In trying to assess ERW's (undoubted) potential, I took a look...

In trying to assess ERW's (undoubted) potential, I took a look at Azure's (AZS) experience in terms of market announcements and price movements, from its acquisition of 60% of Andover to the current time, but focusing on the period around AZS's first drill.

The first thing i noted was the huge volume of AZS announcements in the months preceding the formal acquisition of Andover and leading up to their first drill. Far more than ERW. I assume this means Azure had more visibility and a wider shareholder base as they entered drilling than ERW will have.

In respect of actual SP movements, AZS acquired 60% of Mark Creasy's Andover (already with a proven Ni resource) in July '20. This caused a 2X run up from around 6c (MC ~$12m) to about 16c. A tad higher than ERWs today with its 80% ownership of Andover West.

The SP then rose 2X again to ~35c by Oct 2nd when AZS announced drilling had started. The price then rose ~2.5X to 90c by Nov 1st when massive sulphides were announced. This represented an MC of about $220M or about an 18X rise from the March '20 level.

It didn’t last as AZS almost immediately did a mega placement of $37m (50m new shares) at 74c. The effect was the SP retraced to 40c and more recently to low 20’s. Was this protracted decline from peak because Azure's cumulative Ni volume was less than the market hoped for? Not sure.

Notably however they continued to hit and have done better at Ridgeline (the drill closest to ERW). The SP has strengthen to 31c. They’ve also recently found potential Lithium via pegmatites. But curiously I don’t see any hard correlation between announcements and major SP changes after the initial massive sulphid.

What does this auger for ERW? First a few observations. One positive is that whereas AZS owns 60% of Andover, ERW owns 80% of AW. On the other hand ERW is drilling in a less excitable market and has done less to warm it up. Anyway, we’ve not yet seen any pre drill runup at ERW.

So when may we expect something for ERW's SP? Logic says there should be some sort of improvement in the next 2-3 weeks as
(A) Newexco completes its analysis of the EM data and refines knowledge levels of the mega anomaly and ERW announces where best to drill. (a few days away?)
(B) When the Heritage team announce a date for the track to site to be cleared. We may expect the rig to be on site and be ready to start drilling about two weeks after the track is laid.
(C) when ERW announces drilling has started. Possibly early Dec?

But what about after ERW drilling starts? Lets look back at AZS. By this time they started to drill they'd already had a 6X run up 35c. But their largest catalyst was announcing massive sulphides on Nov 2nd: when the SP reached 90 (18X its March position).

All In all. could we see ERW run up from its current 20c when they finally announce everything is sorted and they’re moving the drill to site, then starting? In the current climate I'm not sure we'll see a lot of a rise but given the potential there surely should be 2X in it.

But as with AZS, the largest jump will be if they announce massive sulphides. Then again when they announce Assay results in Jan. If ERW emulates Ridgeline with a solid hit, in theory ERW could jump 10-20X which could mean $2-4 by New year then Mid Jan. However current sentiment and ERW’s lack of marketing may limit a rise to the low level.. But in my view there is no doubt ERW has the potential to ten bag here within weeks if they hit similarly to AZ at Ridgeline.

So it’s down to the possibility of a hit. Again we can use AZS for clues. A seam of similar geo appears to runs broadly NE to SW from Andover to Ridgeline to Andover West. Azure’s larger finds are to the west at Ridgeline. The large anomaly ERW is planning to drill is in line and just 1.8km away. So to me the thesis around ERW is extremely solid.

Sorry its a bit long.