In my last Post #: 63448579on 1 September 2022 I referred to several key elements that made KFM compelling. I now revisit some of them, with some comments following today's announcement of yet further significant exploration results. Today's announcement of course follows a string of highly positive results over the few months since that September post.
This is a long post, especially if you only have Twitter attention span. I've paragraphed it best I could in the time frame, for people who value data and who haven't had a chance to pull it together.
Sleeping giant? We're seeing emerge here a remarkable block, that I expect to provide years and years of new discoveries and upside of potentially very good grade, and at tremendous scale (even if in repetitions of many modest sized discoveries). If that picture continues to prove up, there must at some point be a major, major rerating of Kingfisher's current very modest MC given its very supporting backdrop. Although I've built a very solid position (still adding last week), so good is this story that I often wonder if I'll kick myself one day for not buying heaps more. Here's as much as I'll say publicly (as I'm still a buyer).
Clever and hard-working management, with a special plug for CEO James Farrell Decades of investing has taught me that smarts and drive are crucial when investing in resources explorers. What I've seen here tells me James Farrell is switched on, hard-working, savvy and very focussed on building the business and creating wealth for ALL shareholders. He's doing a great job, and seems to have good support. You need this sort of thing in a small cap resources explorer.
Tight-as cap. structure KFM is a perfect set-up for a major rerating on high impact news flow. In September 2022 we had 42.5M shares. We have now 52.65M and 10.45M listed oppies - 70c exercise price - plus 10.5M unlisted ops. The issue of that extra stock gave us ~$4.2M to go towards exploration, essentially.
Low market cap. We have a ~$29M MC @ 55c – (undiluted - since the exercise price on most if not all oppies is greater than current SP). I'm surprised our MC is not much higher but rather than whinge, I just add to my holding when I can and when additional important info. gets released.
Cleanskin corporate background, free of historical baggage and thus stale shareholders Our clean history (i.e. not a relaunched near failed company from the past) should reduce selling pressure on the way up. Some recent selling may be related to escrow stock having recently come free. If so, that will be finite. The merits of the story will ultimately prevail over day-to-day buy-sell balance issues anyway and KFM's clean background tells me a rerate could come very fast once it gets going and everyone runs to that side of the boat.
Great sector (REEs) Multiple uses for REEs give assurance the sector that will remain attractive for a long time.
Top notch mining jurisdiction (WA) Australia is rich with opportunity and recognised world-wide as such, especially WA, with its extraordinary mineral endowment and well-established processes. Development projects here have higher value than most places because of low sovereign risk coupled with good availability of talent and infrastructure.
Multiple macro tailwinds I previously mentioned 7 easy-to-think-of areas of supporting tailwinds. I missed several; there are more.
Emerging world-class focus area (Gascoyne region, esp. west of Yangibana development) The Gascoyne region manages to get better, even as an already world-class area. e.g. DRE, under the impressive Dean Tuck, has had lightning quick and impressive exploration (and maiden JORC) results from their acreage situated between us and Yangibana, on similar play concepts as ours. Interestingly, DRE went into a Trading Halt this morning on 'exploration results'. Highly likely to be good news IMO so likely more positives for the region. So what? My September post (SP then 50c) suggested: "… 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.... 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…"
That stage is getting closer because since then our position has improved markedly. We've put away a $4.25M placement and overcome the indigestion, and now have enough in the tin for some meaningful drilling. Which takes me to our acreage, where we are developing exceptionally well.
Our remarkable acreage- some recent announcements It's easy to forget how much good news has come in recently. Here's a reminder of some announcements. TimeMagic summarised it neatly with this comment:"Not to mention the masterclass in exploration news flow we’re all enjoying. Nicely done.":
6 Sept. 2022 - Significant Clay REE Mineralisation Confirmed at Mick Well Remember that this is an addition to the hard rock that is rightly getting so much attention.. 4 Oct. 2022 - Further Exceptional REEs Extend MW2 Strike Length to 3km. Note the exceptional grades - even for rock chips - and the multiple lodes, and the good strike extent already indicated.
24 Oct. 2022 - New REE Discoveries along 54km Target Corridor - MW7 and MW8.
12 Nov. 2022 - Drilling Underway at Mick WellResults due Jan. 2023.
15 Nov. 2022 - New REE Corridor Added This was the 18km at the nearby Mooloo Project, which " has the same geology, regional geophysics and a similar high thorium response as the Mick Well area". Sounds good.
29 Nov. 2022 - Assays from MW7 Confirm Another High Grade REE Discovery Fantastic rock chip grades again and rapidly expanding and significant strike length already mapped.
