MarketOpen(ed) Issue #10

July 2 2023

AN ENDURING CONVICTION

MIRAMAR RESOURCES BOSS ALLAN

KELLY REVEALS WHY HE BELIEVES THE ROCKS STACK UP AT WHALESHARK

REDDIT RESTRAINED

The news ‘aggregator’ tries to clean up its act for IPO

PLUS, THE LIZARD KING & MANSOOR’S RADAR

Rueben

Hale

On Thursday, I felt the bittersweetness of joy as the market regained some optimism on the welcome news of betterthan-had-been-expected inflationary figures. At the same time, the US Coast Guard discovered presumed human remains and debris from the Titanic, which will undergo further analysis. However, the stock market experienced a positive shift due to better-than-expected inflation results, and Western Yilgarn (ASX:WYX) had a peak gain of 75% at 17.5c, up from 10c at the start of trading. They announced that their 3 million tonnes NiEQ Challice Mining Gonneville Discovery are the world’s most promising battery metals discovery. Additionally, Premier Roger Cook plans to implement Aboriginal Heritage Laws more leniently, which has been received positively by the mining industry. The Association of Mining and Exploration Companies approves the new conciliatory approach and will review the regulations in 12 months. However, some are worried that these laws could negatively impact future exploration in Western Australia during a critical time for the sector and the local economy.

LIZARD KING

It was a grim opening to the week as the ASX suffered a fourth day of losses on the trot and hit its lowest levels since late March, with seemingly everyone but gold miners worried about global unrest. I’m pretty sure Australian small cap gold miners don’t pull all the strings of geopolitics (that would be the zinc mafia). Still, a short-lived mercenary march in Russia helped keep things interesting for the haven metal sector, which continues to shine through times of strife. But developments out of China are more pressing for the rest of the mining industry, and a rosier outlook for the Red Dragon lifted the rest of the sector and brought the big guns out of a recent downturn, and good news on inflation brought a late Wednesday bump to the local markets and every sector finished up in the black. The tech-heavy Nasdaq and the Australian IT sector lifted through to Thursday, and the ASX denied Senator O’Neil’s assertions that the US Stock Exchange was its choice for replacing the CHESS system, keeping things shady, opaque, and completely on-brand. There have been calls to ban penny stocks from the ASX, with some volatility from Lake Resources and Brainchip Holdings exemplifying the wild ups and downs we know and love in this industry. Shareholders who only pick the majors might outperform, but they’ll never know the thrill of taking a victory lap on HotCopper after a twentieth of a cent turns into a tenth, will they? Success stories from explorers persist, and the dream to feed that minnow with enough lithium to turn it into a prized catch is always on the table. However, I still can’t personally justify buying heavily into a company with “Brainchip” in the name.

THE RIGHT ROCKS FOR A ‘WHALESHARK’ DISCOVERY

BY RUEBEN HALE

In an interview with Rueben Hale, Miramar Resources’ Executive Chair Allan Kelly talks about his unexpected career journey and what sets him and his team apart as they get closer to uncovering the massive potential of its Whaleshark IOCG and Bangemall nickel projects in Western Australia.

Originally hailing from Albany, Allan Kelly was in the military and became a brewer before returning to his passion as a geologist, believing in Whaleshark’s cop-

per-gold potential since the 90s.

“WMC was looking for another whopping mine the scale of Ernest Henry, and they picked the area around Onslow as having that potential,” Kelly explains.

But the accomplished explorer departed for Alaska as his first employer exited from its keenness to pursue its project. The site remained almost untouched for about three decades until Kelly returned in 2019 with Miramar, believing that Whaleshark had the potential to be Australia’s next big iron oxide copper-gold (IOCG) project.

Miramar hopes to achieve the IOCG benchmark of 100 million tons at 1 per cent copper and 1 gram per tonne of gold, with the possibility of other valuable el-

ements such as silver, uranium, and rare earth. “If we are successful in finding such a deposit, the value from the copper content alone could be worth billions of dollars,” Kelly adds.

“We have all the ingredients for a large IOCG deposit, and if you overlaid the footprint of Ernest Henry over the top of Whaleshark, it’s very similar in scale. We recently completed a heritage survey and plan to conduct a drilling program in July or August.

What did you see in the early stages that others did not?

While at WMC, I worked with great individuals, including the geologist who discovered Ernest Henry. Throughout the 1990s, I learned a great deal from them. Later, while working at Avoca Resources, I managed IOCG exploration in South Australia during an exploration rush after Minotaur’s Prominent Hill discovery. Witnessing the exploration successes at Carrapateena and Hillside, I decided to peg my own IOCG projects. I recognised the similarities between

these sites and Whaleshark, where the rocks’ age is very similar to Ernest Henry and other deposits in the Mount Isa area.

