Making it simpler to view Coffee with Samso To help out subscribers, I have separated the episode into headings: Individual Segments for Episode 001 Coffee With Samso Ep 001_ 01_Introduction Coffee With Samso Ep 001_02_Mark Strizek talks about his experience with Chinese Tungsten experts Coffee With Samso Ep 001_03_Solution to Low-Grade Tungsten Projects Coffee With Samso Ep 001_04_Dealing with impurities in Tungsten projects. Coffee With Samso Ep 001_05_Tungsten Projects Coffee With Samso Ep 001_06_Australian Tungsten Projects and the Tungsten market. Coffee With Samso Ep 001_07_Tungsten market and Conclusion 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

Kryptonite is a sodium lithium boron silicate hydroxide with fluorine and it a mineral that is harmful only to superheroes Well, the only one I know of that is affected by the green mineral is Superman.  The internet tells me Kryptonite has a chemistry that is similar to another REAL mineral.  That real mineral is Jadarite, which is a white, earthy monoclinic silicate mineral, whose chemical formula is LiNaSiB3O7(OH) or Na2OLi2O(SiO2)2(B2O3)3H2O. Jadarite is a Lithium and Boron mineral that at this moment, is only found in Serbia at a mine that is called Jadar.  Jadarite has a mineralisation style that is very different from spodumene and Brine Lithium. It is probably more in common with a Mississippi Valley Type or MVT. MVT deposits typically are in districts covering hundreds, or even thousands, of square kilometres. What this means is that it appears to be very sedimentary and has nothing to do with pegmatites nor salt lakes. I have looked at two projects that are next to Jadar, but they have been very green in nature.  The latest project that I saw is just waiting on some soil sample results to come back, sometime this month. Some of the results are looking promising.  This source of lithium is different. Hence one would want to wonder if this type of lithium geology could be replicated elsewhere. As an exploration geologist, I would take a step further and say, what if another commodity could have a Kryptonite cousin.  Imagine if there is another form of cobalt or tungsten or nickel etc. Who would have thought that you could have found Jadarite? These thoughts are what excites me about exploration and the discovery of the unknown. Jadarite In December 2004, drill core from the Jadar Valley (Serbian: Јадар) in Serbia, unearth a new mineral called Jadarite. Jadar is 10 km (6.2 mi) southwest of the Cer mountain. Findings were initially located in the villages of Jarebice and Slatina and later in Draginac. Exploration geologists from Rio Tinto Exploration discovered the mineral as small rounded nodules in drill core and were unable to match it with previously known minerals. Jadarite was confirmed as a new mineral after scientists at the Natural History Museum in London and the National Research Council of Canada conducted tests on it.  Chris Stanley, from the Natural History Museum, described Jadarite as being unique to mineralogy. There are not a lot of public information on the project as you would expect with Rio Tinto being the owner of the project.  It has taken a long time to get to this stage and yet there have not been any signs of real mining.  The main issue with the project is the mineralogy as it is both lithium and Boron.  Jadar is a large project. The resource at Jadar is currently are 21 Mt of B2O3-equivalent and 2.5 Mt of Li2O-equivalent. Discovery Story (Source: Rio Tinto) As I have always said, exploration is the only game in town that will deliver exponential value to shareholders.  It is exceptionally risky, but in the scheme of the value you may create, it is not a significant outlay of investment.  In repeating my rant on investments in “old production assets”, – The Golden Pineapple – Exploration or Production Projects. – I do believe that exploration, in reality, is not that risky, assuming you have the right management team. I have taken the excerpt below from Rio Tinto as it defines what I like about exploration and is pretty much a great depiction of how Jadar was discovered. Nenad Grubin has vivid memories of the moment he and his Serbian-based team discovered a new mineral that British scientists would later dub kryptonite (more of that curious story later). Nenad and his fellow explorers from Rio Tinto had spent months looking for evidence of borates in the Jadar Valley, wading through creeks and examining rocky outcrops. By September 2004 they’d found sufficient evidence of the in-demand metal to justify the expensive process of exploratory drilling. “We had enough money to drill two holes. In the first one we found what we hoped would be there – a substantial intersection of boron mineralisation. It was a phenomenal moment,” recalls Nenad. There were more sensations to come. In the second drill hole, they found a substance that contained both borates and what would become one of the world’s hottest metals, lithium, which is an important component of lithium ion batteries. The discovery of a world-class deposit of borates and lithium, which was named Jadar after the Serbian valley in which it was found, was later supported through the work of a dedicated Rio Tinto project team. Conclusion When this project starts to produce, it will supply 10% of the market.  Currently, almost 100M has been spent on the project to get it to its current pre-feasibility stage.  Jadar will see lithium carbonate and boric acid produced from the mined ore.  Lithium is increasingly being used to produce batteries for electric vehicles and mobile phones, while borates are essential components for heat-resistant glass, fibreglass and smartphone screens. Whatever the case, this is a significant discovery, and Rio Tinto has spent a lot of time and money to unravel the chemistry to create real value.  There is some negative news noting that this project will never take off, but I feel that those thoughts are unwarranted.  This project will be in production.  It’s just a matter of time.  From a geological point of view, this shows how versatile this planet of ours is and Exploration Discover Deposits. 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 1 with Mark Strizek, ex-Managing Director of Vital Metals This is the first episode of Coffee with Samso.  Samso will have a coffee with someone and have a conversation about what’s happening in the resource sector and general topics of interest.  It is a simple coffee conversation with no formalisation of style. In this first Episode for Coffee with Samso, I chat with Mark Strizek who was the ex-Managing Director of Vital Metals who had the Watershed Tungsten market.  We discussed the tungsten market in general and what is the future demand, supply and project viability. Mark has a lot of experience in the tungsten market as he dealt extensively with the Chinese looking at how to improve processing tungsten for the Watershed Tungsten project. He is a man with a wealth of insights into the sector that is not readily available in the market.  It is worth the whole 18 minutes. I hope you enjoy the chat and the topics were useful. Individual Segments for Episode 001 Coffee With Samso Ep 001_ 01_Introduction Coffee With Samso Ep 001_02_Mark Strizek talks about his experience with Chinese Tungsten experts. Coffee With Samso Ep 001_03_Solution to Low-Grade Tungsten Projects Coffee With Samso Ep 001_04_Dealing with impurities in Tungsten projects. Coffee With Samso Ep 001_05_Tungsten Projects Coffee With Samso Ep 001_06_Australian Tungsten Projects and the Tungsten market. Coffee With Samso Ep 001_07_Tungsten market and Conclusion 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

