital raise for a total of $845k.

We like seeing management teams that have skin in the game and see this as a vote of confidence from the managers leading our Investment in MNB.

The capital raise will see MNB issue a total of 227,272,728 shares split as follows:

  • 131,414,473 shares to be issued on the 20th of July 2022.
  • 95,858,255 shares to be issued after shareholder approvals in August.

In the short term, we expect to see the share price hold around the 11c per share level as some of the investors who participated in the capital raise are likely to sell on market and take their profits.

With the market looking a little fragile, we suspect there will be more of these type investors than we are otherwise used to seeing.

That being said, we think the big glowing positive from today’s announcement is that MNB was able to raise this much capital in an otherwise tough market.

For us, this level of funding underlines the serious potential that MNB’s fertiliser and green ammonia/hydrogen projects have.

Australian PM: “we see enormous potential in hydrogen”

ASX:PRL   Jul 12, 2022

Investment Memo: PRL IM-2022
Investment Thesis 2 : Australia is aiming for net zero emissions by 2050

This morning Prime Minister Anthony Albanese addressed the Sydney Energy Forum with a 26-minute speech about the future of the energy industry in Australia.

One thing that stood out to us was his remarks concerning the hydrogen industry. As you can see in the clip below, he said that the Australian government “see enormous potential in hydrogen”.

He added that “Australia has all of the ingredients needed to become a major hydrogen producer and exporter [...] with over 91% of hydrogen production planned being green hydrogen”.

He also stated, “we have plans to establish hydrogen refuelling infrastructure to support the next generation of heavy vehicles right around the country”.

Clearly, the Australian government is taking the hydrogen industry seriously and has big ambitions to make Australia a hydrogen superpower on the world stage.

We have long held the view that Australia’s access to abundant natural renewable energy resources, including solar and wind power, uniquely positions it to produce the cleanest form of hydrogen - green hydrogen.

As a result, we are Invested in Province Resources (ASX: PRL), which is looking to develop Australia's first truly zero-carbon, green hydrogen project.

To see why we are Invested in PRL, the key objectives we want to see the company achieve in 2022 and the key risks to our Investment thesis, check out our 2022 PRL Investment Memo here.

Some of the best graphite in the world?

ASX:EV1   Jul 12, 2022 Announcement

Investment Memo: EV1 IM-2022
Objective 2 : Assess Downstream “Value Add” Opportunities
Milestone 3 : Market update battery specific value add (studies or partnerships)

This morning our 2021 Wise-Owl Pick of the Year, Evolution Energy Minerals (ASX:EV1) made further progress with its commercial verification program to evaluate the suitability of its graphite fines product for battery anode materials.

EV1 confirmed that thermal purification achieved an industry-leading purity level of 99.9995% carbon (C).

What we’re really interested in from today’s EV1 announcement is the “inversion” of the traditional battery anode process flow sheet:

Importantly, this flow sheet results in a product that exceeds the required purity level for battery grade spherical graphite, while also using an environmentally friendly thermal purification processing methodology.

This compares to the conventional approach which is currently responsible for producing 100% of the world’s battery grade graphite.

The key difference between the two is that the conventional process uses highly toxic chemicals such as hydrofluoric (HF) acid — existing anode manufacturers use between 400-600kg of HF acid for every tonne of graphite feedstock.

Thermal purification, on the other hand, is completely sustainable using no toxic chemicals. This fits in with EV1’s strategy of producing net zero carbon graphite.

We think this is a step in the right direction towards positioning EV1 as the world’s leading producer of the most green and sustainable battery anode materials.

The thermal purification process also has cost advantages. EV1 explains that the cost of the conventional process is ~US$700 per tonne as compared to the thermal purification process which EV1 expects to cost ~US$500 per tonne.

EV1 is making strong progress towards qualifying its graphite fines product as suitable for use in both high performance batteries and in the nuclear industry — where graphite products can fetch as high as US$30,000 per tonne.

