ENCOUNTER RESOURCES

(ASX:ENR)

Company Profile

Encounter Resources is following up on some exciting late-2022 results as it explores for copper, rare earths and lithium at its 100% owned projects, as well as those covered by farm-in agreements with industry titans BHP, South32 and IGO.

Attracting the attention of majors is hard work in a crowded small cap space, so the backing of high-profile partners is a significant tick for ENR. ENR currently has agreements in place for up to $65 million in initial exploration funding.

In its 100% owned portfolio, Encounter controls a commanding position in the exciting West Arunta region of WA with a +100km east-west tenement holding.

“Modern geophysics is revealing exceptional targets in the West Arunta critical minerals province. The limited exploration in the West Arunta has shown that the region is highly prospective for the formation of IOCG and carbonatite-hosted REE deposits under shallow cover,” Will Robinson, Encounter managing director, said.

The first drill holes completed in the region contain highly anomalous REE and niobium as well as IOCG pathfinders. We believe that the West Arunta is on the verge of becoming the next major copper and rare earths exploration focus in Australia.”

Across the Northern Territory border ENR’s assets include a series of copper opportunities. Among these are the Elliott project, which is being advanced via a $25 million earn-in and joint venture in partnership with BHP, and farm-in agreements with South32 at the Jessica Copper and Carrara Copper-Zinc projects.

Eight targets defined at Jessica and Carrara by South32 will be drilled commencing in April-May 2023, while the first diamond drill program by BHP was recently completed at Elliott.

On top of this, field work recently delineated two juicy lithium targets at the Junction project in the lithium-rich North Arunta pegmatite province of the Northern Territory, home to Core Lithium’s (ASX:CXO) Ringing Rocks target.

Outcropping pegmatites at the Junction project have been sampled, with results expected in February 2023.

A soil sampling program early this year at Junction will test for caesium, tantalum, tin, tungsten and rubidium, as well as more lithium, with ENR to carry out reverse circulation drilling of defined targets after the results of this sampling are in.

In WA’s Paterson Province, ENR is developing a large portfolio, including the 100% owned Lamil Project, and coppercobalt deposits at the Yeneena project through its $15 million earn-in and JV with IGO. Lamil covers an extensive mineralised copper-gold system 25km northwest of Newcrest’s huge Telfer gold, copper mine.

“The footprint of mineral system at Lamil continues to grow and high-grade coppergold reefs, up to 6.5% copper and 21.5g/t gold, were intersected nearer to surface in the latest drilling,” Robinson said.

“For 2023, we are looking to capitalise on our strengths: the right commodity mix; high quality projects; relationships with Australia’s biggest companies and an experienced and capable team.”

Key Points

◾ Company Name: Galan Lithium

◾ Company ASX code: GLN

◾ Key Commodities: Lithium

◾ Key Personnel: Richard Homsany, Non-Executive Chairman | Juan Pablo Vargas de la Vega, Managing Director | Daniel Jimenez, Non-Executive Director

◾ Locations: Argentina, Western Australia

◾ Market Cap as of 25/01/23:

$377.29M

◾ 52-Week Share Price Range at 25/01/23: $0.935 - $2.330

◾ W: galanlithium.com.au

Investment Highlights

DECEMBER 13: Galan acquires the remaining 20% of the Greenbushes South Lithium Project from Lithium Australia, giving GLN 100% ownership.

NOVEMBER 2: Application submitted to scale up HMW project piloting stage to 4000 tonnes per annum lithium carbonate equivalent (LCE), including the construction of 120ha of evaporation ponds.

OCTOBER 24: HMW mineral resource increases 2.5 times to a globally significant 5.8Mt contained LCE at 866mg/l lithium, with the project retaining its high-grade profile.

JUAN PABLO VARGAS DE LA VEGA MANAGING DIRECTOR

Galan Lithium

(ASX:GLN)

COMPANY PROFILE

Galan Lithium is poised to become a major player in battery minerals with two worldclass projects within South America’s ‘lithium triangle’, as well as Greenbushes South in Western Australia, about 3km from the world’s largest and highest grade hard rock lithium deposit.

After snapping up the last 20% it didn’t already own in the Greenbushes South lithium project last year, Galan is set to drill for the first time down the road from the Greenbushes mine owned by industry giants Albemarle, Tianqi Lithium and IGO.

