Melbourne lithium update - We attended

ASX:LRS   Sep 16, 2022 Announcement

Investment Memo: LRS IM-2022
Investment Thesis 1 : Potential to re-rate again
Objective 4 : JORC resource at the Brazilian lithium projects


Yesterday afternoon we attended a Melbourne shareholder update for our lithium exploration Investment Latin Resources (ASX: LRS).

To view the presentation slides, click here.

After a few years stuck behind a computer screen, these types of in person meetings are great to get along to, and it’s always good to see how presentations by our portfolio companies are received.

First up, managing director Chris Gale gave an update on LRS’s resource definition drilling at its new lithium discovery.

The major takeaway from the presentation was that Chris is focused on getting a maiden JORC resource defined by the end of the year, although there is still a lot of untested exploration upside that could make LRS’s project even bigger in the years to come.

Following Chris’ presentation, an analyst from research firm Benchmark Mineral Intelligence (BMI) gave an update on the supply/demand situation in the lithium market.

Our key takeaway was BMI’s belief that we are already experiencing a structural lithium supply shortage — a situation that will only worsen over the coming years.

The analyst also touched on a recent BMI report that says, “To meet the world’s lithium requirements would require 74 new lithium mines with an average size of 45,000 tonnes by 2035”.

With the macro outlook so strong, we think LRS’s strategy of fast tracking its project to a maiden JORC resource and preliminary economic assessment should bring much more interest to what LRS is doing with its lithium discovery.

What’s next for LRS?

We want to see LRS complete its resource definition drilling program and establish a maiden JORC resource to form a preliminary economic assessment report.

DXB’s latest Investor Presentation

ASX:DXB   Sep 16, 2022

Investment Memo: DXB IM-2022
Objective 3 : Progress the Phase III Clinical Trial for Rare Kidney Disease (FSGS)
Milestone 6 : Patient Recruitment Updates


We were lucky enough to attend the latest Investor Presentation from Dimerix (ASX:DXB) and it gave us a great look at how our 2021 Biotech Pick of the Year is progressing.

We heard from DXB CEO and Managing Director Nina Webster as well as DXB Chief Medical Officer Ash Soman. This is DXB’s Chief Medical Officer Ash Soman presenting yesterday:

Here are our key takeaways from the presentation:

  • Patient recruitment update - DXB is more than 35% through recruitment and anticipates that it will be complete for the first 72 patients required for interim analysis by Q4 this year. This means that DXB is on track to deliver interim analysis results for Part 1 of the Phase 3 FSGS clinical trial in mid-2023
  • Significant market interest in kidney disease leading to major transactions - according to Garibaldi et al. (2021), there’s been “more change in the past 24 months than the past 24 years” for kidney disease treatments. The US government has made it a major priority because Medicare spends more than US$54BN on kidney treatment a year and this number is expected to grow. As a result, there have been a number of major transactions for kidney disease treatments in the last two years. We’re hoping DXB can ride these macro tailwinds and deliver great Phase 3 results.
  • If DXB can replicate Phase 2 results this would be a major success - the primary way of judging the efficacy of DXB’s treatment is through measuring the amount of protein in the urine of someone with FSGS. DXB’s Phase 2 trial already showed a 17% reduction across this metric. Something similar to that result would be very significant for DXB. We also learned that at each 10% reduction across this metric, this delivers tangible improvements in kidney function (see slide 38).
  • DXB’s treatment may be complementary to other FSGS treatments - there is only one other Phase 3 FSGS treatment at the moment, but since it works on a different aspect of FSGS it isn’t in direct competition with DXB’s FSGS treatment. In fact, both may wind up being used together as part of a cohesive approach to FSGS treatment.

With regards to patient recruitment, DXB’s progress is outlined in this slide:

We think the progress should pick up as DXB’s estimates indicate now that startup activities are largely finished (18 of the ~70 sites for the study are in Europe).

We found Nina to be an excellent ambassador for DXB’s treatments and we particularly enjoyed the clinical detail that DXB Chief Medical Officer Ash Soman added to the presentation.

For an easy to digest summary of all the progress that DXB has made since we initially Invested:

Click here to see our DXB Progress Tracker

Battery materials demand will need more than 300 new mine

Sep 16, 2022

Macro: Lithium


The battery materials thematic is a major part of our Portfolio.

After a nasty down day for the market two days ago driven by inflation fears emanating from the US, we remain confident that this theme will be part of a decade long trend.

A recent Benchmark Mineral Intelligence report highlights just how much battery materials are needed for the world to reach its ambitious decarbonisation goals.

The report notes that, “At least 384 new mines for graphite, lithium, nickel and cobalt are required to meet demand by 2035.

Here are the companies in our Portfolio that we hold as exposure to each of the four battery materials referred to in the report (click the company name to see our Investment Memo):

Graphite:

Sarytogan Graphite (ASX:SGA) - early stage development, Kazakhstan

Evolution Energy Minerals (ASX:EV1) - late stage development, Tanzania

Lithium:

Tyranna Resources (ASX:TYX) - exploration, Angola

Latin Resources (ASX:LRS) - resource definition, Brazil

Vulcan Energy Resources (ASX:VUL) - development, Europe

Ragusa Minerals (ASX:RAS) - exploration, Northern Territory (recently acquired)

European Metals Holdings (ASX:EMH) - development, Europe

Nickel:

Galileo Mining (ASX:GAL) - exploration, Western Australia (currently in resource definition mode on PGE project)

Cobalt:

Kuniko (ASX:KNI) - exploration, Europe (KNI also has a nickel project)

The report also had a great infographic outlining the required tonnages of the various materials which can be found below:

We note that one Barrenjoey analyst recently upgraded their forecasts for the lithium prices for 2023 and 2024 by 36% to and 86% respectively.

As a bellwether of the battery materials space, the lithium price remains strong:

We remain confident in our battery materials Investments now, as well as over a long term +3 year timeframe.

