Merlin-2 oil well spudded

ASX:88E   Mar 10, 2022

88E has commenced the Merlin-2 drilling program, targeting 652 million barrels of oil with a planned Total Depth of ~8,000 feet. With the US and the UK sanctioning Russian oil imports, 88E seems to have perfectly timed the drilling program at its Merlin-2 well in Alaska.

While not suggesting this will be the case, we do note that last time 88E completed a drilling program its share price moved higher by over 1,000%. And since then, amid the Ukraine/Russia conflict, the price of oil has reached ~US$128/barrel.

88E expects it to take approximately four weeks to reach the targeted depth of ~8,000 feet. It then plans to conduct production testing to see if the flow rates from the well can be considered commercial.

88E is targeting a prospective resource of 652 million barrels of oil and assuming a successful drilling program, is aiming to convert the prospective resource into reserves.

A new large-scale discovery in Alaska right now could be viewed as strategically important to the USA and to its allies who need to fill in the gap left by Russian oil bans.

In our last note, which you can read here, we set the scene for the upcoming drilling program, highlighting the regional significance of the Merlin-2 well and what it could mean not only for 88E but the majors on the Alaskan North Slope.

With the drilling of the Merlin-2 appraisal well, 88E will meet our key (and single) objective for the company for the year. To see our full 2022 Investment Memo click here.

Marvel Gold shareholding update

ASX:EV1   Mar 10, 2022

Marvel Gold is exploring whether it can conduct an in-specie distribution of its shareholding in EV1.

Marvel holds 50,000,000 EV1 shares, or ~31% of EV1’s register, that are escrowed until November 2023, meaning Marvel can’t sell until then.

An in-specie distribution is when a company passes on its shareholding in another company to its shareholders. In this case, Marvel would transfer its 50 million EV1 shares to its shareholders pro rata, rather than have the company’s treasury hold onto them.

As mentioned in our launch note, one of the key reasons we liked EV1 is because of its tight capital structure.

With Marvel's shareholding escrowed, ~31% of the shares can’t be sold on-market until 16 November 2023. This means that there will be a limited number of shares to purchase on-market, so if EV1 can deliver progress on its graphite project we could see a sharp share price re-rate.

Whatever happens with the shareholding, ideally we would like to see the escrow remain in place.

Nickel hits US$100,000 per tonne, LME suspends markets

Next Investors   Mar 10, 2022

Read the full article here: LME forced to halt nickel trading, cancel deals, after prices top $100,000

Earlier this week we saw what we think is a genuine once in a lifetime move in the nickel price, with the commodity reaching ~US$100,000 per tonne – well above its previous all time highs of ~US$50,000 per tonne.

We have been pretty vocal about the impending shortage of raw materials that will power the electric vehicle revolution. We also knew of the current nickel supply/demand imbalance (nickel is an essential EV battery ingredient). But we don’t think anyone could have forecasted a move this big in such a short period of time.

The move by the LME (London Metals Exchange) to halt trading looks to have come off the back of a large short position taken out by a Chinese company, that is facing losses >US$12 billion.

We think there is more to play out with the nickel price and don’t think that the US$12 billion margin call will be resolved in a day or two with the halt on the LME likely to take a while to sort out.

Though it was great to see the nickel price reaching these levels, we are invested in our nickel stocks because of longer term structural changes to the supply/demand equation for the critical battery metal.

Below is a list of all of our investments with exposure to nickel.

Kuniko (ASX:KNI) - why we invested

  • Zero Carbon copper, nickel, cobalt and lithium, European Union (Norway)

Galileo Mining (ASX: GAL) - why we invested

  • Nickel-Copper-PGE, WA (Australia)

Pursuit Minerals (ASX:PUR) - Memo coming soon

  • PGE, Nickel and Copper (Australia)

Mandrake Resources (ASX: MAN) - Memo coming soon (Catalyst Hunter portfolio)

  • Nickel, Copper, PGE, WA (Australia)

Aldoro Resources (ASX:ARN) - why we invested (Catalyst Hunter portfolio)

  • Nickel, PGE, Rubidium and Lithium, WA (Australia)

Auroch Minerals (ASX: AOU) - Memo coming soon (Wise Owl portfolio)

  • Nickel, Exploration Stage, WA (Australia)

Uranium drilling program on track for completion next week

ASX:GTR   Mar 10, 2022

GTR today announced that its maiden drilling program at its ISR uranium project in Wyoming, USA is nearly complete.