A drilling program at the project 250km south of Perth and covering about 315sq km, will take place after highly encouraging fieldwork campaigns.

“We are very excited by the identified opportunity at the newly defined Fry’s Block (at Greenbushes South),” Juan Pablo Vargas de la Vega, Galan managing director, said ahead of the drilling.

“We now have three highly prospective targets and expect these initial targets to be the first of many planned in one of the world’s most renowned lithium districts.”

Over in Argentina, Galan has two preliminary economic assessment (PEA) level projects – Hombre Muerto West (HMW) and Candelas – with a combined long-term base production of 34,000 tonnes per annum lithium carbonate equivalent (LCE).

HMW has been proven to host lithium brine deposition of the highest grade and lowest impurity levels in Argentina. That’s not bad given it’s in world-class lithium ‘elephant country’, within a 20km radius of the established El Fenix lithium operations (Livent Corporation), the Sal de Vida (Allkem) and Sal de Oro (POSCO) lithium projects.

HMW’s definitive feasibility study, on track for delivery in Q1 this year, got a game-changing boost last October when Galan announced a 2.5-times increase in its mineral resource estimate (MRE) to 5.8 million tonnes contained LCE at 866 mg/l Li. For the first time the MRE included a higher confidence measured resource, which came in at 4.4Mt at 883 mg/l Li.

That increase, driven by the company’s greater tenure scale and encouraging drilling, brings the total Galan resource (including Candelas) to a globally significant 6.5Mt at 839 mg/l Li.

The news was followed in November by Galan announcing it would apply to scale up the pilot program at HMW, which is in the final stages of construction.

The expanded pilot program will include 120ha of evaporation ponds to boost pilot production to 4000 tonnes per annum of LCE.

Full-scale HMW production profile permits for 20,000tpa of LCE are on track to be lodged in the first quarter of this year, while construction of the expanded pilot plant could start in the second half of calendar year 2023.

Led by a highly experienced board and in-country team with a mix of world-class knowledge and local insights, Galan is targeting first-phase lithium concentrate output from HMW in 2024 and lithium concentrate production from HMW in 2025.

Key Points

◾ Company Name: Galileo Mining

◾ Company ASX code: GAL

◾ Key Commodities: Palladium, nickel, copper, platinum, rhodium, cobalt, gold

◾ Key Personnel: Brad Underwood, Chairman & Managing Director

◾ Locations: Norseman & Fraser Range, Western Australia

◾ Market Cap as of 25/01/23: $188.73M

◾ 52-Week Share Price Range at 25/01/23: $0.185 - $1.950

◾ W: galileomining.com.au

Investment Highlights

◾ Galileo Mining recently encountered significant palladium, platinum, copper, nickel, and rhodium at its emerging Callisto discovery in Norseman, Western Australia.

◾ The company is strongly supported, with its largest shareholders being successful mining investor Mark Creasy and major mining company IGO.

◾ Galileo is well funded with a strong cash position of $20 million and has an exceptional track record of deploying capital into exploration activities, building shareholder value through discoveries.

BRAD UNDERWOOD CHAIRMAN & MANAGING DIRECTOR

Galileo Mining

(ASX:GAL)

Company Profile

Galileo Mining has all the hallmarks of success, with the backing of high profile mining investors, high value targets hosting minerals critical to the world’s electric future, plenty of cash in the bank, and an early stage discovery with substantial upside.

GAL has come off a busy 2022 and launched into 2023, with exploration ongoing across its portfolio of projects in the tier one mining jurisdictions of Norseman and the Fraser Range in Australia’s top mining state, Western Australia.

The 100% owned Norseman project is ripe with new discoveries, the most recent being a fresh nickel sulphide zone at the Callisto prospect that in December 2022 delivered its highest grades to date of nickel (1.58%) and copper (0.93%) from disseminated sulphides.

The peak nickel, copper, and palladium grades at the prospect are interpreted as increasing at depth and to the east.

“The nickel results from disseminated sulphides in diamond core show we are drilling a quality mineralised system capable of producing high grades of nickel, copper, and palladium within disseminated sulphides,” Brad Underwood, managing director of Galileo, said following the discovery.

