Singular Health Group Limited (ASX: SHG) looks like a health and medical story, but the story is really about software. In my opinion, SHG needs investors to see them as a software company that just happens to have a medical story, CURRENTLY. The technology is more than medical, and with recent announcements from the company, I am making the call that this is a company where investors should get some serious DYOR going. Who is Singular Health Group Limited (ASX: SHG)? Singular Health was listed on the ASX on 12th February 2021 with a Virtual Viewer for the medical sector. The concept was to allow patients to visualise their medical scans. Now, twelve months down the line, the initial strategy has developed and expanded to a more vertically integrated strategy. I have done a couple of Coffee with Samso with Singular Health, one with Thomas Hanly, Managing Director and CEO: - 3D Medical Imaging - Taking Health Care to the next Dimension: Singular Health Group Ltd (ASX: SHG) and the latest with James Hill, the Chief Operating Officer of Singular Health: - Singular Health Group Ltd (ASX: SHG) - The Business of Scan To Surgery. Currently, SHG has a market capitalisation of AUD28.78M and is currently trading at AUD$0.28 as of 21 December 2021 (Figure 1). Looking at their 30th September Quarter report, there is about AUD$3.5M in the bank. Figure 1: The share price chart for Singular Health Group Limited (ASX: SHG). (Source: Commsec). The Business Concept - Scan To Surgery The key to the whole business for Singular Health is the concept of Scan To Surgery. Scan To Surgery is the process of taking the whole process of the patient from having the initial diagnosis scan through to the recovery part of the required surgery. Figure 1: The Singular health Business: Scan to Surgery – Seven Phases of Delivering Better Health Outcomes. (Source: Singular Health Group Limited) The uniqueness of this is that Singular Health provides the software to collate all the previously individually isolated processes and connecting them into a systematic sequence of events. The Scan to Surgery initiative aims to provide a single, unified software platform that bridges various siloed activities involved in patient-specific surgical planning and allows for a fully-featured, vertically-integrated software solution that can be used in part or in whole for a diverse range of medical applications. - Singular Health Group Limited The whole business falls into seven identifiable stages which completes the Scan To Surgery phase. The phases are well documented in the website and I have provided the links below: Scan PACS 3DS/VR Scan Review Artificial Intelligence Virtual Surgical Planning 3D Printing Surgery Software Looking at their website now, there are four listed software. In February 2021, this was a company with only one software. The initial product, MedVR has now expanded to become 3Dicom Viewer allowing end-users to interact with standard 2D medical images such as MRI & CT scans in 3D. 3Dicom Viewer According to Singular Health, 3Dicom Viewer is primarily focused on visualisation. Its role is to facilitate improved practitioner communication to obtain true informed consent and adherence to treatment plans from patients. The competitive advantage is that it is a multi-modal, cross-platform DICOM viewer. It is cost-effective as it is distributed online with low overheads. The software is currently being used by surgeons, dentists and other medical practitioners who are providing patients with before and after operative 3D scans. 3Dicom's Unique Value Proposition is the modular design, ability to rapidly load DICOM files on the device itself rather than requiring a cloud service, and ability to add AI models to the software for triage & segmentation. 3DicomVSP – Virtual Surgical Planning The 3DicomVSP is an important tool within the Scan To Surgery business model. It allows medical professionals to plan the best way to treat their patients in 3D and/or Virtual Reality. 3DicomVSP is the flagship software that underpins Singular’s Scan to Surgery Initiative which is critical to deliver better health outcomes. 3DicomVSP underpins the Scan To Surgery approach with the intuitive user-interface driving the phases from 3D/VR scans review through to the provision of digitised surgical plans on tablets during surgery. Health Academy The concept of Health Academy is to help improve the health literacy of patients, students and some practitioners. This is achieved through the Health Literacy Hub website. The concept of educating the public on the process and the deliverable results of the Singular Health community is a really good idea. As we all know and have come to understand, the process of educating users and potential users in a non-obtrusive manner is the best way to engage users, future users and supporters of the concept. Online education is one of the fastest sector that is currently capturing markets from all forms of commerce and non-commerce topics. The online "How To" market is the fastest and largest growth in commerce at the moment. The Singular Health concept is taping into a market that is eager to embrace and adopt new thoughts. This online sector is always wanting to find ways to learn more about how to better and be more efficient for now and in the future. “Health literacy is the knowledge and skills needed to find, understand and use information and services to make decisions about health and healthcare.”-Tasmanian Department of Health Singular's Health Academy has been developed to focus primarily on the current Year 11 and Year 12 Australian Tertiary Admissions Rank (ATAR) human biology courses, providing a proven, curriculum-aligned, course structure. Health Academy combines traditional text-based content with multi-media such as illustrations and video, interactive 3D models with annotations and a fully-immersive Virtual Reality experience for a holistic and engaging educational experience. Singular Health is currently preparing free and monetised courses for the general public as well as school-based programs. GeoVR – Mineralisation Through Visualisation The development of a use outside the medical field for the 3D/VR aspect of the business creates an impact, at least for me, that this company is more than a medical software business. According to Singular, this came about in mid 2021 when the company was approached to provide a means for 3D/VR applications for the mining and drilling industry. In a preliminary proof-of-concept, the Volumetric Rendering Platform (VRP) was adapted for use with drill-hole data, allowing for the 3D/VR visualisation of multiple drillholes and the assay results of each hole in an immersive 3D environment. Singular Health made the following announcement on 16th November 2021: GeoVR JV formed to commercialise 3D & Virtual Reality visualisation software for mineral exploration & mine optimisation. The start of this relationship was the completion of the purchase order for the GeoVR software as announced on 22nd February 2021: SINGULAR HEALTH RECEIVES PURCHASE ORDER OF $170,000 FOR DEVELOPMENT OF GEOVR SOFTWARE Whilst this is not the sole focus of the company, I can see that this software is far reaching. I have to agree that the medical sector is far bigger and far more lucrative than the mineral industry. So What Does This All Mean? Singular Health is a software company that is in the medical field. Like the GeoVR partnership, it is very clear that the potential goes beyond the medical field. My opinion of this observation is not because there is more money to be made outside the medical field. This observation has more to do with the competitors who will see the potential of what this could mean in the medical field for Singular Health. In the world of business, the intrinsic value of the business is sometimes only clear when somebody else wants it. When someone else wants what you are eyeing, it suddenly becomes a lot more attractive. The company will probably say that they are a minnow in the world of giants. In the last Coffee with Samso with James Hill, he talked about consolidation and acquisition as a key component of the coming market. Click here to watch James talking about this in his Coffee with Samso. There is no doubt that this is an emerging space and I for one, am keen to see more of these kinds of stories. At some stage of all our lives, we will want these kind of medical benefits to flow into our lives. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer.

Rare earth elements like scandium, neodymium, and dysprosium are used in numerous products like smartphones, electric car motors, wind turbines, satellites and jet engines. These 17 prized metals are looking to be China’s biggest bargaining chip in winning the trade war and offer a great investment opportunity. Our team has uncovered a company that is poised to benefit from the current situation and believe this is stock is set to surge. Chinese rare earth prices are set to climb further beyond multi-year highs. Demand is forecast to increase all while an embargo can cut off much of the needed supply creating an ideal situation for those this company. Big Threats and Big Consequences China Supplies at least 95% of the world’s rare earths and the escalating trade war between the two superpowers presents an opportunity for investors. The key role these minerals play in many products means China could strike a heavy blow against the US. On May 29th the official newspaper of the Chinese Communist Party made their third threat“The U.S. must not underestimate the ability of the Chinese side to hit back” The US is extremely dependant on critical mineral imports and many experts believe they will move forward with an embargo. If China was to stop exports to the US for a long period of time it could cause a huge shock to the entire US economy. The national security concerns are enormous and the government is searching for solutions. With this move China can effectively shoot-down the entire F-35 stealth fighter production program, missile systems and satellite development. The US is looking elsewhere for supply Increasing trade with allies and partners will help reduce the likelihood of disruption to critical mineral supply chains. The US has a historical trade relationship and geographic proximity with Canada and experts believe that supply chains will be shifted over the next 12 months. Just this month the US laid out a federal strategy to ensure secure and reliable supplies of Critical Minerals that mentioned Canada as a key supply option. Defence Metals Corp. TSXV: DEFN OTCQB: DFMTF FSE: 35D Defense Metals is a mineral exploration company focused on the acquisition of mineral deposits containing metals and elements commonly used in the electric power market, military, national security and the production of green energy technologies, such as high-strength alloys and rare earth magnets. The company is able to capitalize on the current macro changes in the Rare Earth market through its Wicheeda Property in British Columbia. The Wicheeda Property consists of 6 mineral claims covering an area of 1,780 hectares, located approximately 80 km northwest of the city of Prince George, British Columbia. The company recently received a 5yr exploration permit (in May 2019) for the Wicheeda property which includes approval for up to 51 drill site locations. The company had $800k at the end of 2018 and is now very well cashed up upon completion of a $1million dollar Private Placement. Drilling will commence this summer which means many potential catalysts that can drive the stock price up. Project Highlights 2 specific rare earth minerals Monazite and Bastnasite-Parisite with 60% of the REE contained in Monazite and 40% in Bastnasite-Parisite Results from a recent 30-tonne bulk sample include 1.77% lanthanum-oxide, 2.34% cerium-oxide, 0.52% neodymium-oxide, and 0.18% praseodymium-oxide which the Company considers potentially economically significant, for a total of 4.81% LREO (light rare-earth oxide) Extensive local infrastructure – Roads, Railway, Water, Power, Natural Gas and Labour Share Structure There are 23.75M shares outstanding and currently, insiders and friendlies hold roughly 75% or 18mm shares. The float of this stock is very small coming in at only 6 million meaning that this stock is susceptible to large gains. Bottom Line The growth potential in Rare Earths in North America can lead to profits for investors looking to take advantage of the Macro effects of the Trade War. DEFN has a proven asset base, large resource and major exploration program already underway. This stock’s small $3.8 million dollar market capitalization has the potential to skyrocket. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