NHE increases its landholdings by 59%

ASX:NHE   Sep 16, 2022 Announcement

Investment Memo: NHE IM-2022
Objective 3 : Acquire more Tanzanian permits, strengthen in-country presence
Milestone 1 : Finalise licence areas (9 Prospecting Licences) (Q2 2022)
Risk 1 : Permitting risk


With a big helium drilling event slated for Q3 2023, our Investment Noble Helium (ASX: NHE) said yesterday that it had secured an additional 1,138km2 across 5 new prospecting licences - which represents ~59% growth in NHE’s landholdings.

Located around Lake Eyasi, here is where these licences sit in relation to NHE’s pre-existing licences in the Rukwa basin which is the primary focus of its exploration efforts:

NHE has measured helium at the 5 new licences in the Eyasi Basin’s hot springs and they return helium grades of up to 5.7%, compared with the US commercial cutoff of 0.3%.

This is why we think today’s news is important:

  1. It secures further landholdings in “potentially the most prospective primary helium landholding globally
  2. As a result, it allows NHE to pursue another prospective helium resource estimate at Eyasi, to further cement its place as the leading pure-play helium exploration company in the world
  3. It provides slightly different geological fundamentals for NHE to work with, different styles of targets, while still being amenable to the same exploration techniques (the North Rukwa project also has a lake in the middle of it)

Helium is needed for spacecraft (NASA and SpaceX use it) and yes, computer chips.

Among a range of high-tech applications, growth in helium demand from the space industry is expected to grow at a 10% clip each year through to 2026 and the chip industry demand will grow at more than 11% a year in the same time frame.

And if there’s one thing we know about tech - it’s that it usually surprises to the upside.

We think all of this bodes well for NHE’s Q3 2023 drilling event.

Today’s announcement means that NHE is more than half way to knocking down the following milestone set out in our NHE Investment Memo:

We have also updated our internal “Progress Tracker” document to reflect today's news.

Click here to see our Progress Tracker and that slide

What’s next for NHE? We’re very much looking forward to the commencement of the 3D seismic program in late September, which remains on track.

$2M raised to fund copper drilling in WA

ASX:TG1   Sep 16, 2022 Announcement

Investment Memo: TG1 IM-2022
Objective 3 : Drill test the Ashburton Basin copper projects:
Risk 3 : Funding risk


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

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

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

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

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

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

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

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

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

Los Cerros recognised for local ESG endeavours

ASX:LCL   Sep 14, 2022 Announcement

Investment Memo: LCL IM-2022


It is crucial for companies developing resource projects to have the approval of both the governments and communities where they are based. Without such support, these projects rarely make it to commercialisation.

So we were pleased to see that our gold Investment Los Cerros (ASX:LCL) was recently publicly recognised for its ESG initiatives at its 100% owned Quinchia Project, in Risaralda – Colombia.

In a televised event, LCL received an award from Quinchia Mayor, Mr Absalón Trejos Arias on behalf of the Quinchia Regional Council alongside support from local community leaders. The mayor relayed the economic and social benefits of LCL’s presence within the community, predominantly employing locals - we note that 78 of LCL’s total work-force of 80 people (including executives) are Colombian.

This award comes on the back of LCL’s “Quinchips” initiative, which was a finalist in the Colombian Mining Industry ESG awards last year. This project re-trained 15 women from families of artisanal miners in Miraflores village (the closest village to LCL’s Miraflores gold deposit), to build and operate a plantain chip business.

https://youtu.be/JsDwwc1nBQs

LCL is busy progressing the Preliminary Economic Assessment of its Quinchia Project, which hosts a Mineral Resources of 2.6Moz @ 1.02 g/t Au. We expect this to be completed before year-end. The company remains well funded, with a cash balance of over $13 million at the end of June.

For our detailed take on LCL and what we would like to see the company accomplish for the remainder of this year, here is our Investment Memo.

Rig mobilised - drilling to start this week.

ASX:GTR   Sep 13, 2022 Announcement

Investment Memo: GTR IM-2022
Objective 2 : Drilling at the company’s Wyoming uranium projects.


This morning our US-based uranium exploration Investment GTI Energy (ASX: GTR) confirmed that its drill rigs were being mobilised ahead of its 2022 drilling program.

GTR’s 2022 drilling program will be for a total of 100,000 feet (~30,000 metres) at its uranium projects in Wyoming.

Drilling is expected to start this week and is expected to be completed by Christmas.

The ultimate aim of this drilling program is to put out a maiden uranium resource estimate or, at the very least, an achievable exploration target to base future exploration programs.

We will measure the success of GTR’s drilling program against the following expectations:

  • Bull case = Uranium intercepts lead to a maiden JORC resource.
  • Base case = Enough uranium intercepted to put together an achievable exploration target.
  • Bear case = No uranium is intercepted. Projects are considered stranded.

We did a deep dive on the upcoming drilling program in our most recent GTR note which you can read here: GTR launching USA uranium drilling campaign.

Zero Carbon Lithium Project update

ASX:VUL   Sep 13, 2022 Announcement

Investment Memo: VUL IM-2022
Objective 1 : Complete Phase 1 Definitive Feasibility Study (DFS)


Having today announced that its sorption-demo plant was now under construction, Vulcan Energy Resources (FSE | ASX: VUL) also provided updates on other progress at its Zero Carbon Lithium™ Project.

VUL says its lithium hydroxide production Demo Plant, (CLP-Demo Plant) is also progressing and remains on track to start commissioning in late Q1 2023.

The company also provided updates on an upcoming 3D seismic survey in the Insheim license area with seismic teams mobilising to site this week. The survey, surrounding VUL’s existing geothermal operations, will lead toward an expanded development plan.

VUL also advised that it has received Preliminary EIA approval — its second second positive environmental approval — for its Taro license to drill wells for geothermal energy and lithium.

As outlined in our VUL Investment Memo, the key objective that we want to see the company achieve is completion of the DFS.

VUL says the DFS for Phase 1 of the project is progressing and is likely to be completed in Q1 2023. It is also working to provide an updated PFS for Phase 2, ideally completed at the same time.