We covered this test work in our last EV1 note which you can read here: EV1’s Graphite Meets Purity Standards – Good for Batteries and Nuclear Energy

What’s next for the ongoing test work:

EV1 has confirmed that downstream processing and battery anode testwork is ongoing. The company expects to release the results of testwork on the production of coated spherical graphite in the coming weeks.

Subject to the results of that testwork, EV1 intends to undertake a feasibility study on the production of coated battery anode materials and other advanced battery products.

This, we hope, will lead to improved overall project economics for EV1 as it moves towards making a final investment decision to develop its graphite project in Tanzania.

African gas in high demand, EU looks to replace Russian supply

ASX:IVZ   Jul 11, 2022

Investment Memo: IVZ IM-2022

The following article from Bloomberg highlights the European rush to African gas supplies to replace Russian supply.

Read the full article here.

Below are our key takeaways:

  • The EU wants to import as much African gas as it can.
  • Nigeria has 3% of the world's proven gas reserves, yet has tapped almost none of it. Like most African countries, what has been extracted is mostly sent to Europe, which now wants to import even more to make up for supplies lost to Moscow’s invasion of Ukraine.
  • Italy recently signed a deal to buy gas from Angola and the Democratic Republic of the Congo, while Germany has been looking to secure supplies from Senegal.
  • Many African leaders support boosting gas exports to help their cash-strapped governments, but they also want access to financing that would allow them to harness the fuel’s potential to create domestic natural gas markets.
  • A recent spate of major discoveries has led to big private projects with supermajors including Exxon Mobil, BP and Shell spending tens of billions in Mozambique, Tanzania, Senegal and Mauritania to extract more gas for export.
  • The supermajors plan to grow existing LNG facilities in Nigeria and Angola to help Africa produce 470 billion cubic metres of gas per year by the late 2030s, equal to about 75% of Russian output this year, according to consultants Rystad Energy.

The article clearly lays out the structural demand for African gas from developed EU nations like Germany, Italy and Spain.

The demand comes as gas prices reach astronomical highs all across the EU and the need to transition away from a reliance on Russian gas becomes a lot clearer.

We have exposure to this macro thematic through our 2020 Energy Pick Of The Year Invictus Energy (ASX: IVZ) which is gearing up to drill its elephant scale prospect in Zimbabwe with the potential to open up an entirely new oil and gas basin in Zimbabwe.

Just last week, IVZ upgraded its prospective resource to a giant 20 trillion cubic feet (Tcf) and 845 million barrels of gas condensate.

The prospective resource now stands at a total of 4.3 billion barrels of oil equivalent on a gross mean unrisked basis.

With drilling expected to commence in August, we think IVZ has timed its drilling program to perfection — any new discovery is likely to garner a lot of international interest, especially from the EU.

Natural gas to speed up Australian transition to clean energy?

ASX:TEE   Jul 11, 2022

Investment Memo: TEE IM-2022

The following Bloomberg article highlights the need for gas as a transitional energy source from fossil fuels toward cleaner energy technologies.

Read the full article here.

Below are our key takeaways:

  • Natural gas will help accelerate Australia’s transition to cleaner energy, according to Former Chief Scientist and government special adviser on low emissions technologies, Alan Finkel.
  • With Australia looking to phase out its reliance on coal-fired power plants and pivot toward solar and wind, natural gas will need to act as a stopgap to ensure reliable energy supply, said Finkel.
  • Finkel also said that energy generated from coal is “too slow to respond” and won’t be able to support the kinds of green technology that will turbocharge the transition.
  • Finkel closed by saying, “There is a pursuit of perfection to say get out of fossil fuels completely, and eventually we will. But for the next 10, 15, and 20 years, being able to call on natural gas to firm up the solar and wind electricity in a country like Australia will enable us to develop and deploy solar and wind at enormous scale -- more quickly than if we cannot call on natural gas”.

