Breathe in. Breathe out....
In Greek philosophy, Ataraxia is the central thesis of Epicurean pleasure (hedone, from which we get hedonistic).
When putting your hard-earned capital into a small-cap exploratory play, then you need to adopt this mental state, if you are investing for the long-term payout. Selling out on bad news, and then buying back in on good news, is a surefire way to slowly erode your capital - unless the company is running out of cash, or there is a material change to the long-term investment case.
With a caveat - if you are only prepared to 'lose' so much on paper, stop losses exist for a reason. Manage your own risk, you are the only one who lives with the results of your decisions.
Helix Hurdle
Today, Helix is a case in point.
While preparing for wireline logging, the Clink #1 well encountered caving with the Mowry shale from ~2,100 feet onwards which compromised the stability of the wellbore. Hex noted that 'stability issues in the Mowry shale had not been seen in any surrounding wellbores, including Hillison #1.'
This is a bit of a pain - but more of a fly in the ointment than a thorn in the side. Mowry shale can cause minor issues as its stability can weaken when it absorbs water - but the plan is fairly simple.
Helix notes that the Mowry formation will require an intermediate 7" casing to be rotated through the shale section, allowing the company to re-enter and test the lower parts of the well where a helium system has been identified.
This requires a different rig to handle this casing - which will take a month to get to site; however, it 'remains fully funded for operations, including mobilisation of a rig to insert intermediate casing over the Mowry.'
There are two competing tensions here: one month may as well be a century on AIM, but there is no risk of further dilution to pay for the additional work. And the Cardwell rig can move on to Rudyard, so you may well find that both assets are wireline logged at the same time, which could create some excellent momentum a few weeks from now.
But those of you with HE1 PTSD will remember a similar story, so the message from investors is clear. As Spiderman said to Peter Griffin:
'Everybody gets one.'
The Helix investment case is one of near term news flow and quick commerciality - and while there is always exploration risk, any further hiccups will go down like a lead balloon.
The good news is that Ingomar saw 'significant shows of helium and hydrogen gas from the Amsden, Charles, and Flathead sandstone formations,' with CEO Bo Sears noting:
'we are very pleased with the results from the well to date. The mud log revealed reservoir quality strata with positive helium results. Clink #1 appears to be a good well with a bad shallow interval which has complicated our completion. However, the well proves the presence of helium within all our target reservoir horizons.
"The Clink #1 well has also demonstrated the presence of geological hydrogen within the deeper, Cambrian, sandstones. Hydrogen grades increased towards Total Depth, which was called at 8,030ft while apparently still in gas and without reaching basement.'
In other words, Bo is saying there is one issue with the well that will be fixed fairly easily. I would also point out that the next rig may be rated to further than 8,000 feet - so there could well be some unexpected upside news when it arrives on site.
Overall, I suspect today will be a decent buying opportunity - and then it's a short waiting game.
Good luck to all.
In other news
Guardian Metal investors waiting for the inevitable Chinese action on Tungsten (and also grant funding, and assays) were treated to a quick update on Garfield. Assays from eight rock samples taken across the newly staked Freeze Zone have come back with some decent numbers:
up to 15.56%* and 9.58% CuEq* with 7 of the 8 samples returning >1.75% CuEq.
These were accurately described as 'exceptional and consistent high-grade copper-gold-silver results,' but it's worth noting that (a) 8 samples is a tiny sample and (b) rock samples are selectively taken from site.
Nevertheless, the recently completed ground magnetic geophysics survey has also highlighted a buried magnetic anomaly close to the high-grade rock sample results, pointing to the potential for the Freeze Zone to host a mineralised porphyry system. This means there could be multiple porphyry systems on the asset, and GMET is now finalising preferred drill target locations. A notice level permit will be submitted to the local Bureau of Land Management office soon; remember, the company remains well capitalised to explore.
CEO Oliver Friesen enthused 'we now have a greater than 6km x 3km mineralised footprint at Garfield, with confirmation of porphyry and skarn as well as epithermal mineralisation across the now four principal target zones.'
I'd also point to his comments on 'the commencement of assay results back from the laboratory following their typically busy summer period, with a steady flow of results expected from here on in for the next several months,' after the well-reported lab backlog.
Assays, grant funding, and potential tungsten export ban awaits.
On that note, I will mention that the two rare earths China export banned last year (Germanium and Gallium) initially barely moved, but have since rocketed in price.
I am currently mid due diligence on Firering; as you know I am very bullish on Zambian copper and like the 'picks and shovels' approach of supplying quicklime to the industry.
In the Witswatersrand gold rush, it was the hoteliers and restaurants that made the cash first.
Firering's Limeco (an ex-Glencore quicklime project with an historical spend of +$100m), which is aiming for first production from the first of eight kilns in Q4, has been awarded a 392.51 hectare exploration licence adjacent to its current licence.
This could increase the MRE by between 60 and 70 million tons (at similar grades), and will see Limeco's economics improve further - it already has sufficient resource to produce circa 700 tonnes of quicklime per day for some 30 years.
Remember, Zambia has seriously ambitious copper production targets and will need all the quicklime it can get.
CEO Yuval Cohen notes that 'Limeco will be one of the largest quicklime producers in the region and is strategically positioned to support copper producers in the Zambian Copper Belt, which currently rely on imported quicklime from South Africa.'
Oriole Resources is also now on the watchlist - the Mbe (Adamawa region of Cameroon where BCM is funding up to $4 million in exploration expenditure) update has seen initial trenching results at MB01 return up to 50.00m at 1.11g/t Au.
This trench, MBT001, saw grading at 20.00m at 2.23g/t Au.
This is only one of five licences within the Company's broader package of contiguous exploration licences which cover 2,266 square kilometres of ground prospective for gold deposits.
Further trenching results are expected over the next few weeks, and will be used to plan the maiden drilling in the 2024/25 field season. CEO Martin Rosser noted that 'these trenching results are highly encouraging, being over substantial widths and supporting our learned opinion that Mbe is a potentially significant gold discovery.'
Let's hope for some more decent results - ahead of funded drilling.
Great Southern Copper is also likely to be added to the copper portfolio; its key target at the Mostaza Cu-Ag-Au Mine within the Cerro Negro Project has just been expanded due to 'the recognition of significant zones of additional Cu-Ag mineralisation in historical drill-hole assays and surface rock chip samples.'
Presently, preparations are underway for drilling to commence - archaeological and environmental surveys are now completed, and the selection of the drilling contactor already selected.
Remember, the Mostaza Cu-Ag-Au Mine was previously owned and mined by Antofagasta with mixed oxide and sulphide ores processed at their nearby Parral flotation plant located within GSC's concessions.
The wider Cerro Negro is located within the Company's Especularita project, close to infrastructure including highways, powerlines, and towns -
170km from the port city of Coquimbo, and 130km from Antofagasta Minerals' copper concentrate port at Los Villos. The area is accessible year-round for all exploration and mining activity.
The project also is located within the north-south trending Cretaceous metallogenic belt that includes Teck's Carmen de Andacollo Cu-Au Mine 80km to the north, and Pucobre's El Espino Cu-Au development project 30km to the south.
Historical drilling at the Mostaza mine includes 25 diamond drill holes for a total of 1,024m; 16 finished in anomalous copper mineralisation (>0.1% Cu) and 4 of the holes failed to reach the high grade target.
Ongoing compilation of the historical data by Great Southern Copper, together with re-interpretation and 3D modelling of assays and geology has identified a significant halo of additional copper mineralisation located either side of the high-grade lenses - which could potentially significantly increase the size of the Mostaza deposit.
On-going exploration at Cerro Negro has also identified additional copper mineralisation hosted in multiple structures parallel to the Mostaza trend, further expanding the copper potential.
CEO Sam Garrett enthuses 'Exploration at Cerro Negro is rapidly advancing with three key objectives - drill beneath the historic Mostaza open pit to develop a high-grade copper-silver-gold resource, expand the Mostaza deposit along strike targeting extensions to the mineralised structures, and explore at depth targeting large-scale porphyry copper type deposits.
"It is very encouraging to identify this additional potential before any metres have even been drilled at Mostaza. This newly recognised mineralisation has the potential to significantly increase the size of the Mostaza deposit and provides additional optionality for potential future mining operations.
"The discovery of additional copper-mineralised structures hosted in the advanced argillic lithocap above the Mostaza mine is also very significant in terms of our porphyry copper exploration at Cerro Negro. The potential of these anastomosing mineralised structures to grade downward into porphyry type mineralisation is a genuine target vector.'
That's all for today.
- Charles Archer, 3/9/2024