Coffee with Samso Episode 27 with James Marsh, Andromeda Metals Limited (ASX: ADN) In my opinion, Andromeda Metals Limited (ASX: ADN) is one of those companies that have a story so simple the market cant understand.  I spoke to James Marsh a few months ago after I published my article on their “clay” business – A simple business in mining Clay – Andromeda Metals Limited (ASX: ADN).  In that conversation, I got my first insight into what could be driving the surge in the share price.  I was not sure why a “clay” business could harvest all the market interest.  I have known about the clay story for a while as there are a lot of known kaolin resources in Western Australia.  These resources have never been successful due to logistics.  James and I spoke for a while and we agreed to try and catch up for a Coffee with Samso one day. Well, that day has happened in the beautiful city of Adelaide.  The conversation was very engaging and we had the longest ever Coffee with Samso.  This is a testament to how effective it is to get a story out with the Coffee with Samso format.  This is one of the most interesting conversations as I learnt a lot from James and the Kaolinite industry and how Halloysite is positioned in this market. What I can say is that Andromeda Metals has some very natural barriers to entry for new players.  The company is very lucky to have someone who knows the end product market and at the same time have had over 30 years of experience with Halloysite.  I don’t think these parameters are easily replicated… 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

Coffee with Samso Episode 26 with Scott Williamson, Blackstone Minerals Limited (ASX:BSX) Blackstone Minerals Limited (ASX: BSX) have been working hard on the Ta Khoa Nickel project since Scott Williamson had the last Coffee with Samso.  I have always liked nickel and I still think that the good times are not here yet.  What Scott and his team are trying to define is a Nickel Sulphide deposit that will be payable to mine.  As in the property investment strategies, location is the most important component which will determine the ingredients within the rock types.  I do feel that Blackstone Minerals are in the right address and the recent drilling proves that they are taping some good mantle materials. Form a geological point of view, these are critical components.  I do agree that there may be some sovereign issues but from what I am hearing, these are not creating any barriers.  As in these developing countries in Asia, economic development is of the utmost importance.  I have many business associates who tell me that Vietnam is no longer a sleepy place. Things are booming and the labour costs are no longer as they were in the past.  I am not saying that they are Western standards but they are definitely signs of economic growth. I have always enjoyed my conversation with Scott and this is another great conversation as we learn of the discovery of Platinum, Palladium and Gold discovery in their recent exploration.  Mobilisation of multiple rigs to the site is a great sign that money is going into the ground. It is a great update on Blackstone Minerals and their journey to develop the Ta Khoa Nickel Project. 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

Gold mining in the Pilbara has been hit and miss for the previous decades.  If you look into the history of gold in the Pilbara, there is no doubt there have been many “gold mining” events.  However, I would never describe gold mining in the Pilbara as a provincial size.  I would call it spotty and sporadic over the many decades.  The focus back onto the Pilbara as a source for gold mining is only recent.  The re-focus is due primarily to the last gold conglomerate rush that was created initially by Artemis Resources Limited (ASX: ARV) and Novo Resources Corporation (TSX: NVO).  That gold rush has since disappeared, but the remnant debris is the appearance of some exciting gold stories.  These are not new stories but more rejuvenation of some old projects that may now become interesting due to the rising gold price. In amongst the myriad of stories, some have interesting aspects.  The Pilbara is a callous place for juniors with a tradition of shallow pockets and long arms, but it does bring some signs of possibilities to the process.  The only real producer was the Paulsens’s gold mine, and that is now a shadow of what it was.  In 2001, AGSO (Geoscience of Australia) quoted the following, “Bamboo Creek deposit (7.05 t Au total production; Williams,1998), the Golden Spec deposit (2.06 t Au to 1987) and the Lynas Find district (3.8 t). More importantly, however, significant Au resources have been defined at the Golden Eagle deposit (6.67Mt @ 1.96 g/t Au for 10.1 t Au), the Klondyke deposit (9.95 Mt @ 1.0 g/t Au for 10.0 t Au) and the Indee area (4.96 Mt @ 2.08 g/t Au for 10.3 t Au).” In some past conversations, I was told that the Paulson mine never really made money. It was marginal at best and creative accounting made it better than it was in reality.  I don’t know how much that was the truth and how much was a creative conversation… 🙂 Let’s have a look at some of the participants that I think is worth discussing. Kairos Minerals Limited (ASX: KAI) (source: www.kairosminerals.com.au) In the Pilbara, Kairos’ flagship asset is the advanced Mt York deposit which is located ~100km south-east of Port Hedland. Together with the nearby Iron Stirrup and Old Faithful deposits, this forms the cornerstone of the Company’s Pilbara Gold Project.  These deposits, some of which were mined historically in 1994-1998 by Lynas Gold NL, are located directly adjacent to the world-class Pilgangoora lithium mining complex (Pilbara Minerals and Altura Mining). On 23 May 2018, Kairos announced an updated Resource for these centrally located deposits, including Mt York, Iron Stirrup and Old Faithful.  The global Mineral Resource estimate at the Pilbara Gold Project is now 14 million tonnes at 1.3g/t gold for 643,000 ounces of contained gold. I was at one of the presentations and I was pretty impressed with the story.  Kairos suffers from the stigma of being one of the “conglomerate companies” which is common for all the players during that period of time.  In fact, almost every company in the Pilbara chasing gold suffers from that even if you were not involved.  Terry Topping, the Managing Director strikes me as a true exploration geologist and I was impressed with the presentation.  I took notice of the story so that makes him a great presenter and I like the way he thinks. Although Mt York is the main attraction, they have another project called Croyden that I liked. Croyden is an exploration stage play and will be far from the word “production” but it has a story worthy of some DYOR. The story is that there are a series of nuggets that are found along a ridge that seems to be NOT “Conglomerate” related.  In the valley, there are “watermelon seed” shaped nuggets found but these nuggets are definitely of different genesis.  There is a major regional structure that is striking NE-SW which could be a source of “primary” mineralisation, well at least a source of cooking ingredients.  In generality, I agree with Terry’s comments that this is most likely to be a sedimentary primary gold story.  It’s not a conglomerate story. Calidus Resources Limited (ASX: CAI) (source: www.calidus.com.au) The Warrawoona Gold Project is in the East Pilbara district of the Pilbara Goldfield of Western Australia, approximately 150km south-east of Port Hedland and about 25km south-east of the town of Marble Bar. Historically fragmented ownership has held back the development of the area. Calidus now controls the entire Warrawoona Greenstone Belt with a total of 780km² under its control. Since listing in mid-2017 with a resource of 411kozs, the Company has undertaken a systematic modern approach to exploration and tripled the resource base to its current 1.25 million ounces. Calidus completed a Pre-Feasibility Study (PFS) in early July 2019 confirming the Warrawoona Gold Project will be a robust operation with strong financial returns. The compelling technical and economic outcomes of the PFS have led the Board to immediately approve the commencement of a Definitive Feasibility Study (DFS), which we are aiming to complete by Q3-CY2020 to allow an investment decision to be made in late CY2020. The DFS will incorporate results from an extensive resource drilling programme (infill and extensional) to expand the current resource base and increase its confidence. I know very little about this deposit but from what I have read, this is a story that is developing slowly.  The research does show that the basaltic and ultramafic rocks of the Warrawoona Group are one of the most important hosts to gold mineralisation in the Pilbara. Looking at the latest presentation where the Feasibility cost of AUD1,159oz appears to make this operation very interesting.  With what is happening in the world events, and the inflationary nature of paper money, there is not much chance of the gold price going too far south of the current level of AUD2,200 oz. What I like about the nature of this project is the length of the strike.  