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

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

It is not an easy task to work through a market that is dealing with the fourth most commonly used commodity, globally.  Trying to decipher what is a “play” and what is “real” is another scale up in difficulty especially in ASX (Australian Stock Exchange). Making a list of “interesting” companies is an even harder task. When you take away the big players who are in the sector, there are not too many that stands out.  There are a lot with projects that are more a product of the rush to get a zinc project into the company to attract funding a while back.  Unfortunately, they are now stuck with it as the price surge did not happen.  Now with China officially in a slow down pattern, I can not see the price surge happening.  They will be lucky to get a price that is reasonable. I have selected a few that I know of from previous dealings and some that I have discovered while researching for this blog.  I must say there are a lot more companies than I thought.  There are a couple of companies that I like, but I have had to do them separately as there was too much detail.  I will post those shortly. Venturex Resources Limited (ASX: VXR) Venturex Resources is the closest small-cap company that may get into production.  I do realise that it is more a Cu project than a Zinc mine, but it is the closest that I can find in regards to a small-cap ASX listed company.  However, they do have a reasonable resource number for Zn.  The other companies out there are either exploration or just doing up their resources, and it will be still a while before there is confirmation on absolute resource number. The Sulphur Springs Deposit shows typical VMS morphology with a copper-zinc rich, massive sulphide lens that is underlain by a copper-rich stringer zone up to 50m in width. Mineralisation has been drilled over a strike of approximately 500m and to a depth of about 400m below the surface. Drilling below 400m vertical is sparse offering excellent exploration upside. Sulphur Springs has a JORC compliant resource if 17.4 MT of 1.3% Cu, 4.2%  Zn and 17 Ag/t. The company has outlined a 12-year life of mine to produce 12,000tpa Cu concentrates and 32,000tpa  of Zn concentrates.  A pre-tax NPV of AUD338M with a payback of 2.6 years. In October 2018, the company made a presentation on the financial result of the Definitive Feasibility Study. I was a shareholder recently and sold out to relocate my investment.  My original intention for the investment was for Sulphur Springs, but the stock went on a different course with the Pilbara Conglomerate gold rush.  I do feel that this is still the main game.  The only issue I think is the size and the shareholding as Northern Star Resources Limited is a 19.0% shareholder.  In my opinion, the reluctance of a  giant to throw lots of money into the production seems to be a sign of the quality of the project.  That is my opinion. In saying that, I am sure this will be interesting for the ASEAN investors, especially the ones to the northern parts. Corporate Information Market Capital:  44M Outstanding Shares:  239.9M (06/2018) Top 20 Shareholding:  60.7% Trek Metals (ASX: TKM) The Kroussou Project consists of one Exploration License, G4-569, covering approximately 1,500 square kilometres located in Ngounié Province, western Gabon, 220 kilometres southeast of the capital city of Libreville. Recent drilling has uncovered up to 15.2% zinc and lead at Dikaki, with Trek planning to release an exploration target for Kroussou in 2019. On the 20 November 2018, the company announced some decent results from their Dikaki project. There were intercepts of 24.5% Zn to as high as 32.6% Zn This company has a small minimal market capitalisation, and if they do find more decent intercepts, I think this may be a fair punt.  The intercepts are not very wide, but I think its still early days. There are some encouraging 7m intercepts which are good.  The issue will be how much cash do they have and will they be able to stay away from political issues that are common in Africa. Corporate information Market Capital:  4M Outstanding Shares:  312.3M (06/2018) Top 20 Shareholding:  53.6% Terramin Australia (ASX: TZN) Terramin holds a 65% shareholding in WMZ, with the remaining 35% owned by two Algerian government-owned companies: (32.5%) and Office National de Recherche Géologique et Minière (ORGM) (2.5%). The Project is on the Mediterranean Sea, 15km from the regional city of Béjaia, on the northern Mediterranean coast of Algeria.  The town of Béjaia provides extensive infrastructure including an international airport and deepwater port. Location benefits include grid power, abundant water and proximity to European zinc smelters. The Tala Hamza deposit holds a Resource of 68.6Mt (Measured, Indicated and Inferred) at 4.6% zinc and 1.2% lead at a cut off of 2.5% zinc equivalent (inclusive of Probable Reserve). The deposit is within the Oued Amizour permit area that covers 125 square kilometres and includes some potential additional prospects for lead-zinc and copper. Corporate Information Market Capital:  224M Outstanding Shares:  1869.2M (06/2018) Top 20 Shareholding:  89.4% (2017) Todd River Resources (ASX: TRT) Todd River Resources holds an extensive exploration portfolio of tenements in the Northern Territory.  The company is exploring for base metals and gold. Currently, the Company is focused on expanding the mineralisation identified in mid-2018 at the Mt Hardy zinc-copper Project north-west of Alice Springs and has an aggressive exploration program planned into 2019. Also, the McArthur and Rover Projects are highly prospective, and both will be advanced during 2018 and into 2019.  However, the recent news has been the high-grade intercepts coming out of the Mount Hardy project.  The company quotes the project as a Cu-Zn project, and the recent announcement on the 29 November 2018 highlighted the interception of sulphide mineralisation.  One of the holes had 21 metres of brecciated sulphide. XRF values from of 3.9%Zn over 22.50m is impressive.  They reported some zones going up to 10.2% Cu and 32% Zn. The results are from pretty deep down. So there will be some more work required. What is more interesting for me was the partnership with S2 Resources Limited (ASX:  S2R).  Dr Mark Bennett will join the Todd River Board, and I am sure that will inject a lot of value to the company.  The announcement was on the 22 November 2018. Todd Resources will be worth keeping on the watchlist. Corporate Information Market Capital:  11M Outstanding Shares:  66.3M (06/2018) Top 20 Shareholding:  36.2% (2018) Red River Resources (ASX: RVR) Red River Resources’ Thalanga Zinc Project consists of the Thalanga Mill and base metal deposits at West 45, Far West, Waterloo, Orient and Liontown, located about 65km southwest of Charters Towers in central Queensland. Production of metal concentrates at Thalanga Zinc Project recommenced in September 2017 after a five-year hiatus. Thalanga is producing zinc, copper and lead concentrate with off-take agreements in place with Glencore (copper) and Trafigura (zinc & lead) for three years. Corporate Information Market Capital:  83M Outstanding Shares:  489.9M (06/2018) Top 20 Shareholding:  46.3% (2017) New Century Resources (ASX: NCZ) New Century Resources (ASX: NCZ) is an Australian base metal producer that has restarted the Century Mine in Queensland with the aim of becoming one of the world’s top 10 zinc producers. New Century acquired the Century Mine when it ceased production in 2016 and has executed an economic rehabilitation plan comprised of upgrading the mine’s existing world-class infrastructure. This rehabilitation was completed in August 2018 when the mine successfully entered production. New Century Resources is initially focusing on the existing ore reserves to produce zinc in the lowest cost quartile globally.  Substantial mineral resources exist on the mining leases which will provide a significant opportunity for mine life extension and metal production increases from the mine’s operations. The company had the first shipment of 11,000t of zinc concentrate to China. The company has reserves of 2.3Mt zinc and 29.7Moz silver (77.3Mt at 3.1% ZnEq)  The projected mine life is 6.3 years based on the Reserves only. Corporate Information Market Capital:  365M Outstanding Shares:  504M (06/2018) Top 20 Shareholding:  59.6% (2018) Ironbark Zinc (ASX: IBG) In my research, I found this company, and I was very intrigued by the information.  