Author: Steve Morgan, Managing Director, ESG Capital It is one of the most common questions we get asked as ESG consultants. The simple answer is that you must start with an awareness of what it means specific to your company. All companies are in some way unique, therefore your ESG strategy should take this into account. We recommend Boards and company leaders begin with 6 simple questions. These give an insight into the knowledge that leaders have on ESG topics specific to their organisation as well as the presence (or lack of) a proper process in place. 1. Are we clear on the ESG topics that are and will become material to our business? Material topics, according to the Global Reporting Initiative (GRI), are topics that reflect an organisation's significant economic, environmental, and social impacts; or that substantively influence the assessments and decisions of stakeholders. These topics are determined in part by the scale and reach of your company, the industry you work within and where you operate. What is material in an ESG sense to a company today will not necessarily be in a years' time. Boards need to be regularly reflecting (at least every 2 years) on their material topics whilst planning for future topics based on trends and company evolution. Companies can end up with a lot of topics that could be considered material. Sometimes too many on which to have a meaningful impact. To manage this, boards then need to apply the process of principled prioritisation, weighing up the influence the issue has on stakeholder assessments and decisions, and the significance of the company’s ESG impact. These defined issues then form a core part of any ESG strategy and reporting efforts. 2. Is our view of these topics informed by data captured from our stakeholders and do we review this consistently as our business and the context we operate in evolves? Material topics must be informed through a stakeholder engagement process to ensure all stakeholders have the opportunity to communicate what matters to them. This starts with identifying or ‘mapping’ stakeholders and working out the best way to give them the opportunity to contribute. Common methods include online surveys, direct calls, and workshops. It is important to document this process for records and if you will be seeking assurance of your report. Stakeholders can be both entities and individuals including: Employees Shareholders Suppliers Local communities Indigenous communities Government and regulators NGO’s Stakeholder inclusiveness is an important principle when developing an ESG strategy or report. The organisation needs to ensure it connects with those stakeholders they cannot be in constant dialogue with, as well as those who are unable to express their views through traditional methods or through proxies. Data must then be captured and analysed by leaders to crystallise an accurate and representative list of material topics. 3. Have we set up a suitable ESG framework that incorporates recognised global frameworks and standards? ESG frameworks and standards are plentiful and somewhat overwhelming for many company leaders. They exist, just like international accounting standards do, as a tool for the accurate, transparent, and comparable disclosure of a company’s material ESG topics. Whilst it is still a developing space, there are several global leaders including: Global Reporting Initiative (GRI) Sustainable Development Goals (SDGs) Value Reporting Foundation (VRF) Task force for Climate Related Financial Disclosures (TCFD) World Economic Forum (WEF) These dominate the global ESG reporting landscape and as a result, investors and ratings agencies seek these frameworks out when evaluating a business. One of the early challenges with ESG is selecting the most suitable ESG framework and/or standards. For example, junior ASX listed resources companies may find that the SDGs are sufficient for their initial strategy and reporting cycle. Mid cap resources companies that are producing and, in the process generating high emissions may want to engage with GRI and TCFD. 4. Are we using our view on current and future material topics to guide the development of our core business strategy? Gone are the days where a company can have an ESG strategy that sits separate to its core business. Investors and other stakeholders now demand ESG is integrated into the operations and strategy of a company. Risks must be managed, and opportunities explored through the ESG lens to protect capital and unlock value. Recent examples of the importance of this can be found throughout the passenger vehicle industry. Tesla, which is now the most valuable car company in the world has a mission statement that is “to accelerate the worlds transition to sustainable energy.” (www.tesla.com) Now as the leading global EV brand, it has built a powerful early mover advantage over its competitors through executing on a strategy that was driven by awareness of the climate crisis and its implications on the auto industry. 5. Are we executing our strategy effectively and efficiently, having a positive impact on our material topics? Sir Winston Churchill once said, “However beautiful the strategy, you should occasionally look at the results.” Whist it starts with strategy, impact on ESG must be measured through a mix of qualitative and quantitative results. Most of the global reporting frameworks and standards provide KPI’s for material topics. Establishment of a baseline for a company’s material topics is critical for measurement of impact and to communicate this with investors and stakeholders. Outside of the results, execution of ESG strategy relies upon properly resourcing ESG initiatives, having the right skills and knowledge supporting ESG efforts and a genuine commitment from the company leaders on ESG. 6. Are we effectively communicating with our investors and other stakeholders in relation to our view on future ESG material topics and our strategy on these? Communication of ESG is traditionally done through an ESG or sustainability report. These can range from short (up to 20 pages) to very long (up to 120 pages). Whilst it is commonplace for these to be standalone, there is a trend towards integrating these reports into a company’s annual report. Good ESG reporting needs to be communicated in a well-structured, visual document that can tell a story. More importantly, this story needs to be backed by data. Outside of the traditional annual sustainability or ESG report, companies are innovating with more regular disclosures on ESG for investors & stakeholders through ASX/press releases. We expect that these methods will continue to be the dominant communication tools but that they will be complemented through impactful corporate videos and other more dynamic media. Good ESG strategy and reporting takes time and expertise but getting started is easier than you think. With the introduction of inevitable ESG reporting requirements in the years ahead, the cost of not acting now is likely to be significantly higher than the cost of acting. ESG Capital are an ESG Consultancy that work with public and private companies across APAC. Our value-driven approach focuses on the opportunities for value creation through ESG strategy and reporting. We believe the companies that choose ESG today will be the leaders of tomorrow. www.esgcapital.com.au Contact@esgcapital.com.au Media Partner Brilliant-Online: Our investment articles are also shared across Brilliant-Online magazine. Check out their investment column. Subscribe to Brilliant-Online. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. Share to Grow If you find this article informative and useful, please help me share the information. I try to write topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. Download our eBook: How to Add Value to your Share Portfolio A lesson on geological models sought by mining companies that gives insight and an understanding of which portfolios are better - and potentially more lucrative – investments. Click here to download this eBook. Keep us informed too! Please let us know your thoughts and send us any comments to info@samso.com.au. Remember to Subscribe to our YouTube Channel, Samso Media and our mail list to stay informed and make comments where appropriate. Other than that, you can also give us a Review on Google.

Investors put their money in all sorts of commodities and far-flung places. But there is one product that people seem to ignore which is just as lucrative. I have been looking at the silica market since the early 2000s. I looked at projects in Malaysia, met the vendors and realised that they did not even own the tenements. Then there was the Sri Lankan project, then the one in the Philippines and the last one was in Indonesia. I knew Australia had good projects, but the market was just too far away. The economics did not allow a review until my recent research into the silica market. It appears that the market has done some shifting, and things are not as it seems. Transportation cost appears to be no longer a barrier and products have changed. Technological changes have created products that have a higher value and created a niche market. What is Silica? Silica is simply silicon and oxygen. Silicon and Oxygen are two of the most common elements on the planet. Crystalline silica is the most common form, and it makes up over 12% of the earth’s crust, making it the second most common mineral on the planet. Crystalline silica comes in the forms of quartz, cristobalite and tridymite. Quartz is the most common of these, which transforms into cristobalite when heated at high temperatures (over 1450 °C). Non-geologist will call these particles white sand. The same white sand that you see in those exotic beaches is what pure silica looks like as a product. For thousands of years, crystalline silica was a beneficial mineral used to make products for building structures. Crystalline silica is present in thousands of different raw materials, including almost all types of content extracted from the earth’s crust. It is present in virtually all materials that are quarried, including sand, clays, gravel and metallic ores. It is hard, chemically inert, and has a high melting point, qualities which make it a valuable raw material for many industrial and manufacturing processes. Why are we talking about it? When we talk about commodities, we would mention, nickel, iron ore, copper, gold, lithium….etc. Not many people would put silica into that sentence. Silica is like the fundamental component of almost everything that we need as the all-consuming human species. There are very few items in our daily life that do not involve some percentage of silica. Unless you are living in solitary confinement, you will have windows, and that is silica. It is mind-boggling that most people do not think about silica as a sought after commodity. It is an irreplaceable ingredient in lots of high-tech applications, for example, precision casting, fibre-optic cables, and the raw materials for computer chips. It is present in our computers and phones. It is even key to the infrastructure of the internet, renewable energy and telecommunications. It is a vital part of how we get around – our cars and buses, roads and railways. Our homes are made from it – rocks, glass and ceramics, and many of the things we use every day contain or rely on crystalline silica. For the handy type of people, think life without the silicone gel. How would we fix those little things in the house without silicone gel? In all of these everyday contexts, crystalline silica is entirely safe. It is inert, meaning that it does not react with any chemicals, and it is not harmful to health. Availability as a commodity. Silica is quartz, and when you have a silica deposit, you have a quartz deposit. The purity of SiO2 is what determines the grade. There are a few deposits where the purity is in the 99%+ range, but the majority are not up to the grade. Recently, there have been a lot of countries, such as Vietnam, the Philippines and Indonesia that have announced that they will not be exporting sand anymore. These are not the high-grade sand. These are more about the construction, landfill grades. The restriction imposed on importing these low-grade sand may have shifted this market into a higher value status. Silica is not rare like cobalt or tungsten or nickel sulphide deposits, but the market is not straight forward. The high quality “grade” is significant, and then there are the size fractions. Finding a deposit that has the consistency of silica grade and a lack of impurities is not easy. This combination of chemistry and size fractions will determine which market you can participate, and then your location will also come into play. Hence, as simple as the product is, there is a measure of complexity that makes this market unique. Once you have sorted all of this, you need to find your buyer. What could quickly stop a project is if the deposit is logistically challenged. There are two companies that I know in the ASX who play in this space, VRXSilica (ASX: VRX) and Diatreme Resources Limited (ASX: DRX). VRXSilica is entirely a silica company whereas Diatreme has other projects in zircon, gold and copper. The projects are worthy of more than a glance. Diatreme has its projects that adjacent to the Cape Flattery Silica Mine which is being mined by Mitsubishi. Cape Flattery was discovered in 1967, Mitsubishi purchased the mine in 1977 and in 1987 a deep water jetty was built. Cape Flattery Silica Mines employs over 80 people (source: Cape Flattery Mine). The Cape Flattery Silica Mine gives you a good indication of how profitable a silica project can be if you get everything lined up. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