20 Dec. 2022 - Mick Well REE Drill Program Completed This announcement highlighted that 4 additional holes were added to the program during drilling and due to constraints associated with rig availability five drill holes in the initial plan were delayed and will now be prioritised for completion in 2023.I like the sound of extra holes "during drilling" (which obviously were not necessitated by any drilling difficulties). 10 Jan. 2023 - Exciting New Carbonatite REE Targets Along 54km Corridor This one referred to: * "Numerous potential carbonatite intrusion locations across the entire length of the Company’s 54km Chalba target corridor identified from tenement-scale airborne geophysics survey." * Significant new large-scale target confirmed at Kingfisher South, where geologicalmapping has already confirmed the presence of ferrocarbonatite intrusions. The targetincludes a central area defined by a distinct circular magnetic feature with a diameter of2km; a geophysical signature like other known carbonatite intrusions globally and withinthe region. * New targets show geophysical responses similar to the Mick Well area…" Don't say we weren't given a heads-up!
18 Jan. 2023 – Large-Scale Carbonatite REE Targets Identified at Arthur River * "Numerous Rare Earth Elements (REE) targets identified at Arthur River, with a large-scaletarget area that features several circular magnetic and thorium responses which areinterpreted to be associated with the intrusion of carbonatites. • In addition, six large-scale and high priority target areas have been identified with tens ofother discrete magnetic features with geophysical signatures similar to other knowncarbonatite intrusions globally and within the region. • The newly identified targets add a further 12km of strike to the Lockier target corridor which also hosts the Company's Mooloo project target zone, taking the Company's target corridor on the Lockier shear to a total strike length of 30km. This significantly adds to theCompany's already extensive 54km Chalba target corridor which hosts the MW2 discovery…"
So, we're now up to 84km of shear zones, with a myriad of targets etc, showing similarity with discoveries to date. If that isn't enough check out the following statements and pic: "…Our tenement-scale airborne geophysics surveys have once again led to the identification of more high quality and large-scale carbonatite targets, including a truly exceptional target whichextends for over 9km and is comprised of numerous circular magnetic and thorium features which we interpret to be associated with carbonatite pipes and dykes. This is the most significant and largest geophysical feature we have identified so far, adding significantly to an already impressive pipeline of geophysical targets and zones of outcropping high grade mineralisation..."
That fantastic (9km) target is currently called LK1.
The announcement further said: "We recently announced a series new targets carbonatite targets along the Chalba mineralised corridor, which we hope to see develop into a world-class REE centre. We are now seeing similar high quality targets emerging along the Lockier corridor. We remain amazed that these two mineralised corridors extending over a total of 80km have never before been identified for carbonatites and REE mineralisation …." 23 Jan. 2023 – MW2 and MW7 Continue to Expand on Latest Surface Sample Results Among today's announcement, which includes more superb rock chip results from MW2 and MW7, there was this exciting revelation - KF3:
Huge 'kid in a lollyshop' problem It's pleasing to see several astute posters commenting today and recently. Accumul8 , I agree that MW7 is shaping up beautifully but there's an emerging 'problem' with our acreage - where to look for the big mother(s)! There's an embarrassment of riches, with significant pointers all over the place, and it gets better.
It's important to recall that the myriad of first class rock chip locations are only one possible source of important mineralisation. KFM's initial high grade discovery, in the Mick Well drilling reported in January last year, was a blind discovery! No outcrop; no rock chips. God knows (literally!) how many other blind discoveries are waiting to be found.
If one day we find there is a huge (world-class) system driving all this we'll be able to look back at the proliferation of indicators and nod our heads with a smile. Which leads me to a somewhat related but fun diversion…
Pilbara iron ore in the 1960s Here's some iron ore that I got from Mount Tom Price in 1968. This superb specimen would be even more sparkling now – 55 years on - even with oxidation and so on - if I hadn't carelessly stored it for a few years on a slightly rusty shelf, without thinking.
Anyway, the mine had started by 1968 but I wonder what the exploration geologists Ian Whicher and Bill Burns (who were the first on the deposit, and recognised the iron ore mountain as such, in mid September 1962) would think now about its world impact. Acknowledgement BTW to their boss, Haddon King, too, for his crucial role in that extraordinary discovery.
Do your homework folks, you're capable of pulling out if signs aren't good enough but, importantly believing, when you should but dare to dream and have a serious go at something. I've seen it pay off many times. If you get it right, it can change your life!
KFM Price at posting:
55.0¢ Sentiment: Buy Disclosure: Held
That fantastic (9km) target is currently called LK1.
