State inspectors found the levees leaking in mid-2024. When they went back earlier this year the sludge was still getting out, and the water in the ditches was rust-coloured and bright pink.

The sludge is called red mud. It’s what a refinery has left after it pulls the aluminium out of bauxite, and around four billion tonnes of it is sitting in dams around the world.

Alcoa’s refineries south of Perth run on bauxite out of the Darling Range and keep their red mud in dams behind the plants.

Our portfolio company Mount Ridley Mines (ASX: MRD) has just run bauxite from the same hills through a process it owns called Selectro. The photo in the announcement shows red bauxite going in and a small pile of grey silica coming out.

On its first run Selectro recovered 92% of the aluminium and 97% of the iron from a blended bauxite sample.

MRD trades at 3.6c with a market value of about $50 million. The aluminium that comes out of the world’s refineries each year is worth about US$235 billion, and MRD wants to sell those refiners a process that turns the biggest part of their waste bill into a product.

Selectro Takes on the 130-Year-Old Bayer Process

Aluminium starts out as bauxite. A refinery cooks the bauxite in a hot bath of caustic soda (the chemical in drain cleaner) and the aluminium dissolves out into the liquid.

The refinery dries what it dissolved into a white powder called alumina and sells it to smelters, who turn it into metal.

Everything the caustic soda can’t dissolve comes out the bottom as mud, and the refinery pays to keep it in a dam for good. The method is called the Bayer process and refineries have run it since the 1880s.

Iron is the first thing in the dam. It’s between a third and a half of the mud, and Selectro recovered 97% of it. MRD says it can pull the iron back out of the liquid and sell it.

Gallium is the second. It’s the metal in military radar and other defence electronics. China produces about 99% of it and the Trump administration wants it made elsewhere.

Most of the gallium in bauxite goes to the dam, and Alcoa has just committed $200 million to a plant at its Wagerup refinery south of Perth to get it back out of its own liquor.

Selectro has already recovered gallium from MRD’s own clay. The bauxite gallium result is still at the lab, and if it comes in a Selectro plant would have a third product to sell.

Heat is the third. A Bayer refinery cooks Darling Range bauxite at about 145°C inside pressure vessels and burns gas or coal to do it. Selectro did all of this below the boiling point of water at normal pressure.

On our own back-of-the-envelope sums, less fuel and more products to sell bring Selectro in well under the cost of the Bayer process.

The bauxite for the test came from Australian Silica Quartz Group (ASX: ASQ), whose ground sits right next to Alcoa’s bauxite leases. ASQ sent samples from four drill holes and the lab blended them. If Selectro works on this bauxite it works on Alcoa’s.

Mount Ridley Mines and Selectro

We added MRD to our portfolio in March at 2.4c for Grass Patch, its clay deposit 25km north of Esperance in WA. Five months later MRD upgraded the clay to the world’s largest reported scandium resource, with heavy rare earths and gallium in the same ground.

Chris Larder changed the company’s direction when he became chief technology officer in July. He brought a leach called Selectro he had spent more than a decade building.

Chris knows the process better than most, having worked on two of the three active bauxite refineries in Western Australia.

Managing director Allister Caird explains a leach with a tea bag. The ore is the tea bag and the leach is the hot water. The metal comes out into the water and you collect it from there.

Selectro’s reagent runs in a closed loop, so the plant recovers it after each batch and uses it again.

On Grass Patch clay, Selectro recovered 91.8% of the scandium in its third test, against 27.6% for the standard hydrochloric acid leach.

Bauxite looks a long way from a scandium deposit. Scandium’s main job is making aluminium alloys stronger, so Caird says MRD was heading toward the aluminium industry anyway.

The bauxite test is Selectro’s first on ore from another company.

The small-cap market has gone quiet lately and MRD was still up nearly 50% on our entry price before the result came out.

“This is a remarkable result for Selectro. Bauxite is a very different material to our Grass Patch feed, so this test gives us a clear indication of how broadly Selectro can be applied.”

- Allister Caird, managing director of Mount Ridley Mines

What Selectro Leaves Behind vs Red Mud

When the Selectro test was finished, about a quarter of the sample was left over. It was mostly silica (what sand is made of) and it came out close to neutral on the pH scale.

Red mud sits up near drain cleaner on the same scale and burns skin. Almost none of it can be reused, so refineries keep it in dams for good.

A Bayer refinery is left with between a third and just under half of every tonne of bauxite it puts through, and all of it is red mud.

Red mud holds scandium too, and Selectro has already recovered 91.8% of it from MRD’s clay. A US company is planning a US$850 million plant to pull gallium and scandium back out of the leaking red mud lakes up the Mississippi. It’s the best evidence we’ve seen that the metals in red mud are worth going back for.

The world mined about 440 million tonnes of bauxite last year and added 150 to 200 million tonnes of red mud to its dams. If every tonne went the way of MRD’s sample, the leftovers would come to about 110 million tonnes of sand, and the dams would take in somewhere between 40 and 90 million tonnes less a year.

We know a lab sample is a small thing to hang tens of millions of tonnes on, and MRD still has to repeat it on bigger batches in its demonstration plant.

A single plant running Selectro would keep millions of tonnes of red mud a year out of a dam.

What Comes Next for MRD

The team ran the bauxite through Selectro as it was built for Grass Patch clay. Tuning it for bauxite is the next job, and Caird expects the recoveries to improve from there.

MRD has more ores from other companies lined up for testing. It had told the market to expect the first outside result in early 2027, and this one turned up months early.

Bayer refineries can’t make money from bauxite with too much clay in it, because the clay uses up their caustic soda and takes alumina into the mud with it. Selectro was built on clay, so MRD thinks it can open up bauxite the industry has written off.

There are also bauxite deposits too small to pay for a refinery, and MRD sees room for small Selectro plants built next to them.

MRD is designing a demonstration plant in Perth to run Selectro in bulk on its own clay and on other companies’ ore, and it says it has the money to keep going. The plant will also make sample batches for the buyers and partners MRD wants to sign.

What We’re Watching at MRD

We’re still working out how big this could get, and so is MRD.

The gallium result from the bauxite is the next news we expect. We also want to see Selectro repeat the result on a second outside ore, because ASQ chose the samples for this test.

The number we want most is MRD’s own costing against Bayer. Ours is a back-of-the-envelope sum, and the demonstration plant work should produce a proper one.

MRD is talking to industry and government about funding the next stage. Alcoa is the obvious partner. It’s an American company, and Caird wants to take Selectro to the US.

Selectro has now beaten our expectations three announcements in a row, twice on MRD’s own clay and now on another company’s bauxite. We’d have been happy with 80% of the aluminium on a first run at bauxite, and it came in at 92.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (”Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club has 2,083,333 performance rights and 303,030 shares in MRD. Equities Club has been engaged by MRD at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services License (AFSL) No 519872.

They packed up in 1974 without drilling a hole as the copper price fell about 40% in the world recession.

Today Exultant Mining (ASX: 10X) said its crew went back over the same hills with a handheld analyser and was still picking up copper and zinc at both ends when the survey finished.

The crew also found a new patch of lead at the northern end, reading close to double the best 1970s number.

10X is the smallest company in our portfolio, valued at under $5 million at 13c with about $3 million of it in cash, and its copper targets sit in a tier-one mining jurisdiction.

The company calls the ground Watsons, and it sits inside Black Hammer, 10X’s 390 square kilometre copper-gold project in the same belt of old volcanic country as Newmont’s Cadia mine.

Cadia sits near Orange and is one of the biggest gold-copper mines in the world, with around 50 million ounces of gold and 9.5 million tonnes of copper.

A Quick Catch-Up on 10X

10X listed in December 2025 and we bought in a couple of months later after sitting down with executive chairman Brett Grosvenor and the team.

They had ground full of old high-grade hits nobody had tested with modern gear, and a plan to do the cheap fieldwork before paying for a rig.

10X listed expecting Black Hammer to be its key asset, and Brett admits the team got a little distracted by early results at Peak View, its other NSW project near Cooma.

The maiden drill program there in August hit silver, zinc and lead at modest grades at the Balerion prospect, and the crew then moved north to Black Hammer.

Take out the $3 million of cash and you’re paying about $2 million for 390 square kilometres of copper-gold ground, which looks cheap to us.

“Everybody’s fighting for equity and capital right now. Thankfully we don’t need it,” Brett told us.

There are 37 million shares on issue, and Brett told us the top 20 holders have gone from owning 40% of the company to 48% since the float.

It’s a sign of confidence in management and the assets in our opinion.

We think a good drill result at Black Hammer could move 10X a long way.

Boa Resources (ASX: BOA) drilled 22 metres at 3.05% copper in WA a fortnight ago and went from $30.5 million to $50.9 million in a week. A copper hit at 10X would land on a company a sixth of Boa’s size before the hit, with about an eighth of the shares.

What 10X Found at Watsons

Exploration manager Seb Hind and his crew pushed a handheld XRF gun into the soil at 190 points and took copper, lead and zinc readings on the spot.

The video below has Seb on the ground at Watsons, where the copper and zinc run for 2.4 kilometres through the hills behind him.

The 1970s crews took their samples along lines up to 488 metres apart, so there were big gaps nobody had tested. 10X went back with a much tighter grid of 50 by 100 metres to see whether the old numbers were real.

The copper and zinc turned up in the same places the old reports had them, along the same 2.4 kilometre strip. The readings were still high at both ends where the grid stopped.

Copper peaked at 330 parts per million and zinc at 529. For copper it works out to about a third of a kilo in every tonne of soil.

Soil numbers always look small next to drill results because the soil only carries a trace of whatever metal sits in the rock underneath. Geologists judge a soil reading by how far it stands above the ordinary dirt around it.

The typical reading at Watsons was 44 parts per million copper, so the best one ran at more than seven times normal. We rate it a solid result for a soil survey.

The strongest readings sit over volcanic rock cut by the same quartz veins where the 1970s geologists found copper minerals.

10X also found lead at the northern end in a patch about 100 metres wide and 300 metres long.

Copper and zinc ran high in this patch, so 10X has a sharper spot to aim at.

“When we redeployed the team from Balerion, we flagged Watsons as the immediate opportunity at Black Hammer, and this survey shows why.”

- Executive Chairman Brett Grosvenor

It’s early days and drilling is the only way to find out what sits below, but we like what 10X is finding at surface.

A drill program can eat a large slice of the cash at a company this size, so 10X is spending wisely on fieldwork before putting holes into the ground.

What Comes Next for 10X

10X plans to extend the grid north-east and south once it signs access agreements with more landholders, and it’s looking at lab analysis on the best spots.

It’s also weighing up ground magnetic and IP surveys. IP runs an electrical current through the ground and maps where the charge holds, which is how geologists find the sulphide minerals carrying copper, zinc and lead.

If the geophysics picks up sulphides under the best soil readings, 10X has its first drill target at Watsons.

Copper traded near US$6.70 a pound on Monday, about 2% under September’s record and up about 30% in a year.

Copper stockpiles are already low, and 709 workers at Antofagasta’s Centinela mine in Chile walked off the job last week. Their unions say production there could halve in November.

Glencore starts trading on the ASX this week at a value of about US$88 billion, and it plans to almost double its copper production to 1.6 million tonnes a year by 2035. A miner its size only spends the money when it’s sure of buyers.

We’re copper bulls, and we like owning a $5 million explorer on the hunt in the same belt as Cadia.

Our Take on 10X

It’s rare to find an explorer this small with money in the bank and a register this tight.

In 10 months on the ASX the team has drilled its first six holes at Balerion and gone straight on to Watsons, and the chairman bought 500,000 shares on market along the way.

From here 10X will widen the soil grid and look at geophysics to pick its first drill target at Watsons. Black Hammer has two more undrilled targets behind it.

The last crews to find metal at Watsons packed up as copper fell 40%.

10X is on the same hills with copper near a record and $3 million in the bank, and we like its chances of being the first to put a drill hole into them.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (“Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 200,000 10X shares at the time of publishing this article. Equities Club has been engaged by 10X at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services License (AFSL) No 519872.

The AI data centre builder was asking $11 a share, and last Sunday we said it’s out of our usual wheelhouse but we’d lean towards shorting it once it listed.

It turns out no one will get the chance.

The AFR ran a bit of a campaign against the float this week, and people close to Firmus are reportedly already blaming the media for killing it.

But when you aim to list a $44 billion company that has never made a profit in a new frontier, you’ve got to expect a few bruises and hard questions on the way to market.

Cynical News Corp journos love to grumble about the company’s all-knowing Verity score, which was brought in to rank their stories on the clicks and subscriptions they drive.

Write about topics that produce a good Verity score (think Dan Andrews, bikie wars, private school rankings…) and you get a gold star next to your name from the higher-ups. It’s why the same topics get run again and again.

We’re going to guess The AFR has a similar ranking system, and Firmus sent it off the chart this week. As we type this there are 28 mentions of the company on The AFR’s homepage.

Away from Firmus it was a quiet week at the small end of the ASX, although a 2c rare earths explorer still managed to triple.

Here’s what else caught our eye:

• Why a quiet market suits busy companies

• Powerhaus puts crews on the ground in Argentina

• Drones take over Land Forces in Perth

• Fortuna’s first deep holes deliver the goods at Mkanda

• Elk Range sees gold at five depths as core is off to the labs

• Black Horse starts deeper drilling under Mt Egerton

• ASX small-cap of the week, a 2c rare earths explorer triples

Let’s get to it

Firmus Flops

Firmus would have landed among the 20 biggest companies on the ASX.

The AI data centre builder set out to raise $7.9 billion at $11 a share, which put a $44 billion price tag on a company that made about US$50 million in revenue last financial year.

Backers including Nvidia and Blackstone put money into Firmus in July at a valuation of $15.5 billion, roughly a third of what the bankers were asking three months later.

The crazy part is last week Firmus’ term sheet (the sheet brokers send out to investors) said it already had more orders than shares to sell.

Firmus opened its books to the super funds and fund managers on Monday, and Australia’s fourth-biggest super fund UniSuper said the float was “priced to perfection”, meaning everything had to go right to justify the valuation.

In the end UniSuper kept its money in its pocket.

The bankers had been counting on big orders from American funds, and the orders never came.

By Wednesday night the bankers were talking about $9 a share, and by Thursday the number being reported was $8.25.

The Australian then reported they were testing whether anyone would pay $5.50, which is half the price Firmus started the week at.

On Friday it became clear a discounted price would be a horrible look, and Firmus pulled the IPO.

Construction company Maas Group (ASX: MGH) owns 3.2% of Firmus and has $1.1 billion of contracts to do the electrical work on Firmus’ data centres. Maas shares fell 32% this week.

The banks running the deal had been in line for about $215 million in fees. There’s going to be a few smaller Christmas parties than the bankers expected.

Firmus still needs billions to build its data centres and plans to borrow up to US$35 billion to do it. It says it will go back to private investors for the money and look at listing on the Nasdaq, and we’d be surprised if this is the last we hear of it.

US data centre company CoreWeave looked in trouble last year when it had to cut its float price and nearly halve its raise. The investors who backed it at the discounted price more than quadrupled their money within three months.

And we say all this not to put the boot in. We like big stories and we like the great unknown. Firmus had a swing at both, and the ASX needs more companies willing to have a go.

A good float would have given the ASX a lift, although we do wonder how much of the $7.9 billion would have come out of other shares to pay for it.

We thought the price was the problem (as plenty of others did). At the right price we’d look at it differently.

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A Quiet Market and the Companies Still Working

The small end of the ASX has gone quiet. It might be school holidays, it might be interest rates, or a government policy lag effect. Either way, trading volumes have dried up.

We caught up with a number of brokers this week and each of them talked about how thin the trading has been. One of them described it as the worst he has seen in years.

We own shares in the companies we back, so we feel a market like this in our own pockets.

We turn down a lot more companies than we back, and we only back the ones that stay active. A company that sits on its hands waiting for the market to turn will have nothing to show when it does.

Right now we’ve got a gold explorer in Idaho and a rutile explorer in Malawi waiting on assays from the lab.

Another gold explorer has a rig turning under an old Victorian goldfield and a uranium explorer has crews lining up drill targets in Argentina.

Others in the portfolio are working on commercial deals, and the drone parts maker is shipping to its customers again.

For punters a quiet market is a chance to get behind hard-working companies while their share prices are out of favour.

We’ve been through quiet markets before and each one turned. When this one does we want to be holding the companies with results in hand.

Powerhaus Uranium Gets to Work in Argentina

The uranium price has tripled in six years, from about US$30 a pound to around US$90, and this week our uranium explorer Powerhaus Uranium (ASX: POW) started fieldwork at Malbec, its main project in Argentina.

Power companies buy most of their uranium on long-term contracts, and the contract price went past US$90 in January for the first time since 2008.

POW holds a large land package of about 2,000 square kilometres. This week crews started surveying nine square kilometres of shallow uranium ground with radiation detectors and taking samples, with results due before the end of the year.

The nine square kilometres are part of a 17 square kilometre terrace, the biggest stretch of shallow uranium ground POW has found at Malbec so far.

The uranium here sits within a few metres of the surface, and in places the crews can see it as a yellow mineral in the rock.

Earlier samples from the southern end ran 523 and 344 parts per million uranium oxide. If the new samples stack up, POW plans to dig trenches early next year and follow with drilling.

The bigger target is deeper in the sandstone, where POW is looking for the same style of uranium deposit Kazakhstan mines. Kazakhstan produces around 40% of the world’s uranium.

It’s some of the cheapest uranium in the world to mine because the miners pump a solution down wells and draw the uranium back up.

Drilling is slated for November once the environmental permits arrive. It will be POW’s first drill program at Malbec.

We went to POW’s investor lunch this week and nearly the whole board was there.

Steve Blower sat on the discovery teams for three uranium finds in Canada, and Andrew Penkethman drilled out the resource at Husab in Namibia.

Sashi Davies ran marketing at Extract Resources, which owned Husab and sold for $2.2 billion.

They could sit on nearly any uranium board in the world, and hearing them explain why they like the geology in Argentina gave our confidence in POW a lift.

Managing director Siobhan Lancaster worked on the Husab sale too. She then ran 92 Energy, which found uranium on its fourth drill hole and was taken over inside three years of listing.

She walked the room through the plan for Malbec, and we rate the team she has put together. And last but not least, chairman Richard Pearce was present. Pearce founded 92E, and was chairman at the sale.

POW finished the week at 19c and we’re looking forward to the next few months.

Drones Lead the Show at Land Forces in Perth

Australia’s biggest land defence trade show came to Perth for the first time this week, and drone makers were out in force.

Land Forces ran for three days at the convention centre with 964 exhibitors from 60 countries, including Boeing and BAE Systems.

The army has drones “in the low thousands” and is getting ready to buy a lot more, a brigadier told defence news site Janes at the show.

Defence Industry Minister Pat Conroy said at the show the government has added $5 billion to its drone budget. He said it has also doubled what it spends on defences against drones.

The money is promised over 10 years and the army is still trialling much of the equipment, so the orders are slow to arrive. We think they’ll come once the trials finish.

ASX-listed weapons maker EOS said at the show demand for its counter-drone systems is the strongest it has seen, and on Friday it signed a $700 million counter-drone deal with a Gulf government. It’s the biggest contract in EOS’ history.

EOS found its buyer overseas, and it’s why we like defence companies with customers outside Australia.

We’ve backed drone parts maker KTEK Aerosystems (ASX: KTK), which listed on the ASX in May.

KTK builds the wings and body sections of military drones out of lightweight composites in Europe, assembles them for US customers in Los Angeles, and sells them to the companies that make the drones.

The Iran war shut the shipping route to KTK’s biggest customer in March. Deliveries started again last week, so the parts are going out and revenue is flowing again.

It has also won its first order from a major Israeli defence company. While the small suppliers at Land Forces wait on orders, KTK is busy delivering the ones it has.

Governments have announced far more defence spending than they’ve handed out, and we think a lot of it still has to reach the smaller companies selling into a global market. We’re always looking for new defence stocks to cover.

Fortuna Metals Drills Deeper at Mkanda

Rutile explorer Fortuna Metals (ASX: FUN) drilled below eight metres at its Mkanda project in Malawi for the first time this week.

The best hole ran 24 metres at 1.5% rutile from surface and was still in rutile when the rig stopped.

Another returned 3.43% rutile from about 30 metres down, which is the highest grade Fortuna has recorded at Mkanda.

Fortuna’s July resource of 298 million tonnes at 0.87% rutile only counts the top eight metres, because hand augers can’t drill any deeper.

It already ranks as one of the six biggest rutile deposits in the world.

Rutile is the cleanest starting point for the titanium that goes into jet engines and the joints of humanoid robots.

Fortuna has done all of it in the year since we backed it at 4c, and SpaceX investor WndrCo paid 11c a share for 18.57% of the company in June.

