CRML executes Shareholder Agreement with Obeikan for JV
50/50 JV to build lithium refinery in Saudi Arabia
Exclusive offtake from Wolfsberg spodumene mine
US$0.03-0.04 cts/kWh power costs very attractive
BMW offtake agreement assigned to new JV – US$15m paid in
Lithium price in bottoming process
CRML pass through value still > A$0.50/ EUR share
KEY POINTS
JV execution allows renewed progress at Wolfsberg
Saudi Arabia lithium refinery will have very low energy and other operating costs
Lithium market may recover soon
Watch Gangfeng share price!
Acquisition of TANBREEZ rare earths will be a game changer for CRML
EUR still ridiculously priced
Re rating must come soon
Market cap A$78m on 1,398m shares @ A$0.054
Critical Metals Corp and the Obeikan Group have executed the Shareholders Agreement to form a joint venture with Critical Metals Corp to construct and commission a large-scale lithium hydroxide processing plant in the Kingdom of Saudi Arabia to process spodumene concentrate produced from the Wolfsberg Lithium Project located in Austria.
Becoming a serious company. Tanbreez is a world leading REE deposit. CRML breaks 3 month downtrend.
CRML share price breaking out technically from 3 month downtrend
CRML becoming a leading US-based critical minerals company
Acquisition of world leading Tanbreez REE deposit is a master stroke
Proposed Lithium Refinery in Saudi Arabia with Obeikan Investment Group - negotiations soon
Saudi Arabia’s industrialisation program delivers <US$0.048/kWh electricity
BMW US$15m prepaid lithium supply funds received by CRML
EUR will be taken along
EUR is also acquiring the high grade Leinster lithium project in Ireland for US$10m paid with 1.23m CRML shares
Market cap A$68m on 1,398m shares at A$0.049.
MPS assessed market value is A$0.67 today.
Appraised value A$1.14.
The pieces are coming together for EUR for it to be now taken as a serious company.
The listing on NASDAQ of CRML has given EUR a vast balance sheet to pursue developments of its lithium and now REE assets.
Despite the naysayers, CRML is well placed to become a key part of important US indices and the acquisition of Tanbreez should provide a significant re rating.
BMW has contributed US$15m to the Wolfsberg Lithium Project and Saudi Arabia is encouraging resources development using its world class new infrastructure and low cost energy inputs for the lithium refinery.
Saudi-based Obeikan Investment Group is proposed JV partner.
Obeikan is one of Saudi Arabia's top 100 companies with more than 3000 employees and offices in 16 countries.
Saudi Arabia has been encouraging industrialisation and resource development under its Saudi Vision 2030 plan to reduce reliance on oil revenues.
A good example of this is the current Saudi drive to invite Australian exploration and development expertise to Saudi Arabia’s Archaean Nubian Belt.
Saudi Arabia is rewarding discoveries by offering 75% debt funding for capex, low energy costs (ultra low gas prices into electricity generation) and 2-3% interest rates for new mining development projects.
Obeikan Investment Group would be well placed to assist in utilising these available incentives.
Note the extent of Saudi Arabian Infrastructure described here.
All those oil revenues have been building a powerful infrastructure base for Saudi Arabia.
Roads 73,000km
Railways 4,500km
Seaports 10 sea ports
Airports 28 Airports
Industrial activity is significant in Saudi Arabia.
1 The MODON (Saudi Authority for Industrial Cities and Technology Zone ) administers 35 Industrial cities with over 3,500 factories.
2 The Royal Commission for Jubail and Yanbu (RCJY) has four enterprise zone cities to develop energy related projects.
3 Saudi Arabia also has The Economic Cities Authority overseeing three private sector owned economic zone cities.
The installed infrastructure of power and utilities extends across the Kingdom and offers internationally attractive costs structures.
Note power costs of US$0.048/kWh for normal businesses and for energy intensive businesses, like lithium refining where power costs are >20% of operating costs, the rate is just US$0.032/kWh.
These are far cheaper than European costs of >Euro$0.20/kWh ( US$21.6/kWh).
Annual Electricity Prices (incl taxes) for Industrial Businesses in Germany. (Euro cents /kWh) Source: Statistica
The Lithium Refinery in Saudi Arabia is very real for CRML.