The Callisto prospect is geologically similar to the extensive Platreef palladium-platinumgold-rhodium-copper-nickel deposits in the renowned Bushveld Complex of South Africa, which contains the world’s largest reserves of platinum group elements (PGEs).

The Platreef deposits are very large in nature and have combined indicated resources of +700 million tonnes (Mt) at 1 gram per tonne PGEs plus gold.

Callisto already hosts a 25Mt nickel-cobalt laterite resource and Galileo is working hard to unearth the full potential of this new palladium-platinum-rhodium province in Western Australia, with over 20,000m of drilling completed so far.

GAL also has joint ventures with successful mine finder Mark Creasy, one of the company’s largest shareholders, over highly prospective ground in the Fraser Range.

The region is best known for another Creasy-led discovery – the world-class Nova nickel-copper-cobalt mine unearthed in 2012 by Sirius Resources.

There is still vast untapped potential in the Fraser Range, with just two deposits uncovered to date and over 150km of prospective strike between them.

Galileo has identified two targets that host sulphides, one located 30km from Nova and the other 80km from the mine, increasing the confidence in the regional prospectivity.

GAL is led by a highly experienced board including Underwood, who has more than 20 years’ experience in exploration, prospecting, and mining and was previously general manager of the Creasy Group’s exploration in the Fraser Range and at Norseman.

The company, which includes major mining company IGO – the current owner of the Nova mine – as one of its largest shareholders, is well funded with ~$20 million in the bank to continue building shareholder value through discoveries.

With an early discovery valuation of around $180 million, Galileo is highly leveraged to further exploration success.

KEY POINTS

◾ Company Name: Global Lithium Resources

◾ Company ASX code: GL1

◾ Key Commodities: Lithium

◾ Key Personnel: Warrick Hazeldine, Non-Executive Chairman | Ron Mitchell, Managing Director

◾ Locations: Western Australia

◾ Market Cap as of 25/01/23:

$560.85M

◾ 52-Week Share Price Range at 25/01/23: $1.005 - $2.940

◾ W: globallithium.com.au

Investment Highlights

◾ Transformative JORC compliant resource upgrade to 50.7 million tonnes at 1% Li2O following substantial increases in inventory at the Manna and Marble Bar lithium projects in Western Australia.

◾ Consolidated ownership of Manna project with the acquisition of the remaining 20% interest from Breaker Resources, providing Global Lithium with a clearer development pathway.

◾ Scoping study already underway and feasibility study to commence at Manna in 2023 to progress the project towards production.

Global Lithium Resources

projects in December 2022.

GL1 anticipates it will grow this resource base further in 2023 with the inclusion of results from an additional ~30,000m of drilling undertaken at the Manna project. Both the Manna and Marble Bar projects have significant scope for further growth, the explorer says.

Global Lithium cemented itself as the sole owner of the Manna project in November last year after it acquired the remaining 20% of the project from Breaker Resources – a move that provides the company with a clearer development pathway.

concentrate produced from the company’s operations at market prices, which increased significantly in 2022.

$16 billion lithium producer Mineral Resources (ASX:MIN), meanwhile, increased its stake in the company to 9.9% in October 2022 by participating in the $121.5m equity raising.

In 2022, Global Lithium also signed a non-binding memorandum of understanding with Korean battery maker SK On to explore a range of business opportunities, including potential development of downstream lithium assets.

KEY POINTS

◾ Company Name: Greenstone

Resources

◾ Company ASX code: GSR

◾ Key Commodities: Gold, lithium, cobalt, scandium

◾ Key Personnel: Chris Hansen, Managing Director & CEO | Glenn Poole, Technical Director & Chief Geologist

◾ Locations: Coolgardie & Norseman, Western Australia

◾ Market Cap as of 25/01/23:

$34.38M

◾ 52-Week Share Price Range at 25/01/23: $0.023 - $0.084

◾ W: greenstoneresources.com.au

■ High-grade gold resources centered on the historic mining region of Coolgardie, including the historic and underexplored Burbanks gold mine (100% ownership).

■ Advanced stage cobalt, nickel, manganese and scandium project centered on Norseman, for which IPO options are currently under review (50% ownership).

■ Exploration war chest at GSR’s disposal, with $4.9 million cash at bank at September 30 and no debt.

