MarketOpen(ed) Issue #16

19th August 2023

AN ENERGY SPECTRE HAUNTING EUROPE

WA GAS STRIKES CAUSE GLOBAL CONCERN

THE RIGHT CRITICAL SIGNS

AUSTRALIAN CRITICAL MINERALS MAKE THE RIGHT MOVES FOR DISCOVERY

MIGHTY ~60MT WINSOME’S ADINA

DELIVERING 2 MRS’s AFTER 2 YEARS FROM IPO

THE LIZARD KING LOOKS AT MOON MINING, STRIKES, AND SOME SPICY LEGAL ACTION

THE LIZARD KING

The major powers have put moon mining back on the agenda. This lizard’s mature years have me remembering that this is the type of irrational behaviour one would come to expect from the US in times of great global stress! It seems the US may find it easier to bring a mine to goddamn outer space than Nevada! Not that our miners are complaining. It takes half a decade quicker to make a mine here, so if it turns me a profit, dig and ship away, baby!

The gas strikes are slightly concerning but are going better than the Hollywood writers. The prospect of running out of heat is more pressing than missing out on another Disney reboot or adult cartoon (what an oxymoron). I’m sure the AI they’re protesting can do a better job of writing whatever the hell “The Pope’s Exorcist” was, as much as I love me some fat

Rusty Crowe.

Though I don’t think this AI race is much to care about, sometimes it’s just a hype bubble for a spicy autocorrect so tech companies can cover up the fact that they haven’t had any real innovation for about 15 years. If people get bored, they can always go back to stuffing the internet into a toaster or whatever they were up to. Given the state of our dollar and the materials sector’s performance over the past week, I can no longer afford US goods.

But the real materials action is in the Hancock Prospecting trials. I was hoping Rose Porteus would pop up and give me a taste of the OG West Aussie drama, which aired alongside Melrose Place, though distance does make the heart grow fonder, and now ol’ Rose might be the most likable figure in the whole affair.

And the US has some even sexier legal drama. How many times is it now that Trump has been I’m indicted? I’ve lost track!

He could not hope for better publicity. Talk about knowing your audience!

Trump is a drama queen at heart. I miss the days his theatrics were focused on more harmless material like his multi-day seethe session on Twitter over Kristen Stewart and Robert Pattinson’s Twilight spectacle (Google it and give yourself a chuckle).

Meanwhile, I have left my ode to nationwide heartbreak to last. It was a shame the Tillies couldn’t take it all on home turf. Albo will have to wait a bit longer for his next chance to be like Hawky after the America’s Cup in 1983!

FROM THE EDITOR

Who really knows what’s happening with the price of lithium?

Depending on whom you talk to, the rapid decline of battery-grade lithium futures in China was either the apocalypse for the industry or just a bump in the road to eternal prosperity.

No matter what camp you have pitched your tent to, the impact on ASX-listed producers would be hard to put down as a mere bump as billions of dollars fell off the sector in mid-July faster than fat from an Olympic athlete on Ozempic.

Market Open analyst Mansoor Jan noted that reactions in the ASX lithium sector could be exaggerated responses to minor market pricing changes.

So, what the hell’s happening with Core Lithium, if this is correct?

According to Jan, Core’s recent capital raise can be attributed to its own efforts. So why has Core Lithium sought a $120 million cash injection from the market if a structural deficit remains and the correction is explainable as a mere supply versus demand correction? Jan says this decision was made due to lower-than-expected price guidance from sell-side analysts.

“Importantly, Core Lithium management updated the market that there is a three-month lag of ore supply from the mine and processing plant, resulting in ROM pad stockpile building after FY25,” he says.

“This is a reality check for the Core lithium operation team and management. Drilling is one thing, and operational excellence is another.

One thing is clear. Core Lithium will have to always wear its big boy pants from here on in. The market has moved on from the inspirational story of its inception and will judge it by the throughput tonnes, stockpile reserves and meters of exploration.

Jan departs with these final words of wisdom: “Cost is sticky, and a restructure might be on the card for the business’s longevity. Go Early and Go Fast.”