Direct Lithium Extraction demo plant now being built

ASX:VUL   Sep 13, 2022 Announcement

Investment Memo: VUL IM-2022


Vulcan Energy Resources (FSE | ASX: VUL) has begun onsite construction of its sorption-demo Direct Lithium Extraction (DLE) plant on the premises of local energy utility, Energie Südwest AG (ESW), in Germany.

This demo plant represents a key element of VUL’s strategy to de-risk its Zero Carbon Lithium™ Project, with technical and operations staff to train here ahead of construction of the first commercial plant.

VUL chose a sorption-type DLE approach for its lithium extraction business due to its demonstrated successful commercial deployment globally, and because this method optimally produces lithium chemicals from hot brines with low operating cost and sustainable footprint.

As sorption-type DLE typically requires the brine to be hot, and VUL intends to use the heat in the waste brine from its geothermal renewable energy operations. This removes the need to heat the brine with natural gas (which has become a scarce resource in Germany and the rest of Europe), as is needed at other commercial operations worldwide, and represents a significant financial and greenhouse gas emissions saving.

It also allows for the technology to be used on lower grade lithium brines compared to salar brines. Other advantages over traditional brine evaporation include higher lithium recovery, lower water and chemicals consumption, shorter lead time to production, and minimal land footprint.

The sorption-demo plant is scheduled to start operating in early 2023 after the start of cold commissioning later this year.

CEO Dr Francis Wedin explained that this was the logical next step to continue upscaling towards commercial production of lithium hydroxide with a net zero carbon footprint.

IRD launches Cape Hardy Green Hydrogen bid process

ASX:IRD   Sep 13, 2022 Announcement

Investment Memo: IRD IM-2022
Objective 2 : Greenlight Cape Hardy Port Development


Earlier today, our Wise-Owl long-term iron ore investment Iron Road (ASX:IRD) announced that it had launched the bid process for development of its Cape Hardy site as a green hydrogen hub/ industrial precinct in South Australia.

IRD fully owns the 1,200 hectare greenfield site at Cape Hardy.

Fourteen green hydrogen proponents -primarily comprising globally significant players in the power generation and emerging energy transition sectors - are expected to participate, up from the shortlist of 10 parties expressing interest in July.

The launch follows re-registration of an amended multi-commodity Indigenous Land Use Agreement (ILUA) with Australia’s National Native Title Tribunal. This essentially incorporates green hydrogen and green ammonia to the previous agreement, which focused on iron ore and other mineral exports. This provides certainty to long-term broadened commercial terms for the green hydrogen proponents, paving the launch of the competitive Expressions of Interest process now underway.

We anticipate that the close for the expressions of interest phase will occur during 4Q 2022, with commercial terms and partners likely determined in 1H2023.

We primarily invested in IRD for its Central Eyre Iron Project (CEIP) - among the few development ready, substantial high-grade iron ore projects globally - with Cape Hardy as the logical logistical channel for export. That said, we like that the company also has this port opportunity within its asset base, with an active pathway to commercialisation.

We consider that Cape Hardy has strong government backing, noting that the Federal Government has tipped in a $25m grant commitment to assist with development.

As per our Investment Memo, the next key milestone we’d like to see IRD deliver remains securing a partner to greenlight development.

Gas production testing commenced

ASX:EXR   Sep 12, 2022 Announcement

Investment Memo: EXR IM-2022
Objective 1 : Pilot production program at the gas project
Objective 2 : Exploration drilling


Following COVID-related and other logistical delays Elixir Energy (ASX:EXR) has commenced operations on its Nomgon pilot production program, spudding its first coalbed methane (CBM) gas well, the Nomgon-8 well, on Saturday.

The two well (Nomgon-8 and Nomgon-9) drilling program is expected to take less than 30 days, with pilot production testing operations to begin within weeks of the wells being completed.

The two pilot wells will be drilled by Major Drilling and will each reach a total depth of ~600m with well planning and casing sizes similar to that of most Australian CBM wells.

This is the first such test in the sub-basin so the timetable is uncertain. But as is the norm with CBM wells, water will initially be produced until the reservoir pressure is lowered and gas can be desorbed and flow. The gas will be flared during the production test.

This comes as welcome news to us as the maiden pilot production project was a key objective that we wanted to see EXR achieve this year, as per our Investment Memo.

Exploration continues

Alongside its production testing in the Nomgon sub-basin, EXR’s exploration program across its giant landholding in Mongolia continues, now utilising three local drilling rigs.

EXR publicly tendered for an additional and more technically advanced drilling rig to join the exploration campaign to improve drilling performance. That tender has now been awarded to Major Drilling, who will introduce a larger mineral-style rig at a cost effective price. EXR expects drilling using this new rig to commence within the next few weeks.

EXR also reports that since its last CBM operations update in July, it has drilled the Bulag Suuj-2, Yangir-5, Orio-1 and Big Slope-1 wells.

  • Bulag Suuj-2 well determined that the coals intersected at Bulag Suuj-1 were deeper than 1,000m at this down-dip step-out location.
  • The Orio-1 and Yangir-5 wells failed to reach their target depths due to various drilling problems.
  • Big Slope-1 is still drilling, having already cored ~10 metres of coal. Visible gas was seen associated with the coals and appears to represent a new CBM discovery for EXR (subject to final logging).

Four targets at Kuniko’s nickel copper project

ASX:KNI   Sep 12, 2022 Announcement

Investment Memo: KNI IM-2022
Investment Thesis 2 : Historically producing projects


Our European battery metals Investment Kuniko (ASX:KNI) recently released some promising results from sediment sampling work at its Ringerike project which lies just 15kms away from its Skuterud project.

While we’re eagerly awaiting the assay results from Skuterud where there was visible cobalt mineralisation in 7 of the 8 drill cores, KNI’s other exploration work is throwing up some interesting targets.

Ringerike includes a historically producing mine called Ertelien and between 1688 and 1716 it produced 400kt of ore at a grade of 1.04% nickel, 0.69% copper and 0.17% cobalt.