I do wonder how this project will get developed, but the numbers are imposing so if they get this project up, I am sure it will be a good value adding exercise for the shareholders. Ironbark Zinc is aiming to develop its 100%-owned Citronen zinc-lead project in Greenland, which has a significant resource of 132Mt at 4.4% zinc and lead – equating to about 12.8 billion pounds of zinc. The Citronen Zinc-Lead Project represents one of the world’s most significant undeveloped zinc-lead resources with a resource of more than 13 billion pounds of contained zinc and lead metal. The project is located in northern Greenland, a self-governed part of the Kingdom of Denmark and has a low level of sovereign risk. To date, there has been more than 67,000m of diamond drilling at the Citronen Project. Citronen is a sedimentary exhalative (SEDEX) deposit- a potentially large type of deposit. The mineralisation at Citronen starts from the surface, is flat lying and is currently open in almost all directions. The deposit is adjacent to a deepwater fjord that may provide near mine ship docking and loading opportunities. In September 2017, the company released the following information, Highlights of the Feasibility Report included: NPV8: US$1,034  Million (US$909M post-tax*) IRR: 36.0% (35% post-tax*) Capital Cost: US$514 Million** Large Scale Production: 3.3Mtpa Mine Rate/Production up to 200,000tpa zinc metal Site Cost: US$0.52/lb Zn (Payable, Net of by-product credits)*** Mine Life: 14 years (open-ended and with further inferred resources that could potentially be converted to reserves) Life of Mine Revenue: US$6,364 Million Life of Mine Operating Costs: US$3,025 Million Life of Mine NPAT: US$1,836 Million* The current JORC 2004 compliant resource for Citronen is: Corporate Information Market Capital:  21M Outstanding Shares:  638.2M (06/2018) Top 20 Shareholding:  43% Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information.  I try and write about topics that are interesting and have the potential to be of investment value.  It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

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

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

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

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

What is the problem with vanadium?  There is a rush for the product, but the market does not seem to be giving the vanadium companies any slack.  We all know that it’s a complex element and many a company have gone bust trying to master it.  We also know about its special properties that are luring young and old to invest and take that punt hoping for a big payday. Over two centuries have passed since the Spanish scientist Andres Manuel del Rio discovered vanadium in Mexico.  Despite this, we are only now understanding the mineral’s vast potential.  If vanadium is known for anything, it’s steel. Added in small quantities – as little as 0.15% – vanadium is proven to double the strength of the alloy.  Henry Ford was one of the first exponents of the metal, using it to strengthen the Model T – the car credited with introducing the automotive industry to the masses in the early 1900s. Its the unique properties of vanadium that is driving the excitement at the moment. What is Vanadium? According to Wikipedia, Vanadium is a chemical element with symbol V and atomic number 23. It is a hard, silvery-grey, ductile, and malleable transition metal. The elemental metal is rarely found in nature, but once isolated artificially, the formation of an oxide layer (passivation) somewhat stabilizes the free metal against further oxidation. Andrés Manuel del Río discovered compounds of vanadium in 1801 in Mexico by analyzing a new lead-bearing mineral he called “brown lead”, and presumed its qualities were due to the presence of a new element, which he named erythronium (derived from Greek for “red”) since, upon heating, most of the salts turned red. Four years later, however, he was (erroneously) convinced by other scientists that erythronium was identical to chromium.  Chlorides of vanadium were generated in 1830 by Nils Gabriel Sefström who thereby proved that a new element was involved, which he named “vanadium” after the Scandinavian goddess of beauty and fertility, Vanadís (Freyja). Both names were attributed to the wide range of colors found in vanadium compounds. Del Rio’s lead mineral was later renamed vanadinite for its vanadium content. In 1867 Henry Enfield Roscoe obtained the pure element. Vanadium is the 20th most abundant mineral in the earth crust and occurs naturally in about 65 different minerals.  The metallic vanadium is rare and is known as the mineral vanadium, native vanadium.  Wikipedia has a pretty substantial write up on its uses and other factors. One should contribute and keep it free :-). Traditional uses of Vanadium. About 90% of vanadium is used to produce speciality steel alloys.  Vanadium pentoxide is a catalyst for the production of sulfuric acid. Uses in the Renewable Sector. The recent rush to find vanadium stems from the introduction of vanadium flow batteries. As reported in altenergymag.com, these batteries allow intermittent energy supplies to be regulated from moment to moment.  This dispatchable energy or dispatchable power enables the grid to balance the amount of energy going into wires. Vanadium flow batteries utilise vanadium’s unique characteristics for rechargeable energy storage, which is critical to renewable and dispatchable power systems. Research facilities around the world are investing in vanadium flow battery research and development to meet the projected global demand.  The vanadium flow battery has virtually unlimited storage capacity with the ability to scale the batteries. As a result, the vanadium flow battery’s value to the emerging renewable energy technology sector is compelling for many utility companies and grid operators. Why is the Vanadium Flow Battery not as famous as the Lithium Battery? Currently, the Lithium Battery (LiB) are more efficient and hence more cost effective for the everyday household.  The Vanadium Flow battery (VFB) close the efficiency gap with the larger storage capacities.  However, at this stage of the technological race, the VFB is still at its infancy.  Like the tungsten battery article that I wrote about in my previous blog, at this stage, the race is still favouring the LiB. Interestingly, when you look at the capacity of the VFB,  I do see them doing well with the massive solar and wind farms.  The way the battery works will be a great benefit in those cases, but I think the cost effectiveness is going to be a big issue. Research does show that these batteries are the most efficient in large capacity requirements. The VFB has up to 40% vanadium content, and this will make the battery vulnerable to price fluctuations.  Imagine what the price of a Cobalt battery now if there was a Cobalt battery.  LiB has already established a big stronghold on technology, and as always, this is going to be hard to change.  No matter how good your technique is, once the mainstream players set their views, they are not going to change in a hurry. So what does that mean for the mineral resource fraternity? For those that have been following this sector, the lack of keen interest is becoming very frustrating.  Many people would have remembered the Windimurra Vanadium project.  The last proponents to take on this project was Atlantic, and that ended in tears.  I believe that was around 2014.  The project had a significant mineral resource.  As quoted on the Atlantic website, the resource was over 235MT.  They claimed to have highest quality ore and was building a plant as well. Recently there was news that the owners of the project are making a comeback with the rising interest in vanadium.  This project had many issues, and the volatile vanadium price did not do them any favours.  However, if my memory serves me well, the main problem was the chemistry and the issues in the plant.  Whether it is a chemistry problem or a lack of management, one will never know.  I remember talking to a few guys about this and they did say that chemistry was the issue. It was because of these issues that I have always maintained,  if you have that large a resource and you cannot get the chemistry right, what hope would any company have without all those positive parameters.  The guys who were in that industry would tell me that it is easier to work with another commodity than to try and work this one out :-).  I am sure that this is now had many technological advances and such issues would have been overcome. Vanadium Companies on the ASX There is a good list of these companies listed on www.smallcap.com.au and it had a good summary of vanadium facts.  I will admit that I have not followed them much because I feel that there is a gap in making the chemistry right.  These boutique stocks are now taking a hiatus on the market, and like all things unique, it needs the market to be hot.  Lithium and Cobalt stocks are a good example. Late last year, you could do no wrong, but now, they are not looking healthy.  Even the ones that have a good story are having a hard time getting the market to get excited. As you can see in the share price charts that I have included, things are not happening.  I have added the stocks that I have some knowledge about so please don’t think that I am favouring any particular companies. My Conclusions The vanadium Flow battery is new technology compared to the traditional Lithium variants.  My thought is that the science behind the technology is very good.  