Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Zambian Copper Project (ZPC)
From WHI research:
The ZCP in the ZCB is a pre-resource project with significant potential.
Valuing potential is not straightforward, though history shows that tangible success (i.e.
discovery drill hole, maiden resource, resource upgrade, and progression through
engineering and economic studies) is likely to accrete significant value to ARC.
We determine a base value for the ZCP using the terms of the Anglo JV (first reported -
RNS 12.05.22):
• Phase 1 - Anglo will pay $14.5M in staged cash payments to Unico Minerals Ltd (67% ARC) and invest up to $24m in exploration expenditures (total $38.5M) within three years and 180 days of the signing of the Agreement (RNS 20.04.23)
to secure a 51% interest in ZCP.
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• Phase 2 - Anglo may elect to increase its interest in the ZCP to 60% by investing a further $20M (total $58.5M) within two years of the completion of Phase 1.
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Phase 3 – Anglo may elect to increase its interest in the ZCP to 70% by investing a further $30M (total $88.5M).
We determine the value of the ZCP using the value that Anglo places to earn 70% of the
project. Anglo will, in total, pay $88.5m for 70% of the ZCP project (which calculates at
$125.4m for 100%). ARC’s interest in the project was 67%, prior to Anglo’s involvement,
we therefore calculate that ARC’s stake is worth $84.7m (being 67% of $125.4m).
We consider that Phases 2 and 3 are dependent on exploration success, should the JV
advance beyond Phase 1 we would revise our valuation approach and fair value, but note
that in similar cases there has been a significant rise in the value of the junior partner.
We show what could be achieved in exploration success.
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Valuing exploration success:
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Based on our two examples – we are not aware of any other AIM listed explorers with
comparable recent success – we conservatively suggest that a maiden resource for the
ZCP could generate a 10x uplift in the value of ZCP.
This would likely represent the
completion of Phase 2 of the JV. Should the JV progress through Phase 3 (JV Completion
and reporting of updated resource) we anticipate an updated resource and suggest that
the uplift in value may reach 15x.
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Some Conservative SP targets in the region of 10 x to 15 x for ARCM.
https://s2.q4cdn.com/256050873/files/doc_downloads/research_notes/2023/FN-ARCM-031123a.pdf
I see our neighbours Lifezone metals share price put on some weight this week and now have a market cap of £660m
Their Kabanga deposit Mineral Resource estimate as of 15 February 2023 as attributable to Lifezone of 25.8 Mt (Measured and Indicated resources) at 2.63% Ni, 0.35% Cu and 0.2% Co and additional 14.6 Mt (Inferred resources) at 2.57% Ni, 0.34% Cu and 0.18% Co each with a recovery percentage of 87.2% for Ni, 85.1% for Cu and 88.1% for Co.2, 3, 4, 5, 6, 7, 8
Their Definitive Feasibility Study for the project is due for completion by Q3 2024.
Last month they completes a US$50 million non-brokered private placement of unsecured convertible debentures. These debentures have been issued to a consortium of marquee mining investors, led by Harry Lundin (Bromma Asset Management Inc.) and Rick Rule.
I remember back when SOLG got their $40m cash for exploration drilling and the SP went from 1.77p to 45p+ in the space of months as drill result after drill result after drill result kept landing and pushing the SP higher and higher as it became clear they had a Tier 1 discovery on their hands.
Looking for a similar outcome here over as drill season gets underway with AA deep pockets.
Probably the biggest copper drill program to be seen in the small cap space since 2016.
SP ticking up nicely now.
The time for trading is over.
Hold onto these Copper Tickets tightly.
RNS next week with a potential Globally significant Tier 1 discovery up for grabs!!
🚀 🚀 🚀
@Dai
I just remembered I agreed to shout up once I was taking a position
Well, I'm in for an initial Tranche to get some skin in fhe game.
Let's see how she goes from here.
Chart firming up nicely here now.
Break to the upside next week looking ever more likely now.
GLA
GLA
Re ARCM
I agree.
Given yesterday's events....
That probably is the bottom in now.
Just need that red dot now to say 'drilling underway'
Yeah, just watching I3E atm to see where the support levels are.
Re ARCM...
Must have been nervous times yesterday with the potential BHP bid for Anglo American as that stock is totally at the mercy of A A getting their massive drill program underway.
A A really have tested the patience of holders over there since locking them into their JV.
The pros of the JV with a super majors is that they have very very deep pockets to throw millions at proving up a what they hope will be a new Tier 1 discovery worth Billions.
The cons is that ARCM can't call the shots on when A A eventually decide after a long long loooooonnnngggg wait to actually get their drill crews out into the field... lol
Today is day 2 of the SP drop...
Let's see how it plays out next week.
I3E
Looking to test the 3 day theory on this one BTW
Today is day 2 of the DP drop
Looks like the start of the next leg up to 64p.
Chart looking fantastic here now.