And do you credit your unique experience as the reason you were able to hold light on this opportunity?

Indeed, my previous work experience with these individuals in the 1990s and my exposure to a subsequent generation of IOCG exploration in South Australia during the early 2000s led me to recognise the need for further action. Two decades later, I approached the exploration of Whaleshark with fresh perspectives gained from multiple phases of exploration.

What would be the advantages of the project where it is?

Onslow is well-equipped with highways, a port, and a gas pipeline. Whaleshark is just 40km east. Chevron operates two gas plants, and Mineral Resources has a new iron ore project shipping through the Onslow port.

Because of those factors, will there likely be some ef-

ficiency dividends with the OpEx?

Let’s assume we’re fortunate and make a discovery and then decide to build a project there. One of the critical things will be power – and you’ve got a gas pipeline right there. So, the key would be to tap into that gas pipeline and have energy coming from gas turbines — so I’d much rather have that there than not.

Are there any other significant developments at your other Miramar projects?

We’ve got two main types of projects. We’ve got our Goldfields projects, which are different from Whaleshark because they are located right next to Kalgoorlie. They already have infrastructure and processing plants in the area, which we could tap into. We’ve got a project between the Super Pit and Paddington, which is a fantastic location. But we’re getting little love for gold now, so those things are a little on the back burner until the market for gold turns around. So, in the meantime, we will move straight ahead with exploration at Whaleshark for IOCG.

But shouldn’t the love for gold be more than it is?

You would think so because gold shines through when you get a bit of market uncertainty due to the war in Ukraine, high-interest rates, and turbulent economic times. The gold price is high, but the love for gold exploration is low. The gold producers are making good money, but it must be filtered down to the developers and explorers. So, it is frustrating when you’ve got such a good gold project, and no one particularly cares about it.

Tell us about your Bangemall Projects, which also cover the Capricorn Orogen.

We have projects in the Proterozoic Capricorn Orogen in WA, including the Bangemall Projects, a high-priority area for nickel, copper, and PGE targets. The Mount Vernon Project has high-priority targets for these elements, confirmed by historic rock and soil sampling and an EM survey. Bangemall has the potential for Norilsk-style nickel copper PGEs, and we’ll be back on the ground soon for further sampling before drilling. What is your ethos when it comes to exploration?

The foundation of my approach is questioning and curiosity. Whenever I encounter something new, I make sure to ask questions and seek out answers. Both technical and non-technical factors are crucial for achieving success in exploration. Additionally, it’s essential to test promising projects. I’m always eager to learn about new projects and their potential results.

What are your hopes for the next 12 months to five years with Miramar?

I aim to discover and be drilling at Whaleshark, potentially leading to a joint venture or acquisition. I also want to confirm the presence of a nickel province in the Bangemall region and conduct deeper bedrock drilling at our promising Gidji project, which has potential like Paddington. We have access to processing plants at Gidji and Glandore to make processing easier if we find a deposit.

Did You Know?

Allan Kelly is also a qualified brewer after taking a break from geology around 20 years ago to study brewing at university. His studies led to him owning an award-winning brewery in Albany. Kelly says he no longer brews, preferring to enjoy a pint at local drinking holes instead.

Diamond Drilling at Miramar’s Glandore Project

MANSOOR’S RADAR

The Oz Minerals Acquisition BHP Had to Have

With renewable energy and the electrification theme in full swing across the planet, lithium is at the forefront of every conference, investor briefing, IPO, Spinout etc.

However, Copper is the sector where big boys play, with deep pockets, unlocking value through technology benefits, technical synergies etc. BHP’s recent acquisition of Oz Minerals is a perfect example. This is the acquisition that BHP had to have.

What does this acquisition deliver to BHP shareholders?

Increased exposure to future-facing commodities: The acquisition would add essential copper and nickel resources to support the global megatrends of decarbonisation and electrification.

This is consistent with BHP’s strategy to deliver long-term value and returns through owning a portfolio of worldclass assets with exposure to desirable commodities that benefit from global megatrends.

Attractive synergies: Creation of a South Australian copper basin that could unlock potential operational synergies due to the proximity of OZ’s Carrapateena and Prominent Hill operations with BHP’s existing Olympic Dam asset and Oak Dam development resource.