This battery can handle the fluctuation in energy within itself as if it has a living ecosystem. The fact that you have an ever-changing flow of reactions that is comfortably controlled by vanadium with its “living” oxidation states is critical.  Lithium batteries have a tendency to surge and the technology required to manage that is not simple.  This is why we don’t have a rush on electric aeroplanes. The imbalance use of charging and discharging in batteries promotes decay, and that is what these Vanadium batteries can overcome.  I feel that in the long run, the VFB will become significant tools. I read in one article that the New York’s Metropolitan Transport Authority has signed a deal to test vanadium redox batteries. Researchers are developing a prototype that can store electricity generated overnight when the demand is low. The energy stored in the cell could then be used in the morning when the demand for electricity goes up, and this would reduce the amount of power needed during the day. The city would also save money on its electricity bills because power generated overnight costs less than during the day. In the case of the most widely used renewable energy source for everyday households, the solar panels, vanadium-based redox batteries could also help in to be more efficient. Solar panels produce the most electricity in the middle of the day, when residents are often at school or work and when the demand for electricity is low. Vanadium batteries could store this excess electricity and discharge it later in the evening when people are at home to use it. Cost efficiency of these batteries is now what holds it back.  There is a company that makes a “mega-battery” that is as big as a car which sits on top of an office building in Manhattan skyscraper that is charged at night when electricity is cheap and discharge during the day to reduce the amount the building has to pat in daytime prices.  So as you can see, in future, these batteries will be a big player.  It is just a matter of time. 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 Paterson Range which lies in the Proterozoic Paterson Orogen has been a forgotten region of mineral wealth.  It has only been the focus of all punters because of the recent Greatland Gold announcements on Havieron.  In addition to that has been the rumour mill on Rio Tinto possibly finding another “Olympic Dam” style deposit.  Since the discovery of the Telfer gold-copper mine, the region has highlighted its extreme mineral wealth, but in reality, I feel that it has taken a backseat run to all the other provinces regarding discovery excitement. Paterson Range – Mineral Wealth The Paterson range is home to three world-class mineral deposit.  Geologically the area is known as the Paterson Proterozoic Orogen.  The most famous is Telfer Gold-Copper Mine followed by Nifty Copper Mine and the undeveloped Kintyre Uranium Mine.  In amongst these giants are several other gold and base metal projects such as, Warrabarty – Carbonate-hosted Zinc-Lead Woodie Woodie – Mn Magnum – Gold-Copper–Silver-tungsten (Antipa Minerals, ASX: AZY) Goosewacker – Lead-Zinc-Copper vein deposit Maroochydore – Disseminated Copper O’Callaghans – Tungsten Rainbow – Stratiform Copper Moses Chair – Pb-Zn Grevillea – Massive pyrite. Citadel – Cu Finch – Cu These are only the more significant and notable names. There are numerous projects which have had decent discoveries, but due to a lack of infrastructure and the higher cost of exploration and development, not many have advanced.  The O’Callaghans Tungsten project is a good example.  It is one of the most massive known Tungsten project outside of China and yet, it is relatively unknown as it is 300m below the surface and has little chance of being developed at today’s Tungsten price. The projects that define The Paterson Range. Telfer Copper and Gold Mine. The Telfer operations are approximately 400km east-south-east from Port Headland and 1,900km north-east from Perth. Newmont Mining first made a claim to the deposit in 1972.  However this claim is disputed by Jean-Paul Turcaud to this date. Turcaud claims he found the Telfer deposit two years before Newcrest did. In the early 1980s, Turcaud reached a settlement, accepting $25,000 from Newmont’s head office in New York City but continued his claim, demanding a Royal Commission. Turcaud continues to sign posts on Global warming to newspapers as the Discoverer of the Telfer and Nifty Mine. The official story of the discovery states that the deposit was found by Day Dawn Minerals, a small exploration company, who did not stake a claim either. One of the company’s geologists, a man called Ronnie Thomson, then moved on to work for Newmont, in which position he informed David Tyrwhitt, then exploration manager for the company in Western Australia, about the promising gold samples that had been found. Newmont paid Day Dawn $15,000 for the maps of the deposit and Tyrwhitt staked out the claim in May 1972 Despite more than 30 years of exploration, the Telfer deposit remains the only significant gold deposit in the province.  Copper and gold are hosted by veins and stockworks that are concordant in the upper parts of the mine, but crosscutting at depth. Currently, Telfer has the following facts on the mine, 2.4Moz of Gold Ore Reserves 8.2Moz of Gold Mineral Resource 0.21mt of Copper Ore Reserves 0.66mt of Copper Mineral Resources Nifty Copper Mine The mine is approximately 450km east of Port Headland, Western Australia.  Currently, the Nifty mine is owned by Metals X (ASX: MLX).  It has a resource of 21.10Mt @ 1.73% Ni and 539Kt of Copper. The deposit was discovered by Western Mining Limited (WMC, now acquired by BHP Limited) in the early 1980s.  WMC developed a conceptual model for the exploration of sediment-hosted stratiform copper deposits.  Regional fieldwork uncovered coarse-grained sandstone source and laminated dolomitic siltstone and pyritic shales as host In the 1970s,  work began with geophysical and geochemical field work with the discovery coming in the early 1980s.  Geophysical work highlighted a Pb-Zn-Cu target in the western part of the Yeneena basin.  Mapping and lag sampling confirmed the presence of the anomaly and subsequent drilling uncovered the secondary ore body.  Discovery occurred in may 1982.  Mining began in 1992. Interestingly, the Nifty copper deposit is not the most significant copper orebody. It is the only one mined.  The most substantial copper ore body is the Maroochydore disseminated copper deposit. Kintyre Uranium Project. The Kintyre uranium project is 60 km south of the Telfer gold mine and 260 km northeast of Newman at the western edge of the Great Sandy Desert in the East Pilbara region of Western Australia.  CRA Exploration (now Rio Tinto) first discovered the Kintyre deposit in Western Australia in 1985.  Cameco bought the project in 2008 from Rio Tinto in a 70% joint venture with Mitsubishi for US$495M in July 2008.  In July 2012, Cameco announced that the deposit was not economical at current market conditions, stating it required a $67 per pound uranium price. (GSWA Report 97) Maroochydore Copper Project The Maroochydore copper Project is at the western margin of the Great Sandy Desert approximately 100km south-east of the Nifty copper mine (Nifty), 100km south of the Telfer gold mine and some 450km south-east of the Port Hedland concentrate loading facility. Metals X Limited currently owns it. The prospect as 486,000T of Cu metal @1%Cu and 19,000T of Co metal @ 380ppm Co. The 2012 drilling programme, comprising 33 drill holes for 14,971 metres of pre-collared diamond drilling, commenced at the end of April 2012 and was completed in October. Drilling was undertaken over a 5km strike length and included 10,602 metres of diamond drilling at an average hole depth of approximately 453 metres. Stratabound copper sulphide mineralisation of low to medium grade tenor was located in almost all holes and was locally upgraded to narrow high-grade lenses in highly deformed and strongly brecciated folded and faulted structural traps. Note:  I have forgotten where I got the above information. I know that information did not come out of my brain. I tried to source the info but in, my untidy manner, I cannot remember.  It has been a busy weekend. What is the Issue? Like always, the investment world flock to low hanging fruits or perceived low hanging fruits.  Funding for companies is hard to find when you want to explore in “frontiers” such as at the Paterson range.  As I mentioned earlier, the lack of infrastructure for working in this region is a big negative. I remembered in 2009 when I was scouting for projects before listing my previous company,  I looked at a project in the Paterson Range. I liked the potential and the upside. No one was spending money in the region.  I loved the fact that no one was looking to do things in the Paterson Range.  I had a discussion with the vendor, and he mentioned that it would be an expensive journey and being a small company, he advised that I look elsewhere.  Reluctantly I agreed, and it made good sense at that time. Many people would have done the same. Driving over dunes and getting your drill company to do that would be an expensive exercise.  