OD6 to complete US critical minerals acquisition in Nevada

Our US critical mineral Investment OD6 Metals (ASX: OD6) just exercised the option to acquire its fluorspar project in Nevada, USA.

OD6 first announced the acquisition back in March.

At the time it was via an option agreement - where OD6 had 120 days (extendible by 60 days with $25k) to work up the asset (basically like an extended due diligence period).

So it’s good to see OD6 has the confidence to exercise the option within 100 days of the announcement.

Since then OD6 has mapped an ~8km mineralised corridor across three structures with samples grading up to 94% CaF₂.

Then OD6 acquired old data and found:

• The previous project owner Union Carbide from back in the 50’s had drilled 4 holes.
• Metallurgical sampling results which showed the project can produce acid-spar grade fluorspar (the type of fluorspar buyers like the Pentagon are out looking for).

(source)

OD6’s project produced fluorspar back in the 1950s, but hasn’t had any modern exploration done on it in years.

(~26,000 tonnes @ 44.9% fluorite from a small-scale open pit on the side of a hill).

Now we know the exploration upside is 8X bigger than first thought AND with the old drilling data that the fluorspar isn’t only at surface but actually extends into the side of those hills…

(source)

Today, OD6 exercised the option to acquire the asset which means OD6 will now settle $100k in shares (in addition to the $100k in cash, already paid) to take 100% ownership of the project.

(source)

All up there is the cash and share payments (now sorted) and Deferred Milestone Payments linked to project progress, totalled at $3.8M, also split in cash and shares (source).

Why are we Invested in OD6

We Invested in OD6 because it was the first ASX-listed small cap with a pure-play fluorspar asset inside US borders AND because we think there is a window of opportunity to bring a fluorspar project into production in the US with support from funding out of the US.

Like the funding support that small cap ARES mining received (up to US$250M from the Pentagon).

(source)

The only reason Ares received that funding was because its the only fully-permitted, ready-to-restart fluorspar mine in the United States.

Ares' project in Utah is currently designated as the sole domestic supplier of acid-grade fluorspar to the US government. (source)

The interesting part is the way the contract is structured. The Department of War orders the product as Ares delivers it.

No acidspar produced = no payment.

We think that now OD6 with its metwork results and historical drilling data has enough data already to put itself in the conversation as an alternative domestic supplier of fluorspar…

AND the dream scenario for us as OD6 investors would be the Department of War issuing a similar contract to OD6.

It’s hard to see the DoW put all its eggs in one basket (which is one small Canadian listed company) for the supply of a critical mineral that it is 100% reliant on imports for.

In an announcement last month, OD6’s Managing Director commented on US engagement confirming that OD6 had enough data that “could enable application to the White House for FAST-41 status” on its project:

(source)

FAST-41 is a special accelerated USA permitting and development framework for projects considered “critical” and essential for US national security. (more on Fast-41 status here)

What we want to see next from OD6

🔄 Target generation for US fluorspar project

We want to see OD6 samples in and around the old workings on its project, run some geophysics and generate high priority drill targets ahead of its maiden drilling program.

Milestones:

• ✅ Rock chips
• ✅ Channel sampling
• ✅ Historic drill results
• ✅ Metallurgical testwork showing OD6’s material can be processed to acid-spar grades.
• 🔄 NEW: Digitisation of scanned paper maps and cross-sections into a 3D geological model
• 🔄 Soil/channel sampling
• 🔲 Geophysics
• 🔲 Drill targets generated

🔲 Strategic / Government Engagement for fluorspar in the US

• 🔄 Fast-track permitting 🔲 Engage with US Department of War, Department of Energy, or DLA regarding domestic fluorspar supply
• 🔲 Explore strategic partnerships or offtake discussions