The Zinc market has been threatening to surge for the last three years but has been a non-event. Initially, the talk started with a supply shortage and hence followed with a rush to zinc projects. Everyone was chasing projects, and all of them had a high valuation, as it is always the case during these times. Money was being raised easily as long as you mention zinc. Today, in 2019, there is still a feeling of anticipation for the wave to hit. One can be forgiven to think that this is a never-ending story. What do we use Zinc for? The most common use for zinc is to galvanise metals for anti-corrosion., manufacture of brass and as an oxide for rubber manufacture and as a protective skin ointment. Anti-corrosion If anyone had listened in high school science or chemistry classes, they would have remembered that zinc is highly reactive. When compared with steel or iron, it will preferentially attract all the oxidation (rusting) and corrode first. When the oxidation process starts, the reaction will form an oxide layer on the surface and acts as a barrier. It serves as a sacrificial lamb and can act as the anode or the cathode depending on the chemical situation. Alloys A widely used zinc alloy is brass, in which copper is alloyed with 3% to 45% zinc, depending upon the type of brass. Brass is generally more ductile and stronger than copper and has superior corrosion resistance. These properties make it useful in communication equipment, hardware, musical instruments, and water valves. Other Industries Zinc oxide White pigment in paints and as a catalyst in the manufacture of rubber to disburse heat. Protect rubber polymers and plastics from ultraviolet radiation (UV). The semiconductor properties of zinc oxide make it in varistors and photocopying products. The zinc-oxide cycle is a two step thermochemical process based on zinc and zinc oxide for hydrogen production. Zinc Chloride Added to lumber as a fire retardant, and sometimes as a wood preservative. They are used to manufacture other chemicals. Zinc Sulfide and Sulfate Used in luminescent pigments such as hands of clocks, x-ray and TV screens and luminous paints. Used as lasers Dyes and pigments Antifouling paints. There are several other uses of zinc compounds as described in Wikipedia. Where do we find Zinc? The typical resource-rich regions of China, Australia and South America are the major producers of zinc. Interestingly, in the 1960s, Ireland was a world-ranked producer of zinc-lead mines. There were up to 6 producing mines and no less than 15 significant discoveries. One of the largest zinc mines in Europe is the Tara mine in Ireland. Tara was established in 1977 and is currently at a depth of 1km below the surface. It was discovered in 1970 and is a zinc and lead deposit. The initial resource was 7oMT at a grade of 10.1% Zn and 2.6% Pb (source: Boliden). In 2017, 2.3MT of ore were processed into metal concentrates containing, zinc, lead and silver (source: Boliden). I learned this fact several years ago when there was a swag of Irish Zinc projects popping up. Who are the primary producers? According to Mining.com, the top 5 Mines ranked by 2017 Annual Production are as follows, Red Dog (Alaska, USA) – Teck Resources Rampura Agucha (India) – Vedanta Antamina (Peru) – BHP/Glencore/Teck McArthur River Mine (NT, Australia) – Glencore Penasquito (Mexico) – Goldcorp According to Zinc Investing News, the three largest zinc producing regions are, Rampura Agucha (Indio) with 2017 production of 619,981 tonnes of zinc concentrate and 92,228 tonnes of lead concentrate. Red Dog mine (Alaska, USA) accounts for 5 percent of global zinc mine production. In 2017, the mine produced 542,000 tonnes of zinc concentrate. The company estimate that in 2018 it will produce 663,000 tonnes of zinc concentrates. Mount Isa Mines in Australia produced 226,000 in 2017 (a reduction of 22%). World Consumption The annual global consumption for zinc is about 14.1MT. If we take the calculations from the above, the three largest mines in the world are producing just under 2M tonnes. The largest zinc mine in Europe is producing about 200,000 tonnes per year so one would not be wrong in thinking that there may be a shortage soon. According to Mining Intelligence (source: Mining.com), the top five producers make up to 40% of the total zinc production. Based on the rough figures that I have quoted, my pure mathematics tells me that the other 60% will produce 3MT? I think something is not correct :-). What is the Price of Zinc doing? The news on commodities is not looking good currently. The last manufacturing data from China clearly show that there is going to be a slowdown on products, which is not good news to most investors. However, the upside is the Chinese government is being proactive in stimulating the economy, but the trade war between the US and China has not helped. The recent announcement of tax cuts is a good sign that Beijing is making it known that things will not go south and that it is sorting out the current issues. For the commodity market in general, all this is not helping the companies that are promoting an upside shortly. According to a report on CNBC, the outlook for Zinc is mixed. Inventories are down, and the technical view is bearish. The market feels that the decreasing demand is now controlling the market rather than a simple order vs supply concept. The slowing China market is the primary driver. I would suspect that the decreasing outlook for commodities is going to bring more supply to the market. The projects which were being held up with a buoyant market by “red-tape’ will now be loosening those barriers so to increase their fortunes. In minerals, the lack of a cohesive front to control such matters have always made mineral pricing so much more volatile, unlike the oil and gas participants. I am not convinced that the turn around is near as China is now reaching First World Problems od rising wages and increasing administrative hurdles. The thinking that a central government is going to prop the economy up and have this unlimited use of money is now a thing of the past. What I have heard over the last few years is the retail sector in the second tier and below cities are entirely kaput. There is still money being used internally to buy things, but the credit control is hurting investors. Investors internally are too scared to spend, and when they do want to spend on investments, the returns are no longer attractive. Those that are outside the Chinese Wall are now not able to access their funds as that flow of capital is now virtually closed. Conclusion The anticipation of a market to run is premature or “publicised” without a thorough understanding of the parameters involved to sustain the economics. Like the tungsten market in 2012 and 2013, I was marketing our tungsten project. I could see the pricing being buoyant, but I could not understand how it could be sustained with those parameters. There appeared a rush for the product, but when I researched the fundamentals, I started to note some issue. One of the problems was the lack of transparency with pricing and why China who reports a vast resource was a nett importer of concentrates. If China had a lot of resources, why is there a squeeze on the price? Typical demand vs supply fundamentals would show that supply way exceeds demand. In the case of zinc, I can see that there is a shortage coming, but there does not appear to be a clear path of supply shortages. The projects in the pipeline in some instances seem to be sufficient for any increased consumption. Price may still rise, but I think pricing will find an equilibrium that will sustain future pricing. I hope this gives an overview of why the Zinc market did not flourish and help interested readers have a better understanding of the zinc market. If you need someone to help get your message across to your clients or intended audience or require some research on products or business development, please give Samso a call or send us an email at noel.ong@samso.com.au Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

Lucia Darcy's take on the recent partnership and its key product - a zero carbon-emitting hydrogen fuel cell compressor. As an investor novice and an individual with anxieties about Earth's tussle with unrenewable energy, Sprintex Limited's journey into the realm of zero-emission engines was undoubtedly alluring. I was excited to learn more about a compact and light device that ran on air and water - it sounded too miraculous to be true (clearly, I am not an engineer either). However, after some research, it became apparent hydrogen fuel cell technology has been around for some time. The only thing missing was the cost efficiency, and perhaps more importantly, the global drive for a cleaner atmosphere and greener conscience. But not anymore. Via Sprintex's collaboration with Aeristech Limited, I've learned the market for clean energy has burst wide open and is only going to get bigger. Those as interested as I am should read on for a broader understanding of the significance of the partnership. We will cover the following key points in this Samso Insights: Collaboration with Aeristech, global experts in electric motor and control technology, strengthens Sprintex's goal to manufacture and supply e-compressors for zero-emission electrical engines (hydrogen fuel cells). Agreement furthers the global desire for industrialisation of top tier electrical engineering, expanding the clean air market and making it more accessible. Production is already underway in China with production samples to be expected this month (October 2021). Solid opportunity for future revenue for both parties as the consumer world becomes more environmentally conscious, with retail expected within the year. A Match Made in the Board Room The era of electric vehicles is speeding towards the present with the recent partnership of Australian automotive manufacturer Sprintex Limited (ASX: SIX) and Aeristech Limited. Aeristech, being a global leader in electrical technology, has entered into an agreement with Sprintex to manufacture three types of high speed electric compressors for the hydrogen fuel cell market. Sprintex's recent re-entry into the ASX preceded a launch of their ideas for a cleaner atmosphere. Along with a $6.6 million recapitalisation, the company has reshuffled their management team as led by Jay Upton, the new CEO of Sprintex Limited (ASX: SIX). The now debt-free Sprintex anticipates innovating carbon-free eCompressors (electric compressors) and continues to manufacture their patent-protected twin-screw supercharger product. The company has previously been highly associated with the automotive and vehicle performance industry but is now speeding down the zero-carbon engine route. The lucrativeness of the 'green energy' and clean air market makes this partnership important for investors. In a world increasingly more captivated by zero-emission technology, the high-growth expectancy for the green hydrogen fuel industry puts both companies on a mutually fortunate footing. Under the deal, Sprintex will bring their expertise in compressors to meet Aeristech's renowned