Ok so today I bought some CR9 (10% of my portfolio) without knowing anything about the company... Well, I knew the ticker was CR9, and that's about it... I just learned its called Corella Resources
I have a habit of buying BNRL stocks (Buy Now Research Later), so here I am now doing the latter (the research)...
I wouldn't recommend this to any investor, but it has worked out quite ok for me so far... In another stock I own beginning with C (The best Gold/Copper stock on the ASX - I think my signature gives away my sentiment), I entered the same way, and now after 12 months of research and commitment to the company, my holdings now make up 70% of my portfolio (again, I wouldn't recommend this)
Ok, time to start researching .... Does Corella make face masks? Is it a BNPL? I have no idea! Hopefully I will find out now :)
Corella Resources (previously Sinetech Limited, which principally was involved in the development of software applications and information technology systems to support validating credentials for potential employees and suppliers) is an Australian exploration company listed on the Australian Stock Exchange (ASX:CR9). The Company’s main focus is on the exploration of the following wholly owned, high-grade, low impurity kaolin and silica projects located in the Yilgarn Craton region of Western Australia:
Corella Resources Limited (Corella; ASX:CR9) has assembled a portfolio of only the highest purity kaolin projects in the stable mining jurisdiction of Western Australia.
. Initially targeting existing DSO Kaolin industrial markets:
* An additional opportunity exists in the high purity alumina (HPA) market.
Kaolin, or China clay, is nearly white in color. It is distinguished from other industrial clays based on its fine particle size and pure coloring. Its ability to disperse in water make it an ideal pigment.
The primary constituent in kaolin is the mineral kaolinite, a hydrous aluminum silicate formed by the decomposition of minerals such as feldspar.
The name kaolin derives from the Chinese and means high ridge. High ridge is a reference to the hill in south-eastern China where the clay was originally discovered and used. In the 7th and 8th centuries, the Chinese were the first to use kaolin to make porcelain. It was not until centuries later that other areas of the world could duplicate the process.
The white color of the mineral can either be naturally occurring, or can result after processing which removes minerals and other color-bearing compounds. The small particle size of the mineral contributes to its white color by scattering light.
Other Uses:Kaolin has a variety of other uses in products including paint, rubber, cable insulation, specialty films and fertilizers. New uses are being discovered frequently, and ensure that the mineral will remain in demand for a long time.
Global Production of Kaolin:Imerys, Quarzwerke (Sibelco) and BASF accounted for over 26% of global production in 2017 and dominated the global market. Imerys alone accounted for 16.3% of the market; other producers include KaMin and Thiele Kaolin Co. (both US). Asian producers account for significant volumes but for the lower end of the quality spectrum*.
Supply and Demand of Kaolin:
Global demand by volume was 30.6 million tonnes in 2017 and is expected grow at a compound annualised growth rate (CAGR) of 4.4% from 2017 to 2025 to reach 43.1 million tonnes by 2025... WOW!!!
I won't paste the whole thing here, but its worth reading:
https://www.wakaolin.com.au/the-kaolin-marketHigh Purity Alumina (HPA):
In regards to Kaolin, as explained in CR9's prospectus, this is how it was explained:
The name “kaolin” is an adaptation of the Chinese term “Kauling”, which is the name of a hill in Jiangxi Province that was historically mined. Kaolin is typically a soft white material consisting primarily of kaolinite, with lesser amounts of other minerals such as quartz, feldspar and various forms of iron and titanium oxide. The mineral kaolinite has a theoretical chemical composition of 39.5% Al2O3, 46.54% SiO2 and 13.96% structural H2O.
Kaolin deposits can be broadly described as two types, either residual or transported deposits. Residual deposits may be formed in situ (in place) by the alteration of feldspar-rich rocks such as granitoids or feldspathic sandstone by weathering or hydrothermal fluids.
Kaolin in weathered deposits is formed by the hydration of minerals such as feldspar to produce kaolinite. The weathering process resulted in the leaching and removal of silica, iron, potassium, sodium, calcium and magnesium from the original granitoid rock. It is noted that weathering processes may be affected by the composition of the original rock, topography, fracture zones (e.g. joints or faults), groundwater and the balance between the weathering process and erosion. The extent of kaolinisation partially depends on the nature of the parent rock. Granites with a high alumina to silica ratio are highly susceptible to kaolinisation processes.
All of the HPAA kaolin Projects are classified as a residual, having been formed by the weathering of primary granitoid rocks.
Ok, so let's have a look at Corella's Projects:
As announced on 11 February 2021, the Company entered into an acquisition agreement, pursuant to which the Company acquired 100% of the issued capital in HPAA Pty. Ltd (HPAA) (the Acquisition).
