Small Cap Mining: May Review

Volatility, that double-edged sword

Good Afternoon Team.

It’s that time again.

If I could describe last month in a word, it would be volatile.

Volatility is the soulmate of the trader and the curse of the investor - but most importantly, when the stocks you believe in go down, it’s the time to trust your research and double down.

In the large-cap world, well, um, everything’s on fire.

But apparently also fine.

Amazon is a traitor to American capitalism. It doesn’t matter if they immediately rowed back on reports that Trump’s Tariff Tax will be on invoices. Bottom line is that consumers are going to pay ‘em.

And iPhone production is moving from China to the US.

Just kidding - to India obviously. Winning.

Canada has elected Mark Carney to rule the country and will be in even more dire financial straits before long. Half of Western Europe experienced a major blackout and the powers that be have decided to pretend it nobody was to blame.

Bitcoiners couldn’t use their Bitcoin, but to be fair, I imagine few walked into their local Mercadona with a silver stack to trade with.

We had Liberation Day at the start of the month - the day Trump decided to liberate wealth from every portfolio across the world and get rid of capital gains tax by removing the possibility of capital gains.

When Trump brought the board out, I literally heard the dying screams of a million call options.

The man (or more accurately his son) is now launching an Executive Branch membership club with $500,000 fees, so he can sell inside information on his own rather than have Bessent do so at JP Morgan events.

Then there’s the Trump coin madness, were the largest 220 holders will be allowed into a special private event with the President, presumably to be told which shitcoin to buy next.

The grift is unimaginable.

But anyway, we have the world that we have. China has decided it won’t be playing ball until all the tariffs are removed, and basically the American consumer is about to learn a very harsh lesson in economics.

As is the retail investor, who continues to buy the dip as almost every institution bails on their very helpful exit liquidity.

This recent rally is classic bear market territory - make some cash on the volatility if you will - but make no mistake, when these tariffs start to hit the real US economy (think empty shelves), stocks are going to suffer.

And with Trump saying that anyone buying oil from Iran is state non grata…does this include China?

Another screaming red flag?

McDonald’s. Sales down 3.6%, even after the insane price rises? If the American consumer can’t afford a cheeseburger, then Houston, we’ve had a problem.

On the mining front - the US is going all steam ahead on critical minerals, with Executive Order after Executive Order designed to get cracking on domestic assets as soon as possible.

The EU is on it with strategic projects, and Australia’s Albanese is even plotting a A$1.2 billion strategic reserve of critical minerals as it looks to create a separate supply chain, in a market dominated by China.

Speaking of China, say goodbye to rare earths - and they’re banning third countries from exporting either. Graphite, antimony, tungsten…I’m sure more are to come.

But the bottom line is that the US is hyper-focused on minerals. Ukraine? We want metal. Deep Sea mining? Sure thing, chicken wing. The Congo? Yes please, we’ll sort out your pesky rebels in exchange for access.

And most importantly of all?

Direct US investment is coming. Not the DFC, or any other hands-off agency. Direct government equity investment.

But with that said, here’s your review:

The golden trio

I’ll reiterate: A portfolio equally split between Sovereign Metals, Amaroq Minerals and Greatland Gold will deliver a positive return in 2025.

Good news: overall, the three are up 29% ytd (though one is doing the heavy lifting).

So what have the three been up to?

Let’s start with Sovereign Metals. Sometimes, I wish I had been born a trader, but sadly a short-term mentality seems saved only for geniuses and those dropped on their heads as a child.

As I fit neither category, I instead have to buy more shares when my favourites fall for no good reason whatsoever - and that’s life. The joys of averaging down however means that when the recovery comes, I make even more profits.

It’s foolproof!

SVML rose to 49p per share in late March, but has since fallen to 32.75p - down circa 13% year-to-date. That’s not a disaster but it is a shame given how much paper profit has come off the table.

But I don’t much care - it will sort itself out.

For reference, SVML raised A$40,000,000 just before the share price started falling, and is cashed up in all likelihood into 2027 and beyond, with A$65 million in cash and no debt.

Good luck with the placing timing - yes, it always helps.

We’ve now got the geotechnical investigations underway at Kasiya - with the DFS due in Q4. But first, the updated mineral resource estimate is due this quarter (it’s imminent :)).

And the company continues to chat with ‘future potential end-users of rutile and graphite.’

