Scoping study commences for Halls Creek base metal mining hub

ASX:AKN  

Dec 20, 2022

Announcement

Investment Memo: AKN IM1

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Today our exploration junior AuKing Mining (ASX:AKN) announced it had begun a Scoping Study for an open-pit and underground mining operation at its Koongie Park base metals project, located in the Halls Creek Mining hub in WA.

The study would focus on the Sandiego deposit, which contains a JORC resource of 4.1Mt @ 1.38% copper, 4.28% zinc, 0.2g/t gold, 25g/t silver and 0.41% lead, primarily in sulphide ores (ie can use conventional extraction methods).

The study will also give consideration to nearby deposits with similar mineralogy, such as sulphide ores from the Emull deposit, as well as nearby deposits owned by Cazaly Resources (ASX:CAZ). However, the Onedin deposit would be excluded, given that a different extraction path would be required.

AKN has appointed Wave International to assist with the preparation of the Scoping Study, which is anticipated to conclude by March 2023.

What’s up next?

We’re keen to see AKN complete the acquisition of its Tanzanian assets and commence field work programmes there, especially at the two advanced uranium prospects. We also like to see the outcomes for the Scoping Study at Koongie Park, which could pave a way for quick development and early cashflow.

Tanzanian assets

🔲 Complete acquisition - December 22

🔲 Start fieldwork sampling, review existing data - 1Q23

Koongie Park

🔲 Scoping Study at Sandiego deposit - 2Q23

🔲 Drilling of two anomalies at Emull prospect - 2Q23

🔲 Metwork progress for Onedin prospect - 1H23

$1.5 million R&D rebate bolsters cash balance

ASX:BOD  

Dec 20, 2022

Announcement

Investment Memo: BOD IM-2022

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Our cannabis Investment Bod Science (ASX:BOD, note name recently changed from Bod Australia) got a boost to its coffers from the Aussie government today - which shores up its cash position as it advances clinical trials for its CBD products.

The federal government helps companies innovate and grow by offsetting some of the costs of eligible research and development (R&D).

This is to the benefit of the nation as it can lead to commercially viable innovations that spur economic growth, as well as to innovative companies by subsidising some of their upfront costs.

So it was good to see BOD’s R&D focus rewarded, as it announced this morning the receipt of $1.512M via a R&D Tax Incentive Rebate for the 2022 financial year.

As the table below attests, BOD has certainly been active this year in this space, advancing 11 R&D programs. Three of these are now in phase I and II trials, including a Schedule 3 (pharmacist-only) CBD (cannabidiol) product to treat insomnia currently recruiting patients.

What’s up next?

We’re keen to see an update on patient recruitment for the Schedule 3, CBD-based insomnia treatment, early in 2023. A dossier submission to the TGA is expected in 1H23.

Subject to the outcomes of the trial, BOD could have this product available for purchase late 2023/ 1H24, which would make it among the first to offer such OTC CBD-products in Australian pharmacies.

We also anticipate an update on progress of the long Covid observational trial, early in the new year.

Also on our watchlist is to see progress of Bod's latest announced acquisition, Aqua Phase, which has the potential to revolutionise how CBD is delivered to the human body.

Soil sampling completed at WA nickel/copper/PGE project

ASX:TG1  

Dec 19, 2022

Announcement

Investment Memo: TG1 IM-2022
Investment Thesis 4 : Tiny enterprise value (EV) means leverage to a discovery

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Our junior exploration Investment TechGen Metals (ASX: TG1) has just completed a soil sampling program at its nickel/copper/PGE project in WA.

TG1’s project sits inside the West Yilgarn province - the same region where Chalice Mining made its multi-billion dollar Julimar discovery.

The focus of this sampling program was a 25km x 4km long magnetic anomaly inside TG1’s ground, the soil sampling focused on the northeastern section of this target.

TG1 now has ~434 samples submitted for analysis with assays pending. TG1 intends to follow up on any successfully identified Ni-Cu-PGE targets with moving loop electromagnetic surveys to identify possible magmatic massive sulphide intrusive systems.

While this project is a key objective of our Investment Memo for TG1, we will be watching to see what comes from the results.

Euro Manganese releases quarterly, with cash balance update

ASX:EMN  

Dec 19, 2022

Announcement

Investment Memo: EMN IM-2022

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Our European battery metals Investment, Euro Manganese (ASX:EMN) released its quarterly reports today, which summarised its significant progress to date.

