Looking for the next money tree on the ASX, have a good look at Nuheara Limited (ASX: NUH).  Nutheara Limited makes Hearing Aids with a difference.  The company, Nuheara Limited (ASX: NUH) recently announced that they had been selected by the United Kingdom’s (UK) National Health Service (NHIS) to provide hearing solutions to adults and children with mild to moderate hearing loss. Now prescribed alongside traditional hearing aids means that they are real participants in a billion dollar industry.  Nuheara Limited has also partnered with Specsavers which is a fantastic distribution partner.  However, in my view, the main game is the health industry.  The health industry has limitless customers.  As we all know, the two sectors that never run out of customers are childcare and aged care.  The critical aspect is that a loss in hearing in an ageing population is more than a common coincidence.  Nuheara making hearing aids with a difference is a sure way to get noticed in an industry that have billions to share. My Involvement My involvement with Nuheara Limited started in 2015 by way of an investment in a small company called Wild Acre Metals Limited.  They took on this new technology called “Wearable Hearing Aids”.  I thought that Bluetooth earbuds are not exactly new and what is the whole excitement.  As my position was not significant at all, I just let the entire scenario play out but I was not impressed. In fact, for a long time, I did not think much of the technology.  I guess it was nearly18 months later that I looked into the technology and was impressed.  This lack of interest was because I had minimal exposure to the stock.  But I did make up to 5 times my investment, so that made up for it :-). Corporate Information Nuheara Limited was born out of a Reverse Takeover (RTO) of Wild Acre Metals Limited and formally incorporated in early 2016.  However, the announcement of the transaction started in 2015. Market Capitalisation: 66M (12/2018) Shares Outstanding 891.5M (06/2018) Top 20 %: 38.6%  (Two directors, Justin Miller and David Cannington own 7.1% each) What is the Technical Aspect of the Story In a very simplistic way, the Nuheara earbuds allow the user to change the frequency of sound based on the environment you are present.  If you are at a construction site or a restaurant or in an aeroplane, it works to allow the user to change the ambient noise and improve the sound of what you want to hear.  As I understand, if you are talking to someone in a construction site, you can cut out the ambient noise and allow you to listen to that person’s voice.  Similarly, in a crowded area, you can use it to cut out the surrounding talking and concentrate on the person you are talking to directly. I remember when I first bothered to look into the Nuheara Limited’s product, I was surprised that it is not just a Bluetooth earbud, but it does all these functions.  I was amazed at what the fuss was all about at that time.  I seem to have an issue with looking into details 🙂  The products range looked very stylish and wearing that would not look like your traditional hearing aids which spells Old Man So What’s the Big Deal? Now that we are all at the twilight of our lives (I am anyway…) when things such as an improvement to our health are so apparent.  As a gadget freak, I own three rather expensive wireless earbuds, and god knows how many noise cancelling headphones.  Now researching this product, I am tempted to buy the buds myself.  Imagine that we have an app on our phone (a gadget we seem to cannot live without and cannot stop touching every 5 seconds.)  that allows us to manipulate the sounds we hear.  We can cut out the surrounding noise and only listen to what we want to hear, and I am not talking about music. I love the idea that we can cut the sound of the machines and isolate the voice of the person we want to talk to directly. Having spoken to several people who are wearing hearing aids, their biggest complaint is that sounds are all pouring into the head.  They cannot isolate.  The ability to do this is a big deal.  I recently paid $200+ for a Jabra earbud .  It is great to use, but it has some of the functionalities while you are playing music but not as a hearing aid.  Now I believe that the Nuheara Limited iQbuds are both. The other factor is the use of these buds in industrial applications.  As a geologist, we are always working close to noisy drilling rigs, and we wear earplugs.  These earplugs protect our eardrums from the constant loud noise.  Imagine wearing these buds to do that, but it is connected to all the technology to play music….etc So What’s The Business? Now, this is an excellent question?  There are a heap of brands out there in the market.  Let’s not kid ourselves.  We are a species of the animal kingdom that loves brands. Brands make us feel the quality.  Even the perceived quality comes from the name and the perceived quality of the name. We are such simpletons. But you need to understand the message Nuheara is trying to sell.  They are not headphones, and I feel that many people out in the general public will miss this message. When you look at the diagram below, Nuheara had placed the IQBuds in a sector that is different from headphones.  How is it different?  The best analogy that between fossil fuel cars and Electric cars, the general public can understand the clear distinction.  However, when you ask people about dementia, they think of memory loss issue, but when you talk to carers, it is the character change that drives them nuts ( see my post on dementia ).  I fear that Nuheara is in this confusing category.  The market will lump them into the headphone industry. There is a danger that customers cannot differentiate between a hearing aid and a hearing aid with a difference. The diagram above represents where Nuheara Limited is in the market.  The traditional hearing aid industry is an $8B market but is only selling 13M devices p.a. as opposed to the conventional headphone industry of the same market value, but it sells 300+M devices p.a. When you look at those numbers, it’s an important reason to be in the industry.  There are several videos on the website that explains the IQ buds. The videos are great as it makes it clear why they are not just another Bluetooth device. Share Price Movement In Figure below,  you can see that the share price journey has been volatile, but if you smooth the curve out, it has not been too exciting.  Listing at a low of 2.5c in early 2016 and now being 7c is not what I would call impressive. Fortunately for me, my exit was well timed, but that was because I had a small shareholding and the capital gain warranted a departure.  If I had a more substantial holding, my modus operandi has always been to exit when the story changes.  In this case, that would have meant that I would be still a shareholder. Technically, the 5-year chart does show that it is trending upwards and trying to break the resistance level at 15c would appear to be approaching.  I am never one to make bold predictions on individual stocks solely on technical analysis but when you couple the recent announcements and the chart, I do feel very comfortable in predicting that the share price will test 15c again. Technically, when I look at the 3-year chart, there is more clarity on my thoughts on breaking that 15c level — lots of bullish sentiments and setting new higher lows.  As I am an advocate of horizontal support, I see several support levels.  It seems like the bulls are busy creating new highs, but the bears come in to set the lows before the bulls are back in there setting new highs again. My Thoughts I have to admit that I am now more intrigued about Nuheara Limited than before I started writing this blog.  The more I have learned about its potential, the more I feel its a reality.  So what does all this mean?  In my opinion, the Hearing Aid industry is only going to get bigger. My parents paid thousands for their hearing aid, and they tell me that it is too annoying to wear them which is also consistent with other people wearing hearing aids.  If the IQbuds can deliver what they are marketing, they will conquer the market. In regards to a view of its share price, I feel that the currently released announcements are good signs of a good foundation and the market accepting the company strategy.  Surely the oversubscribed placement in December 2018 is a testament to the direction of the company.  For me, that placement at 7.5c is now below the current share price, and this is representing good value. Conclusions Remember that once you go past the age of 35,  everything in our body is deteriorating including our hearing.  I once read that once we reach 21 years old, everything is going downhill. If there are still people, who think that the hearing aid industry is a small market you need to have a look at a company called Amplifon .  It retails and fits hearing aids and supplies correlated services aimed at the solution of problems related to the loss of hearing.  The Group operates in Italy, France, Spain, Portugal, Switzerland, Austria, Holland, the United States, Hungary, and Egypt. Amplifon operates through a network of distribution centres and licensee network affiliates.  In Q3 of 2018, they had a revenue of 303.2M Euro and a nett income of 10.6M Euro ( Bloomberg )  In August 2018,  Bloomberg reported that its IPO had returned almost 1000% since IPO. Hearing Aids market Size Projected To Reach $6.5 Billion By 2024 (www.grandviewresearch.com) The global  hearing aids market  was valued at USD 4.5 billion in 2015 and is expected to reach a value of USD 6.5 billion by 2024, according to a new report by Grand View Research, Inc. Key factors driving the market expansion include the dramatic increase in ageing population of 65 years & above and the associated loss of hearing and growing demand for new-generation instruments that are technologically enhanced and enriched equipment with better aesthetics. As per the data published by the WHO (2013), the prevalence of the same disease in adults over age of 65 years is expected to be five times more than that for the individuals below 65 years of age. It also estimates that in the developing nations around 20% of the people with hearing loss require hearing aids and less than 3% of them are expected to be using it. 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