COMPANY PROFILE

Global Lithium is rapidly building its valuable lithium resource in Western Australia, positioning itself as the state’s fastest growing lithium company.

The global electric vehicle value chain is now turning its attention to the next wave of potential supply and Western Australia is in the box seat, accounting for more than 50% of the world’s lithium production in the form of raw materials.

Global Lithium wholly owns two of only 14 JORC compliant lithium resources in Australia, having amassed a game-changing war chest of 50.7 million tonnes at 1% Li2O after delivering substantial increases in the resources at the Manna and Marble Bar

Greenstone Resources

(ASX:GL1) (ASX:GSR)

COMPANY PROFILE INVESTMENT HIGHLIGHTS

Bonanza gold grades are a rare event in modern gold exploration, so Greenstone Resources’ hit of 7m at 57.8 grams per tonne gold near Coolgardie in December was an eye opener to the potential of its historic Burbanks gold project.

Burbanks was first discovered in 1885 and across more than a century produced over 420,000 ounces of gold from just the upper 150m – including a high-grade core 180,000 ounces at 27.4 grams per tonne (g/t) gold. Eye-watering numbers.

Historically, however, operators had been focused on small-scale production, meaning limited exploration work had been carried

“We are now in the fortunate position to own 100% of Manna following the consolidation of Breaker Resources’ 20% stake in November 2022,” Ron Mitchell, Global Lithium managing director, said.

“This provides us with maximum control and flexibility to expedite these studies with the goal of bringing Manna into production as soon as practicable.”

The company expects to reveal the outcomes of the scoping study, which will lay the foundation for the subsequent feasibility study, for Manna in the first quarter of 2023.

Late last year, GL1 also completed a $121.5m equity raising providing it with the cash it required to fund the acquisition and complete the upcoming feasibility study, while adding balance sheet strength and flexibility during the critical project growth and study phase.

Global Lithium is in the enviable position of having secured lucrative partnerships such as a 10-year strategic offtake with Suzhou TA&A for at least 30% of spodumene out below 250m in the central mining area and almost no exploration below 50m along the broader 5km strike extent of the Burbanks shear zone.

GL1’s highly experienced board and management team has deep lithium industry connections like Mitchell’s own 25 years’ experience in senior commercial, strategy, sales and business development roles, including senior positions at Tianqi Lithium Corporation and Talison Lithium.

He is also the inaugural chairman of the London Metal Exchange (LME) Lithium Committee, a position he has held for more than three years.

Greenstone has completed a full corporate rejuvenation process with an entirely new board and management team now undertaking a three-phase drilling campaign to test the true geological potential of Burbanks and the broader Coolgardie gold portfolio.

The campaign has started with 10,000m of infill drilling over an under-explored and unclassified area north of the main mine, which supports an exploration target of between 215,000-330,000 ounces. It was here that bonanza gold was reported from 90m.

Greenstone hopes the current round of drilling will add up to 330,000 ounces of contained gold to the project’s already considerable 277,000oz JORC resource.

The company is scheduled to finish the first phase of infill by March, after which it will update the resource to potentially support a pre-feasibility study while tackling the second and third phases of the program.

These will test unexplored areas of the Burbanks shear zone to depths of up to 500m, and also test directly below the level of the historical mine area.

Greenstone’s other Coolgardie hub assets include the Phillips Find mining centre and the Phoenix mine – both previously producers of historical significance.

As with Burbanks, Greenstone sees potential for exploration beneath the three historic open pits of Phillips Find, where little has been done to date.

Meanwhile at the recently acquired Phoenix, planning is underway for maiden drill campaign in early 2023 that will target north-west to south-east trending geological structures.

Greenstone’s other major asset is its cobalt-focused 50-50 joint venture with Conico (ASX:CNJ), the Mt Thirsty project.

Located 16km northwest of Norseman, Western Australia, Mt Thirsty borders ground held by Galileo Mining (ASX:GAL), which last year made significant platinum-group discoveries just 200m north of the JV’s tenement boundary.

First phase drilling at Mt Thirsty was a success, with the JV reporting the sixth-best cobalt intercept reported nation-wide in 2022 – 78m at 0.113% cobalt from an extremely shallow 3m, including 15m at 0.45% cobalt, 0.91% nickel, 5.42% manganese and 40.9g/t scandium from 45m.