For the moment you can be forgiven in thinking that the much-anticipated depletion or commodities shortage is more a mirage than a reality. The situation feels like someone copying a famous quote and then not crediting the author. The phrase “Commodities Shortage” seem to resonate excitement and fear in the market, but there does not appear to be any substance, for now. It is a bit like a case of Missing In Action. The lithium and cobalt space was once great and had a lot of fanfare in the last two years. However, when you look at the market conditions, you will have to think that the lithium and cobalt market has come to some equilibrium. I don’t see that rush that was present previously. All the content on the subject has been taken off the screen. A comment I heard from a very respected resource group said one should not bother with cobalt. The DRC now can turn that on and off. Go chase nickel. I am fully on board with that. According to Reuters, Tesla is trying to cut its use of cobalt. The US electric carmaker said that it needs more nickel. For those that have read my earlier Insights, they would have remembered that I am a big fan of Nickel, Copper and Zinc. Although, I am losing faith with Zinc.  This lost in faith is because I think that the present stream of suppliers may fill any future shortages. Nickel and Copper, on the other hand, have been the main components of human civilisation, and they will continue to fill that role. That is my opinion, anyway. You can have an electric or a hydrogen vehicle and not have or have very little lithium and cobalt, but you cannot have no or little nickel and copper. Copper Copper pricing is just coming to its 50% retracement from 2015, and it will be interesting to see if it takes off positively from here. The bottom was in 2016, so it has only been less than three years of recovery. Although May 2019 has not been a good month, with Copper dropping from US$6,400 to almost US$6,000. It has since recovered, but I think there will be some weakness still to come. There is no doubt that this trade war happening is creating headaches on both sides. Trump is doing what most bullies do with lots of noise and China is doing what people who know they have absolute power is doing. The stand-off will remain, and the markets will keep reacting to every word. People talk about LME decline and deficit in supply, but what I see in the market is weakness and steady growth in pricing when it is recovering. There is no signs of a deficit issue nor a shortage of supply issue. Like the iron-ore pricing, some people would say the surge in pricing is more to do with a supply issue than a demand resurgence. I wrote an article recently, Shortage In Metals and I could not explain the rapid decline in supply and rather slow and half-hearted rise in pricing. Now I think that the demand is not there more so than a shortage in supply. According to Reuters, • COPPER STOCKS: Copper inventories in warehouses approved by the London Metal Exchange (LME) MCUSTX-TOTAL on Friday hit 203,750 tonnes, its lowest since April 25, the latest data showed. • COPPER DEFICIT: The copper market should see a deficit of 189,000 tonnes this year, widening to 250,000 tonnes in 2020, the International Copper Study Group said on Monday Copper Producers The copper producers are very dull. They are all the big players, and they are either in Latin America or Africa. Sandfire Resources (ASX: SFR) is a copper and gold miner, but their mine life is now limited. There is Oz Minerals (AX: OZL) who is a large company with big mines. Probably not too much upside in capital growth but still a good investment for steady growth. Apart from those two companies, I can’t think of anyone else. There is BHP, but they are boring. 🙂 Copper Explorers I just don’t see too many of these copper explorers as exciting. As I said, when you look at all the copper mines, they are big and all discovered from deep drilling stuff. The Olympic Dam story is one that comes to mind. Some explorers could have a good chance, such as Ausmex Mining Group (ASX: AMG) of which I am a shareholder. I am hoping for big things with this company but I will say that the exit from that stock will be when they hit great grades and the share price blossom. The other exit possibility is that a big brother comes over and say thank you very much. Nickel The Nickel price chart is also not so exciting. What I do see is a break in the downward trend but a slow movement up. I guess that is a good sign as recovery is quiet, and a good base building exercise is always a good thing. I like nickel as a commodity more so than copper because Nickel Sulphide (NiS) is harder to find than your average copper deposit. One could say that Latin American projects are always pretty copper-related. If the market supply does get tight, some of those projects will quickly reach the green light. Don’t forget the African projects. There are a few there that will become a player once the price allows it to happen. For Nickel, in my opinion, the best projects are the nickel sulphides variety, and there are not too many of those laying around in the paddocks. These are hard to find and hard to make economical. There are plenty of Nickel lateritic styles but the projects During the recent nickel pricing “crises”, those projects that held together were the high-grade NiS plays. This brings me to the town of Kambalda in, Western Australia is synonymous with the name nickel. It was here where the birth of the Komatiite nickel phenomenon took roots. I remember learning this in University, but as I was not such a great student ( I wish I were), I got lost with all the terminologies…etc. Anyway, my point is that NiS is the prize. The Kambalda story and the Forrestania story were great discoveries. They are what the likes of St George Mining Limited (ASX: SGQ) and Artemis Resources Limited (ASX: ARV) are looking to discover in their respective regions. I was looking at Rox Resource (ASX: ROX) but they seem to have taken a strange turn to go into Younmi Gold mine. That has got to be the most interesting move as my thoughts of that project is refractory and isolation. There are some oxides but that is going to make it worst as you have a bag of two ore types. Unless you are flush with cash, you want to be one or the other. They have seemed to have taken the focus away from the Mt Fisher project. I think that is a mistake as I do think that the demand for nickel is going to come. The lateritic