KNI also has rock chip assays as high as 1.55% nickel and 4.12% copper from the following locations:

Importantly, the stream sediment sampling program confirmed the north-northwest and south- southeast trend.

CEO Antony Beckmand said the work at Ringerike is aiming to see if there is a “potential extension of cobalt mineralisation from the nearby Skuterud Cobalt Project license area”.

KNI noted that it now has four targets at Ringerike and future works would pursue a magmatic nickel-copper sulphide deposit type, like Voisey's Bay — a 6,000 tonnes-per-day mine in Canada operated by Vale S.A., the largest producer of nickel in the world.

While that is a tantalising prospect, KNI still has a range of follow up exploration activities to attend to with further geochemical sampling work to come in Q2 2023 following the end of the Scandinavian winter.

What’s next for KNI? The countdown is on to get the cobalt assays back from Skuterud, which are expected in late September.

Gold discovery in first drill

ASX:TG1   Sep 12, 2022 Announcement

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


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

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

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

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

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

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

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

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

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

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

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

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

Helium production test underway - initial results next week.

ASX:GGE   Sep 09, 2022 Announcement

Investment Memo: GGE IM-2022
Objective 3 : Drilling First Well


Our 2021 Catalyst Hunter Pick of The Year Grand Gulf Energy (ASX: GGE) is now flow testing its first ever pure play helium well at its US helium project.

GGE announced today that follow up operations are underway with the ultimate aim of delivering a successful flow test at its helium discovery.

GGE is following the discovery made at its Jesse #1A well where the company confirmed commercially viable helium concentrations of up to 0.65%.

The final part of unlocking its helium project that could result in the company transforming from helium explorer to producer is to prove that the well can produce commercially viable flow rates.

GGE expects initial results from the flow testing program as early as next week.

With some preliminary flow test results expected next week, here is what we know GGE have so far and what we are still waiting on:

  1. A proven helium structure that can be followed up with additional drilling. ✅
  2. Commercially viable helium concentrations above our 0.4% expectation (GGE’s grades were between 0.44 and 0.65%). ✅
  3. Commercially viable flow rate 🔄- (Preliminary results expected early next week).

Before this drilling program, we had detailed our bullish/base/bear case expectation for the flow test results.

Our expectations are primarily based on the flow rates at the nearby already producing Doe Canyon helium field.

To check out our detailed breakdown of the expectation, click here to read our previous note.

Copper demand to outstrip supply by early 2030s?

Sep 07, 2022

Macro: Copper


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

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

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

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

Kuniko (ASX: KNI) - Next Investors Portfolio

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

Titan Minerals (ASX: TTM) - Next Investors portfolio

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

TechGen Metals (ASX: TG1) - Catalyst Hunter portfolio

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

Mandrake Resources (ASX: MAN) - Catalyst Hunter Portfolio

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

Auking Mining (ASX: AKN) - Catalyst Hunter Portfolio

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

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

Our key takeaways from the article are as follows:

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

Lithium JORC resource by December - drilling with multiple rigs.

ASX:LRS   Sep 07, 2022 Announcement

Investment Memo: LRS IM-2022
Investment Thesis 1 : Potential to re-rate again
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 has multiple drill rigs on site, and is now ~35% of the way through its 25,000m drilling program, after which it hopes to put together a maiden JORC resource in December 2022.

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

The key takeaway from today’s results was that LRS continues to increase the width of its discovery and continues to hit more lithium mineralisation at depth.

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

  • Drillhole 23: 26.88 at 1.4% lithium from 94m
  • Drillhole 26: 28.8m at 1.16% lithium from 307m.
  • Drillhole 24: 10m at 1.05% lithium from 186m.

The images below give us an idea of the size and scale of LRS’ discovery.

Outside of the resource definition drilling, LRS also confirmed that it would run a geochemical sampling program along the southern part of its discovery, looking to test for extensions across what it calls a ‘lithium corridor’ extending across 4km.

At present LRS is yet to drill test for extensions to its discovery in that southern part of its project area - so we will be watching to see what comes from the sampling work.

While we wait for news of a maiden JORC resource expected by December 2022, here’s our expectations for LRS’s JORC resource, which are 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 the reasoning behind our expectations: Lithium deposit getting bigger - plenty more drilling to come

Ground granted along strike $1.3BN Capricorn Metals.

ASX:BPM   Sep 07, 2022 Announcement

Investment Memo: BPM IM-2022
Objective 2 : Side bets: Drilling at the company’s other projects.
Milestone 3 : Drilling program at the Claw gold project


This morning our exploration Investment BPM Minerals (ASX: BPM) confirmed that its exploration licenses at its Claw Gold project had been granted.

BPM’s gold project sits adjacent to Capricorn Metals (capped at $1.3BN) Mount Gibson gold project, where the company has a 2.1M ounce gold resource and is currently drilling less than ~1.5km away from BPM’s ground.

More importantly, BPM already has two high priority drill ready targets right near the southern border of the Capricorn Metals project.

  1. The Lewie anomaly - Covers an area measuring 1,200m x 400m
  2. The Chickie anomaly - Covers an area measuring ~1,000m x 500m.

We recently saw the following presentation from Capricorn Metals at the ‘Diggers and Dealers’ conference, where the management team laid out a masterplan for the project and the areas surrounding it.

As a sign of this intent, the company completed ~80,000m of drilling and then committed to over 20,000m more of drilling with a view of making a final investment decision on redeveloping the project by the end of the year.

Our view is that what’s good for Capricorn will be good for the look through valuation of BPM’s ground.

You can see that presentation here starting from 14:47 onwards:

Next for BPM’s gold project:

BPM will complete some geochemical sampling before putting together the highest priority drill targets for an RC/aircore drilling program at the project.

Gas production testing commenced

ASX:EXR   Sep 12, 2022 Announcement

Investment Memo: EXR IM-2022
Objective 1 : Pilot production program at the gas project
Objective 2 : Exploration drilling


Following COVID-related and other logistical delays Elixir Energy (ASX:EXR) has commenced operations on its Nomgon pilot production program, spudding its first coalbed methane (CBM) gas well, the Nomgon-8 well, on Saturday.