On 31 December 2018, Doriemus PLC (ASX: DOR) announced that they had signed a binding agreement with Rey Resources Limited (ASX: REY) to obtain a 50% interest (plus operatorship) over the 5,058km² Western Australia onshore petroleum exploration permit block EP487.  The statement by the Executive Chairman of Doriemus , David Lenigas mentioned that the first thing they want to do is get a consultant to look at how to incorporate the Fishbones Stimulation Technology. The Fishbones Stimulation Technology reportedly can help generate more profits and create efficient oil flow. In the very tight crude oil industry, any edge to allow efficient oil flow and make more money would be fantastic. What is this Fishbones Stimulation Technology? Fishbones is a provider of unique technology that has defined a new level of precision and efficiency in reservoir stimulation. Using a short pumping operation, numerous titanium tubes are extended from the mother bore to create long channels, delivering significantly improved reservoir productivity. Fishbones, like no other stimulation system available today, guarantees connectivity with your reservoir precisely where planned with the optimal use of valuable resources. The Inventor Fishbones Stimulation Technology was invented by Rune Freyer, a serial entrepreneur that holds many patents and patent applications. His vision was to deliver a shift change in completion method that creates vertical connectivity in the reservoir without the infrastructure, environmental impact and complexity of traditional fracturing treatments. Rune was the inventor, manager and owner of the successful Easywell company (swellpackers) until 2005, and is the Fishbones, principal shareholder. Reasons To Choose Fishbones Increase productivity  by connecting the well to the reservoir with up to 300 laterals. Accelerate production  by integrating stimulation in your drilling program. Avoid water or unwanted gas  by predictable penetration and location of the laterals. Simplify logistics  by using rig pumps and significantly fewer fluids. Accelerate progress  by avoiding cementing, perforating, cleanouts, running frac strings and other operations. Reduce HSE exposure  by reducing the number of operations and working hours. Reduce the environmental impact by reducing emissions and by using fewer fluids. Avoid flow back  and disposal of fluid from hydraulic fracturing. Effective reservoir conductivity  may be low due to layering or faulting. The layers or faults can be penetrated and drained by Fishbones with the mother bore not even penetrating the faults. Different intervals have different pressures and can be hard to effectively hydraulically stimulate. Fishbones allows you to stimulate zones with different pressure regimes. The Project The Derby Block occurs north of the Fitzroy Blocks and overlies the major road infrastructure in the region. It abuts the northern flank of the Fitzroy Trough and is considered prospective for both conventional oil on this northern flank as well as for significant accumulations of gas in the Laurel regional gas accumulation. REY currently holds a 100% interest in petroleum exploration permit EP487. The block is considered to be predominantly a Wet Laurel Basin Centred Gas play (“BCG”), which is regionally extensive throughout the Canning Basin, with major companies such as Mitsubishi and Buru Energy also having operations further along trend in the area. Existing infrastructure in the area is extensive due to the activities at Mitsubishi’s Valhalla and Asgard gas field operations. Oil Pricing In recent times, the price of oil has had a battering, and it seems that the start of 2019 has not made too much noise. This morning as I write, US Oil is at $45.44 which is slightly down from a recent high of about $47. Remember that the low $42 was around Christmas time 2018. All the recent news that I am hearing and reading seem to be indicating a run back up to $70 per barrel. The oil industry is similar to the iron ore miners in regards to the rush to be efficient in production. Efficient oil flow is critical in a pricing market such as what we are observing now. I remember the time when iron ore took a battering in 2009 with low prices and companies such as Rio Tinto started working on reducing production costs.  Now, the iron ore miners are travelling comfortably with the cost of production in the low $20 per tonne (so I am told). I read that some of the oil producers are currently producing at $15/barrel to overcome the low oil pricing. I am suspecting that with all the depressing oil pricing, the use of the Fishbones Stimulation Technology will be helping those marginal wells to make more profits and have more efficient oil flow. How is the Industry? When you review the news in regards to the oil and gas industry, it is business as usual. Industry people are telling me that they are still going about their business but are looking at projects that are more attractive to investors. When you think about it, this makes perfect sense. I have been in the mineral exploration industry for the last 25+ years, and this is how the industry keeps chugging along. When the commodity price takes a turn for the worst, the participants of the industry keeps going. Things are tough currently, but there are a lot of talks of oil going back to the $70/barrel levels. What’s The Good News? Industry participants tell me that it is now increasingly harder to find oil. All the previous discoveries were easy targets.  Exploration is getting expensive.  All this talk sounds like supply is decreasing, but the big question is whether the increasing use of EV vehicles will make significant changes to the demand equation.  In my opinion, this uncertainty is not a bad thing as this will move the price of oil up, for the short term anyway. Like all commodities, the cream of this industry has all been discovered. The Fishbones Stimulation Technology will bring online a lot of projects that were previously not considered.  Will this increase future supply?  I think not.  The real supply player will be the US shale oil players and many people are proposing that they will create an oversupply issue. My call is that the shale oil players will affect supply over time.   However, I don’t think it will change the oil price as the price will hang around the sub $100 range even with the Oil Shale players.  I can’t see it going over the $100+ levels. Corporate Information REY Market Capitalisation:  53M (12/2018) Shares Outstanding:  212.4M (06/2018) Top 20 Shareholding:  92.7% (2018) DOR Market Capitalisation:  4M (12/2018) Shares Outstanding:  50.4M (06/2018) Top 20 Shareholding:  57.9% (2017) This announcement is exciting as DOR which is spending $1M to get 50% of the “production field” will add significant value to the share price.  REY, on the other hand, is not going to have much action as its Top 20 shareholders own 92.7%.  It appears to be a Chinese company, and if it is, I am sure that the entire 92.7% holding will be only shared with a handful of non-related entities.  It will be tough for anyone to make shareholders get value with that holding percentage. This issue is why I believe that the play is for DOR and with a market cap of 4M, this has to be a great buy.  I had a look at the market depth, and the issue will be trying to get a meaningful amount of shares.  DOR has a lot of upsides as the Executive Chairman is  David Lenigas.  David has had a lot of successful corporate activities and the most recent is that of Artemis Resources Limited (ASX: ARV).  David is also the Executive Chairman of Artemis Resources Limited (ASX:  ARV) , Southern Hemisphere Mining Limited (ASX: SUH) and Clancy Exploration Limited (ASX: CLY) .  That is all that I know. In terms of a “good buy”, I am tempted to go for a punt with DOR.  I am currently not a shareholder, but I am going to be following this program.  I have invested in one other oil and gas play, and that was Arc Energy in the early 2000s.  That was a ride from 11c to $1.20.  The story back then was a similar scenario.  It was a new story to find oil in the Perth Basin (if I am correct). My “mentor” Geoff Donahue explained to me how the project was going to work and suggested I take a position. That was the best decision. Conclusion Investors should start looking at these technological advances that can make previous sub-standard oil fields profitable.  There will be many ASX listed companies such as Doriemus PLC  that will benefit from such technology.  Previously there was the fracking technology, but this is another advancement.  In my opinion, this kind of companies using technology such as the Fishbone Stimulation Technology will make their shareholders very happy. Currently, the ASX is very stagnant, especially within the small-cap resource/oil and gas sector.  My thought is that investors should look out for parameters that are generally not on their lists of must-have in a company. I am sure with the depressed oil price, those companies that are in the oil and gas sector will be looking for any edge they can find. Whether DOR makes this venture work is all in a crystal ball at the moment, but the main point of this discussion is the introduction of the Fishbones Stimulation Technology. 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