nickel game is just too big. Indonesia and the Philipines are major sources of these type of deposits. The downside for them is that they are plague with issues, political, local corruption, greed, you name it. The interest in this sector took a turn for the positive as all of these deposits have some cobalt. Some deposits have more and when the cobalt price was running, these were a cobalt and not a nickel project. Nickel Producers The main stayers such as Western Areas Limited (ASX: WSA) – two of the highest grade underground nickel mines in the world, Flying Fox and Spotted Quoll mines, near Forrestania. Mincor Resources NL (ASX: MCR) – several ex-WMC mines all near Kambalda. Panoramic Resources Limited (ASX: PAN) – Savannah (East Kimberley), Lanfranchi,[18] Gidgee and Copernicus mines. Independence Group Limited (ASX: IGO) – Long Nickel mine (ex-WMC) near Kambalda. MMC Norilsk Nickel (Not listed on the ASX) – Emily Ann and Maggie Hays nickel mines. BHP Billiton Limited (ASX: BHP) – Mount Keith Mine and Leinster Nickel Mine. Minara Resources/Glencore – Murrin Murrin Joint Venture. First Quantum Minerals (took over from BHP Billiton in 2009) (TSX: FM) – Ravensthorpe Nickel Mine. Poseidon Nickel Limited (ASX: POS) – Windara Nickel Project (currently under care and maintenance). I would say that the best on that list has to be WSA. I remember in 2015 when I went to one of the conferences on Nickel and was surprised to learn what a great buy WSA. The geology was fantastic and it was by far the best project I had ever since in terms of grade and peer comparison. I still think the same. I was a shareholder for a period of time and traded out of that 12 months ago. Explorers As I have mentioned, in the explorer’s sector, I like St George Mining Limited (ASX: SGQ) and Artemis Resources Limited (ASX: ARV). The two companies have what I call a region that is known for nickel mineralisation. Nickel is so hard to find, it small and it’s like a pod and not continually mineralised in a continuous manner. Looking for a high-grade deposit is not easy and it’s better to be in a known space rather than not, in a simplistic way of thinking. What I don’t like about Kambalda and Forrestania region for new explorers is that WMC, Western Mining Corporation, who were taken over by BHP would have looked at most of the low hanging fruit prospects. The chances of finding are lower. I agree that there are still holes and these holes are definitely there, it’s just that these holes would be less prevalent. WMC would have been very diligent and persistent in their search. There are some other explorers but I have not looked much at them so I can’t comment. Maybe I will do some research on them at a later date. My Thoughts The shortage that people speak about in commodities does exist, in terms of stock levels. However, when you talk about world resource, there is plenty. Copper is everywhere and there is a good supply in the ground. The LME stock levels will change but I don’t think it is a measure of availability. What the LME levels tell us is the demand from the market. China in the space of 30 years now dictates the way of the world. It dictates the same way as we how when the Dow Jones sneezes and the ASX catches a cold. When China is not buying the world commodity market goes back significantly. The world market as we know it now is not the same as the way of the old. What economists love to do is to look back and then say that is how it is. Who would have known that little old China 30 years ago will today be a power in almost everything but speaking fluent English? Listing what they are good and not good is now a waste of time. The domestic market in China is suffering and have been for at least three years and possibly five. The trade war is not making it any better. This trade war hurts everyone but Trumps political and personal profile aspiration. It is absurd to think that the trading partners, the “allies” of the US are not hurting. The farmers that he is protecting are suffering. On the other end of the war, the Chinese are hurting….and the list goes on. The delay in shortages, the delay is a rising commodity pricing that we are all anticipating, need to take into account that demand is not there for the moment. The proposed demand rises that are being proposed by the economists and promoters of companies are wrong. All the so-called projections are off because domestic demand in China is down due to factors that are not market driven. Factors such as a need to meet environmental measures and in China, which is not a free market, businesses are “required” to comply. If you don’t comply, you are out of business. There are no market forces to do this. Subsidies are taken away so your factory of EV vehicle manufacturing is not less profitable. You are going to use less of everything. The good news to this is that you will get premium on high-grade coal, high-grade iron ore, items that are environmentally better. The zinc story is classic. The supply crunch sort of never came. There are so many moving parts now that I feel is contributing to the lack of obvious signs. In some ways, it is confusing and complicating the market at the same time. What I do see is opportunities to get into things that are not apparent. It feels like when people were looking at lithium when the obvious was not happening. I called that nickel will be the best flavour two years ago. I think this is still the case as the market is reequilibrating. 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

Hydrogen Fuel cars have been the forgotten cousin in the EV market.  It was no more than six months ago, over a typical BBQ lunch, I expressed my opinion that Hydrogen Fuel cells had a lot of advantages. My guests would disagree and insisted that electric cars would dominate.  The race for emission targets in 2020 seems to be fueling all the discussion about cleaner car emissions, but I fee that the debate should be more on what is the most economical means for the First World and Third World economies.  The Electric Power or Hydrogen Fuel Cell, in my opinion, is more about something new or you can use existing infrastructure, which means, spend more money or spend less and use what you have already. When we think about EV and Hydrogen Fuel Cell vehicles, we forget that commercially, according to CNBC, there are over 20,000 hydrogen fuel celled forklifts running around the warehouses and distribution centres across the US in more than 40 states including factories of Amazon and Walmart.  Also, there are hydrogen fuel cell buses in use or planned in the US states of Ohio, Michigan, Illinois and Massachusetts, as well as California.  Hydrogen Fuel Cell buses are also now increasingly being used in Asia and Europe. The central aspect of hydrogen fuel cells is the ability to adapt to existing cars and save users money instead of buying a completely new vehicle. What are the current thoughts? There is no question about the technology with the widespread use of hydrogen vehicles already in place.  Since my last article  – Hydrogen Cars – Are they safe?  