As of 2020, ~54% of all electricity generation in Australia was produced by coal fired power plants, gas contributed ~20%, and renewables contributed ~24%.

The interview with Finkel states what we think is obvious, that it isn’t possible to just shut down 54% of power generation capacity and replace it with cleaner renewable technologies overnight.

We agree with Finkel’s comments about needing new investment in the gas industry to act as a “stopgap” for the next “10-15-20 years”.

Eventually the world, along with Australia, can transition away completely from fossil fuels. But over the medium term we think the oil and gas industry is being starved of new investment at the expense of energy security.

We’ve long held the view that gas is the natural transitional fuel that can bridge the gap between fossil fuels and cleaner energy sources. Burning gas to produce power has a far lower carbon footprint compared to coal and oil, with the added benefit of having all of the infrastructure in place to produce and consume it.

As a result, we are Invested in gas explorer Top End Energy (ASX: TEE), which holds prospects in the NT and in QLD.

To see why we are invested in TEE and what we are looking to see the company achieve over the next 12 months check out our 2022 TEE Investment Memo here.

Highest grade palladium-platinum assays yet

ASX:GAL   Jul 11, 2022 Announcement

Investment Memo: GAL IM-2022 [Archive]
Objective 3 : Cobalt and palladium exploration at Norseman

It was more good news for our long term exploration Investment Galileo Mining (ASX:GAL) this morning.

GAL announced the highest grade palladium and platinum assays to date at its “Callisto” PGE discovery at its Norseman project in WA.

Assays from four drill holes measured as high as 8.25 g/t Pd and 1.94 g/t Pt over one metre in drillhole NRC275 — the highest-grade palladium and platinum assays GAL has recorded so far.

These high-grade palladium and platinum results show potential for the occurrence of high-grade zones within the overall mineralised system.

Importantly, the assays confirm that the discovery extends along strike to the east over 300m. GAL also confirmed that mineralisation remains open in all directions, which means the discovery has more room to grow into.

With over five kilometres of prospective strike length at Callisto, there remains a lot more drilling to come.

Assays received for drillholes NCR274, NRC275, NRC276, NRC277 (circled in blue).
Assays received for drillholes NCR274, NRC275, NRC276, NRC277 (circled in blue).

As you can see, the mineralisation (in red) remains open and starts to dip east, further onto GAL’s mining lease. NRC278 ended in mineralisation at this location and will be completed with a diamond drill rig, as will further step out holes to the east.

GAL also reported significant thicknesses of mineralisation of over 20 metres.

With grades remaining relatively strong and the higher grade 8.25g/t intercept made today, we think the drilling program so far sits firmly in our bull case which was to see the deposit get bigger to the east and grades increase towards the 2.5g/t measure we had set.

GAL now has the funds needed to accelerate that RC and diamond drilling and test along the five-kilometre prospective strike length, having just raised $20.4M in an oversubscribed placement that saw cornerstone investments by major shareholders Mark Creasy and IGO.

The second drill program is nearly complete with next assays expected next month.

The third round of RC drilling is scheduled to begin in late July, followed by diamond drilling which is planned to start in August.

GAL’s share price was already up 535% since announcement of the discovery hole on 11 May 2022 and was up a further 23% this morning on this latest news.

Billion $ capped neighbour spuds production well

ASX:88E   Jul 11, 2022

Investment Memo: 88E IM2
Investment Thesis 4 : North Slope in Alaska - one of the most oil rich places on the planet
Investment Thesis 3 : Nearology to Pantheon Resources

Over the weekend we noticed that London-listed Pantheon Resources’ (capped at $1.26 billion), started drilling its first horizontal production well right next door to our oil and gas exploration Investment 88 Energy (ASX: 88E).

Drilling commenced on the 7th of July at Pantheon’s first horizontal well on the Alaskan North Slope.