GTR expects the final 9 holes of the ~100 hole maiden drilling program to be drilled in the week starting on 15 March. The full set of final results and interpretations are expected in the first half of April.

The ultimate aim of the current drill program is to identify the depth, grade and width of mineralisation over the project area with a target of announcing a maiden ISR uranium resource, or at the very least, an exploration target which will form the basis for follow up exploration.

In a previous note, we set some expectations for what we want GTR to achieve in this drilling program and we look forward to seeing the last batch of results before we can make an assessment of what GTR has on its hands.

This drilling program forms the basis for the first objective we set for GTR in our 2022 Investment Memo. To see what else we want to see GTR achieve this year check out our 2022 Investment Memo here.

Rig contract executed, drilling to commence in June

ASX:IVZ   Mar 10, 2022

Ahead of its drilling program that’s anticipated to commence in June, IVZ today confirmed that the final drill rig contracts had been signed for its Muzarabani-1 well in Zimbabwe, as well as an option to drill a second exploration well.

As for the option for a second well, IVZ is currently waiting on the formal granting of the extended licence area before committing.

IVZ have agreed on is the Exalo #202 rig, which can drill down to a depth of ~5,000m and is expected to begin mobilisation at IVZ’s project in May.

A key takeaway from today's announcement for us is that IVZ has managed to secure a rig that is powerful enough to drill down to ~5,000m depths.

In the most recent investor webinar, managing director Scott Macmillan mentioned that the seismic data to date showed that a drill rig could test five different structures of interest by drilling to a depth of ~4,500m.

IVZ is still finalising its interpretation of the seismic data it acquired in 2021 as well as the US$30M legacy dataset left over by Mobil as it works to firm up where it will be drilling in June.

We set this as objective #1 in our 2022 Investment Memo which you can check out here.

More high grade nickel intercepted from infill drilling program

ASX:AOU   Mar 09, 2022

Earlier in the week AOU announced another batch of assays from its 2,667m drilling program at its Saints nickel project.

The stand out assays from todays announcement were as follows:

  • 2.13m @ 3.26% Nickel from 167.99m
  • 4.79m @ 2.05% Nickel from 311.98m

Both high grade intercepts, but this came as a result of the drilling program being made up mostly of infill drilling. The purpose of the drilling program is more so for AOU to be able to conduct metallurgical testing which will form the basis for a scoping study being planned.

With the nickel price temporarily hitting US$100,000/tonne overnight, we expect that the scoping study that AOU is putting together will show some really favourable project economics.

Gold trading near all time highs

Next Investors   Mar 09, 2022

Read the full article here: Gold makes run for record high as Ukraine concerns, inflation risks mount

With geopolitical tensions continuously escalating, overnight we saw the gold price trade a few dollars off its all time high at US$2,068 per ounce.

Gold keeps doing what it does and in times of uncertainty/fear the price keeps going up, historically around times of market uncertainty the price of gold tends to appreciate and the gold miners/explorers generally tend to outperform.

We saw this dynamic in mid-2020 after the COVID led lockdown of the global economy - the gold price reached its all time high at the time of ~US$2,072 per ounce.

We are invested in gold companies so that they can act as a hedge in times like this, below is a list of our gold exposures:

Los Ceros (ASX:LCL) - This is why we invested

  • Gold, Exploration Stage (Colombia)

Tempus Resources (ASX:TMR) - This is why we invested

  • Gold, Exploration Stage (Canada, Ecuador)

Titan Minerals (ASX:TTM) - This is why we invested

  • Gold, Exploration Stage (Ecuador)

Ragusa Minerals (ASX:RAS) - This is why we invested (Catalyst Hunter Portfolio)

  • Gold, Halloysite Exploration Stage WA (Australia and Alaska)

Madagascan rare earths divestment completed

ASX:MNB   Mar 08, 2022

On Tuesday, MNB announced the divestment of its interests in its Madagascan rare earths project.

MNB’s interests in the project at the moment is an exclusive option agreement that was signed in 2018 which gave MNB the right to acquire up to a 90% interest in the project.

MNB’s divestment comes as the sale of this option (exclusive right to acquire that 90%) for a total consideration of $2.48M contingent on due diligence being completed.

