This has been flying under the radar, not a bad idea to keep a close eye on this one after the capital raise is over. I attended a recent presentation and ended up getting some much needed information from the management.
I asked about the recent slump in share price - the company has been following a longer term strategy that involved acquiring multiple assets/projects with the $7m of funds that were raised in the ipo. Over the past 24 months they have acquired a significant number of assets and potentially have more Lithium projects than any other asx listed company.
What has got me interested is the val post completion is only $8m at 5 cents with $3m cash at bank to fund a extensive drilling campaign in coming months.
A drilling campaign which will begin anytime soon will start to unlock and create share holder value and the market loves a drilling campaign. These projects are currently all being valued at Zero by the market. The have got some serious pedigree on the board but importantly the start their drilling campaign in WA , next door to where Liontown has recently had success and I clarified that their properties share borders within a few km's.
By 2019 Q1 extensive drilling campaign on their African assets gets underway "where initial exploration has shown outcrops similar to the early WA lithium finds at surface."
The company seems to be extremely optimistic about their prospects in Africa, in particular the Mozambique Asset. This has the potential to be a a world class asset with a indicative strike zone of 3k and hundreds of meters wide. It is comparable to Greenbush in scale, there's outcropping at surface and its high grades. I can only imagine how large the ore body would be. Have a look at the prospectus. If this is anything like what the maps indicate then it could be a company maker.
In summary what I gathered is the company has never been in a stronger position since the I.P.O for 20 cents - Gaining first-mover / exclusive rights in Mozambique (which has historically been one of the worlds richest tantalum provinces in the world.) and now only the second asx listed company to enter Zimbabwe another historical leader in tantalum production.
My biggest concerns with regards to Sovereign risk were addressed learning that Mozambique has been a stable Mining economy and more recently almost $100 Billion in foreign investment has been committed to funding one of the largest LNG projects in the world. Zimbabwe was the unknown with reports that things have improved with the removal of Mugabe but more work needs to be personally done on this.
Again company is extremely bullish on their Zimbabwe assets which initial sample testing has indicated some of the highest grades we have seen in the market.
The timing is interesting and I really like the story now I understand a lot more. I suggest we keep our eyes close to this one, can't get much lower but huge upside from here. Also due for a bounce and there seems to be a number of catalyst in the pipeline that could do just that. I will share some other findings soon. DYOR.
LI3 Price at posting:
4.7¢ Sentiment: Buy Disclosure: Held