Pantheon in its press release mentioned that the ultimate objective for this well would be “to gain robust production test data to accurately assess the ultimate potential of the reservoir”.

Pantheon estimate that the Alkaid prospect has ~900 million barrels of oil in place and have previously estimated a US$595M NPV across the prospect at an oil price of US$55/barrel, this compares to the current oil price which sits at around US$105 per barrel.

If Pantheon can make a discovery anywhere near these estimates then we suspect interest in the area will start to come into our portfolio company 88E.

88E recently acquired got access to 3D seismic data which covers the reservoir units that Pantheon Resources’ (capped at $1.26 billion) is drill testing.

These reservoir units are interpreted to extend from Pantheon’s acreage onto 88E’s, so any good news from 88E’s neighbour will be great news for 88E.

88E have also confirmed that the datasets would provide key data for potential farm-out partners as part of their due diligence programs leading up to the drilling of a new exploration well currently being planned to spud in 2023.

In the meantime we will be closely watching for some news from Pantheon with the drilling of its horizontal well.

To see our deep dive into all of the exploration work Pantheon have been doing next door to 88E check out our last note here: 88E - What to watch out for in the next 12 months

Gold project option exercised ahead of non-core asset divestment

ASX:LRS   Jul 08, 2022 Announcement

Investment Memo: LRS IM-2022

Our lithium exploration Investment Latin Resources Ltd (ASX: LRS) has exercised its option to secure 100% ownership over a gold prospect in the southern Lachlan Fold Belt in NSW.

The decision followed the completion of extensive regional exploration including reprocessing and interpretation of the available airborne geophysical data, on-ground reconnaissance mapping, and outcrop sampling and systematic soil sampling.

This prospect — the Peep O’Day prospect — is the southern portion of the original Yarara Tenement and the most prospective area, returning high-grade gold in outcrops over a strike length of 1.3 kilometres.

This all bodes well for LRS, which is currently in discussion with a number of third-party groups in relation to the divestment of Peep O’Day and other non-core assets.

Our primary reason for holding LRS remains its South American Lithium project, so we like to see that the company is making decisions to centre its focus on its lithium business.

✅ Trading halt for assay results at Norseman PGE discovery

ASX:GAL   Jul 08, 2022 Announcement

Investment Memo: GAL IM-2022 [Archive]
Objective 3 : Cobalt and palladium exploration at Norseman

This morning our long term exploration Investment Galileo Mining (ASX: GAL) went into a trading halt “pending the release of an announcement to the market in relation to material drill assay results from the Company’s Callisto discovery (Assay Results)”.

Today’s trading halt comes two weeks after GAL intercepted more sulphides along strike from its discovery hole at its PGE discovery in WA.

Below is an image of where the upcoming assays are likely to be from.

In a previous GAL note, we mentioned that we are watching for the discovery to continue to the east — the sulphide intercepts were a positive first sign that this could be the case.

We then set some expectations for the assay results as follows:

  • Incredible case: 40m at over 3.0 g/tonne
  • Bull case: Mineralisation keeps going, grade increasing to 2.5 g/tonne
  • Base case: Grade above 1.0 g/tonne, 10m + intersection lengths
  • Bear case: Grade below 1.0 g/tonne, intersection lengths reduce

At this stage, we know that the mineralisation continues along strike to the east with every hole so far intercepting greater than 20m of sulphides, with a peak intercept of ~28m.

We now want to see the grades from coming assays be on par or above those from the discovery hole. If we see grades improve off of the discovery hole then the results would be in between our bull case and incredible case expectations.

We think this could be a positive surprise to the market and lead to a move higher in the company’s share price. We are now looking forward to Tuesday when GAL expects to come out of its trading halt.

Environmental and community support for geothermal project

ASX:VUL   Jul 08, 2022 Announcement

Investment Memo: VUL IM-2022
Risk 4 : Stakeholder risk

VUL today reported that it has received preliminary Environmental Impact Assessment (EIA) approval for its Taro license, paving the way for VUL to drill six wells for geothermal energy and lithium.