Rueben Hale

THE ENERGY SPECTRE HAUNTING EUROPE

By Tom Duggan

Even in a state of low prices, the northern winter approaches, and international powers are turning their attention to Australian gas worker strikes, which have the already-precarious global supply balance closer to the knife’s edge.

Natural gas prices, down almost 72 per cent year-on-year in the US markets, surged by 40 per cent in Europe, spooked by unions potentially making good on threats of all-in walk-offs by workers on Western Australia’s most critical offshore oil platforms. The jump was the largest since just after the Russian invasion of Ukraine and could lead to a potential bidding war between Europe and Asia which would again drive energy costs to extremes. Woodside and Chevron workers have voted tools down, but concerningly breakthroughs have yet to be made so far in labour discussions which have as much as a tenth of global LNG exports at stake.

“The potential strike comes when the gas market is in a precarious state even though prices have tumbled and are at relatively low levels compared to the recent

past,” Flex LNG Chief Executive Oystein Kalleklev said.

To provide some context on their significance, Japan, Thailand, and Taiwan received approximately one-quarter of their supplies from the affected facilities this year. Additionally, they have been significant suppliers to the Chinese and Singaporean import markets.

The Russian invasion is a harrowing reminder of the volatility of the world’s power supply. Even world powers remain keenly aware of the thin line between staying online and going dark. Who would have foreseen even just five years ago a situation where a severe heatwave had Japan dangerously close to a Tokyo-wide blackout, as was the case last year, forcing the Japanese government to swallow its pride and issue a public plea to reduce energy consumption?

It was one of many capitals to avoid going dark narrowly. Britain was forced to pay the highest price, more significant than a five thousand per cent premium, to keep the lights on in London’s south-east.

“We were bidding in a tight market, and market prices were high that day because Europe also wanted the energy,” a spokesperson at National Grid ESO said.

The pain was felt globally, and a report from the Nature Energy journal found that up to 140 million extra people could have been tipped into extreme poverty. Australia is hardly immune. Despite being a country that produces energy, last year’s crisis persists. As a result, some households are experiencing price increases of up to 100%. And when power gets expensive, so does everything. Higher energy costs flowed through almost all essential goods and services in the wake, and indirect costs of the energy crisis are even higher.

Europe has tried to restock its gas reserves since last year. German multinational power utility company E.ON’s chief executive Leonhard Birnbaum said that a repetition of last winter’s crisis had decreased dramatically - but the first had not yet abated.

“We have to be clear that the structural change due to the Russian war in Ukraine and the drop out of Russian gas in the supply of Europe is going to stay, and therefore the crisis is not over,” Mr Birnbaum said.

Energy prices were already increasing due to the swift economic recovery after COVID-19. In contrast to the oil shocks of the 1970s, the current crisis affects all fossil fuels, and Russia is the leading exporter by a long way.

Moscow had already begun stockpiling reserves before its invasion, and prices soared further in the wake of boycotts as nations bid over each other for alternative energy sources and international trade routes were rerouted.

But the ongoing energy crisis, like those oil crises decades ago, spurred significant technological advances in efficiency, nuclear and renewable power and could lead to a turning point in global energy policies.

The invasion sparked a global rethink of energy policies. Many nations had been phasing out nuclear and coal sources with gas in mind as the bridge between renewable energy and more carbon-intensive sources. They have been left scrambling after being warned that boycotts would have consequences.

The European Union’s RePowerEU Act and the United States Inflation Reduction Act both contain initiatives to advance energy efficiency and renewable sources, and nuclear power, even in post-Fukushima Japan, is back on national agendas.

The heating season in the northern hemisphere is fast approaching. While strike threats could be quickly resolved, the fact that their very possibility on the other side of the world caused such a market panic is the canary on the gas rig that an energy concern can turn into a crisis at the drop of a spanner.

MANSOOR'S

WINSOME CLOSE TO DELIVERING 2 MRE’s NEXT QUARTER

Winsome started its life as MetalsTech, with the Cancet and Adina projects under its wings. Cancet being the key project; management focused on historic workings and advanced through understanding the metallurgical testing and recoveries, understanding where next to drill, making field visits and keeping the market excited.