The two well (Nomgon-8 and Nomgon-9) drilling program is expected to take less than 30 days, with pilot production testing operations to begin within weeks of the wells being completed.

The two pilot wells will be drilled by Major Drilling and will each reach a total depth of ~600m with well planning and casing sizes similar to that of most Australian CBM wells.

This is the first such test in the sub-basin so the timetable is uncertain. But as is the norm with CBM wells, water will initially be produced until the reservoir pressure is lowered and gas can be desorbed and flow. The gas will be flared during the production test.

This comes as welcome news to us as the maiden pilot production project was a key objective that we wanted to see EXR achieve this year, as per our Investment Memo.

Exploration continues

Alongside its production testing in the Nomgon sub-basin, EXR’s exploration program across its giant landholding in Mongolia continues, now utilising three local drilling rigs.

EXR publicly tendered for an additional and more technically advanced drilling rig to join the exploration campaign to improve drilling performance. That tender has now been awarded to Major Drilling, who will introduce a larger mineral-style rig at a cost effective price. EXR expects drilling using this new rig to commence within the next few weeks.

EXR also reports that since its last CBM operations update in July, it has drilled the Bulag Suuj-2, Yangir-5, Orio-1 and Big Slope-1 wells.

  • Bulag Suuj-2 well determined that the coals intersected at Bulag Suuj-1 were deeper than 1,000m at this down-dip step-out location.
  • The Orio-1 and Yangir-5 wells failed to reach their target depths due to various drilling problems.
  • Big Slope-1 is still drilling, having already cored ~10 metres of coal. Visible gas was seen associated with the coals and appears to represent a new CBM discovery for EXR (subject to final logging).

Four targets at Kuniko’s nickel copper project

ASX:KNI   Sep 12, 2022 Announcement

Investment Memo: KNI IM-2022
Investment Thesis 2 : Historically producing projects


Our European battery metals Investment Kuniko (ASX:KNI) recently released some promising results from sediment sampling work at its Ringerike project which lies just 15kms away from its Skuterud project.

While we’re eagerly awaiting the assay results from Skuterud where there was visible cobalt mineralisation in 7 of the 8 drill cores, KNI’s other exploration work is throwing up some interesting targets.

Ringerike includes a historically producing mine called Ertelien and between 1688 and 1716 it produced 400kt of ore at a grade of 1.04% nickel, 0.69% copper and 0.17% cobalt.

KNI also has rock chip assays as high as 1.55% nickel and 4.12% copper from the following locations:

Importantly, the stream sediment sampling program confirmed the north-northwest and south- southeast trend.

CEO Antony Beckmand said the work at Ringerike is aiming to see if there is a “potential extension of cobalt mineralisation from the nearby Skuterud Cobalt Project license area”.

KNI noted that it now has four targets at Ringerike and future works would pursue a magmatic nickel-copper sulphide deposit type, like Voisey's Bay — a 6,000 tonnes-per-day mine in Canada operated by Vale S.A., the largest producer of nickel in the world.

While that is a tantalising prospect, KNI still has a range of follow up exploration activities to attend to with further geochemical sampling work to come in Q2 2023 following the end of the Scandinavian winter.

What’s next for KNI? The countdown is on to get the cobalt assays back from Skuterud, which are expected in late September.

Gold discovery in first drill

ASX:TG1   Sep 12, 2022 Announcement

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


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

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

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

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

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

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

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

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

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

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

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

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

Helium production test underway - initial results next week.

ASX:GGE   Sep 09, 2022 Announcement

Investment Memo: GGE IM-2022
Objective 3 : Drilling First Well


Our 2021 Catalyst Hunter Pick of The Year Grand Gulf Energy (ASX: GGE) is now flow testing its first ever pure play helium well at its US helium project.

GGE announced today that follow up operations are underway with the ultimate aim of delivering a successful flow test at its helium discovery.

GGE is following the discovery made at its Jesse #1A well where the company confirmed commercially viable helium concentrations of up to 0.65%.

The final part of unlocking its helium project that could result in the company transforming from helium explorer to producer is to prove that the well can produce commercially viable flow rates.

GGE expects initial results from the flow testing program as early as next week.

With some preliminary flow test results expected next week, here is what we know GGE have so far and what we are still waiting on:

  1. A proven helium structure that can be followed up with additional drilling. ✅
  2. Commercially viable helium concentrations above our 0.4% expectation (GGE’s grades were between 0.44 and 0.65%). ✅
  3. Commercially viable flow rate 🔄- (Preliminary results expected early next week).

Before this drilling program, we had detailed our bullish/base/bear case expectation for the flow test results.

Our expectations are primarily based on the flow rates at the nearby already producing Doe Canyon helium field.

To check out our detailed breakdown of the expectation, click here to read our previous note.

Copper demand to outstrip supply by early 2030s?

Sep 07, 2022

Macro: Copper


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

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

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

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

Kuniko (ASX: KNI) - Next Investors Portfolio

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

Titan Minerals (ASX: TTM) - Next Investors portfolio

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

TechGen Metals (ASX: TG1) - Catalyst Hunter portfolio

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

Mandrake Resources (ASX: MAN) - Catalyst Hunter Portfolio

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

Auking Mining (ASX: AKN) - Catalyst Hunter Portfolio

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

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

Our key takeaways from the article are as follows:

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

Lithium JORC resource by December - drilling with multiple rigs.

ASX:LRS   Sep 07, 2022 Announcement

Investment Memo: LRS IM-2022
Investment Thesis 1 : Potential to re-rate again
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 has multiple drill rigs on site, and is now ~35% of the way through its 25,000m drilling program, after which it hopes to put together a maiden JORC resource in December 2022.

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

The key takeaway from today’s results was that LRS continues to increase the width of its discovery and continues to hit more lithium mineralisation at depth.

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

  • Drillhole 23: 26.88 at 1.4% lithium from 94m
  • Drillhole 26: 28.8m at 1.16% lithium from 307m.
  • Drillhole 24: 10m at 1.05% lithium from 186m.