Pilbara Minerals Limited ( ASX: PLS) was the flag bearer of the lithium rush.  In 2018, this rush took a backward step and there are now many unhappy shareholders.  I remember in 2017, the market could not get enough of the commodity. Then the Cobalt hype came in, and that made the market super hot.  After all the commotion, there is a reason why the market has gone into hibernation, and I don’t think its got anything to do with a lack of demand. I would describe the latest woes in lithium pricing as a hangover that had to happen. In the run-up to the end of 2017, it was all about the coming of the lithium revolution — the revelation to the market about the demand and the lack of supply. There was also the belief that there was a supply issue. When all the dust settles, I believe that my thoughts and that of the market will be consistent.  I believe that this Lithium Hype will finalise at a lower price that is economical to users and buyers.  The high prices cannot be sustained and will come down to a level that will work for all participants. Let’s work out what is what first. Before we get into all the details, let’s try and distinguish the different sources of lithium.  The hard rock stuff is more accessible to mine and process but is generally more expensive.  When the brine guys sort themselves out, they will take over as the leading supplier of lithium. Hard Rock Lithium The primary and more commonly understood types are what is called the hard rock ore.  The hard rock lithium comes from pegmatites which are bodies of rock that contain very incompatible elements.  These elements are those that nobody wants on their team, so they are the last to form and concentrate within these rock units.  They are mainly found in and around granitic rocks as their chemistry is consistent of these rock types. One of the significant characteristics of pegmatites is the vast crystal nature of the minerals.  As pegmatites are effective a large quartz vein but with more elements, when the fluids cool, the process of formation is allowed to cool slowly and form larger crystals.  See the photo of a spodumene bearing pegmatite below. What makes an excellent hard rock lithium source: Distributed homogeneously throughout the Earth’s crust; Lithium-Cesium-Tantalum pegmatites form in orogenic hinterlands as products of plate convergence; First-order criteria are an orogenic hinterland setting, appropriate regional metamorphic grades, and the presence of evolved granites and common granitic pegmatites; Neither lithium-cesium-tantalum pegmatites nor their parental granites are likely to cause serious environmental concerns; Traditional mining through movement and crushing of ore; Economic grades are between 1% and 2% LiO2; (source: www.tsxmedia.com ) Lithium Brines Lithium brines just salt lakes with a high proportion of the lithium element in the solution.  The mining process is a combination of concentration and evaporation.  There is no shortage of these lakes, but as usual, there are only a few that will have a geological and economic advantage. The mining process is straightforward.  Brine, typically carrying 200 to 1,400 milligrams per litre (mg/l) Li, is pumped to the surface and concentrated by evaporation in a succession of artificial ponds, each one in the chain having a greater Li concentration. After a few months to about a year, depending on climate, a concentrate of 1 to 2 per cent Li is further processed in a chemical plant to yield various end products, such as lithium carbonate and lithium metal. What makes a good Lithium Brine: arid climate; closed basin containing a playa or salar; tectonically driven subsidence; associated igneous or geothermal activity; suitable lithium source-rocks; one or more adequate aquifers; and sufficient time to concentrate a brine, economically 1 to 2 per cent LiO² achieved over time and evaporation, then considered economical for processing (source: www.tsxmedia.com ) So what happened in 2018? In 2018, it was all about the realisation that lithium is not a super commodity, it was not a commodity that is super-rare. It is like any other commodity. This “light-bulb” moment occurred for the cobalt and REE rush as well, and every other “super-commodity rush” that investors seem to think exists in the marketplace.  I am the last person to call myself a market expert, but it is strange that punters talk about reserves and resources when evaluating the stock while it runs from 2c to 55c or dollars?  How is that part of a value proposition?  Is it worth 2c or 55c a share or $2 per share :-)? When the stock comes back, they call it a miscarriage of justice and say management sucks.  How did the management go from Heros to Donkeys over the short space of time? There is no doubt that there is more demand with the EV story but the hype will also back to something that makes economic sense. It cannot sustain the sky-high pricing.  If you look at the graphs below, one can see a trend of decreasing price over the 2018 period. If you look at the price chart for Lithium, Cobalt and Nickel, you can see that they all share the same trend. More apparent for Lithium and Cobalt.  I am a Nickel and Copper bull so I am a bit surprised with Nickel coming back.  As much as I follow the commodities, I was very surprised to see cobalt come back the way it did.  Interestingly, I was not that surprised with lithium coming back. What happened to the stocks? When you look at the major players in the industry, they are all in the same place.  I like to put the lithium companies into three categories, Producers Resource Explorer In my opinion, there is no need to look at the explorers anymore as they are too late.  In reality, anything that has not been discovered or re-marketed is probably not worth looking at as the ship has well and truly sailed.  At this stage, the hard rock resources that are not developed or are near development may find themselves a steep hill too hard to climb.  For those resources, I do think that if the brine resources come into play, they are going to struggle to make money. Looking at the charts below, one can see the consistent run to a high and all at the same time came back over the year.  In my opinion, I think there is only a need to look a the top players in the sector.  There is no need to discuss the lower level companies. The market is now maturing so it is all about supply now.  Competitors are coming up, and the sooner the company deliver their product, the better. Pilbara Minerals Limited (ASX: PLS) – The first and most well known. Market Capitalisation:  1.23B Outstanding Shares: 1.744B (06/2018) Top 20 Shareholders: 48.1% When you look at the chart above, isn’t that just a very good looking chart?  Lately, when it reached the 60c mark, I was telling people that this has to be a good buy.  However, as I looked at all the participants in the lithium sector, they all had the same trend.  You could be forgiven to have felt all your Christmases had come at the same time. To me, PLS is the one that everyone compares to and they are the first to have made Western Australia a lithium region.  I know that Greenbushes and Wogina are big players too but they were really a Tantalum play.  Their unique geology is very good.  I think they produced up to 60% of the world’s tantalum and now they are a big lithium supplier as well.   I have not looked at the geology throughly but I am sure their grades are good too. There is not much to write about PLS that is not known in the public space. I just wanted to highlight the intersection to highlight why as a miner.  I don’t think there is a problem with the mine, its all about the market and how the market is repositioning itself.   You cant help to find comparisons in the industry.  The last one is the iron ore price going down to $40 and then it ran up to $100+ in six months.  Now, we are seeing the decoupling of the iron ore pricing with premium ore getting a higher pricing. In my opinion, once you have a good supply, such as the likes of PLS, all you have to wait for is the market to recalibrate. What is the future for the Lithium sector? I think the price of lithium will come back in 2019 and 2020.  It probably won’t be as high as before, and if the brine players are successful, it will be lower.  The slow down in China is making a dent in the hopes of bulls but I think with patience, these bulls will be proven correct.  Fortunately, this slowdown in China has been happening for a few years and it will not have a dramatic end. The Caixin China General manufacturing PMI fell short of expectations in November and may have spooked the markets in general but as you can see the depressing commodity pricing (in the charts above) has been showing this slow down for a long time.  The figure below also highlights that there has been a slow and steady decline all 2018 in manufacturing. The dark horse on the market will be the shadow banking issue that is happening in China.  This shadow banking issue has got to be the most crucial aspect of the world market as if this was in any other country other than China, the financial market would have felt its wrath a few years ago.  As it is a China issue, the Chinese government is orchestrating a soft landing which is probably a good thing for everyone. Xi Jinping How is this done? Why was Xi Jinping able to get his way? Well, my opinion the answer to the two questions comes from the doings of the past government.  What I mean is that the last government was too busy pocketing money to care about the consequence.  Hence when Xi Jinping came into power and “fixed it’, he was able to curtail any objections by using the “country first’ card and anyone that had not been asked to stay at home indefinitely, would not be speaking loudly.   Hence, wielding a big stick, Xi Jinping was able to control the masses and he inevitably created the path for a soft landing. In regards to the Lithium pricing, it is these happenings that give me comfort in saying that lithium will rebound with the continued improvement in the Chinese market. Solid State Batteries This battery will stabilise the lithium market as this new form of cells use less of the other component, nickel and cobalt and uses more lithium.  The solid-state battery replaces the liquid or polymer electrolyte found in current lithium batteries with a solid.  Saying that this is not proven technology as yet.  There are lots of research making this happen it is very likely that this will happen.  There is a lot of money being spent in this area and that will probably mean that the technology will make it happen. Benefits of solid-state batteries, smaller higher capacity and allow faster charging cheaper non-flammable – which is very important for car makers and the electric aeroplane sector. A US company, Saki3 , has announced that they can make a solid state battery that has twice as much density and at one-fifth the cost.  Currently, Panasonic makes Tesla’s battery at %500 a kilowatt-hour.  Sakti3 claim it can get the cost of 4100 a kilowatt-hour by the end of the decade. Interestingly. This private company was bought by the Dyson group who is on the path to building its own electric vehicles. Magnis Energy Technology Limited (ASX: MNS) Currently, there is one company in Australia that I found which seems to be in this space.   Magnis Energy Technology (ASX: MNS) is the company that has jumped on this sector.  I don’t know this company too much, but I remember them as a graphite story related company.  I stumbled onto their story while researching for this blog.  The chart fits the lithium story I guess. Market Capitalisation: 180M Outstanding Shares: 572.9M (06/2018) Top 20 shareholders: 39.8% What is the Big Issue with Solid State Batteries? As mentioned earlier, in 2015, Dyson (vacuum cleaner Dyson) invested 90M for the US start-up Sakti3 to secure their solid-state battery technology.  Recently, Dyson spent an additional 200M pound in August 2018 to set up six test driving tracks for their yet to be built electric vehicles.  