HPAA was legal owner of four granted tenements and one tenement application, which together comprise four exploration projects prospective for high-grade kaolin and silica, described generally and located as follows:
(a) the Tampu Kaolin Project, which is located in the shire of Beacon, 265km north east of Perth;
(b) the Wiltshire Kaolin Project, which is located 370km north of Perth and 90km east of Geraldton;
(c) the Kalannie Kaolin Project, which is located 210km north east of Perth and 65km west of Tampu; and
(d) the Bonnie Rock Silica Project, which is located 250km east north east of Perth and 70km south of Tampu,
Note: These projects are each ideally situated for export of product and considered to be low cost exploration and potential production opportunities for products that have an active market;How did we acquire these projects?
Tampu KaolinThe 100% owned Tampu Kaolin Project (Tampu) comprises two granted exploration licences held by Corella, being exploration licences E 70/5235 and E70/5214, which are currently held by Corella, and now, as of Ann 19 May, 2021, Corella has increased its landholdings by 108% through its lodgement of an exploration licence application E70/5744 with DMIRS (Dept. of Mining, Industry and Resources Safety) covering ~88km2 (30 blocks).
If I might say so, this is quite impressive!! Only weeks after being re-instated on the ASX as CR9, it has more than doubled its land holdings in its most prospective project :) (At this point in research, I am officially staring to get excited)
Corella Resources Managing Director, Tony Cormack, commented “The new area under application compliments the flagship Tampu Kaolin Project and secures further prospective kaolin areas within the Tampu region".
The Tampu Project lies 275 kilometres northeast of Perth and consists of two exploration licences (and one under application with DMIRS) that cover 169 square kilometres, near the town and rail siding of Beacon. The project has bitumen road access, mobile network coverage and unused infrastructure located less than 3km from the project site.
Tampu has seen two historical and one modern phase of exploration drilling and metallurgical programs.
This drilling has sufficiently determined the validity and potential of Tampu to host significant bright white kaolin mineralisation with very low levels of contaminants. Further drilling and metallurgical test-work will be required in order to achieve a JORC compliant resource at Tampu.
The known mineralised area at Tampu is contained on two freehold farming properties that are, for the most part, fully cleared of vegetation and intermittently cropped. Agreements are in place with the two property owners for the purposes of exploration drilling and sub-surface rights at the Tampu.
As of 08 May, 2021, Only 12 days after re-listing on the ASX, Corella Resources (CR9) has begun resource and metallurgical drilling at its flagship Tampu Kaolin Project in Western Australia.
“Assay results and preliminary metallurgical testwork from reverse circulation drilling at Tampu in 2019 confirms the kaolin as being of extremely high purity.”
Between 80 to 120 reverse circulation (RC) and aircore (AC) holes, for 2000 metres, will be drilled to outline a maiden resource estimate. The drill program will total ~2,000m and consist of 80 to 120 RC/AC drill holes, to an average depth of ~20m to a drill spacing of 80 x 80m in select locations.
• Drill program designed to underpin a maiden resource estimate and produce bulk samples for metallurgical test work and end user verification. The metallurgical samples will primarily be used for process flow sheet design along with representative samples to be provided for end user analysis and verification using their own processes.
• A select number of historical holes will be twinned to verify the outstanding results reported and assess the potential for inclusion into a maiden resource estimate.
Drilling actually began on May 8 and some holes have already
intercepted significant intervals of bright white kaolin.
Managing Director Tony Cormack commented:
"I am extremely pleased to report that drilling commenced at Tampu on May 8 with holes intercepting broad intervals of visual bright white kaolin," ."We are confident, based on the historic results, that we will be
delivering some excellent assay results over the next few months".The Company has now compiled the historical drill hole assay data into a centralised database and have generated a 3D wireframe model of the kaolin mineralisation at Tampu.
This 3D model will be integral in guiding all the upcoming drilling with all new drill data being fed back into the model daily to ensure optimal drilling throughout the entire program. A select number of historical drill hole locations will also be twinned for the purpose of verifying the outstanding historical assays reported and to determine if the historical drill holes can be included into the
maiden resource estimate calculation due in Q3CY21.
And what did Mr AlfieKnows have to say about this?
Now, for those of you who don't him, he is someone's opinion that MUST be held in HIGH REGARD!! Those of you from my other favorite stock will know what I am talking about... In fact, he is the only reason I even took the time to look into CR9... With more than 2000 stocks on the ASX (90% of them rubbish), we need to be very selective in what companies we research and invest in... So thanks Alfie for the heads up... I love getting into companies at the bottom level
And as of the 19h May, 2021:
"Resource drilling is continuing to intercept broad intervals of bright white kaolin at shallow depths, being consistent with the impressive historical drilling results. A total of 83 RC drillholes holes have been completed to date and we expect to finish the program this week with samples being trucked to the laboratory in Perth the following week. Assay data is expected to flow in the coming months and will underpin a maiden resource estimate for Tampu as well as provide bulk samples for metallurgical test work”.