The images below give us an idea of the size and scale of LRS’ discovery.

Outside of the resource definition drilling, LRS also confirmed that it would run a geochemical sampling program along the southern part of its discovery, looking to test for extensions across what it calls a ‘lithium corridor’ extending across 4km.

At present LRS is yet to drill test for extensions to its discovery in that southern part of its project area - so we will be watching to see what comes from the sampling work.

While we wait for news of a maiden JORC resource expected by December 2022, here’s our expectations for LRS’s JORC resource, which are 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 the reasoning behind our expectations: Lithium deposit getting bigger - plenty more drilling to come

Ground granted along strike $1.3BN Capricorn Metals.

ASX:BPM   Sep 07, 2022 Announcement

Investment Memo: BPM IM-2022
Objective 2 : Side bets: Drilling at the company’s other projects.
Milestone 3 : Drilling program at the Claw gold project


This morning our exploration Investment BPM Minerals (ASX: BPM) confirmed that its exploration licenses at its Claw Gold project had been granted.

BPM’s gold project sits adjacent to Capricorn Metals (capped at $1.3BN) Mount Gibson gold project, where the company has a 2.1M ounce gold resource and is currently drilling less than ~1.5km away from BPM’s ground.

More importantly, BPM already has two high priority drill ready targets right near the southern border of the Capricorn Metals project.

  1. The Lewie anomaly - Covers an area measuring 1,200m x 400m
  2. The Chickie anomaly - Covers an area measuring ~1,000m x 500m.

We recently saw the following presentation from Capricorn Metals at the ‘Diggers and Dealers’ conference, where the management team laid out a masterplan for the project and the areas surrounding it.

As a sign of this intent, the company completed ~80,000m of drilling and then committed to over 20,000m more of drilling with a view of making a final investment decision on redeveloping the project by the end of the year.

Our view is that what’s good for Capricorn will be good for the look through valuation of BPM’s ground.

You can see that presentation here starting from 14:47 onwards:

Next for BPM’s gold project:

BPM will complete some geochemical sampling before putting together the highest priority drill targets for an RC/aircore drilling program at the project.

Updated investor presentation for our helium Investment

ASX:NHE   Sep 07, 2022 Announcement

Investment Memo: NHE IM-2022


This morning our helium exploration Investment Noble Helium (ASX: NHE) released a new investor presentation.

NHE listed on the ASX in April and is already making significant progress toward its planned maiden drilling program in the second half 2023.

The presentation gives a really good overview of the helium supply and demand outlook whilst also giving a great retrospective view of where NHE is at right now and what is coming up next.

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

Farmout process starts - interest received

ASX:NHE   Sep 06, 2022 Announcement

Investment Memo: NHE IM-2022


Our helium Investment, Noble Helium (ASX:NHE), said it is kicking off its farmout process yesterday.

NHE Managing Director Justyn Wood said the company had already received interest even with, ‘limited promotion of the farmout opportunity.

NHE does not expect to conclude discussions on farmout until the results from the upcoming 3D seismic campaign are received.

We think this makes sense, as that 3D seismic campaign will give NHE a much better look at the targets it's working with.

And a farmout could prove valuable here as NHE looks to fund the 2023 drill program which is due to take place during the dry season in Tanzania.

Justyn Wood will be presenting at 2.45pm, Wednesday 7 September (tomorrow) at the RIU Good Oil and Gas Energy Conference in Perth.

Drilling completed at Hellcat, assays next month

ASX:PFE   Sep 06, 2022 Announcement

Investment Memo: PFE IM-2022
Objective 1 : Drilling of the newly acquired Lead/Silver project.


Our multi-commodity exploration investment Pantera Minerals (ASX:PFE) has now completed its maiden drilling campaign at the Hellcat polymetallic project (PFE owns 80%) in WA’s Edmund Basin.

A total of 4 diamond holes were drilled for 1832.7 metres, testing several high priority gravity targets and modelled electromagnetic conductors.

Hydrothermal alteration was observed in all four drillholes.

Whilst multiple sulphides were observed in all holes (pyrrhotite, pyrite, galena and chalcopyrite) in steeply dipping veins and fracture sets, no significant base metal mineralised zones were intersected.

We look forward to the assay results, expected around the end of October, which fits in with our Objective #2 that we’d like to see PFE deliver this year, as per our Investment Memo.

Hellcat is located near to one of the region’s most significant discoveries of the past two decades, Galena Mining’s (ASX:G1A) ‘Abra’ polymetallic deposit. Of note, interest in the Edumd Basin has heightened, with Bellavista Resources applying for the tenements surrounding Hellcat and adjoining G1A tenements.

Next up for PFE will be the commencement of drilling at Weelaranna manganese project, which we expect to commence next month.

Update on neighbours exploring for gas in the Northern Territory

ASX:TEE   Sep 05, 2022 Announcement

Investment Memo: TEE IM-2022
Investment Thesis 1 : Beetaloo Basin gas peers trading at many multiples of TEE


This morning our domestic gas exploration Investment Top End Energy (ASX: TEE) provided an update on the activity of its neighbours in the Beetaloo sub-basin in the Northern Territory.

TEE detailed the activities of:

  1. Santos and Tamboran Resources - Who are production testing two wells (T2H and T3H) and currently reporting normalised flow rates of 7.4 mmscfd over 1,000 metres (T3H) and 4.3 mmscfd over 1,000 metres (T2H).
  2. Empire Energy - Which just drilled and flow tested its Carpentaria-2H well reporting a normalised flow rate of 2.8 mmscf / day per 1,000m of horizontal section

For some context on these results, industry analysts and operators in the basin consider a flow rate of 3 million standard cubic feet per day (per 1,000m of horizontal well section) as the “commerciality standard”.

This means the results from its neighbours are either exceeding commerciality standards or coming extremely close.

We touched on all of the majors actively exploring the region and how we would be watching their exploration initiatives closely in our most recent TEE note.

We think that any success by TEE’s neighbours would bring market interest in the basin and eventually flow through to interest in the permits TEE holds in and around the region.