As one associate said to me recently, one dune looks the same as another. Why is the place so mineralised? According to the Geological Survey, there are 130 mineral occurrences recorded.  In my opinion, the proximity of these vast deposits indicates to me that the system source has to be of a significant size.  The Proterozoic Paterson Orogen has always been known to have the potential to be bigger than the existence of those three world-class deposits (Figure 6).  In early 2000, a company announced the discovery of micro diamonds.  Twenty micro diamonds and other indicator minerals were found during exploration.  Regarding geology, this will imply that the mineral-rich mantle source is surfacing into the Paterson Range. In terms of a Proterozoic Orogen (for those who are not geologists, the Proterozoic word describes a period in geological timeline. A quick google search will explain it), there are a lot of significant deposits.  It is one of the most mineralised geological time producing recent discoveries such as the Tropicana Gold Mine (7.9M oz) and the large Nova Nickel-Copper deposit (10MT). Like all the mineralised fields in Australia, the Paterson Range is only under-explored due to the harshness of the region and the thick cover that exist in most parts of the Paterson Orgen. Regarding structure, the GSA (Geoscience Australia) has made studies that are implying the structures underlying the placement of the Paterson Orogen is deep-seated crustal related.  I don’t think the geological fraternity is arguing against that observation as this is why geoscientist always liked the Paterson Orogen.  If you look at the continent of Australia, thanks to its age, the land is oozing minerals out wherever the land allows this mineral-rich system to surface. So what’s the fuss all about? I only started noticing the fuss after a friend ( the one who had the wisdom to tell me that one dune looks the same as another), sent me the announcement from Greatland Gold PLC.  It was the results from their first drilling program. Greatland Gold PLC HAD001 came back with 121m @ 2.93g/t Au and 0.23% Cu.  It was deep down the hole, from 497m to 618m.  Now the intersection was impressive, but I thought that the intersection was deep down.  As usual, google searching started, and I started to see some news that Rio Tinto may have found something big also, but there was no news about that in the public domain. HAD003 came back with 21m @ 3.78g/t and 0.44% Cu and HAD002 was less significant with 1m @ 5.9g/t with 0.24% and 2m @ 5.44g/t. Greatland believes that they may have an IOCG (Iron Oxide Copper Gold Ore Deposits) on their hands although some proponents in the area think that this could be a variation of a VMS.  Whatever this may turn out to be, all I feel is that there is something substantial. The discovery by Greatland is exciting, and they seem to have raised funds to continue.  It is probably a good time to be doing all these kind of deep drilling as the market is not at it as high as in 2007/2008. Drilling costs are not prohibitive, and there are now some government incentives that subsidise this kind of “frontier” work. Artemis Resources Limited (ASX: ARV) There are a lot of players in Australia involved, but one of the more interesting ones is Artemis Resources Limited (ASX: ARV).  The information from their releases is fascinating. The company made an announcement recently highlighting that they have raised more money and they will start exploration work.  Now I get that they have the tenement adjacent to Greatland gold.  The regular nearology play.  However, have a look at Figure 4, and Figure 5 was released with their announcement. Look at the structure, the line leading north into the Armada Prospect.  Remember that Figure 4 is from coarse magnetic data (400m spacing).  There is one going north and another primary structure heading in an SW direction into Armada.  Now if Havieron is something big,  I think Armada has got a lot of chance of turning into something significant as well. Look at the smaller structures in an east-west nature, and if they cut these primary structures, then you are going to get some action. Remember the pure theory. Liquids come spurting out at the point of least resistance.  The point where these lineaments/structures meet will be what we call an extensional point and a point of pressure release. All these assumptions are assumptions only and will be fact if and when they drill those points.  I would suspect that when they get their act together and start doing more detailed geophysics, things will become clearer for the better or the worst… 🙂 Figure 5 has more structures shown and at this stage who knows what may be in store within Armada.  As a punter in this industry for a long time, I like simple fundamental things.  We are dealing with the possibility of one or several elephant type discoveries.  I wanted to highlight in Figure 2 and Figure 6 the proximity of all those world-class deposits.  They are all within 100km from each other.  I cannot make this any clearer that the discovery is building a significant statement. Antipa Minerals Limited (ASX: AZY) The other player in the Paterson Range rush is Antipa Minerals Limited.  As I mentioned, I came very late into the scenario of “who has what?” and “what is the prospects?”.   And because of these unknown factors, I was surprised to see what Antipa had in their tenements.  Remember that Antipa is the company who has the JV with Rio Tinto, and they could be on the verge of a big payday.  With Rio doing lots of things in their tenement and giving everyone heartburn waiting in anticipation for news, the punters are taking positions. The best place to have a look at their project is n their website.  Their share price has taken a great leap in late October from about 1.3c to a high of 3.7c in late November.  However, if you look at their share price over three years, you will notice a long period of no action (Figure 7). I am not sure if shareholders are happy or not, but I have been in those prolonged short-term punts that last longer than its definition,  and I will say, I was not singing for joy. Looking at the three-year chart, you would think that the last two years were pretty dull. I am not sure what is the driver for the recent rise in October 2018 as I am not intimate with the going on of the company.  However, if you look at Figure 7a,  the journey from the Rio Tinto JV announcement till now will be very disappointing for punters (unless you sold out on the run to 6.6c).  A market capitalisation of AUD$51M appears to be high, but I would think that a discovery of the nature we have been discussing would make this company cheap at this stage. What I am understanding is why its share price has not moved with the amount of “assets” that one can see it its tenements. All the smoke that is in their tenements is proof that there is a lot of mineralisation happening and the source is very productive.  This character is consistent with the other mineral-rich provinces such as the Norseman-Wiluna Belt, the Murchison, the Hamersley, the Albany-Fraser Belt, Yamana Belt, The Arunta Block, Mount Isa, Ballarat…etc.  There are multiple big projects mixed among the numerous smaller projects. The other players in the Paterson Range Rush. Looking at Figure 8, you can look at why I am very upbeat on this whole scenario.  When I started researching the region, I was taken back at the prospect of this area. I knew that there was Telfer, O’Callaghans (Tungsten), Nifty and Kintyre but I did not know about the rest. Conclusion I am not saying that Artemis is going to have the elephant nor am I saying that Greatland has the elephant.  For all we know, the elephant may never exist at this stage.  Maybe the elephant is with Rio Tinto.  What I do know is that with the news that is coming out of Greatland and the inference you would make as a geologist,  the prospect of having kilometres of a massive structure going through your tenement is exciting for Artemis. Time will tell what the real story is.  In my opinion, the game is between Greatland Gold, Artemis, Antipa and Rio Tinto.  In a time when our technological advances in exploration are much better than 20 years ago, I think the time for a real discovery in the Paterson Range is not far away.  The Proterozoic Paterson Orogen will uncover a few more world-class mines if not at least one. To add an outsider tip, Fortescue Metals Group who have some tenements in the area may surprise the market.  I say this because this is a game for deep pockets and they have deep pockets. Companies like Artemis may have the best opportunity, but if they cannot continue to tap the market for money, they may indeed exit this game sooner than they wish.  The recent raise that they made undoubtedly is taking the company in the correct direction. Many industry experts have said over the recent years; exploration will be the most critical component of all major miners.  It will be expensive as all the low hanging fruits are taken. The research will need higher technological advancements.  Exploration will be riskier than before, but if you do it correctly, it may be more rewarding.  The rewards will be more substantial as it will be discovered in a place nobody had been before. 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