Mlongo is the first prospect back from the lab. Kahuna and Agogo are next, and Fortuna expects the rest of the results over the next four to six months.

FUN closed the week at 9c, which is more than double our entry and still below the 11c WndrCo paid.

Sovereign Metals (ASX: SVM) owns the world’s biggest rutile deposit 20km north of Mkanda, and its resource nearly tripled after aircore rigs drilled it to 20 metres.

Sovereign is worth about $325 million with Rio Tinto on its register, and Fortuna is worth about $39 million.

If the other prospects carry their grade as deep as Mlongo, we think the next resource could be a good deal bigger than 298 million tonnes.

Elk Range Sees More Visible Gold in Idaho

Gold explorer Elk Range Mining (ASX: ELK) has finished its first hole at the Friday Gold Mine in Idaho, and the geologists saw gold in the core at five depths.

Friday is a built and permitted underground gold mine the last owner parked during Covid.

The deepest was a thread of gold more than a centimetre long from 234 metres down.

The best of the old holes at Friday ran 112 metres at 5.22 grams of gold a tonne in 2014, and it stopped where the drilling plan ended at 137 metres.

What sits past the end of the old hole is the reason we bought ELK shares, and the geologists have now seen gold in three places past it.

“For a geologist, it doesn’t get much better than opening a core tray and seeing visible gold,” CEO Edward Keys said.

We’ve written three pieces about gold the geologists have seen and we’re as keen as anyone for a grade. Our latest article is here.

The assays are the next big news for ELK. The core is at the lab on a rush order and Elk expects the numbers in late October or early November.

Elk has also sent 113 metres of the 2014 core back to the lab, and those results are due at the same time.

The drillers are already on the second of eight holes and working around the clock. We like what the geologists are seeing and we’re happy to wait.

Black Horse Mining Starts Drilling at Mt Egerton

A drill rig is turning again at Mt Egerton, the central Victorian goldfield that produced 1.29 million ounces of gold before water flooded the workings in 1906.

Gold explorer Black Horse Mining (ASX: BHL) has started the first of up to 10 holes in a program of about 4,000 metres. You can find the article we wrote about this week’s announcement here.

Managing director David Frances told us in December it was a simple story.

“We’re looking for gold in Victoria where there’s plenty of gold and we hope to find some more,” he said.

We named BHL our 2025 Small-Cap of the Year and we’ve waited since March for this drilling.

Heavy winter rain cut off the drill sites within weeks of the rig arriving in June, and BHL has since rebuilt the tracks for all weather.

While it waited BHL reopened a tunnel sealed for more than a century and sampled 1.3 metres at 10.79 grams of gold a tonne inside.

More than 90% of the drilling at Mt Egerton since the mine shut stopped above 150 metres, and BHL’s rig can reach 1,000 metres.

The Fosterville gold mine sits in the same corridor of Victorian goldfields, and its richest zone only turned up after drilling pushed past 800 metres.

BHL finished the week at 22c, and we think one good hole at depth could move the company a long way.

Alvo Minerals Triples on Brazilian Rare Earths

The best small-cap on the ASX this week was a rare earths explorer in Brazil that was worth about $5 million last Friday.

Alvo Minerals (ASX: ALV) started the week at 2c and finished it at 7c.

On Thursday Alvo reported drill results from its Bluebush project, where it found dysprosium and terbium in clay close to the surface.

They’re the two heavy rare earths that go into high-powered magnets, and China restricts who gets to buy them.

The best hole ran 19.5 metres at 1,324 parts per million rare earths from one metre down, and Alvo said many of its holes were still in the clay when they stopped.

Bluebush sits in the same granite as the Serra Verde rare earths mine USA Rare Earth bought this year for US$2.8 billion.

Alvo also raised $1 million on Thursday at 2c a share, and the investors who took it have more than tripled their money on paper in two days.

Alvo has no resource at Bluebush yet and is drilling towards its first one.

It was a quiet week for small-caps and a $5 million explorer still tripled on one set of drill results.

The Week Ahead

The ASX lost its biggest float since Telstra on Friday, and on Wednesday it gets one of the biggest miners in the world.

Glencore is due to start trading here under the ticker GLC without raising a dollar.

CEO Gary Nagle said Australian super funds asked for the listing because they wanted to buy more Glencore shares than their rules let them buy in London.

Australians know how to value a mine, and it’s why most of our portfolio is explorers.

Glencore plans to almost double its copper production by 2035, and copper finished the week within about 2% of the record it set in September.

Gold finished the week just under US$4,200 an ounce, and the small explorers hunting for it are still out of favour. We like the odds of them catching up.

US inflation numbers are out on Wednesday and Australian jobs numbers on Thursday. Both feed into where interest rates go next, and lower rates usually help small-caps.

We’re meeting a large number of companies at the moment as we hunt for the next one to back.

Till next week.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consult your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst Equities Club Pty Ltd (”Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 500,000 KTK shares, 625,000 POW shares, 187,500 BHL shares, 1,554,000 FUN shares, and 625,000 ELK shares at the time of publishing this article. Equities Club has been engaged by KTK, POW, BHL, FUN and ELK at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services Licence (AFSL) No 519872.

They all need titanium in their joints, and the cleanest way to make it starts with a heavy, dark mineral called rutile.

We’ve spent a year writing about a company hunting rutile under the farmland of central Malawi with hand augers, which are giant corkscrews a crew twists into the ground by hand. The augers give up at about eight metres, where the ground gets wet and the sample turns to mush.

In July, Fortuna Metals (ASX: FUN) added up the top eight metres at its Mkanda project and landed on 298 million tonnes at 0.87% rutile, one of the six biggest rutile deposits in the world.

This morning FUN reported its first holes ever drilled below eight metres. The best of them ran 24 metres at 1.5% rutile from surface and was still in rutile when the rig stopped.

The hole went three times deeper than the eight metres in the resource, and its grade was about 70% higher than the resource average.

We’ve held FUN since September 2025, when it was a 4c stock. It last traded at 7.6c, which values the company at about $33 million, and roughly $12 million of it is cash in the bank.

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From 4c to a Top-Six Deposit

Most rutile today goes into paint pigment, welding rods, jet engines and defence hardware, with robot makers the new blue-sky buyer on top.

FUN holds 658 square kilometres 20km south of Kasiya, the largest rutile deposit in the world. Kasiya’s owner Sovereign Metals (ASX: SVM) is worth about ten times FUN at $325 million and has Rio Tinto on its register.

Since buying the ground in September 2025, FUN has sunk 1,323 hand auger holes and turned a 5.4 tonne bulk sample into rutile grading 96.66% titanium dioxide.

In June SpaceX investor WndrCo paid $8.6 million at 11c a share for what is now 18.57% of the company. The maiden resource followed in July at 298 million tonnes grading 0.87% rutile.

What the Deeper Drilling Found

Mlongo is the first Mkanda prospect to get assays back from the 7,618 metre aircore program Fortuna finished in September.

An aircore rig uses compressed air to keep cutting through wet ground until it hits hard rock.

Fortuna drilled the maiden resource with holes 400 metres apart and has halved the gap to 200 metres.

Holes this close let the geologist upgrade the next resource from inferred to indicated, which a mining study needs.

Four holes carried rutile from surface to the last metre drilled:

• 24m at 1.5% rutile

• 25m at 1.17% rutile

• 21m at 1.07% rutile

• 30m at 0.62% rutile

A fifth hole ran 7m at 2.27% from 26 metres down to its last metre. Two metres inside the run graded 3.43%, the highest rutile grade Fortuna has recorded at Mkanda.

A few holes held their grade only in the top eight to 16 metres. Kasiya shows the same pattern of thick rutile cores inside thinner blankets at surface.

We’ve been writing since last November that the ground below the augers was where Mkanda could grow. Sovereign’s resource nearly tripled at Kasiya after aircore rigs drilled it to 20 metres.

A few million years of tropical rain turned the rock at Mkanda into a soft, clay-like material called saprolite, which the rutile sits in.

At Mkanda an excavator tips the clay straight into a truck, compared to the arduous steps of drilling, blasting and crushing that most hard-rock miners have to go through.

The lab separated Fortuna’s bulk sample with gravity, magnets and static electricity.

This is possible as rutile is heavier than the dirt around it, and mineral sands miners have done it this way for decades.

Fortuna had $12.8 million in the bank at the end of July, and hand augers and aircore rigs are some of the cheapest drilling going.

What Comes Next for Fortuna

Fortuna expects results in the next four to six months from its other aircore prospects and 648 hand auger holes, which are at a lab in Cape Town.

Crews started drilling this month at Fortuna’s second project Kampini, which sits 40km south of Mkanda and has about 50km of the same host rock with little drilling into it.

The company’s September presentation has core drilling starting in October and a pre-feasibility study starting in December.

Rare earths are next on CEO Tom Langley's list after that, with the analysis running in parallel with the rutile assays.

Sovereign’s September study showed recovering them as a by-product could add US$722 million to Kasiya’s pre-tax value for about US$29 million of extra capital.

The Robots Are Shipping

Robot makers shipped nearly 25,000 humanoids in the first half of 2026, more than five times the number a year earlier, according to research house IDC. Chinese companies built 78% of them.

IDC expects shipments to pass 750,000 a year by 2030. Research firm Berg Insight has them at 26 million a year by 2040, in a market worth US$554 billion.

Tesla lined up US$30 billion of bank credit in late September, partly to build Optimus.

In early October the robot arm of Chinese carmaker XPeng raised more than US$900 million at a US$6.3 billion valuation, with Tencent and Alibaba among its backers. XPeng plans to start mass production of its Iron humanoid by the end of the year.

Rutile already sells into paint and jet engines, so we see the robots as a bonus on top of a deposit we like anyway.

Our Take on Fortuna Metals

Today’s assays are the first from below eight metres at Mkanda. The Kahuna and Agogo prospects are next, with the rest of the 7,618 metre program behind them.

If they carry their grade as deep as Mlongo, we think the next resource could be a good deal bigger than 298 million tonnes, and Mkanda could move up from its current place in the world’s top six.

An independent geologist still has to turn the assays into tonnes, and Fortuna hasn’t put a date on the update.

We’re also watching the graphite assays from the deeper holes, and whether WndrCo brings a US partner to the table.

At 7.6c, FUN is close to double our 4c entry and below the 11c WndrCo paid in June.

Take the cash off the $33 million market cap and investors are valuing a top-six rutile deposit at roughly $21 million, against $325 million for Sovereign 20km up the road.

It’s a small batch of holes with decent grades, and the rest of the program has to back it up.

CEO Tom Langley said on site late last year he wanted to prove the rutile ran down to 20 or 25 metres, and today’s best holes carried it as deep as 33.

We like his chances of finding the same at Kahuna and Agogo.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (“Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 1,504,000 shares of FUN at the time of publishing this article. Equities Club has been engaged by FUN at the time of writing.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services License (AFSL) No. 519872.

His company now has more than 800 shops and sells things for much more than a shilling (about 10 cents). Coles collected $45.6 billion through the tills last FY and on Friday was valued around $30.6 billion.

112 years later, Firmus is the upcoming float every fund manager and newspaper in the country is talking about. It started life as a bitcoin miner.

These days it owns data centres full of the computer chips to run AI, and has contracts to rent them to the owner of Facebook and the maker of ChatGPT. It has two running and five more on the way.

The fundies start bidding on Tuesday, and the $11 a share they’ve been asked to pay makes Firmus worth $43.7 billion.

Firmus expects to lose US$77 million in the first half of this financial year. Coles made $1.09 billion.

One fund manager told the AFR Firmus was the “BHP of the token generation” (we sat with that one for a moment). Another said he’d short it.

Either could be right, and at that price we’d be on the short side. Then again, in 1914 we probably wouldn’t have backed the bloke selling mixing bowls.

Firmus is too big for us to touch either way. In our neck of the woods the drone company we’re bullish on started shipping again and one copper hole added $20 million to an explorer’s value.

This also caught our eye:

• KTK begins shipping again as demand continues to build

• Lynas bids for a rare earths stock that traded at 1c in 2022

• EVG sells its first container of graphite into Vietnam

• Paradigm calls in the administrators after its trial failed

• 10X finishes drilling at Balerion and heads to Black Hammer

• Boa hits 22m at 3% copper and adds $20 million in value

• Mamba and Micro-X run again a week after we wrote them up

• Northern Star knocks back a $38.7 billion offer from Gold Fields

• Liontown commits $389 million to expanding Kathleen Valley

Let’s get to it.

KTEK Aerosystems Starts Shipping Again

We heard the sobering stat this week that a Russian soldier’s life expectancy once they reach the frontline of the Ukraine war is about 20 to 30 minutes.

It came from Torsten Reil, co-founder of European drone maker Helsing, who said drones have made the front so deadly tanks are basically useless and he expects armies to stop sending people onto the battlefield at all.

He argued 100,000 strike drones on a country’s border could stop any land war, and it’s no doubt the thinking that lies behind the Pentagon asking Congress for about US$75 billion for drones and counter-drone systems next year, and Australia committing up to $22 billion over the decade.

Our drone company KTEK Aerosystems (ASX: KTK) builds the wings and body sections for military drones, and on Wednesday it started shipping to its biggest customer again.

The Pentagon prefers American-made parts, and KTK now assembles its airframes in LA.

The Iran war shut KTK’s shipping route in March, and KTK took in just $273,000 from customers in the June quarter. The first batch is now ready for collection, so KTK can start invoicing again.

KTK’s partner factories built about 50 airframes a month last year. They can now build 200, which KTK puts at $1.66 million a month at last year’s prices.

One of Israel’s three big defence contractors placed its first order a fortnight ago. Founder Dekel Keisar ran drone structures at Israel Aerospace Industries before he started KTK, and he still owns 36% of it.

KTK closed the week at 17c, about $24 million. We paid 20c at the float in May and we’re bullish on the next 12 months.

We sat down with chairman Howard Digby last week. He’s also a director of drone communications company Elsight (ASX: ELS), which has gone from 45.5c in mid-2024 to $5.32 on Friday.

Digby told us he isn’t brave enough to pick the winning drone maker, so he backs the companies that sell to all of them.

The video is below.

Lynas Bids for Meteoric Resources

A share that traded at 1c in mid-2022 got a takeover offer worth about 28.6c on Thursday.

Lynas Rare Earths (ASX: LYC) digs rare earths at Mt Weld in WA and processes them in Malaysia. It calls itself the only commercial producer of separated rare earths outside China. (Rare earths go into the magnets inside EV motors and missiles).

Meteoric Resources (ASX: MEI) owns Caldeira, a clay rare earths deposit in Brazil. It bought the rights in December 2022 for US$20 million from a family who had dug the clay for over 100 years to make bricks.

LYC wants MEI.

Lynas is paying in shares, 0.0207 of a Lynas share for every Meteoric share, so the offer rises and falls with the Lynas share price.

On Lynas’ price before the deal the offer came to 28.6c, a 68% premium, and valued Meteoric at about $968 million.

Lynas fell 8.6% on the day, and at Friday’s close of $12.95 the offer is worth 26.8c.

A punter who put $1,000 into Meteoric at 1c would be swapping it for about $26,800 of Lynas shares just four years later. Good business.

Lynas is also lending Meteoric up to $110 million. Meteoric got $35 million at signing, and the other $75 million only comes if the deal is still alive in six months.

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Evion Group Sells Its First Container Into Vietnam

David Round runs Evion Group (ASX: EVG), the graphite and fluorspar company in our portfolio, and a few weeks ago he was at a defence conference in Philadelphia where robots walked the floor and he got to play with the guns.

He told us every piece of kit in the room had expandable graphite in it somewhere.

Expandable graphite swells up when it gets hot and smothers a fire, which is why it goes into fireproofing for warships and armoured vehicles.

China produced 82% of the world’s natural graphite last year, and since December 2023 its exporters have needed a government licence to ship it.

EVG makes expandable graphite at a plant near Pune in India, through a 50:50 joint venture called Panthera.

This week Panthera sold its first container into South-East Asia. A buyer in Ho Chi Minh City ordered about 20 tonnes at US$3,650 a tonne.

Panthera sold to the US and Europe last financial year for between US$3,100 and US$3,400 a tonne, so Vietnam paid 7% more than its best price.

The container is worth about $104,000 across the joint venture and EVG owns half. It’s small money (we said the same about KTK’s first order), but these things have a tendency to grow quickly over time.

The plant sold 720 tonnes last year and is working towards 2,500 tonnes a year, so we’ll be watching for repeat orders. Managing director David Round says Panthera is negotiating ongoing supply with the same buyer and talking to buyers in Japan.

Round has also been in Washington with Arthur Sinodinos, the former Australian ambassador EVG signed as an adviser in June, and he told us Sinodinos got them in front of senior Pentagon people.

We like that a buyer in a new part of the world paid more than Panthera’s existing customers on its first order. We sat down with Round for a full breakdown of the next few months:

Paradigm Biopharma Calls in Administrators

A Melbourne biotech worth about $140 million a fortnight ago called in administrators on Wednesday.

We wrote last week about Paradigm Biopharmaceuticals (ASX: PAR) and Zilosul, its injection for the pain of knee osteoarthritis. The drug’s big trial had 538 patients and was stopped at the halfway mark because the early results weren’t good enough to keep going.

A week later the board says Paradigm owes more in the short term than it can pay. FTI Consulting now runs the company and the directors’ powers are suspended.

Creditors meet on Friday. The board wants a deed of company arrangement, a deal where creditors agree to take less or wait longer so the company survives in some form.

Shareholders stand last in the queue behind the lender and every other creditor. The shares last traded at 24c, they stay suspended, and Paradigm expects the process to take at least eight weeks.

We said last week we like biotech, and a failed trial taking the whole company with it is the risk every holder signs up for.

Exultant Mining Heads to Black Hammer

The last lab results from Balerion came back on Thursday for Exultant Mining (ASX: 10X), the NSW explorer in our portfolio.

Balerion is a silver and zinc prospect on 10X’s Peak View project near Cooma, and 10X drilled six holes there in August. Five of the six holes hit metal, and the best ran 11.75m at 9.12 grams a tonne of silver and 1.43% zinc and lead from 240m down.

The grades are modest and the zone gets thicker the deeper 10X drilled. The team did what it said it would do, but it’s time to park Balerion and move on.

The crew has been at Black Hammer since early September. It’s 390 square kilometres of copper-gold ground in the same belt as Newmont’s Cadia, one of the biggest gold and copper mines in the world, and its three best targets have never been drilled.

10X closed at 13c, a valuation of about $5 million, with $3 million in the bank. We think it’s cheap, and a copper discovery at Black Hammer could move it a long way.

Boa Resources Hits 22m at 3% Copper

Speaking of copper, a WA explorer drilled 22m at 3.05% copper this week and its shares went from 10.5c to 17.5c.

Boa Resources (ASX: BOA) hit it at Ricci Lee, a prospect on its Neds Creek project in the same district as Sandfire’s old DeGrussa copper mine.

The hole struck copper from 250m down, and 9m of it ran 6.86%. (Boa hasn’t worked out the true widths yet.) Plenty of the world’s big open pit copper mines dig rock grading under 1%.

The same hole found a second copper zone higher up, 10m at 1.81% from 133m.

Boa has drilled 46 holes at Ricci Lee and the lab still has 36 of them, so more results land between now and Christmas.

Boa owns 49% of the ground today. Shareholders vote on October 12 on a deal to buy the other 51%, along with a couple of copper deposits next door.

Last Friday Boa was worth $30.5 million, and it finished this week at $50.9 million.

Buyers are still paying up for copper juniors with real hits, and we’re still hunting for one to add to our portfolio.

Mamba Exploration and Micro-X Run Again

Peter Cook founded Westgold, a $5 billion gold miner with a mill at Meekatharra. On Friday he signed on as an adviser to a copper-gold explorer just down the road he already owned shares in.

The explorer is Mamba Exploration (ASX: M24). We wrote about it last Sunday at 3.6c, after it went back through old drilling and found 165 copper hits in 47 holes.

Mamba announced Cook and a $6 million raise at 3.8c on Friday morning, and by the close its shares were 7.1c.

Mamba will spend the money on 6,000m of drilling at Meeka East starting this month, with first results due in December.

Micro-X (ASX: MX1) was another we mentioned last Sunday. It had tripled to 4.5c in a week after its chairman bought shares on market.

It builds X-ray scanners light enough for an ambulance, and the US Department of Homeland Security is paying it to design an airport checkpoint where passengers screen themselves.

On Monday the department gave it another US$750,000 to build a better baggage scanner over the next eight months, and the stock closed the week at 6.2c.

A fortnight ago Mamba was 2.1c and Micro-X was 1.8c. The ground can move quick in this game.

Northern Star Knocks Back Gold Fields

Now to the big boys, the week opened with the owner of Kalgoorlie’s Super Pit turning down a $38.7 billion takeover offer.