We see these developments out of Empire as positive as part of the overall macro picture regarding the Beetaloo sub-basin.

Next:

We want to see TEE conduct its on-country meetings and secure tenure over its permits that sit closest to the Beetaloo sub-basin.

Testing for natural hydrogen & helium prospectivity

ASX:TEE   Sep 05, 2022 Announcement

Investment Memo: TEE IM-2022
Objective 2 : Clearer strategy on clean energy projects


Our domestic gas exploration Investment Top End Energy (ASX: TEE) is starting to outline its clean energy strategy by reviewing its projects for helium and natural hydrogen prospectivity.

Today, TEE announced that it has commissioned consultants to assess its existing portfolio of projects to see whether or not the projects are prospective for helium or natural hydrogen.

At the same time, TEE also confirmed that it is looking into potential collaboration opportunities with companies already active in Australia's natural hydrogen/helium space.

As part of our 2022 TEE Investment Memo, we wanted to see TEE outline its forward strategy concerning clean energy projects.

With today's news, TEE has taken a first step towards outlining its overall strategy, which looks like it will be in either the natural hydrogen or helium industry.

TEE has confirmed that following initial studies on prospectivity it would look to do some field surveying/sampling to incorporate all of the data into an extended exploration program in H1-2023.

At this stage, it is still too early for us to analyse TEE's strategy. We will be watching to see what comes from the prospectivity studies before providing a deeper dive into the company's natural hydrogen/helium potential.

Operational update across domestic gas projects

ASX:TEE   Sep 05, 2022 Announcement

Investment Memo: TEE IM-2022
Objective 3 : Exploration licence applications to be granted over NT projects
Objective 1 : Target generation works at the QLD gas project


This morning our domestic gas exploration Investment Top End Energy (ASX: TEE) put out an update on the work programs across its Queensland/Northern Territory gas projects.

Queensland gas project:

TEE’s Queensland project sits ~50km west of the Gilmore gas field, which has previously demonstrated commercial conventional gas production.

Initial seismic interpretation is indicating the same formations present in the Gilmore gas field may extend into TEE’s ground, but no wells have been drilled to test this theory.

TEE has now confirmed that it has reprocessed available existing 2D seismic data for its project and is now looking to integrate this into a new project wide geological model.

This will let TEE enhance its understanding of the overall project area, optimise the location of its upcoming 2D seismic acquisition program and identify potential drilling targets.

TEE expects the modelling and interpretation exercise to be completed in Q4 of this year whilst the company continues discussions with landowners and seismic contractors for a planned ~120km 2D seismic data acquisition program.

Next:

We want to see the company start the 2D seismic data acquisition process ahead of a maiden drilling program in 2023.

Northern Territory gas project:

TEE’s highest priority permits (EP 258 and EP 259) sit on the edge of the Greater McArthur Basin, south of the discoveries Santos, Origin and Empire Energy have made across the Beetaloo sub-basin.

Currently, no seismic data is available over the project area. Still, data collected by TEE’s neighbours seem to suggest that the structures which they have drilled and made discoveries could extend into TEE’s ground.

TEE is looking to test this theory in 2023, but before the company can do any exploration work, it needs to finalise permitting and secure its tenure.

Today, TEE confirmed that it is on track for its on country meetings with native title holders in mid-September.

Given the unexpected delays, TEE confirmed that it has used the time to negotiate the terms of a proposed exploration agreement which it aims to present at the on country meetings to native title holders.

The agreement is a key prerequisite to achieving formal granting of the permit, which should mean TEE is making up for lost time here, aiming to get it all done as quickly as possible.

TEE also confirmed that it hopes to have EP 258 granted before the end of the year and up to ~150km of 2D seismic surveying planned for H1 2023.

Next:

We want to see the company successfully complete the on country meetings and progress towards a formal granting of its key permits surrounding the Beetaloo sub-basin in the Northern Territory.

Graphite drilling ramps up with second rig on site

ASX:SGA   Sep 05, 2022 Announcement

Investment Memo: SGA IM-2022
Objective 4 : Complete metallurgical testwork
Objective 3 : Increase confidence in the resource - upgrade JORC resource from inferred to indicated


Sarytogan Graphite (ASX:SGA) has accelerated drilling operations at its graphite project in Central Kazakhstan with a second drill rig now on site.

Adding a second rig will help the company meet the objectives of its current 4,000m diamond drill program by the end of the year, which involves drilling across all mineralised areas including into areas where coarser flakes are anticipated.

It is hoped that once completed, the drilling program will contribute to a meaningful resource upgrade — one of the key objectives that we want to see SGA achieve this year, as outlined in our SGA Investment Memo.

SGA is releasing drilling results to the ASX in regular batches as they become available. The first batch from the Central Graphite Zone, which included multiple thick and high grade intercepts, was reported on 15 August 2022.

At that time, SGA said that metallurgical testwork was also underway which will help clarify the flake size distribution of the graphite resource — another of our key objectives for SGA.

The second batch of results is expected later this month and will include results from holes drilled outside of the project’s current JORC mineral resource estimate area (209Mt @ 28.5% TGC Inferred Mineral Resource).

Managing Director Sean Gregory commented on how easy it has been to add additional personnel and equipment in Kazakhstan, which he said is a testament to SGA’s strong in-country relationships and the maturity of the Kazakhstan mining industry.

Neighbour Dreadnought confirms significant discovery

ASX:LNR   Sep 05, 2022

Investment Memo: LNR IM-2022
Investment Thesis 2 : LNR's tenements are adjacent to the “next major Rare Earths project in Australia”


Today, LNR’s Gascoyne neighbour Dreadnought Resources (capped at $430M) announced some of its best drilling results to date, extending its “Yin” rare earths discovery with high grade rare earths assays.

Dreadnought’s results continue to demonstrate a very good thickness and grade of intercept along what is now ~3kms of strike at Yin.

At the same time Dreadnought also announced that it may have made an entirely new discovery at one of its other drilling targets with hand held XRF analysis confirming the presence of rare earths mineralisation.