All this changed when magnetic signatures identified at Cancet corelated with the pegmatite structure. This led to the discovery of well-mineralised spodumene boulders to the northeast of the Cancet and Eastern pegmatites during the 2018 field exploration program. As a result, the landholding was expanded by 60 per cent through new staking towards the east. MetalsTech carried out diamond drilling over 2 phases (59 drill holes, totalling 5,216m) during 2017, followed by Winsome over the last two years.

At Adina, MetalsTech carried out a field geochemical sampling program during August 2016. The goal was to verify low-grade greenblue spodumene-bearing pegmatites reported in the 2014 Quebec government regional mapping campaign. Work on the ground included a one-kilometre traverse to locate and sample pegmatite outcrops and eleven samples of spodumene-bearing pegmatite were collected from several pegmatite.

Birth of Winsome

The foundation was established, and on the 30th of November in 2021, Winsome Resources listed by raising A$18M on ASX as WR1 and Chris Evans came onto the Board as Managing Director.

21 Months’ Achievement

The list is exhaustive of their achievements across multiple fronts

• Cancet 20 diamond drill holes over 2,000m

• Cancet Gravity Survey

• Acquiring capital efficient exploration equipment

• Decelles value assertive acquisition - 669 claims, 38,000 Ha

• Importantly highlighting early in the program, Cancet resource target 15-25Mt @ 1-2% Li20

• $6.8m CR to advance lithium projects

• Signing a binding agreement to purchase Power Metals Corp’s Case Lake Project

• $60m to accelerate Canadian lithium projects

• Increasing its stake in Power Metals to around 10%

• Pegmatite at Adina extended to 1600m of potential strike

• Lithium mineralisation confirmed over 3km trend at Adina

• Lithium portfolio expands with acquisition of Tilly Project

• Substantial high-grade intersections continue to grow Adina

• Acquiring camp close to Cancet and Adina

Adina Resource Estimate

With current drilling in play, confirmation of connectivity between Adina’s main body and Adina East extending over the Adina resource would have considerable upside potential. If mineralisation is proven to be continuous between Adina East, which extends over 1.9km as suggested by ground gravity readings, analysis suggests the bookend of a resource estimate is 50-60Mt. Analysis does not include any extreme downdip and assume consistent geological extension all way to step out hole AD-23 - 43, 44 & 45.

Cancet Resource Estimate

WR1 has completed around 2142m from 23 infill holes, mainly to better understand geological structures and identify additional pegmatite outcrops across the Cancet project area. Winsome Resources has confirmed the high-

Next 3 - 6 Months Deliverables

The market is expecting four things in the next three to six months:

grade of mineralisation across Cancet land package, validating the existing ore body and extending known strike length to 1.2km.

Cancet is a relatively shallow deposit and simple geological structure, Winsome has already highlighted the resource estimate between 2025Mt.

Winsome Resources Valuation

We are using industry reference resource multiples for generating a WR1 share price estimate. Adina’s conceptual resource of 50-60Mt holds an in-situ resource value of A$500600m for Adina Central and East. The Cancet resource estimate is estimated between 20-25Mt, with an in-situ resource value of A$200-250m with around 190m SOI. This suggests the WR1 price target is around $3.7.

The Right Critical Signs

By Rueben Hale

A group of highly skilled professionals, headed by global minerals explorer Dean de Largie, utilises a comprehensive and well-organised exploration methodology in their initial campaign at the promising Cooletha Lithium asset. The company’s primary target covers a large area of land in Australia’s highly beneficial mining precinct, including the Pilbara Minerals’ high-grade Pilgangoora Lithium Project (223Mt @ 1.25% Li2O). It encompasses more than 100 square kilometres of potential, with visible pegmatite swarms.

In terms of location, it is also near other significant discoveries such as MinRes’ Wodgina Lithium Project (259Mt @ 1.17% Li2O) and Global Lithium Resources’ Archer Lithium Deposit at Marble Bar (18Mt @ 1% Li2O) to the northeast Market Open(ed) chats to de Largie as he and his team eagerly await the results of their first highly anticipated sampling campaign at the Cooletha Project in the Pilbara whilst getting ready to start mapping, sampling and drilling at the Rankin Dome Rare Earth Project near Southern Cross, three hours east of Perth.

