The Pick - Issue 16 - April 2020

ADVERTISING FEATURE

THE PICK APRIL 2020

T H E - P I C K .C O M . AU

EDITION 16

For Elementos bigger is better with world class Oropesa Tin Project now moving toward production

The view looks very good for this golden Horizon page 2

ADVERTISING FEATURE

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F O R T U N E FAV O U R S T H E B R AV E I N T H E COV I D -1 9 WO R L D

P R OT E C T I O N TRUMP’S PREDICTION

EXISTING HOLDERS THE MESSIAHS OF G R O W T H C O M PA N I E S

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SHAW LOOKS AT THE SUPPLY VS DEMAND INTERPLAY Page 6

TABLE OF CONTENTS 11 Middle Island defines new 600m gold target at Sandstone 12 Hexagon at forefront of implementing ‘game changing’ RapidSX REE separation technology

14 Canyon builds case for Minim Martap

Consulting Editor

15 Tietto takes off

Colin Hay chay@chapteroneadvisors.com.au

18 Golden opportunities in West Africa

04 For Elementos bigger is better with world class Oropesa Tin Project now moving toward production 06 Shaw looks at the supply vs demand interplay 08 Noah’s Rule believes protection trumps prediction 09 Ardea has the right address and right commodities at the right time 10 Emmerson Resources ... the next leg up from a unique set of assets!

This publication has been produced independently of the Australian Financial Review newsroom.

THE PICK APRIL 2020

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Chapter One Advisors

Consulting Publisher

17 Nickel revival beckons for Blackstone Minerals

02 The view looks very good for this golden Horizon

Publisher

13 MakCorp’s unique ASX resource sector data offering provides investment security in tough times

16 Red River ready for golden future

01 Squire Patton Boggs suggests fortune favours the brave in the COVID-19 world

The Pick Magazine is published independently for executives in the resources sector.

19 Cashed-up Bardoc Gold well placed to ride out the storm and become Australia’s next mid-tier gold producer 20 Titan Minerals surges into Ecuador 21 Galileo on the road to a major nickel sulphide discovery 22 RIU Explorers Conference hits record attendances in 2020 23 Southern Cross marks the spot for Xantippe Resources 24 Coziron’s suite of quality WA assets is looking very tasty 25 Existing holders the messiahs of growth companies

David Tasker dtasker@chapteroneadvisors.com.au

Design/Production Egg Design

Journalists/Contributors Colin Hay Peter O’Connor Sean Russo Tim Neesham Mark Goulopoulos Thomas Weber Tony Chong Craig Scheef Brenton Reynolds Ben Williamson

Digital Edition Digital edition in partnership with Metrix Publishing

Publishing office 68 Milligan St, Perth, Western Australia Australia 6000 Tel: +61 433 112 936

Disclaimer Chapter One has taken care to collect and publish this information in good faith but makes no warranties or representations as to the accuracy of any facts or representations, and has relied upon information provided to it in doing so. Chapter One does not accept any responsibility for the accuracy of any facts or representations published, or for any opinions expressed. Chapter One is not a financial adviser, and nothing within the publication is financial or other advice whatsoever.

Subject to any terms implied or expressed by the law, Chapter One does not accept any responsibility for any reliance, loss, damage, cost or expense incurred by any reliance upon this information or anything published by Chapter One herein, or by acting upon it or for any error, omission or misrepresentation conveyed.

The information published is general only and does not take into account any individual objectives of investors.

Front Page image provided

by Tony McDonough, Raw Image.

To be featured in the next edition contact David Tasker: dtasker@chapteroneadvisors.com.au

Fortune favours the brave - Asian appetite for resources in the COVID-19 world

BY TONY CHONG Tony Chong is a strategic, commercial advisor to a range of corporates and high-net-worth individuals in Australia and throughout Asia. He leads the Perth office of global law firm Squire Patton Boggs and its Australian Asia Desk.

where the market is closed. Appetite remains for Asian capital (including Japanese capital) to be invested in quality assets in Australia. The Asian mentality for investment is a long term one and these are times where many who are cashed up are seriously looking to invest in sectors heavily affected by COVID-19.

Our favourable exchange rate is no doubt helping the investment story.

Strong appetite remains for coal, iron ore and gold assets and for energy, renewables and waste-to-energy projects. Funds are being structured and established for such investments. The appetite that was there pre-COVID-19 remains today.

The challenge is to marry up the right capital with the right project during such times. Overseas parties need to be educated when dealing with distressed assets. They need explanation for example on how the bid process works in an administration or receivership context or the extra due diligence which should be done as a result of COVID-19.

Things have changed with supply chains and the way people work. The appetite for mining related technology (including in automonous operations) from Asia will only accelerate from here, as the fear of a new pandemic post-COVID-19 will prevail for some time.

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n resources-dependent Australia, the health of the sector is being anxiously monitored. How will it survive this COVID-19 period, and ultimately recover?

Tony Chong, head of global law firm Squire Patton Boggs’ Perth office, discusses the trends his firm is seeing across its resource sector clients and its extensive business network in the Asian region.

In Australia, Squire Patton Boggs is assisting mining companies conducting stand downs and having to adapt to travel restrictions as fly-in-fly-out operations are crimped. As shipping corridors to certain parts of the world are closed or heavily restricted, we are supporting these adjustments. Companies are drawing down facilities in fear that the credit market will cease. Not a day goes by where another client issues a force majeure notice, or a claim is made for frustration under a contract to preserve a position (or in some cases, as a survival measure).

Yet the story is not all doom. The Chinese word for ‘crisis’ has two parts - one is danger, the other is opportunity. And this market does present opportunities.

Signs are emerging in China that industries are getting back to production. Supply chain shocks and challenges continue, but the demand for resources remains. As expected, IPO activities in that region, including Hong Kong, have decreased - but not to the point

APRIL 2020 1

Grade control drilling at Boorara.

The view looks very exciting for this golden Horizon

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ell funded and with an exciting new project set to come on stream in a few months time, Horizon Minerals Limited (ASX: HRZ) is right on target to achieve its aim of becoming the next emerging mid-tier gold producer.

Horizon Managing Director, Jon Price, told The Pick that the company is embarking on a company defining 2020 with gold mining about to commence, a large scale exploration programme set to grow reserves and resources and a consolidated Feasibility Study underway for a larger scale development including the construction of a stand-alone processing plant at its Boorara gold project near Kalgoorlie.

“Horizon is on a mission to join the ranks of the emerging mid-tier gold producers and has a well-trodden path to success for shareholders,” Mr Price said.

“Horizon has very experienced board and management team with a demonstrated track record of finding, mining and processing gold projects to generate cash to self-fund its own growth.

“We proved with the Teal gold mine that we deliver on our promises and Horizon is applying the same formula to develop the first stage of the Boorara gold mine, 15 minutes’ drive from Kalgoorlie.”

Mr Price told The Pick that Horizon has proven to be attractive to investors over a long period for a number of reasons.

“Junior explorers remain heavily reliant on the equity capital markets and competing for capital year-on-year is an increasingly difficult proposition. Horizon has only conducted two capital raisings in five years, both to fund the development of gold mines that generate cash and minimising shareholder dilution,” he said.

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“Horizon has a prime location in the safe mining jurisdiction of Western Australia and has the ability to utilise third party toll milling to generate cash while completing a Feasibility Study.”

“Importantly, what our project location also provides is optionality.

Our assets surround the Superpit, we have neighbouring companies that we would like to collaborate with and potentially consolidate to grow rapidly and we are surrounded by existing infrastructure.

“With 1.1Moz in resource, 75% in the measured and indicated JORC categories, gold production to commence in the June Quarter, low market capitalisation and share price in the current market environment and a $15/oz discovery cost to date, I would think we present an outstanding value proposition.”

Mr Price says Horizon is focussed on four key goals in 2020.

This includes: • Bringing Boorara Stage 1 into production; • Completing a large scale reserve generation and resource growth exploration drilling programme; • Completing the Feasibility study with the aim to have a minimum four year mine production plan based on reserves at four key projects areas: Boorara, Binduli, Teal and Rose Hill; and • Continue evaluating value accretive acquisitions in the region for further consolidation.

Mr Price said that Horizon was right on target with its development of the Boorara Stage 1 project.

Horizon completed a very successful mining operation at Teal in 2018 “We are now fully funded and statutory approvals on track to commence mining at Boorara in the June Quarter with first gold production planned for the September Quarter.

“The toll milling contract is in place and we will be appointing mining and haulage contractors imminently. Grade control drilling has been completed for the three starter pits and ore begins at surface.”

The first stage at Boorara will produce approximately 9,000 ounces and generate over $6 million in free cash flow over an eight month period in a very strong Australian gold price environment.

The successful start-up at Boorara will also provide other long-term benefits.

“In addition to generating significant cash flow, the project will enable us to test the geological models performance against actual mine and mill production,” Mr Price said.

“We are fortunate with our location and surrounding mills to be able to achieve this before committing to a larger capital outlay to fund a standalone mill.

“Pit mapping, campaign milling and subsequent mine to mill reconciliations will enable an updated geological model to be compiled for 507,000 ounce Boorara gold system and significantly de-risk the larger scale development.

“This, in turn, will feed in to the Feasibility Study assessing all long-term development and milling options for Boorara and our advanced satellite open cut and underground projects.”

“Rose Hill is an advanced exploration project with significant open pit and underground mining potential,” Mr Price said.

“Our latest drilling results demonstrate the width and excellent grade continuity with further infill, extensional reverse circulation and diamond drilling planned for this quarter.

“We see Rose Hill as a genuine high grade satellite development that will be a significant contributor to the gold production profile along with our other advanced projects at Binduli and Teal.

Mr Price predicts an exciting 12 months ahead for Horizon and its backers.

“Alongside the current global economic climate amid the COVID-19 pandemic, shareholders are in for an exciting year and can expect a lot of news flow from production, exploration, reserve and resource growth and that’s just the beginning.