EMN is developing a High Purity Manganese project in the European Union (Czech Republic) through the recycling of a tailings resource - and we’re pleased with this quarter’s progress.

We’re hoping EMN can seal an offtake and secure financing for the project in the coming year.

Our key highlights from the quarterly include:

  • Commissioning of Demonstration Plant underway, samples expected in Q1 2023 - this was a big one for us as we believe it will be an important precursor to an offtake agreement - read all about the importance of the Demonstration Plant here.
  • Cash balance of CAD$21.6M ($23.6M) at 30 September 2022 - this should fund operation of the Demonstration Plant for a year, more land acquisitions, potentially some future construction of infrastructure and facilities for EMN’s project and the progress of the Company's North American strategy - a key pillar of EMN’s appeal after the Inflation Reduction Act laid out incentives for domestic production of battery materials.
  • EPCM tender process - to get the project going, EMN needs to put out a tender for construction of the commercial processing plant. EMN is looking at bids from “five tier 1 EPCM firms” and expects the tender to be awarded in Q1 2023
  • Life Cycle Assessments - EMN’s High Purity Manganese project has been shown to not only improve the environment by remediating a tailings deposit - it has a carbon footprint of roughly one-third of the China-based incumbent industry (China makes 95% of the world’s High Purity Manganese). A win for both the environment and EMN’s ESG credentials.
  • Appointment of VP Commercial - another McKinsey alumni joins EMN, Dr. James Fraser. Given Dr. Fraser’s background in the automotive industry, geoscience, mining and consulting - we expect his commercial acumen to be very valuable to EMN, particularly around offtake negotiations. A big win for EMN.
  • Delivery of DFS - EMN delivered a DFS this quarter which we covered in August. It outlined an after-tax Net Present Value (NPV) that sits at US$1.34B ($1.92B) and US$757.3M (~$1.1B) with an internal rate of return of 21.9% and a 4.1 year pay back period. We think these numbers will be good enough for EMN to go out and secure project financing from a range of stakeholders with a mix of debt and equity.

All up, this was a good quarterly from EMN and we think there’s plenty to look forward to in the coming year from EMN.

The company is looking to not only shore up domestic European supply of High Purity Manganese, but also make inroads into what could be a lucrative North American battery metals market.

For those interested, you can also catch the EMN quarterly update call tomorrow at 9AM AEDT:

https://us06web.zoom.us/webinar/register/WN_Z_H3BRPlT4y-CuN54W76vw

We’ll be listening in on that - it should be a good update ahead of a busy year for EMN in 2023.

Noble Helium’s 2022 Operational Review & 2023 Forward Plans

ASX:NHE  

Dec 19, 2022

Announcement

Investment Memo: NHE IM-2022
Objective 2 : Target generation to produce two drillable targets

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It’s been quite a year for our helium Investment, Noble Helium (ASX:NHE).

The company has advanced its exploration program significantly with Soil Gas Surveys, gravity gradiometry, and a 3D seismic survey all contributing to the process of selecting the best two drill targets for an early Q3 2023 drill program.

NHE is going after big helium targets — up to ~30 years of annual helium demand at its North Rukwa project, and it has referred to the “extraordinary primary helium prospectivity of the North Rukwa area”.

New bits of information contained in today’s announcement included more on the farm out process, with LAB Energy Advisors LLC engaged to ensure a competitive process between “multiple interested parties.”

NHE is fully funded through the drill preparation process and we think that bringing in the right farm out partner or partners could be a useful way to de-risk the North Rukwa drilling program.

We’re particularly interested in hearing more about which two drill targets the company settles on in North Rukwa - which can be seen below:

What’s next? NHE was very specific about what’s next for the company, with further information on the drilling candidates for the highly anticipated 2023 campaign expected, along with completion of North Rukwa farmout process and the execution of the rig contract.

Tanzanian uranium asset acquisition on track

ASX:AKN  

Dec 19, 2022

Announcement

Investment Memo: AKN IM1
Objective 4 : Complete the Tanzanian uranium assets acquisition

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Our exploration junior AuKing Mining (ASX:AKN) remains on track to add highly prospective Tanzanian uranium and copper assets into its portfolio by the end of the year.

This follows shareholder approval for the acquisition at its EGM last Friday.