Is this good or not? Let's listen to Alfieknows has to say about this .... AGAIN, I reiterate that he KNOWS what he is talking about!!
"Our resource at 'Tampu' has the potential of being up there with the best in its class. We have extremely high purity, bright white kaolin deposited at shallow cover (low cost to extract) and at above average depths (more Kt), it appears free from contamination due to weathering and ground water seepage, and we will soon find out the metallurgical properties and levels of contaminants".
He goes on to compare our intercept with those of SUV, ADN and FYI:
And then goes on to compare our current market caps: (quite self-explanatory) 
CR9 =$14.8m
SUV = 68.4m
FYI = $173.3m
ADN = $399.7m
"even if you believe our resource/project potential is only a fraction as good as our peers, we still appear quite undervalued with massive potential for exponential share price growth over the coming months"Sorry to borrow your research Alfie, but it is simply too good to ignore (Hence the reason I am here)...
SUV:
FYI:
Again, these charts are self- explanatory
Ok, so currently Tampu is our most exciting project (for me anyway), but lets have a quick look at our 3 other projects:
The Wiltshire Kaolin Project:Located 370 km north of Perth, and 90km east of Geraldton, Wiltshire is located adjacent to the Wenmillia Dam kaolin deposit, which is held by Blue Diamond WA Pty Ltd (ACN 090 511 970) to the north of Mullewa. The Wiltshire Kaolin Project (Wiltshire) comprises a single granted exploration licence, being E 70/ 5216, which is currently held by Corella. Bright white kaolin is known to extend to the south and west of Wenmillia Dam along exposures in Wenmillia creek toward Corella’s Wiltshire project. Chemical analyses by the Geological Survey of Western Australia (“GSWA”) on kaolin samples drill samples from Wenmillia Dam show high purity kaolin with low levels of contaminant elements. This is a grass-roots project and significant further exploration and metallurgical test-work is required.
Kalannie Kaolin Project:The Kalannie Kaolin Project comprises a single granted exploration licence, being exploration licence E 70/5215, which is currently held by HPAA.
A GSWA kaolin sample from the project area location shows high purity kaolin with low levels of contaminant elements. This is a grass-roots project and significant further exploration and metallurgical test-work is required.
Bonnie Rock Silica Project:The Bonnie Rock Silica Project comprises a single pending exploration licence, being exploration licence E 70/5665, which is currently held by HPAA. Previous exploration undertaken on the Bonnie Rock Project identified a prominent quartz vein that extends for an unknown distance below cover.
Chemical analyses indicated that the quartz in the region is high-grade, had favourable thermal stability and thermal strength values and is suitable for use in the production of silicon metal.
What is Silica?
Silica is found in nature in the form of hard rock quartz and naturally weathered sand and is one of the most plentiful naturally occurring minerals on the Earth. The uses of silica are extremely diverse and there are a number of established and emerging markets for varying grades of silica products.
Silica is used in agriculture, brick and tile, concrete, cleansers, foundry casting, ceramics and pottery, paint, glass, soaps, fibreglass, electronics, plaster, sandblasting, industrial effluent filtration, drinking water filtration, hazardous waste
control.
The Company identified an
early mover opportunity to enter the expanding high purity hard rock silica markets and actively secured the historical naturally occurring hard rock silica project at Bonnie Rock, Western Australia.
Is there any risk with investing in CR9?
As with any investment, there is a risk...
There is a risk that the kaolin and silica that may be produced by the Company does not meet market specifications, whether due to
insufficient grade or impurities. For example, the Kaolin market has demanding major element specifications for parameters such as purity
(e.g. Al2O3 content) in addition to tight specifications for trace elements such as Fe,K,Na, and T. Another risk for Kaolin could be the brightness
levels of the Kaoli, ie for the paper industry. The silica market has demanding major element specifications for parameters such as purity
(e.g. SiO2 content) in addition to tight specifications for trace elements such as Fe, Ti and Cr in the glass industry.
Failure to meet specifications may result in selling the products at discounted rates, or not finding markets at all. Other risks for silica may
include particle size distribution and physical strength (crush resistance) as in the case of proppants for the oil industry. Industrial minerals are
generally considered to be bulk commodities and are therefore susceptible to distance to market and transport costs; therefore, logistics
may pose a risk to supplying markets.
Prices for silica and kaolin will be largely subject demand from customers in Asia. Such a decline could have a material adverse effect on the
Company's business, results of operations and financial conditions generally.