Northern Star Resources (ASX: NST) confirmed on Monday it had rejected South Africa’s Gold Fields, which offered 0.3125 of its own shares plus $7.25 cash for each Northern Star share.

Gold Fields’ shares have fallen since it made the offer, so the $27 a share it started at was down to $25.19 by Monday.

Chairman Michael Chaney called the offer highly opportunistic and said the price fell well short. He also said most of it would be paid in shares in Gold Fields, which has mines in riskier countries than Northern Star does.

Northern Star sold 1.54 million ounces of gold last financial year for an average of $4,925 each, and they cost $2,698 each to dig up.

Both companies have bought a junior with a discovery in the past 18 months. Northern Star paid $5 billion for De Grey, which found the Hemi deposit in 2020, and Gold Fields paid $3.7 billion for Gold Road, which found the Gruyere deposit in 2013.

The big gold miners are flush with cash at the moment, and we don’t think their appetite for juniors making discoveries has dulled.

Liontown Commits Big to Kathleen Valley

Lithium major Liontown (ASX: LTR) signed off $389 million on Wednesday to make its WA mine half as big again, and on Thursday its holders sold the stock down 15%.

They sold because it’s a big bill and it won’t bear fruit until 2028, when the bigger mine starts producing.

Lithium carbonate is still about double its 2025 low, even after it fell 22% in September.

It’s Liontown’s second spend on lithium in a month. Four weeks ago we wrote about it buying into a salt flat in Argentina.

The WA mine is Kathleen Valley. It processes 2.8 million tonnes of ore a year and the expansion takes it to 4.2 million.

Spodumene concentrate is what Liontown ships to battery makers. It expects to produce 390,000 to 440,000 tonnes this financial year and about 780,000 tonnes a year from 2030.

A bigger mine is cheaper to run per tonne. Liontown expects each tonne to cost $840 to $920 to produce after the expansion, down from $1,050 to $1,250 this year.

It will pay for the build from the $561 million it had in the bank at June and from what the mine earns along the way.

What We’re Watching Next Week

It was a bit of a quieter week on markets this week.

Daylight saving kicked in this morning, so a reminder the ASX opens an hour earlier for anyone in a state without it from tomorrow. We’ll be up for it, because a few companies in our portfolio are drilling or waiting on the lab.

September quarterlies start landing this month too, which show how much money each junior has left.

China is also back from its National Day holiday on Thursday. Copper hit a record last month but just had its worst week since April while its biggest buyer was away.

We’re bullish copper and want to see if China’s factories keep buying at about US$14,250 a tonne.

And on Tuesday the fundies start the bidding for Firmus, the biggest float in Australia since Telstra and probably the most talked about since Guzman y Gomez. A fair bit to watch in the weeks ahead.

Till next week.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consult your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst Equities Club Pty Ltd (”Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 500,000 KTK shares, 200,000 10X shares, 4,500,000 EVG shares at the time of publishing this article. Equities Club has been engaged by KTK, 10X and EVG at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services Licence (AFSL) No 519872.

Buying CBA shares at $9 is what sensible people did with their money in 1995. We’re small-cap people and we like backing the underdog, so we bought a Freo Dockers membership and left it on direct debit.

CBA closed above $150 on Friday, but for a few fleeting moments yesterday we thought we’d made the better investment.

Freo went 17 points up with four minutes to go and the bells tolled for Wharfie Time. Tears welled in the eyes of grown men who had never seen their side win a flag.

Then Brisbane kicked four goals in four minutes, and the same men cried again.

The small-cap end had a better week than we did. An Israeli defence prime handed our drone company a contract, MRD found richer dirt outside its resource, copper set a record the day before the world’s biggest copper mine shut, and a chairman bought his own stock under 3c and watched it triple.

What caught our eye this week:

• KTK lands an Israeli defence prime

• MRD finds scandium 8km past the resource line

• Rare earths on the table at the Trump-Xi summit

• Copper hits a record and Escondida shuts

• Micro-X triples after the chairman buys in

• Italy votes for nuclear as POW gets to work

• Saudi pays a quarter of the drilling bill

• Paradigm's knee trial fails at half-time

• AMD hits a trillion and Firmus heads for the ASX

KTK Lands an Israeli Defence Prime

Ukraine sent more than 1,000 drones into Russia last weekend, and on Monday morning one of Israel’s three big defence contractors placed an order with our drone company KTEK Aerosystems (ASX: KTK).

KTK builds the wings and body sections that go inside military drones, and the prime has ordered the drawings for a new part. The order is binding and worth US$200,000, the first payment on a US$994,100 design package.

The package covers the drawings and the stress work to prove on paper the part holds together before anyone builds one. Prototypes and production come as separate orders if the design gets through, and KTK puts the design work across the wider program at around US$5 million.

The customer’s name stays secret for national security reasons, so we spent Monday going through the annual reports of Israel’s defence companies to narrow down the list. Three fit the description and each turns over about US$7 billion a year.

Founder Dekel Keisar ran UAV structural engineering at Israel Aerospace Industries before he started KTK, and he still owns 36% of it.

KTK finished last week at 17c. The stock opened on the news Monday and hit 24c before sellers pushed it back down.

US$200,000 is small money (we said as much on Monday). We’re backing KTK on who’s paying it, and those three companies finished last year sitting on US$80 billion of orders they haven’t built yet.

KTK turned over A$5.5 million last year, so the US$5 million design program would be bigger than the whole business, and the order to build the part comes after that. At 17.2c the stock costs 0.2c more than it did before the prime turned up, and the airframes held up by the war since March should start shipping again in the next fortnight.

MRD Finds Scandium Past the Resource Line

Drillers left thousands of bags of crushed rock behind at Grass Patch over the years, and our critical minerals explorer Mount Ridley Mines (ASX: MRD) has been sending them back to the lab to test for scandium.

Grass Patch is MRD’s clay deposit 25km north of Esperance, and it already holds the world’s biggest reported scandium resource at 946 million tonnes.

The resource only counts the ground MRD has drilled closely enough to sign off on, and the second batch of re-assays came from old holes outside it.

The scandium keeps going. MRD found it up to 8km past the resource, at better grades than the ground it has already counted.

The best hole ran 22m at 119ppm scandium oxide from 12m down, against resource grades of about 75 to 77ppm. (ppm means parts per million, so 119ppm is 119 grams in every tonne of dirt.)

Another hole went 40m at 102ppm from 18m, and the drillers stopped before they reached the bottom of the scandium.

Selectro is the part of MRD that has us most excited. It’s the leach Chris Larder brought to MRD before he became CTO, and last week his team recovered 91.8% of the scandium in their third test on half the chemicals.

Richer dirt through Selectro means more scandium out of every tonne MRD would dig.

Managing director Allister Caird says the re-assay program is only at the midway point. The Phase 2 numbers go into the next resource upgrade, and 2,800 more samples went to the lab on Monday.

When we wrote up Test 3, the lab was floating Grass Patch material to strip out clay before the leach. The bulk sample comes after it, running a much bigger lump of Grass Patch through the half-dose recipe to show whether the lab numbers hold at scale.

Those results also feed the demonstration plant costings we wrote about in August.

MRD closed the week at 4.5c. We bought it at 2.4c in March for the size of the dirt, Chris Larder has since given us a second reason to hold it, and he’s still finding out how little chemical Selectro needs.

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Rare Earths at the Trump-Xi Summit

Xi Jinping landed in Washington on Wednesday for his first state visit in 11 years, and both sides arrived ready to argue about magnets.

China’s customs figures came out on Sunday and showed its rare earth magnet shipments to the US fell 20% in August to 512 tonnes.

Those magnets go into everything from electric car motors to guided missiles, and American officials have complained that Beijing hasn’t held up its end of last year’s trade truce.

On Wednesday night, Treasury Secretary Scott Bessent said the two sides had extended the truce by two months to January 10. The truce keeps US tariffs lower and holds back China’s controls on rare earth and critical mineral exports.

The bigger date is January 1, 2027, and no summit moves it. From that day, US defence contractors can’t supply the Pentagon with systems that have Chinese rare earth material anywhere in the magnet, from the mine to the finished part.

China’s gallium ban runs to a different date. Beijing banned gallium exports to the US in December 2024, then suspended the ban until late November this year, and gallium goes into computer chips and military radar.

Buyers in Rotterdam were paying about US$2,100 a kilo for gallium earlier this year. Inside China it trades for under US$250.

MRD’s Grass Patch made the news this week for scandium, and the same clay holds heavy rare earths and gallium.

Heavy rare earths like dysprosium and terbium keep magnets working at high temperatures, and defence contractors will need them from outside China come January 1st.

MRD boss Allister Caird said this week that the size of MRD’s resource puts the company “on the radar of offtakers, government departments, strategic capital and defence primes”. The Pentagon’s deadline is three months away.

Copper Climbs to a Record as Escondida Shuts

Copper closed at a record US$6.92 a pound in New York on Tuesday night, its sixth rise in a row and 7.9% above where it was six trading days earlier.

Copper trades in two locations. New York is where Tuesday’s record was set, and London, where most miners price their sales, sat around US$14,700 a tonne this week, a touch under the US$14,875 record it set on September 10.

Chinese manufacturers bought heavily before China shuts for the Mid-Autumn Festival this week and National Day in early October, and they paid the biggest premium to bring copper into the country in nearly four years.

On Wednesday BHP shut down Escondida in Chile, the world’s biggest copper mine, after a worker was killed doing maintenance. BHP expected Escondida to produce up to 1.28 million tonnes this year, and it hasn’t said when the mine will restart.

In the same corner of Chile, workers at Antofagasta’s Centinela mine vote this weekend on whether to strike.

Two weeks ago we wrote that the world’s copper mines went backwards in the first half of the year and the spare metal in the London and Shanghai warehouses was down 40% and 85%. None of that has improved, and now the biggest mine of the lot is shut.

A record price makes every tonne an explorer finds worth more to whoever eventually digs it up, and BHP, Rio Tinto and the rest of the big miners mostly buy their next mines from explorers. A price like this puts more cash in their pockets to go shopping with.

We called FMR Resources (ASX: FMR) at 16c in 2025 when its Chilean copper projects went into the company, and it hit an all-time high of 60c this month.

This week a much smaller one moved on holes drilled decades ago. Mamba Exploration (ASX: M24) went back through the old drilling at Meeka East, its copper-gold ground in WA’s Murchison, and found 165 copper hits in 47 holes across a 3km corridor.

The best of them ran 26m at 1% copper and 0.33 grams a tonne of gold from 24m down, and a shallow one hit 10m at 1.3% copper from 2m. Meeka East sits 30km down the same belt of rock from Nanadie, the discovery that made Solstice Minerals a $500 million company.

Mamba ran from 2.1c to 3.6c and closed the week at about a $13 million market cap. It’s planning mapping and soil sampling first, then a drill program to test the gap between the two prospects, which nobody has ever drilled.

At a record copper price a copper explorer doesn’t need much of a hit to move.

Micro-X Triples After the Chairman Buys In

An Adelaide company that builds X-ray machines light enough to fit in a Flying Doctor plane was the biggest mover under $100 million on the ASX this week, and the news that moved it was its own chairman buying shares.

Micro-X (ASX: MX1) makes X-ray and CT scanners around a carbon nanotube emitter, which does the job of the big glass tube in a hospital machine at a fraction of the weight. Its brain scanner is built to spot a stroke in the ambulance, where every minute the patient waits costs brain cells.

The stock had been sliding all year. Perennial Value Management held 6.79% in July and sold it down until it dropped off the substantial holder list on September 3, and by last Friday MX1 was 1.8c.

Chairman Patrick O’Brien has been buying the whole way down. He paid 7c a share in May last year and 8c in the placement in April, and this week his companies bought just over 1.36 million shares on market between 2.2c and 2.9c, roughly $35,000 worth.

By Wednesday the stock hit 5.4c, the ASX sent a speeding ticket, and Micro-X pointed to the chairman’s buying and Perennial’s selling. It closed the week at 4.5c and a $31 million market cap.

Underneath it sits a contract with the US Department of Homeland Security to design the next airport checkpoint, with miniature CT baggage scanners and passengers screening themselves. Micro-X says the contract can pay up to $31.7 million in milestones, and on Monday morning the whole company was worth less than half of that.

A chairman who paid 7c, then 8c, then 2.8c for the same stock is either stubborn or right. We like directors who back their company with their own money, and this week the buyers followed him in.

Italy Goes Nuclear as POW Gets to Work

Italy’s Senate voted 81 to 51 on Wednesday to bring back nuclear power, nearly 40 years after Italians turned their backs on it following Chernobyl.

Belgium scrapped its nuclear phase-out law last year, and Switzerland’s upper house voted in March to lift its ban on new plants. Denmark is studying an end to its own 40-year ban.

Australia still bans nuclear power under federal law, while sitting on more known uranium than any other country (we dig it up and ship it to everyone else’s reactors).

Uranium sat flat this week at just under US$90 a pound.

On Wednesday the US announced plans for its Export-Import Bank to back up to US$7 billion of mining and energy projects in Argentina.

Argentina is where our uranium explorer Powerhaus Uranium (ASX: POW) is hunting. POW is looking for roll fronts, which are long bands of uranium sitting in sandstone underground.

Kazakhstan produces around 40% of the world’s uranium from roll fronts, and it does it without digging a pit. The miners pump a solution down one well, let it dissolve the uranium, and draw it back up another. POW’s ground in Argentina has the same sandstone.

POW CEO Siobhan Lancaster’s team started fieldwork this month at Malbec in Chubut province, where grab samples at surface have run up to 771ppm uranium oxide. (Grab samples are hand-picked rocks and aren’t representative of the grade across the project.)

POW plans 20 to 30 drill holes starting in October or November once permits land, with results expected from November.

Lancaster found and sold a uranium discovery at 92 Energy before this one, and she’s about to put the first rig POW has ever owned on the ground.

We backed POW at its 20c float in August because we want to own the junior before the drill results, and with Europe voting reactors back on and Washington backing Argentine mines, we think a uranium discovery in Chubut would get noticed quickly. News from the field could be close too.

Saudi's Mining Push Brings Small-Caps to the Desert

Saudi Arabia’s government puts the value of the minerals under its desert at US$2.5 trillion, nearly double the estimate it gave in 2016.

Riyadh wants mining to become the third pillar of its economy alongside oil and manufacturing, and it’s paying explorers to come and look. The government’s exploration program covers up to 25% of an explorer’s drilling and lab costs, and spending on exploration in the Kingdom went from US$54.6 million to more than US$280 million in 2024.

The government has handed out more than 33,000 square kilometres of ground through tender rounds. Its ninth round, awarded in January, went to 24 companies.

Gina Rinehart’s Hancock Prospecting formed a joint venture with Saudi state miner Ma’aden in December and picked up five exploration licences in a Saudi gold belt. Rinehart said she was excited by the Kingdom’s pro-mining policies.

China’s Zijin and India’s Vedanta won licences in the Jabal Sayid copper belt last year.

Peako Minerals (ASX: PKO) valued at $36 million completed its purchase of six gold projects covering 862 square kilometres this week. Its flagship sits next door to the 2-million-ounce Sukhaybarat gold mine.

Sierra Nevada Gold (ASX: SNX) won its As Safra copper-gold project in a government tender last December and drilled it for the first time this year. In August it raised $12.3 million for a 25,000m second round.

Three SNX rigs should be turning by September 30, with first assays due in November. The company is worth about $68 million.

A government that pays a quarter of your drilling bill is a rare thing for a junior explorer, and Peako and SNX are two of the first ASX names to take it up. We’ve been spending time on the Kingdom ourselves and expect a few more to follow them into the desert.

Paradigm Fails its Halfway Test

Paradigm Biopharmaceuticals (ASX: PAR) has spent years and a lot of shareholder money on one drug for sore knees, and this week the trial fell over at half-time.

Zilosul is an injection meant to ease the pain of knee osteoarthritis. Paradigm’s Phase 3 trial put 538 patients on the drug or a placebo.

The trial rules gave an independent board a look at the first half of the results to decide whether the study was worth finishing.

The shares had run 40% in the month before the halt. Paradigm went into a trading halt on Monday morning and cancelled the investor lunch it had booked for the result.

On Wednesday it said the interim numbers didn’t reach the threshold the study needed to continue.

The company blames a large amount of missing data on how the trial was run, and it’s going back through the numbers to work out what happened.

On Thursday it handed back US$2 million it had drawn from its note holder Obsidian a fortnight earlier. The stock last traded at 24c, about $140 million of market cap, and it stays suspended until Paradigm tells the market by Monday how much cash it has left.

Six years ago, with the same drug and no Phase 3 result, Paradigm was worth $334 million at $1.69 a share.

We like biotech. When a drug works the payoff is enormous, and when it doesn’t you get a week like Paradigm’s. Its holders took that risk with their eyes open, and it went the wrong way.

AMD Hits a Trillion as Firmus Heads for the ASX

AMD shares jumped almost 10% on Monday to a record, taking the chipmaker past US$1 trillion in market value for the first time. Only three other US chipmakers have got there before it, and Nvidia is still the biggest at about US$5.4 trillion.

A US index of chip stocks, including Micron and Nvidia, rose for a sixth straight session on Tuesday.

In China, Alibaba unveiled a new AI chip it says triples the performance of its last one. It plans to take its data centres past 20 gigawatts by 2032, which is roughly the output of 20 big power stations.

Micron reports its results on September 30.

Closer to home, data centre operator Firmus is chasing about $5 billion in what would be the second-biggest IPO in Australian history, behind Telstra in 1997. Blackstone backs it, Nvidia and OpenAI are customers, and it’s due to list in late October.

On Tuesday, Reserve Bank governor Michele Bullock told a Sydney audience that AI could be a bubble. “Some people think it’s a bubble, some people don’t,” she said, and the RBA is keeping an eye on it.

Every chip going into those data centres is a stack of copper wires, and the wires can only shrink as far as the wrapping around them allows. Our graphene company Adisyn (ASX: AI1) grows the wrapping one nanometre thick, at a temperature a chip factory can live with.

Adisyn was quiet this week in its first week inside the All Ordinaries. We added it at 6.8c in April, and a week of trillion-dollar chipmakers and a $5 billion data centre float is a reminder of how much money is chasing better chips.

What We’re Watching Next Week

The Reserve Bank announces its rate decision at 2:30pm on Tuesday. All four big banks expect a 0.25% rise to 4.60%, which would be the fourth rise this year.

If you’ve got a mortgage, a rise that size adds about $15 a month for every $100,000 you owe. Small explorers feel it too, because most of them raise money every few months and every placement gets priced against what the bank is paying on a term deposit.

BHP still hasn’t said when Escondida will restart. Every week the world’s biggest copper mine sits idle keeps the pressure on the copper price, and explorers with copper in the ground are the ones who stand to gain.

We’re out hunting for our next small-cap copper pick to follow FMR. We want an explorer with copper already in the drill holes and the cash to keep drilling, and a market cap small enough that a discovery moves the share price.

Powerhaus Uranium’s team has been in the field at Malbec since mid-September, and we’re expecting an update soon.

Gold drilling is on our radar too, and we hope to have more to share on the gold side of the portfolio soon.

If you want a piece of Firmus, retail applications for the float open on October 12.

Thanks for the distraction from the footy result. We’ll go back to staring into the abyss now.

Till next week.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consult your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst Equities Club Pty Ltd (”Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 500,000 KTK shares, 900,000 AI1 performance rights, 625,000 POW shares, 2,083,333 MRD performance rights and 303,030 MRD shares at the time of publishing this article. Equities Club has been engaged by KTK, AI1, POW, and MRD at the time of writing.

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We spent Sunday watching drone footage out of Moscow. Ukraine sent more than 1,000 of them into Russia yesterday, and earlier this month a handful out of Iraq shut the Saudi pipeline that lets tankers skip the Strait of Hormuz. Brent crude oil went through US$108, the first time since panic gripped markets in May.

Every defence budget on earth is being rewritten around drones, because a handful of them can hit a major city’s infrastructure or stop 4% of the world’s oil in one night.

KTK builds the wings and fuselage sections that go inside them, and increasingly the whole section, wired and tested, so the drone maker bolts it in and moves on.

The purchase order is binding and worth US$200,000. It’s the first payment on a US$994,100 design package the customer has now accepted.

US$200,000 is small money for a company already doing millions a year in revenue.

We care about who’s paying it.

The announcement keeps the customer’s name secret for national security reasons. It describes a military aircraft manufacturer with more than 10,000 staff and billions in revenue.

We went through the annual reports of Israel’s defence companies and three come close. Each turns over about US$7 billion a year.

The defence industry calls companies like these primes. A government signs with the prime for the finished aircraft, and the prime buys the wings and frames from smaller suppliers like KTK.

A prime this size only signs up a new supplier when there’s enough work to make it worth the bother, and KTK puts the design work across the wider program at around US$5 million.

