MarketOpen(ed) Issue #13

22rd July 2023

THE INTERNATIONAL GRAB FOR GRAPHITE

NAMIBIAN COPPER CHARGE

NoroNex Chase a sleepiNg giaNt N

MANSOOR'S RADAR: WE'RE NOT HERE TO KNIT QUILTS!

CygNus uNloCks value at poNtax

PLUS, THE LIZARD KING GETS @ HANDLE ON TWITTER KNOCKOFFS

THE LIZARD KING

The Lizard King looks at the collection of Twitter knockoffs and yearns for the internet of old.

Facebook, or Meta as I guess they're called now, has made its not-so-triumphant entry into the Twitter knock off game, and its Threads app appears to be populated by nothing more than bot and company accounts and users have quickly dropped by half since launch.

The political affiliations of social media platforms seem to be in the eye of the beholder, and a bunch of similar apps have spawned for the left wingers and right wingers to seek refuge among their own kind on Mastodon or Truth Social, but they all come back to the bird app to get what they all crave – attention. Who wants to just be surrounded by their own kind in an echo chamber anyway? I much prefer scrolling through contentious bickering between sworn rivals than smug agreement.

But what I really want is a return to the web of old, with sparkly text forums and custom signatures where the users were all asocial nerds, but until someone goes back in time and destroys the iPhone, we’re stuck with the internet that we’ve got.

At least HotCopper has proven there is still a space for weirdos to shout at each other over niche topics, nicely (or in some cases barely) disguised behind usernames – much more preferable than the alternative of having to put a name behind my harebrained hot takes. For after all, strife and competition will lead us to advancement, whether it is discussing the pressing political issues of our age with the internet’s most deranged users or engaging in fierce debate over whether 0.01 per cent copper is good or not on a website that none of your friends have ever heard of. But go read a book and touch some grass if you want self-fulfilment, I’m just there to be entertained.

FROM THE EDITOR

Investors aren't investing in oil and gas stocks despite decreasing reserves, increasing demand, and the Russian invasion of Ukraine. David Prentice of Brookside Energy believes they're focused on energy transition and not paying attention to executives' attempts to improve shareholder returns and balance sheets, as well as favorable prices.

Based in Perth, Brookside has made remarkable progress in the oil and gas industry, particularly in the mid-continent area of the US, over the last decade. However, despite their and others like its success, they find it challenging to attract investors' support in these uncertain times. I have been monitoring this stock for more than two years, and according to all the indications, their fundamentals and systematic approach to launching a fleet of new oil wells in Oklahoma have made them an investment no-brainer. May I add that this seamless rollout continues while managing to reach a cash-positive position

by the time oil began following at their second of more than 25 wells planned to be operating by 2026.

Despite the positive news flow and Big Oil's persistent interest in its SWISH AOI, the market hasn't received the memo. Prentice, the company's MD, acknowledges that institutional investors are currently focused on energy transition stories, which leaves little interest in the upstream energy sector. Nevertheless, he remains optimistic that this will change over time. "Institutional investors are focused on energy transition stories and not investing much in the upstream energy sector, causing a struggle for attention," Prentice says.

"However, as upstream energy remains crucial in the energy transition, investors may return. The challenge is that this group typically buys our shares as we shift from explorer to producer. The current buyback is helping fill the gap, but we need institutional investors to trade closer to our asset values."

Market Open(ed) Editior Rueben Hale

Since end of 2021, Brookside has drilled 4 wells at the SWISH AOI averging 1,468 BOE (IP30)

Category Unit Flames Jewell Rangers Wolf Pack

THE INTERNATIONAL GRAB FOR GRAPHITE

As Kingsland Minerals advance on converting a large graphite exploration target into a JORC resource, the major mining companies are beginning to make diverse acquisitions across the battery supply

Following a downturn in the sky-high lithium prices, which had shattered previous highs, the majors have sprung into action and begun what some see as a wave of mergers and acquisitions not seen since the very height of the last mining boom – and they aren’t just coming for lithium. After early reluctance to jump in on the decade’s biggest growth market for materials, Glencore Fortescue, Hancock Prospecting, and Rio Tinto are just a few of the names diving headfirst into lithium markets.