“With Australia experiencing record high gold prices, we encourage investors to have a look at the junior gold sector as we believe there are a number of hidden gems and opportunity to be creating wealth.”

With a suite of high quality, near-to-production gold assets in one of Australia’s best mining neighbourhoods, it is hard to disagree.

Horizon also has the promising Rose Hill Gold Project on track for near-term development.

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For Elementos bigger is better with world class Oropesa Tin Project now moving toward production

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ulti-national tin focused miner Elementos Limited (ASX: ELT) had the perfect start to 2020 with news that it had completed the acquisition of the world-class Oropesa Tin Project in Spain.

Elementos Director, Christopher Dunks, recently told The Pick that the successful purchase of Oropesa, one of the best undeveloped base metal finds in the world, is a real game changer for the company.

“The finalisation of the acquisition took around 12 months, but the end result couldn’t be better,” Mr Dunks said..

“This is one of the world’s largest undeveloped, open-cut mineable tin deposits. There is access to world class infrastructure and Elementos’ shareholders now have an advanced, globally significant tin project with near term development and cash flow potential.

“The company firmly believes the finalisation of the Oropesa acquisition will create significant share value-uplift potential as it is advanced towards development and production,” Mr Dunks added.

One of the oldest elements to be mined by mankind, tin continues to have critical uses in the modern world, particularly in the areas of modern energy technologies.

It is certainly something the highly-experienced team at Elementos fully understands and the company is well prepared to take advantage of the unique opportunity Oropesa offers.

“The Oropesa Tin Project represents a significant step forward in the growth of Elementos and our clear strategy to create a multi-project tin production and exploration company, targeting jurisdictions that demonstrate a long history of successful mining,” Mr Dunks said.

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Highlights of the Oropesa Tin Project include: • Large, well-defined resource - A globally significant, open-cut mineable resource with strong potential for expansion through additional drilling; • Open-cut mining potential –The deposit is amendable to simple drill and blast, truck and shovel open cut mining operations; • Simple metallurgy - Extensive metallurgical testing and a process flowsheet designed to produce a 62.4% tin concentrate at a 74.2% metallurgical recovery; • Near-term production potential – Definitive Feasibility Study commenced by the team and an Economic Study released in April demonstrating the project’s economics are very strong ; • Permitting process advanced – Mining Licence application and Environmental Impact Study lodged with the Junta de Andalucia; • Located close to development infrastructure - Located close to major highways which link to export ports, water supply and power supply. The region has a skilled mining workforce; • Low sovereign risk - The Andalucia region of Spain is home to some of the country’s most significant mining operations and part of the European Union which provides a safe investment environment;

• Large sunk cost – significant historical investment in drilling, geophysics, metallurgical testing and development studies; and • Local community support - The local government and community is extremely supportive of the project moving ahead.

Critically Oropesa has tremendous growth potential. The tenement is large and under-explored and Elementos now holds all historical exploration information including drilling results, core samples, environmental and development applications.

The company has just released a detailed Economic Study of the Project that provides the first update on the economic potential of Oropesa since an initial Preliminary Economic Assessment (PEA) was released by Canada’s Eurotin Inc. in July 2014.

The Economic Study estimates an initial mine life of 14 years at a production rate of 750,000 tonnes per annum.

At the 0.52% Sn average grade anticipated for the Oropesa open pit, the Elementos team is forecasting an approximate average tin recovery of 74.5% - which is excellent for a tin project.

Elementos has identified previously the significant potential to grow the

project through drilling the enormous IP anomalies that exist to the north and south of the main Oropesa deposit.

Success with drilling these would make Oropesa one of the world’s great base metals mines.

Elementos’ Economic Study has incorporated results from critical additional work completed on the Oropesa Project completed over the last 18 months.

This additional work includes a pilot plant metallurgical test programme, ore preconcentration test work using Tomra systems, additional exploration drilling and production of an updated geological resource model, hydrogeological and geotechnical studies and advanced environmental impact assessment studies.

Mr Dunks said the company will be implementing key objectives identified from the Oropesa Economic Study as the project advances rapidly towards development.

CLEVELAND TIN PROJECT While market attention is understandably on Oropesa, Elementos has not forgotten its Cleveland Tin Project in Tasmania While not on Oropesa’s global scale, Cleveland remains a significant resource of tin-copper amenable to both open cut and underground mining techniques, located in a world-class mining district with excellent infrastructure.

Elementos owns 100% of Cleveland following a merger in 2013 with then unlisted company Rockwell Minerals Limited. The site is located 80km south west of Burnie in the mineral-rich northwest region of Tasmania.

An historic mine that already boasts excellent power, water and transport infrastructure, revised JORC Study results for the Cleveland Tin Project announced in September 2018, indicate a substantial increase in open pit project resources.

Mr Dunks said Elementos is continuing to undertake work on an official submission of the new development proposal for the mine design of a combined open cut / tailings retreatment project at Cleveland.

Elementos’ clearly defined development strategy for the Cleveland Tin Project is: Stage 1 – combined open pit mining and tailings re-treatment operation to produce tin and copper concentrates.

Stage 2 – refurbishment and development of the underground mine to produce tin, copper and tungsten concentrates.

Recent work has involved exploration, targeting the physical limits of the potential open cut resource at Cleveland and refining the metallurgical processing flowsheet.

With two strong projects on the development path, the Elementos story is definitely one to follow.

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Supply vs demand interplay. Is the window of price opportunity open a little longer?

PETER O’CONNOR, METALS AND MINING ANALYST AT SHAW AND PARTNERS TAKES A CLOSE LOOK AT OUR IRON ORE MARKET

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haw and Partners revisit the outlook for near term iron ore price not least to make some sense of the recent significant moves in both supply and demand.

HIGHLIGHTS Iron ore price trading range – Price has been trading in the range US$80-$120/t (CFR China, DMT) since early 2019 including a brief squeeze to ~US$120/t in mid-2019. The interplay of supply and demand in the months ahead will determine the likely direction and magnitude of iron ore price, as has been the case since early 2019.

• Supply outages dominated in 2019/early 2020 – The availability and elasticity of supply over the past year has been impacted by significant short/medium term supply in Brazil and operational issues and seasonal weather impacts in Brazil, Australia, Africa. Recent COVID-19 country lock-downs are the latest near-term supply headwind.

• Demand decline is likely to feature in 2Q-3Q 2020 reflecting the impact of COVID-19 related lockdowns will be the key demand driver in 2020. Although China’s early COVID-19 recovery offers some demand stability.

• Price trading band likely to continue – We expect iron ore price to remain broadly in the US$80-100/t trading range

Figure 2: Price History – Range Bound for Now? Source: Shaw and Partners, FactSet, Company Data

with supply and demand headwinds largely neutralising one another at this stage. Importantly, price expectations for iron ore are low with most market estimates below the current spot price suggesting the next move in price forecasts is up not down.

• Commodity relativity - iron ore vs oil. The price trajectories for iron ore and oil tend to correlate well over time given the commonality as global growth proxies. But recent oil market (over)supply dynamics – Saudi vs Russia market share grab – have tempered oil price relative to iron ore.

• Iron ore price vs iron ore company performance. The performance of commodity companies correlates well with the underlying commodity price, in this case iron ore. The fortunes of our major iron ore producers will track iron ore price moves.

DEMAND – UNQUESTIONABLY LOWER IN MONTHS AHEAD

Figure 1: Iron Ore Price Vs. Consensus Source: Shaw and Partners, FactSet, Company Data

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Demand decline is likely to feature in 2Q-3Q 2020 – Record Chinese crude steel production in 2019, at ~1 billion tonnes, underpinned global iron ore demand despite developing USChina trade war headwinds and the impact of these on global trade. China accounts for ~53% of global steel production and ~70% of global seaborne iron ore imports so China is key to the demand side outlook for iron ore for the year ahead.

In terms of non-China steel production, we expect COVID-19 related demand weakness to see production curtailments – notably across Europe, North America and Asia excluding China.

For example, European steel producers may have idled around 15 Mt/year of pig iron capacity so far in 2020, as the coronavirus outbreak has weakened demand. This represents ~17% of the European Union’s 87 Mt/year pig iron, or hot metal, production in 2019.

We understand that around 18 Mt/year of iron ore supply globally has been affected.

SUPPLY – SEASONALITY, LOCKDOWNS, REGULATORY AND OPERATIONAL ISSUES Supply dominated price outcomes in 2019/early 20 – Supply side developments in the iron ore market have buoyed the iron ore price over the past 15 months.

The price inflection occurred in late January 2020 subsequent to the significant short- and medium-term outages in Brazil resulting from the catastrophic failure of Vale’s Brumadinho iron ore tailings dam. Aside from a brief squeeze in price to just over US$120/t in June 2020 iron ore price has traded within US$80100/t (CFR China DMT) range. Month to month and quarter moves have largely been dictated by seasonal issues namely southern hemisphere weather especially in December Quarter 2019 and March Quarter 2020.

However, recent Government lockdowns, as part of COVID-19 containment strategies, in key iron ore export countries – including South Africa, Canada, Peru and India – will temper supply availability at least in the near term (April 2020).

Figure 4: Aust. Exports have Flatlined Since Early 2019 Source: Shaw and Partners, FactSet, Company Data

IRON ORE - BALANCING SUPPLY, DEMAND AND PRICE We expect iron ore price to remain broadly in the US$80$100/t trading range with supply and demand headwinds largely neutralising one another at this stage.

A simple rule of thumb to make sense of the numerous recent/ pending moves in supply and demand is that for “every tonne of shuttered pig iron (~70-80% of global steel production) would need to see an offsetting reduction in iron ore supply of ~1.6 million tonnes” so as to maintain the current supply vs. demand backdrop.

Given that backdrop iron ore price could continue to trade in the US$80-$100/t range highlighted earlier and remain in line with the valuation and performance metrics of its “rust belt” (steel, iron ore, coal, manganese) cohort.