The acquirer (ALS Hong Kong) has ~8 months to complete this due diligence and needs to exercise the option before the 7th of November 2022.

The payments to MNB will be $10,000 per month for that 8 month period and a $2.4M cash payment if the option is exercised by ALS Hong Kong.

This divestment means MNB can focus more capital towards the development of its Angolan fertiliser project. We will be releasing our 2022 Investment Memo for MNB very soon where we will set some expectations for what we want to see MNB achieve in 2022.

More palladium from air core drilling at Norseman project

ASX:GAL   Mar 08, 2022

Today, GAL announced another batch of assay results from its recently completed 8,700m aircore drilling program at its Norseman project.

The goal of this aircore drilling is to identify targets for follow up RC drilling, and the assay results released today delivered some impressive intercepts, with peak results as follows:

  • 18m @ 0.29g/t palladium from surface.
  • 22m @ 0.21g/t palladium from surface.
  • 32m @ 0.2g/t palladium from surface.

These type results are more than enough for GAL to commit more capital to its Norseman project and come back with heavier rigs that can test these anomalies at depth.

We covered the first batch of results and highlighted what we think is the most interesting target we want to see GAL follow up on its Norseman project in our last note which you can read here.

With the palladium price up ~15% at one point overnight as markets fear supply disruption from Russia (who make up ~40% of global production), if GAL was to make a discovery at the Norseman project it would be coming at a great time.

Our 2022 Investment Memo for GAL has two clear objectives and that is to see the company aggressively drill both its projects, to see this and why we invested in GAL check out our 2022 Investment Memo here.

$2.6M placement with strategic investment fund

ASX:TMZ   Mar 08, 2022

Today, TMZ announced a $2.6M placement with energy and resources focused institutional investor Patras Capital.

The placement is split into 4 separate tranches meaning TMZ will get the $2.6M over a 4 month period with the first $650k received today.

The placement is being done at a 15% discount to a “benchmark price” set by TMZ at 6.9c meaning the first $650k was placed to Patras at 6c/share. Patras will also be receiving listed TMZOA options on a 1:2 basis (1 listed option for every 2 shares issued).

We generally prefer simple cap raise structures, but at least this give TMZ to raise subsequent tranches at less dilutive share price levels during a time when silver (and all precious metals) prices are likely to rise (which would likely improve TMZ’s share price)

TMZ is currently in the middle of updating its resource estimates across its deposits so the extra funding comes at a good time, check out our 2022 Investment Memo here to see what we want to see TMZ achieve in 2022:

Nickel price up ~76% overnight touching 15-year highs.

Next Investors   Mar 08, 2022

Oil, wheat, nickel storm higher on fears of supply chaos

We have been investing in exploration stocks for over 20+ years but have never seen anything like the move in the nickel price overnight.

At one point the spot price for nickel in London was up ~76% to 15-year highs of US$51,000/tonne. This type of move intraday is almost unheard of in commodity markets let alone in a metal like nickel.

We think that a part of the move overnight comes from the escalation with the Russia/Ukraine situation as Russia makes up ~10% of global nickel supply but also has something to do with the structural tailwinds for nickel demand with it being a critical metal for the production of EV batteries.

At the moment ~7% of nickel demand comes from the battery manufacturing sector, long time readers will know that we have been investing in nickel exploration stocks anticipating the exponential uplift in demand as the sector scales up.

Below is a list of all of our investments with exposure to nickel.

Kuniko (ASX:KNI) - This is why we invested

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

Galileo Mining (ASX: GAL) - This is why we invested

  • Nickel-Copper-PGE, WA (Australia)

Pursuit Minerals (ASX:PUR) - Memo coming soon

  • PGE, Nickel and Copper (Australia)

Mandrake Resources (ASX: MAN) - Memo coming soon (Catalyst Hunter portfolio)

  • Nickel, Copper, PGE, WA (Australia)

Aldoro Resources (ASX:ARN) - This is why we invested (Catalyst Hunter portfolio)

  • Nickel, PGE, Rubidium and Lithium, WA (Australia)

Auroch Minerals (ASX: AOU) - Memo coming soon (Wise Owl portfolio)

  • Nickel, Exploration Stage, WA (Australia)

Food security now a global concern

ASX:MNB   Mar 07, 2022

Another fallout from the Russia/Ukraine conflict is with respect to global food supplies as covered by major news outlet Al Jazeera.

