AHK (ASX) Ann: Investor Presentation Brisbane Mining Conference

Originally posted by La Tache: ↑

JandJhere's an "I do" reply to your recent question:"does not anyone else understand the huge advantages here - and the possibility for huge profits ??"
A mistake I made a few months ago came home to me today and motivated me to write this as a reminder to stay disciplined. I don't want to make that mistake with AHK. Here's what happened...
"Missed by that much …"
Today I watched a recently held stock (not AHK) that I sold a few months ago double after the opening, finishing on its highs, on good volume. The reason? A very good drilling report (which always had a good chance of happening, which is why I bought in the first place but which I got sick of waiting for).My impatience back then meant that I instead got a return of about 1% interest in a bank account, and of course major disappointment for buckling on a well-considered buy decision that I knew would take a little while.

AHK – even more of a bargain
I've got a few AHK and am underwater with them at present but I'm all but certain they'll reward me really well, especially given their very modest MC of ~$7.5M at present, and that they run on the sniff of an oily rag. I'm sure the upside potential that I saw in them from the start remains strong even though the sector is off the boil, aggravated by juniors generally being mostly in the toilet.
Slide 3 (next – and marked by me) of AHK's March Investor Presentation gives an overview of the project for newcomers.

Current sector sentiment
I'm not too concerned about current weak sentiment in the REE (and mineral sands) sectors. I think there's an element of tactics at play. A certain country IMO is keen to discourage/destroy competition in the REE market (which it currently supplies and dominates), and lower REE prices certainly discourage competition. Speaking of which …

Incidents like the much-regretted shutting down of the US rare earth industry (you would know what happened with the Mountain Pass mine from 2002 onwards), plus current significant geopolitical risks, mean that many nations that need REES are no longer prepared to rely on one country (I'm not referring to the USA) for supply. They're now determined to secure supplies of Critical Minerals including REEs from nations such as Australia. That's good for AHK.

Sandy Mitchell: multi-commodity derisking
REEs have many uses but as Slide 3 (above) confirms, Sandy Mitchell contains not only rare earths but also heavy minerals – and phosphate. Some (only) of the REEs are shown on Slide 11 (next – and marked by me). Uses and markets for the remaining REES are not mentioned nor are they for the heavy minerals, nor the phosphate. This multi-commodity dimension will improve market opportunity and economics for Sandy Mitchell.

Interestingly, as I think you've noted, there's always the possibility of further minerals in the basement (assays from initial shallow drilling done in Stage 2 awaited). We'll see after the basement has been drilled at some depth if assays suggest there is something meaningful worth chasing down. If so – noting how shallow it is and that we'll be taking the minerals rich sand off the top anyway – that would be upside that's not priced in now.

Massive Scale
The Project area obviously has massive scale potential. Note my markings on Slide 9 following:
Tenement (currently) 147 sq. km.
Additional pegged area 138 sq. km.
Thorium anomaly 110 sq. km. (correlates well with REE enriched alluvial sands)
No wonder the Presentation from which these slides come is headed "Rare Earths in a Giant Sand Pit".

Some really rough, rough back of the envelope numbers by me, using guesses re possible area, depth, recoveries, post-beneficiation grade, specific gravities etc. come up with a tonnage so huge that I won't mention it - especially since we haven't drilled near the perimeters of the thorium response, to my knowledge. Instead, I'll await with interest from the experts numbers re:
*JORC for Stage 1 and Stage 2 (together, presumably) but bearing in mind that less than 3% of the radiometric anomaly has been drilled in those 2 stages so if a JORC is done on this basis it will represent just an initial figure.
* An Exploration Target for whatever is not JORC'd.
Slides 6 and 7 (following, and marked by me in purple) are worth a look re ease of beneficiation and its potential excellent grades achievable at low cost.

Ease and Cost of Beneficiation; Recoveries and Grade
A key takeaway for me with Sandy Mitchell is the fact of theunique set of benefits of our placer sand deposit i.e.:
a low cost and reliable process using only simple gravity (+ magnetic?) beneficiation, without water;
likely high-grade concentrates in the order of 51.9% TREO (with recoveries of ~72% and potentially >83%)
that together makereferences to the modest head grades rather irrelevant given the remarkable value add that simple beneficiation provides.

The PFS ultimately, and perhaps an earlier Scoping Study, would address these things properly. The fact that the well-regarded Currumbin Minerals has already signed a framework MOU shows to me that they see strong potential. Also note the comment on Slide 8 that:"Several groups who are in the market for a high-quality Monazite concentrate, in Australia, Korea and the USA now assessing Sandy Mitchell".

Market sentiment generally, and for AHK …
My Post #:72329392 on 9 February, finished with this comment:"Really good story here, I think. Yes, it's a lousy spec. market but that won't last forever. The seeds of the next boom are sown in poor markets as the specs are currently experiencing. I don't think this very well-priced story is going to take too long to germinate and flourish but however long it takes, I'll wait it out." That remains my view.

Multiple Near Term Value Drivers
Here's Slide 12 with some comments from me FWIW

In summary: I'm very comfortable about the expected viability of Sandy Mitchell, and I also can see that it can get to market quickly (on a ramp up basis). Really good story this one, especially with the very tight share capital and experienced but small team.

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O'Boy - thanks for that. An excellent wrap on what was an excellent presso, but you were able to add that little bit of extra which a Company is restrained from saying.

I actually came on board to ask if anyone has knowledge of the type of gravity separation machines that could be used in the field to produce the concentrates - I do like the idea of them moving with the excavators (but think it might be best if they move on front of the mining face - more stable ground, only a bit more trucking.)

Mineral Technologies on the Gold Coast has a god website with a lot of detail - but its hard to specifically relate it to Sandy Mitchell.

https://mineraltechnologies.com/what-we-do/our-products/gravity-separation/

Anyway, I am convinced this project has legs, and a profitable future - and at $7 mil cap and cash on hand, I agree too that when a move comes it will be very fast.

Cheers @La Tache - thanks again.