How have things progressed on the ground at Cooletha since listing last month?

We’ve had a great start identifying the zonation within the pegmatite suites. Multiple locations within the Cooletha tenements with spodumene-bearing pegmatites have been identified already. These results are the first critical step because they will allow us to begin planning our first drilling campaign at Cooletha, which we hope to get underway later this year.

What is planned next for your Pilbara tenements?

The large tenement area requires a methodical approach to exploration to optimise the possibilities of discovery of lithium bearing minerals and other commodities associated with pegmatites or alkaline-intrusive host rocks. Our initial field mapping and rock sampling programs will cover much of the prospective area to identify the most fertile areas for future LCT pegmatite focus. With the establishment of focus zones, LCT pegmatites will be mapped and surface sampled in the detail required to produce high-value drill target areas.

In less than three weeks on the ground since listing, Australian Critical Minerals joined the ranks of aspiring hunters making all the right moves for Western Australia’s subsequent significant discovery.

What is the plan for the next six months at Rankin Dome?

Our goal is to thoroughly investigate the bedrock to determine if the rare earth anomaly identified from shallow auger drilling represents the surface expression of a clay-hosted rare-earth occurrence or associated with the underlying intrusive bedrock. Past exploration efforts have been limited to shallow, surface-level drilling, which barely scratches the surface of what could be a massive undertaking. Currently, only a portion of the expansive tenement package has been explored. The Rankin Dome tenement package has an area of over 300 square kilometers of which only 10% has undergone shallow auger drilling. We plan to commence an RC drill program in the east where bedrock is expected near surface. We will simultaneously adopt several exploration methods over areas where bedrock is expected to be deeper. This includes infill auger sampling to provide more detail to the soil anomaly which will optimise future drill hole locations, and extending some soil anomalies which are open to the south east with air-core drilling.

Can you explain why the +8 crustal enrichment is so significant?

This question is interesting for several reasons. Having multiple levels of enrichment in your surface soils is crucial, as this indicates that there has been enrichment in the underlying rocks or in the underlying clays. With rare earths, this is particularly exciting because they can be preferentially absorbed into the vegetation that grows on the soil. Consequently, the ground soils can become depleted in those elements. Therefore, having a high enrichment value in those agricultural surface soils not what we

would typically expect and may indicate that significant enrichment in the clays or bedrock has occurred. Do you foresee land access challenges at Rankin Dome? We’ve got a good relationship with the landowners, and our team has done a great job getting all those permission and agreements in place. What is ACM’s aspiration for the future?

Right from the get-go, our company has sought valuable commodities with scale potential, which could make a significant force in those commodities or become a company of considerable interest to other major producers and end users.

How did you manage to acquire vast land packages in both the Pilbara and in Southern Western Australia?

I’ve been delighted to be able to bring highquality projects into Australian Critical Minerals and float on the ASX. The large tenement holding we have was part of the selection criteria as it provides exploration longevity and the potential to discover the large resources required to become a mid-tier producer of the future. It’s been particularly heartening to have received the support we had for our oversubscribed listing during a challenging economic period for many other companies. It has been a team effort where we have identified many potential projects globally and reviewed them for suitability to a future-focussed energy related ASX listing such as Australian Critical Minerals.

What is your most rewarding moment in a career spanning so many years and so many commodities around the world? There really is nothing quite as fantastic as Andean Geology. I spent more than 20 unforgettable years exploring South America. It was while working there that I developed a passion for intrusive rocks, porphyry copper and high- and low-sulphidation epithermal deposits. Working with global experts early in my career fueled my lasting enthusiasm for these mineral systems.

What has been your most memorable discovery? The Chorobal epithermal vein system in

What is the plan for the next six months at Rankin Dome?