As demand is dialed back across the ex-China steel industry in months ahead we would expect that mill procurement officers will look to lower cost inputs (lower grade) as opposed to productivity (higher grade and price). Companies such as Fortescue Metals Group would benefit in this scenario as the price realisation ticks up.

EQUITY CONCLUSIONS – MAJOR IRON ORE PRODUCERS

Figure 3: China Steel Production Up 4% YTD Source: Shaw and Partners, FactSet, Company Data

The performance of commodity companies correlates well with the underlying commodity price, in this case iron ore. The fortunes of our major iron ore producers will track iron ore price moves.

Brazilian miner, Vale, also recently noted a risk to the ramp up timetable of the partly curtailed Brucutu mine to 80% capacity from 40% currently. Vale would see another downward guidance revision from this outcome.

Importantly, and beyond the above supply outages/curtailments there is not a lot of supply availability/elasticity from other major production sources such as Australia. Australian exports (annualized trailing 12month basis) from the Big 4 miners – RIO, BHP, FMG, Roy Hill - plateaued in early 2018 at around 900Mt pa rate. Whilst we do expect a much better June Quarter (seasonality) from Australian iron ore miners compared to the March Quarter slump over the course of 2020 we expect output to once again be at/around 900Mt rate.

SHAW AND PARTNERS METALS & MINING ANALYST, PETER O’CONNOR.

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Protection trumps prediction

hedges might lock in solid operating margins for some proportion of output. Within both those groups you will also hear the much muttered mantra “shareholders buy our shares for exposure to the price of the commodity we produce, so by hedging we are not serving their interests”.

Today it seems obvious to many that gold mining companies who locked in some proportion of sales of their future production at prices lower than here have squandered profits that would otherwise be made in the future. But while we don’t know what the future holds, and I cannot remember it being more uncertain, we do know those producers with sensible levels of hedging at prices well above their cost of production are robust in all future price scenarios. The same cannot be said of those producers who do not hedge. In volatile times today’s rooster is often tomorrow’s feather duster.

Before you eschew investment in well run gold mining companies (or any other commodity producers) that accept they cannot know what lies ahead and so create certainty through hedging, look at the oil patch.

BY SEAN RUSSO

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verything is easy with hindsight. With today’s newspaper we can all tell CEO’s and politicians what they should have done previously to be in the best possible position to deal with today’s issues. But what good is our advice if we aren’t in possession of the newspapers that will be printed in years to come. Today we still don’t know what the future brings, and possibly worse, today’s media and investment analysis is full of experts telling us where the world goes next, despite few, if any, of them predicting we would be where we are today.

Perhaps, most importantly, even if you could know the price of everything three years from now, without knowing the path markets travel to get there, you still have very little of value to successfully run a capital intensive business exposed to volatile markets.

Sitting around a board table trying to make significant investment decisions that have to stand up over 3-5 year time horizons and impact thousands of employees; thousands more contractors and suppliers from local communities; and, shareholders who entrust them with their retirement savings, the most dangerous directors at the table are the ones who believe they understand where those things outside their control (i.e. commodity prices, currencies etc.) are headed. The next most dangerous group, and they are more plentiful, are the ones that say the future cannot be known so the best course of action is to do no hedging - even though

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Oil producers share the same broad business risks as gold miners, with the same primary risk - the price of the commodity they produce is outside their control, unless they hedge. At exactly the same points in time gold producers were locking in the hedges they currently hold, to underwrite their capacity to deliver on their business plans and ensure they could repay debt, most in the oil patch were choosing not to hedge, at prices 3 to 4 times higher than available today. Debt in the oil sector is plentiful, as is the need for high levels of sustaining capital. The oil price has shown again only recently how volatile it can be. In coming months those companies that don’t fail will likely see current shareholders be diluted unmercifully through deeply discounted raisings, as lenders to the sector seek repayment that can no longer be met from operating margins. To say investors in that sector have not been well served is an understatement. Sure, few predicted the oil price might collapse as it did, but that’s the point. Good boards choose protection over prediction.

In the months after the 1987 crash, the gold price rallied to A$710/oz, double what it had been just three years before when I had started as a trainee bullion dealer. Older heads around me pointed to the charts and the incredible highs we had seen in 1980 and said “strap in young man, gold is going to the moon!” It was hard to find anyone that did not believe gold “must” go higher. Every producer with hedging lower than the market price was a pariah, every producer without it a genius. Fourteen months later AUD gold had fallen back to A$430oz. Those without hedging failed, floundered or were taken over by those with hedging. And, of course, the papers were full of stories about why hedging made sense.

Ardea has the right address and right commodities at the right time And then there is the growing gold story.

The company recently completed an 11hole RC drilling programme at the historic Big Four gold mine - located within the footprint of the GNCP. In a very positive development, each of the 11 drill holes completed in that Big Four programme contained significant gold intercepts.

Nickel sulphate crystals produced from Ardea’s Goongarrie Nickel Cobalt project pilot plant.

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rdea Resources Limited’s (ASX: ARL) Managing Director and Chief Executive Officer, Andrew Penkethman, believes the optionality that the company’s Western Australian assets provide makes it a compelling story for investors.

Mr Penkethman, who recently had the MD title added to his CEO role at Ardea, told The Pick that the company’s large Eastern Goldfields holdings contain tremendous upside in the top ranked exploration and mining jurisdiction, Western Australia.

“At Goongarrie we have the developed world’s premier nickel-cobalt project. We have a best-in-class strategic resource in commodities that are showing increasing demand for modern-day life applications such as energy storage and electric vehicle batteries. Importantly, Ardea’s projects are located in an infrastructure rich location with road, rail and power on our doorstep,” Mr Penkethman said.

The Goongarrie nickel cobalt Project (GNCP) currently has an estimated resource of 216 million tonnes at 0.71% Ni and 0.06% Co, equating to 1.5 million tonnes of contained nickel and 130,700 tonnes of contained cobalt.

The project, which has attracted a good deal of international attention, has the potential to produce nickel and cobalt sulphate or mixed sulphide or hydroxide product.

The final product mix will be determined through on-going discussions with

potential development partners and indepth Feasibility Study Optimisation work streams.

These studies include resource updates, mine scheduling, on-site neutraliser, and flowsheet enhancements. Importantly, all resources are located on granted mining leases.

Mr Penkethman said that once a strategic partner is secured, a full Definitive Feasibility Study should commence.

However, he added that the company won’t be rushed on either of those topics.

“It is clear there are a number of areas to be agreed to. For example, the project scale and final product specifications.

“Whether the strategic partner process takes six months or a few years I am not concerned. I have been involved in these types of discussions before with patience in selecting the optimum partner and developing relationships with respect essential. Critically, Ardea’s extensive nickel and cobalt resources provide the optionality to develop a large scale production centre that can provide significant supplies of ethically sourced minerals to help meet the needs of society.

GNCP is just one of the exciting chapters in the Ardea story.

The GNCP is located within the company’s vast Kalgoorlie Nickel Project (KNP) which contains a globally significant nickel and cobalt resource of 773Mt at 0.7% Ni and 0.05% Co, made up of 5.6 million tonnes of contained nickel and 405,000 tonnes of contained cobalt.

Ardea was also recently successful in intersecting shallow gold mineralisation at the Mulga Plum project and the company has many similar targets to follow up in its large Eastern Goldfields holdings.

“Our gold exploration success has been very exciting, and there is a lot of upside,” Mr Penkethman said.

“Our Goongarrie project is only 80km north of Kalgoorlie, but surprisingly there has been very little gold exploration in that area in recent years due to the strong focus on nickel and cobalt and surface cover hiding the basement rocks which host the gold mineralisation.

“The gold opportunity provides great connectivity with our nickel/cobalt developments, with systematic gold exploration across the GNCP representing another opportunity to enhance overall project economics”.

“We will be doing a lot more work to further confirm that gold potential,” he said.

Mr Penkethman said that Ardea continues to tick all the right boxes.

“We have a very dedicated board and quality management team.

“As a Company we have strategically set ourselves up in the best operating jurisdiction in the world , with quality nickelcobalt and gold projects, which are all sort after commodities.

“I don’t know of any other companies in our position with the optionality we have. We are spoilt for choice with an experienced team and a clear strategy to develop and explore our prospective projects. That has to be good for our investors who have exposure to our strategic nickelcobalt resources and the opportunity to share in further gold and nickel sulphide exploration success.”

APRIL 2020 9

Emmerson Resources ...the next leg up from a unique set of assets

“In NSW, we have used some innovative data analytics to assist in predicting the location of the next big gold-copper discovery.

“In addition, we have teamed up with the University of Tasmania (Centre of Ore Deposits and Earth Sciences) to apply the very latest science, which combined with traditional exploration has assisted in defining three early stage, compelling copper-gold projects.”

These projects are being systematically advanced to the drilling stage with two (Kiola and Kadungle) recently awarded cofunding by the NSW Government. Noting that Kiola has no historic deep drilling yet has all the hallmarks of a copper-gold system similar to Newcrest’s giant CadiaRidgeway deposit(which boasts 43moz of gold and 8.8mt of copper).

Thus, Emmerson is poised for an exciting future where the hunt for giant coppergold deposits in NSW is balanced against an emerging, low risk gold royalty business in Tennant Creek.

“One of our largest shareholders remains convinced that this path will handsomely reward shareholders and mitigate the downside risks typically associated with most junior exploration companies that rely on the capital markets for funding,” Mr Bills concluded.

Emmerson exploration at Tennant Creek

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mmerson Resources (ASX: ERM) Managing Director Rob Bills believes the company has built a truly unique set of assets that encompass a low risk emerging gold royalty business coupled with potential for discoveries in some of Australia’s hottest exploration districts.

Mr Bills told The Pick recently that Emmerson holds 1,600km2 of tenements covering 90% of the Tennant Creek Mineral Field in the Northern Territory – one of Australia’s highest-grade goldfields. In addition, Emmerson holds 1,300km2 across five projects in NSW, one of the hottest new exploration destinations where a recent discovery by Alkane Resources (called Boda) has ignited interest.