As announced in mid-October (and as we covered here), AKN agreed to pay $6M in scrip to acquire 100% interest in six projects in Tanzania, namely:

  • Four prospective projects for uranium (namely Mkuju, Manyoni, Itigi and Magaga) and
  • Two prospective projects for copper (namely Mpanda and Karema).

We consider these uranium projects as highly prospective, given that they are either nearby, or include, areas subject to significant prior exploration and development up until 2012/2013. The two of most interest are:

  • Mkuju - this project is just north of the Nyota Project which hosts a non-JORC uranium resource of 108.9Mt @ 422ppm U3O8 (101.4Mlbs contained U3O8).
  • Manyoni - previous owner Uranex NL, now Magnis Energy Technologies – hosts a 92Mt @ 144ppm U3O8 non-JORC resource (29Mlbs contained U3O8).

We also like that the vendor - Mr Asimwe Kabunga - is joining AKN as Chairman, pointing to his commitment and belief in these projects.

Asimwe’s track record is impressive. He was central in bringing Tanzanian deals into three other ASX listed companies, all of which have had significant recent success, namely:

  • Lindian Resources (capped at $141M - up over 400% for the year),
  • Volt Resources (capped at $58M) and
  • Resource Mining (capped at $36M - up over 160% for the year).

As now with AKN, Asimwe is on the board and maintains substantial holdings in each of these companies.

What’s next?

Subject to final due diligence, expected shortly, the acquisition should be formally completed by the end of the year.

AKN is already planning exploration programs at key prospects, Manyoni and Mkuju, expected to commence early in 2023. An upgraded resource estimate for Manyoni to JORC 2012 standards is expected by February 2023.

More high grade gold from 2022 drill program

ASX:TMR  

Dec 16, 2022

Announcement

Investment Memo: TMR IM-2022
Objective 1 : Make new discoveries at the Canadian gold project.
Milestone 2 : Drilling results

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Yesterday our gold exploration Investment Tempus Resources (ASX: TMR) put out another batch of assays from its 2022 drilling program.

The assays came from five different veins TMR hosts at its gold project, our key takeaways from yesterdays announcement is as follows:

  1. A highlight intercept from the No.9 Vein of 2.57m with gold grades of 11.5g/t from a depth of 139.1m.
  2. Assays indicate that the strike length at the West/Main Veins increased by ~220m to a total strike length at this part of TMR’s project of ~400m.
  3. Gold mineralisation discovered at the Ella Zone (new vein) - at this stage, grades are relatively low, with a peak intercept of 1.7g/t gold over 1.41 metres from a depth of 109m.

TMR still has another eight assays pending across the No.9, Blue and West/Main Veins.

As mentioned in our last TMR note, we are most interested in seeing the assay results from the No.9 Vein, where TMR hit a ~25.75m quartz vein with visible gold.

Interestingly, TMR mentioned in yesterday's announcement that the delay in assays for that particular hole was because of a “number of over limit metallic screening assays required for samples with grades exceeding 10 g/t gold”.

Hopefully, this will mean TMR has in fact hit high grade mineralisation in that hole AND more importantly over a much larger thickness than we are used to seeing.

If we see high grade gold mineralisation over that entire interval, then we think this could be a major catalyst for TMR’s share price.

What’s next for TMR?

We want to see the assay results from the remaining eight drillholes from TMR’s 2022 drilling program.

Updated investor presentation - drilling to start in Q1-2023

ASX:88E  

Dec 16, 2022

Announcement

Investment Memo: 88E IM2
Objective 4 : Clear Exploration Program laid out for Project Icewine

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This morning our oil and gas exploration Investment 88 Energy (ASX: 88E) put out an updated investor presentation on its upcoming drill program next door to Pantheon Resources (capped at $1.19BN).

88E’s well (Hickory-1) is targeting a 647 million barrel unrisked prospective resource (net to 88E) and is planned to spud in Q1-2023.

88E will be targeting six key reservoir targets that are independently interpreted to extend into Pantheon’s ground. More importantly, some of these are the reservoirs where Pantheon is currently looking to get a flow test from with its Alkaid #2 horizontal well.

The presentation sets the scene for the drilling program.

Most of the information we have seen in previous ASX announcements, but we found the following slide especially useful in summarising what to expect from 88E in 2023.