This topic has been a burning question for me lately.  About 12 months ago, I started looking into Hydrogen cars.  What I found was the typical issue of  Hydrogen cars?  Are they safe?  How do they work? “.  I started doing some research in preparation to write a blog.  As I read more about it, I slowly understood the complexity of the whole issue.  Like everything in this complex world of ours, its all about money and the protection of what makes money, even though it means we put the existence of the human species at risk.  Why let the progress of humanity get in the way of making a shit load of money. 🙂 Recently, I got inspired to write on the topic again when I started seeing all these news of people taking investments on this technology.  I began to think that maybe I am just too pessimistic about the investment world.. they do care… 🙂  I started thinking that my thinking is not silly but just a bit too early… 🙂 What is a Fuel Cell? Source:  Smithsonian Institution – Fuel Cell Basics A fuel cell is a device that generates electricity by a chemical reaction. Every fuel cell has two electrodes called, respectively, the anode and cathode. The reactions that produce electricity take place at the electrodes. Every fuel cell also has an electrolyte, which carries electrically charged particles from one electrode to the other, and a catalyst, which speeds the reactions at the electrodes. Hydrogen is the basic fuel, but fuel cells also require oxygen. One great appeal of fuel cells is that they generate electricity with very little pollution–much of the hydrogen and oxygen used in generating electricity ultimately combine to form a harmless byproduct, namely water. One detail of terminology: a single fuel cell generates a tiny amount of direct current (DC) electricity. In practice, many fuel cells are usually assembled into a stack. Cell or stack, the principles are the same. How do fuel cells work? The notes from the  Smithsonian Institution – Fuel Cell Basics, has a lengthy explanation and you can read at your leisure.  In summary, the fuel cells are a combination of a combustion engine and that of battery power.  Fundamentally, fuel cells make the energy on the run. The engine uses the hydrogen and combines air to produce electricity which is then used to drive the motor.  This process creates water as a waste product, and it is so pure you can drink it.  So we are told. The vehicle stores compressed hydrogen in a tank, and it is like your traditional fuel in a combustion engine car as opposed to a battery in an electric vehicle. What is the positive news on Fuel Cell cars? Hydrogen fuel cell vehicles will be the greenest form of energy, claiming the zero-emission title.  The hydrogen is produced from water, and the only waste product is water that is pure enough to drink.  The way you fill your car will take the same amount of time as putting in traditional fuel in your car that is running on the combustion engine.  Hydrogen cars will be able to drive much further than your Tesla (although some of the newer EV cars can do that now.)  Fuel cells work best in bigger vehicles and trucks, and this will help with the current environmental issues of pollution.  The clean environment has got to be positive in anyone’s books. Imagine all those soccer mums driving Landcruisers. The other obvious positive is that you do not have to wait hours for your car to refuel.  You drive to a station and fuel up in minutes and not hours.  Your only problem now is that you don’t have a station to drive to fuel up.  But they will come soon. Readers can view other positive effects of using hydrogen fuel cells at a site called Fuel Cell Today. Why has fuel cells technology been slow for uptake? They are expensive to produce (Platinum is a key component. This I did not know), as is hydrogen. The gas is flammable and difficult to store. And while hydrogen can be produced using renewable energy via electrolysis (using a current to separate water into hydrogen and oxygen), it’s more commonly produced from natural gas, releasing carbon dioxide in the process. For those who have read my earlier postings, I talked about the environmental negatives of renewable energy.  Have a read of the blog, Solar Energy – Could we alter the Climate? Tesla’s Elon Musk has called the fuel cell technology “fool cells”. There’s an industry joke: hydrogen is the fuel of the future – and it always will be. The process of making hydrogen from natural gas is called Natural Gas Reforming, and unfortunately, this is not very green.  In short, this is the process of exposing a methane source to high-temperature steam (700-1000 degree Celsius) and 3-25bar pressure in the presence of a catalyst. Apart from all the technical issues that are apparent, the biggest stumbling block is the lack of refuelling stations. Will Hydrogen cars blow up? – Hydrogen Fuel Tank Integrity. The big issue with hydrogen cars was the previous belief that the vehicles would repeat the Hindenberg scenario. I read an article about the Honda Clarity and came across their documentation regarding the integrity of the fuel tanks. I have quoted an article on Slash Gear March 19, 2017. The 2017 Clarity Fuel Cell actually uses two of them, splitting its fuel between a larger tank behind the rear seats and a smaller one underneath them. Each is made of carbon fiber and, in a world’s first, lined with aluminum. They’re designed both to withstand huge pressure – the total 5.46 kg of hydrogen is stored at 10,000 PSI – but also to fail, should the worst happen, in a predictable and manageable way. It’s tested to withstand extremes both of pressure and heat. Should the temperature rise to a point where an explosion could be a possibility, there’s a special valve that’s designed to safely vent the contents before that happens. Known as a thermally activated pressure relief device (TPRD), it’s a one-time-use outlet which can quickly release the hydrogen in a controlled manner. As for the possible consequences of a crash, frankly the hydrogen tank is probably the safest part of the whole car when it comes to sustaining damage. Independent testing by Vancouver’s Powertech Labs of the sort of carbon-fiber tanks Honda – and other fuel-cell vehicles currently on the road, like Toyota’s Mirai – is relying on have found that nothing short of a .50-caliber bullet can make it through. Anything less just bounces off. And if something does manage to pierce the carbon-fiber? The tanks themselves are designed to vent, but not rupture, just as the TPRD is: in effect, they release their pressure in a controlled way, rather than peeling open like a rotten cantaloupe. As the Honda engineers explained to me, it’ll be loud, and give you quite a shock, but it won’t actually explode. Hydrogen sensors scattered near the fuel cell stack and near the tanks themselves keep their electronic noses primed for any escaping gases, shutting the system down if necessary. Vents on the front fenders and at the filler cap avoid any rogue hydrogen building-up. Since it’s lighter than air, it should quickly dissipate; nonetheless, a warning message is flagged up on the dashboard of the Clarity Fuel Cell, advising the driver to contact the dealership. Recent News Recently, in an article published by “The Australian – CSIRO on brink of a breakthrough in enabling hydrogen fuel cell supplies”, where they talked about a new technology that will make hydrogen fuel cell more viable in future vehicles.  According to the article, the technology from CSIRO (Commonwealth Scientific and Industrial Research Organisation, an independent Australian federal government agency responsible for scientific research.) will solve the issue of transporting hydrogen to pumps that will refuel cars. The technology will also make it commercially viable to export hydrogen overseas as ammonia (NH3) for use in fuel cells. Earlier this month, Andrew Forrest of Fortescue Mining announced that they would invest AUD$19M over a five-year period into research at the CSIRO’s Brisbane laboratories.  I am guessing that it is a pleasant diversion for Fortescue Mining to go into something new and different.  Low-grade iron ore industry is not looking great for them at the moment. Andrew Forrest’s Fortescue joins hydrogen push with CSIRO tie-up. Andrew Forrest gives $20m to help kickstart a hydrogen industry in Australia Mining billionaire Andrew Forrest is throwing $20 million behind the CSIRO’s solution to one of the biggest problems holding back hydrogen-powered cars Who is investing in Hydrogen Fuel vehicles? The main visible proponents of hydrogen fuel vehicles have been Toyota, Honda, Hyundai and Mercedes.  The likes of BMW and Volkswagen/Audi are not far behind with prototypes.  In Germany, a program called H2 mobility is planning to build 100 hydrogen fueling stations across the country by 2019. Mercedes has been in the news lately here in Australia with the detailing of its new hydrogen fuel-cell plug-in hybrid vehicle (www.news.com.au – 14th November 2018) Mercedes plans to have up to 25% of their production in electric cars by 2025.  