Nobody at a billion-dollar contractor pays to design a wing they plan to build a handful of.

At today’s exchange rate US$5 million of drawings comes to about a third of KTK’s $24.6 million market cap, and covers design only.

Do the drawings well and KTK is the company that designed the part, so when the prime orders thousands of them KTK is first in line to build them. A supply contract at a prime runs for as long as the aircraft does, and military drones tend to fly for 20 or 30 years.

Suppliers usually spend years getting onto a prime’s books, and KTK has done it 18 weeks after listing on the ASX.

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Who's Paying? We did Some Digging

Three companies in Israel fit the announcement’s description, and here they are with last year’s numbers.

• Elbit Systems turned over US$7.9 billion in 2025 with more than 20,000 staff.

• Israel Aerospace Industries did US$7.4 billion with a US$29 billion order book.

• Rafael came in at US$6.8 billion and has 10,000 employees.

Elbit alone turns over more in a day (about US$21.6 million) than KTK’s whole market cap.

Between them the three turned over US$22 billion last year and are sitting on US$80 billion of orders they haven’t built yet. Israel’s defence exports hit a record US$19.2 billion in 2025, up nearly 30% on the year before, and most of it went out the doors of these three.

Their drone history goes back further than anyone’s. IAI flew the first modern military drones over Lebanon in 1982, and its Heron surveillance drone has since been bought by around 15 countries. Australia flew Herons over Afghanistan for years.

Each of these companies has thousands of engineers on staff and 40 years of drone programs behind it, and one of them has gone outside to an 18-week-old ASX listing to design an airframe part.

Groups this size qualify a supplier once and use it for years. The volumes they order are the reason a wing is worth designing at all.

What KTK Signed

KTK will design a specified airframe component for the prime. The work covers the drawings, the stress analysis and the bill of materials, plus the engineering support to get the part through the customer’s design reviews.

In plain terms, KTK has been hired to draw a part of an aircraft and prove on paper it will hold together, before anyone builds one.

The first US$200,000 pays for preliminary design over three months. The next US$592,700 covers engineering and development over 18 months, and a final US$201,400 covers a year of production and testing support after that. The whole program runs 30 months.

Prototypes and production are outside this package. The announcement says each of those comes as its own purchase order if the design gets through, and there’s no guarantee written into today’s order.

We read it as the try before they buy test, and the prime has put nearly US$1 million behind seeing how KTK goes.

KTK's MD Learned the Trade Inside a Prime

KTEK’s founder and managing director Dekel Keisar was Head of UAV Structural Engineering at Israel Aerospace Industries, where he worked on more than 20 military drone platforms before starting KTK in 2019.

Structural engineering is the skeleton of the aircraft. The wings and frames have to hold together when a drone banks hard at altitude, and a prime signs off on them before anything else gets built.

He built KTK to sit one rung below the primes. It already supplies finished airframe sections to Elbit and to drone maker UVision. The design work stays in Israel and the manufacturing is spread across certified partners in four countries.

Dekel still owns 36% of KTK and hasn't sold a share since listing. He learned how primes buy from inside one, and he wins or wears this order alongside every other shareholder.

Why Every Military Wants Drones

In July last year, US Defence Secretary Pete Hegseth reclassified small drones as consumables that are bought like ammunition and expended by the case.

The Pentagon’s budget request for the year ahead asks for more than US$70 billion for drones and counter-drone systems, up from about US$16.5 billion the year before. It has since asked industry for more than 300,000 small drones across 2026 and 2027, and the US Army wants a million.

In April the Australian Government put at least $12 billion toward drones over the next decade, then added up to $7 billion for shooting them down.

A drone that costs less than a car can put a hole in a refinery, and the missile fired to stop it costs more than a million dollars. Major militaries have all done the same sums.

Every one of those drones needs parts, and the companies whose names go on the side buy most of them from suppliers. KTK is one of the suppliers, and it gets paid whichever brand wins the tender.

What Else is Moving at KTK

The war in Iran shut the shipping route KTK’s biggest customer relies on, and for most of this year finished airframes sat in a warehouse with the buyer waiting on the other end.

Around US$100,000 worth got through in August as a test run. The rest starts moving again in late September or early October.

On the other side of the world, KTK has a building in Los Angeles ready to go. The Dutch export licence it needed landed in August, so European-made parts can now land in California, get assembled, and ship to American customers from an American address.

The Pentagon’s rules favour parts made in America, and from LA KTK’s will be.

Two weeks ago Vestal signed KTK to build its prototype airframes. This morning one of Israel's three defence giants put in an order for it to design part of an aircraft.

We picked KTK at its May float because primes buy airframes from companies like it, and 18 weeks later one of the biggest is.

The parts that sat in a warehouse all year start moving within a fortnight and the LA plant is waiting on its first American order.

One of the biggest aircraft builders on earth has paid KTK to start drawing, and the first drawings go over in three months. If they’re good, the US$5 million follows, and the order to build the part is KTK’s to lose.

We think they’ll be good. Signing off drone wings was Dekel’s job at a prime before he started KTK.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (“Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 500,000 KTK shares at the time of publishing this article. Equities Club has been engaged by KTK at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services License (AFSL) No 519872.

Buffett took control of a failing textile mill called Berkshire Hathaway in 1965 because the bloke running it tried to shave an eighth of a dollar off the price he’d promised for Buffett’s shares. Buffett bought more instead and sacked him.

He paid around US$15 a share back then. One of those same shares closed on Friday at US$763,600.

The whole mill was worth about US$22 million when he took it over. He used the mill’s cash to buy an insurance company, then the insurance company’s cash to buy everything else, and today Berkshire is worth US$1.09 trillion.

His most famous investment is Coca-Cola. He spent US$1.3 billion on the shares between 1988 and 1994 and the stake is worth about US$25 billion today. Coke now pays Berkshire more in dividends every year than the shares cost him.

By Berkshire's own count the shares are up more than 6,000,000% since 1965. A hundred bucks in the mill back then was worth US$6.1 million at the end of last year. The bloke is a legend of the game.

Down the small-cap end this week we saw a fair bit of news despite lower trading volumes, visible gold hit in drill cores in the US, copper continues to attract attention, and a biotech lost a third of its value.

What caught our eye this week:

• ELK hits visible gold in hole one at Friday

• MRD pulls more metal out of Grass Patch on half the chemicals

• Copper juniors: FMR hits 60c and Gina buys into WCN

• Attacks in Saudi send the Oil price north, what it means for juniors

• AI1 gets its third US patent

• Minerals 260 goes from small-cap to $2 billion gold developer

• EVG is in Washington presenting on multiple fronts

• Immutep loses a third of its value on a manufacturing answer

• Where the money went this week: we dive into trading volumes

ELK Hits Visible Gold in Hole One

Elk Range Mining (ASX: ELK) found visible gold in its first drill hole at its Friday gold project this week. Seven specks turned up 122 metres down.

Edward Keys sat down with us in Perth this week, a long way from the mill floor at Friday where he keeps his sleeping bag. The trip home cost him the town’s annual picnic, and the locals let him know about it.

Friday has been mined on and off for the best part of a century, and the town has grown up around it. Friday’s site administrator is fourth-generation Idaho and lives in the cabin her great-grandfather built on a lease he pegged, and the guy scanning the old assay sheets for ELK lives 100 metres from the office and walks up.

It’s all to say Keys arrived in a town that knows the mine better than he does, and he’s hiring from the experienced pool.

Our launch write-up is here and Monday’s piece on the gold in the old core is here.

Keys told us the new hole started eight metres from the 2014 hole, and the new gold sits about 14 metres above the gold his team spotted on Monday in the old core.

“If you think about a big boulder in a stream, you’re going to find those nuggets in the pressure vortex downstream,” Keys said.

“The same physics applies to the gold we’re seeing in the core.”

The veins at Friday pinch and swell, the gold sits just behind the pinch, and now his geologists have seen it in two holes 10 metres apart, they know what to look for in the next seven.

The rig has drilled past the point where the 2014 crew went home (450 feet), and the same veins keep coming up in the core.

It’s now running day and night shift, and the pad for the next three holes is already dug.

The assays for the new hole and the old core land late October or early November.

ELK closed the week at 17c and a $15 million market cap with $10 million of IPO money in the bank, so the market is paying $5 million for a mine someone else spent US$40 million building.

Keys flies back to the mill floor in two weeks.

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MRD Gets More Metal on Half the Chemicals

Our critical minerals explorer Mount Ridley Mines (ASX: MRD) finished the week up 17.5% after its third Selectro test pulled 91.8% of the scandium out of Grass Patch clay on half the chemicals. You can find our full write up here.

Grass Patch is a clay deposit 25km north of Esperance in WA with the world's largest scandium resource in it, and the same clay carries the heavy rare earths that go into EV and wind turbine magnets.

Chris Larder spent a decade building Selectro before he joined MRD as chief technology officer in July and shared the recipe. A leach is the chemical bath the industry uses to pull metal out of crushed rock, and for clay like this everyone uses hydrochloric acid.

Every test came out of one bucket. The lab ground 16.8kg of Grass Patch core into one lot and took a 90 gram scoop for each run, so the acid and the three Selectro runs all started from the same dirt and the only thing changing between them was the recipe.

The acid got 27.6% of the scandium out. Selectro got 62.1% on its first run and 80% on its second, and on Thursday Larder halved the reagent and got 91.8%.

“Being able to manage the process to get outcomes like that is genuinely exciting,” Larder said.

Dysprosium is the heavy rare earth inside EV and defence magnets, and it went from 39.4% under acid to 85%. Gallium went backwards to 41.5% from 55.8% in August because the same cut in reagent took it down, and MRD expects a richer feed from flotation to claw it back.

We backed MRD at 2.4c in March for the ground they had, and three tests in we think the process might be worth more than the ground.

After the bulk sample MRD wants to run Selectro over another company’s clay. If it works there, MRD clips the ticket on a deposit someone else digs, and there are a lot of clay rare earth projects out there looking for a cheaper leach.

Copper: BHP Now Makes More From It Than Iron Ore

Copper set a record of US$14,875 a tonne a few weeks ago.

We wrote in August about copper making BHP more money than iron ore for the first time in its history, and we’ve written “we’re hunting for a copper junior” in every wrap since.

This week two we’d already put in front of readers ran without us.

FMR Resources Hits 60c

We called FMR Resources (ASX: FMR) at 16c last year when the Chilean copper ground went into the company.

This week it hit an all-time high of 60c, up nearly 300% from our call.

FMR hunts porphyry copper in Chile. Porphyries are the big low-grade systems the majors mine, and FMR now has three of them north of Santiago.

Managing director Oliver Kiddie picked up La Lorena in May because it sits on the same structure as Los Pelambres, which Antofagasta runs as one of the biggest copper mines in Chile, and rock chips there ran 5.32% copper.

FMR optioned Los Warbos in July and its rock chips ran 10.77%. Neither has ever been drilled.

FMR is paying for the drilling at Llahuin to earn up to 60% of the project, and four holes there have confirmed a porphyry system with the main centre due to be drilled this quarter.

Legendary prospector Mark Creasy cornerstoned the drilling money, and the top 50 holders own 65% of the register.

Gina Rinehart Buys Into White Cliff Minerals

White Cliff Minerals (ASX: WCN) made our broker picks for the second half of 2026 at 1.7c in July.

On Monday Gina Rinehart’s Hancock Prospecting agreed to put $8.77 million into WCN at 1.7c for 13.5%, and the stock hit 2.4c. Shareholders vote on it in October.

The money goes into Rae, WCN’s copper project in Canada’s far north, where drilling at Danvers hit 175 metres at 2.5% copper. Hancock pays for the drilling, and when Australia’s biggest private company buys into a junior at market price, the next raise gets a lot easier.

We’ve spent six weeks looking for the perfect copper junior while two we’d already named went and did it.

Oil: The Pipeline Attack and Your Diesel Bill

Last week we told you to fill the car up before the weekend. Six months after Hormuz shut, drones hit Saudi Arabia’s East-West pipeline on 11 September, and the pump price has kept climbing since.

The pipeline is the one route for Saudi crude that skips the Strait, and knocking it out took up to 4% of the world’s supply off the table.

Brent jumped from US$96 to US$104 in the week it happened, touched US$108.75 on Tuesday, and closed this week at US$103.87 once the Saudis said the line would restart within days.

The fuel excise cut ended in early August and Treasurer Jim Chalmers says it’s staying ended. Australia holds about a month of fuel, and most of the diesel we burn comes in on a ship from Singapore or Korea.

Diesel is the biggest line on an explorer’s bill. Rigs, trucks and generators run on it, so every dollar on the barrel makes a metre of drilling dearer, and a junior with a year of cash gets a shorter year.

AI1 Gets Its Third US Patent

Our tech graphene play Adisyn (ASX: AI1) had its third US patent allowed this week.

We added AI1 to our portfolio in April at 6.8c, and it closed the week at 14c off the back of the news.

Every chip is a stack of copper wires, and each wire is wrapped in two layers. A barrier layer stops the copper leaking into its surroundings, and an insulating layer keeps one wire’s signal from bleeding into the next.

As chips shrink under five nanometres, the wires get thinner but the wrapping can only get so thin before it stops working. Engineers call the space lost to wrapping the barrier tax.

Adisyn grows graphene one nanometre thick at under 400 degrees, cool enough for a chip factory. The first two patents covered laying it on the copper. This one covers laying it on the insulator, so AI1 now owns the recipe for both sides of the barrier.

For a company like this, a patent is the difference between a lab result and something a chipmaker will pay to license. Executive chairman Kevin Crofton spent 30 years selling equipment to those chipmakers, and he now walks in with three allowed US patents and a 200mm wafer.

From Monday AI1 joins the All Ordinaries, the 500 biggest companies on the ASX, which puts it inside the size limit a lot of fund managers work to.

Minerals 260 Grows From Small-Cap to $2 Billion

In January last year Minerals 260 (ASX: MI6) was an 11c explorer with Tim Goyder in the chair, the size of company we write about in this wrap every week.

Then it wrote a $156.5 million cash bill, added $10 million in shares, and bought Bullabulling, an old open pit gold project 65km west of Kalgoorlie with 2.3 million ounces already in the ground.

The bill was many times what the whole company was worth at the time.

Eighteen months on, the resource sits at 190 million tonnes for 6.2 million ounces, nearly three times what they paid for, and Franco-Nevada, the biggest gold royalty company on earth, has put $420 million into the project since February in its largest commitment ever made in Australia.

This week MI6 raised another $250 million at 88c (no discount to the share price) with a $30 million share purchase plan for the retail holders who backed it early. The company now has $633 million towards an $855 million mine, with first gold pencilled for 2028.

MI6 closed the week at 94c, a touch over $2 billion. Eight-and-a-half times the price on the day they bought the ground, and they are still years away from pouring gold.

EVG Gets a Second Door Into the Pentagon

The US hasn’t mined fluorspar since 1995 and imports every tonne it uses, which is a handy fact to have on your side when you’re asking the Pentagon for money.

Our graphite and fluorspar company Evion Group (ASX: EVG) was accepted into the Defense Industrial Base Consortium this week, the second US defence buying group it has joined since August.

Members get to see the Pentagon’s requests before anyone else and bid on them, and this one has handed out US$362 million across 51 projects since 2024, with US$159 million of it going to critical minerals.

EVG turns up with two minerals the Americans desperately want. Carp is an old fluorspar mine just over 100km out of Las Vegas. On the graphite side it has a fully permitted mine in Madagascar and a plant in India making the fireproofing material for warships and armoured vehicles, which hardly anyone outside China makes.

None of the US$362 million has come EVG’s way yet. The next time the Pentagon puts money up for fluorspar or graphite, EVG is on the list of companies allowed to ask for it.

And the Carp rock chips are still at the lab.

Immutep Falls 32% on a Manufacturing Answer

A Sydney biotech with one drug lost a third of its value this week for telling the market why its big trial failed.

Immutep (ASX: IMM) makes efti, which is meant to wake up the immune system so it attacks tumours. Biotechs like this earn nothing for years. They raise money and run trials, and the share price lives or dies on what the patients do.

In March Immutep stopped its Phase 3 trial in lung cancer. Half the patients got chemo and Keytruda and the other half got chemo and Keytruda plus efti.

Chemo and Keytruda is the standard treatment for that cancer, and the patients who got efti on top finished about level with the other half.

The stock lost about 90% of its value in one day.

Friday last week the company said it thinks it knows why. The drug in the failed trial was brewed in a 2,000 litre tank. Every earlier trial that worked used a 200 litre tank, and the bigger batch came out with a slightly different sugar coating on the protein.

So Immutep has ordered a fresh 200 litre batch and plans new trials in head and neck cancer and sarcoma, starting in the second half of 2027.

Holders sold anyway. IMM fell from 5.7c to 3.8c on nearly $6 million of turnover, because a reason for the failure is two years and a lot of money away from a result.

Where the Money Went This Week

If it feels like nobody is trading the small end lately, you have company. This week we pulled the turnover for every one of the ~1,800 companies on the ASX to find out how much money has left our end of the market.

The whole market did $56 billion of trade this week. A month ago it did $46 billion and this time last year it did $53 billion, so on the face of it the market is busier than it was.

Friday alone did $22 billion, that’s because the third Friday of September is when S&P rebalances its indices and the futures expire, so every index fund in the country has to trade at the close.

Take Friday out and the big end did $34 billion against $29 billion a year ago. The ASX 200 is down 3.6% since August, so most of the extra was people selling.

The ~1,000 companies under $100 million in market cap traded $179 million for the week. The same week a year ago they traded $390 million, and back then the gold and copper fever had punters buying anything with a drill rig in the photo.

Punters are still trading, they have just moved up the register. Winners like MI6 graduated out of the small end and took their turnover with them, and the investors still down here have stopped buying on a drill photo.

They want a real asset and a management team with a track record before they part with their money. These are the type of opportunities we chase as small-cap investors.

What to Watch this Week

AI1 joins the All Ords on Monday, and the quarter ends on Wednesday, so every junior on the ASX is counting its cash for the September quarterly.

The drones hitting Saudi pipelines keep oil above US$100, and the ones KTK builds start shipping again this month with a new Israeli customer on the books.

Copper sits near its record with the Chinese back from holiday on 8 October, FMR drills in the coming weeks as our copper junior search continues.

Gold is at US$4,392 and ELK’s assays land late October. Until then Keys has seven more holes to drill and a picnic to make up for.

Most importantly, Freo’s in the AFL grand final next Saturday, which is a sentence we've waited a long time to write. It's wharfie time. We hope. And we can’t vouch for the quality of next Sunday’s piece if they get up.

Till next week.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consult your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst Equities Club Pty Ltd (”Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 625,000 ELK shares, 900,000 AI1 performance rights, 4,500,000 shares in EVG, shares 2,083,333 MRD Performance rights and 303,030 shares at the time of publishing this article. Equities Club has been engaged by ELK, AI1, EVG, and MRD at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services Licence (AFSL) No 519872.

Grass Patch is a clay deposit 25km north of Esperance in WA. It holds heavy rare earths, light rare earths, gallium and the largest scandium resource on the planet (China would prefer the rest of us went without every one of them).

This morning MRD pulled 91.8% of the scandium out of the clay, up from 80% in August, using half the chemicals. Every rare earth number went up as well, and the only metal that went backwards was gallium.

We knew in March that a resource is only worth something if the metal comes out of the clay at a price worth paying, and back then the first metallurgical test was still two months away.

Then Chris Larder turned up. He brought with him a leach process he'd spent more than a decade building, named Selectro. He then took the chief technology officer job and handed MRD the recipe.

A leach is the chemical bath that pulls metal out of crushed rock, and for clay like this the whole industry uses hydrochloric acid.

In August, Selectro went head to head with the traditional acid on the same Grass Patch sample. We wrote it up here and said the process might end up worth more to MRD than the ground it sits on.

After today we're more convinced of it. Three tests in, the recoveries have gone up every time, and the bulk sample that proves it at scale is next on the list.

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Half the Dose

Larder cut the reagent dose in half for the third and final test of the program, which MRD released today. The heavy rare earths averaged 84%, which beats the best single heavy rare earth result from August, 83.1% on terbium, and the lights came in at 77%.

The reagent is the chemical in the bath and one of the biggest running costs in a leach circuit. Selectro already runs it in a closed loop, so the same chemicals go round and round like the bags at an airport.

Now it needs half as much to begin with, and Larder says he hasn’t found the bottom of the dose.

“The results make it clear that tuning delivered material improvement, with scandium recovery increasing from 80% to 91.8% while the reagent dose was halved. Being able to manage the process to get outcomes like that is genuinely exciting.”
- Chris Larder, chief technology officer, Mount Ridley Mines

MRD trades at a $67 million valuation, the share price is up 75% from when we told readers we had added it to our portfolio. It has since claimed the world's biggest scandium resource and patented the Selectro process to pull it out.

