Ann: Murchison Development Update - April 2025, page-26

Detailed AI breakdown of everything discussed about Meeka Metals from Mastering the Lassonde Curves's Valley of Despair

Meeka Metals (MA) – In-Depth Analysis

General Context:

• Rick Squire from Acorn Capital shares his investment view on Meeka Metals, a gold-focused developer currently in the ramp-up phase of its project.

• Meeka is identified as one of the top five holdings in Acorn’s portfolio.

Investment Thesis & Opportunity

• Stage in Lifecycle:

  • Meeka is in the transition phase from development to production.

  • This ramp-up phase is inherently risky, often involving operational and geological uncertainty.

• Why Acorn Invested:

  • Rick is attracted to risky-but-rewarding opportunities where strong upside exists.

  • Specifically seeks investments where there’s potential for positive surprises during ramp-up (like better-than-expected grades or throughput).

  Geology & Production Strategy

• Oxide Zone Grades:

  • Meeka has better grades in the oxide zone than originally expected.

  • These oxides are softer and easier to process, which improves production efficiency and cost.

  • The oxide zone was initially expected to feed the mill for 18 months, but new drill data suggests it could support 2 to 2.5 years of feed at higher grades.

• Grade Control Risk:

  • One concern was whether grade control drilling would match the resource model.

  • Drilling returned positive results, confirming and even enhancing expectations.

  • This reduced the risk of a resource downgrade during mining.

Financial and Operational Position

• Capital Raisings:

  • Meeka completed two capital raises (September and November) to support operations and pay off debt.

  • Acorn participated, seeing it as a buying opportunity.

• Operational Upside:

  • Due to the unexpectedly strong oxide grades, there's potential for early-stage outperformance—higher margins and production flexibility.

  • This phase could generate strong cash flows that support further development.

Management Assessment

• Team Profile:

  • Described as young, energetic, cost-conscious, and committed.

  • Rick praises their lean operations and jokes they’re “tight as a fish’s...”

  • The company is a family-run operation to some extent—Tim and his brother are involved, and their retired engineer father has joined to oversee civils.

• Cultural Observation:

  • While family businesses can sometimes raise red flags, Rick felt reassured by their professionalism and drive.

  • Shared a humorous anecdote where the CEO was heard berating his own father on-site, suggesting no favoritism—“He’s got the whole place under go.”

Market Perception

• Stock Market Reaction:

  • Despite solid developments, the market hasn’t fully priced in the upside from oxide feed and grade control drilling.

  • Rick sees this as an asymmetric opportunity: the downside risk is limited by recent data, while the upside could be material if things continue to go right.

Summary of Key Points

• Meeka is a high-conviction, high-risk/high-reward play for Acorn.

• Positive surprises in oxide grade and mine planning reduce risk and increase potential returns.

• Management is young, nimble, and capable, making Meeka a standout opportunity in the gold sector.

• Investment thesis revolves around early operational execution, orebody quality, and tight cost control.

Yes, everything summarized above was directly discussed in the video (Transcript Part 1). Here's how it aligns:

Confirmation of Key Discussion Points

	Summary Element	Transcript Evidence
1	Ramp-up phase risks	Rick talks about how ramp-up is “actually quite risky” and references other companies (e.g., Bellevue) that struggled during this phase.
2	Positive grade control drilling	He mentions that “they’ve done some drilling” and “identified some nice thick zones with good grades just outside of the pit.”
3	Extended oxide feed	Rick notes that better grades are “actually in the oxide zone,” allowing “2 to 2.5 years” of oxide feed vs. the initial 18 months.
4	Capital raises	He refers to “a raise in about September” and another in “early November.”
5	Cost-conscious management	He says, “They’re good for costs as well because they’re tight as a fish’s [expletive]... they won’t be spending money they don’t need to.”
6	Family-run anecdote	The anecdote about Tim, his brother being the CEO, and their father coming out of retirement to manage civils is explicitly told in the transcript.
7	Market hasn’t priced in upside	Rick says, “I don’t think investors have quite picked up on this... strong potential for outperformance.”