Interestingly, all the four companies that I have chosen have these great strike length of mineralisation.  I don’t see many of these kinds of projects in other areas.  What is good in the Pilbara is the lack of cover. For example, the Klondyke project is mineralised from the surface. Artemis Resources Limited (ASX: ARV) Carlow Castle is located 28 km north-east of Artemis’ Radio Hill processing plant, via gazetted roads, and approximately 45 km by road east of the city of Karratha. Access is via the Northwest Coastal Highway and then by the unsealed Cheratta road which passes through the Project area. The gold-cobalt-copper mineralisation at Quod Est and Carlow Castle South is hosted in chloritic shear zones within the predominantly Archean mafic sequence. The ore zones appear partially oxidised above 20m with sulphides extending to depth. The primary sulphides are chalcopyrite, cobaltite and pyrite. The presence of chalcocite in some samples indicates supergene enrichment in the upper portions of the sulphide zone. The structural environment of the area is complex; Quod Est strikes north-south and dips steeply to the east whereas Carlow South strikes east-west and dips steeply to the north. Artemis has redrilled the deposit with a total of 24,721.6 m drilled on regular grids during 2017 and 2018. I have always said that gold is where you find it.  How it got there can be worked out when you have the time and money to have that luxury.  I am not sure why but Carlow Castle has me intrigued as there are no gold deposits that have copper and cobalt associated, especially in this part of the Pilbara. I was introduced to Carlow as a cobalt project and later learned that it is maybe more a gold deposit.  As a cobalt project, I think it is the only one that is of significance in Australia.  How this deposit differs to the other companies in this comparison is the lack of drilling to test the strike length.  Like all the other projects we have mentioned, there is a strike of 30km that Carlow Castle sits on.  Only 1.2 km of that strike has been drilled. Carlow has a current resource of 7.7 million tonnes (Mt) at 1.06 g/t Au, 0.51 %Cu, and 0.08% Co.  I think that the significance of the CU-Co-Au mix makes this deposit interesting.  As most readers of my Insights will know, I am a big fan of the “base-metals” suite.  Carlow castle sits in a known nickel province, and a well-known prospector has an adjacent tenement that is prospective for PGE.  Hence, the base-metal part is not significant, but to me, the gold piece is a bit out of the ordinary.  There are numerous reports of nuggets discovered and small miners in the area, but there have been no significant discoveries recorded. One of the key issues with this deposit is the separation of the gold and the copper.  Artemis has completed a preliminary metallurgical test work and has shown that this could be done efficiently.  A large portion of the gold component ranging up to 48% is recoverable using gravity separation.  The non-gravity gold is recoverable in sulphide concentrates as a by-product using standard floatation. DeGrey Mining Limited (ASX: DEG) (source: De Grey Mining Limited) De Grey’s Pilbara Gold Project is approximately 60km south of Port Hedland in the Pilbara Region of Western Australia. The Company’s current exploration program is focused on the upgrade and expansion of known resources, as well as in the discovery of new deposits. Overall, the Pilbara Gold Project has excellent potential to define significant additional resource ounces along the 200 km plus strike length of mineralised shears zones, throughout the greater than 1,500 km² landholdings. To date, approximately 10% of the shear zones have received detailed shallow RC and diamond drilling to a nominal depth of 100-150m defining ~ 1.7Moz (JORC 2012*) of gold resources (ASX Announcement 16 July 2019). De Grey considers the extensive strike length of untested and gold anomalous shear zones together with the discovery of gold nuggets associated with previously unrecognised conglomerate targets as one of the most under-explored and prospective regions of Australia. The Project is well served by infrastructure since it is close to the regional centre of Port Hedland, a gas pipeline, two railways and is traversed by the Great Northern Highway. Conclusion I chose these four companies to have a discussion because I think they all seem to have similar projects and of a similar style.  They are all juniors and have a project with a decent amount of resource ounces.  There are a lot of similarities to each other.  I left Northern Star (ASX: NST) out of the list as they are a different beast.  What they have in the Pilbara appear to be refractory and only they can make it work.  If any of the four companies have the refractory factor you can take them off the list. I wrote about DeGrey Mining in April 2019 entitled, Finally a Real Gold Project in the Pilbara?- De Grey Mining Limited (ASX: DEG), and I mentioned that this was a good project with A-Grade shareholders.  I still think that this is the case but I sense that the company is struggling to make this happen.  I have not looked at the logistics of the company recently but with the resources and the potential of the area, I am very disappointed to see the result.  There is talk about Board turbulences but I think this one may be heading for hard times.  This could be one of those instances when another owner or two is required to make the “7th company” theory true. As I mentioned, I know the least about Calidus Resources but they seem to me to have the best looking numbers.  Their PFS seems to be pointing to all the right numbers and only time will tell if this is going to happen. Grades look good so they should avoid the Millennium Minerals Limited (ASX: MOY) tragedy (should never have happened). The dark horse could be Kairos Minerals.  Their Mt York deposits have the numbers but I think this may not work.  I don’t mean that the deposit is not good, I feel they need a lot of money to make that work. Piecemeal fundraising in this part of the world is not going to go very far.  As opposed to my previous discussion (Coffee with Samso – Episode 026 – Blackstone Minerals Limited (ASX: BSX) Developing the Ta Khoa Nickel Project in Vietnam.) with Blackstone Minerals Limited (ASX: BSX), their dollar does go very far in Vietnam. The project I like is the Croydon Project even though it is an early-stage exploration project.  I like it because they could actually bring something new to the table.  Unfortunately, that will take time and most importantly, money.   The potential of this project is what I am excited about.  The fact that there is so much free gold being found in samples makes this unique.  Nuggets that clearly appear to be from two different sources cannot be ignored.  The nuggets can be clearly observed to be fundamentally different in form and structure is going to be the hardest thing to understand.  If Terry and his team work this puzzle out, they could actually find their form of Lassiter’s Reef. In my humble opinion, I think the strategy for Kairos Minerals is to try and get the production story happening for Mt. York and then go seek investors in Non-China Asia.  There are a lot of punters who want this kind of story.  My last roadshow there showed me that there are still many people who are waiting to invest in this sector.  When they get this funding and get Mt. York to work, they will have the funding to explore Croydon properly. Carlow Castle is my favourite. I like it because it is a deposit that is different (Best undiscovered project: Carlow Castle an unconventional Gold-Cobalt-Copper mineral Project). A recent article in Economic Geology mentioned that this deposit is older and different from the others in the region.  I agree with them as I have mentioned earlier due to the chemistry.  Artemis has a very simple process, drill and drill and drill. They will absolutely get more resource and they have a highway as a mineralised strike.  When they have over the million-ounce stage, they have the Radio Hill Plant ready to go to work. Carlow Castle and Radio Hill plant will be a joint strategy for the company as things move on.  Like many things in life, there is a Ying and Yang, and for Artemis, it is money.  They need money to drill and then it is a no brainer to production.  Unlike Artemis, the other three companies are not 28km from Karattha and have all the simple pleasures of logistics, utilities and low cost of manpower.  This is why Carlow Castle is my favourite of the three.  The project is well lined up. All they need is to upgrade the resource so that the PFS and the DFS will bring in the production investments. Artemis Resources has taken a wild ride of late.  The recent capital raise to pay off the debt was a great success and Ed Mead must take a lot of that credit.  Speaking to Ed over the years, he is a creative guy and I am sure the forthcoming challenges of raising more money to develop Carlow Castle will be achieved.  This will be the next hurdle for the company. Hence, apart from De Grey, there are going to be hard choices to make on which horse to bet.  Personally, I like Carlow Castle as I feel Artemis is undervalued for what they have. My second choice would be Kairos Minerals as discovery at Croydon and restructuring of strategy on Mt. York will definitely bring re-valuation of their share price. In third place is Calidus as they are prone to a revaluation when they get mining. Currently, they are in a hibernation mode as the market figures them out. NOTE: Samso is not a shareholder of any of the companies mentioned.  Samso is also not commissioned 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