There are already 400 employees in this automotive team which is in a site that is 17km in length. What is interesting is that nearly a billion pounds of investment went into this battery sector alone.  So this industry is not going anywhere.  What does this mean?  Well, companies such as Pilbara Minerals is suddenly looking cheap as they are the only one, apart from Galaxy Resources looking to be a real lithium supplier.  Mineral Resources is also another heavyweight slowly moving in with the Mount Marion project.  By the way, they also own 8% of Pilbara Minerals. Looking at the investments that are going into this product, it seems to me that the lithium sector is endorsing this path for the future of EV vehicles or EV products.  The traditional lithium batteries are also a big hindrance in the electric aircraft sector. The fact that the current Li-battery has a habit of power surging, it is a big issue for those working in the electric aeroplane space. Conclusion I think this is such a well known topic that there is nothing new that anyone could come up with at this stage.  What I tried to highlight is that the Lithium market is down now but I feel very comfortable in saying that the upside is not too far away.  I remember a wise man told me once that in any price surge, you should never chase but let it come back to a level where the market is trying to figure things out. Once that happens, the market will take a direction depending on its assessment of the product. I feel that we are at that point.  I think since the rush on the lithium market, there have only been one or two shipments of concentrates from Australia. Galaxy Resources Limited (ASX: GXY) was an early player and I do not include them in that list.  I remember working for them in 2008 and the lithium rush was nothing compared to what we have experienced in the last 2-3 years. I am not a shareholder in any of the companies listed but for those who have invested in the “blue” lithium stocks, I think there are good times ahead.  There will be alternatives ( Hydrogen Cell , Tungsten and Vanadium ) as I have written before, but there are no arguments that the lithium battery has the head start and looks like the volume may keep the competitors behind the pack. 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

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. 4 6m @ 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

In December 2018, I did a write up on Doriemus PLC and the Fishbones Technology .  Once I understood all the terminology, I was wondering if Doriemus could potentially be another Woodside in the making.  I decided to contact the management of Doriemus to try and understand the whole process and was subsequently given a bit of oil geology and production 101 lecture.  I began to appreciate all the numbers and the potential of the Butler prospect or The Derby Block as referred by Rey Resources Limited .  With my new found knowledge, I did my research and subsequently took me to the light bulb moment of “Could this be another Woodside in the Making?”. What Do We Know Already? For the readers who are not oil and gas savvy,  one would need to understand some of the definition. There is a saying that “ oils ain’t oils ” and boy did I find that out.  As I write this, I am still trying to understand everything I have read. Let’s try and summarise what we are talking about first.  In December 2018, Doreimus PLC (ASX: DOR) announced a JV with Rey Resources Limited in regards to their The Derby Block/ Butler Prospect located in the Canning Basin.  The project is east of the township of Derby. The Butler prospect sits within the license EP487 which is owned by Rey Resources.  Buru Energy and Mitsubishi hold the adjacent tenures.  Buru has the EP to the northern boundary, and Mitsubishi is towards the southeastern border. According to Buru in their 2017 presentation, they stated that the Butler prospect has multi-TCF potential.  Buru pointed out that the key is the prospect is newly defined and with recent seismic work, the management is feeling confident that the potential of the field may be able to be realised soon.  This field of thought is consistent with the beliefs of the current Doriemus management. In June of 2015, the Butler prospect or EP 487 was “operated” between Rey Resources Limited and Oil Basins Limited (now called Emperor Energy Limited, ASX: EMP).  I assumed that relationship did not last, and somehow Rey Resources found a new partner in Doreimus in 2018.  In 2013, the US Energy Information Agency reported that the Canning Basin has the most substantial unconventional (shale) gas potential in Australia and eighth most significant in the world (source: OBL 2016 AGM ). By all accounts, this seems to be still the case. Potential of Resource EP 487 has been around for a long time. As I mentioned it dates back to at least 2015.  As usual, a lot of these kinds of projects take time and funding has always been the issue.  The fact that the current management is talking drilling in 2019 is a good sign.  Management being proactive is a good asset of a company for shareholders.  In October 2018,  the Japanese oil and gas company Inpex had their first shipment of condensate from their Ichthys LNG project in Western Australia’s Bowen Basin. To give a proper perspective on how long these projects can take, Inpex had the exploration permit in 1998, and they first discovered the Ichthys field 18 years ago.  It took them six and a half years to complete the construction.  Now they are producing 100,000 barrels of condensate per day.  At a conservative price of USD70/barrel, that’s USD7M per day. Looking at the diagrams below, EP 487 is in the right zone.  The “Fitzroy Trough has been explored for a while now, and I would suspect it will just be a matter of time before a discovery is made that will make the world take notice.  Buru Energy is lead by the old Arc Energy management, and they appear to believe in the area, and that is encouraging to know. All the focus is on the Butler prospect as shown in the broad red region in the diagram below.  Now Buru has the bit that is not in EP487 so I would see these companies will be working closely together in future.  Form my understanding, the nearology issue in oil and gas is more consistent and more applicable that the mineral resources.  Just because you have a gold mine in your tenement does not mean that it will be in present in my adjacent project, that kind of thinking.  However, in the oil industry, this occurs more often.  IT seems that in the oil game, being neighbours could mean that we are taping the same reservoir. The table below is from a presentation by Doriemus PLC which shows the potential of the Butler Project. As explained in the previous blog , the Fishbones Stimulation Technology will be used to help with production when and if the project gets to that stage.  From what I have heard and learned, this new technology is doing what Fracking is trying to do without the fracking.   I am sure there are more qualified people out there that can explain this better, but as far as I am concerned, it allows more oil to be produced with the old conventional ways. What do all the do numbers mean? What is a TCF? What is a condensate you ask?  I will try and explain that later but it is the premium product from the suite of oil products. What is a TCF? (source: Investopedia ) TCF (Trillion Cubic Feet) is a volume of measurement of natural gas used by the US oil and gas industry.  A TCF is worth about USD3 billion at the wellhead, although this is dependent on many factors which could increase or decrease that figure.  So if you look at the table above, you start to understand the potential upside. What is a Condensate? (source:  Wintershall.com ;  drillinginfo ) Condensate is a very light hydrocarbon with an American Petroleum Institute (API) specific gravity of greater than 50 degrees and less than 80 degrees. In underground formations condensate can exist separately from the crude oil or dissolved in the crude oil. Some oils are light and can be used almost immediately and are therefore very valuable. Other oils are heavy and have to undergo additional refining processes before they can be used practically. One of the lightest and most valuable crude oils is condensate which is used to produce products like petrol, jet fuel, diesel and heating fuels. Condensate comes in various colours, from clear like water to yellow or even brown. Compared to conventional crude oil, condensate is much thinner and has a similar consistency to regular water at room temperature. What is API? (source:  Wikipedia ) The American Petroleum Institute gravity or API is a measure of how heavy or light a petroleum liquid is compared to water.  If its API gravity is higher than 10, its lighter than and floats on water.  If it is less than 10, it is denser and sinks. Although API gravity is mathematically a dimensionless quantity (see Wikipedia ), it is referred to as being in ‘degrees’. API gravity is graduated in degrees on a hydrometer instrument. API gravity values of most petroleum liquids fall between 10 and 70 degrees. Typically, the characterisation of API gravity in regards to petroleum are as follows, Light – API > 31.1 Medium – API  between 22.3 and 31.1 Heavy – API < 22.3 Extra Heavy – API < 10.0 So What do all these TCF and MMbbl mean? Let’s start with Western Australia’s North West Shelf.  It is estimated to have 130 TCF of natural gas resource.  Everyone knows that the North West Shelf is the talk of the resource industry. Its the hotspot for a few decades.  Billions of dollars have gone into the development, and the whole Karratha and Dampier area has blossomed due to this investment.  There is no sign of any slowdown as the business model is projected into the decades. In the table above, at  P50 EP 487 has recoverable gas of just over 28 TCF.  Then there is P50 of 707 MMbbl of Condensate.  Granted that these are estimates and the future exploration wells will be the proof of concept, in the oil and gas industry (as I understand), the calculation of the probability of success is much more scientific and precise.  I know there are many people out there that will say that they have been involved in more dry wells than they care for, but if you compare minerals and hydrocarbon exploration success, you would understand the difference. According to the Australian Petroleum Statistics issued by the Department of the Environment and Energy, there were 98MMbbl of crude oil and condensate produced in 2017-2018.  