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ASX just the tip - Small cap drill ready spec

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Today's tip is a company I have had for a while maybe 6-8 months now, so why am I tipping it now well
 

ASX just the tip

October 23 · Issue #9 · View online
ASX just the tip -Companies I am buying and my reasons for doing so.

Today’s tip is a company I have had for a while maybe 6-8 months now, so why am I tipping it now well from speaking to management I now have a price catalyst.

Todays tip is EPM I have had for a while maybe 6months+ now, so why am I tipping it now? One reason drilling it’s coming.

If we look at the annual report you will see they have a few things going on a Uranium J/V with RIO I don’t know anything about and planned drilling on manganese tenements.
So EPM have been talking of drilling for a while now if you go back to April you can hear mentions of it, so why so slow? well there been some hold ups getting heritage clearance this is QLD the project is close to Gympie which will be a great thing if there is a deposit there local work force, great transport, close to ports, low costs etc…
Every coin though has two sides more people around means more land holders to deal with more people want to flap gums, so that process has taken a while I know I have been waiting.

Low does is the process is finally coming to an end and they expect to drill with in 4 weeks from now and want to really be seeing some results before the New year.
So that is basically the catalyst for me tipping EPM right now drilling in the near term.

Now lets break down the two things, 1. Why manganese? and 2. Why do I like this project.

First manganese the growth potential for manganese market in the near term is not just in steel, but also as a  battery metal.
“Lithiated manganese dioxide (LMD) battery. A typical LMD battery uses 61% of manganese in its mix and only 4% lithium. LMDs have numerous benefits, including providing higher power output, thermal stability, and improved safety compared to regular lithium-ion batteries.
LMDs are already in production, and are currently used in electric cars like the Chevy Volt and Nissan Leaf. These cheaper electric cars, as opposed to the narrower luxury-segment that Tesla operates in, should be a significant part of the budding clean energy revolution.
Finally, there is a game-changing application of manganese worth mentioning: off-the-grid power. Tesla and its Powerwall batteries are breaking ground here, and the market is only poised to grow.
Summation, there are several drivers that should boost manganese demand, both traditional and cutting edge.
Manganese will continue to be a key element in steel production, and the industry should continue to grow at a steady pace. Steel production will ensure that manganese remains as one of the most widely used elements in the world. On the technology side, electric vehicles, off-the-grid power systems and other energy storage applications will require significant amounts of high-quality manganese.”

I see manganese especially high grade manganese having room to grow as the affordable electric vehicle story continues to grow, but I don’t want this tip to be too much about that, it’s not my main reason for buying.

EPM tenements first thing I look for is scale can this thing be big? yes it can we can see a lot of high grade sampling results over quite a large area and we see historical very high grade production.
So we see large scale potential for deposit definition, but what gets me excited is that unlike other places where you see high grade historical production they are sampling left over dumps where all the good stuff is long gone.
Here we are not seeing mined out areas sampled they are actually sampling partially mined area’s with plenty left and open at depth, look at the cross section below, how easy will it be to setup a rig and dill right into the manganese mineralisation? Very easy would be hard to miss. 
If we look at the larger area we see that not only do we have this one area which looks like an easy drill target we have several area grouped together all displaying decent assay results considering these are weathered samples, the fresh rock below I would expect to do even better grade wise.
When I think about small cap explorers like this I always think where is the risk? The risk is in the drill will they find anything? 
If these diagrams are accurate there is no real risk that they won’t find high grade manganese here when they drill, they just need to drill.
One can always doubt to the accuracy of these diagrams I considered it till I saw this one picture.
The guy is standing next to high grade manganese outcrop sticking out of the ground it doesn’t get much better than that, it’s like finding copper or gold sticking out of the ground, no need to drill it just load it ship it off to china that stuff is good to go.

So overall EPM has 21 prospects that have show manganese to test we have scale we have good drill targets, so what is manganese worth? We only have one pure manganese miner/producer on the asx that is OMH, lets see how they are doing since June this year.
They have been killing it 12cents to 51cents in 4 months as a producer that’s amazing simply rising on manganese prices great call by this poster on hotcopper who noticed it early manganese is hot right now margins are high and prices are up.
Right now manganese is around $200 USD a ton, so for every 5Mt of high grade ore EPM can drill out that would be 1$billion+ of in the ground value.
What more we are targeting direct shipping, what does direct shipping mean, that means no plant no giant $200-$300mill capex, it’s more in the range of $10-$20million dollars to get started and you are off making money.
On the potential of the project that is what our chairman had to say in a recent interview.
Multiple millions of tonnes of high grade ore…. this won’t be too hard manganese ore runs between 4 to 6 specific gravity as opposed to 2.5 to 2.8, it’s very dense stuff, if you find 10m of it, it is more like 20m.
DSO operations costs are hard to judge you lose money on impurities and what not each deposit is totally unique could be negative or positive, we are also very close to port which will mean very low transport costs positive, so costs impossible to judge right now, but looking about at other operators in the space they do anywhere from $60-$110 profit per ton, that gives you an idea multiple millions of tons means alot will be very profitable.

So we have scale, we have easy targets, we have good prices anything else yes few thinga that caught my eye about EPM one is management holdings.
Chairman personally holds 22% of the company!! Our interests here are definitely aligned, seeing management having a large holding always a good sign.
Other things management here seems sincere they are genuinely keen to get on with drilling as soon as possible the area needs jobs could be a real plus for the community to get some activity going.
And there is also the very real possibility to quickly produce something in terms of offtakes/financing if drill results are favorable, our kind of ore is in demand right now it’s bringing good margins.

I bought EPM for .006 months and months ago, I think at current cap floating between $5-$6million it’s a screaming buy in the current hot spec market, if they can get a drill into the ground within the next month and produce some good looking core holes I expect it to do multiples of the current price.
This is not a TAW patience play 99% chance it will get there, this is a spec the reward of discovery is and should be alot higher, these personally are my favorite types of play, if drilling shows up on time I expect EPM to do great things.
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