I have always thought that the Heap Leach process was for deposits that were substandard and for those that cannot raise good capital for a  “decent” mining process.  It was a recent discussion with an associate about the treatment of transitional and oxide ores in a low-CAPEX manner that I decided to do some homework.  The conversation was pretty non-engaging and straightforward until he mentioned theTujuh Bukit Mine in Indonesia.  He told me that the Heap Leach pad has about eight million tonnes of material on it.  That is one big pile of dirt. Although, I have always known about this process as a cheap means of extracting gold, nickel, REE and copper ores. What I did not realise was the sophistication that has been applied, learned and developed over the years.  What little I did know was that the ores are mainly low-grade and must have the specifications attuned to the process.  One of the main attributes required is the ability to be permeable, and preferably the ore is of an oxide nature. That was the moment that made me curious enough to realise that this is a serious process and not just for the likes of small-time miners.  And, of course, more reading has made me realise that this is more than a serious operation with the extensive leaching processes in the USA, Chile and Peru.  The Heap Leach process is so advanced that there are practically hundreds of article written about all aspect of the process.  The way they “pile” up the ore is also sophisticated.  The copper players in Chile, the worlds largest copper mine, the Escondida Mine has a leach pad for the sulphide ores and another for the oxide ores. The diagram below gives some context of the size of these Heap Leach pads.  I am not sure if the Escondida one is bigger than the featured image from the Tujuh Bukit Gold mine in Sumatra, Indonesia.  Suffice to say these are an excellent example of the success of the Heap Leach process. To give some context of what I mean by a giant mine, the photo below is that of the Escondida Copper Mine.  Imagine the low-grade nature that is analogous with Porphyry deposits and the associated large amount of ore that is treated with a Heap Leach process.  In some literature, the Heap Leach process is also described as being more environmentally friendly than traditional mineral processing methods. History of Heap Leaching. (source: A Brief Note on the Heap Leaching Technologies for the Recovery of Valuable Metals, 2019, Thriveni Thenepalli, Ramakrishna Chilakala, Lulit Habte, Lai Quang Tuan  and Chun Sik Kim; Sustainability 2019, 11, 3347; doi:10.3390/su11123347). Heap leaching is one of the oldest and the most traditional mining process used to extract valuable metals from specific minerals. This is a hydrometallurgical process in which the solution is applied for the dissolution of minerals from the ore that is used for the extraction of metals. Originally, heap leaching was practised 500 years ago. Georgius Agricola published a book De Re Metallica in 1557 and reported that the heap leaching process was finished in a 40-day cycle. Since the middle of the 16th century, heap leaching was practised in Hungary for copper extraction.  In 1969, gold heap leaching began in Nevada (birthplace of modern heap leaching) and in the middle of the 20th century, the United States Bureau of Mines began applying this technology. Gold and silver heap leaching first began at Cortez in 1969. Currently, 37 different heap leaching operations are active worldwide for the production of gold, which is estimated to be around 198 tons per year. What is Heap Leaching? According to Wikipedia,  it is a simple process. The mined ore is usually crushed into small chunks and heaped on an impermeable plastic or clay lined leach pad where it can be irrigated with a leach solution to dissolve the valuable metals. While sprinklers are occasionally used for irrigation, more often operations use drip irrigation to minimise evaporation, provide more uniform distribution of the leach solution, and avoid damaging the exposed mineral. The solution then percolates through the heap and leaches both the target and other minerals. This process, called the “leach cycle,” generally takes from one or two months for simple oxide ores (e.g. most gold ores) to two years for nickel laterite ores. The leach solution containing the dissolved minerals is then collected, treated in a process plant to recover the target mineral and in some cases precipitate other minerals, and recycled to the heap after reagent levels are adjusted. Ultimate recovery of the target mineral can range from 30% of contained run-of-mine dump leaching sulfide copper ores to over 90% for the ores that are easiest to leach, some oxide gold ores. The significant advantage of the heap leaching method over conventional leaching and recovery techniques is that heap leaching consumes less than 0.3 ton of water for one ton of ore. What do you leach? (Source: Wikipedia) Heap leaching is an industrial mining process used to extract precious metals, copper, uranium, and other compounds from ore using a series of chemical reactions that absorb specific minerals and re-separate them after their division from other earth materials. Similar to in situ mining, heap leach mining differs in that it places ore on a liner, then adds the chemicals via drip systems to the ore, whereas in situ mining lacks these liners and pulls pregnant solution up to obtain the minerals. Heap leaching is widely used in modern large-scale mining operations as it produces the desired concentrates at a lower cost compared to conventional processing methods such as flotation, agitation, and vat leaching. Additionally, dump leaching is an essential part of most copper mining operations and determines the quality grade of the produced material along with other factors. Due to the profitability that the dump leaching has on the mining process, i.e. it can contribute substantially to the economic viability of the mining process, it is advantageous to include the results of the leaching operation in the economic overall project evaluation. This, in effect, requires that the key controllable variables, which have an impact on the recovery of the metal and the quality of solution coming from a dump leaching process. The process has ancient origins; one of the classical methods for the manufacture of copperas (iron sulfate) was to heap up iron pyrite and collect the leachate from the heap, which was then boiled with iron to produce iron(II) sulfate. Some Examples of Major Heal Leach Pads Several major projects around the world are using this method of extraction.  As mentioned, the major proponents of this process are miners of gold and copper porphyry deposits and these are in the USA, Chile, Peru and Indonesia.  These deposits are mainly lower grade and have a large tonnage.  Interestingly, the other gold mining countries such as Australia, South Africa and Canada do not seem to practice this form of processing as much.  In terms of weather, the dry arid nature of Australia would be ideal, especially the low rainfall parts of the drier parts of Australia. Tujuh Bukit Project According to the company website, the Tujuh Bukit Project consists of 2 (two) distinct mining development opportunities: firstly, the low capital cost, low operating cost and low technical risk Heap Leach Project, which entered the production  at the beginning of 2017; and secondly, the potential future development of the world-class Porphyry Project subject to the successful completion of required technical, environmental and social studies. The heap leach pad working inventory of 3 Mt at 0.72 g/t gold and 8 g/t silver containing 0.07 Moz of gold and 0.8 Moz of silver. The heap leach pad is considered to be a working inventory because the active ore placement lift has a planned 150-day leach cycle to realise 100% of the estimated total recovery. In addition to this planned leach cycle, there is potential for additional recovery of metal as the leach solution percolates through the underlying lifts. As of 31 December 2017, the Heap Leach Oxide Project Mineral Resources are 106 Mt at 0.73 g/t gold and 24 g/t silver containing 2.5 Moz of gold and 80 Moz of silver. Escondida Copper Mine (Source; Wikipedia) Escondida is a copper mine in the Atacama Desert in Antofagasta Region, Chile. The Escondida deposit is one of a cluster of porphyry coppers in an elongated area about 18 km north-south and 3 km east-west. It is associated with the 600 km long West Fissure (Falla Oeste) system, which is in turn associated with most of the major Chilean porphyry deposits. A barren, leached cap, in places up to 300 metres thick, overlies a thick zone of high-grade secondary supergene mineralisation of the main