The figure is made up of 8,145ML of Crude Oil and 7,512ML of Condensate.  In comparison, Doreimus is claiming at P50 that there will be 707MMbbl of condensate from EP487.  If that were to be true, I would say we are dealing with something worth taking some notice.  Even if they were 10% correct, that would be 70 MMbbl which is almost equivalent to the total crude oil and condensate produced in 2017-2018 from Australia. How does Fishbones Stimulation Technology help? The Fishbones Stimulation Technology is applied to increase well productivity and access the difficult geological formations and unconventional reservoirs. Fishbones Technology differs from hydraulic fracturing, and its main advantages are the competitive price and reduced operation time. Fishbone shaped multilateral wells may prove to better productivity than multi-fractured horizontal wells in relatively low permeable reservoirs. Not all geological conditions are appropriate for this technology.  There are specific conditions that are ideal, and apparently,  the Butler prospect appears to be suitable for this technology.  If this were the case, this would be another reason to be excited.  As I had mentioned in my first blog on Doreimus PLC and the Fishbones Stimulation Technology, from a geological point of view, this is like the invention of the bread slicer. Conclusion So what does all this mean?  Assuming that the management of Doriemus does raise the fund required to do the necessary drilling, I would be pretty confident that you will get a result.  When you think about what is available with technology these days, the prospects that were substandard are now producible.  Throw in the use of Fishbones Technology and things will get more than impressive. What is a bit on the unbelievable thought is the size of this field?  The size of what Doriemus is talking about is BIG.  I have worked in the mineral resource sector since 1992 and have never worked a day in the oil and gas industry.  Taking that into consideration, I am just a bit perplexed with the numbers.  Let’s take the scenario that those figures were correct and Doriemus and Rey Resources are happily producing those numbers, what kind of money are we talking about?  What would their share prices be?  Imagine if that just came from the Butler prospect and the Basin Centres Gas System within EP487. 707 MMbbl of condensate 28 TCF of recoverable gas. Whatever the final figure is, what I can say is that the shareholders of all companies involved will be happy.  If the drilling comes up empty, then they are not any worst of… 🙂 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

Champion Iron Limited (ASX: CIA, TSX: CIA) is an iron ore exploration and development company with significant projects in the southern Labrador Trough, Canada’s largest iron ore-producing region. Champion Iron, through its wholly-owned subsidiary Champion Iron Mines Limited, is developing eight iron-rich projects in a 707 km2 area. The projects are all strategically located close to the electrical grid, all-season roads and railway lines. This infrastructure connects the projects to a terminal located in water that does not freeze, on the north shore of the Gulf of St. Lawrence. The fascinating story with Champion iron is their vast resource. As you can see in the diagram below, it has several billion tonnes but with what Australians would consider low grade. However, they appear to be able to beneficiate the grades to over the 60% mark and are producing very impressive tonnages for sale. I have very little knowledge of the iron ore industry in this part of the world, but I am impressed. If they can beneficiate all these tonnes, this could be a significant play for investors. An associate had suggested I write about Champion Iron and on first look, I will admit that I was not so keen. Upon more detail reading, I was curious about the size of their resource and the share price journey. The share price has had a great ride and as you will agree after reading this article, technically, I have a feeling, this journey may have only started. Projects As I mentioned the resources shown in the diagram above is super impressive. With the recent iron ore pricing taking a run this has got to be a company to look out for in any portfolio. The Australian magnetite projects differ significantly from the metasomatic varieties in the tropical areas where magnetite “pods” can grade up to 60% plus. However, these Canadian varieties are lower in grade, but I believe they occur as weathered varieties which I assume will help in the economic department during the beneficiating process. I think the structure of the magnetite must allow a more natural beneficiation process. Capital Structure (Data as of November 7, 2018) Market Capitalisation: 682M Top 20 Shareholders: 51.9% as of 2018 Share Outstanding * | 419 319 747 Company stock options | 11 050 000 Compensation options | 21 000 000 Champion is on the ASX and the TSX. It has been an exciting share price journey. The company was a merger of Champion Iron (TSX) and Mamba Minerals Limited (ASX). The merger was initiated in the last quarter of 2012 and completed in the first quarter of 2013. Merger Details • Announced in December Quarter 2012 • The merger of Mamba Minerals Limited and Champion Iron Mines (TSX: CIA) • Champion shareholders to receive 11 Mamba shares for every 15 shares of Champion shares. • Raised AUD$10 million with the merger. The recent upsurge in pricing appears to have taken hold after the acquisition of the Bloom Lake project in 2016. The addition included related rail assets and a capital raising of C$30 million at C$0.16. The transaction brought in two private equity firms invested in the placement, • WC Strategic Opportunity( a Wynnchurch Capital LLC portfolio company) • Resource Capital Fund These two funds are big players, and this would have been a great sign of support from the “smart money” and the “big money sector”. It would be a boast of confidence to the general market. The old saying” safety in numbers” or rather ” Don’t get me angry, my big brother behind me will fight you” :-). Labrador Trough – What is the deal? (source: Canada Natural Resource) The Labrador Trough is something like the Pilbara Region of Western Australia. A mass of super-rich mineralisation with a lot of iron ore. It has been mined since 1954 and currently, production is at a rate of over 30 Mt per year. The region has several billion tonnes of ore outlined in fine-grained, cherty magnetite iron formation. The iron deposits occur within an extensive Proterozoic geosyncline. Several facies of iron formation within the Sokoman Formation reflect variations in chemical composition and depositional conditions. This band extends for about 1100 km southeast of Ungava Bay through both Quebec and Labrador. Further south, it turns southwest past the Wabush and Mont-Wright areas to within 300 km of the St. Lawrence River. The iron formation is essentially folded and faulted along most of its length. The degree of metamorphism is variable, ranging from intense in the northern and southern portions to greenschist facies in the central part. Sokoman Formation (source: Newfoundland and Labrador Natural Resources) The Sokoman Formation consists of a 30–170-m-thick sequence of cherty iron-rich sediments and is continuous for 250 km from Labrador City to Schefferville. It also continues into Québec in both directions and is one of the most extensive iron formations known on Earth. The lower part of the Sokoman Formation consists mainly of oxide-rich beds which are the most important economically, with iron-rich layers and lenses commonly containing more than 50% hematite and magnetite. Iron Ore Types (source: Newfoundland and Labrador Natural Resources) Generally, the majority of iron ore production, including that of the Labrador Trough, comes from iron-rich cherty sedimentary rocks and their metamorphic or supergene derivates. All iron-ore deposits in the Labrador Trough formed as these sediments and are eventually altered and metamorphosed in some form and affect grade, mineralogy and grain size, which impacts the economic viability of iron-ore deposits. In addition, faulting and folding led to a repetition of sequences in many areas, which significantly increases the surface extent and mineable thicknesses of the iron-ore deposits. What the above paragraph means is that all the geological “cooking” creates a variety of ore types with differing grades. Three main types of iron-ore deposits are as follows: Taconites are found throughout the Labrador Trough. These are weakly metamorphosed sedimentary iron formations (15 to 30% Fe), with magnetite as the dominant iron-ore mineral. None are presently mined in the Labrador Trough. Metataconites are present in the southern part of the Labrador Trough, especially in the Labrador City– Wabush area. They have been moderate to strongly metamorphosed, and the grade of these iron- ore deposits is generally higher than unmetamorphosed taconites (up to 41% Fe). They are easily beneficiated into iron concentrates (approximately 65% Fe), which are ideal for pellet production. Direct Shipping Ores (DSO) are secondary iron ores containing >50% Fe that formed from the enrichment of primary taconites. Such ores require minimal beneficiation and have very low mining costs. Two main types of DSO deposits occur in the Labrador Trough. Soft, friable, fine-grained, variably porous deposits occur mostly in the Schefferville District and may be related to deep groundwater circulation and supergene enrichment associated with Mesozoic (Cretaceous) tropical climates. Specifically, silica and carbonate were leached from the ores, leaving a high residual iron content. Hard DSO deposits occur in several locations, including Sawyer Lake and Astray Lake, southeast of Schefferville. These are dominated by blue hematite and martite, and, typically, are denser than the soft, friable ores, with no evidence of an increase in porosity. The origin of these deposits is unknown, but they may be related to early hydrothermal processes. In addition, some DSO deposits have characteristics of both the soft and hard DSO deposits (e.g., the Houston deposits close to Schefferville). What could this mean for The Future? According to my research and the information from Champion Iron, the iron in the UIF, MIF and LIF is for the most part in its oxide form, mainly as specular hematite and specularite in its coarse-grained form and to a lesser extent, like magnetite, with some of the iron in iron silicates. Recent