This is perhaps where the rub is. Major investor and FTSE 100 titan Rio Tinto has invested A$60 million into Sovereign to fund the completion of the DFS, which when delivered in Q4 2025 will leave Rio up to 180 days to exercise its option to become the operator at Kasiya.

Tick tock.

However, the major did not participate in the recent placing. SVML notes this was because the accountants at the major ‘believe the Company has sufficient funds to complete the Kasiya DFS.’

RIO’s shareholding has remained static at 119.4 million shares, but its relative shareholding has decreased from 19.9% to 18.5%.

Investors may be worried that falling from the maximum proportional percentage ownership (20%, and under ASX rules a buyout must be considered) signifies a problem with RIO’s attraction to the project…

But the opposite is true.

RIO wants to buy Kasiya and helping SVML out financially now will only increase the eventual price point. SVML clearly wants to sell - but the offer has to be good enough. Otherwise, it can get the mine financed by the Chinese, the Americans or the Japanese - and build it themselves.

Giving Sovereign more cash now just strengthens the junior’s position. The placing was a stroke of genius - because while before SVML would have run out of capital perhaps around that 180 day post DFS mark, now the company can sit back and relax.

If RIO doesn’t want to play ball, someone else will.

FWIW, I don’t believe this will happen. But it needs to be a credible risk.

But bottom line, RIO wants to own the largest rutile and second-largest graphite deposit in the world - the only graphite deposit that can beat Chinese production on a cost basis as it’s a by-product of titanium production, which also happens to be the only rutile deposit discovered in decades.

It’s just a matter of time.

Greatland Gold has had a rocker of a month, rising to new record highs but dropping back slightly to 13.6p - or a market capitalisation somewhere close to £1.8 billion.

There’s a few factors behind this temporary drop; first as I mentioned last month, upcoming consolidations always tend to lead to drops beforehand.

I don’t know why, they just do.

There’s also the fund issue - no, not GDXJ, who according to my source will be required to redress the imbalance post-ASX listing - but the reality that for many funds GGP will have become the largest winner in their portfolio. This means they have to sell some shares to rebalance - this is an annoyance, but don’t worry, the Aussie superannuation funds will be here soon enough.

More widely, there’s always going to be some paper hands cashing out before the big payday. I don’t blame anybody for this, especially when it comes to GGP where more than one false dawn has greeted investors before now.

But y’all gonna miss out.

There’s also been concerns that Wyloo or other actors might try to steal the farm out from under the noses of shareholders.

Let’s be clear here:

It’s no secret that the mining world in Australia is absolutely cut-throat. Smaller players need to constantly keep their guard up. I believe 100% that Shaun & the board have the interests of shareholders at heart, but arguing that Wyloo wouldn't try to take over if the opportunity presented itself is perhaps a little naive.

I don't think there's a master plan to steal the assets on the cheap, but more that if the opportunity presented itself then things could get tricky.

The question then is one of whether that opportunity is likely to arise. Given the cash balance of the company and current economics - with the skillset of the management - I don't think a moment of weakness is going to happen.

But more importantly, the personal attacks on commenters with reasonable concerns are out of order - especially when they clearly also has investor interests at heart.

And if you have a contrarian risk view then it takes some bravery to voice it when you know what the backlash will be like.

There’s also the gold price: when gold goes to a record high, the juniors slightly move. If it drops by 1%, the juniors lose five. It’s unfair, but it’s the way things are - until the big re-rate.

On the plus side, there’s the Telfer Ore Reserve - 712koz gold and 23kt copper. BOOM.

Telfer production has been extended to FY27, ensuring production continuity and no shutdowns at all.

With Havieron coming online in FY28, the newer deposit will slash AISC dramatically - and could also see production lift from 2.8Mtpa to 4.0–4.5Mtpa, unlocking major growth potential.

Others have covered the technicals - for me, GGP’s weakness was this production gap, which has now been bridged.

Then there’s the figures - the March 2025 quarter came in with A$253 million of free cash flow, debt free with a closing cash balance of A$398 million.

90,172oz of gold and 3,511t of copper at an all-in-sustaining-cost of A$2,126/oz Au. Gold production 21% higher, and AISC lower than Greatland's initial pre-acquisition mine plan.

WOW.

With oil responding to recession fears and gold at near record highs, a few more quarters like this and GGP will be able to fund Havieron without debt.

Remember the ASX peer comparison? We’ll see 20p this year - at which point it’s then perhaps not unreasonable to take a little profit off the table.