orebody, largely chalcocite and covellite, which in turn overlies the unaltered primary mineralisation of chalcopyrite, bornite and pyrite. At mid-2007, Escondida had total proven and probable reserves of 34.7 million tonnes of copper, of which 22.5 million tonnes is estimated to be recoverable. Total resources (including reserves) were 57.6 million tonnes of copper, of which 33.0 million tonnes should be recovered. Exploration continues. Sulfide ore, which contributes 77% of the recoverable copper reserve, is crushed and milled in one of the two concentrators and the copper concentrate is separated out using froth flotation. Approximately 86% of the copper is recovered. It is piped down to the port of Coloso, where it is dewatered before shipping. Oxide ore, 4% of recoverable copper, is crushed, agglomerated and then acid leached in large heaps, and the copper is recovered from the leach solutions as copper cathode in a solvent extraction/electrowinning (SX/EW) plant. Recovery is 68%. The low-grade sulfide ore contributes 19% of recoverable copper. It is also crushed and dumped on large heaps, but here the leaching occurs through oxidation induced by microorganisms. The copper is also recovered by SX/EW. Is Heap Leaching something of the Past? In July 2019, Kinross Gold Corporation (TSX:K; NYSE: KGC) (“Kinross”) announced an agreement with N-Mining Limited (“N-Mining”) to acquire Chulbatkan, a high-quality, heap leach development project for $283 million, including approximately $113 million in cash and approximately $170 million in Kinross shares. In addition, N-Mining will have the right to economic participation equivalent to a 1.5% net smelter return (NSR) payment and contingent consideration linked to future reserve additions (www.globenewswire.com). Chulbatkan is located in the industrialised district of Khabarovsk Krai, Far East Russia, approximately 15 kilometres southwest of Udinsk, a settlement on the Amgun River and has year-round transportation access. The projects have indicated resources of approximately 3.0Moz and have an estimated AISC of USD$ 550oz. CAPEX is expected to be in the USD500M mark.  The mine is expected to be low cost, and the processing is focused on a Heap Leach process. The examples I have given above are very big, but on a smaller scale, there are also participants looking at a cheap alternative to mining.  An example is Tatana Resources, a company at the time of research was quoted as looking to list on the ASX.  They have a smaller Heap leach process that is looking to extract copper from oxide ores.  In my time in the Eastern Goldfields, I had seen many such operations.  In 2015, Pheonix Gold Limited (ASX: PXG), taken over by Evolution Mining Limited (ASX: EVN), announced a Feasibility study to progress with a Heap leach strategy with their Castle Hill project.  They reported an AISC of AUD913, and in essence, that is a good result for very low-grade ore. Conclusion This has been an interesting article to write as there is more to the topic than I realised.  Although I am not in the mining world, the whole topic is intriguing and shows that perception can be very deceiving.  I think most people who read or invest in this industry are in the same situation.  We know enough to be dangerous is a phrase I use to say when we know just enough to make a fool of ourselves.  In a simple way, Heap Leach works really well for ores that are oxide in nature and are permeable.  The way the pile is constructed or rather the design of the leach pad is the next most important aspect.  Recovery is normally lower than your conventional treatment methods, but the cost, the capital cost of the process is also significantly lower. The operational cost would also be lower as you require less water, energy and chemicals. As it is always the case, when you learn something about what you think is little known or little publicise, it becomes so in your face you wonder why you never picked up on it.  As most people would have noticed, the mining grade is lowering, and mines are going deeper.  As I was promoting in 2009, the time for a revaluation of gold is coming as mines get deeper and the cost of production follows that curve.  When you look at my recent article, Gold in the Pilbara- The Players and their Story, there are many deposits around the world who are isolated due to the fact that it is too expensive to process. Alternative means of processing have to come into play soon or the gold price would be ascending very quickly.  World and economic situations around the world are already pointing to a rising gold price.  There is no alternative to hedging against inflation at the moment.  If paper money becomes too inflationary and how would you flock to safety.  Apart from gold, what would be safe?  Gold has no alternative to safety unlike how you would have an alternative to fossil fuel, electric vehicles and hydrogen cells…etc Rising gold price will help create alternatives but I think if one can find projects that are amenable to Heap Leaching,  profitability will be assured.  With that comes happy investors and that leads to happy management.  And we all know what that leads to, a happy spouse and a happy world… 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 28 with George Bauk, Northern Minerals Limited (ASX:NTU) I believe that the REE market has large gaps between investors that really understand the market and those that think they do.  I am very comfortable to say that I fall into the latter group as I have not invested in this sector before. This episode of Coffee with Samso has George Bauk from Northern Minerals Limited (ASX: NTU) talking to us about recent news on the REE market.  There has been a lot of news lately about US government discussions with Australian counter agencies in regards to a realignment of priorities with the REE industry. I do hear a lot recently that there is a demand for investing in REE companies.  As I have mentioned in the previous Coffee with Samso with George, most investors don’t really know what this REE do.  Permanent magnets are the main story and there are still investors out there that realise the urgency to get into this business but they are still unclear of the reasons. 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

When people talk about copper porphyry deposits, I am always thinking about South America.  There are some in the Philipines and Indonesia but not in the same frequency.  Over the years, I have not paid too much attention to the details that surround these deposits as it seems too complicated. I have been curious, but it seems to be not straight forward, and each deposit is different.  However, I have noticed some of the recent discoveries coming out of the area, and that has sparked some of my interest.  The more I got into it, the more I was fascinated with the story. One of the fascinating points of these deposits is the concentration in Chile.  The deposits seem to be constrained to one time period and deposits cluster together with similar metal contents and styles of mineralisation. A good way to understand these deposits (according to theory) is to look at the mechanism of a subduction zone.  What is a subduction zone you may ask? A Subduction Zone. I am going to give a chinaman explanation.  For those that want more details, Mr Google has plenty of examples.  The world consists of a series of tectonic plates that move around and slide into and over each other at the boundaries.  The diagram below, Figure 2, outlines where these subduction zones are located within the Pacific Plates. When these plates collide and the process of “subduction” happens (Figure 3), a lot of things happen and one is the creation of these “Back-Arc”.  This is what caused the potential formation of these metallogenic belts that are shown in Figure 1.  A schematic cross-section representation of the process subduction is shown in Figure 3.  The metallogenic “belts” are the creation of the Arc, as shown in Figure 3. As the subduction process is ongoing over geological time, the different belts are created over time.  It is interesting that the different events appear to bring up different metal content within the deposits.  If you look closely in Figure 1, there appears to be a spatial separation of deposit types, IOCG, Manto-type Cu Ag, Porphyry Cu and Epithermal Au and Cu.  There seem to be something controlling where the types of deposits are found but what is pretty obvious is the rich source that is feeding this part of the world. Fortunately, this article cannot explain all the facts so I will leave that to those who actually know what they are talking about.  As they say, when you have enough to be dangerous, one can create all sorts of issue :-). What is so special about these Chilean Deposits According to Camus, F and Dilles J.H 2001 [5], Chile is known to have the largest concentration of copper on Earth. At that time (24 in production), exploration expenditure in the region had exceeded US$2 billion, with 76 copper and gold discoveries. Due to the amount of work that has been done over the years, Chile has become the premier place to come and find that big mother lode.  