The State Office for Geology and Mining determined that “the environmental impact of the planned wells, taking into account their size, extent and intensity of action, cannot be assessed as significant. There is therefore no requirement to carry out a full environmental impact assessment for the wells”.

VUL has also confirmed today that community support for geothermal production is growing across Germany’s Upper Rhine Valley region, with the Upper Rhine Council having resolved in favour of supporting deep geothermal projects in Ortenau. This follows an earlier vote of support for geothermal energy production in the area from the City Council of Landau.

These endorsements address some of the Stakeholder Risk as outlined in our 2022 VUL Investment Memo.

Lastly, VUL has provided an update on progress at its Demo Plant at the Zero Carbon Lithium™ Project in Germany.

VUL says that initial commissioning of the Sorption Demo Plant is now planned to commence in late-Q4. This is behind schedule due to previously flagged, unprecedented global supply chain issues with sourcing certain pieces of equipment. However, the commissioning of ‘LiLy’ — VUL’s lithium hydroxide production Demo Plant — remains on track to start commissioning in late Q1 2023.

Binding agreement with leading Italian geothermal group

ASX:VUL   Jul 08, 2022 Announcement

Investment Memo: VUL IM-2022
Objective 5 : More strategic partnerships (to demonstrate execution)

Continuing to grow and diversify its project development portfolio, Vulcan Energy Resources (ASX: VUL | FSE: VUL) today announced it has entered a binding collaboration agreement with Italy’s largest geothermal energy producer, Enel Green Power (EGP).

EGP, part of the Enel Group, is dedicated to the development of energy generation from renewable sources. A global leader in geothermal energy, it has plants in Italy, Chile and the United States.

Under the agreement, VUL and the Italian renewable energy giant will explore future geothermal lithium opportunities for cooperation. This includes assessing the potential of VUL’s Italian project, the Cesano Permit, in a stepwise approach, starting with a joint scoping study.

The Cesano Permit extends over an area of 11.5 km2, 20 km NNW of Rome. EGP has previously explored and drilled a number of wells in the Cesano area and gathered relevant data directly from local reservoirs, including wells that yielded hot geothermal brine with high lithium values.

VUL and EGP will also evaluate the opportunity to cooperate on other geothermal lithium projects in Italy.

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.

Nuclear power labelled “Green” by the European Union

ASX:GTR   Jul 07, 2022

Investment Memo: GTR IM-2022

The following Reuters article touches on the news overnight in the EU where lawmakers voted in favour of labelling nuclear power as “green”.

Read the full article here.

Our key takeaways:

  • On Wednesday, the European parliament backed EU rules labelling investments in gas and nuclear power plants as climate-friendly.
  • The vote in favour of the proposal means the EU can look to pass the proposal into law. For the proposal not to pass, 20 of the EU’s 27 member states would have to oppose the move.
  • The new rules will add gas and nuclear power plants to the EU "taxonomy" rulebook from 2023, enabling investors to label and market investments in them as green.
  • EU financial services chief Mairead McGuinness said "The Complementary Delegated Act is a pragmatic proposal to ensure that private investments in gas and nuclear, needed for our energy transition, meet strict criteria".
  • Slovakian Prime Minister Eduard Heger said the vote result was good for energy security and emissions-cutting targets.

We are Invested in US based uranium explorer GTI Energy (ASX: GTR) because we think nuclear power has one of the lowest carbon-footprints and highest utility rate of all renewable energy technologies currently available.

We think this, combined with its ability to operate on an almost 24/7 basis, makes nuclear power the ideal source for baseload energy generation.

This is where our exposure to GTR comes into play. With uranium being the primary fuel source for nuclear power, we think it is a critical mineral for a green future.

To see all of the key reasons why we are Invested in GTR and the key objectives we want to see the company achieve in 2022 check out our 2022 GTR Investment Memo by clicking here.