It is also becoming clearer that long term availability of higher grade spodumene for lithium extraction is far more limited than realised and most other non-brine lithium sources are uneconomic.
TANBREEZ
Tanbreez is one of the world’s most important REE deposits and its location in Greenland (part of Denmark) makes it European and more importantly non Chinese.
China produces 60% of the world’s primary Rare Earths output
China processes 87% of the worlds REE concentrates
China produces 91% of the world’s refined REE metals
All other REE deposits just pale into insignificance against Tanbreez.
28.2mt of TREO.
10x Lynas’s resources.
400m thick, at surface and it is the coastline.
Market cap (green) and total TREO resources (blue).
TANBREEZ dwarfs them.
Tanbreez is 27% Heavy REEs which are the most valuable.
CRML is now being rerated.
Pass through value is very attractive for EUR.
CRML closed at US$11.53 on Friday 14 June and broke a three month downtrend.
Over A$0.60 per EUR share fully diluted.
The yellow shading is likely to be moving to the right.
Almost US$12 and A$0.66 for EUR.
Don’t miss out.
Leinster Lithium Project
EUR is in the process of acquiring LHR Resources which is the 100% owner of the Leinster Lithium Project.
The project is situated south of Dublin in the Leinster Granite Massif within the same key tectonic zone and along strike to the Blackstairs Lithium (Ganfeng / ILC joint venture) Avalonia Project.
The Leinster Lithium Project is subdivided into a North Leinster and a South Leinster Block.
The North Leinster Block consists of 15 prospecting licenses covering an area of 477 km².
The South Leinster Block has 8 licenses covering 284 km².
Each block contains several developing prospect areas where significant lithium bearing spodumene pegmatites have been located in surface sampling and more recently in diamond drilling on PL 1597.
Grades over 3% LiO2 have been encountered.
Gangfeng’s Blackstairs Lithium Avalonia Project within the red circle sits between the two Blocks.
EUR will acquire the asset through the sale of 1.23m CRML shares for US$10m.
Completion of transaction subject to usual due diligence.
The MPS Valuation Matrix
Key assets
CRML (83% reducing to 82%)
Tanbreez (7.5%)
Lithium Ireland acquisition (paid for with 1.23m CRML shares for US$10m)
Cash from exercised options in dilution process.
Market value today A$0.67 and A$1,253m.
Appraised Value A$1.14 at A$2,073m.
EUR downtrend broken.
Rally to A$0.09
Break of downtrend gives >A$0.40
Longer Term Technicals
A rise above A$0.065 would put EUR back into the long term formation after the false breakdown.
NASDAQ LISTING OF WOLFSBERG COULD BRING A$1.1BN TO EUR VALUE EUR is developing a portfolio of European lithium and rare earth projects that have considerable potential to significantly increase the market value of EUR and make it an early leader in European lithium production.
The key asset is the smaller scale 8.8ktpa LHM Wolfsberg Lithium spodumene mining project in Austria soon to be vended into CRML for listing on NASDAQ for US$750m in shares to EUR and lead to it becoming the first EU producer of battery grade lithium.
Exposure to exciting Victorian and Pilbara gold exploration
Kalamazoo (KZR) is a very interesting company with an impressive track record since listing less than four years ago. It has built an asset base and astutely secured funding that has placed the company in a strong position to confidently carry out its programmes over the next few years.
The company has its focus on two key areas, Victoria and the Pilbara, that are likely to be amongst the most important and exciting exploration centres in Australia for the next five years.
In Victoria, KZR has accumulated 100% ownership of three historic goldfields in the important 60moz Bendigo Zone that have a combined past production of over 8moz.
In the Pilbara, KZR’s projects include the recent Ashburton 1.6moz resource acquisition and those in the vicinity of DEG’s exciting Mallina Gold Project. KZR’s impressive growth has been through strategic asset accumulation and its future is developing them.
The potential of KZR’s tenements and its corporate character have been recognised by Quinton Hennigh, President of Novo Resources and adviser to Kirkland Lake on Fosterville and also KL.TSX Chairman Eric Sprott with respective shareholdings in KZR.
