HLX MC 17 million with cash of approx. $2-2.1 million with a EV of 15 million
Collerina- Lets start with the flagship project. In May 2016 at near the peak of pessimistic valuations on mining stocks euroz released an investment note.
“Helix is undervalued relative to its peers based on the prospectivity evident to us. We believe HLX’s assets could comfortably sustain a $35m Enterprise Value should satisfactory results be achieved in the current drilling program”.
This is very compelling for the CURRENT value of HLX given there has been substantial geological value added since this point and it has not even reached the 2016 monetary value target:
1. Copper price has risen significantly (33%) since that report which even then was substantially cheap on a comparative level let alone now. That sort of rise and its effect on sentiment and the associated copper stocks has been Significant for other stocks.
2. Importantly this report was written around the time when they were still relatively shallow and not yet going deep so that value was working off the current situation which has since progressed significantly. They have had huge shallow success from surface which no one else has had in this region. Yesterday a very significant event occurred given we found our first massive sulphides at depth. Now we delineate the up plunge and down plunge mineralisation and also that EM 20 meters from the recent hole. This was the missing link to the project economics and now we have the significant scope to potentially define the next Triton or more and with economics that seemed unmatched in the region given the shallow mineralisation.
3. M&A is very active in this area and we control a significant area with great value for multiple commodities. There are certainly entities that have experience in this area on the register now not sure if it’s just for investment purposes or potential corporate action as its clear we are a sitting duck.
4. Infrastructure – the local setting is amenable to modest cost development
5. Ask your yourself why do you think they are not only continuing but accelerating this exploration at depth they know its significant the penny will drop very soon IMO the smart money has had a field day since October or so.
Collerina Ni/Co/AI- HLX has an imminent start to a very significant drill programme to define potential shallow deposit/s.
In general, even the companies solely working on ni/co deposits with other minor minerals are valued between 15 and 800 million in the very trend that HLX is targeting and with very big ground sample success. The other companies don’t even have the other minerals copper gold etc that helix has in spades.
With regards laterite Ni/co drilling that’s about to start one only needs to look at the comparative companies MC nearby to figure there is no value accounted for this let alone the massive copper commercialisation drilling. Now one thing I think has not gone unnoticed by some players is this is not only about the highly heated ni/co space but also the shallow AI mineralisation present in the clays in this area in which when enriched as HPA has multiples more value then ni/co combined. We are drilling in priority targets that have strong geological links and are very close to the CLL homeville deposit. No mention of AI yet but that has a good chance of changing with drilling about to start.
Because of the shallow ni/co/ai ultramafic enrichment in this area 200k/300k worth of drilling can potentially rapidly add a lot to a company’s MC which I’m sure is the expectation.
To steal a line from our JV partner on EL3663 (Homeville deposit) Cll Collerina cobalt:
“High Purity Alumina (HPA), revenues would be far in excess of nickel and cobalt revenues combined"
Also keep note of the work CLL has done in this area in which as a commercially linked party to them helix maybe able to assist in many ways and leverage off each other. I see this as great outcome for both parties as HLX controls the extended majority of the trend and CLL on the other hand has been diligently working on the commercialisation product lines utilising the local mineralisation a true win win and would not be surprised to see this in the works.
PS bakers bought a swag at 5 cent average in Jan on the grab samples alone and still holds.
Mundarlo -
The big surprise last Thursday was this has a huge 750 m strike and the first drill bits look very enticing and to me looks like they have clipped the top of a potentially large VMS base metal deposit with chalcocite copper enrichment. This being the case valuations will be huge when/If confirmed. People who have been a shareholder of Helix for some time will note their excellent logical approach to things but when Mick gets results like this and starts drilling 8 days later chances are he thinks very highly of what lies just beneath those original holes very telling and quite frankly I get a really good sense of success here and the value that will be instantly monetised wont be small given we are right.
The reasons I am very excited about this current drilling that started this week at mundarlo is the strong evidence for chalcocite enrichment and the size of the EM. Chalcocite generally has high copper content (66.6% atomic ratio and nearly 80% by weight) and its ease at which copper can be separated from sulphur makes it very economical and profitable think Sandfire resources.
Then of course you have the Cobar gold close to defining a potentially very large repetition of on the peak trend and the prime value targets of Chile wedged between majors but I don’t have the time to talk about them today but they carry huge weight.
As you can see there is a very clear deep value case here at helix which is a critical value junction near term that could deliver quiet immense value.
IMO the only reason we are at this absurd valuation is the buying was just slowly taking out that couple years of overhang which now is coming to an end and they will have to accelerate the buying with a more and more limited supply available and a rising rapidly rising fundamental/ monetary value.
(20min delay)