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

LNR releases rare earths assays, big target to test in 2023

ASX:LNR  

Dec 14, 2022

Announcement

Investment Memo: LNR IM-2022
Objective 3 : Deliver enough successful Rare Earths drilling results to warrant further drilling campaigns

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Today, our rare earths Investment Lanthanein Resources (ASX:LNR) returned assay results from its maiden drilling campaign in the Gascoyne region, WA.

The hits are shallow (from as little as 6m below the surface) and have a grade that is 3x the global average.

LNR returned a peak hit of 5m at 0.69% TREO from 20m, including 2m at 1.06% TREO (41% NdPr:TREO) from 21m.

Our view here is that this means the results are good enough to potentially be part of the ore used by adjacent and larger neighbours, which includes the next Australian rare earths producer in Hastings Technology Metals (capped at $480M) and advanced explorer, Dreadnought Resources (capped at $280M).

What’s more LNR has now identified over 1km of strike which appears to run almost directly into Hastings’ tenement:

So we think there’s value at Lyons already.

The results also include a hint of niobium mineralisation, a metal we’re increasingly interested in as it shows up on government lists of critical raw materials.

One hole came in with: 1m at 0.71% TREO (47% NdPr:TREO) and 1.20% Nb2O5 from 34m.

In this drilling campaign LNR was primarily pursuing Neodymium (Nd) and Praseodymium (Pr) - and in particular hits with a high ratio of these rare earths.

These are the two rare earths that go into wind turbines and EV permanent magnets - key pillars of the energy transition.

All up we see today’s assays as having satisfied our base case for this round of drilling:

What’s next for LNR? Further assay results from this drilling campaign are expected over December and January. LNR received $200k from the WA government to drill test the outer magnetic rim of the carbonatite structures which LNR has modelled previously - the plan is to drill these targets next year. These are big carbonatite targets that are 2-4km in diameter and go up to 2km deep.

Maiden JORC resource estimate - investor webinar

ASX:LRS  

Dec 13, 2022

Announcement

Investment Memo: LRS-IM2
Investment Thesis 3 : Potential to re-rate again
Objective 1 : JORC resource at the Brazilian lithium projects

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Last week, our lithium Investment Latin Resources (ASX: LRS) put out its maiden JORC resource estimate.

LRS’s estimate came in above our base case expectation and, more importantly, was an almost identical resource size to the one Brazilian neighbour Sigma Lithium (capped at $4.9BN), put out back in 2018.

We covered the news in detail in our most recent note, which you can read here: LRS Delivers Maiden JORC Resource - Following $5.5BN Regional Peer’s Playbook.

This week LRS announced that Managing Director Chris Gale would be running an investor webinar to present the significance of the maiden JORC resource estimate.

We will be tuning in to see what the company’s take on the news is.

For our readers that are looking to join the webinar, the details are as follows:

New CEO appointed - What’s next for BPM?

ASX:BPM  

Dec 13, 2022

Announcement

Investment Memo: BPM IM-2022

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This morning our exploration Investment BPM Minerals (ASX: BPM) brought in a new CEO.

BPM’s new CEO Oliver Judd was previously the company's exploration manager and has had >15 years experience as a geologist.

The most notable takeaway from the appointment today was the structure of the new CEO’s performance incentives which sees Mr Judd receive 1,000,000 BPM shares over the next 2 years if the BPM share price is consistently trading above 30c per share.

What’s next for BPM?

BPM holds $5.3M in the bank (at 30 September), compared to its tiny market cap of $6.9M, giving it an enterprise value of circa $1.6M.

Given the tight capital structure and a strong cash balance we will now be watching to see what comes from the Claw gold project in early 2023 or alternatively, we want to see the company bring in new projects.

Read our latest BPM note to see our deep-dive on what we want to see BPM do next: Assays in - What does $6.5M capped BPM do next?

Ragusa releases NT Lithium Results

ASX:RAS  

Dec 13, 2022

Announcement

Investment Memo: RAS IM-2022
Investment Thesis 1 : Lithium projects along strike to Core Lithium (currently capped at $2.3 billion)
Risk 1 : Exploration risk

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This morning our exploration Investment, Ragusa Minerals (ASX:RAS) released assay results from its NT Lithium project, next door to Core Lithium (capped at $2.1BN).

Today’s results showed, “several elevated lithium values up to 0.35% Li2O within shallow intersections of pegmatite.

Our main takeaway from these results is that, while disappointing, RAS makes a good case for needing to drill deeper to hit higher grades of lithium mineralisation.