I am sure all the car makers will be doing that, and this is the reason why there are a lot of pf people shorting the profitability of Tesla. For Hyundai, the car that has been making news is the Nexo SUV.  The price of the car would be a deterrent to your everyday folk, and the lack of refuelling station would make the lack of interest. However, like everything new, this will become more affordable with time. (www.news.com.au –  23rd February 2019) What do the financial markets think about all the fuss? Honda like all its competitors are all into green technology. Electric cars are now the future, and everyone is into it. Tesla is no longer synonymous to the phrase electric vehicle.  Interestingly, there are a lot of Wall Street people who are shorting (selling, for those who are not familiar with the terminology) Tesla on the market.  Steve Eisman who is the real Steve Baum in the movie “The Big Short” is one of those guys that do not believe in the longevity of Tesla as the Michael Jordon of electric vehicles. Interestingly I found a rebuttal to this thinking, and it is worth a read. Amusing, entertaining and relatively informative.  Its an article by Clean Technica – “Does Hedgefund Honcho Steve Eisman Not Have A Research Department To Give Him The Facts On Tesla?” by a Maarten Vinkhuyzen. I must say that the recent announcement by Tesla saying that they are back on track with production may be the downfall of Steve Eisman’s issue with their execution.  He was right that they had an execution issue as Elon Musk himself said that they nearly went broke because they could not meet production numbers. Whats the Future? In regards to the hydrogen cells, the fact that all the major car makers are going there even with the whole EV market, tells me that they are all hedging their bets.  I believe that the lottery is like this,  time to charge vs the number of fueling stations.  Whichever wins, will win the war. The war is easier to win with building refuelling stations.  The recent media announcement by CSIRO will mean that the reality of hydrogen energy will be closer than say ten years ago. When you look at the EV market now, it’s not a done deal.  There are still so many factors to consider.  Hydrogen is easier to manufacture once the technology is understood, it will be a smooth ride. A recent report by the Future Fuels Cooperative Research Centre (FFCRC) announced in April 2018, has secured more than $90 million in funding (including $26.5 million from the federal government and $8 million from gas network businesses) to undertake research and development to help transition Australia’s energy infrastructure to low-carbon fuels such as hydrogen and biogas. (Hydrogen for Australia’s Future) I have not found any ASX companies that are in this industry so please let me know if anyone does find one. In Conclusion, I must say that two years ago I was looking at a similar project and I will make sure that I contact those guys again.  They had an exciting technology, and after doing all this research, I am very bullish on the sector.  I will revisit those guys and get them to take the technology off the shelf. 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 said, the best way to find yourself a gold mine is to spend money and explore.  Exploration success will only come from persistence and belief in your team.  When I first read about the Bellevue Gold Project, I was wondering how this has come about?  Initially, I dismissed the results as directors holes… However, this quickly changed to “How do people find these kinds of things ?”.  I mean this is an excellent project, and yet it is still discoverable… The Facts: The Bellevue Gold Project (Bellevue Gold 100%) A Forgotten Treasure. Historic Bellevue Gold Mine was one of Australia’s highest grade gold mines producing around 800,000oz @ 15g/t gold.  The Bellevue Mine is approximately 40km north-east from the small mining town of Leinster (370km north of Kalgoorlie).  The Bellevue mine was closed in 1997 after producing high-grade gold for over 100 years.  After it was closed in 1997, very little to no exploration was conducted within the project area. The mine is in the Yakabindie Domain of the Agnew-Wiluna Greenstone Belt, at the south end of the Mt Goode Basalt. Gold is in plagioclase-phyric tholeiite metabasalts. Gold is in a north to north-west trending, westerly dipping, shear zones, and associated with quartz veins and breccias. The gold is associated with massive to disseminated pyrrhotite, with minor pyrite and chalcopyrite. Free gold is rare. Draig Resources Limited acquired the project in August 2016 from Golden Spur Pty Ltd for shares, cash and a capped royalty. The details of the acquisition are in the ASX announcement dated 22 August 2016. Draig Resources Limited changed to Bellevue Gold Limited (ASX: BLG),  on the 25th of July 2018.  There was no management change over this transition period, and Steve Parsons remained the man in charge. Some historical facts on the Bellevue Gold Mine The mine has a long history with some interesting points. I have found the information from www.mindat.org, and a summary is listed below, Started in 1897 and owned by Queen Margaret Gold mines NL and Spargos Exploration NL. Discovered in 1895 by Toombs, O’Reilly, Parker and Dightman which were a group of prospectors from Cue.  They found some minor alluvial and near surface gold and eventually sold the property to Forrest, Emanuel and Co. for 4,000 pounds. Bellevue Propriety Limited became a public company in 1896. The company was reconstructed several times and eventually called Bellevue Limited in 1912.  The project at this time, comprised of 40 heads. The gold was mined from a north-south trending body of laminated quartz and schist with variable values. Below the oxidised level, pyrite carried virtually all the gold. Copper represents one third to one-half of the contents of the mine.  This combination caused significant problems with treatment in the early day. The problems with the treatment proved to be the reason the original company ended. There was a considerable amount of gold left in the sands. The workings reached 400 feet down, where the Highway Fault cut the mineralisation. After the company abandoned the mine, the property was taken up by Claude de Bernales and entered a period of idleness. This behaviour is not unusual for Bernales’ mines, as he was often more interested in speculation than mining. Modern mining at Bellevue S. Shiel of Lawlers applied for the lease in 1920. The plant at the mine was sold and removed from the project area in 1923. Only in the gold boom of the 1930s did activities returned to the area.  New techniques became available to help recover the gold from the sands, and sulphide ores led to the reopening of the mine. In 1933, a  C. McKeown took option over the mine and at that time had 18 leases.  Bellevue Amalgamated NL formed in Sydney in 1935. The nest reported activity was in 1952 and at this time, the owner was an A. Peter, F. Dawson, and A. Greengrass. A total of 884 ounces were recovered. One batch of 100 tonnes recovered 484 ounces of gold at a grade of 154g/t. Beach Petroleum NL sold half its interest in 1995 to the unlisted Western Gold mines NL for AUD$3.75 million, and the mined closed two years later. Since that period, the mine has seen several owners with little more than exploration including Barrick Gold after the mine closed, Siberia Mining Corporation Ltd 2004, Hodges Resources Ltd 2007, Monarch Gold 2008, and probably others since. Historical Gold Production (Including 10,225 ounces of silver.) Pre-1907 – 211,751 tonnes of Ore for 108,107 ounces of gold (16.34g/t) 1907 to 1911 – 26380 tonnes of ore for 21,362 ounces of gold (25.91g/t) Something Interesting. At 10:15, on the 06 December 1988, a Mitsubishi Mu-2B-60 Marquise aircraft crashed at Sturt Meadows Station, 55 kilometres west north-west of Leonora, while taking mine workers from the Bellevue Gold Mine to Kalgoorlie. All ten on board were killed. Investigations determined ice formed on the aircraft causing it to stall and go into a spin. It was the worst aircraft accident for fatalities in Western Australia for the previous 20 years. How Exploration Found More Gold. As far as I understand, two items make this project interesting. Firstly, there was an understanding that the previous orebody had been cut-off by a fault and the remaining “ore-body” were displaced. Secondly, the gold is associated with pyrrhotite.  One of the characteristics of pyrrhotite is that it is magnetic which meant that you could use tools such as electromagnetic geophysical techniques.  So it makes it easier to find. The company used these parameters to mould a systematic exploration program to seek further mineralisation.  Exploration is a simple process of believing in your model, planning your tests and making sure all research is thorough and of quality.  In this game, quantity is not your best friend.  