Expensive it may be for exploration, but the prize of discovery is enormous. There is a good summary I found on the www.kuraminerals.com site. The world’s largest and richest porphyry Cu–Mo deposits occur in the northern portions of the Chilean Andes and have allowed Chile to become not only the leading copper-producing country (5,764 kMT of copper were produced in 2015, 30% of annual global copper production) but also the second largest producer of molybdenum (52,579 MT in 2015) as a by-product of the copper exploitation. Despite the fact that Chile’s overall mineral wealth lies mainly in these world class Cu–Mo porphyry deposits, it is important to acknowledge other significant metallic ore occurrences, such as epithermal Au-Ag, iron oxide-copper-gold (IOCG), volcanic-hosted manto-type Cu-Ag, iron ore–apatite, mesothermal Cu-Au-Ag- vein and minor skarns Cu-Ag-Au deposits. According to an article I found (Cooke DR, Hollings P, Walshe JL (2005) Giant porphyry deposits— characteristics, distribution and tectonic controls. Economic Geology, v. 100) [2], more than half of the 25 largest known porphyry copper deposits, defined in terms of contained copper metal, formed during three time periods: the Paleocene to Eocene, Eocene to Oligocene, and middle Miocene to Pliocene.  Something that is consistent with what has been shown in Figure 1, for Chilean projects. These giant deposits are clustered within three provinces, central Chile, northern Chile, and southwest Arizona-northern Mexico. The other giant deposits occur in Montana, Utah, Panama, Peru, Argentina, Irian Jaya, Mongolia, and Iran. Compressive tectonic environments thickened continental crust, and active uplift and erosion were associated with the formation of many of these deposits. Calc-alkalic magmas are most favourable for the formation of giant porphyry copper deposits, although several of the largest systems are associated with high K calc-alkalic intrusions. In addition, the 25 largest of these deposits are found in the south-west Pacific and South America. The dominance of Chile as a giant copper porphyry mecca can be seen in Table 1 which was taken from a paper published in 2005 [2]. Similarly, there is a lack of gold-related projects in Chile (Table 2).  This is not to say that there are none, it’s just not a “giant” status.  I am not sure what the statistics are like now. It is 15 years since 2005 but without researching that fact, I can’t see the percentage dominance changing much, in terms of Chile having a higher frequency of giant copper deposits. To discover one of these giants is difficult and proving the deposit up is even harder.  Since the downturn of the industry in 1999, I have not seen a large rise in exploration funding for any commodity in scale.  However, what we are seeing is the gradual decrease in metal stockpiles which is starting to create some funding towards real exploration.  As much as I like to think this will be increasing, my heart does tell me that it will still be a slow wait.  There is a sentiment of positivity and in some way, the slow and steady growth is a good thing. It will last longer. The largest of the deposits are associated with high K calc-alkalic intrusions. Many calc-alkalic porphyritic intrusions have also produced giant gold-rich porphyries. In the last 20 m.y., the formation of giant porphyry copper-molybdenum and copper-gold deposits in the circum-Pacific region has been closely associated with subduction of aseismic ridges, seamount chains, and oceanic plateaus beneath the oceanic island and continental arcs. In several examples, these tectonic perturbations have promoted flat-slab subduction, crustal thickening, uplift and erosion, and adakitic magmatism coeval with the formation of well-endowed porphyry and/or epithermal mineral provinces. Similar tectonic features are inferred to be associated with the giant porphyry copper-molybdenum provinces of northern Chile (Eocene-Oligocene) and southwest United States (Cretaceous-Paleocene). Chile’s Metallogenic Belts As I have mentioned previously, the Chilean mineralisation appears to be related to six geological age range (see Figure 1), which is listed below, Late Palaeozoic – Triassic (298-230 Ma) Early Cretaceous (132-97 Ma) Palaeocene- Early Eocene (60-50 Ma) Late Eocene-early Oligocene (43-31 Ma) Late Miocene-early Pliocene (12-4.3Ma) The two youngest porphyry belts are the most important from an economic viewpoint (see Figure 1).  They have the largest deposits and concentrating most current mining operations.  The majority of the older porphyry Cu-Mo deposits are subeconomic (in 2007).  Only Cerro Colorado (Eocene), Lomas Bayas (Palaeocene), Andacollo and Dos Amigos (Early Cretaceous, are currently mined (2005).and Spence (Eocene) is under development. Late Eocene-early Oligocene This is the most significant Chilean porphyry belt. It extends for 1400km along the Domeyko Cordillera and can be traced from the Peruvian border.  There are up to 30 Cu-Mo deposits and prospects with the highest amount of copper resources. Has 220 million tonnes of Cu. The deposits are not regularly distributed along on this north-south trending belt, but rather form local clusters with areas of <200 km2.-1945 Other Porphyry Deposits Just to make sure readers are aware, there are other porphyry deposits.  As you would expect, during the research part of this article, I came across a lot of information. I know there are many other copper porphyry deposits in the world.  There is the Tujuh Bukit in Indonesia, the giant Bingham Cu-Mo-Au in Utah USA. and many others spread all over the world. I came across one project in China and learned that the porphyry here is different from those that are at the Andes.  I am sure that there are more cases of similar type deposits but while researching, it just happened that I came across these in China before the others. Most porphyry Cu deposits in the world occur in magmatic arc settings and are formed in association with calc-alkaline arc magmas related to subduction of oceanic-slab, including porphyry Cu-Au and gold-rich porphyry Cu deposits which usually distributed in island arc setting, while porphyry Cu-Mo, Mo deposits in continental arc settings.[4] There are some significant porphyry Cu deposits in China, unrelated subduction, including porphyry Cu(-Mo,-Au), Mo, Au, Pb-Zn deposits, mainly distributed in Tibet, Qinling collisional orogen belts, and Yanshanian intracontinental settings in Eastern China. These porphyry deposits show many differences from those which are formed in magmatic arc settings, such as geodynamic settings, tectonic control, magma source, and ore-forming fluid system. [4] I have chosen a Chinese example as they are normally not talked about in the general public.  If these projects ever come into an Australian Stock Exchange (ASX) company, most people would not have been exposed to what is in China.  It occurs within a cluster of other porphyry deposits but this area is relatively unknown to the general investor.  Similarly, most investors did not know about the clusters of nickel mines that run north of the nickel sulphide project owned by Blackstone Minerals Limited (ASX: BSX) in Vietnam. You can watch Scott Williamson talking on Coffee with Samso about the Ta Khoa project in Vietnam. Coffee with Samso – Episode 026 – Blackstone Minerals Limited (ASX: BSX) Developing the Ta Khoa Nickel Project in Vietnam. Coffee with Samso – Episode 007 – Blackstone Minerals Limited: Not just mining Nickel. The giant Pulang porphyry Cu-Au district (446.8 million tonnes at 0.52% Cu and 0.18 g/tonne Au) is in the southern segment of the Yidun arc (Zhongdian arc), part of the Sanjiang Tethyan orogenic belt in southwest China [1]. The district consists of three deposits: South Pulang (~96% of the total ore reserves) and the smaller East and North Pulang deposits. Four intrusive phases host the three Pulang deposits. The sequence of intrusion emplacement, alteration and veining, and sulfide associations at the three deposits suggests that South and North Pulang are two separate porphyry Cu-Au deposits, whereas East Pulang is probably a distal part of South Pulang[1]. As you can see from Figure 4, the age of the zones and the clustering of porphyry deposits are very similar to those in Chile.  If one would look at the margins of all these subduction zones, you would see similar geology, age, and mineralisation styles.  The diagram below, a schematic cross-section of the Pulang tectonic setting, is a good way to show how these porphyry deposits are form and the setting that they are found.  When you compare the parallel North-South alignments in Figure 1 with Figure 5,  you can see why the Chilean projects occur in that orientation.  Each event of mineralisation or each rise of the magma (Figure 5)  creates the deposits. The next event, the next mineralisation event will on another parallel alignment and the younger the deposit, the more recent event will be closer and closer to the water’s edge.  This is the most simplistic way I can describe the process.  I hope the academics don’t have a heart attack :-). Why my Interest in Copper Porphyry? In 2009,  I was introduced to a company working in Chile.  