advanced electric motor engineering. In his recent conversation with me, Jay Upton said, "It's a very good marriage… In that, we are the compressor experts and (Aeristech) are the electric motor experts. We can enhance one another's products". Production of new conventional programs has commenced in Malaysia and is to be ready for retail by the close of this calendar year. Chinese production for e-compressors is due to begin this month. Who is Sprintex Limited? The company is heavily associated with the street performance, and motor racing industry. With its roots in Glasgow, Sprintex Limited was originally called Fleming Thermodynamics or FTD. Founded by Professor Dan Wright MBE, FTD took inspiration from the Swedish inventor of the twin-screw compressor, Alfred Lyshom. From here, engineers at FTD developed the Sprintex Supercharger, a mechanically driven rotary compressor that increased speed while allowing lower discharge temperatures and higher volumetric efficiency. "I've been involved in motorsport all my life," said Upton, "In the late 90s, Sprintex was a sponsor of mine… you could not win that category of racing without a Sprintex Supercharger". Today, the Sprintex Supercharger is still patented technology unique to the Sprintex brand and has been an engineers' choice in both drag racing and multiple major car conglomerates. Based in Suzhou, China's highly developed economic region, Sprintex Limited has attained a 1,500 square meter site for high-speed compressor production (according to the investor site Hot Copper). The technology company begins production in China soon, having already confirmed it will research, develop, and manufacture clean energy for industrial applications in China. The company states the facility will aim to produce up to 50,000 high-speed electric compressor units a year and is staffed by an experienced team of turbo-machinery and electrical engineers. What are eCompressors: Explaining the Future During our insightful interview with Jay Upton, the CEO explains how eCompressors and hydrogen fuel cells work. Sprintex's eCompressors (electronic compressors) comprise contactless air bearings, carbon fibre and ceramic rotors, which feed a fuel cell stack to produce electricity from hydrogen and oxygen. Compact and light, Sprintex and Aeristech's innovation has reduced compressor size and weight by 30% compared to high-speed compressors that are already in the market. In addition, the product features a compressor able to go from motionlessness to spinning at 100,000-160,000rpm in a moment. Hydrogen fuel cells emit zero carbon compared to other non-electric engines, making them unique and inherently valuable. A fuel cell needs a compressor to operate efficiently, to supply sufficient oxygen (from air). By combining hydrogen and oxygen in the cell, over a catalyst, the result is a generation of electricity. No oil is involved in the process (as the machinery does not rotate against each other), the only emission is steam: no carbon, no pollutants, just very cool science. The zero-emission technology will meet the high anticipation from buyers, with an initial range of products that range from 6kW to 25kW models to be used for a range of non-emitting machines, covering the current fuel cell market. According to Sprintex, the electricity costs of eCompressors will reduce by up to 30% compared to other compressors on the market. The units are also available as electrical 'superchargers' for hybrid vehicles and high-efficiency air and gas compressors. The products are outlined in the agreement as: 1. fuel cell electric vehicles and stationary fuel cell generators; 2. industrial turbo blowers for clean air supply and water treatment aeration; and 3. multi-stage industrial compressor sets. Global Demand: The Race to Zero The demand for this technology mimics the company's collaboration efforts for rapid growth. Clean emission transportation (buses and long-haul vehicles), water purification, industrial and domestic application have been consumer interests for years but are now being actively pursued by Sprintex and Aeristech. Government enthusiasm for zero-emission vehicles is prevalent in both foreign and local countries. Australia alone has roadmaps for 50% of all lightweight vehicles on the market to be zero-emitting by 2030 (Victoria). The plans are supported by a $100 million package of policies and programs to help their goal. And Australia isn't the only nation aiming to achieve a shared climate goal. Interestingly, the nation renowned for having cities obscured by layers of black pollution and civilians suffering from onset emphysema is now stepping up as leaders in the green energy game. And they're handing out subsidies for anyone who can help them get greener. China is in the foresight for marketability for Sprintex and Aeristech's latest partnership and products. The involvement of eCompressors is limited to establishing a factory in China but to be in proximity to supply Zero-Emission Vehicles (ZEVs) to satiate China's eagerness for a cleaner national atmosphere. In the past decade, China has become the world's largest market for electronic vehicles and products. The International Energy Agency (IEA) stated that the nation accounts for over 90% of the world's sales for electronic vehicles (cars, buses and trucks). Like Australia, China plans for 50% of their vehicles be ZEVs, varying from electric, plug-in hybrids or, Sprintex/Aeristech-developed fuel cell-powered. The other half is to be hybrid vehicles. This vast development is a result of targeted policies by China to encourage the EV market, including incentives, subsidies and vehicle regulations. The Chinese government is a prime example of government support following the technology, as China has granted multiple subsidies for the operation in Suzhou. According to The Market Herald, the facility will not be subject to rent for three years as it will be subsidised by the local government. It will also have tax exemptions of up to 80%. China's proximity to overseas markets also puts the enterprise at a massive advantage for objective success. “The industry is looking for solutions… we have the experience of these unusual applications” - Sprintex CEO, Jay Upton eCompressors Make Their Way Off-road In Samso's August interview with Managing Director and CEO of Sprintex, Jay Upton emphasises that although the history of Sprintex is very much in the automotive supply industry, the Hydrogen Fuel Cell Compressor is applicable for other more creative uses. For example, it is a documented plan for Sprintex to use their eCompressor technology within the water treatment industry, enabling wastewater purification to emit very little carbon during the treatment and aeration process. In addition, the engineering of the hydrogen fuel cell compressors includes the providing of constant airflow, making their application incredibly versatile for both the practical realm and the broader market. Mr. Upton has also delineated plans for Turbocompressor products. These turbo blowers are another outcome of Sprintex's collaboration with Aeristech and are high-speed units for clean air supply. The versatility of application for these products also ranges from use in medicine, food preparation and distribution, to industrial manufacturing. In Samso's conversation with Mr Upton, the CEO mentions his company's work in reducing the cost of electricity usage by up to 30% when compressing air, - an astronomical saving for any industry. He comments, "I think you're going to see us (Sprintex) move quite broadly into certain applications in industries simply because we are more efficient". Ultimately, the invention of the eCompressor doesn't only mean that products will be powered and produced in a way that minimises carbon emissions. It also means that cost efficiency is aiming to improve for the multitude of industries that manufacture compressors. Investor Intrigue Now, onto some statistics that call for attention: The partnership's debut saw ASX: SIX shares spike by 48%, and shares soar from 4.94% to 8.5%, as stated by The Market Herald. For the same reason, no doubt, the collaborative development of these two companies have been alluring to investors. A step in the transformative direction of eCompressors, Sprintex has rebranded itself as a trailblazer in the green energy industry. Hydrogen fuel technology is not a new idea. Previously, hydrogen technologies have experienced cycles of expectations that were unrealised due to the lack of economic viability. However, decarbonisation of the global energy system has remained a priority to many governments and individuals. Improvements in the cost efficiency for eCompressors, and the supportive policy and interest for the technology, have enabled the cause to gain momentum into a reality for a zero-emission run world. “Companies are confident that under this collaboration, both parties will accelerate the expansion of market coverage and gaining profit.” - Sprintex Limited Improvements in cost have aged with the optimism for hydrogen fuel cells. Two decades ago, the production of of a hydrogen fuel cell city bus would have cost "$350,000 for the bus and another $2 Million for thefuel cell, making it not so viable", according to Mr. Upton. Today, the range is claimed to be much cheaper, but the statistics are unclear. What is documented is the expectation for hydrogen fuel to become a lot more affordable in the coming decade. According to a 2020 ANU study titled "Green Hydrogen Production Costs in Australia: implications of renewable energy and electrolyser costs", the expectation for hydrogen fuel costs is expected to drop to $2-3/per kg by 2030. After decades of unaffordability causing the electronic compressor market to suffer, the demand for eCompressors is almost impatient for products. A strengthened global resolve to mitigate climate change has opened the electronic engine market wide open - on which Sprintex and Aeristech have capitalised. Sprintex already has: The manufacturing base in Asia The distribution contacts in the USA, Middle East and Asia Current production in Malaysia and, recently, China A retail partner and aftermarket agreement (Aeristech) Mr. Upton also reassures investors that the technology developed between both companies is patent protected as Intellectual Property (IP), making them exclusive powerhouses in the industry. So it is no surprise that the announcement of the contract was met with such interest. The contract states 24 months, of which Sprintex is deemed the supplier of eCompressors and similar products to Aeristech. Final Thoughts While the technology behind Sprintex and Aristech's range of renewable energy compressors may not be entirely new, the collaboration has developed their products into highly impressive tools that serve a dual purpose. On the one hand, this technology is a significant step towards a cleaner Earth - a popular direction as an international imperative. On the other hand, the lucrativeness of the industry and the way the market has opened up to accommodate massive success indicates a fascinating dynamic between social intent and economics. While I am no expert in investing or engineering, I can see the significance of green energy is in its ability to generate optimism in all places. About the author Lucia Darcy is an up and coming writer, columnist and essayist with her roots in social and philosophical academia. Lucia is a current Literary Studies student who aims to start her career as a copywriter and freelancer by engaging with various companies and topics. Her involvement with Samso is based on a shared curiosity for investment, mining and global economics. She believes that although her approach to each blog is from a place of learning, her writing is for people like herself - novices and autodidacts who wish to educate themselves on a range of matters. Media Partner Brilliant-Online: Our investment articles are also shared across Brilliant-Online magazine. Check out their investment column. Subscribe to Brilliant-Online. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. Share to Grow If you find this article informative and useful, please help me share the information. I try to write topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. Keep us informed too! Please let us know your thoughts and send us any comments to info@samso.com.au. Remember to Subscribe to our YouTube Channel, Samso Media and our mail list to stay informed and make comments where appropriate. Other than that, you can also give us a Review on Google.