Russia and Ukraine supply a third of the world's wheat, which is now trading at 14-year high prices. More importantly though, countries are realising that food supplies are now just as susceptible to supply chain disruptions.

The key takeaway from the coverage in this news report was that the Middle East and Africa were most susceptible to these shortfalls as other exporters look to protect domestic supplies.

This is where MNB fits in, with its phosphate project in Angola, MNB is building a nutrient supply and distribution business that stimulates food security in Angola and the broader Congo Basin.

MNB’s project in August was considered a ‘Project of National Importance to Angola” by the Angolan government, with all of the developments of late we think the project is now significantly more important.

New T cell therapy approved for Multiple Myloma

ASX:ALA   Mar 07, 2022

Last week the FDA approved a new CAR T cell therapy for Multiple Myeloma - the main cancer that ALA is targeting (source).

An in depth discussion of this development can be found at 1:19:22 on last week's episode of our favourite podcast - the All In Pod.

In there, biotech expert David Freedberg explains in depth the benefits of cell therapy in treating cancers compared to traditional chemotherapy as well as a high level overview on the limitations of the technology, including the exorbitant cost as well as the reliability issues.

The cost of the therapy currently sits around US$400-450K for a “one time shot” at eliminating the cancer, however Freedberg believes that the cost of the therapy “could be reduced to US$4000” through new innovations and technology.

ALA is involved in this cutting edge space by developing an ‘off the shelf’ cell therapy to mitigate the cost and reliability issues of existing cell therapy treatments.

In our 2022 Investment memo the first reason “why we invested in ALA” is based on the economics of these therapies and how we think ALA’s tech could potentially be the key to reducing the costs of these therapies through an “off the shelf” solution.

Check out our 2022 ALA Investment Memo here where you can read more about why we invested and what we want to see ALA achieve in 2022.

Assays received from Nickel project

ASX:ARN   Mar 04, 2022

ARN ended the week with some of the final assays from the drilling program completed at its last Nickel project at the back end of 2021.

Peak results from the program were as follows:

  • 7.86m at 0.53% Nickel from 269.5m
  • 4.26m at 1.22% Nickel from 277.14m

The positives from the drilling program is that ARN has managed to intersect massive sulphides and confirmed there is nickel in them. However, the market didn't seem to react to the results, we think because of the nickel grades.

With nickel now trading at US$28,000 per tonne we think that the market may at some stage start to take an interest in these types of results.

Our focus for ARN in our 2022 Investment Memo (coming soon) is around the rubidium/lithium project where ARN is currently in the middle of a drilling program. Be on the lookout for our memo launch in the coming weeks.

Company Project Update

ASX:88E   Mar 04, 2022

88E closed out the week by providing an update on the exploration work its neighbour (London listed Pantheon Resources - currently capped at £1 billion) has been doing.

In Q2021, Pantheon drilled the “Talitha-A” well, ~4.5km to the north of 88E’s Project Icewine permit boundary.

Pantheon recently re-entered that same well and completed a production testing program - confirming light oil flows over a 3 day testing period.

For us the key takeaway from the work Pantheon did at Talitha-1 was Pantheon's commentary around the formations from which the light oil was recovered all extending down into 88E’s Project Icewine.

88E also confirmed that it would use the data Pantheon had gathered to put together a prospective resource for Project Icewine, focused on the eastern parts of the permits, before the end of the June quarter.

In our latest note we mentioned that once the drilling at Merlin-2 was completed that we would expect 88E to go back into its Project Icewine some time this year. With Pantheon’s share price going from 35p to now £1.40, clearly there is market interest for exploration in and around 88E’s Project Icewine permits.

We haven't included Project Icewine in our 2022 Investment Memo as yet because all of our focus for the time being is on the Merlin-2 appraisal well which 88E expects to be spudding next week. After Merlin-2 is drilled we will look to update our investment memo based on the results.

With the oil price trading at near 10 year highs of US$110/barrel, 88E could not have picked a better time to take a swing for the fences on a potential company making oil and gas discovery. Click here to read our latest note which sets the scene for the Merlin-2 well.

More outcropping ironstones found at FNT's REE project

ASX:LNR   Mar 03, 2022

Today FNT’s field sampling program yielded what we think are good early signs that Rare Earths could be present on their tenements.

154 rock chip samples were taken and have been sent to the lab for assays.