The development and use of new technology for effective alternatives for glass or ceramics, or the development of new processes to replace
silica, could also cause a decline in demand for the products produced and could have a material adverse effect on the Company's business,
results of operations and financial conditions generally. Demand for silica and kaolin products can be affected generally by
advances in industry and the development and use of new technology or new processes that reduce or eliminate the need for silica and kaolin
products, including as a material for metal casting, ceramics, metallurgical processes, chemical production, paint and coatings,
filtration and water production and proppant. Such events could cause a decline in demand for the products produced and could have a
material adverse effect on the Company's business, results of operations and financial conditions generally.
There is also Tenure and access risk (applications, renewal, & access), exploration risk (There can be no assurance that
exploration of the Projects, or any other tenements that may be acquired in the future, will result in the discovery of an economic ore deposit. Even
if an apparently viable deposit is identified, there is no guarantee that it can be economically exploited), Mine Development Risk (If the Company commences production, its operations may be disrupted by a variety of risks and hazards which are beyond its control), Silica and Kaolin Demand Risk, Supply Agreement Risk etc... Refer to prospectus for more information...
But with that said and included, let it be said that IMO, any investment with an element of risk has the potential to produce to greater rewards... If risk isn't your thing, maybe you should condier Term Deposits and possible earn 1% per annum
Board and Management:Prior to re-listing on the ASX and subject to completion of the Acquisition, existing Directors Warren Barry, Terence Butler, Derek Hall and Daniel Coletta will resign and the Proposed Directors will be appointed, such that the Board of the Company on re-listing on ASX will be comprised of:
(a) Anthony Cormack – Managing Director;
(b) Philip Re – Non-Executive Chairman; and
(c) Peter Woods – Non-Executive Director.
As set out in the prospectus, the appointment of the Proposed Directors will add experience and skill to the Board to assist with the growth of the Company.
Do the Directors have skin the game? This is a MUST for me!!
I would say that owning a collective 13% of the company is sufficient skin the game :) (Excluding option, performance rights etc...) I will look into this over coming days in more depth...
And please, give us the Latest Top 20 List for MAY :) (Hint Hint to Management if you are reading this)... This will make my research a lot easier :)
With our most current Top 20 list, It looks like Peter and Anthony will shoot straight up to 1st and 2nd place, which, again, I like to see.... Diretors at the top of any Top 20 list usually means one thing... They will strive to achieve Shareholder value ... As they themselves are heavily invested shareholders
Capital Structure:
From what I can see from this, the Top 20 own almost HALF of the company!!! Always a good sign :)
Ok, so let's have a quick look at our new Management Team: Are they any good?
(a) Anthony Cormack – Managing Director;
(b) Philip Re – Non-Executive Chairman; and
(c) Peter Woods – Non-Executive Director.
Anthony Cormack – Managing Director:
His experience:
Ohhhh, so he is continuing on as MD from HPAA :) He must know a thing or two then about our recently acquired 4 projects
- This is very re-assuring :)
North West Nickel was a base metals private exploration focused company (Not listed on the ASX) incorporated in Australia. The company held mineral rights to highly prospective tenure in the Kimberley region of Western Australia. The company was engaged in active exploration and development of its assets until its acquisition in July 2019 by mining legend, Chalice Mining Limited (ASX: CHN)...
NWN held a portfolio of nickel exploration projects including the Ruins Nickel Sulphide Project ("the Project") in the west Kimberley region of WA. The Ruins Project is located adjacent to recent nickel sulphide discoveries reported by Buxton Resources ("Buxton", ASX: BUX) at its Merlin Project. The acquisition formed a key part of Chalice's new ~1,800km2 district-scale King Leopold Nickel Project in the West Kimberley, which represents an exciting new high-grade nickel exploration opportunity alongside its high-profile Pyramid Hill Gold Project in Victoria.
Not to mention his other previous experience :)
How about Phil Re?
Wow, EM1, I think we all know that story :)
That's some big names .. I will you to research each position should you wish, but I am satisfied :)
The Company is aware of the need to have sufficient management to properly manage the business and the Board will continually monitor the management roles in the Company. The Board may look to appoint additional management and/or consultants when and where appropriate to ensure proper management of the Company.
What about their salaries?
Are you kidding me? This is very modest, so I suppose they will have to rely on themselves increasing shareholder value to maximize their income :)
Anywayz... Getting late now so I will leave it here... Looking forward to the next Top 20 list :) and I will post more research when I have the time...
Conclusion: I invested blindly today on a hunch (BNRL), and after such research, I want more!!! - Lets hope I can buy even more at a cheaper price :)
Based on the projects we hold, the composition of management, managements skin in the game, and the fact that Alfie is interested, I see BIG things to come and manyyyy BAGS :)
Please provide any constructive input on my above research... I am always willing to learn more in a constructive manner :)
Regards,
Cari
(20min delay)