The aim at Tennant Creek is twofold: 1) monetisation of existing Emmerson owned gold projects to self-fund ongoing exploration- whereby the joint venture partner undertakes the permitting, mining and processing and Emmerson collects a predetermined royalty stream and 2); application of new exploration techniques and technologies to add to the company’s discovery track record.

“As evidenced by our latest discovery at Mauretania with an ‘eye watering’ drill intercept of 20m at 38.5g/t gold including 4m at 158g/t gold a mere 92m below the surface….and we believe there are more of these to come!” Mr Bills said.

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Emmerson’s first gold pour

“However, it is as much to do with the now apparent continuity of mineralisation in this and surrounding holes, that, subject to resampling and infill drilling, suggests the McClaren prospect may well prove to represent an additional new open pit deposit to supplement the planned recommissioning inventory.

The stars are aligning for Middle Island

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anaging Director Rick Yeates is confident explorer and aspiring gold developer Middle Island Resources Limited (ASX: MDI) is right on target to take the next step in its rapidly growing development.

“We have had a number of significant and very positive developments this year which are clearly aligning with our growth strategy,” Mr Yeates told The Pick recently.

“The stars are really aligning for us in a record gold market,” he added.

A key focus of the company’s rapidly developing gold position is its plans to re-open the historic Sandstone project in central Western Australia.

More than one million ounces of gold have been produced at Sandstone since the 1890s and recent developments at Sandstone have really made the market sit up and take notice of its near-term production potential.

In mid-April, Middle Island announced a new 500,000oz Mineral Resource at the Two Mile Hill deeps deposit, taking the company’s total JORC Code 2012 Mineral Resources at Sandstone to 624,000oz gold, with further additions anticipated once the company’s current 17,300m drilling campaign is fully assessed.

“The addition of 500,000oz of formal Mineral Resources to the Sandstone project inventory is an extremely pleasing outcome that allows a far greater degree of transparency in valuing both the Sandstone gold project and the company,” Mr Yeates said.

“There is a high likelihood that our current aggressive drilling campaign will significantly add to or upgrade additional open mineral resources prior to completing the updated pre-feasibility study.”

Bonanza gold bonus The massive potential at Sandstone was further highlighted when the company also recently announced it had hit a “bonanza” intersection of 4m at 90.6 g/t in its just-completed 13,400m, Phase 1, reverse circulation (RC) drilling programme.

“The bonanza grade intercept of 4m at 90.6g/t is an exciting early outcome from the Phase 1 RC drilling results at the McClaren desposit at Sandstone,” Mr Yeates said.

“We eagerly await drilling results for the nearby McIntyre and Ridge prospects, and the current geological mapping, which may provide evidence that mineralisation associated with all three prospects may be linked.

“It is worth noting that McClaren and the adjacent two prospects all lie within granted Mining Lease M57/129 and only 2.5km from the company’s 100%-owned, 600ktpa gold processing plant.

“I am equally encouraged by the initial drill intercepts within basalts in the northeast quadrant of the Two Mile Hill open pit deposit, which have the potential to significantly extend and/or upgrade Sandstone’s existing Mineral Resources.”

The company recently completed successful re-optimisation studies, utilising contemporary gold prices, of open pit gold deposits at Sandstone, with results demonstrating that the Sandstone gold processing plant could be profitably recommissioned utilising feed from the company’s existing Mineral Resources.

Middle Island simultaneously undertook a comprehensive technical review directed at identifying and prioritising Sandstone’s open pit targets and deposit extensions with a view to increasing Mineral Resources prior to completing an updated Sandstone prefeasibility study (PFS), commenced in December 2019.

Barkly IOCG super project In mid-February 2020, Middle Island added another arrow to its quiver of assets when it was revealed it had been allocated between 19% and 95% of each of the four competing exploration licence applications, representing some 1,363 sq. km, within the newly available IOCG-prospective former Barkly moratorium area of the Northern Territory.

A further six Middle Island exploration licence applications, covering an additional 1,890 square kilometres (including two within the northern part of the former moratorium area) had already been accepted in full by the NT Government.

Collectively, Middle Island’s Barkly super-project now comprises 10 exploration licence applications covering 3,253 sq. km “Middle Island has secured priority areas and targets in several cases, and the allocated areas also include or immediately adjoin three sites planned for much anticipated government stratigraphic basement drilling during 2020, provided it isn’t delayed due to COVID-19” Mr Yeates said.

With near-term potential to become a gold producer at a time when gold prices are tipped to remain strong for quite a period, and a longterm opportunity to be a significant participant in one of Australia’s most exciting new exploration regions, the stars really do appear to be aligning for Middle Island Resources. www.middleisland.com.au APRIL 2020 11

producer with a low cost and low risk alternative to sending their rare earth concentrates to China for separation and processing.

Hexagon’s RapidSX plant

Hexagon at forefront of implementing ‘game changing’ RapidSX REE separation technology

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exagon Energy Materials (ASX: HXG) is pioneering the commercialisation of a proven new technology called RapidSX to separate and process rare earth elements , which has the potential to disrupt China’s dominance of the global rare earth supply chain.

Rare earth elements provide the raw materials that create Rare Earth Permanent Magnets, which are an essential component of the high-growth electric vehicle and renewable energy markets.

The Pick recently spoke to Hexagon Managing Director, Mike Rosenstreich, to gain a better overview of this game changing technology.

The Pick (TP): What are the next steps in developing the revolutionary RapidSX technology Mike?

Mike Rosenstreich (MR): With our partner, Innovation Metals Corp, who developed RapidSX, our primary focus is currently on securing commercial agreements with rare earth producers, and potential producers, for the use of RapidSX. The first of these agreements was signed in February 2020 with Ucore Rare Metals, a North American company seeking to develop a rare earths project in Alaska and more importantly a Strategic Metals Complex for the downstream processing of rare-earth concentrates – from its own project and importantly – potentially from other nearer-term rare earth concentrate supply sources – which could fast track this entire commercialisation process.

It is expected that this will be the first of a series of these types of agreements with both existing producers and merging project developers.

TP: Does this “game-changing” technology make Hexagon a more attractive investment than its peers?

MR: HXG, to the best of my knowledge, has no peers in the Australian market – indeed even on a global scale. That’s a positive in terms of competitors but a negative for investors undertaking benchmark comparisons. We are the only Australian company seeking to commercialise a proven rare earth separation and processing technology.

Our point of difference is that RapidSX can provide any rare earth

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RapidSX has proven it can separate rare earth elements into rare earth oxides faster and cheaper than the very best Chinese solvent extraction technology [solvent extraction is the universal, established process for rare-earth separation]. This enables rare earth producers to improve their margins and generate increased revenues by substantially reducing capital and operating costs and enables them to sell their rare earth oxides directly to downstream customers, capturing greater value.

The ability to diversify the rare earth supply chain by giving current and emerging producers an opportunity to add value and disrupt the Chinese monopoly on rare earth separation is a key value driver for HXG. We are confident that as demand for Rare Earth Permanent Magnets increases, driven by increasing demand from the electric vehicle and renewable energy sectors, demand for greater diversity in the rare earths supply chain will see RapidSX become the technology of choice for rare earth producers around the world.

Unfortunately, this COVID-19 pandemic has highlighted the risks of supply chain concentration across a range of goods – well, it doesn’t get much more ‘concentrated’ than for rare earth materials.

TP: What stage is the development of the RapidSX technology at?

MR: It is at a commercialisation stage. This is not an R&D project.

I refer to RapidSX as ‘proven’ because it has already gone through extensive testing at a pilot plant built at Mississauga in Ontario Canada, via US$1.8 million of funding from the U.S. Dept of Defense. Its important to note that this uses the same chemistry or science as conventional solvent extraction of rare earths – the proprietary aspect is modifications making the process faster, much faster – which reduces capital and operating costs.

Commercialisation refers to our plans to construct a Commercial Demonstration Plant (CDP) on the same site as the pilot plant and have it operational before the end of 2020.

The CDP will be able to process batches of sample products from rare earth producers to provide producers with bankable quality capital and operating costs data to secure project financing as well as generate samples for their customers to secure offtake contracts.

TP: What makes RapidSX such an attractive technology in this rapidly changing world?

MR: Rare earth separation is a critical function in the overall rare earth supply chain. Western manufacturers want to diversify their supply of items like Rare Earth Permanent Magnets, which are critical to making efficient electric motors and wind turbines to enable the transition to lower carbon economies.

Demand for these materials is expected to increase by 300% over the next 10 years, so it’s never been more important to diversify the global rare earth supply chain and generate some competitive tension against the Chinese monopoly over the rare earths industry. RapidSX is an important step to doing this, and Hexagon provides investors with the best exposure to this exciting and transformative opportunity.

TP: Thanks Mike.

MR: You are most welcome.

MakCorp’s unique ASX resource sector data offering provides investment security in tough times

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ith the ASX acting more like a wild ride at an amusement park during this COVID19-led period of major adjustments, it is vital to have the right information to ensure you are making the right decisions.

As a leader in the supply of key data MakCorp is one place you should definitely turn to if you are investing in the ASX Resource sector.

With MakCorp data, you can see the big picture, analyse and report on over 500 data points. MakCorp data helps you make better informed investment decisions.

Formed in 2017, MakCorp was created by CEO, Steve Rosewell. Prior to commencing MakCorp, Mr Rosewell says he spent hours manually researching commodities and projects, directors, financials and top 20 shareholder lists.

“As most investors understand, research takes a lot of time,” Mr Rosewell told The Pick.

“I began researching platforms with information on ASX resource companies, most were asking around 20k or more annually.

“It was at this point, I started building my own platform of data and MakCorp was formed.”

Mr Rosewell says that MakCorp leads its peers in its accuracy and the constant up-dating of data and information.