When I read the news on Gascoyne Resources Limited (ASX: GCY) in the West Australian, I remember all my discussions with investors during my previous life as the managing director of an exploration company — trying to convince potential investors why they should invest their money into an expenditure company as opposed to a production company. I tried to tell that history shows that those who believed an abandoned mine would now be profitable was actually buying not a lemon but a Golden Pineapple fit for places where the sun doesn’t shine. When I listed Siburan Resources Limited (ASX: SBU) in 2010, this was the ongoing conversation until I stepped off the Board in 2017. It was very hard over those years to promote the virtues of investing in a sound exploration strategy involving finding resources and corporate strategic plans was a better option. Is the Production story always better? Many moons ago, I had concluded that any production asset that is not producing is not a good story. Promoters love telling investors what they want to hear, and I have noticed that when they present a “production” story, they seem always to raise the appropriate funds. I remember looking at the Aphrodite Gold Mine in 2009 (Now owned by Bardoc Gold Limited (ASX: BDC) and I passed on it because I noticed that out of the so-called 900K+ of resource, only a fraction was in the Indicated level. I also figured that they were refractory. It was an old mine that is now not producing. I felt that this was not an asset for me to use for my IPO. Later on, I find out that they had raised all the 10M that the IPO wanted and had oversubscription. Meanwhile, I was still looking for funds to fill my IPO. Within two years of the IPO, the company had used up the 10M and was effectively a shell, and the mine never developed. We raised just over 3M and was still cashed up. Investors forget that the margin for a working mine is the same when the gold price is at USD 1000 or USD1800. CAPEX and OPEX increase and decrease in line with the rising or falling gold price. Hence, if it did not work before, it will not work now. The exception is if there was a technological change or a resource/ grade change due to more EXPLORATION drilling. Simple as it may be, but that is the simple equation. If I were to give examples where this is true, this would be a very long article. So let’s touch on some of the recent similar stories. Gascoyne Resources Limited (ASX: GCY) Gascoyne Resources made news this week going into administration after just raising AUD 24M from unsuspecting investors. Looking through the announcements, I calculated a capital raise of around AUD 200M, including debt over 2-3 years, I think. I remember looking at Gascoyne in early 2016 when the gold price was hanging precariously around the USD$1000 mark. There were a lot of companies with excellent resources struggling looking for funding. At that time, I thought that they had several issues with the grade, size of the resource and their location. I was on the lookout for projects that could help with some cash. After I spoke to the management team, I felt that the project was going to have more issues than becoming a saviour project. Turn the story forward to 2019, and I am amazed that all (I am assuming that they would have done their Due Diligence.) of the money raised, has gone down the drain. I know that the gold price in AUD is excellent, but when you have a project that did not work in lower pricing when others are doing well must surely give you some alarm bells. It is sad to see so much money in projects such as Gascoyne are now lost. The fascinating part about projects such as Gascoyne is that the millions of ounces that are being promoted at Dalgaranga and Glenburgh are not from one hole in the ground. I have mentioned this before, digging one hole to get 1M ounce is different from digging numerous pits to get them. Investors should really understand this. Now that the whole project has fallen on its “bottom” or come a cropper, one should ask all these experts that spin numbers so well, the mining engineers that tells you that they know everything and you (the investor with the money) just needs to listen, what happened? The sad fact is that in all these cases, the finger pointing is as fast and as numerous as you would expect. Dacian Gold Limited (ASX: DCN) Yesterday, I read that the West Australian mentioned that Dacian Gold might be announcing another production downgrade for its Mt Morgan gold project near Laverton. Dacian was the darling as they discovered more and more ounces a few years ago. When they were drilling and getting the good news out, the share price was doing well. As soon as they started mining, things are not travelling so well any more. The point I want to make is that if you had invested in the early stage and left when they had the discovery, you would have made money. All the “smart money” that comes in when they have the mine plan, the JORC resource, the Feasibility Studies, they would not be too happy for now. A mothball gold project does not really appreciate. I am not saying that Dacian is going broke. In fact, of the three companies that I have mentioned Dacian should not be used in the same sentence. Dacian management is quality. The deposit is quality. The downgrade that was announced was unfortunate but they are still mining good ounces. But the drop in share price highlights the sensitivity to a highly complex web of mining. Eastern Goldfields Incident (Now Ora Banda Mining) The Eastern Goldfields saga was a tale of the same conditions. It is a hard project, and they have a large package with so many commitments. You got to make sure you raise enough to cover the worst case scenario. I have recently written an Insight on this topic – The Davyhurst Project – Ora Banda Mining Limited – my thoughts on this is well versed there and they have not changed. This package also comes with a large minimum commitment to the Mines Department. The resources in the pits were left there for a reason and probably should be left there unless you can find more underneath to warrant a change in the volumetrics. As usual, the storytellers will sell that there is a resource and now the price is so good, as a Malaysian would say – sure can make money la. How many times has this model been used? The sad part is that this model gets all the money. I used to say that in exploration, you could lose 10M but in one of these stories, 200M is a common number. Focus Minerals Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

Adriatic Metals PLC has an exciting polymetallic project in Bosnia, but I am excited about the Zinc mineralisation. To me, this is an exciting zinc project, and it is not in some corner of Africa, South Americal Alps of in the middle of the Australian desert. The Balkan area is home to several of these kinds of projects. Several years ago, I looked at several projects in Europe and was very impressed with what was available. I tried to get my pool of investors interested. I could not convince them that the properties were one of the best regarding the sovereign, technical and infrastructure parameters. They could not see that these projects had the market within striking distance of the European market, unlike Australia, Africa and South America. The Company Adriatic Metals plc is a UK based Exploration and Development Company, and owner of the Vares Mining Concession in Bosnia and Herzegovina, via its 100% owned subsidiary company, Eastern Mining d.o.o. The Vares Project contains two advanced exploration deposits, Veovaca and Rupice, which were previously mined for Lead, Zinc and Barite. Operations ceased before the commencement of hostilities in the Balkans in the early 1990s. The deposits have been subject to extensive exploration, and contain significant quantities of Lead, Zinc, Silver, Gold, Copper and Barite. The precious metals were irregularly assayed during exploration but were present in produced concentrates. The company listed on the ASX by issuing out Chess Depositary interests, or commonly known as CDIs. Chess Depositary Interests ( CDI ) A CDI is a financial product which is a unit of beneficial ownership in an underlying financial product which is quoted on the ASX market. A CDI confers a beneficial interest in the underlying financial product to which it relates. CDIs can be settled electronically through CHESS and are used when the underlying financial products are not able to be settled through CHESS. Corporate Information Market Capital: 67M Outstanding Shares: 130.8M (06/2018) I don’t think that there is anything to fault the business concept with Adriatic Metals. The directors of the company have done similar things before and appear to be well credentialed. It looks like the company is also well funded. A rise from 20c to a high of 77c is a lot of value adding, and sadly, this chart is a rare sight on the ASX these days. Project Location Bosnia and Herzegovina is a virtually landlocked country with a 20km coast. Today, it is an EU potential candidate country and is now gaining world interest as an investment destination. Bosnia and Herzegovina is a small European country that historically has a small mining industry. However, the export of base metals made up of 12% of the country’s total exports. (USGS 2014). The mining sector was the most significant contributor to the country’s exports. In the former Yugoslavia, Bosnia and Herzegovina was a major metallurgical centre for asbestos, barite, construction aggregates, gypsum and salt. What do I like? Management First of all, during the IPO they got 2M from Sandfire, and that says a lot for its confidence. I take this as an endorsement of the project and the operators of Adriatic Metals. The association also indicate that in the progression of the project, the company will be able to source technical advice easily and this will make the transition to a miner more effectively and with a lot fewer hurdles. The people within the management group appear to be credible. There may be skeletons in their closet but who do not, especially in this business. Now, in the age of social media, who knows what to believe these days. However, I don’t know these guys intimately, but from my research, there does not seem to be any black marks. The management of Adriatic Metals appears to be able to carry this project and the fact that they were able to raise funds for the IPO and the recent raising of 10M as announced on the 20 November 2018, would be the current proof., I am guessing. Market conditions Zinc as a commodity is one of my favourites. I have recently written two blogs on zinc, and for those who have read it, they would know that I hold a cautiously optimistic view of this market. There has been a long believe that there was going to be a shortage of supply, but to date, this has not happened. Parallel to that is the more than apparent slowdown of the Chinese economy. The Chinese slowdown will also be a slow down in the world economy as it deals with the decreasing demand from the Chinese juggernaut of the last 20 years. However, even in the light of a slowing world economy, there is a possible gap happening in supply which would make a high-grade proposition like this within reach of the European market very attractive. Another positive is that the project is within the path of the One Belt One Road strategy. There are lots of talks recently about how zinc could be used more in the EV story. If this has enough traction, then being in Europe will be another advantage. The European market is bustling and doing the whole EV pathway and investing in facilities all over the place to help it become competitive. Drilling The intercepts that were released recently are good. To say good would be not giving it justice. As you can see in the image below showing the highlights of the recent announcement. 72m @18.3% Zn, 10.7% Pb, 211g/t Ag, 2.5g/t Au, 2.5% Cu and 25% BaSO4. That alone will get most people excited. The “other” hole only had numbers slightly lower. 46m @ 12.7% Zn, 9.6% Pb, 309 g/t Ag, 4.1 g/t Au, 1.0% Cu, and 40% BaSO4. In the second half od 2018, I came across the first announcement the company released on Rupice, and I was impressed. The latest results by the company prove that they are onto something that will become a mine. The length of intercept with those grades indicate that you have a massive stew of minerals deep below. At 200m plus below the surface will make no difference to the equation. From the information and the size of the intercepts, I am pretty confident that the mineralisation is present within the project. The fact that historically it was a producing mine is supportive of this thought. The recent drilling indicating a broad zone of high-grade mineralisation is very encouraging. Location It’s not in Africa, Asia, South America or in the middle of Australia. As I have mentioned earlier, being in Europe is a good thing. I have always said to people that my wish as a geologist was to work in a project that is within driving distance from Perth. It would be good to have a project that is within a 30-minute drive from home. The nearest I got to something like that was working on a project at Reefton, New Zealand. We were 10min helicopter ride to the drill site. I could I have my coffee in a cafe in the morning and then take a helicopter to the place. When a company is trying to deliver an advanced project you need a location where you can get economical labour, good infrastructure (exploration level) to keep the costs down. When you get to the mining stage, the comforts can come then as you will have the ability to raise funds to achieve all that. Negative Issues. I cannot see too many obvious negative issues. In saying that, I am aware of how what seems like a fantastic bullet-proof project have a history of going downhill for the reasons that were supposed to be its strength. We have already discussed the market conditions, and I think that will have to be the main stumbling block. Apart from that, the project seems to be very robust. If I were to pick on some negative issues, the steep and highly vegetated nature of the topology coupled with the winter weather would be on the list. Drilling in these kinds of terrain will be more costly than flat grounds. I am not sure if they are using helicopter rigs, but if that is the case, that will be costly. The logistics issue in winter may not be obvious, but it will be apparent for simple things like water freezing in pipes used during drilling. Some of my experience looking at projects in the Balkans highlighted something that may be local, but it will be an issue here. That is the issue of local organised criminal groups. I am not saying that this is present, but it is reported to have some problems. I know that the Balkans get a bad wrap from Holywood, but if we are digging for issues, this would be one. In some of these areas, the legacy of the war may cause some issues. However, people that have worked in these parts have told me that it is in the past. The people are looking to go forward, and in most places, there have not been any sustaining issues. Remember that areas such as Indochina have these issues too. Although we spoke about how the infrastructure was good in Europe, sometimes when you are trying to renovate, it creates more work and cost. Conclusions Adriatic Metals has a unique project. One of the few companies that have an excellent project is well funded, have done the drilling and in a place that does not involve the army. As I mentioned before, this project is destined for mining. I don’t think that this will not end well. The main negative will be the unknown issues that people like me, the general public, do not know as we are not in the “purple circle’. What I like is that Adriatic Metals is currently at a market capitalisation of 67M and it has a stellar project. The company has cash and is doing all the right things to develop the project. How high can the share price go will be very interesting as it has a reasonably low market capitalisation. I do think that it has potential to be in the $ mark. Whether it is a number 1 or number 2 in front or a zero with a decimal is unknown. Personally, a number 1 is realistic if all the ducks get lined up accordingly. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

A Samso Insight on the Investigation of Green Hydrogen by Melissa Buckley All you've ever wanted to know about this energy source, but never thought to ask is in this power-packed ebook from Melissa Buckley, one of our Samso Insights Contributors. Green Hydrogen = World Changing Big things have humble beginnings, and Melissa originally started out writing about green hydrogen as a blog post. With her research and her enthusiasm, her inquiry into green hydrogen grew and it became clear this was getting more exciting and we decided to share it as an ebook. There is no denying that green hydrogen is an exciting, emerging technology. There is much we can learn about it, and it is looking like it has the potential to change our world forever. Download our ebook on Green Hydrogen: An Investigation to get an overview of: What green hydrogen is Australian interests Countries in exploratory phases The technology behind it Costs and parameters Future usage It has all the essential information to help your decision making for successful wealth creation today. Click below to download Green Hydrogen eBook The Author Melissa Buckley is a second year Edith Cowan University student studying Marketing, Public Relations and Advertising. She has a background in social media content creation and management and in her previous career supplied administrative support to the not-for-profit sector and private enterprise. Melissa also has a lifelong love of collecting minerals/crystals. Media Partner Brilliant-Online: Our investment articles are also shared across Brilliant-Online magazine. Check out their investment column. Subscribe to Brilliant-Online. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. Share to Grow If you find this article informative and useful, please help me share the information. I try to write topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. Keep us informed too! Please let us know your thoughts and send us any comments to info@samso.com.au. Remember to Subscribe to our YouTube Channel, Samso Media and our mail list to stay informed and make comments where appropriate. Other than that, you can also give us a Review on Google.