How do they work?– I think there are now clear results that the “potential” of Hydrogen Fuel Cells is real and are being embraced. Hydrogen infrastructure is coming slowly but is building momentum with US news reporting a breakout in the building of hydrogen stations.  There is not going to be an instant rise as reports show that most of these ecosystems will not be at maturity until 2020.  Some argue that this slow build up is keeping doors opened for the EV market. The fact that the Chinese government is now cancelling subsidies to manufacturers of EV and looking to cancel all grants in 2020 is sending a loud message to the market.  At the same time, there is now more news being released outlining that the Chinese government is supporting Hydrogen Fuel cells is a clear message that “they” don’t think this is going to be the only alternative to clean energy. China Daily reports that the Premier Li Keqiang included the development of hydrogen stations for new energy vehicles for the first time in his Government Work Report this year, 2019. This move is a clear indicator of the government’s endorsement of the hydrogen energy economy.  China has been actively developing hydrogen energy in recent years to make the nation’s automobile industry cleaner and more efficient. Many domestic companies have been actively pushing forward their hydrogen industry layout. Recently, Great Wall Motor Co Ltd, one of the country’s largest sport utility vehicle and pickup manufacturers, is making hydrogen fuel cell electric vehicles a new focus for its business. If you need convincing if all these “talks’ are severe,  the company has invested more than 1 billion yuan ($149 million) in research and development in hydrogen energy and fuel cell vehicles. Yin Tongyue, chairman of Chery Automobile Co Ltd and a deputy to the 13th National People’s Congress, proposed at this year’s two sessions the drafting of a national development strategy to promote the healthy development of the hydrogen energy industry. One must remember that the discussion at the Party meetings is as good as endorsements for the path forward.  Don’t get me wrong, I am not implying that China is abandoning EV. What does this mean for Lithium and Cobalt? The demand for lithium and cobalt is not going to disappear in a rush nor the long term. We are not going to see abandoned lithium and cobalt mines.  What I do feel is that this price range is not going to be rising in the medium term nor the long term.  That is my opinion, and the evidence coming out seem to be more supportive than contradictory.  When I wrote my article – Hydrogen Cars – Are they safe? How do they work? – There was not a lot of information, especially from the “China opinion”. However, for this article, there is plentiful of information which I have had to summarise to reduce the avalanche of research material. This sudden influx of material on Hydrogen Fuel Cells and China’s public announcement of its adoption of the technology seem to be a clear message that there is a movement towards the Hydrogen Fuel Cell space.  What this means for the Lithium and Cobalt industry or The Battery Minerals is that those who are efficient will be around and those with slim margins and all the negative aspect of a mineral resource project will be left behind.  If your project does not meet the grade, cost and deliver marks, then you may as well give up.  These factors have more of implication in the Lithium space as there is the divide of Hard Rock against Brine deposits. Those that are already producing will be the last to go, and those with the slimmest of margins will be next on the list to leave the industry.  These kinds of conversations may seem a bit outrageous, but from a “Nostradamus” point of view, I think that is pretty on the mark. What Kind of Projects will make the List of Hopeful Survivors? In a turn around of thoughts, I now think that for Brine Lithium projects may be the favoured style.  I say this because the Brine mines are less expensive to run in the long run.  The argument has always been that the Spodumene deposits are a higher grade, but their OPEX are larger.  The Brine deposits are still struggling with technology to get it to happen. However, it seems that it is now just a matter of time before that is a reality.  It is no longer or at least less of an unknown if the technology can make things work. I will admit that I have not followed the Brine space as much, but from what I have read, the technology is getting closer to success now.  The upside with the Brine deposits are the supply is never going to be an issue, and there is no doubt that OPEX will be lower.  I am not sure about the CAPEX, but my two cents worth tells me that it has to be smaller than the hard rock cousins.  Currently, the technology is the barrier. As for Cobalt, the comments are much more straightforward. There is no need for a debate.  The African sources are sufficient to feed the market.  There is no other deposit in the world that will be bigger than those already in place in Africa and Morocco. The funding to explore for more sources have all disappeared.  An announcement of a cobalt project no longer gets the capital market out of bed.  If this revolution with Hydrogen Fuel Cell takes speed, the need for Cobalt will not see a significant future supply issue. Conclusion The whole Samso process is to look at things from a different angle, a different thought and to make the story interesting.  This full Hydrogen Fuel Cell story is one that Samso thinks is not well understood and almost forgotten.  Everyone is so focused on EV and the renewable story centred on electricity.  Hydrogen Fuel Cell buses are now being trialled all over the world.  A few years ago, I saw a technology applied to the storage and transportation of hydrogen.  I never thought about the industry and took me a long time to understand the market potential.  Now thinking back, that is more than a worthwhile project. The industry research is showing there is an increase in Hydrogen stations and the manufacture of Hydrogen Fuel Vehicles.  California is the model state that has a statewide link of stations.  Holywood is now catching on the bandwagon and has even started a business that leases Hydrogen vehicles to the rich and famous for creating a trend.  We all know who these trends can create revolutions that snowballs into a mass hysteria of “I want these cars because they are trendy” scenario. After doing my first research into Hydrogen Fuel Cell vehicles, I have argued that this could well be better than EV.  The history of hydrogen tanks blowing up is no more.  The cost of using the Hydrogen Fuel Cell is negligible.  The only issue is the cost of producing Hydrogen.  However, like all technology, when there is a commercial win, the market usually funds the solution, and that seems to be the happening process from what I am reading. The Japanese industry is also looking at Hydrogen Fuel Cell because the dense nature of the cities is not going to allow generous space for recharging stations.  The adaptations of existing stations for refuelling hydrogen makes perfect sense.  This is also the case in all the densely populated spaces such as New York.  This ability to use existing infrastructure will make Hydrogen Fuel Cells more practical. Remember that refuelling will be less than five5 minutes as opposed to significantly more minutes for EV. This resurgence to the Hydrogen Fuel Cell energy source could make the brine lithium industry more competitive and be more “investable” than the traditional spodumene deposits.  The downside with that statement is that if the technology does not work, the brine lithium sector will not end well.  Irrespective, if the Hydrogen Fuel Cell revolution happens, I don’t see the lithium market, in general, making any bullish runs. 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