“It gives clients that ability to see the bigger picture. MakCorp is also a lot more affordable,” he says.

MakCorp’s 500 Data points include ASX data, financials, directors, projects top 20 shareholders and more.

Industries using MakCorp include listed and unlisted mining companies, mining services companies include investor relations and

online publishers, investors and those in the finance industry.

Makcorp provides access to comprehensive data which is resource company focused. its website provides a selection of tools which allows the users to extract data related to companies, resource projects and many other features.

Mr Rosewell said that whether you are a mining company looking for your next project to acquire or a human resource department looking for your next CEO, Makcorp is your one stop shop for all resource data.

“There has never been a platform where you can search for information on resource companies, Makcorp is that platform,” he said.

All paid subscriptions gain access to all ASX mining stocks information including; • Company financial information including quarterly cashflow, half yearly and annual reports • Company Director and Senior Management • Company Top 20 Shareholders, number of shares and percentage of share • Company projects, commodities, location and more • Access to a new forum MakCorp’s Annual Single and five Users subscriptions include access to all reports while monthly/quarterly subscriptions have no access to reports.

Mr Rosewell told The Pick that the company is continuing to grow and is always looking at ways to better support its growing client list.

“We are currently looking to develop a new platform. This platform would be a lot more user friendly, and would include built in analysis and reporting tools.

“We are also looking to add information from new exchanges, including the LSE (AIM).”

Mr Roswell said we are in unforeseen/uncertain times with COVID-19, which makes it even more difficult for the markets.

“The mining companies with a strong financial position will survive, the ones without will face even more challenging times.

“Which countries will allow mining activities to continue? Which commodities to consider investing in?

“Gold is the standout commodity, with interest in uranium, coal, nickel & silver.”

In challenging times and markets, now is the time for MakCorp.

APRIL 2020 13

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T’S only a matter of time before Canyon Resources (ASX: CAY) starts attracting the attention of bigger players in the market.

The company is sitting on a massive, high-grade bauxite deposit at Minim Martap in Cameroon – one of the best Guinea-style bauxite deposits in the world outside of Guinea – and with the work that Canyon has already put into it, there’s no question that this project will progress to development and production.

The Minim Martap project is a tier one global asset, and while Canyon is at the small end of town, the potential for it to create value from this project makes the company our number one resources stock.

A Pre-Feasibility Study (PFS) for Minim Martap is the next milestone.

This is fully funded, and Canyon expects to complete it in the June quarter of 2020. We reckon the PFS results will give a much better overview of this project’s potential and it might be the catalyst for a re-rating.

Canyon’s latest coup is bringing on senior executive Rick Smith – a bauxite guru – as Chief Development Officer to lead development of Minim Martap. In a massive boost to the company’s skillset, Smith is fresh from building West Africa’s newest bauxite mine for Guinea Alumina Corporation (GAC), which was commissioned last year. The US$1.4 billion mine in Guinea will export 12 million tonnes per annum through bauxite port facilities at Kamsar.

Tim Neesham

Canyon builds case for Minim Martap

BY TIM NEESHAM, CPS CAPITAL Tim Neesham, a specialist in junior mining and technology at Perth-based CPS Capital, has worked in finance for more than 15 years. He provides corporate structuring, advisory for numerous Initial Public Offerings, capital raisings, company restructuring and operations, and was responsible for the asset acquisition, structuring, funding of the Yowie Group Ltd (ASX: YOW), previously owned by Cadbury, from listing to $200m market capitalisation.

Canyon has tested less than 50% of the identified bauxite plateau at Minim Martap so there’s plenty of scope for this resource to head past 1 billion tonnes or even higher.

Disclosure: – The author owns shares in Canyon Resources.

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Smith has more than 35 years of international mining experience, mostly focused on the development and construction of bauxite and alumina projects, and he will focus on supply chain, offtake and strategic partner negotiations for Canyon. He says Minim Martap is the region’s next major bauxite project, and he is looking to help steer the project through development and into production.

He is incentivised to get the project built, and with his experience and contacts in the industry, we expect that he will deliver.

Minim Martap is well located close to rail infrastructure and in a Scoping Study for the project, Canyon identified a two-stage, twoport development option that would see Stage 1 export bauxite through the Douala Port as a standalone project. Stage 2 would use the deep-water port at Kribi to export higher tonnages.

Bauxite at Minim Martap is high grade and low contaminant, which is important for the aluminium industry. Canyon has a total resource of 892 million tonnes (Mt) at 45.1% Al2O3 and 2.8% SiO2, and there is a high-grade Indicated resource of 431Mt at 48.8% Al2O3, 2.6% SiO2, containing substantial zones of more than 50% Al2O3, with very low contaminants.

Canyon has tested less than 50% of the identified bauxite plateau at Minim Martap so there’s plenty of scope for this resource to head past 1 billion tonnes or even higher.

The bauxite grades at Minim Martap are better than what Rio produces in Australia at Weipa and Gove, and at its current size, the project has more than enough resources to meet expected growing demand in the aluminium sector for more than 20 years.

Canyon has done a lot of work shoring up this project after spending three years negotiating access to it. The company has built good relationships with stakeholders including Cameroon’s rail operator Camrail, the port operators and the Cameroon Government, which is looking to increase the nation’s mining revenue, so it’s mutually beneficial to get this project into production.

Tietto takes off – make a compelling case, especially at a time when gold prices are high and showing no signs of abating in current market uncertainty.

These factors and Tietto’s ability to further build on them have made the company my number one pick in gold stocks. At current prices, one can calculate a Net Present Value (NPV) of more than $1 billion for the Abujar project, but the project economics could improve even further as the resource continues to grow. Tietto has only drilled about 10 per cent of a 70km-long gold corridor, so there’s plenty of scope for that to happen.

BY CRAIG SCHEEF, TECHNICAL INVESTING Craig Scheef has more than 30 years’ experience working with and analysing public companies, including 25 years directly managing portfolios for clients.

Craig has also consulted to some of Australia’s largest investment funds as a technical analyst.

He is backing gold to continue to be a standout commodity with West African explorer Tietto Minerals (ASX: TIE) his best gold pick.

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INCE listing on the ASX in early 2018, Tietto Minerals has made impressive progress at its Abujar gold project in Côte d’Ivoire, West Africa.

In just over two years, the company has grown its gold inventory to more than 2 million ounces with an update on track for the second half of CY2020 that is expected to push it closer to 3 million ounces.

There is a lack of quality gold exploration projects worldwide, and especially on the ASX. The fundamentals of Tietto – rapid resource growth, a shallow high-grade resource, low-cost drilling, cash in the bank and strong, continuous news flow

At drilling rates of about US$35 per metre, Tietto is achieving discovery costs among the lowest in the industry and has more than $17 million in the bank. Those incredibly low drill rates are important as they mean more drilling for less shareholder funds than their peers. That bank balance should see the company well-funded for at least a couple more years of exploration without having to further dilute its shareholding. I’d be disappointed to see Tietto raise any more cash with the share price under 50c.

Recovery rates look as though they should be very high, meaning the company has already defined a resource that could produce 200,000oz a year over 10 years. This is ticking one of the boxes that larger mining companies use when evaluating merger and acquisition opportunities. A lot of the majors are cashed up and it’s hard to believe they wouldn’t be looking at Tietto.

There is risk in developing a project in West Africa, but Côte d’Ivoire is relatively safe in most areas and other companies such as Endeavour Mining and Perseus Mining have delivered successful gold projects there.

mining. Perhaps PFS results will be the catalyst for the share price. Tietto is yet to attract any real institutional backing, but one wouldn’t think that should be too far away if they keep hitting the metrics expected. It is backed by renowned Melbourne gold investor Chesley Taylor and Germany-based fund manager Wilhelm Schröder.

On gold itself, sentiment reached excessively positive levels into early 2020 and needed a pullback. Levels now are much more conducive for higher levels in the future. USD gold has very strong support around $1440/oz and then at $1380/oz and I would expect this level to hold. The USD has been extremely strong with the panic in the market (flight to safety, rush to draw down USD credit lines). With gold’s strong negative correlation to the USD this has put downward pressure on gold. After this current consolidation is complete, we expect gold to continue its upward trend.

While the full effect of the global outbreak of Coronavirus is yet to be seen, what we do know is that Trump now has an almost open cheque book to pump liquidity and stimulus into markets and the economy.

Once the crisis passes, the USD should fall and the massive stimulus and liquidity should be positive for gold. Tietto’s low valuation, strong cash balance, proven resources and excellent growth prospects should enable it to perform well in these challenging times.

The information herein is believed to be reliable, however may not have been verified by Technical Investing Pty Ltd (TI). TI assumes no responsibility for errors, inaccuracies or omissions in this document.

The information contained in this document is general in nature and has no regard to the specific investment objectives, financial or particular needs of any specific recipient. The Directors or staff of TI or their associates may have a personal interest in securities mentioned in this report. Please note the information and opinions contained in this document are not investment advice and should not be construed to be a recommendation to buy or sell units in any fund managed by TI, securities, commodities, currencies or financial instruments.

After the resource update later this year, Tietto plans to start on a Pre-Feasibility Study (PFS) for Abujar targeting the shallow, contiguous zones of mineralisation which should enable low strip, open pit APRIL 2020 15

Red River ready for golden future

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HEN Red River Resources (ASX: RVR) picked up the Hillgrove gold and antimony project in New South Wales for just $4 million scrip last year, the market appeared to assume the deal was too good to be true.

Hillgrove is a high-grade asset on care and maintenance that previously produced gold and antimony and has had more than $180 million spent on its infrastructure in the past 15 years. It has a JORC 2012-compliant resource of 459,000 ounces of gold grading 5.1 g/t Au and there’s also a material JORC 2004-compliant Mineral Resource.

Picking up a project which is close to production when Australian gold prices are at all-time highs at such an attractive price is no easy feat. As a strong believer in gold and gold equities I believe Hillgrove is an inexpensive way for Red River to enter the sector and diversify its project portfolio at the same time.

