Don’t know about you guys, but feels a bit like just before Christmas to me right now. You know the feeling of waiting patiently for a year (in our case more) for that one day/event (in our case - plural).
The perfect storm is here as far as I’m concerned.
1. Copper looking likely to go up and test 3.50 and beyond last seen in the last resource boom and some 50% higher than when Collerina was first discovered in 2014.
2. Overall small cap resource plays completing bottoming formations and what I would say is the start of the next upswing is upon us.
3. TC and Euroz look very done to me now with confidence. They have created a very good chance for investors to get set at a deep value point. No one can say they never had a chance.
4. Technical indicators look on the cusp of something quite significant from my limited experience (others may be able to add) and this has been brewing for some time now.
5. As we all know and one of the main reasons we are here is the disconnect of market cap from not only what has been achieved to date but what is what is portrayed as imminent news flow. It’s the business end now and the first 6 months was setting up for all this drilling upon us. People always forget a good explorer is 90% setting up 10% execution on the drill bit and mick and co do this very well. Its now coming into the 10% execution part and that’s when significant value can emerge especially when you do the other 90% right like they have. This is applicable to both Collerina and Mundarlo.
So, what is imminent?
In the next week or so I expect the following news flow:
1. The start of the more major deeper up/down plunge results at Collerina. Depth tonnage validation which has a very good chance in this programme will see the re-rating we believe is going to happen one way or another. At the moment we have a very juicy oxide zone which NO one else has in the Cobar region and I would estimate it to be very profitable tonnes given its shallow depth and very high grade/thickness the only thing is the oxide zone alone cannot provide the tonnage to justify stand alone status. Now they have significantly found the sulphide down plunge and we are now awaiting those results that are delineating the up and down plunge corridor and will be for some time. The significance of this is massive as when we define some hits lower and it becomes apparent its viable at depth the market will look at this in a core model and finally add the commercial value of the oxide zone in the SP along with the new finds at depth. People need to realise the board was recently renewed to take this company to the next level of development and I believe they always intended this if they saw it was likely that its worth commercially pursuing EL3663 your answer is right there for what is coming IMO.
2. CLL / HLX – As per the shared commodity agreement with CLL We should expect an answer from them regarding the helix discovery within 30 days of notification I believe that is now or very close at the most. They can either take up their entitled 49% and share costs going forward or we get 100%. Please refer to the details on the announcement.
3. Yathella drilling program 7km from Collerina deposit. I expect they will probably do a similar thing to when they started at Collerina a few years back that being an 8 or 9 hole RC program and establish some good hits. Again, this will be adding to a broader expectation of a standalone commercial discovery along with Collerina tonnage. All indicators are as good as it gets here for another Collerina. So, this drilling and current Collerina drilling have high potential of creating a significant market re-rating.
4. Mundarlo lab results and recommencement of drilling. Refer to my previous posts on this one I’m very confident we will have a very nice find here in the CORE - this likely about to be drilled soon.
Definitely the best state this company has been since it started and the market one way or another will move on it, there is too many major catalysts for it not too at a 15 million MC and such disconnect that’s fine - its probably a case of build it and they will come.
All the best.
HLX Price at posting:
3.7¢ Sentiment: Buy Disclosure: Held
(20min delay)