Growth options: OZ’s brings attractive brownfield copper expansion projects at Prominent Hill and Carrapateena in South Australia. The West Musgrave

project will add a large greenfield nickel option to BHP’s Nickel West premier nickel sulphide resource position in Western Australia.

Above all, the Oz’s asset’s location on the cost curve needed attention. Carrapateena and Prominent Hill assets are well located in the 2nd and 3rd quartile, including biproducts. Finding tier 1 support in this day and age is complex. With the deployment of BHP internal business Improvement, process standardisation and Operating System deployment, many benefits can be materialised and potentially happen within the subsequent 12 months.

With a 100% margin on today’s prices, the payback of A$9.6bn will take a while, but now at least, BHP has a bigger footprint in future-facing commodities.

OPEN(ED) SHORTS

Voltaic blossoming at Ti Tree

Voltaic Strategic Resources has several hundred untested trends lying across its Ti Tree lithium prospect and see the returns from just two prospective LCT trends highlighting the project’s regional scale potential.

Pegmatites as wide as 69 metres were intercepted in a new stacked system, and assays are set to start coming in as soon as a week. With over 400 pegmatites mapped within a largely unexplored project, Voltaic believe that they are just starting to tap into the vast potential of its Gascoyne asset.

Critical’s Canadian quarry

Critical Resources has revealed a new stack of high-grade lithium strikes it expects to become part of a significant tonnage upgrade on its starting 8Mt inferred resource at Mavis Lake Managing Director Alex Cheeseman said the assays clearly set the scene for its next chapter of growth at its Ontario asset, seeing the opportunity to build the largest single-site JORC compliant resource in a province which includes parts of James Bay, a lithium region fast emerging as a world class hunting ground.

M3 Mining jump back to El Capitan

After early exploration highlighted the previously undrilled El Capitan Prospect as an extensive gold-in-soil anomaly, M3 Mining made a swift return and has fired up a 4000 metre AC program to follow up on high-grade strikes. Re-assays came in up to 638.8g/t gold, and Executive Director Simon Eley said it was credit to a small but enthusiastic team to return to the field so quickly as it prepares for a flow of results from three other prospects within its Edjudina Gold Project.

of James Bay, a lithium region fast emerging as a world class hunting ground.

Antilles’ Cuban copper

Negotiations are set to start soon between Antilles Gold and Cuban state-owned mining operators to create a new copper-focused joint venture, and before putting away the drill and hitting the conference room, the Australian company has struck into a large copper-gold porphyry system at El Pilar. Last year’s lone hole returned 1.23% copper over 134m and if assays come close to that level, it is sure to get interesting - Antilles expect an agreement would permit majority foreign ownership, opening the possibility of involvment from the majors.

Forrestania crack into Calypso

Even before the arrival of assays, Forrestania Resources’ share price erupted after the reveal of multiple stacked pegmatites up to 63 metres thick from the surface of its Forrestania flagship.

The Calypso prospect has shown all the right markers for LCT prospectivity and tempts a lengthy stay like the namesake nymph from Homer’s Odyssey, but Forrestania has more stops towards its own Ithaca, and is already drilling into other prospects with firm belief that discovery awaits.

REDDIT RESTRAINED

STAFF WRITER

The social aggregation platform continues to push towards a long-awaited initial public offering. Still, history has proved instructive in trying to sanitise social media platforms. Beneath the cover, Reddit has a long list of controversies and explicit and offensive material. The significant investment funds do not like to deal with controversy, but what they don’t like may be essential to keeping Reddit’s large user base intact.

After being sold for $1.1 billion, Tumblr’s ban on explicit content led to a 30 per cent drop in traffic within months after the announcement and was later sold for a paltry $3m, and while boasting more than 22 million unique monthly users, the controversial imageboard 4Chan has never been viable for monetisation.

Even OnlyFans, a platform presumably dedicated to explicit content, announced a ban to attract major investors. However, the would-be social network quickly backtracked after realising what drove its entire business.

So where does this leave us with Reddit? Despite long sanitation efforts to scrub itself up for an IPO which included banning the more infamous subreddits, the platform remains heavily intertwined with large volumes of explicit and bizarre content. Engagement is metric marketers love, but most advertisements on the platform rightfully have their comments locked, and Reddit users gleefully attack any that don’t, with a flood of spam replies and copy-pasted screeds coming in from

anonymous users. While you can see the allure of Reddit and its 1.66 billion monthly active users and rising advertising revenue, potential investors must ask: are you willing to invest in explicit content, and how essential is it to the platform’s user base?

Reddit says it wants to grow up, but the history of prominent social media platforms attempting to court a significant injection of outside capital by sanitising their platform has a troubled past.