GLA
I3E shares 11% down today as the market takes profits on the back of lower y/y production guidance, which was due to i3’s slowdown in investment over the recent winter period in response to falling commodity prices. This follows recent improvements to i3’s balance sheet strength and liquidity position (and stock price) over the last few weeks following the $25m sale of a non-core royalty package and a new $75m credit facility by a major Canadian Bank.
This enables i3 to significantly expand its fully funded capex programme as it targets a ramp-up in drilling activity that balances growth, financial discipline, and a sustainable long term-dividend, all while positioning the Company to commence its high-impact Simonette Montney pad development drilling early next year.
Watching closely after todays dip back to 11p
Quarter div looks attractive
Broker note 21.2p
broker report
Guided 2024 exit production of 20,250-21,250 boe/d reflects the back-end loaded nature of the company’s expected drilling effort – with annual production guidance for 2024 in the range of 18,000-19,000 boe/d. We see the company’s 2024 drilling efforts culminating in strong production growth into winter 2024/2025, just in time to capture the robust
natural gas prices expected for that period. Critically, the futures market for North American natural gas has found its floor and, based on the futures market, gas prices can be expected to increase significantly in the mid-term.
We are adjusting the basis of our fair value estimate to i) use our 2025 (vs. 2024) debt adjusted cashflow (“DACF”)
estimate as the denominator for our 5x EV/DACF valuation and ii) align our gas price forecasts to the futures market.
We also highlight that the value accretive disposition of non-core royalty interests for $US 24.8m announced on
17 April 2024 had built upward backpressure into our fair value estimate, which we flagged at the time. As a result of these changes, we are increasing our fair value estimate for i3 Energy to 21.2p from 16.2p
i3 Energy confirmed its commitment to pay its annual dividend of 1.0260 p/sh (via four quarterly dividends of 0.2565 p/sh). We highlight the generosity of the resulting 8.2% dividend yield based on the company’s closing price yesterday of 12.5p
Gas prices are expected to strengthen dramatically based on the futures market pricing. Oil prices are robust and likely to strengthen further in our opinion. We believe that i3 Energy has consolidated and is now maintaining its balance sheet in
preparation for scaled up growth in order to produce into a significantly higher natural price. Our updated fair value estimate of 21.2p reflects our positive appreciation of i3 Energy’s judicious strategy, combined with the inherent benefits of significantly rising natural gas prices in North America
Apologies.... Dai has also definitely called this 3 day rule on a few shares!!!!
MM's explained
https://www.shiftingshares.com/sets-setsqx-seaq/
And............beat the MM's 3 day strategy discussed on here previously
https://howtotrade.com/trading-strategies/beat-the-market-maker/
Think Horult & Trojan & Kev have used this 3 day MM rule with some solid success previously..
The thing is.... MM's don't need to report.
They are free to trade too... and my god when you see crazy volume spikes.. be sure that they are in the mix and looking to take full advantage of the unsuspecting PI.
Tree shakes are also a real thing (especially ahead of news).... but 90% of the time you see posters referring to a 'tree shake' after a volume spike and its just the market offloading.... lol.
@Prof
Agreed, interested in the mention of Australia in the updates & new technical experience in this area and Gervais Heddle getting involved.
Once news lands wouldn't surprise me to see the SP pretty much instantly double and then go on a decent run as the herd arrives.
These micro cap valuations are always the ones to see the most violent re-rates when the market wakes up to good news so sensible move imo accumulating whilst there is still a chance to grab a few below the price GH & Co paid for their shares.
BHP proposes takeover of Anglo American in mining mega-deal
Combination would bring together two of the industry’s largest companies and comes as copper demand soars
https://www.ft.com/content/9141eee7-825a-41d7-913d-49e8c12e76db
BHP proposes takeover of Anglo American in mining mega-deal
Combination would bring together two of the industry’s largest companies and comes as copper demand soars
https://www.ft.com/content/9141eee7-825a-41d7-913d-49e8c12e76db
Highlights
§ E38/3775 covers more than 50km of strike length of the highly prospective Ernest Giles Yilgarn Craton Archean greenstone belt, with very limited previous exploration
§ The existing land access agreement covers the new tenement and allows on-ground activities this year as part of Greatland's broader Ernest Giles Project program
§ Geologically, the complexity of the structure on the Mount Smith tenement combined with favourable lithologies, makes it ideal for the formation of structurally controlled orebodies as seen throughout the Eastern Goldfields
Greatland Managing Director, Shaun Day, commented:
"The granting of the Mount Smith tenement at our Ernest Giles prospect more than doubles our exploration ground in the underexplored and highly prospective Eastern Goldfields of Western Australia.
"Ernest Giles has been a priority project for Greatland, and especially so since agreeing land access last year. Accordingly, we are delighted to increase the size and prospectivity of our ground there which enhances our opportunity for a discovery at Ernest Giles.
"We are busy working on an updated Ernest Giles exploration program, incorporating geophysical surveys at Mount Smith. Our intent is to commence a substantial drilling program on the Meadows prospect at Ernest Giles in the second half of this year."