FNT is getting the rocks classified into potential groupings of monazite, carbonatite and ironstone.

Ironstone is particularly interesting, as ironstones played a key role in the discovery that ~$500M market capped Hastings Technology Metals made at the next door Yangibana project.

The presence of carbonatite is also worth noting as Australia’s only Rare Earths producer, ~$10B market capped Lynas Corp, found their massive Mt Weld discovery in carbonatite.

For conext, the total grade of Rare Earths across Hasting’s project is ~1% and the nearby Dreadnought Resources re-rated in June-July 2021, in part, on the back of ironstone rock chip sample assays of 11.2% Total Rare Earth Oxide (“TREO”).

We think FNT is well placed in an emerging major Rare Earths district in WA, and we’re looking forward to what they come back with in terms of assays from the labs.

We wanted to see FNT advance their Rare Earth’s project by drilling (Key Objective #2) - and we now know that FNT is planning drilling for Q2 2022, which is just around the corner.

Here is why we invested in FNT and what we expect them to achieve in 2022 - FNT Investment Memo.

MRE for Texas Silver District

ASX:TMZ   Mar 01, 2022

It’s a positive that TMZ got its Texas updated JORC 2012 MRE out on time for Texas.

It now means that TMZ has 40.2 Moz AgEq combined after the Conrad MRE which had 20.7 Moz AgEq.

We’re looking for the completion of the remaining MRE update for Webbs and we think TMZ may now need to drill to hit the 100Moz AgEq nark to do so.

That 100Moz AgEq threshold forms Key Objective #1 in our TMZ Investment Memo.

TMZ has flagged a geophysics program is advancing at Texas so we believe there could be some drilling upside to come there.

TMZ moves methodically, but it’s our view that this is necessary to advance Australia’s highest grade undeveloped silver resource.

The silver price got as high as US$25.60 an ounce on February 24.

Vonex half year results announced

ASX:VN8   Mar 01, 2022

Our telco investment Vonex is in the midst of an acquisition phase, having acquired four complementary businesses over the past 2 years. This has helped VN8 deliver a strong financial performance over the half-year ending 31 December 2021.

We liked that group revenue increased to $15m, up 54% year-on-year (YoY). Gross profit was also up significantly to $7.5m, up 174% YoY. Underlying EBITDA was up to $3.3m for the half year, versus $0.2m in H1 FY21.

The acquisitions have rapidly expanded VN8’s customer base, with PBX users now exceeding 90,000. This has led to a 104% growth in annual recurring revenue to $34.5M - which we think is quite sold for a company with a market capitalisation of ~ $32M.

The flip side to the acquisitions is that VN8 currently has a high level of net debt ($11.9M) - but given its strong cashflow, we expect most of the debt to be paid back this year. This will free up cash for further acquisitions and possible dividends down the track.

We’re keen to see VN8 continue to grow on several key financial and operating metrics in 2022, whilst fully integrating the most recent acquisitions into its business.

1,000m RC drilling program commenced in the Fraser Range

ASX:GAL   Feb 28, 2022

On Monday, GAL announced that it had started a 1,000m RC drilling program to test three new EM targets as well as re-test two targets in an area that was previously tested with shallow aircore drilling.

In its last round of drilling in ~2018, GAL hit 36 metres @ 0.2% nickel from 18m including a higher grade section of 3 metres @ 0.56 % nickel from 24m during a shallow aircore drilling program where the average depth in each hole was ~41m.

Rarely are nickel sulphide deposits found at that depth and with the nickel price trading at 10 year highs we think GAL is taking shots on goal at the right time in search of a large scale nickel discovery in the Fraser Range region.

Whilst we wait for the assays from ~8,700m aircore drilling program from its norseman project, we will be watching to see if GAL makes any visible sulphide intercepts from this RC drilling program.

Wyemandoo pegmatite rock chip samples

ASX:ARN   Feb 28, 2022

ARN announced today assay results from its last round of rock chip sampling at the Wyemandoo lithium/rubidium project.

Out of a total of 188 assays received by the company, ARN reported a peak result of 1.24% rubidium and in a separate assay a peak grade of 1.05% lithium.

This forms the basis for the geochemical sampling program ARN are using to define drill targets, which it will be following up as soon as the drill rigs are done at the companies Niobe project.

At the moment we are waiting on the assays from all of the pegmatite intercepts ARN has made whilst drilling Niobe.