It's that time of the year again when we look back at the last twelve months of 2021 to reflect on developments and trends and then try to peer into our crystal ball to make some predictions for what's to come in 2022. I'm glad we're not fortune tellers. It's actually very taxing to make predictions and do up today's Insights. Thing is, every publication, every "influencer" and every blog post has already done something, which makes this Samso Insights a bit of a late comer to this stage. Still, in spite of that, it's useful to look back and also see what's happening right here, right now and be open and curious to what could come in 2022. 2021 What a year we have had on the Australian Stock Exchange (ASX). I believe the current count of IPOs in 2021 is around the 120 mark and rising. Even as I write this article, there is another one listed today. I remember a time when it was just a fraction of that number. In fact, we could count them and probably even name the companies. As in so many industries around the world, the COVID factor played a huge part and it has driven one of the best bull runs for the small-cap mineral explorers that I have seen in more than thirty years of being in this sector. Looking at the upcoming list on the ASX as of 23rd December 2021, I can count 38 IPOs of which I think two or three have just been listed yesterday. If you assume an average capital raise of AUD$6M per listing, you are looking at nearly AUD$220M to be raised in the next couple of months. Hence, with over 120 IPOs in 2021, that is over AUD$720M raised in 2021. And this is excluding placements and Rights issue. Figure 1: (Source: GESB Superannuation) Looking at Figure 1, it is obvious where returns are coming from in terms of investments, for 2021. The returns from equities have gone through the roof and the number of participants have greatly increased. I don't think there are any arguments about the influx of new investors, new type of investors and new ideology of investors into all sectors of the Australian Stock Exchange. Over the last three years, the returns are just below 10%. However, the twelve-month return is over 35%. This is actually a spectacular result, and if you were to take parts of the mineral sector, the returns have been in the 100s to 100s of percent. This is not what you would get in the sensible investing ideologies, but it is the common reality and the expected realities over the last twelve months. Figure 2: (Source: GESB Superannuation) This is backed up with the data in Figure 2. Look at the steep incline in ASX curve. The steep returns are not well represented but if you take into account that this curve includes all the boring "blue chips", this is a significant information. Market Expectations for 2022 I think 2022 is going to be better than 2021. Volatility will definitely be a common feature but I think the next twelve months could be even better. I was told that there was nearly AUD$400M raised in the second half of 2020. In 2021, the ASX raised over AUD$700M. In my opinion, the capital market is going to either burst out of the gates in 2022 and create a bubble for investors to be concerned about, or it will just plough on to 2023. I think the later will happen as there are just too many things happening and the shift to No Emission will be the main driver of activities. Capital is still abundant outside the game and the uncertainty of the changing landscape of the post-pandemic scene will drive the narrative. Asset allocation will be trying to find some form of normality and this will create a "race" to be in the right place. A flight of capital to compete for the best investment. Figure 3: (Source: E& MJ) I saw a great article recently which expressed my sentiments perfectly. It is written by E&MJ - Engineering and Mining Journal (Figure 3) where they talk about the restarting of projects globally. When you look at the delayed projects, capital requirement will rise just for that portion of the market. To conserve cash, most mining firms deferred capital expenditures and halted or slowed project activity in 2020. GDP growth, an important leading indicator for capital spending in the mining industry, is estimated by the International Monetary Fund (IMF) to have declined by about 4.9% in 2020. As of the end of 2020, the number of metals and mining industry projects impacted by the pandemic exceeded 1,600, representing $212 billion, according to surveys conducted by Industrial Info. About 66% of that is for mining projects, with the remainder being for downstream processing and smelting sectors. The good news is that most of these projects are merely being delayed as opposed to cancelled. Most delays range from three to 18 months, with a lot of project development being pushed into 2021-2022 timeframe. ----- (Source: E&MJ) The renewed interest and the increased opportunistic interest in the mineral sector will push the current "bull" run for a longer period. How long this period will be is hard to say but if the general curve of interest remains smooth, then I think this will be a three to five-year run. Would this become the next super cycle? I think there is a chance that could happen. If you compare my thoughts in June 2019 with the Insight I wrote (Is the Commodities Shortage a Mirage?), with what is happening now, you can see why I am optimistic about the path ahead. My confidence in this optimistic narrative is entirely based on the EV-No Emission Revolution. This is the Industrial Revolution of our current times. At that time of my Insight in 2019, there were no rumblings of the impending lithium run. If you look at Figure 4, the sentiment was still going down. Figure 4: The 5 year chart for Lithium Carbonate. (Source: Trading Economics) The sentiment for lithium was at its all time low in September 2021 and it took off like a greyhound chasing a rabbit on the racecourse. That has changed the entire dynamics of the No Emission narrative.There was already a movement for Green-EV-Reduced / No Emission but as the sharp price movement happened, it is as if the world woke up suddenly and decided this was the way to go. And this movement is now going at break-neck speed. What will Drive the Growth in 2022 It is an obvious statement to say that lithium is the driver but it would be foolish to believe that lithium is the only or main component. In June 2021, I wrote - The Mystical Journey of the Commodity Price - Will it Continue? - as an Insight, and I came across Figure 5. This was the light bulb moment for me in trying to narrate the ongoing space. Figure 5: The elements that are required to have a renewable industry. (Source: www.elements.visualcapitalist.com) When investors get all excited about lithium, one must also get excited about the things that support the lithium products i.e. the buildings, the casing, the products that require lithium etc. As seen in Figure 5, there are a lot of other metals that are required and are more in demand now than in the previous industrial community. Molybdenum - Who Would Have Thought? Let´s look at something that is so unknown and unloved but is now garnering a place in the spotlight - molybdenum. Molybdenum is a component of stainless steel and its claim to fame is that it is what makes stainless steel anti-corrosive. When you look at Figure 6, you get a sense that there is renewed interest and there is a correlation of increasing demand for lithium and molybdenum. Is it a coincidence that the sharp increase in Molybdenum price is at the same time frame as Lithium? This resurgence is another reason that makes me feel the mineral "bull" run will stay around for a lot longer. The short cyclical range that we are used to in the past may be on the verge of breaking into a new range. Figure 6: 25 year chart for Molybdenum. (Source: Trading Economics) Why is Molybdenum going through this new phase is still a mystery to me. The research I have done do point to a correlation to the rise of the oil and gas industry. The increased need for structures that are not corrosive is a factor but if you look at the diagram in Figure 5, the increasing use of renewable energy source could be driving up the pricing as well. Then there is Nickel In my opinion, this metal is going to have a better future. The reason is mainly due to the fact that the EV industry is always seeking for better and more cost effective components. There are now commentaries of how the industry is actively looking at Nickel Solid State batteries. If this is going to be the future, then the demand for the metal will far exceed existing supply. Users are going to struggle to find reliable sources of nickel sulphides and if they go towards the Green space, that market will be even tighter. Figure 7: 5 year chart for Nickel. (Source: Trading Economics) The need for nickel sulphides is going to be a struggle as there is a little problem of finding the source and then mining it. For those who are not proponents in this industry, the mining process is a not an overnight process. It takes time and that is going to cause an even greater strain on demand. Copper - Old faithful Doctor Copper. Copper is the main stay of our civilisation and there have been countless commentaries on the need for more copper. I don't think we are going to have a sky-rocketing price surge as the supply of copper is pretty good. When I say pretty good, I mean that we can get to a source more easily as the price will get to a point where it allows the not so economical projects to become viable. Supply will kick in and that will stabilise the price rise. Unlike cobalt and in some case nickel (at some point in the future), there is a supply issue and the price will get to a point where it is uneconomical to use as a component. Figure 8: 5 year chart for Copper. (Source: Trading Economics) This is like using gold as an industrial use. It just won´t happen with the price. There is indeed a need for more copper but I think the shortage will not be as bad. This is not saying that there may not be pressure on the price. I just don't feel a great fear of not finding copper. And then there is Lithium There is no need to elaborate on the need of this metal. It is a well-known story but the latest price surge is pretty vertical. I will think that there is going to be a coming back to reality at some point. In late 2019, I was talking to an associate who was trading in spodumene and he told me that the turning of lithium is close. I agree with him but the rate at which it turned is what really surprised me. Figure 9: 5 year chart for Lithium. (Source: Trading Economics) I am not entirely sure where the price will end up, but what I can say is that the projects that are near to the market will be beneficial. With these last two years of shifting economics, shifting logistics, shifting politics, I feel that there is a balanced shift of reliance on world supply to one of domestic supply. The position I have on lithium is no longer that of whether the price will rise or if there is a demand, but rather one of location of the project. What I am saying is that if you have a project that is in the right jurisdiction, you will be closer to your market. I have one thought which may raise some eyebrows. The "shortage" of lithium may be due to the lack of plants to produce the end product. The bottleneck in the supply chain is the plant and not the raw material. If I am right, this is not going to sorted out in the near future. There is no doubt that the critical nature of lithium is going to play a big role in the coming years, maybe even extending decades. This will shape political and economical boundaries. These boundaries will become the balancing powers. Hence, the jury will still be out but I suspect we will have the answer soon. These are simply my observations based on experience, past and current happenings. Conclusions The mineral exploration industry is experiencing a state of euphoria which have never existed in my thirty years of participating in this industry. Geologists are in great demand and are being paid handsomely. I have never heard nor seen anything like this kind of fortune for the rock lickers. We have had a long period of suffering with a lack of capital and been seen as not as important as the corporate participants. When you take into account that there was nearly AUD$750M raised in 2021 and about AUD$400M to AUD$500M raised in 2020, you can't help but think that exploration activities will continue to be strong. The outlook for the metals is also strong with the EV / No Emission story that is dominating in every aspect of the resource industry. Another factor which we have not covered is the onset of Environmental, Social and Governance (ESG) requirements and participation. This will be a big driver for the industry as companies look to bring their businesses in line with the ESG bracket. The emergence of a strong ESG requirement is also creating more opportunities and allowing more capital to be allocated. When I quote the metal pricing and potential demand in this Insight, I want to highlight that there is a shift in the use. This shift is what makes up the building blocks of the coming decades. 2022 is most likely at the starting blocks. This shift will create more opportunities and more demand for capital and resources which will fuel economic activities. In 2020, everyone was surprised at the rapid rise in equities. In 2021, investors were trying to work out when the cycle will end. In 2022, I feel that investors are more accepting of the potential of the bull run and may push the pedal closer to the floor. I think investor confidence of a continued surge in mineral equities will be higher. It may be a case of investors doubling down on their expectations. It is as if investors were expecting a slow down. With a slowdown no where in sight, their excitement has been validated and they are speaking with their increase eagerness and money. What I like about the coming Year of the Tiger, 2022, is that the new world is just beginning to start. There is no going back to the old world. This is not a COVID issue. This is a new "industrial revolution" and I feel excited to be part of the process. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. This article is also published on Brilliant-Online