While trawling around for something interesting, I came across the term In-Situ Recovery. In-Situ Recovery, In-Situ Mining or In-Situ Leaching, according to Wikipedia, is a mining process used to recover minerals such as copper and uranium through boreholes drilled into a deposit, in situ. In situ leach works by artificially dissolving minerals occurring naturally in a solid state. ISR reminds me of fracking and the fishbone technology for the crude oil extraction industry. Samso describes the process as drilling holes into a known deposit and injecting a substance they call lixiviant. This acts as a solvent to “dissolve” and “act as a medium to transport” the intended metal or commodity. ISR is what people would call a disruptive technology that will revolutionise the whole metal mining industry. This is what fracking has done to the crude oil industry and opening up shale oil and allowing competition to disrupt decades of OPEC stranglehold on oil pricing. The disruption to the industry that I mentioned could potentially open up sources of mining where previously was not viable due to cost or geopolitical issues constraints. The process of In-Situ Recovery/Leaching This process involves pumping of a lixiviant into the ore body via a borehole, which circulates through the porous rock dissolving the ore and is extracted via a second borehole. The lixiviant varies according to the ore deposit: for salt deposits, the leachate can be fresh water into which salts can readily dissolve. For copper, acids are generally needed to enhance the solubility of the ore minerals within the solution. For uranium ores, the lixiviant may be acid or sodium bicarbonate. A lixiviant is a liquid medium used in hydrometallurgy to selectively extract the desired metal from the ore or mineral. It assists in rapid and complete leaching. The metal can be recovered from it in a concentrated form after leaching. Lixiviants may work by altering the redox state of ore, or by altering the pH. Acidic lixiviants, such as sulfuric acid, are commonly used to leach base metals such as copper,[2] whereas basic lixiviants such as a solution of sodium cyanide are used to leach precious metals. In the United States, lixiviants which contact the environment are almost always oxidizers of neutral pH because this minimizes risk to the environment. The origin is the word lixiviate, meaning to leach, to dissolve out, deriving from the Latin lixivium. (Source: Wikipedia) All of this is very new to me, but when you do the research into the technology and the current knowledge, it is not that “Star Trek” about it. There has been extensive industry work to show that this could potentially be a game changer in mining metals as opposed to just the hydrocarbons. History of ISR References to ISR date back to 177 BC and the Chinese used ISR to recover copper in 907 AD. ISR has been used extensively in the recovery of soluble salts, such as halite (NaCl), trona (Na3(CO3)(HCO3)·2H2O), potash (various salts that contain potassium in water-soluble form, such as potassium hydroxide, carbonate, chlorate, chloride, nitrate, sulphate and permanganate), boron and magnesium minerals. The first trials of uranium ISR were initiated in the 1960s in USA and Russia and, by 2013, almost half of the world’s uranium was being mined from ISR operations, including those in Australia, China, Kazakhstan, Russia, USA and Uzbekistan. (Source: Mining 3) As usual, whenever there is a need to save money and make money, the Chinese are at the forefront. As I mentioned, the idea is not new, and the technology has been around for a long time. It is just the refinement that needs to be sorted out. It seems that the key in Australia is the research by Mining3. They have been doing a lot of work in establishing the requirements to extract more conventional commodities. Who is Mining3? (Source: Mining3) Mining3 is a partnership between CRCMining and the CSIRO Mineral Resources group formed in July 2016. Mining3 comprises all CRCMining’s activities and CSIRO’s hard rock mining research capability. The partnership brings together significant mining research capabilities to effectively deliver research and innovative technologies for the members and the global mining industry. CSIRO As Australia’s national innovation agency, the Commonwealth Scientific and Industrial Research Organisation (CSIRO) has been pushing the edge of what’s possible for almost a century. CSIRO Mineral Resources works closely with industry partners and delivers innovation to grow Australia’s resource base, increase productivity and drive environmental performance. Mining3 Mining3, previously trading as CRCMining (Cooperative Research Centre for Mining Technology and Equipment (CMTE)), was established and supported under the Australian Government’s Cooperative Research Centre’s Program in 1991. It brought together, for the first time, Australian and international leading mining organisations in a cooperative effort to develop innovative mining and processing techniques as well as supporting equipment for the industry. The Centre was successfully refunded in 1997 (CMTE 2), in 2003 (CRCMining 1) and 2009 (CRCMining 2). Under the agreement, funding from the Commonwealth ceased in June 2014, marking a milestone of 23 years delivering world-class research outcomes. Today, it is an organisation that is entirely funded by industry. What are the benefits of ISR? ISR is a bit like the Fishbone extraction theory that I mentioned previously in the article I wrote, Doriemus PLC (ASX: DOR) – Fishbones Stimulation Technology. The implications are similar. Projects that were not viable could come online, parts of the mine that were “left behind” could be extracted. It’s kind of like sucking the last little bit of your bubble tea, digging that last pearl that is mixed in among the ice in the bottom of that bubble teacup. It’s like licking the very last drop of your favourite ice cream from the bottom of the bowl. It’s like drinking that last drop of your favourite Sarawak Laksa gravy :-). The benefits of ISR is simple. Almost every issue that stops a mining process could become a non-issue if this technology were working as it is intended to do. All the cost, the geopolitical, environmental issue could be overcome with such a non-invasive method of mining. Conclusion There is no doubt that ISR will change the mining scene, but as usual, the significance that this technology will create will take time. Will it create an economic factor? Well, that is going to be the problematic variable as there has not been any real test to extract metals commercially. For me, I think to dissolve gold in a vein and then transport that to surface and mine it as we know the meaning of the word today, that is going to be tough. Fishbone Technology for the crude oil industry is very dependent on the characteristics of the hosting rock. This requirement is also going to be the same for this method. Do I think that in time, this will be a plausible scenario? I think that could well be a yes. I believe the path for this technology will allow mining of individual deposits, but it will be limited to specific geological conditions. It could be that particular ore types, like vein-hosted deposits could be the one that is specific enough, usually high grade and contained in chemistry.  