MarketOpen(ed) Issue #12

16th July 2023

TECH PROJECT GETS GAS READY

BOWEN BASIN TO POWER

TOWNSVILLE ENERGY

CHEMICALS HUB

MANSOOR’S RADAR THE PURSUIT OF DIFFERENCE

NEW GOLD STANDARD

RUSSIA TO CREATE NEW GOLD BACKED CURRENCY

PLUS, THE LIZARD KING GOES HARD ON NICKEL & GREENWASHING

THE LIZARD KING

The Lizard King goes hard on at nickel and lazy claimes of ESG

It is amusing to see boasts of saving the environment through Indonesian nickel as they dig up the rainforest and pour millions of tonnes of waste into the Pacific, I know mining will never be beloved by the Greens, but you can at least be a little honest.

I’m not piling on a country that wants to develop a transformative industry, and if it goes like the Saudis and their oil, maybe Indonesia will have a golf tournament of their own someday and get to fire Greg Norman themselves.

But I don’t like hypocrisy, and like how it is cooler to just cheat on someone rather than claim polyamory, or do cocaine instead of having a Ritalin prescription, lazily claiming ESG when it wouldn’t pass the sniff test of an anosmiac is just kinda lame.

Not that mining is renowned for being cool, but it is for being rich, and if you’re rich enough, does it even matter anymore?

FROM THE EDITOR

RUEBEN HALE

Politicians may claim that our dependence on fossil fuels will come to an end soon, but the truth is that it will persist for longer. The transition to cleaner energy is crucial, but meeting the set timetables may not always be practical. To meet the projected demand and compensate for the decline in oil fields, the oil industry requires an investment of $12.6 trillion by 2045, with most of the funds going towards upstream production. These investments will ensure that high prices are not prolonged. Oil and gas exploration plays a critical role in managing dwindling energy supplies, yet investors are hesitant to invest in the many committed small cap explorers with solid prospects. Investment is necessary for the transition to cleaner energy, and big investors are starting to warm up to the energy industry again. For over five years, endowments, pension funds, and other institutional investors have shunned the oil-and-gas sector due to significant losses and concerns about climate change. However, some investors are returning as energy emerges as the stock market’s best performer. The lack of new investment is one reason why oil and gas supplies have not kept up with

surging demand and the loss of output caused by the Russian invasion of Ukraine. New investments could boost production, but there are other factors limiting supply. Some groups, such as college endowments or public pension funds, continue to stay away from investing in the energy industry. Quantum has started fundraising for a new fund with a target size of $5.6 billion and plans to create an energy-credit fund due to growing interest from investors. The firm has observed a change in tone and receptivity from investors since the Russian invasion began, with a 180-degree change in three months.

QPM SOURCES PLENTIFUL GAS FOR TOWNSVILLE TECH PROJECT

By Rueben Hale

Queensland Pacific Metalssubsidiary QPM Energy is soon to announce the completion of the acquisition of the Moranbah gas project, located 400km south of the refinery site. It will funnel its colossal gas reserves into the landmark TECH Project set to begin operating on the outskirts of Townsville in 2026.

Securing gas supply is a breakthrough step toward constructing the TECH Project, a genuinely sustainable battery materials refinery producing 16kt of nickel and 1.8kt of cobalt from imported laterite ore, using lowpressure production.

The ambitious project has garnered worldwide attention and secured 100% offtake shared between General Motors, LG Energy Solutions, and POSCO three years ahead of production.

According to QPM Energy chief executive David Wrench, the integrated business is exciting and unique in the Australian context.

“The energy business within QPM will be operational before the refinery business, which is a bit of a quirk – but it’s the way it has unfolded,” Mr Wrench said.

The additional silver lining will be removing flaring and venting gas from coal mines in Bowen Basin, which will now be used as a valuable energy source for the TECH project and other consumers.

“The gas operation has approximately 120 production wells and corresponding production infrastructure,” Mr Wrench adds.

“It has reserves totalling 240 petajoules and will serve as the primary gas supply source for the upcoming TECH Project and others proximate to the gas pipeline.”

“The gas supply operations will have the capacity to utilise the gas pipeline from Moranbah to Townsville and the Townsville Power

Station, which means that we can supply gas or generate and sell through the power station.”

About the TECH Project

The Direct Nickel process in the TECH Project is eco-friendly and extracts valuable minerals like nickel, cobalt, and iron from ore. This innovative technique has no waste products or tailings and recycles the acid solution, making it a game-changer for battery metal production. The ample gas supply will be the foundation of the landmark TECH Project. The world-leading technology will import laterite ore from New Caledonia to Lansdown on the outskirts of Townsville’s Northern Queensland coastal city. It boasts leading sustainability credentials, harmful carbon emissions, and no tailings dam or liquids discharge. The ore will be treated using nitric acid to recover nickel, iron ore and aluminum. The nickel and cobalt will be processed into high-purity sulphates, and General Motors, LG Corporation, and POSCO will take all the product. The iron ore will also be upgraded to greater than 62% Fe pellets, and the aluminum into high-purity alumina.