research on iron formations in Australia and Brazil has emphasised the importance of structurally controlled hypogene alteration and upgrading of iron formations before supergene alteration. Such models imply that not all high-grade iron ores are linked to surface weathering and leaching processes, which in turn suggests that some ore bodies of this type may lack surface expression. In Australia, there are notable examples of high-grade zones that sit beneath unaltered low-grade primary iron formations. (source: Newfoundland and Labrador Natural Resources) The Koolyanobbing iron ore mine (Southern Cross, Western Australia) has a distinctive ore. It is not your typical BIF types. When you consider that, understanding the ores at the Labrador Trough could be the way to unravel deposits that have been ignored. The mineral exploration industry has a bad habit of following historical methods, and the lack of funding means new techniques and new thoughts are expensive and dangerous. Conclusion Recently, I learned that several Chinese companies are searching for lower grade ore for beneficiation. Chinese steel mills prefer magnetite to hematite, and they can bring grades over 10%. Now that is very impressive. In steel mill language, magnetite is the preferred mineral. One report mentioned that up to 15 billion dollars were spent in the Labrador Trough as investments. This kind of investments is long term looking people and the Chinese are very good with this kind of thinking. Helping these miners in the Labrador Trough is the Quebec government. The Quebec government had set aside the C$20 million from its Northern Plan Fund to contribute to a study to determine the optimum rail option for iron ore miners in the Labrador Trough region to reach ports to service international markets competitively. What the Quebec government have done is very smart with the allocation of funding to help build infrastructure and encourage studies to improve the delivery of products from the Labrador Trough. In the 1960s the Western Australian government did the same for the Pilbara region. This government spending allowed all this wealth created the iron-ore industry as we know it. Otherwise, it will still be in the ground. The booming iron ore industry in Western Australia is all in part due to the foresight of previous government spending and policies. Like all commodities, ports are an essential part of the equation. Currently, as I am lead to believe the ports handle Cape-Size and Chinamax vessels. These port all the mineral wealth to be realised by allowing labrador miners a great passage to markets. 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

Originally posted on Smart Money Gains Bullish price action in spot gold and high-grade copper has resulted in an increased appetite for junior exploration issuers from both institutional and retail investors alike. Improving underlying market conditions, coupled with the seasonal nature of junior exploration stocks presents a lucrative entry point for those in search of exposure to alpha returns. Over the last century, gold has materially outperformed the general market by a ratio of five-to-one. Gold is up 350% over the past 72 quarters, while the S&P 500 realized gains of only 70% in the same timeframe… The Smart Money Gains commodity desk has initiated coverage on well-financed precious metals explorer; strategically located in British Columbia’s prolific Golden Triangle region. This company is equipped with a seasoned management team, armed with a track record of success. This Explorer seems poised to capitalize on the looming bull market in precious metals while it expands upon last year’s considerable discoveries… The End Of The Equity Bull Market Is Nearing… Various recession indictors are suggesting a major market correction appears imminent. During this critical time it’s crucial for investors to diversify and de-risk their portfolios by positioning at least 10% of their assets in precious metals. Nearly ten years into one of the longest bull markets in history, with the majority of asset classes appearing dangerously overvalued it is imperative that as many investors begin increasing their precious metals exposure as a hedge against future market risk. The New York Federal Reserve recession probability indicator spiked to 10-year highs on February 7, 2019. Gold has outperformed the S&P in the 12 months post warning 6 out of 8 times this has happened historically. There are a variety of ways to invest in gold including bullion, miners and ETF’s but the method that offers the greatest possible returns is investing in gold exploration companies that show great potential for major discoveries. The World’s Premier Exploration District The Golden Triangle has long been one of the most prominent mineral exploration districts in the world. Spurred by improving market conditions and material discoveries, exploration activity in the area has been sharply increasing in recent years. Over the past few years, the Golden Triangle has experienced numerous world-class discoveries. Every indication is that this trend will continue through the 2019 field season, as companies continue to deploy exploration capital into the ground. March Is When Gold Exploration Stocks Catch A Bid The share prices of explorers situated in the Golden Triangle are inherently cyclical due to the extreme weather conditions during the winter months in the region. Typically, stocks perk up a few months before drilling commences and perform very strongly during the drill season. Usually the middle of March, shortly after the conclusion of the Prospector Developers Association of Canada (PDAC) Conference is when these stocks start to heat up. PDAC is the largest mining convention and exhibition show in the world and should create a buzz, and with these catalysts in place the right exploration picks have proven to be extremely profitable for investors. This Golden Triangle Explorer Is Poised For Big Gains In 2019… One company who will be looking to leverage their success from last year is Golden Ridge Resources. With continued bullish price action in underlying commodity prices, Golden Ridge is again mobilizing on their 100% owned Hank Project. Golden Ridge Resources TSXV: GLDN FWB: 44G Market Cap: $9,107,000 Shares outstanding: 79,191,834 Treasury: ~C$1,700,000 Chaired by prolific mine finder Larry Nagy, co-credited with the nearby discoveries of the Snip and Eskay Creek mines, and led by young up-and-comer Michael Blady, Golden Ridge has built a team with a history of success in the Golden Triangle and abroad. Golden Ridge deployed over C$4,000,000 exploring their Hank property since 2015, completing nearly 11,000m of diamond drilling in the process. Golden Ridge also completed several comprehensive geophysical and geochemical surveys on the accompanying ground. In 2018, Golden Ridge was credited with one of the years major discoveries in the Golden Triangle on their 100% owned Hank project. The Hank Project 2018 Discovery The Company discovered the makings of a sizable Cu-Au-Ag porphyry headlined by a discovery hole of 327-meters grading 0.31% copper, 0.35 g/t gold and 1.94 g/t silver in drill hole HNK-18-001. Golden Ridge followed it up with an even more impressive 319-meters of 0.34% copper, 0.42 g/t gold and 2.20g/t silver in hole HNK-18-013. This discovery was particularly exciting as it was an original discovery by the company dating back to a geochemical survey completed over the zone during the 2015 field season. 2019 Exploration Campaign All the assay results and geological data from the 2018 drill program will be paramount as the company looks to expand on their 2018 Williams and Boiling Zone (HNK-18-010: 20.00m of 11.63g/t Au and 13.8g/t Ag) discoveries. With geological similarities to Imperial Metal’s Red Chris deposit and GT Gold’s Saddle North discovery Golden Ridge is looking to advance the project to the next stage. The Companies geologists believe the broad intervals of intense potassic alteration with strong bornite and chalcopyrite mineralization indicate the presence of a large alkalic Cu-Au-Ag porphyry at depth. IP chargeability data collected in 2018 indicate that only the fringes of the porphyry have been drilled with the system wide open to the North and East. 4 Reasons this stock is primed for growth Experienced management team with a documented history of success in the Golden Triangle; Two major discoveries made in 2018; positive drill results this summer will again cause a material surge in GLDN’s share price; Catalysts in place for continued price appreciation of gold in 2019; and, The cyclical nature of the Golden Triangle stocks offers a great opportunity for investors that acquire a position early in the cycle. Bottom Line Last year GLDN went from a $0.10 to $0.55 on over 200M shares traded during the exploration season. The stock has retreated in recent months following typical seasonal cyclicity trends of Golden Triangle explorers trading at $0.12. This price range offers an excellent entry point into the stock to take advantage of another exciting summer season of exploration in the Golden Triangle. 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