This style could be the one that is easiest to reach. Vein-hosted deposits are usually high grade in nature and usually not bulky could be the benefit of this technology. Lower cost, less environmental imprint, less geopolitical issues and less social implications could be perfect for ISR. 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

Diamond projects have been my geological soul mate ever since I studied geology in high school. I have always been intrigued by diamonds and the whole coloured gemstone sector. I don’t think I was fascinated with geology. I was fascinated by coloured stones and how they appear in their crystalline forms in nature. Emeralds were my favourite, followed by coloured diamonds. White diamonds are beautiful, but they are just too vanilla. My Honours thesis was on the topic of diamonds. It was after doing my Honours year in Geology that I got interested in diamond geology that was very different from the other commodities. Although I should have done better with the thesis, I did learn a lot from the research with the help from my supervisors Dr Rob Ramsay, Dr Wayne Taylor and the late Dr Nick Rock. Without Rob and Wayne, there would not have been a thesis. What has happened with diamond exploration? The last time I remember a diamond exploration IPO was that by Cambridge Gulf Exploration Limited in the early 1990s. Could have been 1993. They had a plan to mine the diamonds that were in the Cambridge Gulf. The theory was that the action of weathering and erosional would transport diamonds from the Argyle pipe into the gulf. There were Striker Resources which was exploring the North Kimberley Ashmore pipes in the 1990s and then went and tackled the Merlin Diamond project.  Striker changed its name to North Australian Diamond Company, and I think, it later became Merlin Diamonds. Recently there was POZ Minerals who are trying to prove up the Blina Diamonds. Poz Minerals is now called Gibb River Diamonds (ASX: GIB). Lucapa Diamond Company Limited (ASX: LOM) is probably the most recent successful ASX listed diamond company. Lucapa is mining high-value diamonds from the Lulo (Angola) and Mothae (Lesotho) mines.  They are uncovering some huge stones from their projects. The Webb Project (Source: Geocrystal Limited IPO Prospectus) In 2018,  Geocrystal was unsuccessful in their attempted to list the company on the ASX (Australian Stock Exchange). The company is now still an unlisted public company. The Webb Diamond Project is located approximately 500km due south of Halls Creek and 630km west of Alice Springs (Figure 1). Webb is located in the remote West Arunta region of the Gibson Desert of Western Australia. The Webb tenements contain a large cluster of bulls-eye, magnetic dipole features interpreted to be pipe-like intrusions. These geophysical targets compare to geophysical features of mantle-derived rocks found associated with swarms of kimberlite and lamproite pipes in Archean cratons and Proterozoic mobile belts that host known diamond occurrences. Initial modelling of the magnetic features was based on Government aeromagnetic surveys flown on 400m line spacings. However, additional modelling took place following an aeromagnetic study carried out by Meteoric Resources in 2010 over part of E80/4235. More detailed modelling took place following an aeromagnetic survey carried out by the Company in 2014. A total of 12,574 line km was flown on 100m line spacings, and 280 magnetic dipole features were interpreted. Detailed modelling of selected magnetic targets indicates vertical pipe-like bodies with depths to the unweathered top of the modelled bodies ranging from 50 to 150m below surface and diameters varying from 180 to 300m. Recent Exploration by Geocrystal. In 2013 and 2014, the Company carried out the first exploration and drilling programs (7,713m) over these magnetic features and drilled 64 targets located on tenements E80/4235, E80/4407 and E80/4506, discovering 51 kimberlite bodies. There remain 216 untested kimberlite targets at Webb. In the period 2013 through to 2015, the Company undertook extensive loam (surface concentrate) sampling programs of the desert sands (totalling 42 tonnes) to determine the presence of Kimberlitic indicator minerals and microdiamonds. A total of 27 micro-diamonds were recovered with the majority located within a broad surface microdiamond dispersion anomaly 150km2 in area. The surface microdiamond anomaly is characterised by a high incidence of microdiamonds and with larger dimensions up to 0.4mm at its eastern margin. During 2016 and 2017, the company applied ground penetrating Lozar radar, ground magnetic and gravity geophysical surveys on selected kimberlite magnetic targets within the Webb project area, especially over targets, lying within the large surface microdiamond area.  These surveys aimed to obtain a better understanding of the size, shape and depth extent of the targets and therefore prioritise these targets for future drilling. A New Diamond Province. The Webb project is one of the best exploration stories that I have heard.  The unfortunate part is that its a diamond story.  Looking for diamonds is as raw as you are ever going to get in the exploration industry.   It is a long and slow process and in my opinion, an intellectual tease as you have to look at geomorphology, geochemistry and damn hard work.  My experience in this industry came from my time with Ashton Mining Limited.  Ashton was eventually taken over by Rio Tinto Limited (ASX: RIO).  Those years were the most memorable as I got to work at the Merlin Diamond Project which later became the Merlin Diamond Mine.  It was great to have been involved with the discovery of the Bronzewing Gold Mine and the Merlin Mine in the first five years of my geological career. I was the lucky one as I was supervising the drilling and not doing the stream and loam sampling, which was backbreaking work.  After learning what they had to do, I was thrilled to stick to my mustard. I was like the resident at what was then called Boomerang Creek.  