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Three Tests, One Bucket

Every test in this program came out of one bucket. A lab ground 16.8kg of Grass Patch drill core into one uniform composite. Each test ran on a 90 gram scoop of it, so every run started from the same dirt.

The acid went first. Selectro then went three times, and Larder fine-tuned the recipe between each run.

Scandium recovered 27.6% with the acid. Selectro knocked it out the park with 62.1%, 80% and then finally 91.8%.

Dysprosium is the heavy rare earth inside the magnets in EVs and defence systems, and it fetches the highest sales price. It doubled from 39.4% under acid to 85% with Selectro.

Neodymium, the light rare earth that does the volume in the magnet trade, went 30.2% under acid, then 55.2%, 75.2% and 81.7%.

Test 3 was the reagent test. Larder halved the dose and got the best numbers of the program, on raw feed straight out of the ground, before any concentration step and before anyone had tried to optimise the recipe.

The announcement says MRD is still to find the lower limit of reagent concentration, so the next run pushes the dose down again.

Selectro also hit its top recoveries inside four hours in a test that ran for 24. It runs at low temperature and normal air pressure, which Larder ties to an operating cost profile he calls “potentially very attractive”.

Gallium and the Dose

Gallium went the other way. Test 3 pulled 41.5% of it, down from 55.8% in August. The same cut in reagent that lifted scandium and the rare earths is what took gallium down, so each metal has its own sweet spot on the dose.

MRD's next job is finding the dose that suits all of them, and it expects reagent tuning and a richer feed from beneficiation to claw the gallium back. Even at 41.5%, Selectro is miles ahead of the traditional acid, which recovered 0% of the gallium.

What Comes Next

The lab is floating Grass Patch material right now. Flotation runs crushed ore through a frothy tank of water and air, where the minerals you want ride the bubbles to the top and the clay sinks.

Lab work in August found the rare earths sit in phosphate minerals, which float well. Binning most of the clay before the leach hands Selectro a richer feed, and less clay in the tank means less reagent spent on clay.

Then comes the bulk sample, which is the one we’re waiting on. Every test so far has run on a handful. The bulk program runs a much bigger lump of Grass Patch through both the half-dose recipe from Test 3 and the floated concentrate, and shows whether the lab numbers survive being scaled up.

The Test 3 numbers also go into updated process economics and scoping assumptions, feeding the demonstration plant costings we wrote about last month.

Last on the list is running Selectro over another company’s ore. If the process works on third-party feed, MRD gets paid on a deposit someone else digs, and the number of clay rare earth projects looking for a cheaper leach runs well past Grass Patch.

“We haven’t yet established where the reagent concentration breaks for the process, providing further opportunity to optimise the reagent dose and recovery of targeted individual minerals.”
- Allister Caird, managing director, Mount Ridley Mines

Three tests ago the acid was leaving 72% of the scandium behind. Selectro is now leaving 8%, on half the chemicals, and Larder is yet to find the floor of the dose.

The bulk sample decides whether these numbers hold at scale, and we're backing them to hold. At 4.2c and a $67 million valuation, we think you're paying for the dirt and getting the process thrown in.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (”Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club has 2,083,333 performance rights and 303,030 shares in MRD. Equities Club has been engaged by MRD at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services License (AFSL) No 519872.

It’s sitting in a tray of drill core from 2014, in the last metre of the standout hole from the old drilling. The specks and threads of gold in the quartz are big enough to pick out without a lens.

The core has been on a shelf in the shed at Friday since the day it came out of the ground. Friday is the built and permitted underground mine Elk bought this year. It came with the shed full of trays of old rock with the original sample numbers still in them.

Elk’s geologists have started working through those trays and assessing the core again with fresh eyes. They laid this hole out in order and on the final tray one of them saw gold in the metre before the hole stopped.

We’ve written about this hole twice, when we backed ELK at the float and again when the rig started turning. It ran 112 metres at 5.22 grams of gold a tonne and got better the deeper it went until the last three-quarters of a metre came back at 133 grams.

Then the crew reached 450 feet (the depth on their drilling plan) and pulled the rods out. That’s as far as the story went for the next 12 years.

ELK trades at 16.5c, a market cap of roughly $15 million, having just raised $10 million in the IPO. For a company with these grades, sitting on visible gold the last crew walked straight past, we think the market wakes to ELK quickly.

Two Tablespoons

The gold Elk found sits inside the 133 gram interval, and the people logging the core in 2014 missed it. Missing it changed the number the lab sent back because of the way a lab works out a grade.

A lab never tests the whole metre. It crushes the rock to powder, scoops out about two tablespoons, runs that through a fire assay and uses the result as the grade for the metre.

When the gold is scattered evenly through the rock, two tablespoons tells you pretty well what’s in the metre.

The gold at Friday is coarse. Elk calls it nuggety in the fine print and nuggety gold bunches into specks that can carry a lot of the gold in a metre.

If the speck lands in the two tablespoons the number can come back huge. If it lands in the bag left behind, the number can come back small.

The old owners knew this and had a rule to send any sample with visible gold back for a much bigger test.

The rule never kicked in back in 2014 because the geologist logging the metre wrote down the core but missed the gold.

When Elk went through the original assay certificates it found only the standard two-tablespoon result for the metre and for the whole 113 metres of the 2014 hole.

Elk has now sawn the remaining core again along the full 113 metres and sent it off for photon assay in the same sample lengths the 2014 crew used.

Photon assay fires X-rays through a 500 gram jar of rock and reads the gold in the whole jar. Ten times the rock means the speck has nowhere to hide. Results are due late October or early November.

The number could come back higher or lower than 2014. The new sample comes from a different quarter of the same core. Two slices of one metre can grade a long way apart in nuggety ground and Elk says so in the announcement. What it will be is the first measure of those 113 metres taken with a test built for the gold in them.

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Eight Metres Away

The drill rig spinning right now is a stone’s throw from all of this.

Elk started its first hole eight metres from where the 2014 crew started theirs and the two run side by side down the hill. The gold in the photo sits 137 metres down. The new hole passes within 10 metres of it.

Then it keeps going another 200 metres into fresh ground past where the old crew pulled their rods.

As CEO Edward Keys put it, the gold sits “immediately adjacent to where we are drilling today.”

Elk has put the drill on day and night shift to get there quicker and the assays from the new hole are due in the same late October to early November window as the re-test.

So two sets of numbers land on the same patch of hillside within weeks of each other. One tells us what the old hole graded when it’s measured properly. The other tells us what’s underneath it.

Why We’re Backing Elk Range Mining

You can find our full write-up on why we’re backing ELK here.

Two Numbers in November

Elk gets two results back in November and both can move the stock.

The old numbers for this hole came from a test that struggles with coarse gold. A two-tablespoon scoop can miss the specks altogether, which makes the result a lot more hit-and-miss in nuggety rock. Elk is redoing the whole hole with ten times the rock.

There are 386 old holes at Friday and the crews graded nearly all of them the same way, so whatever comes back on this hole tells us something about every tray in the shed.

The new hole is the bigger swing. Elk is drilling straight past where the 2014 crew stopped and another 200 metres into ground nobody has tested. If the gold keeps going, Friday is a much bigger mine than the one the last owner built, and the mill and the decline are already sitting on top of it.

High-grade holes get paid for quickly in this gold market, and Friday has a history of them.

We’ve held since 20 cents and we’ll be holding in November.

The last crew went home at 450 feet. This one is drilling past it through the night shift.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (“Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 625,000 ELK shares at the time of publishing this article. Equities Club has been engaged by ELK at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services License (AFSL) No 519872.

It’s the NFL's biggest regular season crowd in nearly 17 years, and sent us digging for NFL deals that would make an ASX investor put the beer down.

We found one, and it’s the most anyone has ever paid for an NFL team.

Paul Allen co-founded Microsoft with Bill Gates in 1975, left with his shares after a cancer diagnosis in 1983, and spent the next 35 years buying the things he loved: Jimi Hendrix’s guitars, yachts, old computers, and in 1997, the Seattle Seahawks.

He paid roughly US$194 million for the team.

Allen died in 2018 and his sister Jody ran the team for the next eight years. She won a Super Bowl with the team in February and put it on the market two weeks later.

Silicon Valley investor Vinod Khosla paid US$9.612 billion for it, nearly 50 times what Allen paid. The best part, Allen’s will said every dollar of the sale had to go to charity. Good man.

No 50-baggers on the ASX this week, but we did see funds raised for a small-cap thats now six-bagged since July, a board reshuffle, and one metal that keeps drawing our attention as we hunt for a small-cap with it.

This is what caught our eye in our world this week:

• AI1 hands the wheel to a chip industry veteran

• Copper hits a record while the mines go backwards

• EVG finds the mineral the old miners walked past

• Another drone contract signed for KTK

• Trump puts US$5,000 a head on a rank outsider

• The broker’s 1c pick is a six-bagger

• Saudi oil is running out of exits

• Will the AI trade get spooked tomorrow?

AI1 Hands the Wheel to Chip Industry Veteran

Adisyn (ASX: AI1) moved chairman Kevin Crofton into the top job on Monday after founder Arye Kohavi stepped back from managing director to the board.

The company’s reasoning is sound. It wants a chief executive who has walked into TSMC or Intel and sold them something before, and Crofton will run it until it finds one.

A founder stepping aside will look like a warning sign to some. Our read is Kohavi finished the job he came to do, and selling the graphene into a chip factory is a different job for a different person.

Plus Crofton has spent 30 years selling to the people he’s about to pitch. The fab bosses at TSMC and Intel used to buy their machines from him, and he’s on first-name terms with most of the industry.

Back in April he told us what the big chipmakers say when he asks what graphene grown on a chip below 500°C would be worth to them.

“Many of these companies just say, well, it’s worth more than my company.”

That’s a pretty damn big market.

Graphene is carbon one atom thick, it carries electricity better than the copper wire inside every chip, and Adisyn is the first to grow it at a temperature a chip survives.

Kohavi keeps his board seat and stays at the bench until January 9 to hand the recipe over.

We added AI1 in April at 6.8c. Next Monday it joins the All Ords, the index of the 500 biggest companies on the ASX, and the ASX All Technology index alongside it, which puts a company that grows graphene in a lab in Israel in front of every index fund in the country.

Kohavi grew the graphene, and Crofton’s job now is to sell it.

Copper Hits Record While Mines Go Backwards

The UN put out a paper on Tuesday that says a big data centre takes two to five years to build and connect to the grid. The power lines to feed it take more than ten.

Oracle switched on 850 megawatts of new data centre capacity in the three months to August (its cloud revenue went up 121%), and Microsoft reportedly plans to go from 12 gigawatts of data centres to 38 by 2032.

The wiring inside those sheds and the substations feeding them is copper, and the mines digging it are going backwards. Global mine output fell 1.1% in the first half of the year, and Chile, the biggest producer on earth, fell 6.6%.

Copper set a record four days running and touched US$14,875 a tonne on Thursday, then fell 3% inside the day after Reuters reported the White House had put its copper tariff on ice.

The world keeps its spare copper in exchange warehouses in London and Shanghai, and both are emptying. London’s pile is down 40% since May and Shanghai’s is down 85% since March. With the spare running out, every mine hiccup goes into the copper price.

Part of the run was traders shipping metal into the US ahead of the tariff, and Thursday was some of it coming back out.

The tech giants are building data centres a lot faster than anyone is building power lines or copper mines, and nobody has found a big deposit in 20 years.

We’re bullish copper, and we’re still looking for the right copper junior to add to the portfolio.

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EVG Maps Patch the Old Miners Skipped

Evion Group (ASX: EVG) put out its first field result from Carp this week, and it came off a patch of ground miners in the 60s spent 13 years digging around.

Carp is an old fluorspar mine just over 100km out of Las Vegas. Four shallow pits produced 44,900 tonnes between 1958 and 1971 before cheap Chinese imports shut it.

Fluorspar goes into steelmaking and the acid behind chips and batteries, and the US has barely mined any since 1990, which is now an issue. EVG optioned the mine in May and staked the ground around it.

Last month EVG sent a crew over the ground, and they came back with barite across a patch 200 metres wide, 300 metres from the best of the old pits.

Back in the 60s the mine sold everything to Kaiser Steel, which tipped fluorspar into molten steel to pull the impurities out. Barite is a heavy white mineral that doesn’t go in a furnace, so the miners left the patch alone (if you sold by the tonne to a steel mill, barite was basically dirt).

Every pit they did dig had barite sitting next to the fluorspar, and the South Pit, which produced the most, has the most barite.

Ten rock chips from the patch are at the lab, with results due in the coming weeks, then a drone survey by the end of October to pick the drill targets.

We like the idea and we own the stock. A good surface number has fooled us before, so the drill hole is the one we're waiting on. Every pit at Carp had barite beside the fluorspar, and EVG just found it on ground nobody has touched.

At 1.8 cents EVG is a $16 million company with about $5 million in cash, and most of the rest is the permitted Maniry graphite mine in Madagascar with the German buyer signed last month. Carp is close to free at 1.8 cents.

Fifty years ago the team who mined Carp looked at the patch and saw the wrong mineral. EVG looked and saw the right one sitting next to it.

KTK Gets a New Customer Through the Door

An Israeli drone maker run by former Israeli Air Force people handed KTEK Aerosystems (ASX: KTK) a contract this week to design and build two prototype airframes for its SCOOPER 25.

The SCOOPER 25 is a 25kg electric drone built around a wing that gets it off the ground in a few metres and keeps it in the air for hours without making much noise.

Vestal Technology, the company behind it, is pitching it at special forces and surveillance work.

Small money to start, and small money deals is how KTK’s business has grown over the years. A drone maker hands over a prototype job, and if the airframes fly the way the drawings say, the next conversation is about building them by the hundred.

The first prototype is due in about five months, so the 12 to 18 month question is whether Vestal becomes the next Elbit or UVision for KTK.

Meanwhile the deliveries the war stopped are due to restart this month.

KTK dropped to 17.5c this week, against 20c when it listed in May. With shipments about to move again and a new customer signed, below IPO price is a big opportunity in our eyes.

Trump Puts $5k a Head on Rank Outsider

Donald Trump stood in front of 20,000 people in Texas this week and had them raise their right hands and pledge allegiance to “the greatest president in the history of the United States, that loves us so much he can’t even breathe.”

He then promised every adult American US$5,000 if the Republicans hold both houses of Congress at the midterms in November.

Beats a desperate pollie handing you a democracy sausage, we guess.

There are about 245 million adult Americans so call this new stimulus or bribe (depending on your colours) US$1.2 trillion on top of the US$7 trillion Washington already spends a year.

During the early days of Covid, Washington sent everyone US$1,200 and gold hit a record US$2,070 four months later.

While Trump was promising to borrow, Xi was buying. China’s central bank added 20 tonnes of gold in August, its biggest month since 2023 and the 22nd month in a row.

The US already pays more to borrow than it has in decades with its 30-year bond at 5.3%. Another trillion-dollar promise pushes the bill higher again, and a government borrowing money to hand out to voters is reason #1 people buy gold.

The Fed will likely soon lift rates to head off inflation. Higher rates push gold down for a few weeks but a trillion dollars sprayed into the economy pushes prices up for years (and gold with it).

Mind you, the bookies have a Republican sweep as a rank outsider, so the US$5,000 may never get further than Trump on stage.

Gold sat around US$4,370 this week. The record is US$5,589 in January and the midterms are 51 days away.

Whoever wins, we’ll hang onto our gold stocks.

VR8 Doubles Again

In July one of the brokers in our Broker Black Book handed us Vanadium Resources (ASX: VR8) at 1c. We called it the most left-field pick of the dozen and said we love left-field.

Last Sunday we wrote it up after it ran 80% in a day on the site for its vanadium plant in South Africa. This week it doubled again, 2.7c to 5.9c, a six-bagger in two months.

It came out of a halt on Friday with A$1 million raised at 3.2c to fund a US roadshow and the scoping study on the plant, due by the end of the month. It closed the day at 5.9c, so whoever put money into the placement is up 84% before their shares are even issued.

Another Door Shut on Gulf Oil

Before the Iran war a fifth of the world’s oil left the Gulf through the Strait of Hormuz. It closed in March, so Saudi Arabia has been pumping about five million barrels a day across the country by pipeline to the Red Sea and shipping it out the bottom.

On Thursday, drones launched from Iraq hit the pipeline and the Saudis shut it. Then on Friday the Houthis took Perim Island, which sits right in the mouth of the Red Sea and has shipping lanes about 5km from shore.

With the pipeline down, Saudi oil has no way west. Once it’s pumping again, the Houthis hold the bottom exit, so the tankers go the long way north through Egypt and Asia waits weeks longer for its oil.

Most of the petrol Australia uses is refined in Singapore, Korea and Japan from Gulf crude, so the longer route has a direct effect on our servos.

Brent touched US$110 on Friday and closed near US$105. Nine ships got through Hormuz on Thursday just gone, compared to 130 a day before the war.

Tomorrow, the Gulf states sit down with Iran in Oman to talk about Hormuz, the first time the two sides have been in a room since the strait shut. A lot is riding on how the chat goes.

We said in March we weren’t going to pretend we know how it all ends, and we still won’t. What we do know is every drill rig and mine site we cover runs on diesel, and oil at US$105 flows into the inflation numbers that have most expecting the RBA to lift rates in November. Higher rates make every capital raise harder.

Fill the car up ASAP.

As We Hit Send: AI Boss Says Slow Down

Sometimes markets go looking for a reason to get spooked, and the head of Anthropic (the company behind AI behemoth Claude) may have handed them one early this morning.

As we were about to hit send we were sent a blog post from Dario Amodei arguing that AI is moving too fast and the AI labs need outside inspectors sitting inside them to slow it down.

After publishing, both Elon Musk and OpenAI chief Sam Altman (behind ChatGPT) agreed with him publicly, signalling an intent to join him in slowing the rate of development.

The AI trade has done a lot of heavy lifting on Wall Street for the best part of three years, to the point plenty have been calling it a bubble, and a leading figure giving reason for pause could shake some confidence.

Earlier this year about 1,200 OpenAI agents broke out of the test they were meant to stay in and started attacking websites well outside the job they’d been given. Amodei’s worry is a smarter swarm hijacks the internet inside a year.

Altman also ruled out taking OpenAI public this year, telling Fortune it would be “ill-advised” while the safety questions are open. Most had it down as the biggest IPO in history.

Slowing the models changes none of the growing need for data centres and the commodities (like the copper we wrote about above) to feed the buildout, but there’ll be plenty of analysts stewing over Amodei’s blog post today.

We’ll find out Monday how many people read past the headline.

The Week Ahead

You’re probably sick of reading about Hormuz. It’s been shut since March and most people have tuned out beyond an annoyed glance as they pass the petrol station.

But a fifth of the world’s oil used to come through it, and the Oman meeting tomorrow is the first real chance in six months of getting some of it moving again. Iran have said it stays shut until Washington meets its terms, so our guess is Monday changes little and oil stays above US$100 for a while yet.

Later in the week, the Fed decides on rates Thursday morning our time. Most of the market expects a hike, so the only surprise on offer is a hold, and we’ve hoped for one at every meeting since March (look how that’s gone).

We’re still hunting for a copper junior, and with copper at US$14,000 a tonne there are plenty to look at. We’re after the one nobody has noticed yet, and we’ll keep looking until we find it.

MRD’s Selectro results are due any day and POW’s crew heads out to Malbec in the next week or two. We’ll be checking every morning waiting for the updates.

Till next week.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consult your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst Equities Club Pty Ltd (”Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 900,000 AI1 performannce rights, 4,500,000 shares in EVG, 500,000 KTK shares, 625,000 POW shares, shares 2,083,333 MRD performance rights at the time of publishing this article. Equities Club has been engaged by POW, AI1, EVG, KTK and MRD at the time of writing.

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“Many of these companies just say, well, it’s worth more than my company.”

At the time Adisyn's lab in Israel had grown graphene below 450°C on a square of copper about 1cm across. Since then it has got the temperature under 300°C and covered a full 200mm industrial wafer.

On Monday the company told the ASX that Crofton has stepped up to executive chairman to run the company while the board hires a chief executive from the chip industry who has commercialised technology before.

The move clearly tells you the milestone the board is chasing now, a chipmaker's name on a contract.

Arye Kohavi, who founded the lab and has been running Adisyn as managing director since February, steps back to non-executive director and stays on running the lab until January 9 next year.

Adisyn spent the past year proving the recipe works and now is prepping the ground for getting it inside a chip factory and being paid for it.

For anyone new to Adisyn, every chip in your phone, your car, data centres powering AI, your PS5 (to name but a few) is wired with copper. That copper gets thinner with every new generation of chip, and in the newest chips it's now so thin it runs hot and leaks power.

Across a data centre full of AI chips, that leak adds up to a power bill big enough to run a small city.

