A great point raised by Next Investors is Newmont entry to PNG...

A great point raised by Next Investors is Newmont entry to PNG and the opening up of in-country office bodes well for LCL if we continue hitting with the drill bit....

Newcrest already has one operating mine (producing >700k ounces of gold/annum) and a development-ready gold-copper mine (with a resource of 28m ounces of gold and 13.7 mt of copper) project in Papua New Guinea (PNG).Once the merger is complete, Newmont has committed to increasing its presence in PNG - this includes establishing “in-country offices” in the country. Which we hope translates to Newmont scouring around for new local discoveries…For the major gold producers, it is all about consolidating projects and becoming ‘scale monsters’ with projects that have multi-million-ounce potential.

In the merger news coverage (Newcrest Newmont), we saw that the two (after being combined) would be looking to put together a dedicated mining team to go all in on Papua New Guinea.Newmont will be establishing a “regional presence and in-country offices” in Papua New Guinea:

Typically major gold producers prefer to let junior exploration companies do the exploration and definition groundwork and asset de-risking before coming in and paying a premiumfor the project once the company reaches a JORC resource.Majors of the size of Newcrest & Newmont are less interested in doing the early fieldwork, exploration drilling and resource definition.Instead, they like to come in and pay a premium for the potential (set up by the junior) and flex their balance sheets to get the project up to a size/scale where it becomes a major project for them.Majors want defined ounces in the ground and are prepared to pay for them. This is where we think the opportunity lies for companies like LCL. LCL is only capped at $24M, had $8.7M cash in the bank as of 31 March 2023, equating to an enterprise value of just $15.3M.We think this is a low base for which the company can re-rate (assuming continued exploration success).