MANSOOR’S RADAR: PURSUIT MINERALS (ASX:PUR) IS READY TO DO DIFFERENT

Una puerta está cerrada, pero mil están abiertas is a famous Argentinean proverb which means; one door is shut, but a thousand are open!

The land of Andes has created unparalleled shareholder wealth for number of Australian companies, and this time, the lithium brines of South America is opening multiple doors for Pursuit Minerals (ASX:PUR) and its shareholders.

Pursuit is ready and, under the new leadership of CEO and MD Aaron Revelle, is putting a mark on the Argentinian lithium landscape.

The Argentinian lithium brine portfolio made from the fertile territory of Salar de Rio Grande the Pursuit team has pulled together is certainly impressive. Mito is highly prospective ground with an 8,660 hectares option exercised in Feb 2023. Maria Magdalena, with its biblical name, is a modest 73

hectares, but makes up the upside through its sheer location and material high grade brine discovery at neighbouring Noa Lithium, with Lithium grades between 750-900mg/L.

The Rio Grande Salar was first drilled in 2011 by ADY Resources and LSC acquired the majority of its Salar de Rio Grande tenements in 2016.

ADY and predecessor companies successfully produced sodium sulphate from high production brine wells for many years, with the last production being in 2014.

A Key milestone of Technical Report NI 43-101 was achieved in March 2018, publishing a Total Inferred Resource of 2.19Mt lithium carbonate equivalent (LCE) at an average grade of 370mg/Li.

We believe given the resource (NI 43-101) is already in place, it makes this project a lot

more advanced and de-risked than any other greenfield opportunities in the lithium triangle.

COMPETITIVE ADVANTAGES & GAME PLAN

Pursuit Minerals has clearly distinguished itself from its peers by acquiring a lithium carbonate pilot plant capable of producing 100 tonnes per day. The pilot plant was originally constructed in 2013 at a cost of ~US$3.6M and Pursuit has acquired this strategic asset at US$365k, providing a unique competitive advantage.

ADVANTAGES

–Lithium carbonate plant refurbishment

–Plant chemical engineering & block flow validation

–Brines testing

PLAN

– Completion of TEM & CSAMT survey

– Drill target location

– Permit approvals and drilling.

These activities are relatively straight forward but require strong coordination to achieve timely milestones and deliverables. One of the key outliers is funding requirement, which our analysis suggest, Pursuit may require additional cash before drilling commencement. Pursuit Minerals has highlighted, it is planning to progress to definitive feasibility study quickly post drilling by incorporating drilling results and announcing JORC compliant resource estimate.

In addition, Pursuit is committed to produce battery grade lithium carbonate

from Salar de Rio Grande Brines, with initial focus at Maria Magdalena and Mito. There is a likely chance Pursuit may consider improving the process flow of Lithium Carbonate plant by testing brines from neighbouring properties.

TIMELINE

Aaron Revelle and the Pursuit Minerals team are well equipped to achieve the JORC milestones. However, given the harsh terrain of Andes and availability of contractors, there may be some slippage of achieving time-critical milestones.

UPSIDE

Pursuit’s market cap is currently ~A$36M. With a JORC resource in place over the next few months, valuation may increase and can potentially match its peers to above A$250 million market cap, which is around 7x increase from current level. Vamos Argentina! is another famous phrase for La Albiceleste (The White and Sky Blue) and one now cheered by Australians as ASX-listed companies make their mark on the lithium-endowed brines of the Americas.

Summit’s Canadian climb

Already emerged as Canada’s most exciting exploration district, Summit has marked its entry into James Bay with the acquisition of the Castor Lithium Project, sitting next to the world-class discoveries which have come to typify the region.

Covering 33 kilometres of prospective greenstone, Castor remains untouched by lithium exploration despite its standing in a world-class province. Summit stands fully funded for the field season to rapidly gauge prospectivity and spot up targets for the first lithium-focused drilling.

Open(ed) Shorts

Forrestania circling spodumene

Homing in on a lithium discovery at its namesake, Forrestania Resources has discovered more visual spodumene at the South Iron Cap East prospect and confirmed it is circling over areas highly prospective for pegmatite bearing the prized lithium host.

Interest in Forrestania’s operations heightened after announcing it had intercepted thick pegmatites at the Calypso prospect, and it has assays on the way. At the same time, it begins to work on a newly established lithium JV in coveted Canadian territory.