Ultimately RAS’s assay results came in at our bear case expectations, which we had set going into this drilling program.

While today’s results were well below what we wanted to see, we did notice RAS alluded to how both of its neighbours, Core Lithium and Lithium Plus had to drill beyond 100m vertical depth to hit higher grade mineralisation.

With this drill program, RAS only drilled 7/18 of its drillholes beyond this depth.

So the hope here is that by coming back in the dry season and testing the pegmatites at depth, RAS can turn up economic grades of lithium and get back on track.

What’s next for RAS?

RAS will go back to the drawing board to determine how best to explore the company’s lithium tenements.

We have faith that RAS Chair, Jerko Zuvela will eventually get it right, given his pedigree - he helped take Argosy Minerals (capped at $849M) from explorer to late stage development.

How the renewable energy transition will drive copper demand

Dec 13, 2022

Macro: Copper


Approximately 10,000km of new transmission infrastructure will be needed to reach 100% renewable energy according to the Australian Energy Market Regulator (AEMO).

In a new report released this week, AEMO outlined the Engineering Framework to reach the first point of 100% renewable penetration.

Our key takeaway from the report is that Australia, and any other countries interested in renewable generation, are going to need A LOT of copper to upgrade the power infrastructure for a renewable energy generation.

Renewable energy like solar, hydro and wind are seldom installed at the same location as fossil fuel generation (wind farms are not built on top of coal mines).

This means that the power generation between a wind farm and a coal fired power station isn’t a ‘straight swap’ of energy.

10,000km of new powerline infrastructure will be needed to be built from the renewable energy sources to the energy grid to maximise energy efficiency.

We expect this to be a major demand driver for copper as the powerline infrastructure upgrades are fast tracked across Australia and other countries who are moving towards renewable energy.

You can read the full report from AEMO here (warning, it’s long):

Results from low-cost COVID-19 study announced

ASX:DXB  

Dec 13, 2022

Announcement

Investment Memo: DXB IM-2022
Investment Thesis 3 : Covid-19 Side Bets
Objective 2 : Complete Phase III Clinical Trial to treat COVID-19 hospitalisations (CLARITY 2.0)

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Today our 2021 Biotech Pick of the Year Dimerix (ASX:DXB) announced the results from its low-cost investigator-led COVID-19 study, CLARITY 2.0.

This was the first time that DXB’s treatment, DMX-200, was used to treat respiratory conditions, which is a very different cohort of patients compared to kidney disease.

The most important takeaway for us is DMX-200 was found to be generally safe in patients with respiratory conditions, adding to the growing strong safety profile of the treatment.

With regards to efficacy, 92% of patients scored a “1” on the Health Score Scale - this number includes both DMX-200 and placebo patients.

It is difficult for DXB to attribute these strong results to the DMX-200 treatment with any statistical significance, as there was a limited number of patients recruited into the trial (49) and the patients for the most part were young (median age 37) and vaccinated.

Our attention now turns to DXB’s main Phase III clinical trial for FSGS (a rare kidney disease), where DXB is 90% of the way through to recruitment for the interim analysis data (at 72 patients).

More uranium mineralisation next to $1.8BN uranium major

ASX:GTR  

Dec 12, 2022

Announcement

Investment Memo: GTR IM-2022
Objective 2 : Drilling at the company’s Wyoming uranium projects.
Milestone 4 : Drilling results

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Our US-based uranium Investment GTI Energy (ASX: GTR) just released some more drill results from its 2022 drilling program in Wyoming’s Great Divide Basin.

GTR has four drill rigs running for a planned ~30,480m drilling program (100,000 feet) where it is looking to establish either an achievable exploration target or a maiden JORC resource estimate.

Today, GTR confirmed that 18 of the last 22 drillholes at its Teebo and Odin prospects hit uranium mineralisation.

Of the 18 drillholes, four met the grade cut-off (GT) requirements for uranium mineralisation that is typically considered economical in this part of Wyoming, with an average of 0.47 GT - 2.35x the targeted cut-off.

Interestingly, GTR’s drill results are from the ground the company holds, adjacent to Uranium Energy Corp’s (capped at $1.82BN) Antelope Project.

To see why we think GTR’s regional neighbours are of importance for our Investment Thesis, check out our most recent note here: GTR’s regional neighbour buying up USA uranium projects.