Drilling was principally focused on testing deeper ultramafic sill horizons at Mt Thirsty, including potential extensions to GAL’s Castillo discovery.

Options to consolidate the ownership structure at the Mount Thirsty JV to support an IPO are currently under review.

KEY POINTS

◾ Company Name: Hammer Metals

◾ Company ASX code: HMX

◾ Key Commodities: Copper, gold

◾ Key Personnel: Dan Thomas, Managing Director | Russell Davis, Chairman | Ziggy Lubieniecki, NonExecutive Director

◾ Locations: Mount Isa, Queensland & Yandal region, Western Australia

◾ Market Cap as of 25/01/23: $59.14M

◾ 52-Week Share Price Range at 25/01/23: $0.044 - $0.130

◾ W: hammermetals.com.au

Investment Highlights

◾ JORC resource inventory of over 400,000 tonnes of copper equivalent metal at an average grade of 1.5% copper equivalent with a resource upgrade expected in Q2 2023.

◾ Multiple high-grade exploration targets in Australia’s most desirable copper district with follow up drilling programs underway.

◾ Experienced team with a proven track record for large-scale mineral discoveries.

DAN THOMAS MANAGING DIRECTOR

Hammer Metals

COMPANY PROFILE

Hammer Metals has built a sizable copper resource after establishing a large foothold in one of the world’s most significant iron oxide-copper-gold regions, providing it an advantage over many other explorers.

The company has a vast 2600sq km of highly prospective ground in Mt Isa in Queensland, one of the largest base metal provinces in the world.

IOCG deposits can host massive and highgrade concentrations of copper, gold, and other minerals. BHP’s Olympic Dam mine in South Australia, for example, is one of the world’s largest deposits of copper, gold, silver, and uranium.

Late last year, HMX expanded its resource at Mt Isa to over 400,000 tonnes of copper equivalent metal at an average grade of

1.5% copper equivalent by announcing a maiden resource for its Lakeview deposit. Further growth is anticipated as the company prepares to deliver a resource upgrade for the project’s cornerstone Kalman deposit in 2023 based on recent drilling and promising recent ore sorting results.

The current in-ground value of Kalman’s resources, based on current metal prices, is more than $6 billion, and recent exploration shows strong potential to increase resources further.

Kalman also has the added advantage of being the world’s third-highest grade undeveloped molybdenum deposit.

The numbers justify more than 10 years spent accumulating a significant land position at Mt Isa, where work is ongoing across the board. HMX has a pipeline of targets here, from greenfield prospects with strong IOCG potential through to advanced development study projects.

Mining studies are already underway at Kalman, as well as the Jubilee, Overlander, and Elaine prospects, to assess development options.

Hammer also has joint ventures in Mt Isa with two globally significant copper producers, Sumitomo Metal Mining and Glencore, which validates the company’s thesis of the potential that lies within its tenure.

The JVs cover only 15% of HMX’s ground and exclude the already defined JORC resources.

In Western Australia, the explorer has a large position in the heart of the fertile yet underexplored Yandal belt that boasts production of over 24 million ounces (Moz) of gold.

The 260sq km of highly prospective ground sits close to existing multi-million-ounce mines, including the 4Moz Bronzewing and 1.1Moz Orelia gold deposits.

Hammer Metals has identified numerous zones of highly anomalous gold in drilling at the Bronzewing South and North Orelia prospects.

HMX has also uncovered a highly encouraging lithium-bearing zone at its Yandal ground, 40km east of the world-class Kathleen Valley lithium-tantalum project. Rock chip sampling delivered grades of up to 0.65% Li2O from the newly discovered Tapenade prospect.

The established copper inventory and extensive exploration blue sky underpins the underlying value attributed to Hammer Metals.

KEY POINTS

◾ Company Name: ioneer

◾ Company ASX code: INR

◾ Key Commodities: Lithium carbonate, boric acid

◾ Key Personnel: James D. Calaway, Executive Chairman | Bernard Rowe, Managing Director & CEO | Ian Bucknell, CFO

◾ Locations: Nevada, US

◾ Market Cap as of 25/01/23: $986.21M

◾ 52-Week Share Price Range at 25/01/23: $0.315 - $0.835

◾ W: ioneer.com

Investment Highlights

◾ Ioneer is positioned to become a cornerstone supplier of lithium into the domestic US EV supply chain through separate binding offtake agreements with Ford and Toyota (Toyota-Panasonic joint venture).