That company was Hot Chili Limited (ASX: HCH). I have not really looked into this part of the mineral resource, in terms of country, geology, mineralisation styles or companies involved till now.  At that time, HCH was an interesting company which was doing gold and uranium (if I am not mistaken) that was in Chile and working in the “porphyry world”.  A good associate of mine introduced me to the company.  The two share price charts give a good history of the life of the company.  I won’t go into details on what happened but suffice to say the last 12 months could bring the stock staus higher, over time. Several months ago, an associate sent me an HCH announcement of the first drilling phase, and I was impressed. I read the details and told him that this was a “discovery” and there is no doubt that they have a mineralised porphyry.  My only concern was that this was a porphyry and it was going to take a while to sort itself out.  Subsequent drill results supported the discovery comment and the rising share price  (Table 1 and Table 2) indicate that the market is thinking the same. It was at this point that I decided that I want to look at the porphyry deposits and find out what it is all about.  As I have mentioned, I have looked at this style of mineralisation before, but I have never done it in any detail.  I knew about the likes of Batu Hijau, Grasberg, the PNG deposits and the South American deposits.  Now that I have learned more about this topic, I am pretty impressed and keen on these deposits.  I do continue to stand by the fact that exploring these styles means bigger budgets.  A raise of AUD$5M on the ASX is not going to cut it unless there is a plan to support this raise with subsequent funding options. The likes of HCH is not an overnight success story. They have been doing this since 2010, and I am sure management has been persistent.  Do not underestimate the quality of management in this case. For this company to be still in this space for so long and persisted and have done the corporate deals means that there is a bit of stuff in those brains.  I have never met the management, but I think this is a pretty safe assumption.  One would not be able to get their hands on these kinds of projects without being in the know about the subject space. My point here is that if there are investors looking in this space, pay keen attention to the management.  This kind of deposits is like running a marathon. Not a 100m sprint.  The company you are looking at needs good people to sustain the long term play. Conclusion Over the years, from a corporate point of view, I have always stayed away from things that are not in my sphere of knowledge and things that are way too complicated.  Looking at these porphyry deposits would never have been in my thoughts.  Now that I have had done a fair bit of research on this topic, I can understand why many companies go searching for this prize.  Looking at the image of Escondida in the feature photo, one can see the riches that could be obtained.  In a place like Chile, where the discoveries of large porphyry-style deposits are more common, the likes of Hot Chili may not be too far from their “holy grail”. I have come across a lot of prospects in the “ASEAN” region and my conclusion is that it will take a lot of hard work in terms of attracting funding and actual geological work. Hence, investors will need to be aware if they are looking in this area. The South American deposits are no different.  However, my thoughts on these “forbidden areas” have changed.  I think that with the right investing community, these deposit styles can be obtainable.  Like all exploration projects, it is all about attrition.  The longer you can play the game, the more chances you have to find the prize.  Remember, North American resource companies have been playing in this region for decades.  The TSX (Toronto Stock Exchange) has loads of companies that play in this region. I think what HCH did recently in getting access to a “de-risked” project is a good move.  What I mean is the acquisition of the Cortedera project with some historical drilling success is a good move, at least corporately anyway.  The deal has allowed the share price of the stock to climb from sub-AUD$ 0.01 to AUD$0.036 (Figure 7).  It was definitely a good deal and the market is liking what is coming out of the company. The drill results that are being released are definitely more than a good intercept and the length of the intercept is consistent with a porphyry-like style of mineralisation.  If you have read the book on the discovery of Olympic Dam, one would appreciate the feeling of potentially finding something “big”. The likes of HCH will take a while to “develop” this project but at least one can take comfort that they have something to develop. References: [1} Geology and Genesis of the Giant Pulang Porphyry Cu-Au District, Yunnan, Southwest China, Kang Cao ; Zhi-Ming Yang ; John Mavrogenes ; Noel C. White ; Ji-Feng Xu ; Yang Li ; Wei-Kai Li, Economic Geology (2019) 114 (2): 275–301 [2] Giant Porphyry Deposits: Characteristics, Distribution, and Tectonic Controls.. David R. Cooke, Peter Hollings, John L. Walshe;  Economic Geology ; 100 (5): 801–818. doi: [3} Geological, Geochronological, and Geochemical Insights into the Formation of the Giant Pulang Porphyry Cu (–Mo–Au) Deposit in Northwestern Yunnan Province, SW China by Qun Yang 1,Yun-Sheng Ren 1,2,*,Sheng-Bo Chen 3,Guo-Liang Zhang 4,Qing-Hong Zeng 3,Yu-Jie Hao 2,Jing-Mou Li 1,Zhong-Jie Yang 5,Xin-Hao Sun 1 andZhen-Ming Sun 1 [4] Porphyry Deposits in Continental Settings of China: Geological Characteristics, Magmatic Hydrothermal System, and Metallogenic Model. Hou, Zengqian & Yang, Zhiming. (2009).  Acta Geologica Sinica. 83. 1779-1817. [5] A Special Issue Devoted to Porphyry Copper Deposits of Northern Chile, Canus F, Dilles J.H; Economic Geology; Vol 96, No. 2, 2001 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 29 with Ed Turner, CEO, Kingwest Resources Limited (ASX: KWR) High-grade gold mining is relatively uncommon in today’s era of “raging” gold prices, but it’s an interesting aspect of the gold mining industry that merits closer examination. In this respect, Kingwest Resources Limited (ASX: KWR) is in an enviable position, with its portfolio of projects in a highly-respected region of historical high-grade mining that has perceived potential of more resources waiting to be found. When KWR listed late last year I looked into their projects and realised I’d forgotten about the flurry of work in Menzies back in the 1980s and 1990s. Not much was discovered then, but I remember a swag of companies working in the Menzies area. So, I wanted to talk to KWR’s Chief Executive Officer Ed Turner for an update on KWR’s drilling programme in Menzies. Key points made by Ed in our conversation include: Following last year’s successful drilling a further AUS$3.5 million has been raised to fund a bigger drilling programme this year Recently-acquired archival data shows exciting prospects in historic workings Savvy investors are looking for good high-grade gold companies to invest in With the state of the gold price it’s time to advance projects and get them into production 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

Coffee with Samso Episode 31 with James Marsh, Managing Director, Andromeda Metals Limited (ASX:ADN) This interview with James Marsh of Andromeda Metals Limited was important to me, because I consider Andromeda to be a unique beast in the mining jungle. It’s one of the very few companies that can confidently claim to be close to mining, despite using processes I’ve always considered simple. My opinion’s based on experience of working in the corporate mining sector over the past 15 years and becoming frustrated with the mentality of companies who mine deposits without feasibility studies or proper drill-out phases. They do this to satisfy investors by getting rewards as quickly as possible, but in all cases I know it’s ended in tears. In Andromeda’s case the timeframe is similar, though not as complicated as a typical mineral project. There’s an element of just digging up and sending it on the back of a truck – proper due diligence is there, but it really is almost that simple. James Marsh was able to shed light on Andromeda’s process and detail the company’s activities in the coming months. Highlights include: We’re switching from dry to wet process, which can give a massive boost to numbers The whole world is a potential market for us, we have interest from Europe, Asia and the Middle East We meet with the government regularly and they’re very happy with what we’re doing We have a government-funded project to research Halloysite use in high pressurised storage systems for hydrogen transport, a potentially huge market 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