Call me to participate. Barry Dawes BSc F AusIMM MSAFAA Executive Chairman Martin Place Securities +61 2 9222 9111 bdawes@mpsecurities.com.au
Important Information You must read this important notice before you attempt to access the electronic version of the Prospectus through this website. The information on this page is not part of the Prospectus. If you do not understand it, you should consult your professional adviser without delay.
Lodgement of Prospectus with ASIC The paper form of the electronic version of the Prospectus (including its attached Entitlement and Acceptance Form) accessible through this website has been lodged with the Australian Securities and Investments Commission. No offer of securities is made on the basis of the electronic version of the Prospectus accessible through this website. An application for securities can be made by completing the Entitlement and Acceptance Form attached to or accompanied by a paper form of the Prospectus and then lodging the form and the application monies in accordance with the details set out in the Prospectus and the relevant Entitlement and Acceptance Form. No Advice Nothing contained on this website or in the Prospectus constitutes investment, legal, business, tax or other advice. In particular, the information on this website and in the Prospectus does not take into account your investment objectives, financial situation or particular needs. In making an investment decision, you must rely on your own examination of the Company and the securities and terms of the offering, including the merits and risks involved. You should consult your professional adviser for legal, business or tax advice. WARNING For legal reasons, the electronic version of the Prospectus accessible through this website is available to persons accessing this website from within Australia and New Zealand, only. If you are accessing this website from anywhere outside Australia and New Zealand please do not download the electronic version of the Prospectus. The Prospectus does not constitute an offer of securities in any jurisdiction where, or to any person to whom, it would not be lawful to issue the Prospectus or make the offer. It is the responsibility of any applicant outside Australia and New Zealand to ensure compliance with all laws of any country relevant to their applications, and any such applicant should consult their professional advisers as to whether any government or other consents are required, or whether any formalities need to be observed to enable them to apply for and be allotted any securities.
It is not practicable for the Company to comply generally with the securities laws of overseas jurisdictions having regard to the number of overseas shareholders, the number and value of securities these shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction. Accordingly, the offer pursuant to the Prospectus is only being extended and securities will only be issued to shareholders with a registered address in Australia and New Zealand. Clicking on the Prospectus means that you agree to the above terms and conditions and Torque Metals Limited privacy and cookies statement
Torque Metals has two projects - One at Paris/HHH to the South of Kalgoorlie and the second at Bullfinch at Southern Cross to the West of Kalgoorlie.
Paris/HHH is near to production and surplus cash would provide additional funds for further exploration.
The Boulder-Lefroy Fault is the dominant structural feature in the Kalgoorlie region and this diagram clearly shows its NNW-SSE orientation
and the numerous subparallel structures either side.
All the largest gold mines in this region are on or very near this Boulder-Lefroy fault which is acting as the mineralised fluids plumbing system. Paris/HHH is within 50km of some very large gold deposits and the area has not had much modern exploration.
The Paris/HHH Gold Project deposit had 18koz recovered in 2017 in a small mining operation and currently has a JORC `Indicated’ resource of 32,000 ounces
on existing granted pre Native Title mining leases that should allow gold production within the next 18 months. The previous scoping study is still basically current.
Assuming a conservative 50% recovery and $1000/oz margin at A$2500/oz just this resource this would bring A$16m cash surplus to the project.
As with all mines, the increased A$ gold price will increase the total gold in a revised pit design so the resource number should be higher
Paris has good high grade zones and some old workings and good potential down plunge.
The HHH deposit has potential down dip and in the footwall.
Additional potential is noted in a sub parallel structure at Paris North where 5.2m @ 14.2g/t has been intersected.
The 68km2 contiguous granted mining lease tenements have additional potential along strike at in the sub parallel zones for Strauss and Marmaracs.
But much of this is underexplored.
Paris has also has a 10km northward extension in a 80% earn in JV with Jindalee Resources Ltd.
Some high grade intersections have been encountered including Maynard’s Dam with 3m @28g/t.
Gold is moving to challenge previous 2011 highs of US$1800-1923 and has a near term target of US$1800 where some consolidation `should’ take place.
But note that more consolidation around here could allow gold to exceed previous high at US$1923.
Shorter term suggests the current consolidation is nearly over and we should move higher.