Living in five-star accommodation and cooking five Michelin star meals as you can see below. Why Is The Webb Diamond Project Prospective? The Webb project may have given Australia the diamond province that had eluded great explorers since the late 1970s when Argyle was discovered.  The closest project that came close to a province like Webb was the Coanjula Pipes, which was my Honours Thesis.  Ashton Mining owned the project.  There was a sizeable microdiamond field that led many thoughts that the pipes were potentially a field of kimberlites or lamproites.  However, analysis of the pipes showed that they were alkaline pipes and not from the mantle which produced diamonds. Geocrystal has been working on Webb for several years now, and the evidence is throwing up some very compelling evidence that one or more of the pipes are bearing diamonds.  The project is now at the point where drilling will show either they are on the verge of discovering a diamond bearing field or another false hope. The Geocrystal exploration is headed by Thomas Reddicliffe, who is the technical director.  Mr Reddicliffe described the Webb project as one of the more exciting current diamond exploration projects. Mr Reddicliffe was involved in the Kimberley diamond exploration teams that discovered both the Ellendale and Argyle diamond deposits.  He also worked as the Australian exploration manager for Ashton Mining in the 1990s and later continue to be prominent working in Striker Resources and Merlin Diamond Limited.  A wise “old” man who is a probably one of the few actively working diamond geologist that has seen that much experience. The Webb Geology As you can see in Figure 2, Geocrystal has identified approximately 300 discrete magnetic targets.  Drilling and sample analysis has confirmed the pipes show characteristics to a kimberlite.  Both gravity and magnetic modelling show some of the kimberlite pipes to be potentially as large as 12-15 hectares (Ha) in surface extent5, at depths of c.100m. Exploration by the company has now highlighted an area to the Northeast, where the most prospective untested targets need to be drilled.  The discovery of larger microdiamonds has led the company to believe that this region (highlighted pink area) as the area of most significant interest. What is interesting to me is that the 100s of discrete magnetic targets form a series of linear NNE trending dyke – like anomalies. The relationship between these linear anomalies and the discrete magnetic anomalies has not been established.  However, you learn in exploration that nature never produces a pattern for no reason.  When you have items being injected up from the mantle (a long way down), it always seeks the path of least resistance, and if there is a linear feature that allows you to come up, you do that. What that means is that potentially, these linear features could be part of the whole endowment story for diamonds in the area. Simplistically, what all the evidence are saying is that Webb is a Kimberlitic province that has a cluster of pipes with varying mineral geochemistry indicating that they are tapping different parts of the mantle material that are from the “zone” of interest.  Diamonds are only stable at  900 – 1300 C and pressures between 45 – 60 kilobars. (kB), so to identify that particular pipe from that point inside the mantle, you require statistics. The first good news in Webb is the identification that a cluster of Kimberlite, the source of the mantle (the medium in which potential diamonds are to be hosted.) exists.  The second is the presence of diamonds, and Webb has a microdiamond trail.  The third is the presence of indicator minerals which show the chemistry from that diamond formation region of the mantle. When you have all that geochemistry sorted, you need the geomorphological factors, such as the trialling of the diamond and indicator minerals towards the northeastern region.  The discovery of microdiamonds that are still showing the crystal forms means that they have not travelled that far from its source.  This is an important feature. The photo of the diamond discovered by exploration activities, as shown in Figure 3, is a critical aspect. This small macle is one of 30 microdiamonds recovered from surface sands overlying the Webb field.  Eighty per cent of these microdiamonds are concentrated in the northern part of the kimberlite field within a coherent and repeatable surface anomaly. Webb is a vast kimberlite field, with the pipes tested to date being sourced around the theoretical diamond-graphite transition depth. The deepest sourced pipes tested to date occur in the northern part of the field, so it is not a big stretch to imagine that the source for the microdiamonds will be found in the northern part of the field. – Thomas Reddicliffe, Geocrystal Limited. Conclusion – My Thoughts I admit I love the excitement of diamond exploration.  Real exploration has not been done for a long time.  There have been a few companies that have gone into “near mine” projects and then moved into production, but there has not been a discovery of sorts, especially in Australia.  The late Maureen Muggeridge led the last person or group that had any profile looking for diamonds.  I may have graduated as a geologist, but I am in awe of the thing done by the likes of Maureen. I had an insight into what is required to find diamonds and how much it cost.  The most important part of diamond exploration is money and time. Both of these items are in short supply in the equity markets and especially the catch cry today is “near-production”.  The reward for finding a producing diamond mine today is the fact you will be the one and only diamond producer in Australia.  Quality stones still see a high price as companies like Lucapa and Lesotho will tell you.  Merlin Diamonds was fetching up to $300/carat. The Webb project is the only project that will give you that option of spending $2-3M and drill those targets. If you hit a diamondiferous pipe and the results are favourable, you will know immediately.  There is no need to spend years looking at the trail, looking for the trail or analysing the geochemistry.  This is the only diamond project that you literally can walk up to it and drill.  A well-executed exploration program is also supporting the optimism. The cluster of Kimberlite pipes in a confined space with microdiamonds that are consistent with a lack of transportation is what gives me the confidence that this could be the elusive diamond province that everyone has been looking for since the discovery of Argyle and to a lesser extent, Ellendale, Melin and Blina. I was the supervising geologist when the Merlin Diamond Field was discovered. Although I did not realise that I had just drilled through the pipe, named Ector but really should have been named Noel, I knew I had drilled something different.  The thrill of knowing that I played a part in the discovery hole (after Excalibur which was discovered 1-2yrs prior) that proved the concept of a field of pipes would be etched in my memory till I am too old to tell the story.  That is what Webb can provide after all these years. 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