And Rio’s cornerstone investment in graphite focused Sovereign Metals might have indicated a major sweep coming for the rest of the battery chain, with not just immense future growth in mind but a pressing need to secure a diversity of supply away from Chinese dominance. While there has, like lithium, been a recent downturn in graphite spot prices, the actions of the majors indeed indicate an unabated groundswell of demand.

Australian explorer Kingsland Minerals has made what could be a globally significant graphite discovery in the top end of Australia. As it moves on converting a large exploration target into a rock-

solid JORC resource, managing director Richard Maddocks says the market is about more than just a price tag.

“China produces most of the spherical graphite used in car batteries, leading to a lack of diversity in battery production. To address this issue, alternative sources of minerals are being sought out to ensure a more diversified supply chain,” he says. It seems Kingsland’s February discovery of 20 kilometres of graphitic schists within its Northern Tenement holdings could not have come at a better time. It would be an understatement to say Maddocks is upbeat about the market outlook for graphite.

“Things are looking promising, especially consiering larger companies and automakers investing in battery mineral projects worldwide,” Maddocks says.

“Now were hoping to identify varying grades for flexibility which would be the icing on the cake for us given that our location and deposit set us apart from competitors – validations of metallurgy and grade will allow us to move forward with even greater confidence.”

Not that Kingsland wouldn’t pick up the phone if Rio gave them a jingle.

Kingsland Minerals field assistant Richard Maddocks Jnr. and non-executive director Nick Revell at the Leliyn graphite discovery.

High grade intersections from the first two holes at Leliyn confirmed high-grade graphite

“It gives you an alternative to developing it on your own. If larger partners are willing to come in and make a cornerstone investment, it provides a different, maybe easier route to go through to production,” Maddocks notes.

But even outside of supply chain requirements, the long-term story of a battery metal boom remains clear.

“It is all about the upsurge in usage of electric vehicles. So, if you believe the projections on the use of electric vehicles in Europe, Asia, North America, Australia and other parts of the world, there is going to be significant increase in demand for materials to make those vehicles, that is always going to be there, and that is the long-term growth trend,” Maddocks says.

"There has been a short-term fluctuation of prices. But as demand grows, you will see those things getting ironed out, and we will see a price increase over the next five to ten years. "

“It doesn’t impact us right now, we’re not producing! It is very early days for Kingsland, and it is interesting to see how the price does vary. Going forward we will aim to future-proof our project against these sorts of things should they occur again.”

China has cracked down on rare earth metal exports of gallium and germanium, but Maddocks says graphite is likely too important for export bans to be considered.

“That is always a risk, but I don’t see it happening. You see in recent conflicts like Russia and Ukraine, gas and oil and things like that are the last to get turned off because they're a lifeline for any economy, suppliers and consumers, and I think graphite will be the same,” he says.

“I don't think you would ever See China say, ‘we’re not going to sell you graphite’, it’s just prudent to diversify your supply chain. It makes sense to buy from China, to buy from Australia and west Africa, it’s just common sense.”

WHAT’S NEXT FOR KINGSLAND

Australia has favourable conditions for large graphite resources, with fewer risks and access to skilled individuals. Companies there have a higher level of confidence in ESG credentials and are close to potential source markets in Asia. Kingsland has an exploration target set for up to 27Mt of graphite at Leliyn, from just a quarter of the 20-kilometre strike length, with a focus on quality over quantity. The goal is to become a globally significant graphite project and the potential scale has it well positioned.

Antilles see deep El Pilar Porphyry

Antilles Gold have continued to bring in high grade strikes of copper and gold from the oxide zone of El Pilar, and after intersecting numerous zones of porphyry-style copper mineralisation in the underlying area, it is starting to see a potential company-maker in central Cuba.

Antilles could soon have two producing open-pit Cuban mines at Nueva Sabana and La Demajagua to its name and it is continuing to deepen its partnership with the Cuban mining authorities to unlock the island nation’s untapp mineral reserves.

Antilles expect a MRE and a pre-feasibility study for Nueva Sabana by the end of the year.

HyTerra heat up for hydrogen

HyTerra is now in discussions to begin an independent resource assessment and commercialisation of assets at Nemeha Ridge after obtaining licenses to explore and develop its natural hydrogen play in the sunflower state of Kansas.