But we are up 120% ytd already…

Amaroq Minerals is flat over the past month and down around a fifth for the year - though this hides the volatility within the stock.

We started the year at around £1, rose to 120p+ in mid-January, were at one point below 70p and are now back to around the 85p level.

Why the volatility?

It’s not the resource. The updated MRE in March saw a significant 51% increase in overall contained gold, to 157.6koz Indicated plus 326.3koz Inferred…

And this is some of the highest grade gold in the world.

It’s possible that investors are nervy about Q1 maiden production numbers - but the mine is optimising this year and to an extent these are not particularly important.

Key is ramping up to 300tpd by year-end, and then on to 450tpd in 2026. The good news is that with gold at near record highs and oil lower for now, the profit margin should give the company some decent slack.

But there’s not much else to day this month - next review will be meatier.

The explorers

Arc Minerals acquired the Chingola project in Zambia in April.

There are a few things you will want to know about this asset if invested - perhaps scratching your head as to why the company is acquiring another project.

First, Kobold wanted it. Like, really wanted it - to the extent that ARCM had to fight for it for a year and a half. Kobold is happy to do JV deals with juniors.

Do the maths.

This licence is carved out of a larger, previously held block – the southern portion of the older licence - and its in a geologically rich zone with Roan Group stratigraphy and two domes (notably Chisangwa), which are highly prospective for copper.

But the most intriguing point to consider is that despite effectively no public data, Arc Arc secured the licence ahead of a major. The only way this is possible is because they have private intelligence - and there’s no prizes for guessing who supplied the data.

There’s a lot more unconfirmed data swirling around online right now - but what is certain is that this is another flagship asset and not just a sideshow.

$21 million is going into the ground at the current JV with FTSE 100 titan Anglo American by the end of 2026.

And exploration plans should be released in short order. ARCM shares are up 15% or so this year but I don’t tend to worry about day to day prices with this explorer, given the open road in front of it.

Rome Resources is up more than 50% this month - yes, still down 30% in 2025, but this should now change for the better.

We have a ceasefire.

As I noted last month, there was zero chance that the world’s major trading houses would tolerate both Myanmar and Bisie being offline - and lo and behold - Rwanda and the DRC are being told to play nice by both the Chinese and the Americans.

And the Saudis.

When your GDP is less than the hourly swing of any large NASDAQ stock, you don’t get play rebel for long.

On a humanitarian level, this period has been an utter disaster.

If Rome does hit the jackpot at Bisie North, I will be donating 20% of any profits to Médecins Sans Frontières - several staff have died in the line of duty - and the region needs support.

I’d encourage others in the stock to do the same.

The good news for holders is that after shutting down operations on 14 March, both Alphamin and Rome are restarting. We’re looking for the higher grade, at depth tin now…at a cost of $1.6 million, comfortably within the current cash reserves of $2.7 million.

Results for drill holes MADD024 and MADD026 are also due any day now - I have moderated my expectations for these - as the model is for higher grades at depth.

But I’ll take good news if it comes.

With a maiden inferred mineral resource estimate for the Mont Agoma and Kalayi Prospects coming later this month, it’s worth noting that the stock has popped on several occasions before.

I’m unworried about both stocks now - it’s just a waiting game for news that ends this month.

The dealmakers

No deals this month sadly, though decent progress is being made.

Asiamet saw its updated Ore Reserve - the BKM Stage 1 project now has 28.3 million tonnes @ 0.7% Cu, containing 207,000 tonnes of copper, with a very favourable strip ratio of 0.8:1.

This new reserve supports a smaller, higher-grade pit and redesigned heap leach facility, reducing upfront construction capital while preserving optionality for future expansion.

But most importantly, the updated reserve forms the foundation of the 2025 Optimised Feasibility Study, which is expected imminently (shoot me now) and is absolutely key to project level financing.

Get the OFS next week and a deal (whether financing or outright sale) is the last thing to check off. It’s finally, finally there - and up 25% ytd.

Alien Metals has a new General Manager Project Development, with a focus on the Hancock, Brockman and Vivash iron ore projects and more than 15 years of experience. I interviewed Christopher Maiolo and the man was a breath of much-needed fresh air.

Improved investor comms and Maiolo’s strategic review of development pathways, including working alongside Sternship Advisers to evaluate M&A and JV opportunities will be most welcome.