After today’s results, GTR has increased the strike length (mineralised roll fronts) of its uranium mineralisation to ~7.9km - strong progress considering GTR only had ~5km of strike before starting its 2022 drilling program.

We hope that the progress made with drilling translates into a maiden JORC resource for the company - we see a maiden JORC resource as the primary catalyst that would bring GTR onto the watchlists of the major uranium players in Wyoming, like Uranium Energy Corp.

With the ultimate aim of the drilling program being either an exploration target or a maiden JORC resource, we set up our expectations around potential outcomes for GTR as follows:

Lycaon upgrades its Niobium-REE Targets

ASX:LYN  

Dec 12, 2022

Announcement

Investment Memo: LYN-IM1
Objective 1 : Pre drilling work at its niobium & rare earths project in WA.
Milestone 2 : Geophysical surveys

Shares Held: 2,631,250

Options Held: 300,000

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This morning, our exploration Investment Lycaon Resources (ASX:LYN) announced that it has re-processed magnetic data over the Stansmore Carbonatite Project in the West Arunta region.

We’re hoping that with drilling slated for next year, LYN makes a discovery in 2023.

LYN is going after a discovery from a large carbonatite structure (Stansmore) here which is prospective for Niobium-REE (rare earth element) mineralisation.

Encounter Resources announced two weeks ago a ~600m diameter gravity anomaly, which is similar to WA1 Resources’ whose grounds are prospective for IOCG style copper and carbonatite-hosted REE mineralisation.

WA1 Resources recently surged ~2,300% after making a niobium and rare earths discovery.

LYN’s re-processed geophysics also revealed a number of other targets which can be seen in the tenement adjacent to the one that hosts the large carbonatite structure:

For those unfamiliar with niobium, 90% of it is used in the steel industry as a micro alloy to improve the strength and durability of steel.

It also has a range of high-tech applications, most notably in magnetic resonance imaging (MRI) machines and particle accelerators.

What’s next for LYN?

A busy 2023, where the company is looking to drill test the Stansmore niobium-REE target but also have a go at its projects in the Kimberly region projects which includes the Gnewing Bore polymetallic project and the Bow River nickel copper PGE project.

While LYN’s focus is largely on the Stansmore project after WA1 Resource’s recent niobium discovery - we think the Kimberly projects could hold additional upside.

More graphite outside of the already giant 209mt JORC resource

ASX:SGA  

Dec 09, 2022

Announcement

Investment Memo: SGA IM-2022
Objective 4 : Increase confidence in the resource - upgrade JORC resource from inferred to indicated
Milestone 2 : Drill results

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This morning our 2022 Small Cap Pick Of The Year Sarytogan Graphite (ASX: SGA) put out some more positive drilling results.

The highlight intercept from today’s announcement was the 75.1m intercept with grades measuring 34.6% TGC starting from 2m.

SGA’s current JORC resource sits at 209Mt with graphite grades of 28.5% which means today's intercepts show SGA is finding more graphite basically near surface (from 2m) and at higher grades than its JORC resource.

More importantly, the drill results come from outside of SGA’s current JORC resource with mineralisation now extending:

  • 1,000m south-west of the Northern Graphite Zone (NGZ)
  • 800m south-east of the NGZ
  • 150m north of the NGZ
  • 300m north of the Central Graphite Zone (CGZ)

The ultimate aim for SGA’s 2022 drilling program was to gather more information on the project so that SGA’s inferred resource can be upgraded to a higher confidence level (indicated).

With the intercepts made outside of the already known resource area, with higher grades and essentially from surface, we see these results as an unexpected bonus.

The shallow high grade mineralisation has the potential to improve SGA’s overall project economics.

Here it is overlaid with the 3D models we made of SGA’s project:

In today’s announcement SGA also confirmed that its 2022 drilling program had now been completed, assays from the central graphite zone were pending and that a JORC mineral resource upgrade was expected in Q1 2023.

Click here to see what’s next for SGA.

Sidetrack well now over 50% complete - results in 10 days

ASX:IVZ  

Dec 09, 2022

Announcement

Investment Memo: IVZ IM-2022
Objective 4 : This is the most important: We want to see the first drill.

Shares Held: 3,692,102

Options Held: 1,217,101

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This morning our 2020 Energy Pick of The Year Invictus Energy (ASX: IVZ) put out an update on its drilling operations.