◾ With debt and equity commitments of nearly US$1.2 billion, INR is primed to commence construction upon receipt of final permitting.

◾ Exploration programs focused on organic growth opportunities will become more prominent to demonstrate significant multi-generational scale potential of the Rhyolite Ridge project.

Ioneer

COMPANY PROFILE

Australian-listed ioneer has positioned itself to become a cornerstone supplier of lithium to the domestic US electric vehicles (EV) supply chain through its Rhyolite Ridge project – the most advanced undeveloped lithium project in the US with conditional loan backing from the US Department of Energy.

Fully funded to a final investment decision, the world-class resource is a unique lithiumboron deposit with a very robust definitive feasibility study modelled on 63Mt, 26+ year mine life – and significant potential for this to increase further.

It’s also expected to be a low-cost lithium producer in the US, thanks partly to its valuable boron co-product.

Ioneer entered into a conditional 50-50 joint venture agreement with SibanyeStillwater in September 2021 to advance Rhyolite Ridge, with INR retaining operational management responsibility.

INR signed separate offtake agreements with Ford Motor Company and PPES (a joint venture between Toyota and Panasonic) in 2022 and Korea’s EcoPro Innovation in 2021.

In top location for a battery metals project, Rhyolite Ridge is on uninhabited federal land just 330km from the Tesla Gigafactory near Reno, Nevada.

It’s also an ideal time for the project, with the US now determined to overcome its dependence on foreign battery supply chains and supporting the domestic industry with billions of dollars.

INR is a beneficiary of this government push, receiving in January a US Department of Energy (DOE) conditional commitment for a loan of up to US$700 million (A$1 billion).

The proposed DOE loan, coupled with Sibanye-Stillwater’s (JSE: SSW and NYSE: SBSW) expected 50% equity contribution of US$490 million in the project, is expected to fund a substantial part of the preliminary capital expenditure estimate – a significant step towards a complete funding package for Rhyolite Ridge.

Conditions include a positive record of decision (ROD) issued by the Bureau of Land Management, and a final investment decision (FID) by both ioneer and Sibanye-Stillwater.

However, the term sheet and conditional commitment from DOE demonstrates its strong support for Rhyolite Ridge. The loan would also be the first-ever by the DOE to provide financing for the processing component of a project where lithium is extracted and refined at site.

In a positive sign from the DOE, Jigar Shah, director of its Loans Programs Office (LPO) commented: “Rhyolite Ridge is a major step towards bolstering domestic lithium production for clean energy technologies, and LPO is excited to further develop an environmentally responsible US supply chain for critical materials.”

After a construction period of 24 months, first production is expected in 2026 from a low-emissions and low-water-usage site with a small mine footprint.

While the BLM works towards the permitting ROD, ioneer will continue efforts on being “shovel ready” ahead of FID and, with a resource update on the horizon, is now planning exploration programs focussed on organic growth opportunities within existing tenements aimed at demonstrating the significant multi-generational scale potential that Rhyolite Ridge has to offer.

Key Points

◾ Company Name: Krakatoa Resources

◾ Company ASX code: KTA

◾ Key Commodities: Rare earths, nickel, copper, platinum group elements, gold

◾ Key Personnel: Colin Locke, Executive Chairman | Mark Major, CEO

◾ Locations: Western Australia, New South Wales

◾ Market Cap as of 25/01/23:

$14.82M

◾ 52-Week Share Price Range at 25/01/23: $0.039 - $0.140

◾ W: ktaresources.com

Investment Highlights

■ Emerging critical metals developer, successfully progressing a diverse portfolio of rare earths, nickel and rubidium projects, located in tier-one mining jurisdictions.

■ Major clay-hosted ionic rare earth discovery made at Mt Clere in April 2022 – Tower deposit maiden mineral resource estimate of 101 million tonnes at 840ppm TREO defined in November 2022.

■ Exploration and development potential at Mt Clere underpinned by scale of the project, with only 20% of Mt Clere explored to date.

MARK MAJOR CEO