Graphene is a sheet of carbon one atom thick. It carries electricity better than copper and keeps working at sizes where copper fails, which the chipmakers have known for a decade.

The problem was that graphene grows at around 1,000°C and anything past 450°C wrecks the chip. Adisyn’s patented recipe grows it below 300°C.

The industry sold about US$800 billion of chips last year and will pass a trillion dollars this year. Adisyn’s plan is to license the recipe to chip factories and collect a fee on every wafer they run it on.

The world makes more than 92 million 200mm wafers a year, so a small slice of that is a lot of fees for a company woth $150 million at 14c a share.

Why Change the Driver Now

Kohavi is a serial founder. He built Watergen, the Israeli company that pulls drinking water out of the air, and sold it. Then he started 2D Generation in 2020 and brought it onto the ASX when Adisyn bought it in January 2025, and this year his team went from a centimetre of copper to a dinner-plate wafer inside four months.

The board now wants someone who can walk into TSMC or Intel with that wafer and come out with a signed contract, and has done it before.

Google’s founders did the same thing in 2001 when they hired Eric Schmidt to run the company they’d built, and that one turned out all right.

Kohavi keeps his board seat and stays at the lab until January 9 next year, so the new chief executive learns the recipe from the person who built it.

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Kevin Crofton, and Why We’re Backing Him

Crofton spent 30 years selling to the chipmakers. He started at Lam Research and KLA, which are two of the biggest chip equipment companies on the planet, and ran SPTS Technologies for 14 years.

SPTS is a British company he bought out with his management team. It makes the machines that put layers onto wafers and etch them off again, and Adisyn’s graphene grows in the same kind of machine. He sold it to Orbotech for US$370 million in 2014 and KLA later bought Orbotech for US$3.4 billion.

After that he ran Comet AG in Switzerland and chaired SEMI, the chip equipment industry’s own body.

In April he told us those companies had chased graphene themselves.

“Companies like Samsung and Intel and TSMC on the top level, and companies that I used to work for or used to run, we’ve spent hundreds of millions of US dollars trying to get graphene into a device. To our chagrin, we were never able to do that.”

The companies he ran were among those that spent hundreds of millions on graphene and never got it into a chip. He now runs the one which did.

The Market, and What Comes Next for Adisyn

Blackwell is Nvidia's current AI chip, the one data centres buy to train and run models like ChatGPT. The chips ship in racks of 72 and one rack sells for around US$3 million.

Nvidia has been shipping about a thousand of them a week, and earlier this year Jensen Huang, the CEO of Nvidia, told investors he could see US$1 trillion of orders for Blackwell and its successor Rubin through 2027.

Deloitte counts fewer than 20 million AI chips among the 1.05 trillion chips sold last year, and expects them to bring in close to US$500 billion this year.

Adisyn has proved the recipe on 200mm wafers, the size behind the chips in cars and phones. AI chips come off 300mm wafers, so the lab is now chasing the 300mm result to get in front of the top-end lines at TSMC and Samsung.

Since June the company has been in talks with the big chipmakers and their factories about testing the graphene inside their own lines, and Monday’s announcement described the engagement as growing.

The chipmakers do their own testing before anything goes near a production line, and talks move at their pace.

The company’s target is a binding deal with a global chipmaker worth more than $1 million to Adisyn, and a chipmaker or equipment giant could also buy the process outright.

The final 100 million performance rights owed to the people who built the recipe are tied to the deal and expire in January 2028.

Adisyn also holds an exclusive worldwide licence on a second program with Tel Aviv University, where the same graphene makes drones harder to see on radar. It sits behind the chip work in the queue.

Our View on AI1

When Crofton told us in April a chip executive had called this worth more than his company, we wrote it down and waited to see what the lab would do.

In June it grew the graphene below 300°C and UNSW confirmed it. In August it covered a full wafer and the Hebrew University confirmed it. Twice this year the company told us what it would do and then did it, which is rarer in small caps than it should be.

Our view is the science risk is behind this company and the time risk is in front of it. Chipmakers test slowly and Adisyn is pre-revenue, so the next 12 months are about the 300mm wafer and a name on a contract.

Kohavi built the recipe and stays to hand it over, and the person selling it needs to have sold into a fab before. Crofton has, for 30 years, and the CEO they’re hiring will have too.

At a market value that wouldn't fit out one corner of a TSMC plant, we think the odds are on our side. Regal, one of Australia's biggest fund managers, Meitav, Israel's biggest investment house, and Senvest, a US tech fund, are already on the register.

Adisyn is an Equities Club portfolio company and we wrote it up in April at 6.8c. It has roughly doubled since and we’re backing Kevin and AI1 into the next phase.

In April the chip executives told Crofton a recipe like this was worth more than their companies. Five months on, he’s the one taking it to them.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (”Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 900,000 performance rights at the time of publishing this article. Equities Club has been engaged by AI1 at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services License (AFSL) No 519872.

Tim Cook, or Tim Apple as Donald Trump once called him, stepped back this week 15 years after taking over from near-deity Steve Jobs.

Apple’s share price rose a tidy 2,258% while he was in charge.

Apple is worth around US$4.8 trillion today, more than double every one of the 2,000-odd companies on the ASX added together.

Taking over is John Ternus, a mechanical engineer who walked into Apple in 2001, before the first iPod had shipped and six years before anyone had seen an iPhone.

A long way down the food chain, at our end of the market, a Namibian copper junior is up more than 1,000% since listing in May off the back of two drill holes.

A gold explorer reopened a Victorian tunnel sealed since 1906, two names off our broker list ran hard in the same week, and a lithium producer went shopping 4,000 metres up in the Andes.

Here’s what caught our eye this week:

• Kaoko Metals up 233% on visible copper in its first two holes in Namibia

• BHL reopens a Mt Egerton tunnel sealed since 1906

• MRD raises to take Selectro out of the lab, and we topped up

• Fortuna presents at Africa Down Under

• VR8 rips almost 80% and delivers the first big result off our broker list

• Ceretas cracks $1, the second name off that same list to run

• 10X puts a crew back on a copper line nobody has drilled in 50 years

• Liontown heads to Argentina and buys into lithium brine

Let’s get to it.

Copper Finally Pays Someone

We have been banging on about copper for months, and this week a junior with two drill holes and no assays back put on 233%.

Kaoko Metals (ASX: KAO) listed in early May this year at 20 cents after a $6.5 million raise, hunting copper in Namibia.

On Wednesday it reported the first two diamond holes ever drilled at Chalkos, its copper-silver project in the Kunene region of northern Namibia.

Both holes hit copper from shallow depths, 60 metres of it in one and 51 metres in the other, and the copper runs through several stacked layers of rock.

The assays are still weeks away, so how rich it is stays a waiting game for now, but the copper is green in the core and you can see it without a lab.

Then it rocketed. The shares more than tripled intraday to a record $2.28, closed Wednesday at $1.80 for a 145% day, lifted again on Thursday and finished the week at $2.50 in a trading halt for a capital raise.

A 233% gain in five days on a company that does not have a single assay back yet.

Results like that are the whole reason we love life at the small end of town. The company floated at 20 cents in May, the rig started turning in August, and by the first week of September the shares were $2.50.

Copper sits around US$6.60 a pound after setting an all-time high in early August.

We've been hunting a small-cap copper company to add to our portfolio, and weeks like this one are why.

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BHL Walks into a Century-Old Tunnel

The miners at Mt Egerton once dug a side tunnel off their main one and ran straight into a crack in the ground with gold-bearing quartz sitting along it. They left it alone.

At 1906 gold prices there was not enough gold in it to bother with, so they kept going, and when the water beat the pumps that year everyone went home and the tunnel sat sealed in Victoria for the next 120 years.

Black Horse Mining (ASX: BHL) reopened it this week. Sampling the wall where that quartz sits returned 0.60 metres at 10.92 grams a tonne gold and 0.7 metres at 10.67 grams, on a structure the old boys walked past.

The crew that walked past it in 1906 was digging gold worth about US$20 an ounce. On Friday it closed near US$4,430.

Historical drilling has already hit the same structure 14 metres below the tunnel, and the two results now line up along one continuous body of gold. BHL has now measured it underground with a tape measure, and the crew found the old plans were wrong. They had the tunnel joining a shaft, and it never did.

All of that feeds the rig mobilising late September, around 10 holes for 4,000 metres, chasing this structure down and along strike.

Mt Egerton produced 1.29 million ounces at roughly 12 grams before it closed, and more than 90% of the drilling since has stopped above 150 metres. Everything below that is still sitting there untouched.

MRD Puts $2 Million Behind Selectro

Most critical minerals companies on the ASX share a problem. The metal is in the ground, measured and signed off, and the acid used to get it out leaves most of it behind.

Scandium and gallium in particular sit behind a processing route the industry has never really improved.

Our portfolio company Mount Ridley Mines (ASX: MRD) may have a fix.

Selectro is the leach process MRD owns outright. A leach is the chemical bath that pulls metal out of crushed rock. Last month Nagrom, an independent Perth lab, ran raw drill samples from Grass Patch, MRD's project near Esperance in WA, through Selectro and through hydrochloric acid side by side.

The acid returned 27% of the scandium and none of the gallium. Selectro pulled out 80% of the scandium and 56% of the gallium, and that was before anyone had tuned the process for that ore.

That result is behind the recent run up in the share price, and this week MRD went back to the market for $2 million at 3.3 cents on the back of it.

The raise came in oversubscribed and the directors put another $100,000 of their own money in on the same terms. We like the company enough that we topped up our own holdings.

The cash pays for a flotation program, where crushed ore goes into a frothy tank and the metal-bearing minerals float off the waste, to lift the feed grade before leaching, then a much bigger Selectro run to show the numbers hold at scale.

Get that far and the next two conversations are federal funding and other companies asking whether their own ore can go through the same process.

Fortuna at Africa Down Under

We were at Africa Down Under in Perth this week and caught Fortuna Metals (ASX: FUN) chief executive Tom Langley presenting. Malawi's minister of mines was up not long before him, selling the room on Malawi as a place to build mines.

Langley ran through the numbers at FUN’s Mkanda project: 298 million tonnes at 0.87% rutile in the maiden resource, with the rail line 11 kilometres away. Core drilling starts in October.

Rutile is the highest-grade natural feedstock in the titanium chain, so it needs less processing before it turns into paint pigment, welding rods, aircraft parts or the joints inside humanoid robots. Global supply has been shrinking for years.

He also spent time on what the project has meant for the area around it, which not every executive bothers with.

Sovereign, Lindian, Lotus and Globe Metals are all working ground in Malawi, a country that barely registered on the ASX five years ago.

The Japanese government has also backed Malawi, putting US$7 billion behind the Nacala corridor, the rail and port line FUN’s ore would ride out on.

The Broker List Pays Out

In July we published what a dozen brokers were backing for the back half of 2026, all of it given to us on the condition we never named them.

One of those names was Vanadium Resources (ASX: VR8).

Less than two months later, VR8 has delivered.

VR8 owns 86.49% of Steelpoortdrift in South Africa’s Bushveld complex, a vanadium project with a mining licence and a finished feasibility study. Vanadium hardens steel and sits inside flow batteries, the big units built to store grid power.

Washington handed Largo a US$125 million defence contract this year at close to US$20 a pound, against a market price near US$5.

The shares ripped almost 80% on Thursday, after VR8 secured first right of refusal until 31 July 2027 over part of the Highveld Industrial Park in Mpumalanga, the site it wants for its V-Iron plant. First right of refusal means VR8 gets the first shot at the ground before anyone else can buy it.

Power, water, gas and rail are already there, and the site once shipped vanadium slag to the US and Europe using a process close to what VR8 is proposing. The scoping study lands by 30 September.

There are another 22 names sitting in that article. We have gone back through it this week and would suggest you do the same.

Make That Two off the List

Ceretas (ASX: CTS), a brain tech company that’s flown under the radar of many, also came off that same July list (Here’s the link once more if you didn’t click it above)

CTS listed at 25 cents in July having raised $8 million for the IPO. This week it cracked $1, touching $1.08.

A patient wears the Ceretas headset and it fires low-intensity ultrasound through the skull at the brain circuits Alzheimer's pulls apart. The whole treatment happens through the headset.

The University of Queensland spent more than a decade getting it there, and a first trial in 12 patients in 2024 found it safe and well tolerated with early signs it helped.

Proving that properly needs hospitals, and every hospital has to clear its own ethics committee before it can enrol a single patient.

This week St Vincent’s Hospital Sydney signed off on the Phase 2 trial and opened two more Australian sites, while the lead site has finished its setup, so first patients are only weeks away.

The trial puts 66 Alzheimer’s patients through six treatments over 12 weeks to see whether the agitation and distress that wear families out long before memory loss does can be settled down.

From 25 cents in late July to $1 in early September. A good six weeks for anyone who was in early.

10X Walks a 50-Year-Old Copper Line

In the early 1970s two crews spent two years walking hills three hours west of Sydney, in lines 240 metres apart, stopping every 30 metres to scoop a bag of dirt for the lab.

Copper and zinc lit up along a 2.4 kilometre line with the metal still running at both ends when they packed up and went home. Nobody thought to test those samples for gold, and nobody has put a drill in the ground since.

Our portfolio company Exultant Mining (ASX: 10X) put a field crew back on that line this week.

The ground is called Watsons, one corner of Black Hammer, 390 square kilometres 10X holds in the belt that hosts Cadia, Newmont’s mine near Orange with 50 million ounces of gold in it, and Evolution’s Cowal further west.

Watsons is the first of three targets pulled from 12 prospects across Black Hammer, with Porters Retreat and Vermithor behind it, and assays from 10X’s other NSW project landing in the middle of the work. Our full write-up is here.

Take the $3.5 million of cash out of the $5.5 million the market says 10X is worth, and the ground is being valued at around $2 million. Three untested targets in Cadia’s belt for that money is why we hold it.

Liontown Buys into Argentine Brine

There are two ways to get lithium out of the ground, and Liontown Resources (ASX: LTR) has only ever done one of them. Kathleen Valley in WA is a mine in the way everyone pictures a mine, trucks and a crusher turning ore into concentrate.

This week it signed a binding farm-in with NEXT Lithium over Centenario, a salt flat in Salta Province, Argentina, sitting around 4,000 metres up in the Andes. A farm-in means Liontown earns its stake by paying for the work.

The lithium there is dissolved in salty groundwater, and the work is pumping it into ponds and letting the sun take the water off.

The deal is US$5 million cash and US$10 million in shares up front, then US$40 million of spending over four years to take the whole thing.

Brine is about half the world’s lithium supply and a different cost structure to hard-rock mining.

Lithium carbonate was assessed around US$18,160 a tonne in early August, more than double where it sat through 2025, and spodumene is back near US$2,000 a tonne. At these prices there are healthy margins for lithium producers.

We’ve been big on Argentina ever since our geologist mate wrote a great piece for us on the country last year. Check him out if you haven't already.

Watching a producer of Liontown's size spend money in Argentina is another vote of confidence. It's the same reason we backed Powerhaus Uranium (ASX: POW), which listed in late August at 20 cents and starts drilling for uranium in Chubut, down in Argentina's Patagonia, next month.

Liontown joins BHP, Rio Tinto, Glencore and a long list of others already spending in Argentina.

The Week Ahead

Kaoko goes into Monday in a trading halt with its first assays still weeks off at the lab. There are a handful of other juniors drilling copper targets right now with nothing priced in for a hit, and we are still hunting one for the portfolio.

In our portfolio, BHL’s rig lands at Mt Egerton late in the month, POW starts drilling in Chubut in October, FUN’s core drilling at Mkanda starts the same month and MRD’s flotation work kicks off on the back of this week’s raise.

10X also has assays from its other NSW project due while the crew is still walking Watsons.

Oil closed the week just under US$95 a barrel, up 6.6%, with tankers through the Strait of Hormuz down to a trickle. The energy names stay in play for as long as that lasts.

The defence stocks that carried 2025 have drifted sideways for months, and it will take a contract announcement to get them moving. Tech went quiet too.

Money is still pouring into AI and data centres, and we keep an eye on which small caps sit close to it.

And a happy Father's Day to the dads reading this between the socks and the homemade cards. Till next week.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consult your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst Equities Club Pty Ltd (”Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 1,554,000 FUN shares, 200,000 10X shares, 625,000 POW shares, 187,500 BHL shares 2,083,333 MRD performance rights at the time of publishing this article. Equities Club has been engaged by FUN, 10X, POW, BHL and MRD at the time of writing.

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They did that for two years. The lab tested for copper, lead, zinc and silver, and copper and zinc lit up along a 2.4 kilometre line with the metal still running at both ends when the crews packed up.

Nobody tested for gold. And two kilometres along the same line of rocks sit a pair of old gold mines that were worked by hand in the early 1900s.

Fifty years later, that whole strip is still waiting for its first drill hole.

Today Exultant Mining (ASX: 10X) put a field crew back on it. The company calls the target Watsons, and it sits inside Black Hammer, 10X’s 390 square kilometre project in the Macquarie Arc.

The Macquarie Arc is a strip of old volcanic country running up through the middle of NSW. It's where Newmont dug Cadia, one of the biggest gold-copper mines on the planet at around 50 million ounces of gold and 9.5 million tonnes of copper, and where Evolution Mining pulls gold out of Cowal.

At 14 cents a share, 10X is a $5.5 million company with $3.5 million in the bank from the June quarterly, which leaves about a $2 million value on the 390 square kilometres.

Watsons is the first of three targets 10X picked from a list of 12.

We've been on the register since earlier this year. 10X's other NSW project is Peak View, near Cooma down in the south of the state, and its maiden drilling there at a prospect called Balerion got six holes in during August.

While they wait on the three assays still at the lab, the crew has driven north to Black Hammer, the project we've been wanting to see them get into since day one.

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10X, For Anyone Who Missed February

10X listed in December 2025 and we got in a couple months later. It's run out of Perth by executive chairman Brett Grosvenor, an engineer who has spent 25 years building big mining and power projects and getting them switched on.

The company has a tight capital structure at 37 million shares on issue, which means the price doesn’t need much volume to shift on the back of news.

Peak View is the high-grade one, with copper, lead, zinc, silver and gold packed into a compact zone of old volcanic rock and historical drilling that hit 22% zinc and 119 g/t silver in the same hole. Black Hammer is the big one by area. There's gold ground in WA as well.

The Balerion core had sulphides in it, which is the first thing you want to see, and the assays for holes four, five and six are due in the coming weeks. That's when we find out whether the old drilling grades hold up.

Black Hammer Time

The reason anyone cares about the hills around Oberon is what came out of them a century ago. Miners dug small workings across the ground in the early 1900s, and the records from the Tuglow Copper Mines show grades up to 14% copper, 26.4 g/t gold, 283 g/t silver and 13.1% zinc.

They dug what they could reach by hand and stopped. In the 100 years since, no one has put a drill hole under the workings to see what was left behind.

10X went through every report and map on the tenements and came up with 12 spots worth a look. It ranked them on how big each could be, and how cheaply it can be tested from surface before anyone pays for a rig.

Three came out on top.

Watsons

Watsons is where the 1972 crews found the copper and zinc in the dirt. The hottest patch is a block about 400 by 500 metres in the middle where copper, lead and zinc all ran high together, and the trend runs 2.4 kilometres with the anomaly open at both ends.

Copper-bearing quartz veins poke out of the ground along the trend. The Shooters Hill and Chatham Valley gold mines are two kilometres along strike.

10X has a land access agreement over most of the target and the crew is mapping and sampling now with a handheld XRF, a gun that reads metal content on the spot, so the hottest samples go to the lab first and are tested for gold.

Porters Retreat

Porters Retreat has gold sitting in the river that runs through it.

The Retreat River runs past an outcrop of monzonite. Monzonite is an intrusion, molten rock that pushed up through the crust and cooled where it sat, and the same type of intrusion fed Cadia.

The gold in the river is angular, meaning the pieces still have sharp edges and the water hasn’t carried them far, so the only obvious thing to have shed them is the intrusion they sit next to.

The intrusion has pyrite and chalcopyrite in it at surface. Chalcopyrite is the main copper mineral, so the copper is there to see before anyone digs. Lab work on rock samples 10X collected last year came back with the chemistry you see in the big low-grade copper-gold systems Cadia belongs to.

Magnetic surveys show anomalies beneath and beside the outcrop, which suggests the intrusion at surface is the top of a much larger body underground.

Vermithor

Vermithor started life in a filing cabinet.

10X went to the archive and ran a 1991 airborne magnetic survey through modern software, finding a circular anomaly about a kilometre across.

The software turns the old data into a 3D shape, and at Vermithor that shape runs roughly 1.2 kilometres deep.

At other deposits in the district, magnetic bullseyes like this have turned out to be the sulphide minerals that carry copper and gold. That's how Vermithor made the list. Drilling is the only way to find out whether this one is.