EU Parliament to consider gas a "Green" energy source

Jul 07, 2022

Macro: Natural Gas

Overnight, EU lawmakers voted in favour of labelling gas and nuclear power as “green” as part of the continent’s plan to transition away from fossil fuels.

We’ve long been of the view that gas is the natural transitional fuel that can bridge the gap between fossil fuels and cleaner energy sources.

Burning gas to produce power has a far lower carbon footprint compared to coal and oil, with the added benefit of having all of the infrastructure in place to produce and consume it.

We think that the world is ready to embrace it as part of the energy mix for the next decade and potentially beyond that. As a result, we hold several Investments in companies looking to supply gas to energy hungry parts of the world.

The following Reuters article provides an overview of the proposed EU legislation:

Read the full article here.

Our key takeaways:

  • On Wednesday the European parliament backed EU rules labelling investments in gas and nuclear power plants as climate-friendly.
  • The vote in favour of the proposal means the EU can now look to pass the proposal into law. The only risk facing the proposal is if 20 of the EU’s 27 member states oppose the move.
  • The new rules will add gas and nuclear power plants to the EU "taxonomy" rulebook from 2023, enabling investors to label and market investments in them as green.
  • EU Financial Services Chief Mairead McGuinness said "The Complementary Delegated Act is a pragmatic proposal to ensure that private investments in gas and nuclear, needed for our energy transition, meet strict criteria".
  • Slovakian Prime Minister Eduard Heger said the vote result was good for energy security and emissions-cutting targets

To see the Investment Memos for these companies click on the links below:

Elixir Energy (ASX: EXR)

  • Exploration stage, coal bed methane gas, Mongolia

Invictus Energy (ASX: IVZ)

  • Exploration stage, gas, Zimbabwe

Top End Energy (ASX: TEE)

  • Exploration stage, gas, Northern Territory

More visible gold intercepts, assays coming soon

ASX:TMR   Jul 07, 2022 Announcement

Investment Memo: TMR IM-2022
Objective 2 : 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.

Highly encouraging testwork paves way for Scoping Study

ASX:LCL   Jul 07, 2022 Announcement

Investment Memo: LCL IM-2022
Objective 3 : Commence scoping studies

Colombian-focused gold explorer, Los Cerros (ASX:LCL), has described results from metallurgical testwork at the Quinchia Gold Project’s Tesorito deposit as “highly encouraging”.

LCL has a substantial bank of established resources at Quinchia and the company is now focussed on creating value through building confidence in these resources.

We note that LCL offers substantial leverage to the upside — it is trading on a very low Enterprise Value of <$4M, with existing funds of ~$14M (as at 28 June) and a current market cap of $18.2M.

This first round of Tesorito metallurgical test work was designed to assess physical and metallurgical characteristics of the major lithology types in the Tesorito deposit, and to assess amenability to conventional grinding, gravity, and leach/adsorption processing routes.

Results included:

  • 97% recovery of gold from saprolite and 87% from other units (derived from 24 hour whole ore gold leach tests);
  • An optimal grind size of p80 ~75 micron, which is fine grind and typical of porphyry gold ores;
  • Deleterious elements such as arsenic, mercury, organic carbon and soluble copper are all low and of no processing concern.

LCL also noted that silver recoveries and commentary on potential processing pathways are pending and that gravity beneficiation would add no benefits so is not a required step.

These encouraging met’ test results are an important step to building a PEA (Preliminary Economic Assessment) around the project’s potential production scenarios.

LCL has outlined three broad production base case configurations to be investigated under the PEA framework.

  1. Plant designed and sized based on the Miraflores Underground Reserve. Subsequent expansion or modifications in outer years to then accommodate new materials from other sites within Quinchia (including Tesorito).
  2. Plant designed and sized on Miraflores (as above) plus a potential high grade starter pit at Tesorito, incorporating additional feed in later years.
  3. Plant sized and designed based on Total Quinchia Resources.