IVZ is currently in the middle of drilling a ‘sidetrack well’ to its already completed Mukuyu-1 well where the company drilled down to a depth of 3,923m and confirmed a working hydrocarbon system.

The ultimate aim of the sidetrack well is to successfully produce a fluid sample which is the precursor for IVZ to declare a basin-opening oil and/or gas discovery in Zimbabwe.

Today, IVZ confirmed that drilling had been delayed due to equipment failures and the subsequent repairs needed to continue drilling.

While initially, IVZ expected to be completing this sidetrack well by the 12th of December, IVZ confirmed that it would take an additional 10 days to complete the drilling program.

This means that we should expect to see the sidetrack well complete and the results from the program start to come in on or before Monday the 19th of December.

IVZ has already drilled down to a depth of ~2,020m which means it is just over 50% of the way through the sidetrack well.

Here is what we know from IVZ’s Mukuyu-1 well so far:

  • ✅ A 10-15m interval indicative of potential hydrocarbons (oil and/or gas) across the first three of its targets.
  • ✅ Seal identified with several hundred-metre thickness above the primary targets. This was a key risk going into drilling. This hopefully means there’s a geological seal that’s strong enough to trap oil and/or gas in the primary targets IVZ is drilling for now.
  • ✅ Elevated gas shows up to 135x above background gas levels through the first of two primary targets.
  • ✅ Elevated (100%) fluorescence, indicating condensate or light oil.
  • ✅ Elevated Logging While Drilling resistivity.
  • ✅ A working conventional hydrocarbon system.
  • ✅ ~900m gross interval in one of its primary targets.
  • ✅ Mukuyu-1 well drilled down to a depth of 3,923m.

What is IVZ doing next?

  • 🔄 Sidetrack well to be completed - This will be when IVZ will try to identify any moveable hydrocarbons and ultimately put out a “net pay” number. IVZ’s sidetrack well is currently at a total depth of ~2,023m.

We are now expecting results from the drilling program by the 19th of December.

LNR has visuals of 30m of kaolin from 4m

ASX:LNR  

Dec 09, 2022

Announcement

Investment Memo: LNR IM-2022

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Options Held: 5,250,000

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Our rare earths Investment, Lanthanein Resources (ASX:LNR) announced today that it had intersected “high quality” kaolin at its Koolya Project in WA.

The best visual result of 30m from a 4m depth looks like this on the drill site:

While we await the assays from LNR’s maiden drill campaign at the Lyons prospect in Gascoyne, WA we think this is a promising early sign from the kaolin project.

LNR will now analyse the samples to, “quantify the specific characteristics such as ISO Brightness, Alumina content, presence of Halloysite and rare earth elements.”

These are all important factors to determine the overall economic viability of the deposit which essentially starts at surface level.

What’s next for LNR? The Lyons assays and a follow up drilling campaign at a large carbonatite structure in the coming year.

17.8 billion barrels of oil estimated to the north of 88E’s 2023

ASX:88E  

Dec 09, 2022

Investment Memo: 88E IM2
Investment Thesis 2 : Nearology to Pantheon Resources

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Overnight we came across news from Pantheon Resources (capped at $1.19BN) - neighbour to our oil and gas exploration Investment 88 Energy (ASX: 88E) in Alaska, USA.

Pantheon’s announcement was with respect to a detailed reservoir modelling exercise the company got done by the world's largest oil service company, Schlumberger.

The modelling was on four distinct oil reservoirs inside Pantheon’s acreage - importantly for 88E it includes reservoirs 88E will be drilling with the Hickory-1 well in 2023.

Below is an image showing where 88E plans to drill overlaid on the different reservoir units.

The major takeaway from the report was that the net oil in place estimated independently was for ~17.8 billion barrels of oil across Pantheon’s ground.

We think this puts this part of Alaska on the map for other oil and majors who are currently watching to see what comes from Pantheon Resources Alkaid #2 horizontal well.

If Pantheon is able to show a strong flow rate from the well and then commercialise its acreage, then we think the look-through valuation for 88E’s project could increase significantly.

Hopefully, this news comes out before 88E drills its Hickory-1 well which it now expects to start drilling in late February/early March 2023.

With its Hickory-1 well 88E will be chasing a 647 million barrel unrisked prospective resource (net to 88E).

We are Invested in 88E to see it make a giant oil and gas discovery and re-rate to a market cap in line with companies like Pantheon Resources in the billions of $.

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