The Footrot copper-gold prospect is within 5 kilometres. Nobody has sampled Vermithor, let alone drilled it.

The Metals 10X is Hunting

The last people to work this ground properly were the 1970s crews, and the metals in it are worth a great deal more now than they were then.

Copper is around US$6.60 a pound after setting an all-time high in early August. BHP was built on iron ore but now makes more money from copper.

The problem for BHP (and everyone its size) is that nobody is finding new copper. Of the roughly 400 million tonnes added to global copper resources since 2005, the vast majority came from extending mines that already existed.

Gold is around US$4,400 an ounce, off its January peak and still up close to 30% on the year. In the Macquarie Arc gold and copper come out of the same systems.

Zinc sits around US$3,850 a tonne, its highest since mid-2022 and up about 36% on a year ago, with the investment banks expecting mine supply to fall this year.

Why We Like the 10X Set Up

The order of events from here is Watsons fieldwork, then priority samples to the lab for gold and multi-element assays, then geophysics over whatever the surface work supports, then drill targets.

Porters Retreat and Vermithor follow as land access lands, with the Balerion assays arriving in the middle of it.

For a $5.5 million company that is a steady run of news over the next few months, and the $3.5 million in the bank pays for all of it without going back to the market.

10X is spending small money to rank big targets on a $2 million enterprise value, in a belt where copper and gold discoveries get bought. With 37 million shares on issue, there is very little stock around to absorb a good result.

If any one of the three delivers a drill result that matches the surface story, we like our chances of the market repricing 10X well beyond where it sits today.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (“Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 200,000 10X shares at the time of publishing this article. Equities Club has been engaged by 10X at the time of writing.

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That’s more than a billion US dollars a day (call it $1.6 billion in ours).

One day of chip sales at Nvidia buys any one of about 1,800 of the 2,000 companies on the ASX outright, with a few hundred million left over.

Every one of those chips is wired with copper and runs in a data centre the tech giants are signing up nuclear reactors to power, and this week we had news on both at our end of the market.

Copper hit an all-time high, and Powerhaus Uranium joined the portfolio, led by a team that has sold two uranium companies already. More on them below, let’s get to it.

What caught our eye this week:

• Copper bulls continue the charge to an all-time high

• MRD claims the world’s biggest scandium resource

• Powerhaus Uranium becomes our newest portfolio addition

• Two catalyst-loaded companies front a packed corporate lunch

• FUN’s deeper drill program nearly doubles in Malawi

• The rig is spinning for ELK as directors buy up

• WhiteRock Lithium goes bananas on debut

• The drill campaign for 10X wraps up at Balerion

• A German buyer takes a quarter of EVG’s Maniry

• X2M runs 350% on an AI data centre deal

• 170 metres of mineralisation in Nevada for 49M

• DroneShield posts a record half, but still registers a loss

STOP RIGHT THERE - It’s Gold Comp Time

Whatever you were about to do next can wait, because tomorrow our gold competition closes and someone on this list is going to win a full ounce of gold.

At current prices that’s north of $6,200. Pick a number, and if it’s the closest to the pin, the ounce is yours.

Click below and tell us where you think the price of gold is on December 1 to be in the running.

Enter the comp by clicking here.

Send this to a mate too. If they win off your tip, they’re buying the beers till Christmas.

The Copper Bulls Are Charging

Robert Friedland got up in front of a business school crowd in LA last year and told them the world has no idea how much copper it’s about to need.

“You people have no idea whatsoever what we’re facing. You’re dreaming,” he said. Darryl Kerrigan would have been proud.

Friedland is the billionaire behind Ivanhoe Mines and two of the great copper discoveries of the modern era, Oyu Tolgoi in Mongolia and Kamoa-Kakula in the Congo, and his presentation quickly became a maths tutorial.

The world uses about 30 million tonnes of copper a year and only four million of that comes from recycling, so to keep global growth ticking along at 3%, the industry has to dig up as much in the next 18 years as it has in the past 10,000.

He’d have loved this week. Copper hit an all-time high above US$6.80 a pound, and it’s up close to 50% on this time last year.

Supply keeps getting interrupted at the worst possible time. Grasberg in Indonesia, the second biggest copper mine on earth, is still running at around half capacity after last September’s mudslide, and earlier this month the smelter that processes its ore sprang a boiler leak and shut for weeks.

Flooding has hit Friedland’s Kamoa-Kakula, and Zijin (his partner in the mine) said this week its copper target for the year is under pressure. LME stockpiles have nearly halved since May.

All those problems get fixed eventually, but the glaring one that can’t is that a major copper deposit hasn’t been found in 20 years (and boy do we pray we’re on the one that breaks the streak).

The big mines pull a little less copper out of every tonne of rock each year, and a new mine takes a decade or more to permit and build. Even BHP, which said last week it’s steering more than half its future spending into copper, has its extra tonnes landing in the mid-2030s.

We’re on the hunt for a copper junior to add to the portfolio (and the pool room). Watch this space.

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MRD has the Biggest Scandium Resource on Earth

"The World's Largest Publicly Reported Scandium Resource" was plastered across the top of Wednesday’s announce from Mount Ridley Mines (ASX: MRD), and it had the desired effect, up 16% on $1.6m stock traded that day.

Grass Patch is MRD’s clay deposit 25km northeast of Esperance where MRD nearly tripled the size of its scandium resource to 946 million tonnes at 50.1 ppm scandium.

That works out to 72,637 tonnes of scandium oxide and backs up the bold announcement header. To put in perspective, the whole world made about 80 tonnes of the metal last year.

The extra tonnes came from 3,271 old samples sitting in storage from a decade of drilling for nickel and copper. MRD sent them back to the lab to be tested for scandium and the resource grew 2.5x for the cost of the assays (and we're quietly hoping there's more in the shed).

You can find our full write up here.

We added MRD to the portfolio in March based off the three critical minerals it had in one deposit (scandium, heavy rare earths and gallium).

We were under no illusions as to the challenge of extracting scandium out of the clay in their deposit, because hydrochloric acid leaves nearly three quarters of it in the rock.

Then Chris Larder joined as CTO and brought with him Selectro, a leach process he'd spent 10 years building and MRD has now lodged a patent application over. Selectro recovered 80% of the scandium in its first test on raw Grass Patch clay and took most of the heavy rare earths and about half the gallium with it. The acid method got 27.6% from the same sample.

Lab work earlier this month found the rare earths at Grass Patch sit in phosphate minerals. Phosphates can be floated off the waste clay before any chemistry starts, a cheap step that processing plants everywhere already run, so Selectro should have a richer concentrate to work on when the next round of testwork runs.

Of the few scandium names on the ASX the one getting the attention is Sunrise Energy Metals (ASX: SRL). Sunrise is building its mine at Syerston in NSW with a US$400 million loan from the Pentagon and carries a $2.8 billion valuation. Robert Friedland from the copper section above is its co-chair and biggest shareholder.

Sunrise’s dirt runs 414 ppm against MRD’s 50, so we won’t pretend the two deposits are twins. MRD holds more of the metal and trades at $50 million.

MRD finished the week up an impressive 43% on last week’s closing price.

Our New Addition: Powerhaus Uranium

Siobhan Lancaster told us you can dig a small hole in a riverbed at her new project in Argentina and pull out uranium that’s yellow against the dirt. Her team did it on their first site visit from about knee depth.

Lancaster was on the Extract Resources team that found Husab in Namibia and sold the company for $2.2 billion while Fukushima was melting down. She then ran 92 Energy, which hit uranium on its fourth hole in Canada and was taken over inside three years of listing.

Argentina was Philippe Portella's idea. He's a geologist who spent 35 years hunting uranium for the French, and when Lancaster asked him where the next giant deposit was hiding, he said Patagonia. Her first reaction was "that's a bit interesting, I'll have to have a think about that."

The thinking ended in Lancaster leading Powerhaus Uranium (ASX: POW), the third uranium explorer she’s built and our newest portfolio addition, which listed on Tuesday at 20 cents with a $17 million market cap and $9 million in the bank.

You can read our full write-up here.

Governments (and major tech companies) are building reactors, with the US aiming to quadruple its nuclear fleet by 2050 and Microsoft paying to restart Three Mile Island so its data centres never lose power. Uranium is at its highest price since 2008, after a decade where the industry barely explored and barely discovered.

The flagship for POW is Malbec, around 2,000 square kilometres of ground in Chubut, a province in Argentine Patagonia. The uranium sits in sandstone, the same style Kazakhstan has mined for decades at the lowest cost on earth. Surface samples have run up to 771 ppm and rock chips a short drive away up to 3,183 ppm, and nobody has ever put a drill hole through any of it.

That changes around October, when 20 to 30 holes for 5,000 metres go in with the uranium term price at US$97 a pound. Hidden Bay in Canada’s Athabasca Basin comes with the deal, on the doorstep of the world’s richest uranium mines.

POW finished its first week at 24 cents, up 20% on the IPO price. The past two times the POW team put a drill into uranium, somebody bought the company.

Two Catalysts Walk into a Lunch

We got a lunch invite this week and turned up to a room of brokers and investors, all there to hear two companies with big news due inside the next few weeks.

Albion Resources (ASX: ALB)

CEO Peter Goh went first and took the room through the drilling about to start at Gidgee, ALB's gold project in WA's East Murchison.

The tenement package sits surrounded by JORC resources, with Horizon Gold’s 2.3 million ounces at 1.9g/t on the same fault line to the south and Wiluna’s 7 million ounces up the road. The old holes on ALB’s ground came back with strong grades, and the rig starts shortly.

ALB trades at 6 cents for a market cap around $8 million, and this drill campaign is already paid for.

Botala Energy (ASX: BTE)

Kris Martinick followed and was upfront that the next fortnight decides a lot for Botala, with flow rates from its Botswana gas pilot due in a week or two.

A flow rate is how much gas a well gives up once the water is pumped off the coal seams, and a good one is what gets a gas field financed.

Botala’s current gas resource comes from under 5% of its ground, in a corner of southern Africa that keeps running out of power. BTE trades at 6.1 cents with a market cap around $25 million.

We walked out well fed with two more names on the watchlist, and we’d make room on yours. In a couple of weeks, both of these stories will look different, one way or the other.

FUN Goes Deeper at Mkanda

Fortuna Metals (ASX: FUN) expanded its aircore drilling program at Mkanda this week, with the new rig reaching rutile the hand augers never got to.

The current resource of roughly 300 million tonnes is already one of the world's biggest for rutile, and it was built entirely from hand auger holes that stopped around 8 metres down. Most of them stopped at the water table with rutile still running under the workers' feet.

The aircore rig is averaging 22 metres in the same soft ground with rutile running to the bottom of the holes. Whatever sits between 8 and 22 metres gets added to the resource once the assays come back, and aircore is cheap drilling.

Sovereign Metals (ASX: SVM) ran this play next door at Kasiya, where aircore drilling tripled the resource on its way to becoming the largest rutile deposit in the world.

FUN sits 20km down the same corridor chasing the same style of mineralisation, into a rutile market that has been short for years.

Priority assays land in November and feed an updated resource.

Drilling Update for Elk Range

Last week the rig started turning at Elk Range Mining’s (ASX: ELK) Friday gold project in Idaho, and this week we got video proof.

CEO Edward Keys, who has made camp on the floor of the mill on site, took to YouTube to walk through what the first eight diamond holes are chasing.

The last owners put a hole under the old mine that ran 110 metres at more than five grams and finished in 133 grams a tonne, then sold the place for a fraction of the US$40 million they’d spent. Keys is drilling straight back into that ground.

The eight holes add up to nearly 3,000 metres and every hit that matches the old numbers counts toward a maiden JORC resource.

This week we also saw two more directors buy shares on market, which takes the total to three. Confidence like this so soon after an IPO is rare, hats off to management.

WhiteRock Goes Bananas on Debut

We flagged WhiteRock Lithium (ASX: WLC) in last week's wrap as the lithium IPO to watch, and it ran harder than we expected. It listed at $3.25 and was knocking on $4.90 within days.

The flagship is called the Banana Project (we’d have backed it for the name alone). It’s a big slab of 100% owned ground in Quebec’s James Bay region, where some of the best lithium discoveries of the last boom were made. Every diamond hole drilled there so far has hit lithium-bearing pegmatite, and early test work points to simple, cheap processing.

Simon Hay runs it. He built the Goulamina lithium mine in Mali, which has proven a hard place to keep a mine after it’s built, and we suspect he’ll enjoy Quebec a lot more.

A $400 million lithium explorer is bigger than the stocks we usually write about, but Hay has built a mine before and every hole at Banana so far has hit. It's on the watchlist.

10X Wraps Up the Drilling at Balerion

Exultant Mining (ASX: 10X) pulled the rods on the six holes it drilled for its maiden program at Balerion this week.

Visible sulphides turned up in five of the six, and the last hole cut a 6.5 metre shear zone carrying zinc, lead and silver-style sulphides that looks like it thickens at depth. The assays land in four to six weeks and will settle that.

We've been staring at the core photos all week like everyone else, and they look good, but we've been burnt by shiny rock before.

In the meantime the team turns to Black Hammer, where the old-timers pulled grades up to 14% copper and 26 g/t gold.

A German Buyer Signs for a Quarter of Maniry

Evion has spent more than a year in meetings with Europe’s lenders, and most of them ended with some version of the same polite brush-off. Lovely project, call us when someone’s agreed to buy the graphite.

This week, someone did. You can find our full write up here.

A German graphite house, an established outfit that has supplied and processed flake across Europe for a long time, signed a binding deal to take about a quarter of everything Stage 1 at Maniry will dig up, every year for the first five years of the mine’s life.

Graphite that has never touched China is scarce, and the buyers who need it are locking it in years before a mine pours its first concentrate.

Each shipment sells at the market price or at a floor that covers digging it up and paying the bank, whichever is higher, so Beijing can flood the graphite market again and the bills still get paid.

Our portfolio company Evion Group (ASX: EVG) has been stacking these pieces up for a while. The mining permits landed in July after a four-year wait, and Brussels has named Maniry a strategic project, which puts the lending arms of the EU and German governments at the table.

A bank lending against a hole in the ground wants to know who’s buying what comes out of it, and now Evion can point to a signed German.

The feasibility study puts a value on Maniry at more than 10 times what the whole company trades for today. A loan offer is the next domino, and if it lands, Evion has a mine to build.

X2M Rips 350% on an AI Data Centre Deal

X2M Connect (ASX: X2M) started the week at a fifth of a cent, touched 1.2 cents by Thursday, and closed at 0.9.

Anyone holding on Monday finished the week up 350%, with close to $10 million worth of stock changing hands along the way.

The trigger was a binding agreement to deliver and manage an AI-enabled GPU data centre, with an estimated project cost north of $250 million over three to five years.

X2M expects to book that full cost as revenue and clip a margin on top, plus recurring platform and management fees for the life of the facility.

X2M has spent a decade connecting metering devices for water and energy utilities, and the pitch is that the same smarts can squeeze more compute out of every megawatt inside a data centre.

This deal is the first conversion from a roughly 150MW pipeline of Australian sites, most of them in Queensland. The agreement is conditional on a development approval, and X2M hasn’t put a megawatt figure on the facility.

49M Pulls 170 Metres of Gold in Nevada

One from outside the portfolio that caught our eye this week. 49 Metals (ASX: 49M) wrapped up its maiden drill program at Gold Mountain in Nevada and saved the best for last, 170.7 metres at 0.9g/t gold, the thickest hit the project has seen.

Another hole cut 67.1 metres at 1.7g/t around a core that ran as high as 20g/t.

Worth being clear that 170 metres is the length down the hole rather than the true width of the zone.

The company hasn’t published true widths yet, but with a 45 degree hole drilled into steep structures, our rough read is the true width is around half the downhole number, call it 60 to 80 metres. Still a serious chunk of mineralised rock.

The scorecard for the program reads 22 holes drilled, 22 hits of gold or silver. You don’t see that every day from a first pass.

Gold Mountain sits on the Walker Lane trend, one of the most productive gold belts in the US.

What the company first read as a handful of narrow structures is shaping up as a much broader system with high-grade feeders running through it, and it’s open in every direction drilled so far.

The grades outside those feeders are modest, and joining the dots will take plenty more drilling. But at high gold prices, bulk systems like this get a second look.

Follow-up drilling is planned before the end of the year, so this is one for the watchlist. 49M finished the week up 30% at 13c.

DroneShield Delivers a Record and Cops a Selldown Anyway

Last week we flagged DroneShield (ASX: DRO) as one to watch into results. It reported its best half ever and the shares fell anyway.

The company sold $126 million worth of counter-drone kit in six months (a record), but it’s spending money faster than it makes it and the half ended in a loss.

The stock dropped 10% on the day, because after doubling and doubling again, a market darling gets marked down for any imperfection it shows.

It’s also why our own drone exposure sits at the picks-and-shovels end through portfolio company KTEK Aerosystems (ASX: KTK). Suppliers get paid for every unit that goes out the door, and with shipments starting next month, KTEK’s revenue arrives with the boom.

What to Watch Next Week

Gold ran to a three-month high this week and gave some back on Friday after the new US Fed chair talked tough on inflation and the market priced in an American rate rise as a coin flip for next month.

Higher US rates reliably knock gold around, so we’ll be watching (we’re hoping for a hold, but we’re eternal optimists).

Results are landing thick and fast across the ASX, and boards like to raise money on the back of good news, so expect a run of small-cap capital raisings in the coming weeks.

Tech and biotech had a quiet one, and in our experience a quiet week at this end of the market usually means a busy one is coming.

And the gold comp closes tomorrow. Get your guess in and send it to a mate before the door shuts.

Till next week.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consult your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst Equities Club Pty Ltd (”Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 500,000 KTK shares, 625,000 ELK shares, 1,554,000 FUN shares, 200,000 10X shares, 625,000 POW shares, 4,500,000 EVG shares and 2,083,333 MRD performance rights at the time of publishing this article. Equities Club has been engaged by KTK, ELK, FUN, 10X, POW, EVG and MRD at the time of writing.

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The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services Licence (AFSL) No 519872.

“The World's Largest Publicly Reported Scandium Resource” is the line MRD plastered across the top of this morning's announcement, and it had the intended effect.

Grass Patch, 25km northeast of Esperance, holds 946 million tonnes at 50.1 ppm scandium. That works out to 72,637 tonnes of scandium oxide, which is how the metal gets sold. And the whole planet only made about 80 tonnes of it last year.

Most of that 80 tonnes goes into two things.

Solid oxide fuel cells, the boxes that sit beside AI data centres and power the racks, run on a scandium ceramic. Those cells took close to half the world’s scandium last year.

Most of the rest went into aluminium. A pinch of it gives an alloy that welds without cracking, which is why it ends up in aircraft frames and defence platforms.

China mines about 80% of the world’s scandium and processes almost all of it. In April last year Beijing started requiring a licence for every kilogram leaving the country, so China now decides who gets to buy it.

That is the metal MRD now holds more of than anyone.

The Grass Patch mineralisation starts at surface and runs about 70 metres deep. Strike is more than 25km. It’s soft clay the whole way down, so it gets dug with an excavator and skips the blasting and crushing, which strips out two of the most expensive steps in building a mine.

Fifty ppm is a lower grade than Sunrise Energy Metals (ASX: SRL), the best performing stock on the ASX last year. SRL is building its mine on 414 ppm dirt at Syerston in NSW, and anyone who has looked at both deposits will spot the gap straight away.

Grass Patch gets away with it because an excavator does the mining and because of a leach process called Selectro (more on that soon).

We added MRD to our portfolio in March for three critical minerals it has in one deposit. What it didn't have was a way to get most of the scandium out of the clay. Fifty ppm across a billion tonnes is a big number on paper, but hydrochloric acid leaves nearly three quarters of it in the rock.

Then Chris Larder joined as CTO and brought Selectro with him, the leach process he’d spent a decade building and MRD lodged a patent on last week. In its first test it pulled 80% of the scandium out of raw Grass Patch dirt. Hydrochloric acid got 27.6% from the same sample.

The tonnes make the headline and Selectro is what turns them into a possible mine, and that pairing is why we’re happy holding a $42.5 million company at 3.2 cents as we type.

Investor Webinar

Mount Ridley is holding an investor webinar on Thursday, 27 August at 10:00am AWST (12:00pm AEST). Managing Director Allister Caird will run through Grass Patch, Selectro, and take questions live.

It’s an MRD event rather than one of ours. Registration is free via the link below.

https://us06web.zoom.us/webinar/register/WN_WPMqVaqSTNemqQJgmyMZfQ

The Tonnes Came Out of a Storage Shed

Every explorer has boxes of old drill samples sitting somewhere. MRD's had scandium in them.

Between 2014 and 2022 the company drilled 410 holes at Grass Patch looking for nickel and copper, and the base metals never came in. The pulps, which are the crushed leftovers the lab sends back, went into storage. Nobody assayed them for scandium because nobody was looking for it.