Final Processed Seismic Data Received

ASX:IVZ   Feb 28, 2022

Today IVZ announced that the datasets from its 2021 2D seismic survey and the re-processing of the US$30M legacy dataset left over by Mobil had largely been received from the 2D seismic consultants.

Next, IVZ will continue with its internal interpretation of the datasets before ranking the anomalies picked up from most interesting to least, so as to finalise the locations for its drilling program now expected to be spud in June 2022.

In our 2022 investment memo we put the “detailed interpretation of seismic data” and final identification of the drilling locations as objective #1. Once this is out of the way, IVZ can shift its focus to the maiden drilling program.

2022 Drilling program kicks off

ASX:EXR   Feb 28, 2022

Today EXR announced that it had started drilling the first of a total 24 well drilling program planned for 2022.

The first of these wells sits right on the border of the tenements that make up the Oyu Tolgoi mine owned by Rio Tinto and will be drilled to a planned total depth of ~700m.

This year, we want to see EXR complete the pilot production program off the back of last year's drilling program.

EXR confirmed that the 2 well extended pilot production program was scheduled to commence around ~mid year. With gas becoming a talking point off the back of the Russia/Ukraine conflict we are eagerly waiting to see if EXR can confirm economic flow rates at its project.

$2.5M funding package + drilling program expanded to 5,000m

ASX:LRS   Feb 28, 2022

Today LRS announced a $2.5M financing package signed with Lind Asset Management over a 14 month loan term.

With fresh funding secured, LRS also announced that the 2,000m drilling program at its Lithium project in Brazil would be expanded to 5,000m with the ultimate aim of putting together a maiden JORC resource.

The terms of the funding facility are as follows:

  • $2.75M face value loan, repayable over a 14 month period.
  • LRS to issue Lind 35 million unlisted options with an exercise price of 5c, expiring March 2026.
  • LRS to pay Lind a $75k commitment fee.
  • Funds raised from “in the money” options being exercised must be used to repay the principal of the loan.

So in total over the 14 month loan term, LRS is paying $325k in loan fees and 35m in unlisted options exercisable @ 5c.

In our last note, where we covered LRS’ first spodumene intercept from its drilling program at its Brazilian lithium project, we mentioned we wanted to see LRS shore up its balance sheet so we welcome the news from Monday.

New products hit shelves at Coles

ASX:FOD   Feb 25, 2022

We noticed something new at our local Coles this week, FOD’s plant based protein smoothies had hit the shelves.

We bought both, and our key takeaway (from flavour point of view) is that these things are filling - essentially an entire breakfast / lunch replacement.

Banana was our favourite, but we did like the Raspberry & Chocolate one too.

If you’re invested in FOD, go down and try one for yourself and let us know what you think.

We are keeping an eye out for early sales/market share data from this new product, and how it will help improve FOD’s overall sales and financial performance.

AJX Half yearly results

ASX:AJX   Feb 25, 2022

On Friday, AJX announced that it had increased its revenues by ~46.3% with gross margins consistent with 2H FY21 and from the same period last year's results at 40.1%.

AJX showed a US$1.9M loss in its income statement, but the actual cash outflow was much lower at ~$900k and we note that with the addition of the new BioCoolTM products and new customers AJX had increased its inventories by US$600k.

Earnings call and preliminary annual report summary

ASX:ONE   Feb 25, 2022

ONE reaffirmed revenue guidance of €12.5 - €14m for 2022 - ONE remains one of our favourite investments and biggest positions.

Key metrics (with commentary):

  • 5% Recurring Revenue growth - slightly disappointing, but still time to make up ground
  • 37% Total Revenue growth (due to lumpy outlay of lower margin hardware sales) - this is reflected in non recurring revenue up 120% and cost of sales up 86%
  • 9,487 beds live at 31 December 2021 (+3%) vs 9,121 at 30 June
  • 2,355 beds contracted not yet installed.
  • 11,842 contracted beds - we want to see 15K contracted beds by the end of 2022

40% increase in sales and marketing - means ONE is spending 20% of receipts on sales and marketing so they did what they said they would do here, hopefully, they reap the rewards in the sales pipeline

We think the lag from hardware push should come through in coming quarters with recurring revenue, potentially in the 20-25% range.

ONE has 12,123 beds in RFP/RFI which are still waiting on decisions - these formal processes represent 64% of ONE’s total sales pipeline of 18,927 beds.