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

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

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

Originally posted on Smart Money Gains Earlier this month Australian Gold producer St. Barbara ( ASX: SBM ) announced it is acquiring 100% of Canadian gold producer Atlantic Gold ( CSE: AGB ) in a deal valued at $802 million. St Barbara’s offer represents a 41.1% premium to Atlantic’s closing share price on the day of the announcement. This deal comes after Australia’s largest gold company Newcrest Mining purchased close to a billion-dollar stake in Imperial Metals earlier this year. Trends suggest that other Australian companies will be looking at purchasing Canadian assets in the near future. The valuation gap between Australian and Canadian producers is projected to lead to consolidation for mid-tier miners. BMO Capital Markets analyst Brian Quast notes that other potential acquirers could include New Gold (TSX: NGD); Pretium Resources (NYSE: PVG); TMAC Resources (TSX: TMR) and Wesdome Gold Mines (TSX: WDO). Atlantic Gold Company Overview Atlantic Gold began commercial gold production in the Moose River Consolidated mining complex a year ago. The operation consists of two open-pit gold deposits that produced over 90,000 ounces of gold at the low all sustaining cost of C$731 per ounce. The company is awaiting a mining permit for a nearby project and is also exploring other areas of their land holdings. Nova Scotia Gold Mining Gold mining has been a big part of this Canadian Province’s economy. To date, over a million ounces of gold have been produced in the province since mining began in 1861. So far there have been 65 historic gold districts hosting past mining operations. Atlantic Gold’s Neighbour has a massive land position Meguma Gold has extensive land holdings adjacent to Atlantic Gold and that leads gold analysts to believe that there is significant gold content at their properties. With Atlantic producing MegumaGold can expect a ton of appetite for their assets as their exploration program moves forward. This map puts it all in perspective….. MegumaGold Corp. CSE: NSAU OTC: NSAUF FWB: 2CM2 Market Cap: C$13M Shares issued: 96,530,640 The company recently announced promising results from ongoing exploration work including one sample that graded as high as 49.8 grams per ton Au. These samples came from waste rock piles associated with previous mining and certainly confirm gold mineralization. It seems that they have found the location of a gold vein and further work should help uncover more details as to the magnitude of the discovery. Meguma is going to be commencing a drilling program that is designed to confirm, expand and reinterpret the known mineralization on this property. The company has sufficient capital to continue its drill program and their 179,280-hectare land position and 11,147 mineral claims should surely lead to some great findings in the near future. Bottom Line Atlantic Gold has been one of the biggest success stories in Canadian gold mining this year. The company saw it’s share price surged 73% YTD. This acquisition is putting MegumaGold in the spotlight due to the close proximity of the projects. With such a massive land position and experience gold mining veterans MegumaGold has the potential to be the next Atlantic Gold within a few years. 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

To the general public, Vietnam has not been synonymous with mineral resources. However,  Vietnam is very active with mining and currently is host to the biggest working Tungsten mine outside of China. Located in Thai Nguyen Province in northern Vietnam, Nui Phao is the world’s largest tungsten mine, with an estimated reserve of 66 million tons. As the flagship asset to Masan Resources’ portfolio (Masan core business is making and selling noodles), the polymetallic deposit also includes a rare combination of economic mineralisation of fluorspar, bismuth and copper occurring with the tungsten. (source: Mining Global) The north-western part of Vietnam is host to a  very mineralised belt that extends into China (Figure 1) The northerly trending Loei Belt (Figure 3) from Laos is also very mineralised where numerous copper and gold mines have flourished for many decades. Apart from the numerous established mines, there are a series of small miners like what you would find in Australia, South America and Africa.  Vietnamese are no strangers to the art of mining and dealing in mining projects (Figure 2).  In Figure 2,  you can see that the northern part of Vietnam has an extensive amount of mining activity.  I remember 15 years ago I was doing work for a private company who had a gold project in this part of the world.  The project as a quartz hosted high-grade gold story but they abandoned the whole project due to jurisdiction issues.  The major downside with doing any work in Vietnam belongs to the “highly sophisticated administration” process. Blackstone Minerals Announcement On the 8th May 2019, Blackstone Minerals announced that they have taken the option on the Ta Khoa Nickel Project in Vietnam to earn 90% interest in the project (Figure 1). The project is anchored by the Ban Phuc nickel mine which was mined from 2013 to 2016 and is currently on care and maintenance. The package is 150 square kilometres and has more than 25 massive sulphide vein targets that will give the company all the upside. Some of these targets may be larger disseminated sulphide targets.  The deal is pretty soft, $400,00 cash as quarterly payments over the 12 months and exercising the option with AUD$1M worth of shares on VWAP (Volume Weighted Average Price). The tectonic setting in this region is interesting as it is where you would expect strong mineralisation events.  The structural belts that run adjacent to the project area have a strong metal endowment and especially on the China side within the Yunnan Province.  The NiS mines in China are large systems and this is what Blackstone is marketing.  No doubt the Ta Khoa Nickel project has all the ingredients to make this a world class nickel project. The concept of chasing the Disseminated Sulphide ore bodies makes good sense.  The historical mining strategy of chasing the NiS veins worked well in the past.  However, I do think that the new strategy of chasing the lower grade disseminated orebodies will pay off as there appears to be a readymade open pitiable mine. Granted that more drilling will need to be completed but the historical drilling results are very encouraging.  Remember that these kinds of projects favour those that do go out and test the near mine resources.  Bellevue Gold Mines (ASX: BGL) did that with their current project and it has put the company is a very strong position. Blackstone has mentioned that there are numerous targets that have not been tested.  The proof in the pudding is when they go out drilling. 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