Don’t forget Alien’s deal from last month - yes it was incestuous - but Elizabeth Hill should be getting drilled this month. This asset was once Australia’s highest grade silver mine.

And if silver goes on the expected tear, then expect excitement to follow. Alien is up 3% ytd.

Blencowe signed another non-binding offtake with Qingdao TaiDa Carbon Company - based in China - for natural fine flake concentrate, covering an initial 5,000t per year of 96% graphite concentrate for three years, with potential extension and expansion thereafter.

But with the US DFC taking its sweet time to regroup in the midst of Trump’s chaos, the company needed to raise capital - £1 million at 3p and a further £87k through the accompanying retail offer.

The company remains in active discussions to get finance to build Orom-Cross with the US DFC and the African Finance Corporation alongside others - and the share price re-rate hinges on getting this done in 2025.

For context, the stock has lost a quarter of its value ytd - but get financing and this will be a distant memory.

Bezant received approval of its Environmental Clearance Certificate at the start of April, for the Hope & Gorob Project in Namibia. The ECC is the critical step that activates the official issuing of the mining licence previously approved by the Ministry of Mines and Energy.

Chair Colin Bird notes: ‘The approval of the ECC is an important milestone in the development of the Hope & Gorob Project. We look forward to providing further updates as we move towards project development.’

Get project level financing - it soars. Remember, Bezant’s market cap is less than its shareholding in ASX-listed Blackstone Minerals which is exploring the company’s former Mankayan asset with some success.

Energy Pathways didn’t release any particularly pertinent news in April. But it was entertaining to watch CEO Ben Clube tell the Telegraph that:

‘We don’t want any public money. We just want permission to get on with it.’

That’s a powerful statement, but what’s more powerful was watching half of Western Europe, including Spain, Portugal and parts of France descend into darkness during nationwide, unplanned power cuts.

If Russia invading Ukraine doesn’t tell you the UK needs to up its energy storage at least to the continent average, then ‘lights out’ should do the trick.

Please Labour, the country hates you. But do us a favour and sign whatever piece of paper is needed to make MESH happen.

It’s not even an AIM or profits thing, it’s a national necessity. EPP was added to this list last month and is pretty much flat.

Remember - ‘multiples.’

Guardian Metal remains up 26% ytd, with investors cashing in warrants seemingly every day - the deadline to do so is coming up, and I know a few people reading this who have yet to exercise.

Let this be your friendly reminder :)

Warrants are pressuring the share price a little - though the regular cash injections are well worth it.

The big news was the doubling the footprint of co-flagship Tempiute through staking 29 new Bureau of Land Management claims, following the identification of new tungsten-rich skarn zones and previously overlooked porphyry-style mineralisation…

which could offer significant untapped resources.

The key consideration is the confirmed porphyry-style stockwork veining with molybdenite and secondary copper mineralisation, particularly in the southern quartz monzonite stock - which indicate potential for large-scale, high-tonnage polymetallic resources, expanding the project's scope beyond high-grade skarn mining.

Which would be cool.

Beyond this, multiple ‘truck-ready’ ore stockpiles are strewn across the site, offering a near-term production opportunity, ans positioning Tempiute as a potentially strategic domestic source of tungsten in the US.

Cornering the US domestic tungsten market? Yes please, that’s the dream - and a deal to make this happen is in all likelihood being worked on.

But the next big catalyst is going to be the grant funding. The US presentations are public knowledge - and suggested GMET would get its grant at the tail end of Q1. This has not happened, though is perhaps to be expected given the Trump chaos.

I’m willing to bet it comes this quarter though.

The Executive Orders amid US desperation to negotiate with China with its testicles in less of a critical minerals clamp is incentive enough.

However - a word on the grant funding. It may not be tens of millions initially. If you look at the way the funding has been unlocked at other projects, each company is given enough capital to prove up the next stage of development, and then is given more if it stands up to scratch.

The grant applied for was for Pilot Mountain’s FS only, as Tempiute is a recent acquisition - and the cost of delivering a study in Nevada, the home of mining and gambling, is relatively low.

Ergo, the grant might not be in the tens of millions. The plus side, however, is that GMET has been drilling for some time and there is already an outdated Scoping Study on the asset.

Spending the grant and getting the study completed should be quick - and then the next cash amount gets applied for and allocated - but much quicker.

It’s coming.