In the pursuit of Happiness in the mineral resource industry, the mecca of strategies is to secure yourself a “Province or Belt”. I like the word Province as it feels like you have got more :-).  For Echo Resources Limited (ASX: EAR), it was the realisation that the Yandal Belt is a province of great wealth that till now has not been fully realised. The Yandal province has brought much wealth to the gold industry and has been a known gold producing region. The famous prospector Mark Creasy cut his teeth here and made his first fortune (a 150M fortune) kicking rocks here. Starting Point Echo Resource listed on the ASX (Australian Stock Exchange) in 2006. It was a robust listing with AUD$6M which in those days was a right amount of money. They had one project in Western Australia and several in Queensland. A simple strategy of wanting to chase a gold, copper and nickel project. They are pretty high standards, • Gold: > 3M ounces @ >3 g/t Au • Copper-Gold: > 440M pound copper @ >1.5% Cu equivalent • Nickel: > 90M pound nickel @ >5% Ni This story is not a greenstone discovery story but one that is impressive not for their expectations but in the fact that at that time, they were able to secure such a sizeable acreage in such a prospective province. According to their information, they had Indicated resource in the ground, • 196,000 ounces of gold (75% Indicated) • 97,000,000 pounds of copper (75% Indicated) • 924,000 ounces of silver (95% Indicated) History Life for the directors of Echo Resources has been volatile. Starting with the combination of Queensland “base-metal” projects and a West Australian gold project was always going to be challenging to juggle. I have always looked at such portfolios as one that is for the BHPs of the world. Small minnows should stick to projects that make sense logistically. There is nothing wrong with being multi-commodity, but the projects should be geographically close to each other. I think when I see portfolios like that, I know that 3/4 are a space filler. If you show me that you have a cash balance of 20M, then I will change my views. As expected, in December 2014, Echo Resources announced that they would be divesting their Queensland projects. When I look at those projects, the first that came to my mind was that is just too difficult. A swag of environmental issues will probably be arising or some land access issues. I will say that I did not investigate as that is no longer an asset of the company. What is exciting and humorous is that in 2015, the company received a 249D requesting Board make changes. That indicates to me that life on the Board was “interesting” The Board would have been affected with significant shareholders meddling, and in most cases, they would have hampered real work. Shadow director things are the worst for people who want to get things to happen. In September 2016, the company announced the friendly merger /takeover of Metaliko Resources Limited. In December 2016, the merger created the present package of tenements. A 1600 square kilometre coverage of the Yandal Province. Corporate Information Market Capitalisation: 127M (03/2019) Outstanding Shares: 551M (03/2019) Top Twenty Shareholding: 60% (03/2019) Why is the Yandal Province Attractive? I am familiar with the Yandal province due to my time working at Bronzewing and working with a group with some holdings in this area. It is a great place to explore, and there are more questions than answers. I worked in the area in the 1990s. Firstly as a field assistant and then being “promoted” to a graduate geologist in 1992. It was my first job out of University with Great Central Mines (No longer exist) on the Bronzewing project. When I arrived,  it coincided with the time when they got the discovery result from the first pass RAB drilling that brought a mass of activities that led to the discovery of the Bronzewing gold mine. As usual, unbeknown to me, that period of my employment turned out to be one of two discovery teams I was to get involved with in my geological career. The other was the Merlin Diamond Field. Again unbeknown to me, I had drilled through the pipe and did not understand it. What I did realise was that it was different from the other holes I had supervised at that time. Every time I went on break, there would be one more drill rig, and more people were coming into the camp. When I arrived in August 1992, there was one RC rig at Mt Joel and one RAB drilling at Bronzewing. When I left in January 1993, there was four diamond rigs, four RC rigs and one RAB (mine). The rest is history. So What’s the Fuss? The reason I mentioned my working experience is to point out the fact that the last real exploration activity for the Yandal Province.  There has not been little exploration since that mid-1990s period. Therefore, the chances of finding something similar to Jundee, Mt McClure, Bronzewing sitting there with millions of ounces of resources, are pretty good. In my opinion, what Echo Resources may have is something like what Gold Road has with their Yamana Province. The last time I saw something like this was when Mt. Holland Gold Field ( Now better known as the Early Grey Lithium Deposit) was up for grabs. That Forrestania Gold Field was well drilled and mined in the 1980s and 1990s. A nice tenement package like this has never been present. The Package When I came across Echo Resources, I was taken aback with the package of tenements. The whole package is 1600 square metres and in the Yandal Belt? That is impressive. Hence I started to have a look at how this came about for Echo Resources. To top it all off, I see that Northern Star is a significant shareholder as well. The merged package as shown below looks impressive.  Whatever Echo discover here is going to have a big brother waiting to do all of the above.  Name the option, and they will want it. Why would they not want it? Jundee is just up the road.  Remember that Jundee is an outstanding deposit. It was one of the best discoveries at that time and probably still is in today’s standards. The Resource The resources look robust, and I am assuming that all the financing talk and the introduction of mining personnel into the Board and senior management tells me that they are gearing up for mining.  In saying that, I will assume that the numbers are stacking up.  In my time looking at these projects (not claiming I am an expert, just saying that I am :-), like every punter),  I do think about the grade and the resource.  The grade of 2.1g at Julius with 96K ounces kind of reminds me of the lower grade that Gascoyne Resources had on their deposit.  They mined that, and I think things are not going well. I am not saying that this is a similar deposit, but I find that there are a lot of smaller companies trying to be producers with not enough resource.  When things are not going well, their margins get squeezed, and the house of cards begins to fall. Silverlake Resources Limited (ASX:  SLR) did it well with limited resources, so I am aware that it is not always about the size of your resources.  Their early downfall was mainly due to their mill and not the mine.  When they got that to happen, it was all smooth sailing.  The inside factor on that was Les Davis, and Chris Banisik were playing with the same style of deposits during their time at Western Mining in Kambalda.  So they knew what they were doing.  What happened, in the end, is another story but the company did well when they were mining Daisy Milano. The upside for the resource is that you have the higher grade stuff coming from Orelia.  The higher grade at the bottom of the pit looks great but renovating a house sometimes is not the best idea.  They are saying that they will mine the bottom of the pit and they don’t have to spend a lot of money to cut back.  I have seen many a great idea like that come undone spectacularly. Conclusion When I first looked at Echo Resources, my impression was this is an exciting story.  It seems to have the ducks in line and their future appear bright.  I say bright because I like the potential of the area.  There are some potential ugly duckings in the package but which package does not.  I love the fact that Northern Star Resource s (ASX: NST) is a significant shareholder (?) and they have put their money into the business. There is no need for me to comment on the geology nor the deposit potential.  The fact that these guys have put money in and the management content tells me that a decent amount of due diligence has happened.  The result of that process of due diligence would have been positive. I do remember when I was doing some mapping with a senior guy, we saw a heap of quartz veins, and they sampled well. But when we sent a rig to test them, we came up with nothing.  The system there is very mineralised.  Maybe some of the recent discoveries were the result of those previous works. Having a significant shareholder with a mill close by is a substantial part of this puzzle.  Northern Star will also be the big brother watching the play, and if they need more ounces for their inventory, it is a done deal.  Good or bad, it can be hard to say sometimes, but I think in this case, it is probably closer to the right than sorry here.  Well, it’s too late to have that debate 🙂 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

Coffee with Samso Episode 13 with Ed Mead, Artemis Resources Limited (ASX:ARV) This episode of Coffee with Samso is all about the “Paterson Goldfields”. A wealth of potential gold and copper deposits could be found in what I feel is a very underexplored province. This mineral belt is about to open up. Ed Mead gives us an update on the latest Share Purchase Plan (SPP) and speaks about the potential of the other projects they have in their portfolio. We discussed the new seismic information made available by Geoscience Australia and the Geological Department of Western Australia. We speak about the positive change in investor sentiment flowing into the exploration industry. PODCAST 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

Ausmex Mining Group or Ausmex (ASX: AMG) has had a lot of attention lately with announcements that they are possibly sitting on top of an IOCG (Iron Ore Copper Gold) source. Recent drilling results have been very encouraging, and they are in elephant country in terms of talking about IOCGs.  When I think of IOCG, I think of Olympic Dam, and if what Ausmex have is anything like that, this is going to be a fantastic story for shareholders.  I am a shareholder of the company and have been for almost two years. A long-suffering shareholder until the recent rise in share price. History I became a shareholder of Ausmex nearly two years ago when they listed on the ASX (Australian Stock Exchange) in May 2017.  It was a rebadging of a company called Eumeralla Resources Limited at a price of AUD$0.08.  It has been a long ride, and the share price has gone as far down as AUD$0.032. The original concept was to explore and add value to the Mt Freda group of tenements.  They have some stockpile of ore that they were going to commercialise, but I was intrigued by the package of projects and the historical drilling results. One of the things I have learned about the Cloncurry area is that it is a very mineralised corridor, but it is not very big in terms of strike length (length of the region).  There have been some big mines and the potential of developing a project to get some of the cream will be good. Corporate Information Market Capitalisation: 63.8M (04/2019) Outstanding Shares:   Approx. 470.7 (04/2019) -including 58.3M placed on 2 April 2019 (Not including 89.25M unlisted options) Top 20 Shareholding:   Approx. 