When Red River bought the Thalanga Zinc Project in northern Queensland from Kagara’s liquidators for $6.5m in 2014, it was heralded as “deal of the year”, but it appears the market has a short memory as efforts to replicate that success at Hillgrove – with a legitimately good project – have been largely ignored to date.

However, Red River is ready to challenge the market’s perception and has hit the ground running at Hillgrove where it expects to fasttrack gold production from Hillgrove later this year, leveraging its exposure to high gold prices at the perfect time.

The company has an Enterprise Value of about $17 million but based on the numbers we’ve crunched; Red River could add another $25 million to its cash balance over the next 18 months from Hillgrove. Perhaps this kind of success could provide the overdue share price re-rating for the Company?

Red River has outlined a low-cost plan to recover gold from existing stockpiles – no mining needed – across the Hillgrove landholding while the company prepares to resume underground operations.

The Bakers Hill stockpile has a maiden resource of 18,000oz gold and Red River is less than six months from producing first gold at Hillgrove.

Led by Managing Director Mel Palancian and Chairman Brett Fletcher, who both have considerable experience in building and operating mining projects to run at their most efficient, the team at Red River is an impressive one. Executive Director Donald Garner who has 20 years’ experience in project identification and analysis, and General Manager Operations Karl Spaleck, who the company has just announced is transitioning from his role at Thalanga to lead the Hillgrove restart, add further to strength to the team.

After bringing the Thalanga Zinc Project back into production ahead of schedule and on budget in 2017, where a third deposit is set to be developed this year, the team knows what is needed to get Hillgrove producing gold quickly and efficiently. This means that by the end of 2020 Red River will become a truly diversified base metals and gold producer, an investment proposition perhaps not fully appreciated right now.

Important notice: Mark Goulopoulos (AR 1004769) is an authorised representative of Cumulus Wealth Pty Ltd (ABN 25 808 051 439), a Corporate Authorised Representative of Viriathus Capital Pty Ltd (ACN 113 959 596, AFSL 297950).

General advice disclaimer: The information in this article is general advice only and does not take into account your personal objectives, financial situation or needs. You should therefore consider whether the information is appropriate to your investment objectives, financial situation and needs before acting upon it, seeking advice from an authorised financial adviser if necessary. Not all investments are appropriate for all people. It’s important to remember that investing in shares can lose you some or all of your money.

Investments in ASX companies do not include taxes, brokerage commissions, or associated fees. Past performance is not a reliable indicator of future performance.

The value of any investment and income derived from it can go up or down.

Disclosure: Mark Goulopoulos, his family and associates and employees of Cumulus Wealth or other entities associated with the publishers, may at any time have holdings in some, or all of the stocks mentioned in this article.

BY MARK GOULOPOULOS, PARTNER AT CUMULUS WEALTH, MELBOURNE Mark Goulopoulos has more than 20 years’ experience in the securities industry, specialising in advisory services including portfolio management and construction, corporate advisory, and equities specialised execution for high net worth, intermediary, institutional, and corporate clients.

He is a partner at newly formed Melbourne firm Cumulus Wealth.

THE-PICK.COM.AU

Blackstone battery deal builds nickel potential

BY BRENTON REYNOLDS, DIRECTOR AT WESTAR CAPITAL, PERTH Brenton Reynolds provides corporate advisory and broking services to sophisticated investors and high net worth clients. He has a special interest in commodities, mining, biotechnology and health, and started his career as an associate at West Australian firm Hartleys Ltd 10 years ago. Westar Capital is a West Australian Corporate Advisory and Stockbroking firm focused on investing in small to mid-cap ASX opportunities.

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revailing whilst others are flailing, Blackstone Minerals’ (ASX: BSX) recent deal with the world’s second largest - and Korea’s largest - electric vehicle battery cathode manufacturer, EcoPro BM Co, demonstrates exactly why we like this company.

EcoPro – which counts electronic device giant Samsung and electronic component manufacturer Murata among its customers – is investing nearly $7 million in Blackstone through the placement of 40 million shares at $0.17 per share. This represents a 62% premium to Blackstone’s last traded price before the deal – a huge feat amid recent market volatility. The placement will give EcoPro a 17% stake in Blackstone and a seat on the board.

Blackstone’s Ta Khoa project in Vietnam represents a district-scale nickel-PGE sulfide opportunity of a calibre rarely controlled by a

junior company. Ta Khoa hosts the Ban Phuc nickel mine, which operated for 3½ years between 2013 and 2016 before going into care and maintenance when nickel prices hit 10-year lows.

Blackstone can quickly bring the project back into production to capitalise on a nickel price revival.

Previous project owners invested more than US$136m in capital at Ban Phuc, with infrastructure including a 450ktpa processing facility built to international standards, a permitted tailings facility and a modern 250-person camp. The project generated US$213m in revenue while in production.

Blackstone signed an option agreement for a 90% interest in the project last May in a low risk/ high reward deal. As part of the deal with EcoPro, Blackstone must exercise this option by issuing A$1m of Blackstone shares at the 30-day VWAP. Since then, Blackstone has drilled 12,000m of diamond core in 65 holes, focusing on the Ban Phuc DSS deposit and King Cobra discovery zone. Results from King Cobra continue to return shallow, high-grade disseminated nickel sulfide mineralisation, providing further evidence of potential improvement in project restart economics.

Blackstone is also examining the potential of in-country downstream processing to deliver high value nickel sulfate into Asia’s rapidly expanding electric vehicle (EV) industry through a Scoping Study that’s underway. EcoPro has expressed interest in establishing a joint venture on the downstream processing, should the scoping study show a significant benefit.

The study is due for delivery in early 2H CY20, along with a maiden resource. We expect these results may trigger a share price re-rating.

The team behind Blackstone impresses us, with Managing Director Scott Williamson showing he’s ready to make his mark on the industry – his ability to secure an offtake deal for Ta Khoa will put this to the test. Mining professional Steve Parsons, an industry heavyweight, is also on the board.

Post COVID-19, we’ll be looking for a recovery in the mineral commodities sector and companies with quality projects and management will be the ones that thrive. Blackstone will be among them in our opinion.

Disclosures – The author owns shares in Blackstone Minerals Ltd. In the past two years, Westar Capital Ltd participated in capital raisings for Blackstone Minerals Ltd for which it earned a fee.

APRIL 2020 17

West African Resources Executive Chairman Richard Hyde, right, and Executive Director & Chief Operating Officer Lyndon Hopkins at the Company’s first gold pour.

Golden opportunities in West Africa

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EWS last month that Endeavour Mining and SEMAFO would combine to create West Africa’s largest gold producer in a US$1 billion deal has reignited interest in the region’s gold sector.

Here we look at the top picks in the West African gold sector from Shaw and Partners’ Thomas Weber.

PERSEUS MINING (ASX/TSX: PRU) – GOLD PRODUCER Perseus is one of the companies who has survived tough times before – and will again. The West African-focused gold producer has two mines in operation – Edikan in Ghana and Sissingué in Côte d’Ivoire, with its third operation, Yaouré also in Côte d’Ivoire, expected to pour first gold in late CY2020.

Perseus is led by Managing Director and CEO Jeff Quartermaine, known in the industry as being a no-nonsense operator. He has already steered the company through challenging periods,

including the outbreak of Ebola virus earlier this decade. With Yaouré coming online, Perseus will increase gold production to more than 500,000 ounces per year over the next few years at less than US$1000 per ounce.

WEST AFRICAN RESOURCES (ASX: WAF) – NEW GOLD PRODUCER West African Resources has made the transition from explorer to producer with first gold poured at its Sanbrado Gold Project in Burkina Faso last month. West African is on track to produce more than 300,000 oz in its first year of operation at less than US$600/oz.

Richard Hyde, now Executive Chairman, founded and has led West African for 10 years. He has built a great team around him which delivered first gold six months ahead of schedule.

West African expects to generate ~A$560m in free cash flow over Sanbrado’s first three full years of operation.

TIETTO RESOURCES (ASX: TIE) – GOLD EXPLORER With a gold resource of more than 2 million ounces and growing, Tietto Resources has led an aggressive drilling strategy at its Abujar Gold Project in Côte d’Ivoire since it listed on the ASX in 2018.

Tietto will release another resource update later this year which could see its resource inventory closer to the 3Moz mark.

BY THOMAS WEBER, SHAW AND PARTNERS THE-PICK.COM.AU

The biggest concern when investing in gold explorers is the likelihood of them raising money following good results and diluting existing shareholders. Tietto is funded for at least two years with more than $17m cash at bank and has some of the lowest exploration costs in the sector with its own fleet of drill rigs so good results should see appreciation in the share price.

Cashed-up developer well placed to ride out the storm and become Australia’s next mid-tier gold producer

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ardoc Gold (ASX BDC) chief executive Robert Ryan and his team is likely to remember the release of the company’s highly-anticipated Pre-Feasibility Study on its namesake gold project near Kalgoorlie for quite some time.

The company emerged from a 3-day trading halt to deliver the news the day after what has since become known as “Black Monday II” (16 March 2020, when the first big falls in global markets heralded the start of the COVID-19 induced market crash).

“It was a tough day, to put it mildly,” Ryan recalls. “It was one of several days we’ve seen where the selling was remorseless and across every asset class – everyone took a serious hit.”

(~A$2,600), the NPV jumps to $641 million and the IRR to 58%, while project life-of-mine cash-flows surge to $976 million.

“With 790,000oz in Mining Reserve, the Bardoc Gold Project is one of the best undeveloped gold projects in the Eastern Goldfields,” Ryan says, drawing on his experience over an 18-year career living and working in Kalgoorlie (most recently running one of Kalgoorlie’s biggest mines).

It’s a point not lost on renowned Hartleys mining analyst John Macdonald, who recently updated his coverage of the stock, noting that the Bardoc Project joins Capricorn Metals’ Karlawinda Project and Red 5’s King of the Hills Project as the only undeveloped WA gold projects with more than 500,000oz in reserves in a mine plan.