Again, understanding the structure is of utmost importance and I will state again, this was something that I missed in my undergrad time… 🙂  I learned all about structure when I started working realising all these real geologists were always talking structure.  A presentation in May 2017 laid out the exploration plan in that early stage.  I learned that structure is an exploration geologist best friend. First Principals of Exploration On the 7th of August 2017, Draig Resources announced several geophysical targets had been identified and will be tested after reviewing historical data.  If you have read the announcement and had no prior knowledge of the project, you would think that this was your typical garbage that a company puts out at this stage of a project.  I will admit that if I had read that, I would have thought the same.  How many times over the years have I read about a group of people going into an old mine and saying we are going to find more…etc The next release on the 18th September 2017 was not very exciting however the one on the 16th November 2017 came up with several eye-catching numbers.  Another announcement followed on the 20th November 2017. It would be sufficient to say that from this point, the journey to the magical 1M oz target would take the dramatic turn for the better.  The company went on to discover several lodes which comprised together to give the company a 1M oz gold resource. I am assuming that when you have looked at the presentation and some of the announcements, you would have realised that the simple process of smart exploration and making sure there is enough funding to do this lead to the discovery of all the deposits.  The most important part is to have a champion or a good guide.  That person I assumed would be Steve Parsons… I hope… Resource Currently, the Bellevue Gold project has a JORC Inferred Resource Estimate of 2.6 Mt @ 12.3 g/t gold for 1,040,000 oz.  The resource includes an Inferred Resource of 0.8Mt @ 22.0 g/t for 550,000 oz for the Viago Lode.  There is a comprehensive presentation that was posted by the company on the 22nd October 2018. The series of diagrams below illustrates how closely related the multiple lodes are in relation to each other spatially. I have to say that looking at the spatial relationships of the ore bodies, I do feel that there must be more to find.  I don’t believe in random events…  I think if you encounter smoke and there is enough of it, there must be a mother of a fire storm. My Thoughts as an Investor The transaction was in late 2016, and I believe that Draig Resources was around 2c.  Now today, 15th November 2018, the stock is at 46c.  If I were an investor, I would be pleased.  Who would not be happy?  In my case, I learned of this project late and was not involved in any investment opportunities with the stock.  However, I am toying with the idea of buying some? My views are hindsight investment, so we all know how beautiful this kind of investment turns out.  However, I will try to be logical. In this case, I do see my 3 point test which is as follows, The flagship project has lots of legs and does not cost to explore, e.g., not in PNG or South America, not in Africa. There is a good driver of the project.   What I mean is there is a guy that will champion the cause. There is a character or a group that has good financial backing, a good record of raising money or delivering the funding when required. Those three points, if passed, will always deliver excellent results unless there is a technical failure or something like a tsunami comes along and brings down the uranium price from USD$70+ to the low USD$20.  The last part is a personal experience :-). Company Facts (As of 14th November 2018) Shares on Issue:  ~447M Market Capitalisation:  ~AUD208M My Thoughts In the world of exploration, there are not too many things that you can hang your hat on when you are looking at a grassroots project.  You get all your euphoria from old stories, old literature and what people have said. You follow your hunch, and with research on historical data, you come up with this great idea that there is a place to spend some money.  When you have discovered this place, you will go and convince all the money people that you have a great idea.  This process is that simple in a short story way, so you as the geologist or promoter need to have some very compelling truths. I am sure when Draig Resources took on the project, they would have had a good idea on the prospectivity of the place already.  It’s just the way it works.  Whether the whole process hangs together will be up to who I call the flag bearer (in this instance, its Steve Parsons) and the money.  If you have the two, you got all the chance to make the story work. Currently, the results are spectacular, and I am sure it will get better.  What is the difference with this project is that there has not been any modern work done on this project for 20 years and if you take it further, there have not been the technological advances since its discovery in 1895 or 1897?  There are not too many of these kinds of stuff around, and I praise the guys at Bellevue to have taken the initiative to get this project.  It is always good to see how to do this kind of project the correct way. Do I like the project? I like the project and what the future holds.  Looking at where the new lodes are, you got to think about how many more could there be? It reminds me of the Kundana province where Northern Star is continually finding more gold.  Here at Bellevue, they are only at 1M oz.  There have been up to 5M ounces mined at Kanowna Belle since 1994 and Kundana had had up to 4M ounces mined already. Do I think that there could be more gold discovered,  all I can say is why not?  Remember that at Kundana, Northern Star recently relooked at their database and went and found themselves another 1M+ ounce of gold.  The discovery was in amongst an area that was densely drilled by Barrack (I think).  I believe that the endowment of the entire Yilgarn goldfields. I have always said that this Norseman-Wiluna greenstone belt is 1,600km long.  Imagine it as one great big mineralised fault.  Do you think there are no more mines???  My money says that there are still elephants to be found and what if those found are only the baby elephants. What are the potential Issues? Issues are elementary. No further resource upgrade. – Could happen but they already got a 1M oz resource that sits nicely in their asset drawer currently. There is a metallurgical issue? – Possibly the only problem that I could think of that may put a spanner in the works. I have not seen any info that may create an issue.  They have released some information on the metallurgy, and it appears to be positive. The gold price tanks. – Unlikely with all the smart Wall Street executives pumping out more credit default swaps look-alikes than in 2007. Natural disaster – Possibly, there was an earthquake in Kalgoorlie a few years back. But I would instead put my money on a horse than a natural disaster happening on a scale that would be devastating to the mining industry in this area. Conclusion I look at this in a straightforward manner.  There is now 1M ounces of gold on the table.  There is no reason to doubt that the guys on the Board are smart guys.  A margin of say AUD$200/oz means that you are looking at AUD$200M profit. A gold price of AUD$1600+ and an AISC of AUD$1400 is being very conservative I think.  So that profit margin could double easily to AUD$400/oz which would make it AUD$400M profit or more.  However, I do believe that in Australia, an AISC around the AUD$1200 is minimum. The geology looks good, and they will probably find more ounces which will mean more positive news, I would be assuming.  Now that the company is travelling well with a healthy share price and plenty of cash in the bank, I think in the short term, we will see a rising market capitalisation.  Steve Parson is a proven guy, and the Board is well versed with this game. They have plenty of ground to support future growth in resources. One other possible outcome is the consolidation of projects/companies.  The merger of Silverlake Resources and Doray Minerals and Ramelius Resources failed attempt to make a play for Explaurum Limited and its Tampia Gold project, and subsequently, Alkane taking a stake in Explaurum is a sign that someone may make a play for Bellevue.  Consolidation of projects such as this is not uncommon.  I would think that the big companies such as Northern Star, Barrick, Newcrest…etc will be waiting in the wings for the opportunity.  When that happens, I am sure the value will go much further than what it is now. Also Check For :-Malaysian Artistic Talent with Soul and it’s Not 1MDB. 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