70.4% (2019) – Before placement What is an IOCG? (Source: Geoscience Australia ) Iron oxide copper-gold (IOCG) deposits are a diverse family of mineral deposits characterised by the following features: (1) Cu with or without Au, as economic metals, (2) hydrothermal ore styles and strong structural controls, (3) abundant magnetite and/or hematite, (4) Fe oxides with Fe/Ti greater than those in most igneous rocks, and (5) no clear spatial associations with igneous intrusions as, for example, displayed by porphyry and skarn ore deposits. Uranium-rich IOCG deposits in which U is an economic metal are an important yet uncommon subset of the IOCG family. Currently, the Olympic Dam deposit is the only IOCG deposit in which U is extracted as a significant economic commodity. This deposit is the world’s largest single resource of U (BHP Billiton, 2010 Annual Report, www.bhpb.com ). In a global context, most of the other IOCG deposits containing higher grades of U are found in the Gawler Craton and Curnamona Province of southern Australia. Based on current knowledge of IOCG deposits globally, it would appear that the IOCG deposits with the highest grades of REE are also confined to southern Australia. Distinctive features (Source: Geoscience Australia ) High to extreme paleogeothermal gradients is the critical driver.  What that means to the average person is that it was damn hot at the time of mineralisation.  To achieve this extreme gradient, it has to be of a crustal-scale hydrothermal system to accomplish the massive scale of alteration systems and the masses of hydrothermal precipitates (mineralisation) in individual IOCG deposits.  When we geologists talk about crustal scale, what we mean is that it is a big system.  It’s like comparing the Grand Canyon to the trench you would dig in your backyard for your garden reticulation pipes. There is the presence of two distinct fluids during deposit formation: (1) a highly oxidised fluid (e.g., meteoric/ground waters), and (2) deep-sourced high-temperature brines (magmatic-hydrothermal fluids and/or fluids reacted with metamorphic rocks). In many IOCG systems there is also evidence of volatile-rich fluids during ore formation (e.g., CO2-bearing; see review by Williams et al., 2005, and references therein). To collect so much “mineralisation”, you need to have a topographic depression such as calderas, grabens, maar complexes…etc).  They are conducive to mixing of shallow-crustal and deep-sourced fluids. IOCG deposits are characteristically diverse in their minor element compositions and contain elevated concentrations of many critical commodities. Recently published data for the Olympic Dam deposit have revealed the presence of an extensive range of minerals and corresponding geochemical variation. More than 90 minerals have been identified, and in addition to Cu, U, Au and light REEs the deposit is enriched to strongly enriched in As, Ba, Bi, C, Cd, Co, Cr, F, Fe, In, Mo, Nb, Ni, P, Pb, S, Sb, Se, Sn, Sr, Te, V, W, Y, and Zn (Ehrig et al., 2013). It is interesting to note that almost all of these elements are included in the current study of critical commodities. Australian IOCG Provinces There are two major IOCG provinces in Australia of global significance: the Olympic IOCG Province along the eastern margin of the Gawler Craton in South Australia, and the Cloncurry district in the eastern Mount Isa Inlier of northwest Queensland. In addition, there are several other metallogenic provinces that contain or may contain medium-sized or small IOCG deposits, including the Tennant Creek district (Northern Territory), Curnamona Province (South Australia and New South Wales), and the Aileron province, Northern Territory (Schofield, 2012). Mt Freda Story (Source: Ausmex Mining Group ) The project area is approximately 38km from the township of Cloncurry. The famous Ernest Henry Mine which is an iron oxide copper-gold deposit lies in the same area (35km NE of Cloncurry). As of 2017, the mine had the following resources, Measured, Indicated and Inferred Resources for the Ernest Henry Mine (source: Evolution Mining ) 95.30Mt @ 0.63g/t Au for 1.92Moz 28.59Mt @ 1.17% copper for 334kt Ore Reserves for the Ernest Henry Mine 51.40Mt @ 0.55 g/t gold for 902koz 15.42Mt @ 1.07% copper for 165k The main component of the whole story is that you have this massive IOCG target that is being worked by Newcrest Mining Limited  (ASX: NCM) within a stone’s throw from the tenement boundary.  I have been a fan of the whole Olympic Dam story, and hence I am excited to be associated with a story such as this in Ausmex. SAM could make all the Difference. Why do I keep bring up Olympic Dam?  When you read about the extent they went about chasing the concept, you realise that it could have been a non-event.  Looking at the image below, the SAM ( Sub Audio Magnetic ) conductor could be more than impressive. Remember my article about Carlow Castle , the only geophysical method that picked up the mineralisation was SAMS.  In the world of exploration, no one way works 100% of the time, and it is this kind of logical optimism that drives discovery.  If SAM is picking up something real, then this could be the game changer that will work in this instance. The great thing about an IOCG target is that it is big and as mother nature intended, completely random where it put or shares its mother lode.  Looking at the location of that blue speck for the next phase of drilling, one has got to be quietly excited.  As in Olympic Dam, it was not the area of the high that drove the discovery.  It was the periphery of the high, and even the participants admitted that it was a stroke of random genius that decided on that area. The conductive structure that has been defined is an easy target, and if the drilling comes up with good results, this will be a sitting target to drill out.  Imagine what Newcrest would think if a minnow like Ausmex makes such a discovery.  Imagine what the Ausmex share price would do with discovery. Why Do I believe? I do get some of my “confidence” from the fact that you are not dealing with hundreds of meters of cover and being in the middle of the desert.  The intercept at Little Duke when they got 59m @1.25g/t Au, and 0.43% of Cu is very significant in my books.  The first two significant drill holes at  Olympic Dam was, RD1 which came back with 38m @1.05% Cu and RD5 with 92m @ 1.01% copper.  Although the copper values are more significant, one has to be encouraged with the length of 59m from a depth of 73m.  In my book (and it’s not a very detailed book), I think if management can zero in on the source, I am going to be holding onto my shares. There is a diagram (see below) that was released in an announcement that gives a cross-section view of the whole concept.  I am a big believer of a schematic diagram as it simplifies the technical into a cartoon view.  This view was something that sold me on the story, and the funny part is that I think the story got better over time.  As I have said, it has taken a long time, and I hope this comes good. You can interpret the diagram below in any level of technical confidence, but we all know that a missed drill hole could mean a lot, but a persistent team will most likely make up for that missed hole.  Just like the story of Sirus Resources Limited using the last remaining budget to drill holes which led to the discovery of the Nova-Bollinger nickel sulphide mine. The flip side of a schematic diagram is that it is a cartoon and one has to become aware that it does not become a real cartoon.  Schematic diagrams are made to simplify a complicated view 🙂 What does this all mean? The big prize is the potential of tapping an IOCG source, and the reward can be astronomical.  The issue with chasing IOCG style mineralisation and chasing this big pie in the sky is that you will (not potentially) be spending a lot of money.  Western Mining Corporation which is now part of BHP started searching for a copper deposit in 1953 and only found Olympic Dam in 1976.  They spent in today’s terms around AUD$45m to discover that copper mine.  Fortunately for WMC, they not only found a copper mine, but they also found the mother of all mines in copper and uranium and to a lesser amount, gold.  I think they commercialise a few other commodities. It is good to see that Ausmex raised the AUD$7M as they will need that to keep the momentum going.  There is no doubt that there is a lot of noise around and management will have to be very scientific on where to drill. I don’t think there are too many people out in the geoscientific world today that will doubt the way WMC went about exploring.  When you read the book “The Olympic Dam Story” by David Upton, you will see the long and meticulous way the people went about looking for “Olympic Dam”. It took them years of postulating and finally ten holes to get the discovery.  Only 3 of those holes were not barren.  It was almost a 3-year journey, and it took another 13 years to get to production (mostly due to the anti-uranium program).  RD1 was a start, and RD5 was a teaser and RD10 was the discovery.  The time from RD1 and RD10 was over 12 months. Hence, the point is that it is going to take even more patience and even more efficiency on the part of Ausmex management to create even more value for shareholders ( ME…  🙂 ) Conclusion To close on this article, the storyline that the management of Ausmex is telling people is the potential of a significant find. As a shareholder, I hope they are correct, and they spend the AUD$7M wisely and manage their salaries like how a chinaman would (if they want advice on how to do that, they know where to contact me) do if they were running the company. I don’t doubt the storyline, but as many “investors” will attest, there have been many great stories that have become lemons.  In my experience, I always say that the proof of concept is the numerous smoke that is in the area and that Newcrest is spending money on the same idea.  It is not a lone ranger concept, and that gives me some confidence. The conductive structure is the other piece of confidence.  Technology such as SAM was not around in the 1970s, so the comparison I have made with the discovery of Olympic Dam may not be so pertinent.  However, as a shareholder, I bloody hope it is the holy grail….. At the end of the day, Olympic Dam is a big deposit. It had 10B tonnes of ore.  Something close to that would be punching above Ausmex weight and all shareholders will be happy. NOTE:  I am a shareholder of Ausmex, and I do want to highlight that this Insight is not meant to give advice and not to influence anyone to buy or sell the shares of the company.  This is my research and my thoughts on the activities of the company.  I have not been paid by the company to write this Insight. 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