Critical’s new chief

The Queensland Government is investing heavily in its vanadium potential. Critical Minerals Group has appointed Scott Winter as Managing Director and CEO as its flagship Lindfield Vanadium Project gets closer to production - and vanadium moves nearer to a supply deficit.

Outgoing helmsman Scott Drelincourt brought an asset of world-class scale to Critical, and a scoping study will come under new leadership almost a year earlier than expected since the company joined public trading on the ASX.

Cooper

cooking copper-gold

There is much more copper left at Mt Isa. Cooper Metals has a new prospect to explore after discovering a coincident VTEM anomaly and copper-gold-rich gossan with rock chips up to 26.7% copper and 2.49g/t gold at the Raven prospect.

It is what you want to see from territory next to Aeris Resources’ Barbara deposit, now sitting at 2.2 million tonnes at 2% copper and 0.2g/t gold – believed to have a VTEM signature proven useful in spotting up big-time deposits.

Bryah’s manganese mining

The Bryah Basin JV holds a combined 1.836 million tonnes at 21 per cent manganese resource, and Bryah Resources have lodged mining applications over two of its JORC resources with an upgrade on the way.

The view is to get production underway again at the region’s largest manganese mine. Bryah sees the applications as representing its exploration success as it moves closer to a restart resource and ticks the final boxes to refire mining in its namesake basin.

Altech’s low carbon creation

Now shown by independent studies to produce around half the greenhouse gas emissions of its lithium-ion competitor, Altech wants to get that green tick of approval signed off as it brings the Cerenegy battery facility online.

Powered by common table salt, the Cerenegy battery sits outside the critical mineral supply chain, requiring much less mining, minerals, and money. Altech has meticulously designed its facility to minimise emissions and expects to get a green accreditation as ESG investment continues to grow.

GOLD BRICS IN DEMAND

By Staff Writer

The sanctions on Russia, which froze almost half of their $540 billion gold and foreign exchange reserves, have other nations seeing a dangerous precedent. As a growing number repatriate their reserves and buy at a historic pace, Russia has announced plans to create a new currency backed by the gold standard.

The annual Invesco Global Sovereign Asset Management Study showed the number of central banks keeping reserves within their borders had risen to 68 per cent, compared to only half in 2020, a widely held view according to Invesco head of official institutions Rod Ringrow.

“If it’s my gold then I want it in my country has been the mantra we have seen in the last year or so,” Mr Ringrow said. And as tensions with the U.S. grew and nations took their reserves out of London, Moscow called for a new gold-backed currency.

The Russian Embassy in Kenya first declared that the BRICS nations, Brazil, Russia, India,

China, and South Africa, were planning to introduce the new currency and challenge the dominance of the U.S. dollar, later confirmed by government-backed news network R.T.

The BRICS bank headquartered in Shanghai, the New Development Bank, has previously stated that while it is not yet ready to challenge the global dollar dominance, it remains a medium to long-term ambition. But the intent has been shown, and China and India have been prominent among the central banks which have been buying gold at a historic pace since mid-2022, collectively purchasing a net 125 tonnes of gold, the highest amount for a year-to-date pe -

riod since they became net buyers in 2010. The invasion of Ukraine has served as a stark reminder of the realities of geopolitical unrest, and as the West focuses on critical minerals, a growing number outside are seeing gold as a vital resource of their own.

A CAUTIOUS APPROACH

While a gold price dampened by interest rate rises has not shattered all-time highs as predicted by the bulls, the S&P 10-Year Treasury Futures and the bond market continues to point towards lower rates ahead despite indications made by the Federal Reserve. The gold price remains robust and has yet to dip low enough to tempt a surge of physical investors. While the U.S. Mint has seen a sharp dip in sales, its Perth-based counterpart saw improved sales through June and reports strong growth compared to 2022. Even at a price well above US$1900, Neil Vance, General Manager of Minted Products at the Perth Mint, said a steady price slide over the last month had presented a buying opportunity for clients.

“The current strength of interest was re -

flected in the fact that ounces sold were 12% ahead of June 2022,” Mr Vance said.

Analyst Nigel Green of the deVere Group, one of the world’s largest independent international financial consultancies, said Consumer Price Index data had raised hope that the Federal Reserve was going to be able to bring down inflation without bringing the U.S. economy into recession, suggesting better near-term demand for commodities.

“The battle on rising prices is being won, as the data suggests, meaning the pressure is off the Fed for future rate hikes. Cooling inflation and a strong and resilient labour market suggest that no recession will come in 2023,” Mr Green said.

Gold investors appear to be waiting to see if the Federal Reserve go through with its indications for more rate hikes, and if there is a clear signal from the central bank that interest rates have reached their peak, it could trigger another golden bull.

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