Malaysian Artistic Talent with Soul and it’s Not 1MDB. Who would have thought I would say this…  You would not be wrong to feel that Malaysians are now more known for the 1MDB scandal than anything with soulful artistic talents.  My recent trip to Malaysia has surprisingly shown me that there is some real profound talent in the country. Skills that do not only involve gambling or multi-billion dollar scandals. The now famous  quote by the U.S. attorney-general, Jeff Sessions, “Jeff Sessions calls Malaysia’s 1MDB scandal ‘kleptocracy at its worst’ I am Australian with Malaysian heritage or more specifically, an  Australian Sarawakian (from Sarawak, Malaysia).  Some call me a Banana, which in some respect may be right.  There is no denying that we expat Malaysians are full of opinions and we all know how things should be done in Malaysia.  However, I have to say; it is very refreshing to finally see and understand the Malaysia that Malaysians love apart from food.  To finally realise what people have described being as the artistic flair of Malaysia. Maybe I am just becoming an old fart now and blossoming in my appreciation of art? Serena Chiam and Michael Teh – Gold Art Distributors My friend Michael Teh (Aureo Gallery) invited me to a charity event where a Korean artist, who mix 24-carat gold with oil and glue to create paintings, was displaying his collection for charity.  Michael had shown me this art late last year, and I have admired from afar since.  This time I was in the same room as the artist himself.  The only downside was that I never thought of getting a photo with the man himself… Micheal Teh and I met late last year when I was asked to meet a guy who was selling Gold Art.  We hit it off immediately as we discovered our passion for ASX mineral companies. Since I have been coming to the SE Asian region, there has not been one person who understood the small-cap resource sector this well.  This guy was a refreshing sight after so many years trying to entertain people in this region with small cap companies. Serena Chiam was the instigator of the distribution of this intriguing artwork.  As I believe,  Michael came into the partnership after buying some of the art pieces himself and becoming a fan of Kim Il Tae.  Serena and Michael are the primary distributors of the art by Kim IL Tae. Having met and spoken to Serena, this is the entrepreneur side of Malaysia.  Tatler Malaysia did an excellent piece on Serena and Aureo Gallery.  In fact, from this first meet, I felt that they were onto something.  Australians are art lovers, and I had a feeling, even at that stage, that this could be a good business. The only problem was that I don’t have the background.  Although, many characters in the mineral resource sector do like to dabble in these art pieces, especially with its association with gold. Doing it the Australian way 🙂 – We adopt everything good. I know the artist is a Korean and not a Malaysian but like good Australian spirit, I have envelope great things and make it Malaysian :-).  I have learnt well from being Australian.  We have claimed, Olivia Newton-John (actually English), Mel Gibson (Born in the USA and came to Australia when he was 12yrs old), Jimmy Barnes (He is Scottish), Keith Urban (New Zealand), Nicole Kidman (Born in Honolulu), Russell Crowe (New Zealand), Naomi Watts (England)…etc. Jokes aside, the entrepreneur spirit shown by Serena and her partners are what I believe is the Malaysian thing… Finding something that is not in vogue and taking it to the market. And the introduction of this kind of art is more than impressive. My inspiration for this blog. My invite to a charity event to raise money for an Autism Centre in the Malaysian state of Perlis was the highlight of my very long roadshow in Asia.  It was like the halfway mark, and we could relax and enjoy some rest and recreation.  To my surprise, I was mentally enlightened and inspired and decided that I must write something about the night and the people I met at the table. When I think of the works by Kim Il Tae, I think of Malaysia. Its kind of silly but the mind works with an association. I am sure that no one cares what my thoughts are but I think that speaks volumes of the work that Serena and Michael are doing.  One can see that there are significant synergies between all the partners.  As a geologist, I can appreciate what Kim Il Tae is trying to do, and as I have mentioned it many times, I am impressed. Kim Il Tae I am drawn to write about Kim Il Tae because his place in time now is a journey of inner self.  Like many people in this planet, the drive to realising one’s inner passion as an artist comes about after a period of submission.  Like many people, the realisation of this passion came later in his life.  The desire is what I call “The Journey”. Kim Il Tae (b. 1956) was born and raised in South Korea. He was good at art since he was a child but did not pursue an artistic career when he graduated from college. It was only in his late thirties that Kim Il Tae rekindled his passion for art when he enrolled at a university in San Francisco to study oil painting. At that time, he harboured a dream of becoming an international fine art artist, to represent an Asian name in the art world. What’s so Special about Kim Il Tae? I admire the passion for Kim to make a difference in the art world and make it unique with the skill to create and innovate.  He has created art that will test time and be as its pristine state even when generations have left this world.  I see his craft in the same light as the creators of IT and all the modern devices in this world or like Leonardo Da Vinci, Michelangelo, Claude Monet, Vincent Van Gogh and all the world-famous artist that have gone by over the years.  The creativity to make the best software, the best app is the same as what Kim Il Tae has done.  The skill required to create and persist on this path to the ultimate goal of acceptance is a testament to his genius. What I am most impressed is that this man sat down at some time and said, what can I do to make this different… What can I do that nobody has done… And then go and create it.  The thought process is no different from the likes of Bill Gates and Steve Jobs.  These two technological maestros have transformed our lives in the area of technology.  Similarly, Kim in time will be at those levels, if he is not already. The Beginning The story – The Journey. Liu Cheng Hua – Malaysia’s Future It was also at this event that I met my first Malaysian artist.  I was seated next to a guy called Liu Cheng Hua, a young bloke who turns out to be a great up and coming artist.  He showed me his collection, and I was impressed. Liu showed me one that he had done on the current Malaysian Prime Minister Mahathir. Mr Liu has created this collection with acrylic on aluminium.  To me, a non-artist buff, this seemed very impressive. As I am the least respected art critic on this planet,  I have to say that I was impressed and thought at that moment, this guy is good. Imaginative, not mainstream, not afraid to explore his boundaries and has a great personality.  I am not sure if all artist is like him, but I suddenly got even more inspiration to write this piece.  As I mentioned, my understanding of Malaysian artist with soul. Liu Chen Hua – The Inspiration The inspiration for these works is very eye-opening.  Mr Liu was born during the Mahathir era. Since when he was young, he was told by his parents that Mahathir is a wise, intelligent and knowledgeable Prime Minister.  Today, he has seen for himself the truth that was spoken and realised that he is the person that was described by his parents.  Personally, over the years I have too learned that Mahathir is an extraordinary person.  There is no denying that there are things which may tarnish his status, but he did manage the country well.  And the recent come back to the Prime Ministerial role cements his greatness.  For Malaysia, I hope he stays around long enough to clean it up. Liu has created a collection of great pieces of art that is related to several Malaysian stories.  There are many collections, and I encourage readers to visit his site.  I am sure many Malaysian artists have this artistic soul that is not related to creating 1MDB. To Liu’s credit, he has featured in many media articles which I am sure is boasting his profile. https://www.star2.com_Liu Cheng Hua: First Sculpture Exhibition – Taiping Here are a collection of media publications. Liu’s most inspiring artists. I asked Liu what his most inspiring piece of art is and his reply was, Andy Warhol’s Two Car Crash. The braveness of the artist to show what looks like an incomplete piece of work. It makes me think that art is not just about the work that is nice or beautiful because every audience sees and think differently. Just do what we like to do! My Conclusion To me, the Andy Warhol piece looked pretty complete, but that shows the shallow understanding I have of this kind of things. Irrespective of my level of knowledge, what I did get out of all the research I had done for this piece of writing, I have really got a better appreciation of the art world, the way the artist thing and I feel that their thought process is not that different to your other inspirational people in the world.  As I mentioned, the Bill Gates, the Steve Jobs, the Elon Musk, the Mark Zuckerberg, the Jeff Bezos and the list goes on… Not seen as an artist but they came up with this thought that this thing that they want to do will change the 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