Coffee with Samso Episode 32 with Christian Easterday, Managing Director of Hot Chili Limited (ASX: HCH) The land of giant porphyry deposits is one that is hard to visualise when you have not worked in that particular style of geology.  Most Australian geologist will never work in that environment.  However, I will not be surprised to be challenged for stating that as I have only worked in two states of Australia.  Porphyry Copper-Gold deposits are frequently found in the Andes of South America, especially in Chile.  Christian Easterday, the Managing Director of Hot Chili Limited (ASX: HCH), has been working in that area for over ten years and this is why the company potentially has one of the largest porphyry deposits discovered in recent times. A classic David and Goliath story of a small-cap company, on the Australian Stock Exchange (ASX) with a market capitalisation of AUD$40M, with a project that respectfully should be developed by a Tier 1 company with a market capitalisation of billions.  The discovery last year of a massive intercept of 622m of 0.6% copper and 0.2g/t gold is testament to what this project should become in future. The repetition of such great mineralisation drill results supports the excitement that Christian portrays in the conversation that lasted for over 48 minutes.  Watch how Christian dissects the journey of the company and what is in store for a more significant story. 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

The commodity market is in a quandary at the moment. What I mean is that there is no doubt that there is going to be a shortage of metals on the market soon.  The lack of supply is well documented, and there is no shortage of news professing all sort of theories.  However, commodity pricing is not setting any all-time highs.  You would think that if there were going to be a shortage in metals or even a prediction that there would be a shortage, you would see signs of a resurgence. Yes, the price has moved up over the period, but investors are not jumping up and down.  Fear is still in the market.  Even with a known shortage of metals and a rising price, investors are sensing FEAR. Lithium and Cobalt pricing has taken a beating and is still not showing any signs of a resurgence.  The darlings of the resource industry have taken a backward step as the world adjusts to the falling demand out of China.  The Chinese economy is dealing with a financial issue that has stemmed from their over-eagerness to generate a GDP worthy of a gladiator.  In that journey, a shadow banking industry developed, and it has since blown up.  A bubble that is a Chinese economy size is not an easy thing to fix, and I am sure this shadow banking bubble is more significant than many GDPs put together. The fear of what may come in a decreasing consumption level is driving a market into a fear syndrome and most people sitting on the fence.  Take Palladium,  it is now worth more than gold, but try raising some funds to explore for the metal.  The demand for iron-ore is also showing some signs of slowing. I cannot see demand increasing for commodities which would reflect a lowering of pricing shortly. However, the charts show a cautious to a complex scenario. Nickel History of Nickel (Source:  Wikipedia) Use of nickel (as a natural meteoric nickel-iron alloy) has been traced as far back as 3500 BCE. Nickel was first isolated and classified as a chemical element in 1751 by Axel Fredrik Cronstedt, who initially mistook the ore for a copper mineral, in the cobalt mines of Los, Hälsingland, Sweden. The element’s name comes from a mischievous sprite of German miner mythology, Nickel (similar to Old Nick), who personified the fact that copper-nickel ores resisted refinement into copper. An economically important source of nickel is the iron ore limonite, which often contains 1–2% nickel. Nickel’s other essential ore minerals include pentlandite and a mixture of Ni-rich natural silicates known as garnierite. Major production sites include the Sudbury region in Canada (which is thought to be of meteoric origin), New Caledonia in the Pacific, and Norilsk in Russia. Nickel Pricing There is no secret that the investing world has been telling everyone that there is going to be a nickel supply issue very soon. I have been a nickel, copper and zinc bull for the last two years.  Looking a the 5-year price above and the LME stock levels will hopefully give readers a clear view of the shortage scenario.  There is a clear correlation in a decreasing or an increasing nickel price with a corresponding increasing or decreasing supply.  If this were a reasonable demand and supply Economics 101 world, you would be excused for saying – what is the big deal? Its just market equilibrium. I would agree too, but with the onset of an expected rush for lithium batteries for EVs, there will be a supply crunch. This is mainly due to the miners holding off on producing as they await a more stable nickel price. This is probably a smart move considering the last price crunch would have hurt a lot of them. The other issue that readers need to understand is that reopening mines is not like reopening a cafe.  And some of the economics of these mines are very thin so if the integrity of the spreadsheets may be entirely dependent on a consistent and efficient system. Opening and shutting the operations could tilt the balance so much that the system cannot be recreated economically. Speaking to some of the nickel producers in Perth, they tell me that consistent pricing in the USD7,000 per Ib or USD15,000 (currently USD13,000+)  per tonne is where they feel comfortable.  Some of the mines are now taking steps in anticipation of the price rise and gone ahead with re-opening the mines they closed. Copper History of Copper (Source:  Wikipedia) Copper is a chemical element with symbol Cu (from Latin: cuprum) and atomic number 29. It is a soft, malleable, and ductile metal with very high thermal and electrical conductivity. A freshly exposed surface of pure copper has a pinkish-orange colour. Copper is used as a conductor of heat and electricity and as a building material.  Copper is also used as a constituent of various metal alloys, such as sterling silver used in jewellery, cupronickel used to make marine hardware and coins, and constantan used in strain gauges and thermocouples for temperature measurement. Copper is one of the few metals that can occur in nature in a directly usable metallic form (native metals). This led to very early human use in several regions, from c. 8000 BC. Thousands of years later, it was the first metal to be smelted from sulfide ores, c. 5000 BC, the first metal to be cast into shape in a mould, c. 4000 BC and the first metal to be purposefully alloyed with another metal, tin, to create bronze, c. 3500 BC. In the Roman era, copper was principally mined on Cyprus, the origin of the name of the metal, from aes сyprium (metal of Cyprus), later corrupted to сuprum (Latin), from which the words derived, copper (Old English) and copper, first used around 1530.[5] Copper Pricing When you look at the copper pricing and its LME stock levels, you see the same patterns as that of Nickel.  Copper is usually the barometric indicator of the economy.  If copper goes up, things are going well.  The beginning of 2016 was effectively the bottom of the commodity slide, and the bounce ran for three years.  At the same time, Gold was hovering around the USD1050 mark.  It was at a point where many pundits thought it was going to break the USD1000 mark. Typically, people look at the worst case scenario, but when you look at it logically, at that time, no mines would be able to produce gold at sub USD1,000 mark for an extended period.  If the price of gold had gone down that low, production would have ceased.  And what happens when you do that, the price goes up. I feel that this is the case with Nickel and Copper. The two metals are like the main components of our civilisation.  Looking at the LME stock levels, you can see the sharp drop in supply with the price around the pre-2016 timing.  When you looked at the stock level dropping in 2018,  you noticed that the price is going the other way.  The price reacted much faster than the supply change, and this is consistent with the reversal in pricing in 2016. Zinc History of Zinc Zinc is a chemical element with symbol Zn and atomic number 30. It is the first element in group 12 of the periodic table. In some respects zinc is chemically similar to magnesium: both elements exhibit only one normal oxidation state (+2), and the Zn2+ and Mg2+ ions are of similar size. Zinc is the 24th most abundant element in Earth’s crust and has five stable isotopes. The most common zinc ore is sphalerite (zinc blende), a zinc sulfide mineral. The most massive workable lodes are in Australia, Asia, and the United States. Zinc is refined by froth flotation of the ore, roasting, and final extraction using electricity (electrowinning). The element was probably named by the alchemist Paracelsus after the German word Zinke (prong, tooth). German chemist Andreas Sigismund Marggraf is credited with discovering pure metallic zinc in 1746. Work by Luigi Galvani and Alessandro Volta uncovered the electrochemical properties of zinc by 1800. Corrosion-resistant zinc plating of iron (hot-dip galvanizing) is the primary application for zinc. Zinc is an essential mineral, including prenatal and postnatal development.[9] Zinc deficiency affects about two billion people in the developing world and is associated with many diseases.[10] In children, deficiency causes growth retardation, delayed sexual maturation, infection susceptibility, and diarrhoea.  