Our goal is to thoroughly investigate the bedrock to determine if the rare earth anomaly identified from shallow auger drilling represents the surface expression of a clay-hosted rare-earth occurrence or associated with the underlying intrusive bedrock. Past exploration efforts have been limited to shallow, surface-level drilling, which barely scratches the surface of what could be a massive undertaking. Currently, only a portion of the expansive tenement package has been explored. The Rankin Dome tenement package has an area of over 300 square kilometers of which only 10% has undergone shallow auger drilling. We plan to commence an RC drill program in the east where bedrock is expected near surface. We will simultaneously adopt several exploration methods over areas where bedrock is expected to be deeper. This includes infill auger sampling to provide more detail to the soil anomaly which will optimise future drill hole locations, and extending some soil anomalies which are open to the south east with air-core drilling.

Can you explain why the +8 crustal enrichment is so significant?

This question is interesting for several reasons. Having multiple levels of enrichment in your surface soils is crucial, as this indicates that there has been enrichment in the underlying rocks or in the underlying clays. With rare earths, this is particularly exciting because they can be preferentially absorbed into the vegetation that grows on the soil. Consequently, the ground soils can become depleted in those elements. Therefore, having a high enrichment value in those agricultural surface soils not what we would typically expect and may indicate that significant enrichment in the clays or bedrock has occurred.

Do you foresee land access challenges at Rankin Dome?

We’ve got a good relationship with the landowners, and our team has done a great job getting all those permission and agreements in place.

What is ACM’s aspiration for the future?

Right from the get-go, our company has sought valuable commodities with scale potential, which could make a significant force in those commodities or become a company of considerable interest to other major producers

and end users.

How did you manage to acquire vast land packages in both the Pilbara and in Southern Western Australia?

I’ve been delighted to be able to bring highquality projects into Australian Critical Minerals and float on the ASX. The large tenement holding we have was part of the selection criteria as it provides exploration longevity and the potential to discover the large resources required to become a mid-tier producer of the future. It’s been particularly heartening to have received the support we had for our oversubscribed listing during a challenging economic period for many other companies. It has been a team effort where we have identified many potential projects

LITHIUM UNIVERSE (ASX:LU7) BLASTOFF

On Monday, Lithium Universe went public on the ASX and experienced a significant increase of 80%. Iggy Tan, a trailblazer in the lithium mining industry, founded Lithium Galaxy, which quickly grew from a $10m market cap company to a $2b powerhouse before merging with Orocobre. Tan has assembled a team of experts to replicate his past success with a portfolio of hard-rock lithium and rare earth opportunities in prime locations. Iggy has inspired many with his vision and amassed disciples ready to follow him to the new promised land – Canada!

SUMMIT (ASX:SUM) SENSE SPODUMENE AT CASTOR

Satellite and radar data analysis has identified more than 100 potential targets for Summit Minerals to explore in the James Bay area, which is rich in lithium-bearing minerals. Despite being hindered by fire restrictions, Summit’s Castor Project is now ready for accelerated exploration along a 33km Yasinki Lake Greenstone Belt stretch. This area is known for its valuable spodumene-bearing pegmatites. It has recently become a highly sought-after lithium frontier on the ASX due to several significant discoveries.

KINGSLAND (ASX:KNG) KEEP GROWING GRAPHITE AT LELIYN

Kingsland Minerals believes that its Leliyn graphite discovery is leading the pack, and the frequent finding of thick, high-grade graphite intersections has not deterred its ambitions. The latest results, which include 158m @ 10.1% from 16m and 128m @ 8.6% from 45m strikes, align with the company’s exploration target of 200-250Mt at 8-11% TGC. Ongoing drilling continues to expand the grade, strike, and tonnage potential of Leliyn. Kingsland is now focusing on metallurgy to prove that Leliyn is a tier-1 graphite discovery in a tier-1 Northern Territory location.

DREADNOUGHT (ASX:DRE) MAKES DILATED DISCOVERY

Recent infill drilling at Yin Ironstones, which Mangaroon wholly owns, has revealed some of the thickest and highest-grade NdPr intercepts. This discovery further confirms the massive scale of the rare earth deposit. One of the highlights was a 36m @ 2.75% TREO strike with 31% NdPr to TREO. Other similar high-end returns were also reported, indicating a significant resource upgrade is in the works. The Yin resource report is expected by Christmas, and a maiden resource from C3 carbonatite is anticipated this month as Dreadnought continues to expand the scope of their potential company-making discovery.

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