Several drilling and operational consultants are engaged for exploration and HyTerra’s US-based subsidiary is preparing to reach the landmark of permitted wells,

The United States has made its intent on hydrogen clear, and the first ASX-listed company to focus on natural hydrogen has a purposeful strategic directive to align itself with a superpower seeking to accelerate production, processing, delivery, storage, and use of a clean burning energy source.

EcoGraf’s purification patent

EcoGraf is on its way to commercialisation after securing the patent for a unique hydrofluoric, acid-free purified graphite production method.

Discussions with lithium-ion and EV manufacturers are already underway, with environmentally compliant technology in alignment with U.S Treasury IRA guidance on clean vehicle criteria. Any products made using the process will fringe upon import into the United States and protects the use of its technology in lithium-ion battery recycling, worthy of note as battery recycling is increasingly recognised in the transition to clean energy. supply chains.

VRX move toward mining

After securing a $2 million grant from the WA Government to develop a high-purity quartz sand manufacturing process for its assets across the state, VRX Silica backed it up the next day and announced it had secured the final of three mining leases over its Arrowsmith flagship

With a combined resource exceeding 1.1 billion tonnes at Arrowsmith alone, VRX is starting to see large-scale production ambitions of an in-demand and finite silica resource drawing ever closer to reality.

CYGNUS METALS (ASX:CY5) PONTAX ACQUISITION TO JORC WITHIN 12 MONTHS

David Southam, the newly appointed MD of Cygnus Metals, said he meant business during his first presentation. He is focused on delivering a maiden JORC resource at the Pontax deposit in Quebec, Canada.

“WE ARE NOT HERE TO KNIT QUILTS!”

This was said by none other than David Southam on his first presentation coming as MD of Cygnus Metals David meant business from day one and is on the pathway to deliver a maiden JORC resource at the Pontax deposit in Quebec, Canada.

Cygnus Metals Business Model

The approach Cygnus Metals is using to unlock and create value is successfully trialled and tested at Bellevue Gold.

• Start with acquiring an attractive option, which Cygnus did in September last year through Stria Lithium’s Pontax project.

• Raise capital, which Cygnus has done twice over the last ~12 months. With ~60% of the capital gone into the ground and ~$5.4M cash still on the books to complete the summer drilling program.

• Drill by twinning historical holes, followed up by step-out holes to increase the strike and improve understanding of orientation/ depth.

• Consolidating all insight together, incorporating it into a resource estimate, and importantly putting a time stamp on updating the market. Which Cygnus Metal's is planning to do in the next 4 weeks. This program of work looks simple. However, it requires heavy-handed coordination, which Cygnus Metals MD David Southam and his management team are well aware of by working on, and delivering multiple projects in their earlier professional life.

Cygnus Metals Safety & Compliance Model

Cygnus Metals management team comes from a background, where safe operation, compliance to plan, and timely delivery are at the forefront of unlocking value. 11,328 meters of drill program completed, a 7km road constructed by spending collectively >8,000 hrs1 in the field without any (LTI) loss time injury in very rugged harsh terrain, highlights the commitment of the management and professionalism of operators involved during various facets field activities.

Pontax JORC Mineral Resource Estimate

Over the last few weeks, a number of brokers have written reports on Cygnus Metals. The floor and ceiling of the resource estimate is now almost well-defined based on available information. 7 million tonnes is the resource estimate floor aligned with Market Open internal assessment. However, we believe the cutoff grade used

by the market to calculate the resource estimate is higher than our internal assessment. Regardless, we believe this is a great achievement of Cygnus Metals Management in delivering the maiden resource estimate within 12 months of acquiring the Pontax asset.

Sakami and Auclair Field Program

Sakami Project is ideally located within the La Grande greenstone belt and exploration will start with airborne magnetics, LiDAR, and high-resolution orthophotography

Initial desktop studies have identified multiple pegmatite targets, with outcrops up to 140m long and 30m wide, field work commencement from August onwards

Auclair Field Program Pathway to JORC

Cygnus Metals exploration team has identified around 67 targets at Auclair for investigation, some of which are up to 1.6km long and 60m. The airborne magnetic survey was completed in late June. LiDAR and high-resolution orthophotography are expected to commence later this month.

Geophysics, mapping, and sampling are expected to be followed by diamond drilling commencing in August, with a rig and crew contracted for the entire summer season.