Enzymes with a zinc atom in the reactive centre are widespread in biochemistry, such as alcohol dehydrogenase in humans. Zinc Pricing Zinc has a very interesting chart history.  For those people who have read my previous blogs ( Zinc Market- What happened to the price surge?  and 7 Interesting Zinc Companies on the ASX ) on zinc will know that I am a big bull on this commodity.  Like all the commodities, it rose from the ashes in 2016 and has continued the run.  Currently, like its other commodity cousins, the price has taken a rest recently, but it has also started to move again. What is the most glaring is the steady reduction in stock since 2014?  You will find lots of commentary about how this commodity is going to be the darling of the market, but you will not find too many companies succeeding with mining zinc comfortably. The relentless slide in supply is not seen in Nickel nor Copper.  But you will see it in aluminium which I will discuss below.  This relentless slide in stock levels is due to the combination of a lack of investment in exploration and a lack of profitable deposits to mine.  When I did my research on the previous articles on zinc,  I struggled to identify the decent projects, and those that look decent appear to be lacking in the strike length which I assume will lead to a deposit that cannot be mined profitably. Aluminium History of Aluminium Aluminium or aluminum is a chemical element with symbol Al and atomic number 13. It is a silvery-white, soft, nonmagnetic and ductile metal in the boron group. By mass, aluminium makes up about 8% of the Earth’s crust; it is the third most abundant element after oxygen and silicon and the most abundant metal in the crust, though it is less common in the mantle below. The chief ore of aluminium is bauxite. Aluminium metal is so chemically reactive that native specimens are rare and limited to extreme reducing environments. Instead, it is found combined in over 270 different minerals. Aluminium is remarkable for its low density and its ability to resist corrosion through the phenomenon of passivation. Aluminium and its alloys are vital to the aerospace industry[8] and important in transportation and building industries, such as building facades and window frames. The oxides and sulfates are the most useful compounds of aluminium. The history of aluminium has been shaped by the usage of alum. The first written record of alum, made by the Greek historian Herodotus, dates back to the 5th century BCE. The ancients are known to have used alum as dyeing mordant and for city defence. After the Crusades, alum, an indispensable good in the European fabric industry, was a subject of international commerce; it was imported to Europe from the eastern Mediterranean until the mid-15th century. The nature of alum remained unknown. Around 1530, Swiss physician Paracelsus suggested alum was a salt of earth of alum.[51] In 1595, a German doctor and chemist Andreas Libavius experimentally confirmed this; In 1722, German chemist Friedrich Hoffmann announced his belief that the base of alum was distinct earth. In 1754, German chemist Andreas Sigismund Marggraf synthesized alumina by boiling clay in sulfuric acid and subsequently adding potash. Attempts to produce aluminium metal date back to 1760. The first successful attempt, however, was completed in 1824 by Danish physicist and chemist Hans Christian Ørsted. He reacted anhydrous aluminium chloride with potassium amalgam, yielding a lump of metal looking similar to tin. He presented his results and demonstrated a sample of the new metal in 1825 Pricing of Aluminium I think Aluminium is one of the most exciting commodity. I know I have stated that I like nickel and copper, but aluminium to me is the most significant part of EVs.  What is this considerable part, you may ask?  Aluminium is light, and EVs need to be light.  For it to go far with the battery, it cannot be carrying too much weight.  Like zinc, I have previously written two blogs on bauxite, and this is why I see the excitement. To understand what I am talking about, have a read of  Bauxite – The next commodity rush? And The Best Small-Cap Bauxite Companies on the ASX – Canyon Resources Limited (ASX: CAY) and Metro Mining Limited (ASX: MMI). The bauxite industry and hence the alumina industry took a beating a while back, and I don’t think that the supply team has been able to catch up.  As mentioned in my previous blogs, the bauxite industry is not as prevalent as other commodities. It is a tight market.  This means that there is a deficit game in catching up with demand.  When you start taking into consideration that the EVs will boost the need for more metal, that is just not a good thing. Conclusion In conclusion, as readers can see from the charts, the negative news in regards to the resource industry is not consistent with what we see in the price and stock charts.  All the technicals tell a situation where supply is low, and the price has to be rising.  Why is the market negative?  I believe that it is the FEAR factor.  The fear if the unknown and what is this big Chinese Panda bear is going to do. Market sentiment tells us that the recent biggest consumer of commodities may appear to be in hibernation, but I think the bear is too big not to eat over winter.  The Chinese government will not simply shut consumption.  It needs to stimulate the industry. It needs to stimulate investments that will drive the GDP or at least keep it turning over. Exploration funding is very hard to find, and pre-production or brownfield project funding are getting very expensive. Production funding, on the other hand, is getting cheaper as they are now the best bet in the game. Those companies that I have mentioned in my other blogs will do well if they find what they are looking for with whatever funding they have received.  This shortage of metals and is not going to go away very soon.  I think the next boom that many people talked about post-2016 is just getting some legs. I remembered in 2016 when I told many people that the bottom is near or at least the worst is over, and I was proven correct.  I sense that we are in a similar place with all the same parameters in play, just at a different price level.  The same signs are appearing, lack of funding, everyone is negative, China is slowing down, and consumption is not coming.  I heard that in 2000 and 2016. 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 30 with Thomas Reddicliffe, GeoCrystal Limited In this episode I talk to diamond industry veteran Thomas Reddicliffe of GeoCrystal Limited, who currently works on the Webb Diamond Project. I was keen to interview Thomas because diamonds and diamond exploration have been missing from geological conversations for many years, although in that time there have been many good diamond discoveries. In fact, I have to go back as far as the mid-1990s to recall when diamond exploration was openly discussed. The current investment environment seems to be good for diamonds and Thomas was the ideal industry insider to ask about this. Webb Diamond Project is one of the most exciting diamond explorations of recent times, giving enough vectors to a potential source of diamond-bearing Kimberlites. However, although drilling has confirmed the presence of Kimberlites, the prize of these diamond-bearing Kimberlites is still elusive. Thomas didn’t disappoint in his information-filled conversation, with great insights into the ins and outs of diamond exploration. Key points of his interview include: A northern section of the Webb field contains “a tantalising spread” of microdiamonds, the best indicator of diamonds GeoCrystal has invested more than AUS$4 million so far in the project and would benefit from additional investment Many targets remain to be tested in the Webb field, which has ideal geology and mineral chemistry for diamonds, and optimism is high for discovery In fact, Thomas gave me so much information it was difficult to edit it all – so this is a longer-than-usual interview. I hope you find it an interesting object lesson in diamond exploration and its investment potential. 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

Rooster Talk Episode 1 The first episode of Rooster Talk is all about the Ta Khao Nickel project in Vietnam. We speak to Scott Williamson about the current state of affairs and how the company is dealing with the current situation facing the industry. It is a short conversation but this is a great way of keeping the news flow circulating. Rooster Talk is a new product that Samso and Samso Media are adding to the different tools for Investor engagement. In a time like the current COVID 19 pandemic, life in the business world needs to be supported. The idea behind this is to keep supporting the mineral industry and keep the flow of information out in the general public. Everyone is doing it tough. A short chat to industry leaders about what they are doing and what their story is about. Let’s support each other and get to that light at the end of the tunnel ASAP. This is not another way to make money, this is all complimentary for the industry.  Hoping to get support and keep news flow happening. 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