“The project has a number of clear competitive advantages such as proximity to infrastructure and logistics supply lines and a residential workforce (rather than a fly-in, fly-out operation) will be big ticks for the new development.

Bardoc was no exception and, despite having a healthy cash balance (around $14 million at the end of March), a well-credentialled board and management team and a quality PFS-level gold project with a 3.02Moz resource inventory, its share price has fallen by around 40 per cent since the start of the year.

While the PFS sets a strong base case for the Bardoc Project with robust financial and economic returns, the company says the clear upside potential remains one of its most compelling features.

“At the time of releasing the PFS, it was hard to get investors to pay much attention. But once the dust settles, I think people will be looking around for quality projects and for companies with the ability to weather the storm and ultimately create value for their shareholders.

“Secondly, there is also strong potential to continue growing the resource, as evidenced by recent drilling successes at satellite deposits such as Mayday North, El Dorado and North Kanowna Star,” he adds.

“We are confident Bardoc ticks all of those boxes.”

The PFS outlined an initial 8-year project producing on average 135,000ozpa of gold at an all-in sustaining cost (AISC) of A$1220 an ounce, underpinned by a 789,000oz maiden Ore Reserve (77% of the production profile) and strong Measured and Indicated Resource component (80% of the production profile).

“Firstly, there’s plenty of room to grow the current 1Moz mine plan within the existing 3Moz resource,” Ryan says.

Bardoc’s strong balance sheet ($14 million cash and no debt) means it is well funded to weather the current market storms and resume aggressive exploration as soon as market circumstances permit.

The Company is aiming to grow its global resources by drilling out several newly-acquired satellite deposits and ultimately completing economic studies and bringing them into the mine plan.

The engine room of the project is two underground gold mines and four open pits feeding a centrally located 1.8Mtpa CIL plant incorporating a flotation circuit to accommodate the non-free milling portion of the reserve base.

“The addition of one or more free-milling deposits to our mine plan could make a big difference to the overall economics of what is already a robust project,” Ryan says. “And if we make a breakthrough with the discovery of a big new greenfields deposit somewhere, that would be an absolute game-changer.”

Bardoc plans to utilise this flotation circuit to produce a gold concentrate, rather than invest in expensive alternatives – following a well-worn processing pathway employed by several other recognised producers.

Some analysts point to the recent success of De Grey Mining (ASX: DEG), which was pursuing a development strategy based on known resources before making a massive breakthrough with the highgrade Hemi discovery.

As a result, the pre-production capital figure is a relatively modest $142.2 million which, combined with strong forecast operating pretax cash-flows of $551 million, underpins strong financial returns.

“A lot of the areas within our tenement package have been virtually untouched by exploration for 20 or 30 years, so the potential is definitely there,” says Ryan.

Using a conservative A$2100/oz gold price the Project generates an NPV (8%) of $332 million and 32% Internal Rate of Return.

“We already see clear potential to grow the project at deposits like Mayday North and El Dorado. If we find something else in the meantime, that would be a massive step forward for Bardoc.”

If the gold price is hiked to spot levels at the time of publication

APRIL 2020 19

Titan Minerals Surges into Ecuador

Esperanza pits at the Dynasty project.

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resh from a successful takeover bid, Titan Minerals (ASX:TTM) has re-emerged on to the ASX boards with a host of Ecuadorian gold tenements, an experienced team and a plan to rapidly accelerate operations.

The jewel in the crown for a revitalised Titan is indisputably its southern Ecuadorbased Dynasty project.

Dynasty hosts a 9km long geological phenomenon known as a vein swarm, where a large number of gold-bearing formations develop in close proximity.

expected to follow, combining for a busy project development schedule.

While Dynasty is a major focus, Titan will also be running the ruler across its other new Ecuadorian asset, Copper Duke – a gold-rich and outcropping copper porphyry target.

Aeromagetic work, geochemical sampling and surface mapping have all been flagged to commence later this year and Titan is expected to consider maiden drilling in the wake of these preliminary investigations.

The explorer is in the midst of an extensive 12,000m drilling campaign across the vein swarm, using independent drillers as well as its own in-house rig.

While Dynasty and Copper Duke have captured significant investor attention, Titan has also been able to lure the support of project development specialist, Laurence Marsland, who has joined the company as its Managing Director.

To date, Dynasty hosts a 2.1 million-ounce non-JORC resource with current drilling intended to bring the resource up to the latest standards, as well as inspect some stand-out targets.

Marsland played a critical role in the turnaround of Dundee Precious Metals, a major TSX-listed miner, which brought into production base and precious metal mines in Bulgaria, Armenia and Serbia.

Aeromagnetic surveying as well as preliminary metallurgical work are

The highly experienced resources executive was also a director of West

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African gold play Toro Gold which successfully developed the Mako gold mine and was recently sold to Resolute Mining for $US274 million.

Commenting on the appointment to Titan, Marsland said:

“Put simply, Titan is a rare opportunity of which there are not many like it left in the world and was something that I couldn’t refuse.

“The suite of new gold assets in Ecuador offer some stellar grades and the potential for much larger resource development.

“Over the course of my career I have spent a lot of time in a range of jurisdictions, working with local authorities to develop world-class assets. Titan Minerals fits this mould perfectly and I look forward to the bringing our investors along for what we think will be an exciting ride.”

Three RC drill holes were completed around a highly-prospective geochemical anomaly generated from the air-core drilling.

Importantly, the third hole (LARC003) identified the source of the anomaly by intersecting nickel-copper sulphide mineralisation in fresh rock. The hole returned a significant intersection of 12m @ 0.38% Ni, 0.33% Cu from 124 metres down hole including 5m @ 0.49% Ni, 0.46% Cu from 126m.

Galileo Mining Managing Director Brad Underwood said he was pleased with the result, having now discovered a fertile mineralised system containing nickel and copper sulphides.

“Our next step is to define the extent and quantity of the target metals and, given that we have over two kilometres of untested strike length at this one target alone, the potential for a large discovery is outstanding,” he said.

Reverse Circulation (RC) drilling at Lantern

Galileo on the road to a major nickel sulphide discovery

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ith recent drilling unearthing a nickel sulphide discovery in the highly prospective Fraser Range nickel belt in Western Australia as well as two more exploration campaigns on the horizon, Galileo Mining (ASX:GAL) is certainly living up to its reputation as one of the most active nickel explorers in the land.

Galileo Mining – which listed in May 2018 and is backed by highly successful prospector Mark Creasy who holds a 31% stake – has been quietly going about its business testing targets within its Fraser Range project. The project is a joint venture 67% owned by Galileo and the remainder owned by Creasy’s private vehicle, Creasy Group.

The Fraser Range – which lies around 250 kilometres from Kalgoorlie – is home to two

world-class nickel discoveries, the NovaBollinger deposit and the Silver Knight deposit.

Importantly, Galileo’s exploration team helped discover Silver Knight when they were part of Creasy Group, highlighting the team’s significant exploration success in the region.

Galileo’s primary focus at the moment is drilling out its Lantern prospect which lies in a great neck of the woods for nickel sulphide discoveries, 100km along strike from Nova-Bollinger and Silver Knight, as well as 50km along strike in the opposite direction from Legend Mining’s Mawson prospect.

On the back of pleasing air-core drilling results last year at Lantern, Galileo moved ahead with a reverse circulation (RC) drilling campaign in March to test below existing drilling to a depth of around 200 meters.

The company isn’t going to be sitting idle with Underwood saying the RC drilling results would act as a guide for upcoming exploration programs.

“With our first RC program we have shown that our ground contains nickelcopper sulphides, he said. “While we wait to complete downhole EM surveying of the mineralised drill hole (LARC003), we will continue to build a pipeline of targets with aircore drilling. Our ground has had no previous nickel exploration which provides Galileo with a first mover advantage on a virgin greenfields property in a new nickel belt.”

Galileo had begun aircore drilling of magnetic targets north of the Lantern Prospect, however this was postponed in late March due to restrictions associated with the novel coronavirus (COVID-19).

Galileo also owns tenements near Norseman with over 26,000 tonnes of contained cobalt, and 122,000 tonnes of contained nickel, in JORC compliant resources.

The company is well funded with cash of $4.8 million at the end of March quarter 2020.

APRIL 2020 21

RIU Explorers Conference hits record attendance in 2020

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or the junior end of Australia’s mining and exploration sector, February has traditionally marked the start of what is always a hectic conference year with Australia’s premier smallmid cap mining conference, the RIU Explorers Conference, first cab off the rank.

Held at the Esplanade Hotel in the port city of Fremantle, the conference – which in 2020 celebrated its 19th year - has become a staple in the conference circuit for the junior and mid-tier exploration and mining end of town.

Over its three days, previously two but changed to three in 2018 on the back of surging demand, the event attracted an overwhelming response from the junior and mid cap resources industry, all keen to communicate their latest exploration and production successes along with updates on their technical and corporate performances.

Over 70 of the who’s-who in Australia’s junior exploration and mining space - including stocks in precious metals (gold and silver), base metals (copper, nickel and zinc) through to battery metals (cobalt and lithium) - presented.

This year, it was a sold-out show with a whopping 1,400 delegates registered. From investors through to brokers and analysts and mining executives, everyone was clamouring to get a seat in the packed auditorium.

Stavely Minerals’ Managing Director, Chris Cairns THE-PICK.COM.AU

RIU Explorers Conference Managing Director Stewart McDonald said while everyone in the industry looked forward to the event after the holiday season, it was not just about mingling and catching up.

“This is an important event for Australia’s junior and mid-tier explorers and miners as a whole as it is the first major conference of the year and really sets the tone for the year ahead,” he said.

With the gold price trending higher on the back of the COVID-19 pandemic, the big-ticket items for a number of investors in attendance were precious metal stocks including presentations from the likes of Gold Road Resources (ASX:GOR) and Ramelius Resources (ASX:RMS).