Is the commodity market depressed or is it just not used to the China Panda taking a long time to chew through the bamboo stalks. Whenever the markets get a whacking, the general public is hoping for a quick recovery. This reaction is natural, but seasoned investors will tell you that this never happens. The recovery is always longer than you expect and usually is more depressing than you wish. Interestingly, this is the same, whether you are talking about property or the equity markets. Over the last decade, the commodity boom has been primarily being driven by the growth of China. China has come from a farmyard economy to a world juggernaut in just 30 years. I was in China a few years ago and an associate (Chinese migrant with Australian residence for 20 years) was telling us that several years ago when he came home to China, he used to take his relatives and friends out for dinner. Now it is the other way around, and the return of favour was magnitudes of difference. The wealth creation in China over that time has been tremendous and even surprised those closer to home. Now that China is undergoing a slowdown and Trump is doubling the misery, the world is confused. Should we buy more? Should we produce more? Should we invest more? These are the puzzle that is causing heartburn for the rest of the world. I wonder if all the confusion on the market is just the general commodity market getting used to something new after so many years of the same prosperity. The Chinese Economy Source: Trading Economics The Chinese economy advanced 6.4 per cent year-on-year in the March quarter of 2019, the same pace as in the previous quarter but slightly above market expectations of a 6.3 per cent expansion. Industrial output growth accelerated markedly, and consumer demand strengthened amid government’s pro-growth policies, which helped stabilise sentiments rattled by the trade dispute with the US. On a quarter-on-quarter basis, the economy grew 1.4 per cent in the first quarter, compared to a 1.5 per cent expansion in the previous period and matching market estimates. It was the weakest quarterly growth rate since the first quarter of 2016. GDP Annual Growth Rate in China averaged 9.52 per cent from 1989 until 2019, reaching an all-time high of 15.40 per cent in the first quarter of 1993 and a record low of 3.80 per cent in the fourth quarter of 1990. Over Inflated GDP Figures In March 2019, I read an article in Bloomberg, which talked about how China had been over-reporting its GDP between 2008 and 2016. As you can see in Figure 1, the GDP range is much like a roller coaster ride. Over time, there have been numerous reports on this issue, and many debates have argued if this was a conspiracy or an act of jealousy. According to Bloomberg, one of the significant culprits could be the over inflation of growth by local governments. The provincial government authorities would want to be seen to be achieving economic growth goals to improve their chances of promotion. These are times before President Xi, where brown paper bags and inaccurate reporting were the things to do. Local government authorities had absolute power to approve and influence economic development. As President Xi started to exert his authority, fear has been brought over the system and “more accurate” figures are appearing. To the shock of the western economist, these figures started to send shock waves through the market. What was a reality? It was around 2015 when I started getting involved with China investments, and that gave me a first-hand look at how private industry do things in China. There was no shortage of money, especially with the younger generation. Ferraris, Lamborghinis and Bentleys were standard features of associates. What else was apparent was over capacity: elaborate factories not fully occupied and the typical industries that were showcased to create a mirage of prosperity. I saw several factories, car parts, shoes, clothing, plastic manufacturing and furniture, to give some examples. The one common feature was the overcapacity. Many buildings looked like there was nothing in them. And some of the buildings had 25 per cent occupancy. Apart from that, things were just “normal”. Friends and associates in China were telling me of a retail downturn, and even the food and beverage sector was not doing well. The tightening of elaborate “entertaining” killed off “entertaining” cities. Excessive dinning was non-existent practically overnight. My associates in smaller cities in Malaysia were telling me that the Chinese company officers would be too scared even to be associated with these expensive dishes. That was how hard the crackdown was on excessive expenditures by government officials. Is the commodity price just reacting to World economics? To blame the fluctuating commodity pricing solely on the China market would be simplistic. In January 2016, almost every commodity was at its lowest, but Crude oil joined the depressed pricing late in 2014. That period was the first time that I can remember where every valuable commodity was at its lowest. During that first quarter of 2016, the markets rebounded, and there was optimism for the next phase for the resource sector. In our new world of debt, corporations servicing the rapidly growing mountain of debt has proved a great deal more expensive than expected. Corporates have been forced to sell their commodities at increasingly deflated prices (and continue to do so). What many assumed were exceedingly good borrowing terms have proved to be anything but, once the cost of exchange rates are taken into account. The slowdown in Chinese economic growth is, in no small degree, the result of problems in the banking industry. In 2016, The issues of non-performing loans were rising at no more than 1-2% a year, according to official statistics. During that period, the actual growth rate in non-performing loans is probably more like 5-10%. The shadow banking story has been a problem since 2016, and there were reports of the second and third level financial institution not having enough money to repay depositors. The problem in the financial sector has exacerbated domestic slowdown, which will, in turn, create a roll of depressed pricing. The One Belt and One Road Issue. What is a debt financing tool is now slowly biting back with non-repayments and the building of white elephants? Many projects were built on this debt facility all over the world. This was going to be the instrument that would help China get its growth back on track. However, reports are indicating a lack of real growth and economies are being left with white elephant projects. Ports that are built, but there is no infrastructure to support the development. One of the most significant infrastructure projects in Kazakhstan is now in limbo. China invested over 14 billion dollars in Kazakhstan as the gateway to the new Silk Road. There is a great article titled, Kazakhstan – The Broken Buckle in the Belt and Road, which talked about this particular issue. On the other hand, projects in Indonesia are booming. Large state-owned enterprises were implementing the One Belt One Road song, and dance and all is happening. Factories and cement plants are popping up everywhere. However, the locals are telling me that they are not performing well, and local employees are being laid off or had wages cut to keep overheads down to show profits. Conclusion The slowdown in the world economy is the real blame for the commodity price sentiments. The China story is just part of the equation but I think commodity pricing has just got too comfortable with a rising Chinese economy. The European market is not a happening thing and the US revival is coming to a close. If you take into account that the China GDP was really not that high and the numbers were not that big, then you would assume that the buoyant pricing had to do with other factors. Now that the pricing is heading south, you would have to apply the same relevance to the other non-china factors. One can blame the slowdown in the world economy to the instruments of debt funding that has created a circle of death. The same geniuses that created all the tools that blew up Wall Street during the Financial Crises are still doing their magic. The recent demise of Gascoyne Resources, Dacian Gold and all the Eastern Goldfields companies are most likely to have been driven by the same financial models that were created to justify investments during the Ninja (No Income, No Job, No Asset) Loans period of madness. The same instruments are hurting corporations and driving the volatility of commodity prices. I am no economist but I am convinced that a combination of these hybrid alternative investment products that are the root cause of the direction of commodity pricing. One would argue that if investing groups were to make decisions on the factual repayable model, there would be a more stable movement in pricing. This ability would lead to more reliable forecast on pricing movement and future pricing levels. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

5 Points you need to know before investing in a small-cap resource company on the ASX? Many would ask, are you trying to sell a How to Blog? My answer is simple. I have been in this industry for nearly 30 years, and I feel that the structural parameters of risk and reward ratio that “entice” investors have not changed after all these years. You would be surprised how often investors ignore these simple basic questions. In the last ten years of “corporate” work, I have heard so many people say that promoters misled them and were all liars. What I know is that in many instances, the fault is in not asking these simple questions. It is not negligence, its that fact that this is a unique and dangerous sector but filled with the excitement of more substantial capital gains. How many times have you been approached to look at a company that is raising money, doing an RTO, an IPO or merely being asked to buy on the market? We all know that investing in a small-cap resource company on the ASX can be very challenging. When you look at this industry, many commentators have compared the process much like going to the casino. In many aspects, I agree, but every gambler has a system that uses science to explain the process. It is this science if applied properly that increase your chances of getting a good result from investing in a small-cap resource company on the ASX. So What Should We Be Looking For? Investing in a small-cap resource company on the ASX is something of a unique beast as it deals with the blue sky but yet requires a lot of the first principle of investing, DYOR (Do Your Own Research). The issue with the average punter and those that are new to the industry is that many of the research may sound like a foreign language or don’t see the full spectrum of activities behind the scene and don’t realise that what they read and see is not necessarily a result in reality. In my opinion, there are many factors to put on a checklist. However, let’s discuss those that are probably more relevant, more important or more critical. These points are not a saviour of a decision but give an excellent