The completion of the PEA will go towards LCL meeting our Objective #3 for the company for this year: Commence scoping studies, as outlined in our LCL Investment Memo.

Bill Gates backs start-up for hydrogen storage & transportation

Jul 06, 2022

Macro: Hydrogen

The following Bloomberg article looks at a Bill Gates backed investment in the hydrogen mobility space.

Read the full article here.

Below are our key takeaways from the article:

  • A key part of having hydrogen form part of the global energy mix is to find a way to store and transport it effectively.
  • Spanish startup H2Site is aiming to do this and just secured €12.5M in investments from Bill Gates-led Breakthrough Energy Ventures, French utility Engie SA and Norwegian oil giant Equinor ASA.
  • Current existing methods to store and transport hydrogen are expensive, especially when compared to gas storage/transportation.
  • H2Site aims to find technological solutions to use existing natural-gas pipelines to move hydrogen by diluting natural gas with ~30% hydrogen before being recovered using H2SITE’s filter where it needs to be consumed. The process would use a palladium alloy with the aim of filtering hydrogen at 99.9% purity from a pipe carrying between 5% and 30% hydrogen.
  • Another technology being focused on is transportation via ships within ammonia and methanol. The aim being that projects like the ones in Australia where hydrogen is converted into ammonia then transported using ships could then have hydrogen recovered by undoing the chemical reaction after shipping is completed.

In summary, the article speaks to the volume of capital pouring into the downstream technologies that are required to build up a sound and efficient hydrogen supply chain.

For hydrogen to become a part of the energy mix the infrastructure required to produce, transport and then consume it all needs to be developed to the standards of current energy technologies.

With institutional capital and big names like Bill Gates now making investments into the hydrogen space we think it is a matter of WHEN not IF for the hydrogen sector.

Historically, our best performing Investments have come from industries where we have Invested well ahead of institutional capital arriving on the scene. Our Investments in the green hydrogen space are no different.

The following companies held in our Portfolio provide exposure to an industry that we think is on the cusp of exponential growth:

Province Resources (ASX: PRL)

  • Feasibility stage, green hydrogen, WA (Australia)

Elixir Energy (ASX: EXR)

  • Scoping stage, green hydrogen, Mongolia

Minbos Resources (ASX: MNB)

  • Scoping stage, green hydrogen/ammonia, Angola

📈 Mark Creasy and IGO back $20.4M raise to accelerate drilling

ASX:GAL   Jul 06, 2022 Announcement

Investment Memo: GAL IM-2022 [Archive]
Risk 1 : Financing risk

This morning our long term exploration Investment Galileo Mining (ASX: GAL) came out of a trading halt having raised capital to accelerate drilling at its new PGE discovery in WA.

GAL managed to raise $20.4M via a placement at a share price of $1.20 per share with the shares expected to be issued on the 13th of July 2022.

Importantly, the placement closed oversubscribed with cornerstone investments by GAL’s major shareholders Mark Creasy and IGO for a combined $8.7M.

Before the placement mining billionaire Mark Creasy owned 24.82% of GAL and IGO 8.89% for a combined ownership of ~34%. After tipping in $8.7M of the $20.4M raised, we expect to see the combined shareholdings of the two increase.

The significance of this is that IGO has previously purchased projects from Mark Creasy backed companies, including the Nova mine for $1.8 billion and the Silver Knight discovery.

We think that the cornerstone investments from both Mark Creasy and IGO are a strong vote of confidence for the recent PGE discovery GAL made and show that there is institutional interest in the company’s projects.

GAL expects to have $26.5M in cash after the capital raise and is already putting the cash to work procuring a third RC drill program which is scheduled to begin at the end of July followed by a diamond drilling program planned to commence in August.

Next: We are eagerly waiting to see what comes from GAL’s ~4,000m of RC drilling to test for extensions to its new PGE discovery.

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