HLX (ASX) Ann: Quarterly Activities Report March 2018

Originally posted by La Tache ↑

@1ForDaMoney - thanks for gathering up the Collerina announcements (on that thread); very helpful. It's prompted me to reflect on Helix's portfolio, and what a day to do so, given the exciting cobalt-lateritic nickel announcement just released. (I've posted on this thread however as my content was broader, and is more akin to what was in the Quarterly).

More good news: cobalt-lateritic nickel
With Helix's vast acreage position and this being only the first regional scout air-core drilling, it's exciting to see "thick zones of laterite from or near surface, with numerous holes ending in mineralisation", with peak grades of 0.20% cobalt and 1.2% nickel.

Those projects aren't cheap but Helix has nothing in its share-price, IMO, for this asset. Helix has a M.C. of under $15M in total, whereas companies directly along strike from us on this play have vastly bigger market caps (CleanTeq - $810M; AUZ - $220M; CLL - $60M).

The JV (Helix 51%) with Collerina Cobalt (CLL - 49%) gives Helix the majority stake in this play, while reducing future costs. There is obvious strategic value in that alliance. We'll surely get good value for this asset, one way or another, especially when much of the world's cobalt comes from a part of Africa that many buyers do not want to deal with, so they're studiously looking elsewhere. Not to mention the cobalt price - about US$89,000 / tonne last night on the LME.

Unlocking the upside
I know there are some other juniors like Helix which have exceptional upside but are lagging badly in the current market. I'm confident that proper value will erupt for Helix at some point so I'll just wait it out, and not stress myself out of the position because of underwhelming share price performance so far.

Board – more quality
I like how Helix is subtly re-modelling itself e.g. with quality additions to the Board (Gary Lethridge and Tim Kennedy). It's also pleasing to see how good the acreage portfolio is; the depth of assets is extraordinary. It shows that MD, Mick Wilson, has a very good eye and has been very astute in building up a quality portfolio - on a shoestring budget, BTW.

Kid in a lolly-shop problem?
The remarkable thing with Helix, IMO, is that because the portfolio is so deep with early-stage opportunities, individual assets ironically are not fully appreciated by the market, and the sum of them is certainly under-appreciated. It's like being in a lolly shop that has so much choice that it's hard to know what you like the most because something else distracts you before you've finished looking.

It's also true that our management is, I imagine, a bit stretched for the number of activities that we have on at the moment - and so is focussed on substance rather than spin. Far better that than the reverse. This is not an easy balance for a small explorer.

Still to come …
Like the dilemma faced by The Who, who didn't want to follow Jimi Hendrix on stage, I'm hesitant to follow previous explanations of the likes of @Technician and @1ForDaMoney re Helix's exploration potential. However :

The recent announcement of more Cu at depth in our flag-ship asset, Collerina, was very significant. My guess is we'll end up proving up a commercial resource there, and getting a re-rating off that alone. Further drilling surely will be starting there any day now. Whether we see the "don't argue" hole in this round or later, I'm pretty confident we'll find it before too long.

Speaking of copper, the Joshua asset in Chile will be increasing in price as the copper & other battery metals phenomenon winds up (yes, pun intended - sorry) and the copper demand-supply balance improves. There's nothing in our share price for this, IMO.

Then there's Yathella, which looks really interesting. And Mundarlo, which is a big sucker if it works at all. Again, patience will be the key. I'm allowing several rounds with the drill bit before we really know.

There are many more assets, in a very high-potential pipeline of opportunities. Good luck, to all!

appreTha

Expand

Thanks @La Tache reckon you are definitely giving us the " good oil ".
Considering Collerina will be the jewel in the crown, in your opinion should
most of the other assets including and in particular cobar gold be JV'd
Also with CLL building their own plant is it an advantage to HLX to do an
offtake deal? As understood CLL are looking for deals in this space.
Would appreciate your thoughts.

Cheers

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(20min delay)
Last 0.5¢		Change 0.000(0.00%)		Mkt cap ! $14.68M

Open	High	Low	Value	Volume
0.5¢	0.5¢	0.4¢	$13.78K	3.175M

Ann: Quarterly Activities Report March 2018, page-51

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Ann: Quarterly Activities Report March 2018, page-51

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