guide to what you would want to know, before investing in a small-cap resource company on the ASX. So How Does it Normally Work? For your average Joe investor, opportunities arise where an “introducer” proposes to you to invest your hard-earned money into a company through one of these five scenarios, • RTO (Reverse Takeover – probably less likely in time to come as the ASX is slowly making it less attractive to do this method.) • IPO (Initial Public Offering) • Placement • Rights Issue. • Buy on Market RTO Lately, the RTO or Reverse Takeover was a flurry of activities, but I see this as less likely. The ASX is now making it hard for an easy RTO and instead of making participants go down the route of re-compliance and do a new IPO. All pathways to the “easy money” no longer exist. IPO The traditional IPO is probably the least favoured as there is a perception that it is harder for 20 cents to get to $1 than for a stock to go from 2c to go to 10c. This kind of thinking is purely an act of market psychology and I feel that strongly through my trading activities. The market is all about psychology and very little on fundamentals. One can argue that but what makes a stock price plummet many percentage points overnight, technical or psychological? Placement Placements are the most commonly used instrument, and they occur very often. When you are dealing with a business that does not make an income and the investors make money from the capital appreciation of the share price (and this is why activities are essential for the company), you would expect cash burn rates to be higher than usual. The downside of placements is that they usually are not placed to the public and all the good ones are for the “boys” club. And when you get a look, you would wonder why am I getting this? Rights Issue Rights issues are an interesting phenomenon as it is like a double edge sword. Rights Issues are taken to raise more money from existing shareholders and sometimes, it’s a good thing, and sometimes it’s a bad thing. It is also used in many cases to change ownership of the management and the shareholding. Don’t get me wrong, this happens in all the other forms of capital raising, but this is just the most commonly used instrument. It is also the most “legal” way of doing things :-). Buy On The Market Buying on the market is the most easily understood. Buying on the market is least used to influence a sinister plot. In saying that, I am assuming that you are not going to buy a controlling stake from a recommendation. The professionals do take controlling stakes from the open market. I have seen this happen more than once, but they are people who have a mandate/agenda to achieve a future yet determined purpose. So what are the points to look out for? With over 30 years of experience, it usually only takes a quick 5 minute of reading and investor deck, an Information memorandum or Presentation for me to decide if I need to spend any more of my time. You will be surprised at the numerous name changes that projects can go through with a new concept or a new super idea over and over again. The predominant motive for investors in this sector is to make money and make good capital gains. Otherwise, you would buy BHP (ASX: BHP), Rio Tinto (ASX: RIO), National Australia Bank (ASX: NAB) or Westpac Bank (ASX: WBC). Investors in this sector tend to turn a blind to the “sharks” in return for the share price heading north. Let’s try and make this simple and discuss some of the critical points that I think one must check before throwing our hard earned money into the hands of these “sharks”. In my normal checklist are these items to be considered, Technical Merits Corporate News People involved Brokers Market Perception of the Commodity 1 – Technical Merits All projects have a specific component that will make it happen or not. A good friend of mine once told me that all diamond mines have something unique that will make it viable. If not for that component, the mine will never happen. He said, look at Argyle Diamond mine, it’s the Pink diamonds that make it viable. You could also add the marketing of its browns as Cognac and Champagne diamonds was anything but a spectacular stroke of genius. Take Ellendale diamond mine, the yellow diamonds kept the company going, and as soon as that marketing game finished, the company was in administration. On the other side is the Letseng Diamond mine in Lesotho. Letseng is characterised by extremely low-grade ore (less than 2 carats (400 mg)/hundred tons) and is known for producing huge diamonds, having the highest percentage of large diamonds (greater than 10 carats (2.0 g)), giving it the highest dollar value per carat of any diamond mine. The world average is roughly US$81 per carat, while Letseng averaged over US$1,894 per carat for the first six months of 2007. My point is that the technical merits of a project are not the headline numbers. It is about possible production numbers. It is about the intrinsic value that it has which makes it a viable project. Also, depending on your investment strategy, are you looking for capital gain while the story is in high momentum or when it comes to production. Again, these are essential factors to consider. In many gold projects, investors get excited with big numbers, but they need to realise that an interception of say 5m at 125g/t is markedly different from 150m at 2.5g/t. The example I have given there is almost on two extremes of the spectrum, meaning that the first may not work and the second is practically a discovery. 2 – Corporate News Corporate activities are the most contentious point for investors and vendors of projects. In reality, most plays are in a public company scenario and where everyone is going to make lots of money from the share price going up. For companies that are in the ASX, it is common for vendors of projects to be paid in part or in full with company shares. The share price going up is what vendors are all hoping that they will have their payday soon. Under present ASX listing rules, in most cases, vendors of projects have their shares escrowed for up to 12 months or at least 12 months (the shares are held and not allowed to sell till a particular time in the future). This is where the problem starts for everyone. Everyone benefits with a rising share price, and if your drill hole does not come right, that is not going to be good for all shareholders. As companies “make money” through placements, the company wants as high a price as possible before they start issuing shares for new money. As you can see, the ingredients for mining the market begins, and with all schemes, it just gets worse as time goes. The Old Boys Club, kool to some people. (source:Tailgatecorneroffice) The term “mining the market” is very well used and the losers are the shareholders, and the smaller you are, the more insignificant your thoughts and feelings are to the company. Sweet deals are very commonly placed to “the boys club” to average their cost down while the smaller shareholders are ignored. 3 – People The management team/directors need to be compatible with the activities of the company. As the company is a non-income generating spending machine, those paid an income need to be doing it’s best to reduce the expenditure. A mineral resource company with AUD5m in the bank is not going to have a lot of money left if they are paying themselves a high wage and employing everyone under the sun. I would go further in saying that the directors who are geologist should be the ones sitting on drill rigs. Mark Bennett is one that is a real example of saving money and doing it all and the result was the discovery of the Nova-Bollinger nickel-copper mine with Sirus Resources Limited. Sirus is now absorbed into IGO (ASX: IGO). There are too many examples of directors who are on a high wage and not making any real effort to reduce the spending. For a small company, controlling cash is a significant issue as the cost of operating a public company and making sure you get the stories and maintaining market expectations is very difficult. 4 – Brokers The broking industry is not doing well at this time as there is a downturn in the small-cap sector. My 30 years in this industry have taught me that the broking industry is one that is very robust. It is incredible how they can survive for this long. My relationship with brokers is in a ubiquitous phrase; the broking industry gives you the umbrella when it has stopped raining. It is very frustrating, but I do understand why that is the case. The brokers are only interested in no lose stories, and they negate bad stories by being lined with options and shares that are or will be “in the money”. This is a commercial world, and that is a simple truth. Hence, when these guys start coming to you, be very aware that all the walls are lined, and you are the fuel that the vehicle needs to get going. They are given the incentive to approach you and compensation has been given to them in case they lose you as a client. Brokers play an essential role in helping companies to promote however I am open to thinking that in today’s social media world, companies can do a lot of promotion internally with the right personnel. Don’t get me wrong. I am not saying that the brokers are all shonky hub stealing people in suits. What I am saying is that they are in this business to make money. The everyday investor is also in this business to make money. All I am alerting to is that investors should understand the motive of the introduction. There is always going to be a level of conflict of interest as they make money for companies in getting you to invest, but that is just the nature of the game. The other way to look at this is that you would not get the opportunity to make money without them. 5 – Market Perception of the Commodity Market perception of the commodity is obvious, and as I explained in my previous blogs with zinc (Zinc Market- What happened to the price surge?; 7 Interesting Zinc Companies on the ASX), market perception may not necessarily be the market reality. In the first part of 2018, I started telling people that I believe that the simple commodity like nickel and copper will flourish. At that time, cobalt was still the darling with many commentators always saying, get cobalt and all your worries will be over. At that time, I think Cobalt pricing was near USD 92,000. As I write today, the price of cobalt is around USD 32,000. Nickel and Copper are showing good signs of recovery, and simple commodities such as iron ore are now back in favour. As I tell my associates, I don’t need to have lithium as I don’t need an electric car, but I need the essential metals to have that car. The next EV story could be hydrogen or tungsten or vanadium, but I need the nickel, copper and the iron in any of those scenarios. Gold is a good example. After the crash in 1999, it was USD 240/ounce, and today it is over USD 1300/ounce. Market perception, in my opinion, takes into consideration, timing, price upside and demand upside. When all three points are aligned, then, in my opinion, that is a good thought. Conclusion It is never easy to decide what is a good investment or the right timing and I am not professing that I am an expert. The more I write, the more there is to share, and suddenly I realise that there is an endless amount of mines field that I have seen and heard over my 30 years. For example, it was only recently that I realise that no more than five personalities control the whole mineral resource small-cap sector in Australia. Everyone else feeds from them and deals are done in a myriad of ways in companies that are related to or friendly to these identities. I don’t mean that in some illegal manner, what I mean is that they have positioned themselves well over time in projects that are in their portfolio. To get a good look into whether the investment is a good move, one needs to understand how the market works in this industry. It is easier for the likes of myself to understand if there are any big holes in the presentation, but it is also impossible to say that a bad reputation means a bad investment. In some cases, you can make a lot of money with a functional promoter with a lousy project. Sometimes, it is the opposite. When I started this blog, I thought I could cover everything that I wanted to say. However, it appears that I have already written too much and there is still so much to share. I guess that this means that I will have to do the rest in another blog. These 5 points are just a rough guide to what I think I know, so there is no need to crucify my thoughts. I have been wrong, and luckily for me, I have been correct most times 🙂 Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso