Guardian Metal does it again

Good Thursday MINING AIM, and welcome to your thought of the day.

In a certain light, Guardian Metal Resources CEO Oliver Friesen and acting treasure Jeff Goldblum could be twins; and somehow, the magician has pulled yet another rabbit out of the hat. 

Shard is the lead broker, but GMET doesn't need their peasant money. The company has once again raised a couple of million - £2,154,074.58 to be exact (the £74.58 covers the CEO's tea bill) - through a direct subscription. Shareholders have been diluted by a meagre 6.7% at an issue price of 27p per share.

Yes, this is a circa 10-15% discount, but this company was trading for 7.5p per share less than a year ago. And yes there are warrants; one for every two subscription shares totaling almost 4 million warrants. These have a two year expiry and are exercisable at 40p - as I expect £1 per share within a year, whoever the lucky partner is has also got a good deal.

But warrant money means further funding is secured should the share price keep rising. Yes you can argue you want a higher warrant price, but another way of looking at it is that you have secured further future capital at a premium to the current share price.

Anyone complaining - consider the discounts and terms attached to other recent placings in the market. This is a good deal. Imagine what the discount would be if Oliver had gone to London for finance; and also be aware the share price at which the placing was done may have been 'handshake agreed' some time ago.

I will also note that while the company may be cash rich, exploring a porphyry system is expensive (let alone two), and this money was available now. Long-time readers will also know that I predict a global correction soon, and it's far better to have a cash buffer at a small discount today than have to ask for capital during the months when fear will be in the markets.

Financing exploration is a long-term game.

All we know of the origin of this new finance is that it 'has the potential to significantly increase North American investor interest in the Company. This interest can be channelled through the Company’s quotation on the OTCQX market, where CEO Oliver Friesen recently rang the bell on market open.'

It's Strategic North American Financing. It came from the USA. That's all we get to know right now, though if it's going to increase North American interest then it simply has to be a name we all know - whether a man of influence like Rick Rule or one of the majors in Nevada. 

The cash is going to be used to explore and develop at both Pilot Mountain and Garfield, including drilling of new and validated porphyry targets across both projects, and continuing resource expansion drilling at Pilot Mountain. We have got to the point where it might be worth starting to ask whether these assets are actually one big system.

I am.

GMET believes 'that these work programmes have the potential to markedly increase the value of its leading projects.' Should hope so too; no gamechanger was ever discovered without a drill bit. Or three.

The other good news is that the first assays are about to come back, while final interpretations of geophysical data is nearing completion. As a result, a number of key announcements are expected in the near term.

I'll translate: it's August which is both quiet in terms of trading volumes (beach time and margaritas), and uncharacteristically busy in terms of market news. There is no point releasing the good stuff when half of you are at the beach, and the other half are focusing on Helix, Rome and Arc Minerals. 

1 September, expect the fireworks.

OR, the CEO is staking more land (this being one of the few reasons you can delay releasing material news).

Then this RNS says the business is 'proactively working on various corporate initiatives including non-dilutive grant funding and separate announcements will be made in each key area as material developments are finalised.'

You keep dangling that grant funding carrot Oliver, a decision is now two months overdue. (Not officially, but best guess is applications went in June 2023 and these take 12 months to process).

Which suggests it's either not going to happen, or may be more than the market expects. I'll wager (and am currently invested) in the latter being the case; in case you hadn't heard as it's not widely marketed, this is considered to be the largest undeveloped tungsten deposit on US soil.

So once the Pilot Mountain resource is upgraded, and we get drilling Garfield after a few pesky permits and geophysics are acquired/reviewed, it's all looking roses.

Perhaps the only thing I can't interpret using my homemade RNS Alethiometer is that comment on 'various corporate initiatives' that include grant funding but are not entirely comprised of it.

We know from the Defence PowerPoint that grant funding is likely - but something else? Read the RNS of 8 July 2024;  the United States Senate Committee on Armed Services noted that 

'The committee encourages the Department of Defense to ensure that the domestic source of antimony and tungsten supply chains are not limited to a single source...

Therefore, the committee directs the Assistant Secretary of Defense for Industrial Base Policy to brief the Committees on Armed Services of the Senate and the House of Representatives, not later than March 31, 2025, on: (1) The ongoing efforts to cultivate a diverse supply chain for antimony and tungsten, to include the Manufacturing Capability Expansion and Investment (MCEIP) office's investment efforts; (2) Any updated concerns regarding the supply chain for antimony and tungsten, to include efforts to develop more than one domestic or allied sources within the supply chain; (3) Ongoing interagency challenges with permitting or regulatory hurdles for MCEIP's investments; and (4) Any other matters the Secretary deems appropriate.'

Something bigger than grant funding is cooking.

Let him cook.

- Charles Archer 15/8/2024