Dreadnought’s discoveries sit roughly 30km away from LNR’s ground, which also shares similar geological characteristics to both Dreadnought and Hastings - more on this below.

All of this bodes well for LNR which is set to commence its own drilling program in the region any day now.

Dreadnought has been on a tear up the charts in the last month, with its share price moving up more than 300% since mid-June from low to high.

Dreadnought is chasing another Gascoyne rare earths company Hastings Technology Metals (capped at ~$550M) - which Twiggy Forest’s Wyloo Metals recently backed with $150M, and has just entered a trading halt ahead of a capital raise this morning.

As we mentioned above, LNR’s project sits on similar geology to both Hastings’ discovery and the recent discoveries made by Dreadnought, in particular:

  1. Outcropping ironstones confirmed to host rare earths (through rock chip sampling) - LNR has returned rock chips grading as high as 8.01% total rare earths oxide (TREO).
  2. Geophysical anomalies used to rank the highest priority drill targets - LNR has 12 high priority geophysical anomalies over its project area.

The only difference between LNR and its neighbours is that LNR is yet to drill and make a rare earths discovery.

We are hoping LNR can emulate the success of its neighbours and close in on the market caps of its neighbours with a successful drilling program set to run over the coming weeks and months.

What’s next for LNR? The commencement of drilling. This should be imminent as the company flagged “early September” for the start of drilling.

3D seismic helps define drilling sweet spots

ASX:88E   Sep 05, 2022 Announcement

Investment Memo: 88E IM-2022
Objective 3 : Clear Exploration Program laid out for Project Icewine


88 Energy (ASX:88E) has defined “sweet spots” for drilling ahead of its 1H 2023 exploration well at its Project Icewine East on Alaska’s North Shelf.

After recently licensing 3D seismic data over its Icewine East project 88E set about re-interpreting and analysing the data to try and put together a high priority drilling target.

Today, 88E completed all of this analysis and interpretation works and confirmed that it would look to drill the Hickory-1 exploration well in H1 2023.

This well is designed as a vertical well to be drilled to approximately 12,500 feet to intersect and test all four key play fairways at the project (Shelf Margin Delta, Slope Fan System, Basin Floor Fan and Kuparuk).

Importantly, these are the same structures where 88E’s neighbour Pantheon Resources (capped at $1.6BN) has successfully drilled.

As well as refining selection of target drilling locations, 88E can use the seismic data to further enhance its existing 2D and 3D interpretation and reservoir understanding, and improve the probability of geological success.

88E reported that areas of anomalous “Amplitude Variation with Offset” behaviour were identified, which could indicate hydrocarbon content and/or superior reservoir quality.

Drilling the Hickory-1 well helps meet a objective that we want to see 88E achieve over the coming 12 months — ”Clear Exploration Program laid out for Project Icewine”.

We want to see 88E flow testing its acreage to follow up on the theory that its London-listed neighbour Pantheon Resources’ proven reservoirs could extend into 88E’s project area.

TG1 brings in Rio Tinto as a project partner

ASX:TG1   Sep 05, 2022 Announcement

Investment Memo: TG1 IM-2022
Investment Thesis 1 : Tiny enterprise value (EV) means leverage to a discovery
Objective 2 : Drilling at the Paterson Province copper projects:


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

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

The key terms of the agreement are as follows:

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

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

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

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

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

Next:

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

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

ASX:TG1   Sep 02, 2022 Announcement

Investment Memo: TG1 IM-2022
Investment Thesis 1 : Tiny enterprise value (EV) means leverage to a discovery
Objective 3 : Drill test the Ashburton Basin copper projects:
Milestone 4 : Drilling commencement


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

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

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

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

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

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

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

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

Updated investor presentation

ASX:IVZ   Sep 02, 2022 Announcement

Investment Memo: IVZ IM-2022


This morning our 2020 Energy Pick Of The Year Invictus Energy (ASX: IVZ) released a new investor presentation.

The slide deck comes after the recent granting of two exploration permits that cover the entire Cabora Bassa Basin in Zimbabwe, which gives IVZ (in its own words) - “basin master position.”

Effectively meaning in the event a basin opening discovery is made, IVZ will be in control of all of the other prospects in the basin.

IVZ is now only a few weeks away from drilling the first of its two wells this year (Mukuyu-1), targeting a gross unrisked prospective resource of 20 trillion cubic feet of gas and 845 million barrels of condensate.

We found the following slide particularly useful for a quick recap of what IVZ has done this year and to see what’s coming next.

To check out the updated investor presentation click on the image below:

First look at IVZ’s ‘String of Pearls’

ASX:IVZ   Sep 02, 2022 Announcement

Investment Memo: IVZ IM-2022
Investment Thesis 1 : First mover on an Elephant Scale Target
Investment Thesis 3 : We like big oil & gas exploration drilling events


This morning our 2020 Energy Pick Of The Year Invictus Energy (ASX: IVZ) gave us a first look at its basin margin ‘String of Pearls’ play.

Using the 2D seismic data that IVZ acquired in 2021, the company has managed to map out several high priority prospects all along the basin margin.

The key highlight from today’s announcement was that all of these new prospects come in addition to the single Mukuyu prospect where IVZ’s gross unrisked 20 trillion cubic feet + 845 million barrels of gas condensate prospective resource sits.

IVZ confirmed today that an updated prospective resource is being prepared to include the potential in these prospects. We think the market is underappreciating just how important this could be.

We expect to see this be the next major share price catalyst (outside of the Mukuyu-1 drilling program).

Below is an image of these prospects:

Another highlight from today’s announcement was the comparison made to the East Africa Rift “String of Pearls” play that resulted in material discoveries in the Lokichar Basin in Kenya.

This was the same basin where one of our first ever oil and gas picks Africa Oil made its discovery and re-rated by over 1,200%.

There is no guarantee IVZ will experience the same success Africa Oil did but after today’s announcement, we like that IVZ has multiple shots to open up an entirely new basin in East Africa, first at Mukuyu-1 and then again across the “String of Pearls” prospects.


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