Funding

With any junior exploration company, funding requirement is ongoing and Cygnus Metals is no different. With $5.4m in the bank at the end of June. We believe this funding program may not be enough to start the next phase of the drilling program. Most likely a Capital Raise pre or post-mineral resource estimate update to market.

A FRONTIER OF NEW OPPORTUNITY

By Rueben Hale

Noronex's Chief Geologist, Bruce Hooper, is returning to one of his geological heartlands in Namibia, Southern Africa, where he eagerly anticipates starting drilling on prospective sections of the more than 300 kilometres of strike they hold, exploring for the sleeping copper giant under a shallow layer of sand.

Botswana is currently increasing its mining production of copper and silver from the Kalahari Copper Belt, just over the border. There has been a significant rise in output, with Sandfire Resources, a company listed on the Australian Securities Exchange, leading the way. They are aiming to reach an output of 30,000 tonnes of copper, with plans for future expansion. Cupric Canyon is another prominent player in the industry, with their Khomecau mine currently producing 60,000 tonnes of copper per year with plans to soon increase their production to 130,000 tonnes. Hooper and his exploration team have received full funding to complete the 4000-metre drilling program at the Humpback project. There is a sense of exciting new opportunities ahead as the Kalahari Belt veteran outlines plans for drilling to get underway at the site by the end of the month.

"This region is unlocking its secrets, more so every day,” Hooper says. “We're excited to begin investigating previous intercepts and testing various targets to understand the scale of the mineralisation in the Fiesta project. “We'll also be conducting the first-ever drill program at Blowhole, focusing on targets identified on a sheared fold closure — Blowhole is near the Botswana border and has huge potential for a new copper discovery.” Hooper believes that the project presents a significant opportunity for growth, as it can build on the existing JORC Resource of 10mt @ 1.3%.

“Our first stop will be at an old project called Fiesta, where they've had some impressive intercepts before, and we're following up some of those and then looking for the big picture story in extensions,” Hooper says.

“We are planning to test various numbers of

targets with up to twelve holes. Additionally, we will be doing some infilling in areas where previous good hits have been made. There is a large 250-metre zone where a follow-up hole has not been put yet, which we also plan to explore.”

What is the reason for people's excitement regarding this specific drilling package?

Exploration for copper is expanding to underexplored regions like the Kalahari Copper Belt due to the depletion of global copper mines. With modern technology, the opportunity to make discoveries in this known copper belt is now more compelling than ever. High-quality jurisdictions such as the Kalahari Desert are covered by a shallow cover layer that has deterred previous explorers from seeking simple outcropping structures.

Why is moving east such an exciting opportunity for Noronex?

We have recently been granted a large new 100% owned package in Namibia covering over

100kms of the key NPF-D’Kar contact points where most of the major copper deposits on the Kalahari Belt are located. Some of our ground has high grade historical copper drilling that we are planning to follow up along strike and at depth. It's exciting to note that some newly discovered geological features are dome-shaped structures that serve as ideal traps for copper. These structures are located on the same mineralised horizons as some of the major recent discoveries. What's the plan of attack?

We anticipate the arrival of the rig by the end of July. We will start drilling shallow targets along the strike from known mineralisation at Fiesta. Once completed, we will move east into our Blowhole project. Our primary focus will be in areas of shallow cover and will target areas with solid indications of copper known on the prospective contact.

Can you update me on your neighbours and the area?

Botswana has emerged as a significant producer of copper, with the Motheo mine set

to officially open soon. The Zone 5 project and Khoemacau, owned by Cupric Canyon Capital, the majority shareholders, are currently looking for potential buyers for the mine's expected annual output of up to 130,000 tonnes.

Have you noticed that people are becoming more aware of the significance of copper as a crucial critical mineral?

It's fascinating how copper remains the most sought-after metal during the lithium, nickel, cobalt boom, and the increased awareness of their importance for EV change and electrification. It seems to have gained even more attention due to the boom in these electrification metals.

Have you got other acquisitions in mind?

The current program is on 100% owned ground Noronex applied for as it became available after a moratorium. We carefully selected this land and have worked through all the necessary environmental clearances and permissions for drilling but remain open to new opportunities.

Noronex Senior Geologist Bruce Hooper and consultant Ivor Kahimise traveling between one of the company's many exploration sites on the Kalahari Copper Belt

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