Don’t you just love long term charts! From Jason Atkinson in Dallas @schism
Institutional investors have added to portfolios abut are still low compared to previous gold bull market leg.
The main driver is likely to be the short covering from Western gold market participants although it would be expected that Asian demand is likely to be soft for a while yet.
Physical gold is scarce and premiums are being paid for coins and bars.
Some US numbers on coin sales. (Can’t confirm source though)
US$ holding strong. The numbers might seem horrific but just think of the numbers everywhere else. Who would buy the Euro(57% of this index)?
Nth American Gold Stocks
And those liking the long term, the XAU should rise about 50x over the next decade. From Jason Atkinson in Dallas @schism
And here. Gold stocks vs S&P500. From Jason Atkinson in Dallas @schism
A$ has had a major reversal.
A$ will follow gold and goldstocks
A$ gold to consolidate with rising currency.
The Australian gold industry is doing very well at present with record production and record exploration at a time of record gold prices.
Gold sector shares should rise much higher and action should just get better as market breadth expands and more investors participate.
Aren’t you glad you bought NST for dividends a few years ago and not NAB or the other banks!
NAB
When I think of Silver I think of Palladium. When I think of Palladium I think of Silver. For Silver Bulls - From Jason Atkinson in Dallas @schism
The low for oil is in. The recovery will be rapid. Graphics from @Gradhhy
This has certainly been uncharted territory for us all so we can only react to what major markets are doing and saying. The very long term price histories remain positive and suggest the past few months have seen declines to major long term support.
We now need to ponder what this all means in the longer term.
And price history suggests you can forget the doomsday scenarios.
Extremes in sentiment show many signs of very important lows and provide the basis for continuation of the DawesPoints Global Boom.
The rally in global equities has begun and it could be driven more by the assumption that the worst for Covid-19 may be over rather than just the US bailout. The markets are anticipating a peaking in new Covid-19 reportings and/or that a cure/cures has/have been found.
Let’s look at what the markets are saying and have been showing these signs for the past month as reported in my desk notes.
Key Points
Dow Jones Industrial Index at important MAJOR long term uptrend support
Four year cycle low is probably in place
Sentiment indicators show high pessimism levels
Long term indicators suggest low is in place
US$ still strong – Euro made new 3year low
Bond markets well over extended
Commodities driven lower by oil price rout
Shanghai market still holding well
Iron ore steady
Long term ASX Metals and Mining index back to downtrend line
I still am of the view that this weakness will be over very quickly and the fiscal and monetary easing across the world will cause strongly inflationary pressures.
I am seeing numerous efforts to bring some vaccines and drugs to combat the virus and am particularly impressed with the results from the anti-malarial Hydroxy Chloroquine. Markets might be recognizing this.
These figures are very interesting for the understanding of this Covid-19 virus and who it hits.
A 2 April 2020 report from Reuters on Louisiana showed an astounding 97% of COVID 19 hospital admissions had pre-existing conditions:-
Diabetes 40%
Obesity 25%
Chronic Kidney 23%
Cardiac Problems 21%
(these are not meant to add to 100)
And this:-
I have not been able to independently confirm this data but it seems whatever data we are seeing it is more a matter of comparing apples with bananas, cheese and zucchini.
Age, gender, race, comorbidities, mortality/admission ratios and so much needs to be tabulated and analysed.
Control might prove to be far simpler than currently perceived.
This crisis is enforcing curtailment of civil liberties and changing expectations from citizens so we might see some most unexpected outcomes when this is all over. Will it bring better people into politics and will the media be reformed after so much partisan commentary from commentators who are instant experts on everything?
Good people need to, and are, standing up.
The opportunity for restructuring the global economy and supply chains is now massive. This should result in more manufacturing in the US and hopefully in Australia and may be a sea change here in attitudes and actions. New incentives for start ups, fewer regulations, revival of onshore oil and gas exploration, consideration of new onshore refining capacity and changes in labour laws.
The crisis has created problems in Europe and the pressures will surely lead to the eventual break up of the EU. That union has no leadership and its many members will be wondering why they are there at all. Euro to zero?
Also the problems in Iran could lead to a better outcome for its citizens and a regime change would curtail much of the insurgency in the Middle East.