Power, Jubilee & AFP

Power Metal shares keep falling - the valuation remains ridiculous. Drilling in the Athabasca is imminent, as must be wider plans in Saudi. I remain unstressed about holding given the fundamentals and large cash position.

I remain certain long-term holders will be rewarded.

Jubilee - it’s simple. Operations in chrome and PGMs at South Africa are going swimmingly, with production at record highs. In Zambia, Sable is fine.

Roan is where the issue lies - the company is taking forever and a day to trial new stockpiles of higher grade copper ore, with suppliers to be selected within the next week or so. JLP has been optimising the plant for this new material - and if we do indeed see ‘a significant and sustained improvement in copper production from Roan’ then there could be a really strong share price recovery coming very soon.

At this juncture - that’s just what it boils down to.

African Pioneer? Like Bezant, it’s received its own Environmental Clearance Certificate, for the Ongombo Mine Project, also in Namibia.

While I remain of the view that its Zambian copper licenses will see renewed interest in 2025 as the majors head back to the country, project level financing for this asset could also be the catalyst needed.

We await news.

Helix pushes ahead

I covered Helix in depth recently, but it’s worth noting since then that Linda #1 has been drilled to 5,398ft - with significant helium gas-shows in multiple horizons, up to 1,117ppm (240x background) in drilling mud.

There were also ‘encouraging oil shows with strong oil cut, good odor, and noted sucrosic porosity,’ - an unexpected and potentially Brucey Bonus.

Now for wireline logging and flow testing - the plan is $4 million in revenue per well, and we may have the potential for 20 wells on our hands.

Another key helium stock - Pulsar - saw rock dust enter the well at Jetstream #1 and #2, meaning that until they clear up the operation, no meaningful news on economic viability is going to be released.

This could take a couple of months, so that’s pretty much that - check back in later.

The Moonshot!

Emmerson soared to as high as 2.30p on 1 May, but has since come down to 2.09p. Sadly that only leaves…

…a 186% gain year-to-date!

Not too shabby - Emmerson has now filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes over the Khemisset Potash Project in Morocco.

As a reminder, the claim cites multiple breaches by the Moroccan government under the UK-Morocco Bilateral Investment Treaty signed in 1990 and effective since 2002.

The company is claiming full compensation, valuing the Khemisset Project internally at $2.2 billion - with legal and significant G&A costs covered by the $11.2 million litigation funding facility secured in January 2025.

The arbitration process is expected to take around two years from now - time enough for the share price to build several times further.

The market cap stands at a paltry £25 million - though there if you took this journey with me at the start of the year, there’s nothing wrong with now taking out your original stake to enjoy a free ride.

It’s a lot more enjoyable this way.

Recent commentary

It’s good to see some of my highlights of the past few weeks deliver.

I noted that Xtract Resources’ Silverking ‘could be huge when assays land - sulphides & oxides, with the right lengths’ on 27 March - and on the day the stock was at several points the largest riser on the LSE.

Key results included:

• Borehole SKIDD003: 4.15% Cu and 42.91g/t Ag over 29.70m from 93.0m.

• Borehole SKIDD002: 3.18% Cu and 40.32g/t Ag over 54.10m from 56.9m.

And peak individual intercepts achieved included copper grades of 41.96, 31.1, 30.73 and 19.47% Cu. Further, silver grades associated with high copper values frequently exceeded 15g/t Ag with a number of samples in excess of 200g/t Ag.

The next set of assays extended the strike length - and now the company is drilling at depth.

On 28 March, I noted that GreenRoc was putting out all sorts of positive noises on potential EU strategic project status - noting that the CEO on LinkedIn was trying to ‘lead a horse to water.’

It’s since doubled in market cap.

On 6 April, I noted that Microsoft was ‘least affected by events, so least affected in share price. But I suspect it’s the best from a risk-reward perspective if you like the US.’

It’s up 17% and is now the most valuable company in the world. I don’t expect this recovery to last just yet - but if you must be invested in US big tech, it’s probably got the most recession and tariff-proof business model.

Finally, I noted in last month’s review that Afentra was cheap - it’s since dropped another 4%. No sweat there, it’ll sort itself out.

Then I noted as my pick ‘for April (and perhaps further), I would like to highlight UOG as a potential multi-bagger. Beer money only.’

We saw a new TR-1 and the stock rise 80% in the month. Sometimes you wish you had invested champagne money, but a win is a win!

See you next month.