There was also significant interest in some of the up-and-comers including Stavely Minerals (ASX: SVY) which hit shallow high-grade copper-gold at the Thursday’s Gossan prospect, part of its whollyowned Stavely copper-gold project in Victoria.

Stavely also went on to win the coveted Craig Oliver award - which recognises the ASX resource sector’s best all-round achiever throughout the year – at the conference.

Last year, Stavely’s share price skyrocketed over 250% thanks to an intercept from diamond hole included a phenomenal 2m at 40% copper hit at the Thursday’s Gossan prospect.

Stavely was chosen from a list of highly accomplished exploration and mining plays including gold producer Alkane Resources (ASX: ALK), West Australian gold explorer, Bellevue Gold (ASX: BGL), tier 1 gold producer Gold Road Resources (ASX: GOR) and mineral sands play Image Resources (ASX: IMA).

The award – now in its tenth year – is in memory of Craig Oliver who passed away on Saturday 19 June 2010, aged 46. Craig was on the Sundance Resources plane which tragically crashed in the Congo with the loss of all people on board.

RC Drilling at the Southern Cross gold project

Southern Cross marks the spot for Xantippe Resources

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strategic refocus and some timely deal making has seen the recently re-branded Xantippe Resources (ASX: XTC) launch into Western Australia’s Southern Cross region, holding some 76km2 of highly-prospective gold tenements.

The Southern Cross greenstone belt, which lies 380km east of Perth and is one of the country’s most prolific gold provinces, is now home to the emerging explorer following a deal completed in December last year.

Under the agreement, Xantippe now wholly-owns an extensive tenement package consolidating an area which has been historically fragmented as a result of its lively history.

The newly minted Southern Cross project is surrounded by a series of active and historical mines. It is directly along strike from the Marvel Loch mine, which is in operation and has produced in excess of 3Moz of gold.

The tenement is also adjacent to the historical Axehandle and Frasers mines, which lie directly along the NW/SE strike.

Regionally, the area boasts roughly 15Moz of gold endowment and also contains other major gold operations such as the Edna May and Yilgarn Star mines.

The heavy gold endowment has seen the Xantippecontrolled areas attract a number of historic exploration campaigns, however as Managing Director Richard Henning explains, there may still be a lot of life left in the project.

“The Southern Cross project tenements have never been systematically explored by a modern drilling campaign – mostly due to the area’s fragmented history – so the combined area really opens up a lot of potential for us,” he said.

“To give an example of how little is known about the project, none of the historic drilling has ever tested below a depth of 100 metres, so we’re hoping to change that.

“We also have a number of shallow targets we want to look at as well. Some of the historic drilling was auger drilling which only tested to a depth of a few metres despite the underlying geology looking quite promising. Geochemical results were good, but we really want to do some Geophysics across the area.

“We think that the region’s precious metal history plus some historical exploration suggests there is still plenty of gold to be found and we’re really looking forward to finding out.”

Xantippe has a number of historical results for interpretation across its priority targets, with the Glendower prospect returning 9m @ 28.41 grams per tonne of gold from 33m and the Xantippe prospect unearthing 13m @ 4.69 grams per tonne of gold from 38m.

None of the historical results have been reported under a JORC reporting standard, so it is expected re-drilling these holes plus some step-out targets will be an immediate focus for the Company.

At the time of reporting, the company has completed its maiden RC drilling campaign with samples at the lab and results pending.

APRIL 2020 23

Coziron’s suite of quality WA assets is looking very tasty

Coziron’s follow-up programme will include diamond drilling to provide structural and geological results for the intercepts reported from the December drilling.

An RC programme will then be used to infill and extend drilling from the holes reporting significant intervals of mineralisation.

In addition, RC drill holes are planned for the coherent gold and pathfinder- element anomalies generated by soil sampling programmes at Bottom Camp, Murph and Martin prospects.

Mr Sierakowski said the prospectivity of the 300sq. km Croydon Project for gold mineralisation is reflected by the widespread presence of gold and pathfinder-element anomalism in the database of drainage, soil, auger and rock-chip sampling completed

by Creasy Group and earlier explorers over a wide area.

While the exciting gold potential at Croydon is a major focus for investors at the moment, it is only the cream on a very large cake of quality assets Coziron brings to the table.

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ith a prime location in one of Australia’s hottest new gold provinces, Coziron Resources Ltd’s (ASX: CZR) Croydon project has grabbed the attention of many market watchers and the company is moving quickly to follow up its recent, very promising maiden RC drilling programme.

Chairman Adam Sierakowski told The Pick recently that everything appears to be falling into place for the company to be back drilling in the Pilbara region of WA by early May. “We consider this geology highly prospective, made even more interesting by DeGrey’s exciting Hemi gold discovery to our northwest, and we can’t wait to see more drilling rigs spinning bits up there,” Mr Sierakowski said.

“We have long felt that this area has the geological make-up of a strong feeder system for structural gold deposits, in the style of the Hemi discovery – which I feel could end up being the exploration discovery of the year – and from our first drilling campaign at Croydon – that is really starting to look to be the case.”

Coziron’s maiden RC drill programme at the Top Camp Prospect at Croydon included a number of headline results such as 8 m @ 10.2g/t that included 1 m @ 66.1g/t, 7 m @ 1.4g/t including 1 m @ 7.7g/t and 19m @ 0.6g/t.

The wide spaced drilling identified a number of broad and highgrade intercepts in carbonate-rich, siliciclastic turbidites beneath an area of surface gold anomalism within the faulted corridor that extends over an area approximately 400m wide by 1.5 km in length.

“We have really only just scratched the surface at Croydon,” Mr Sierakowski said. “There was virtually no drilling there for nearly 20 years and we really believe the sky’s the limit for potential discoveries in our 300 sq. km Croydon Project.”

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“While the Croydon gold project is our major focus at the moment, we also have priority gold targets at our Buddadoo project near the Deflector mine, but there is no doubt that we are strongly tied to our large high grade iron-ore and magnetite portfolio,” Mr Sierakowski said.

Also in the Pilbara, Coziron’s Yarraloola project contains +90Mt @ 53% Fe (calcining to 60% Fe) of indicated and inferred JORC compliant CID (Pisolitic ironstone) in the Robe Mesa, Robe East Extension and P529 deposits.

The resource includes a higher-grade surface interval on the Robe Mesa of 24.9Mt @ 56% Fe, which will calcine to 62.7% Fe. Coziron’s other major Yarraloola prospect is its Ashburton magnetite located 40kms from CITIC’s Sino iron mine and extending over 12km long and up to 1km wide. RC and diamond drilling has established Ashburton magnetite concentrate as a 65-70% Fe product with low levels of impurities such as phosphorus, sulphur and alumina.

In a top-class iron ore neighbourhood and surrounded by key infrastructure, Coziron is investigating opportunities for the development of the Robe Mesa, including discussions with potential partners.

Mr Sierakowski believes there is a strong possibility that iron ore can ride through the COVID-19 storm and come out the other side in strong demand as countries, particularly China, look to stimulate their economies.

Coziron is also investigating opportunities for possible partners in its Pilbara magnetite potential and CID resources.

“The Robe Mesa project represents direct shipping ore and is strategically located near port, rail and road infrastructure. We have seen some interesting corporate activity in the iron ore sector in the West Pilbara just recently and we see our project as a very attractive development opportunity,” Sierakowski said.

With a suite of high quality assets, in high-value commodities, in prime locations and backing of the Creasy Group, Coziron has the right recipe for success.

Existing holders the messiahs of growth companies

BY BEN WILLIAMSON CEO & Co-Founder of Fresh Equities.

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arkets are down, the world has changed, but business continues and companies still need funding.

In a world hit by COVID-19, and with markets in turmoil, this provides a great opportunity for investors to back their favourite companies, and get a deal in the process.

We have worked with over 400 ASX companies since kicking off 18 months ago, helping investors get access to their deals when these were normally locked away to the top holders, or the broker’s book. Navigating this world is hard, there are over 140 different lead brokers, over 2,000 listed stocks and no single service to bring the deal flow together.

uncertain times, they are the rock on which the company can continue to grow.

If you do qualify, you only need to complete a few simple steps to get prepared:

If you have held through this period and supported the company you should be reaping the rewards too when the time comes to raise. Too many investors are unprepared and not set up to take advantage of discounts offered through capital raises.

1. Make sure your accountant certificate is up to date (they only last for 2 years);

Firstly, are you a sophisticated or retail investor?

Sophisticated investors either have an income of >$250,000 per year for the last 2 years or a net asset base of $2.5m. You will need your accountant to sign off on this and if you control a company, can include it in your calculations. Retail investors are everyone else.

In the last 18 months we have been changing this. We now work on 2 in every 3 deals, broaden access to include other investors and importantly, existing holders.

Retail investors can participate in Share Purchase Plans and Rights issues. So if you’re selling out, question if you should still hold a portion to take advantage of these events.

Companies that have cultivated relationships with existing holders are now reaping the rewards. Their investors are not selling as much, they might even be buying and supporting the current share price.

And when it comes time to raise, in these

Sophisticated and Professional investors have more freedom to invest in Placements - quick deals done intra-day that don’t require lengthy processes or documentation. These are the easiest to miss if not set up.

2. Talk to your broker about deal-flow.

There are 600 or more placements a year, see how many they have access to.

3. If you want access to most deals, sign up to freshequities.com. You can add your broker’s details here so all your stock and funds stay with them but you get more deal flow.

4.

Set alerts on your favourite stocks and watch out for trading halt announcements. Don’t forget to read the second page which will tell you if it is a capital raise or not.

With this setup you will be in a prime position to benefit from your continued loyalty and knowledge of different stocks as they come out to raise.

In 2019, the average discount for raises that we worked on was 13% and one in four had free options. With a more volatile market, deals will likely give bigger discounts and the benefit will go to those who are prepared.

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