And the impact on China may also lead to more liberalisation once the crisis there has truly passed.
The collapse in the oil price will cause restructuring in US shale production and in Russia. Saudi Arabia will be having budget issues as will all the high taxing oil producing countries.
Expect to see the permanent loss of at least 1mmbbl/day production from marginal fields in the US and Russia in 2020. Oil prices (West Texas Intermediate -WTI) in Midland Texas have been in the US$6-7/bbl range as demand drops storage is taken up. Expect a 25% decline in US oil production rate from ~13mmbbl/day to <10.
This crisis has also shown up problems in so much infrastructure so renewal capex should accelerate across the board with physical assets and also in IT and bureaucracies. Interesting times.
The economic impact of the shutdowns will be great on employment levels but many sectors will be completely unaffected in the short term.
The equity markets will discount the future and give a better idea of the outlook so it will again be a time to `Heed the Markets, not the Commentators’.
This is indeed a critical moment in the markets but could be the MAJOR low here as the bottom picked up the 1982 uptrend. Maybe some churning is required but the worst is probably over.
This graphic shows the extreme low channel and a jump back into the next channel.
The shorter term looks even better for a market bottom to be in place. Bounced off a lower channel and back into a mid-range channel.
It is worth looking at some of the sentiment graphics available.
Martin Pring with Stockcharts showed the NYSE Bullish % Index hit a level almost as low as 2008.
The US Put/Call ratio was at extremes with all Puts and no Calls.
Martin Pring’s momentum indicators provided a major BUY signal with many stocks making extreme lows then rebounding to show leadership in the S&P500 Index.
Ciovacco Capital has this interesting chart for the S&P 500 250 week moving average with probably fastest-ever test.
The short term has seen a close above the 200 week moving average but with confirmation needed with this week’s close.
Stocks are outperforming bonds and have just pulled back to the break out line. Very positive.
And this from Graddhy – Commodities TA and Cycles (@graddhybpc) suggesting the 4 year cycle low is coming in right now. This is impressive. Major sell off, massive volume right on time with this 4 year cycle.
f you have a Twitter account I suggest you follow him at @graddhybpc
Comparisons with 1929.
The 1929 fall was very dramatic and the recovery quite spectacular.
This graphic is not logarithmic so is not so useful. (Apologies that it is cut off, unlabelled and unsourced.)
However, this is Martin Pring’s view of 1926-1941 highlighting major selloffs.
The world worked on the Gold Standard then so prices had a true yardstick (even if it did change in 1934 from US$20.67 to US$34.00).
Today, with no Gold Standard, all prices are measured against a floating currency which means nothing can be measured against a fixed yardstick.
It is also worth noting that in the 1920-30s about 40% of Western World workforce was employed in primary industries:- agriculture, mining, fishing, forestry, energy etc.
Today it is 3-4% so low commodity prices benefit most of the other 96%.
But today, services are far more than 40% and here it is where most job losses appear to be.
Importantly, many of these services have low barriers to entry as far as working capital so we should see a strong pick up once the turn comes through.
Barriers to employment in many services might just be a desk, phone or a vehicle.
I have shown this long term graphic of the Dow Industrial Average from 1923 to present from Schism @jatkinson33 previously.
A break of the uptrend curve from the low in 1932 would be very negative indeed but it would seem that government fiscal and monetary policies are and will be very accommodative such that a decline would be unlikely.
Also, bull markets, and this has been a major bull market, generally end with a bang. This hasn’t!
Note that the Dow 30 was not even at the midpoint curve when it had its pull back to the bottom uptrend curve.
We have a long way to go yet to the upside!
The US$ seems to be retaining its strength in this index.
The Euro looks awful to me.
Bonds are well overbought, at EXTREMES and have hit the top of the channel….
… the long term is for a change in the direction of interest rates. This must be the low in interest rates.
Commodities are bottoming out after a massive energy related sell off into a four year cycle low.
The longer term in this 60 year price history of the CRB Index shows today is certainly at an extreme level but it is at a stage of close to the end of a 12 year decline from 2008.
This index is back at 1973 levels in nominal terms but it is heavily weighted to oil and petroleum sector products.
It seems to be coming into a major low.