RFPs (Request for Proposal) and RFIs (Request for Information) are lengthy affairs that push ONE’s contracted beds through the bureaucratic pipeline.

It’s good to see so many beds potentially there for ONE, now we just want to see its sales and marketing team convert.

Massive nickel sulphides at the Saints nickel project

ASX:AOU   Feb 24, 2022

On Thursday AOU announced that it had made two massive sulphide intersections at its Saints nickel project.

The 7 hole diamond drilling program is mostly being done so that ARN can upgrade its 1.02mt @2% nickel JORC resource. The drilling is mostly infill so the intersection of massive sulphides was somewhat expected by the market.

We are more interested in the grades of the intercepts as opposed to the massive sulphide intercepts themselves, if the drilling was targeting a new discovery then we suspect the market would have reacted a lot differently.

With 3.01m in massive sulphides intersected in one hole and 0.84m in another, all eyes are now on the nickel grades that come back from the drilling program, before AOU can try upgrading the JORC resource.

CAY enters trading halt

ASX:CAY   Feb 24, 2022

On Monday, our latest investment CAY went into a trading halt with respect to permitting at its bauxite project.

We read this news piece on Saturday afternoon which showed that the two tenements (sitting outside of the area where CAY’s resource is) were under an MOU with a Chinese state owned entity.

The MOU listed that they would be handed as exploitation permits (earliest stage of permitting in Cameroon). Importantly the MOU was with the national mining company Sonamines and not issued by the Ministry of Mines.

It didn’t look great for CAY holders however 48 hours later, we read this news piece which showed the Ministry of Mines (the main regulatory body in Cameroon) had cancelled this MOU and said that permitting was a ministry duty and not up to the national mining company Sonamines.

This was swift action from the government who look to us like they were not consulted when that MOU was signed.

We will be watching to see updates CAY provides and hope that everything is resolved this week.

Drilling commenced at nickel targets

ASX:BPM   Feb 23, 2022

Last week we put out a note on BPM’s Nickel targets identified next door to our other portfolio company Auroch Minerals nickel project.

Today BPM announced that drilling had commenced across the 11 identified EM conductors. To read more about these 11 targets, read our last note here.

The 3,000m of Aircore drilling is expected to take a few weeks and we don't anticipate any assays coming in for at least another 4-6 weeks after that.

GGE Appoints Managing Director

ASX:GGE   Feb 23, 2022

Today GGE announced the appointment of Dane Lance as its managing director.

Lance is a senior oil and gas professional and reservoir engineer with over 16 years industry experience. He has a focus on “resource maturation and monetisation” - a perfect fit for GGE who will be drilling its maiden well at its helium project very soon.

Lance has worked for Woodside, Ophir (including technical evaluation of the ~$500m Ophir acquisition of Salamander) and Oil Search in previous roles.

We think the experience in monetising new discoveries is important especially given GGE’s project sits in an infrastructure rich area where new discoveries can quickly be brought to market.

KNI drilling program update

ASX:KNI   Feb 22, 2022

KNI announced today that the drilling program at its main cobalt target (Skuterud) is on track for Q2-2022.

With the applications for a drilling permit lodged and drilling contractor “Norse Diamond Drilling AS” awarded the contract, the 7-hole, 2,800 metre program appears to be on schedule.

KNI also announced that after further review of the geophysical and geochemical data the Vangrofta copper target wasn't of sufficient size to warrant further drilling.

This comes as KNI has spent the last 6 or so months refining the highest priority drill targets to allocate its funds to drill test in 2022.

EM surveys completed at newly acquired lead-silver project

ASX:PFE   Feb 21, 2022

On Monday PFE announced that it had completed EM surveys over the two main target areas at its newly acquired lead/silver project in WA.

The EM survey results are yet to be received but PFE is aiming to analyse the results and prepare a drilling program which is expected to commence in Q2-2022.

Read our deep dive into the newly acquired Hellcat asset, where we discuss why we like the project and where we compare it to Galena Minings' deposit that is currently being put into development.

RC drilling scheduled on Fraser Range EM targets

ASX:GAL   Feb 21, 2022

Today GAL announced that it had contracted 1,000m of RC drilling over some EM targets in the Fraser Range region.

Drilling is planned to commence later this month, and assays to start coming back from the labs in April-May 2022.

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