Good one, Tomcat69.Another insightful and helpful post from you.
You makeyour own luck
These guys deserve successbecause they had the smarts and discipline to:
(a) keep their minds open withthe initial drilling;
(b) look out for other anomalous things(thus discovering the REEs); and
(c) drill around the REEdiscovery spot without over-focussing (obviously knowing the regional potentialand that the best spots could be elsewhere, as is now apparent).
That's smart exploration - but itdoesn't always happen. I know of monumental oversights that weren't realiseduntil years later – not for discussion here!
Our team also secured a huge acreage package – now 969 sq. km., with ~54km of REE target corridor - and quickly gotboots on the ground after the discovery. As well as making the Mick Well discovery (blind, under cover), they've also recently even found REEs in clays. I don't expect that to be the biggest event but it shows we're not on a one trick pony.
Far more importantly, however,while only traversing a small part of our ground they've already mapped veryexciting outcrop, a further small part of which has got the share price movingnow due to spectacular rock chip results.Looks like the outcome of good early work by a thoughtful and capable team. Well done, James Farrell and crew.
A nice cleanskin
Importantly, this story isemerging in a recent float (late 2020) which is not saddled with years' worthof baggage and stale, disgruntled shareholders, wanting their money back yesterday.We're sailing in clean air now and can write our own story, from afresh.
Tight as …
What I'm describing, coupled withcapable and hard-working management, sits within a super tight capitalstructure (currently only 42.3M shares only).It's a great setup for possibly making serious money.
Let's get back drilling
Clearly, we've seen enoughalready to know that we should lay into the exploration, so I hope we'll raise afew mill. before year end to enable a really decent swing at it – perhaps get acouple of rigs going (once the geology is well enough understood).It would still be tight as.
Like barneydigs, I'd be really keen to pitch in more towards a serious drilling campaign, especially under any massive monazite outcrop!It's clear that we haven't yet drilled our best targets.
Great sector; great mining jurisdiction
I love well-credentialled explorers that are actively exploring in high value sectors (like PGEs or REEs) in great jurisdictions (like WA). Kingfisher gets three ticks just there...
Our initial results show very high grades / percentages of the much sought after, high-value minerals neodymium and praseodymium. Another tick …
By the nature of those REEs and due to the uses to which they are put, there is no likelihood of substitution in anything like the foreseeable future. Think barriers to entry for other products that might compete with what we have.
Emerging world-class focus area
We have a huge block that'ssuperbly located in one of the world's best mining jurisdictions, WA's Gascoyneregion, not far from the more advanced projects of :
* Hastings (~$550M market cap.and with its Yangibana plant under construction), and
* Dreadnought (~$425M, havingadded ~$300M? in only 5 weeks after its 25 July 2022 announcement of fantasticearly exploration results at Mangaroon).
Further south, near Eneabba,Iluka is about to build a $1.25 Billion refinery for rare earths, (see below).
There's a lot of heavy dutyactivity underway and planned in the region.Think impact potential -> eyes on what's happening -> more demand for good entry points -> share price rerating on exploration success etc.
Other macro
1. Previous world-wide over-reliance on China for REEs has been now proven to have been seriously misguided. A trusted and reliable supplier is needed. Australia is the obvious choice, WA has the best and most convenient of that, and this Gascoyne area is the hot spot (leaving aside Lynas Corp's Mount Weld).
2. The February 2022 decision by the Northern Australia Infrastructure Facility to provide Hastings with a A$140 million loan facility for the development of the future Yangibana plant shows Federal Gov't enthusiasm for the sector
That plant could significantly improve the value of any tonnes found by Kingfisher, due to potential big capex savings and an accelerated timeline to production in a trucking-to-a-nearby-plant scenario.
3. The April 2022 Federal government loan of $1.25 billion to Iluka to establish the Eneabba Rare Earths Refinery, further south has great potential if we prove up enough ore. That refinery:
* will handle monazite (which we've got outcropping at surface and which already has been found in our early drilling); and
* to quote from the relevant Gov't website (parts underlined by me for emphasis):
"The Eneabba refinery will produce high valueproducts (neodymium, praseodymium, dysprosium and terbium) that arenecessary for a wide range of technologies …
The refinery could supply up to 9% of globaldemand for rare earth oxide products in 2026...
It will establish Australia as a major supplierin the rare earths market ...
The Eneabba refinery will have the capacity toserve as a rare earth processing hub for more deposits across Australia. Thiswill lower cost and reduce risks, helping other projects get to market…"
Think 3rd party access possibilities and, again, the huge potential capex savings and earlier production potential.
4. In June 2022 – Ait was anounced that US Department of Defense will fund the entire cost of a heavy rare earths plant about to be built in Texas by Lynas, as well as half the cost of a light earths facility, with all feedstock coming from Mount Weld, here in WA.
5. In July 2022 – Dreadnought's early success from their admirably active exploration could easily be an insight into a commercial discovery by them at nearby Mangaroon. That may open up further options for us, too.
6. August 2022 - Twiggy's company has just agreed to lend Hastings $150M, accompanied by comments about the attraction of the sector.
7. August 2022 – I think the US has just passed Critical Minerals legislation giving favoured status to Australia and a few other nations, with future REE supply being an important driver, and part, of that.
Conclusion
The above tailwinds haven't yet been factored into Kingfisher's share price IMO. Our $21M market cap. won't stay anywhere near this if the drilling goes really well. I'm confident it will at some stage – but I don't know in which campaign, or what the market may do between now and then. I'm positioning myself to be there when we do get some 'don't argue' type results because I believe that our potential is heavily skewed to the upside and we might even get fantastic share price improvement. So I've already taken a very good swing at it, and will add to my holding.