Clearly precious metals and copper are well above 1973 levels and certainly iron ore so do not fit into this group.
ASX Metals and Mining
This is one of the best and most positive charts I can find. Pull back to 2008 downtrend and some long term support.
This graphic tells me a lot and is very positive. Ignore the current `fundamentals’ and consider that a retest of the 2008 downtrend line has taken place at a level that is horizontally important. The bounce should be robust from here.
BHP is well placed to continue its longer term outperformance of the S&P500.
Shanghai - Long term still heading up
It is surprising that Shanghai is holding up well and in 2019 finally broke out from its 2015 downtrend.
This market may be manipulated but it is still at the level of a decade ago despite rising GDP figures.
Shanghai – Short term still solid
And what might this mean? Shanghai vs S&P 500.
Iron ore is holding OK.
Gold – looking very strong - Much higher prices coming -probably quite soon
Gold – still in uptrend here and making new rally highs.
And here
This model puts gold into the US$10,000/oz class in the next few years and almost US$9,000 now.
Another view on gold from Northstar @Northst18363337 suggests we are only just starting this bull market. Northstar is an excellent analyst on Twitter.
Gold stocks in North America have done some constructive (if highly unusual) technical action and this is very positive.
The sell-offs were related to highly leveraged ETF and hedge funds getting margin calls. The worst of this should now be over and will allow gold stocks to move higher again.
Market leaders Barrick and Newmont are very constructive.
The bigger picture is provided by this Dawes Point Elliott Wave interpretation where it would appear we have just completed a wave 2 in a WAVE 3.
Gold stocks are poised to strongly outperform the general market.
A$ gold is still strong and made a new high above A$2800 and is now about A$2730.
The ASX Gold Index has provided a good test and a bounce.
All this looks very encouraging to me. Best big buys BHP RIO FMG MIN WPL OSHBest Golds NCM NST EVN WGX RRL SAR WGXBest emerging golds DEG BGL CYL RED KZR CDV NTM CHN MGV
Call me to participate. Barry Dawes BSc F AusIMM(CP) MSAFAA Executive Chairman Martin Place Securities +61 2 9222 9111 bdawes@mpsecurities.com.au
LKE has a lithium development strategy with projects in the prime Argentinian brine producing regions and utilising innovative technologies to minimise operating costs and to maximise earnings and sustainability benefits.
LKE’s 4.4mt LCE Kachi resource will utilise Lilac Solutions ion exchange technology in its project with a PFS due shortly for 2023 production startup.
Lithium sector undergoing improved conditions as supply and demand match.
The rise and rise of the lithium-ion battery is changing the world.
The versatility of this technology for application from smartphones, domestic appliances, power storage to Electric Vehicles (hereon EVs) implies universal acceptance and dependence. The advent of the high tech chemical refiner and processor for battery plants is changing the lithium industry.
It becomes critical to understand that whilst lithium prices are soft it does appear that they are bottoming and as the near term market balance is being sorted out. Underlying battery demand is inexorably rising between 15-18% per year together with EV and energy storage demand and will eventually impact the lithium price.
LKE has globally significant resources and has Lilac Solutions’ innovative approach to lithium recovery from brines.
Ion exchange technology cuts out the time and capital intensive evaporative process from the flow sheet.
Developing Quality Gold Exploration Portfolio in WA
Torian has quality exploration tenements in two prolific gold production regions in Western Australia and is ready to resume activity after a period of tenement rationalisation and management changes.
Kalgoorlie Region tenements have six projects including the Zuleika Shear, Credo Well, Mt Monger and Gibraltar. This Kalgoorlie region has a widespread blanket of transported cover and little outcrop and is undergoing a major re-evaluation and re-interpretation from basic principles as new gold hosting environments in the Black Flag Group (including sediments) are recognised. Over 127 targets have been identified by TNR on its tenements using geological and geophysical tools.
Leonora Region tenements have three projects Mt Stirling, Mt Stirling Well and Diorite. Mt Stirling is adjacent to RED.ASX’s very encouraging King of the Hills development and likely to provide near term cashflow from small scale mining.
Torian has accelerated the activity over its portfolio by farm-outs and is seeking to achieve gold production and build cash by end 2020.