MRD pulled 3,271 of those pulps out and sent them to ALS in Perth to test for scandium. The resource was 368 million tonnes in January. It's 946 million today, and the company got there without turning a drill bit.

We’ve watched plenty of $40 million explorers raise money to drill holes that go nowhere. MRD grew its resource two-and-a-half times for the cost of assays.

The old holes were good ones, too. One came back with 20 metres at 115.3 ppm scandium from four metres down, another with 22 metres at 90.1 ppm, both well above the 50.1 ppm average.

Across both blocks the clay mostly runs 40 to 60 ppm, with patches over 80 that sit in continuous bands. Those two holes are the best of a consistent lot.

A lot of the old holes ended in scandium. Aircore rigs stop when they hit hard rock, so the hole finishes wherever the clay does, and the scandium was still there at the bottom.

The system is open below them and open to the south-west for about 4km off Block 1 alone, so there is more scandium down there before Mount Ridley tests anything new.

Roughly 80% of the tenure has never been tested for scandium at all, and seven gravity targets covering about 33km of strike sit outside the current resource, already mapped.

One Leach Circuit for All Three Metals

Three critical minerals sit mixed through the same weathered clay at Grass Patch, not in separate zones you would have to mine apart.

Alongside the scandium sits a 122.5 million tonne heavy rare earth resource at 889 ppm total rare earth oxide with a 41% heavy split, and a gallium resource running to 838.7 million tonnes across the broader project.

All of it comes out of the same pit, and all three are metals the US and Europe are trying to source outside China.

Most explorers holding that combination end up making a hard choice. You design your processing plant around whichever metal pays best, you build it for that metal, and everything else either drops out as a low-value byproduct or stays in the tailings dam where it earns nothing.

The second Selectro test, run earlier this month, suggests Mount Ridley gets to skip that choice. It pulled 80% of the scandium, 77 to 83% of the principal heavy rare earths, 70 to 77% of the light rare earths and around 56% of the gallium out of the same untreated feed in a single leach circuit.

The hydrochloric acid baseline, the traditional method, run on portions of the identical composite sample, recovered 27.6% of the scandium and no gallium at all.

If scandium prices run because the US keeps putting money into supply, Grass Patch leans into scandium. If the heavy rare earths do the running because dysprosium and terbium stay in short supply, the same pit and the same circuit lean towards those. Gallium comes along either way.

Mount Ridley can follow whichever market is paying best at the time. Most explorers lock in their commodity bet years before they produce anything.

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Washington is Writing Cheques for Scandium

Every kilogram of scandium in circulation today arrives as a byproduct of something else. There is no dedicated scandium mine operating anywhere in the world, so supply stays flat no matter what demand does.

On August 10 the US Department of War’s Office of Strategic Capital signed a conditional 25-year loan of up to US$400 million with Sunrise Energy Metals, and took first call on everything Syerston produces before the project has produced anything.

Syerston is designed to make 60 tonnes of scandium oxide a year against global production of about 80 tonnes, and the market now values Sunrise at $2.8 billion.

We first covered Surise in April, then again in July, when it had already risen more than 2,000% in a year and signed a supply option with Lockheed Martin. What it shows is the price the market puts on a Western scandium story once it starts to work.

Mount Ridley sits at $42.5 million, roughly one 66th of that, holding the largest reported scandium resource on the planet.

Sunrise is ahead, with an ore reserve and a flowsheet, plus a US government loan behind it. The gap between $2.8 billion and $42.5 million is the whole reason we own MRD.

What We Are Watching

Mount Ridley has put out four announcements this month, the phosphate mineralogy work, the Selectro results, the patent lodgement and now this resource.

Several work programs are running at once, so the next few months should keep producing news.

Density testwork sounds like the dullest line in the announcement and it is the one that lifts this resource out of the inferred category, the softest classification the JORC code allows.

Phase 2 of the re-assay program is already underway across the rest of the Grass Patch pulps, and after what Phase 1 delivered we like our chances.

Flotation testwork comes next to check the mineralogy, and then Selectro gets run over the upgraded ore to see how much further those recoveries stretch.

Scoping study talks are running with several engineering firms to cost a demonstration plant. Mount Ridley has also started testing the Selectro chemistry on other deposit types, and if it works on someone else’s deposit, MRD can license it.

A batch of Grass Patch ore is sitting on a bench at Fraunhofer in Germany right now. Oak Ridge National Laboratory has signed a materials transfer agreement, and Lawrence Livermore is still in the mix.

It’s a lot of serious laboratory attention for a $42.5 million company.

Managing director Allister Caird and his team found the biggest scandium resource in the world in boxes of drill samples the company had already paid for. We're happy to sit tight and wait for the rest of the shed.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (”Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club has 2,083,333 performance rights in MRD. Equities Club has been engaged by MRD at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services License (AFSL) No 519872.

China’s building reactors by the dozen, and the US has set itself the job of quadrupling its nuclear fleet by 2050.

Microsoft is paying to switch Three Mile Island back on so its data centres never lose power, and Amazon, Meta and Google have all signed reactor deals of their own.

And all of it comes back to one fuel the world suddenly wants a lot more of than it’s digging out of the ground.

Uranium.

Meet our latest portfolio addition: Powerhaus Uranium (ASX: POW). It starts trading at 10am AWST today.

POW has ground in Argentina and Canada, with Argentina the main prize.

Managing Director Siobhan Lancaster told us you can dig a small hole there, reach in, and pull out uranium that's yellow against the dirt.

Lancaster was part of the Extract Resources team that found the Husab deposit in Namibia and sold the company for $2.2 billion, then ran 92 Energy, which made a uranium discovery in Canada on its fourth drill hole and was taken over inside three years of listing.

Now she’s holding yellow rock at a project that gets its first drill hole within weeks.

Alongside her sits a deep bench of all-stars who have been on discovery teams for some of the standout uranium finds of the past decade. They've found it (and sold it) before and now get to start again from the ground floor.

Listing today at 20 cents, POW has a market cap of $17 million, with $9 million raised in the IPO and most of it headed straight into the ground. Strip out the cash and the market is valuing the whole company at single-digit millions.

While Australia's government will need to be dragged kicking and screaming into accepting nuclear is the fuel of the future, the rest of the world has already made up its mind.

So have we.

Uranium is at its highest price since 2008 and POW has picked up ground where it sits at surface. It’s hard to top that.

Let’s dig in.

The Reactors are Getting Built This Time

Germany spent 20 years phasing nuclear out and switched off its last three reactors in 2023. Within a year it was buying French nuclear power across the border to keep the lights on.

China waved through eight new reactors worth about US$25 billion at the end of July.

Donald Trump signed executive orders last year targeting a quadrupling of nuclear capacity to 400 gigawatts by 2050, with US$80 billion behind 10 new reactors and more money to rebuild domestic enrichment.

Reports of nuclear’s death, it turns out, were greatly exaggerated.

And from 2028, Russian uranium is banned from the US, pulling a slab of supply out of the Western market.

Over in Europe, France is pouring concrete on six of its reactors, with an option on eight more. Britain is about to sign off the money on its next plant, Poland's building its first reactors, and the EU has lifted its long-term nuclear target for the first time in years.

India runs less than 9 gigawatts of nuclear today and has set itself a target of 100 by 2047.

That means building close to 100 reactors' worth of capacity in two decades. It even passed a law opening the sector to private money for the first time and ending the government's monopoly on building reactors.

A reactor runs for decades once it's switched on, and it needs fresh uranium every year of its life. The utilities behind this list will be signing fuel contracts long before the concrete is set.

Big Tech Starts Buying Reactors

In 1979 a reactor at Three Mile Island in Pennsylvania partially melted down. It’s still the worst nuclear accident in American history, and for a long time was used as the counter-argument to the benefits of nuclear.

Microsoft just signed a deal to restart it, and is contracted to buy everything it produces for the next 20 years. First power is expected next year.

The technology has moved a long way in 50 years. Nuclear now sits alongside wind and solar as one of the safest ways to generate power (measured by the grim-sounding stat of deaths per unit of electricity produced).

That’s part of why AI companies are comfortable going all-in. The other part is that a data centre runs flat out 24 hours a day, and tech bros like Google’s head of energy have admitted a carbon-free grid will take “more than just wind, solar, and lithium-ion storage”.

To underline the nuclear stampede, consider what’s happened in just the past two years:

• Amazon locked in 1.9 gigawatts of reactor output in Pennsylvania through to 2042, and tipped US$700 million into a developer of small modular reactors

• Meta signed 20 years of output from a reactor in Illinois, with commitments of up to 6.6 gigawatts across four suppliers

• Google ordered seven small reactors of its own, with the first due to switch on by 2030

• OpenAI signed a 20-year lease last Monday on an Ohio data centre that will scale to 8 gigawatts, the largest AI facility planned anywhere in the world.

All up, Microsoft, Amazon, Meta and Google have signed 13 nuclear deals for close to 10 gigawatts of power, all of it since 2024.

Every one of those reactors needs a whole lot of uranium.

Why the Price Keeps Climbing

When Siobhan Lancaster listed 92 Energy five years ago, uranium was selling for roughly US$32 a pound.

Today the term price sits at US$97, its highest since 2008, and she puts the difference down to a decade where the industry barely explored and barely discovered.

So while the reactors have kept multiplying, the mines have stayed still.

Uranium gets bought differently to oil or gold so those numbers need a quick explanation. Power utilities sign their fuel deals years in advance, locking in five to 10 years of supply at a time at the term price. The spot price covers one-off parcels, and it’s sitting lower, near US$88.

The term price is the one that counts, because that’s where the reactors buy their fuel.

The World Nuclear Association has uranium demand hitting around 390 million pounds a year by 2040 as its base case, and 520 million if things run hot. Mines dug up roughly 132 million pounds in 2024.

The world will need three to four times the current uranium supply in just over a decade, and mines can take 10 years or more to permit and build, so the gap can't close quickly no matter what the price does.

It's about the most lopsided supply and demand setup we can find on the ASX, and it's why we went looking for a uranium company to back.

During the cheap years the utilities got slack and stopped locking in supply, and by 2025 they'd only secured 48% of their future needs, down from 56% the year before. Now they're all scrambling back at once, into a market that can't fill them fast.

The banks that trade uranium for a living have put out their forecasts. We don't make price calls at Equities Club, so here's what the pros are saying:

Macquarie, Morgan Stanley, RBC and Canaccord are bullish too, though they mostly show it by backing uranium producers like Cameco instead of publishing a price forecast.

Two Countries Feed the World’s Reactors

The world’s supply of uranium is controlled by only a few.

Kazakhstan digs up close to 40% of the world’s supply (and it barely digs at all). The method they use is called in-situ recovery. They drill wells into porous sandstone, pump a mild solution down, let it dissolve the uranium out of the sand, and pump the loaded liquid back to surface.

Barely any rock gets moved, which is why it’s the cheapest way to produce uranium anywhere in the world. Kazakhstan’s state producer mined it for US$18 a pound last year.

It's also the method POW is chasing in Argentina, in the same style of sandstone (more on that later).

Canada’s Athabasca Basin supplies the high-grade end, home to Cameco’s McArthur River and Cigar Lake, the richest uranium mines going. Namibia holds Husab and Rössing, the two big open pits in the desert.

Past that short list, the world has leaned on stockpiles built up over the years that are running down.

With supply that concentrated, one bad week can spook the whole market, which we saw in July.

Cameco shut mining at Cigar Lake, the highest-grade uranium mine on earth, for two weeks after the mill it feeds ran out of sulphuric acid. The shortage traced all the way back to the closure of the Strait of Hormuz, which is where a huge chunk of the world's sulphur ships through.

We covered Hormuz when it shut (like everyone else with a publish button), and we’ll admit uranium wasn’t on our list of casualties.

The acid problem reached Kazakhstan too where Kazatomprom is the world's biggest uranium producer and runs its wells on sulphuric acid. Its cost of production jumped 37% in six months mostly due to the acid shortage, and the plant it's building to make its own acid won't be ready until late 2027 at the earliest. So it's keeping production flat until then, even with uranium at an 18-year high.

The biggest producers on earth can't lift supply. That leaves the door wide open for whoever finds the next deposit.

Argentina Just Changed the Rules

Siobhan Lancaster sat down with Philippe Portella, a geologist who’d spent 35 years hunting uranium for French nuclear group Areva, and asked him where the next giant uranium deposit was hiding.

Argentina, he said. A massive Kazakh-style roll front system that nobody had gone after.

Lancaster told us her honest reaction was “Argentina, that’s a bit interesting, I’ll have to have a think about that.”

Fair enough too. Argentina used to be radioactive to investors. Pun intended.

The country has defaulted on its debt three times this century. In 2002 the government cut the peso loose from the US dollar and froze bank accounts, and inflation skyrocketed. Building a mine there was a bet on the government as much as the ground.

But president Javier Milei has spent two years decontaminating the place, and the centrepiece is a law called RIGI. It hands large projects up to 30 years of locked-in tax and regulatory stability.

It’s a written promise that the rules won’t move under your feet, and so far it’s worked.

BHP and Lundin signed up their US$9.7 billion Vicuña copper project last month, and Rio Tinto has signed up its Rincon lithium project. All up, 16 projects worth close to US$30 billion have been approved so far, with another 25 waiting.

In December the Economy Ministry said that it wants to turn Argentina into the "Saudi Arabia of uranium".

Governments announce things all the time, but this one created a new department the same week to run its nuclear push.

Argentina has mined uranium before, from seven small historic operations, and it runs three nuclear reactors today. The ministry puts the country's known uranium at around 36,000 tonnes, and the modern exploration tools this team used to find Husab in Namibia and Gemini in Canada have never been run over any of it.

Chubut Province, where POW's Argentine projects sit, has banned open-pit mining and cyanide since 2003. In-situ recovery uses neither, which is why Powerhaus bought ISR-style ground there.

The Five Reasons We’re Backing Powerhaus

1. A Board That Has Done This Twice Before

Powerhaus is the 92 Energy team and the Extract Resources team joining up for another crack, and Lancaster’s CV is the spine of it.

At Extract she worked on the $2.2 billion sale of Husab, a deal that got over the line with Fukushima unfolding in the middle of it. If you can sell a uranium company for billions while the industry’s worst accident since Chernobyl is worldwide news, you can sell one in this market.

She then founded 92 Energy with Richard Pearce, now Powerhaus’ chair. She ran it, he chaired it, they were drilling within two months of listing, made a discovery on the fourth hole, and the company was taken over inside three years.

Portella is technical director, and his career took in the Kazakh roll fronts and Argentine uranium. He’s personally worked the very deposit type Powerhaus is drilling for.

Steve Blower sat on the discovery teams for three separate Athabasca uranium finds, IsoEnergy’s Hurricane, Denison’s Gryphon and 92 Energy’s Gemini.

Andrew Penkethman ran the feasibility study at Husab and drilled out the resource, and now leads Ardea Resources.

Sashi Davies was Extract’s head of marketing and knows the utilities and traders who buy uranium, having worked with the likes of Boss Energy.

This group has taken uranium companies from first drill hole to takeover twice. Now they’re starting a third time, from 20 cents.

2. A Very Big Target, at a Very Small Price

The flagship is Malbec, around 2,000 square kilometres of southern Chubut, held through four granted permits and 16 applications.

Groundwater picks up dissolved uranium as it seeps through porous sandstone, carries it along, and then hits a patch of ground where the chemistry flips.

At that boundary the uranium falls out of the water and stacks up in a long curved band. Geologists call it a roll front.

Kazakhstan is riddled with them, some running for hundreds of kilometres, and they feed 40% of the world’s uranium.

And the Kazakh comparison has independent backing. The IAEA, the UN's nuclear agency, has published a cross-section putting Chubut's geology side by side with the Kazakh basins.

The uranium sits at the boundary between two types of sandstone, and the colour of the sand tells you which type you've drilled into. So every hole tells you which side of the boundary you're standing on, and you step the next one towards it.

Powerhaus is targeting a formation about 100 metres thick, with the uranium expected to start shallow, from under 50 metres down to around 250, the depth and soft ground that ISR runs best in.

And roll-front mineralisation has already been exposed on the same trend just north of Malbec, with the host formation interpreted to run straight under Powerhaus ground.

The first holes ever drilled into it go in early October, a 5,000 metre drill campaign to be exact, and the whole thing sits inside a company priced at little more than its cash.

3. Uranium You Can Already See

There’s uranium sitting at surface on Powerhaus ground.

The team was following up an anomaly from an airborne survey flown back in the 1970s. They walked the ground on the first site visit, got to a riverbed, and there it was, yellow uranium mineral about 30 centimetres down.

The sampling since has come back as high as 771 parts per million U3O8, and shallow trenches show the mineralisation carrying down to at least two metres.

A short drive away at El Tropezon, rock chips have run up to 3,183 parts per million, and a channel sample cut 1,370 parts per million over half a metre, all sitting on a 1970s airborne anomaly that has never had a hole put through it.

A caveat on those numbers. Grab and rock-chip samples are hand-picked from the best-looking material a geologist can find at surface. They show uranium is there and where to drill. The drill program will tell us how much.

4. The Drills Start Within Weeks

Powerhaus starts surface sampling, mapping and geophysics at Malbec Central straight after listing, then moves to a program of 20 to 30 holes into the roll-front targets, lined up for early October once the exploration permit lands.

The permit has already been submitted, and the 5,000m drill campaign will follow. Sonic drilling is set aside for the shallow calcrete targets. For a company that only started trading today, first assays are a matter of weeks to a couple of months out.

Plenty of explorers list and then ask you to sit tight for a year before anything spins. This one will know by Christmas whether the uranium at surface keeps going at depth, with the term price at an 18-year high while it finds out.

5. A Second Shot in the Athabasca

Powerhaus has bought Hidden Bay in Saskatchewan’s Athabasca Basin, the same province that hosts Cameco’s best mines.

It's home ground for this team. Steve Blower's three Athabasca discoveries include Gemini, the one that got 92 Energy taken over.

It sits about 20 kilometres from the Rabbit Lake deposit and on the Dragon Lake fault, the structure that controls the Rabbit Lake, Horseshoe and Raven deposits.

A hole drilled by the previous owner in 2024 cut anomalous uranium of 0.38 metres at 227.6 parts per million inside a graphitic-pyrite shear zone. That’s the style of ground that hosts the basin’s biggest deposits, NexGen’s Arrow among them.

Powerhaus completed the purchase earlier this month, and at today's price you're paying for Argentina with Canada thrown in.

What Could Go Wrong

It's important we're straight about the risks too.

Every grade in this article comes from grab samples, rock chips, shallow trenching or old surveys, and Powerhaus has no resource to stand behind any of it yet. The first holes at Malbec decide whether the surface uranium goes anywhere.

The whole portfolio is built around ISR because Chubut bans open pits and cyanide, so a discovery that only worked as an open pit would stay in the ground. Provincial mining law also moves with the politics, and Chubut politics have a history.

Milei’s settings are friendly to capital today, but you’ve read the history above, and RIGI has never been through a change of government.

And like every small-cap explorer alive, Powerhaus will be back for more money down the track to turn targets into a resource and, one day, a mine.

We weighed all of that against uranium sitting at surface and a team that has sold two uranium companies. We’re comfortable being early.

What We’re Watching

The team lands in Argentina within a fortnight of listing, weather permitting, so the news should start early. Here’s the checklist we’ll be tracking:

• Boots on ground at Malbec, with surface sampling, mapping and geophysics kicking off straight away

• The drilling permit for Malbec Central, already submitted and expected in the coming months

• The rig turning on the first roll-front holes, slated for around October

• First assays after that, the numbers that decide whether the surface uranium keeps going at depth

• Geophysics at Hidden Bay, working up drill targets on the Canadian ground

We’ll cover every step of it here.

The Bottom Line

Sometime in the next few weeks a rig will pull up on a patch of southern Argentina where a handheld detector already goes off at your feet, and start drilling to find out how deep it goes.

The roll fronts it’s chasing are the kind Kazakhstan has mined for decades at the lowest cost on earth, and when they work, they run for kilometres through the sandstone.

If the drills hit uranium and keep hitting it along the channel, POW stops being a $17 million company in a hurry.

We’re in at 20 cents, with the cash covering more than half the market cap, while the term price sits at an 18-year high and the reactors keep multiplying faster than the mines.

Argentina has spent two years rolling out the red carpet for mining money, and it would love nothing more than a uranium story it can point to.

The last time Siobhan Lancaster stood on ground like this early, it ended in a takeover. The time before that, it ended in a $2.2 billion sale.

Now she’s standing on it again, holding yellow rock, with the drills weeks away.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (“Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 625,000 POW shares at the time of publishing this article. Equities Club has been engaged by POW at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services License (AFSL) No 519872.

A German graphite house has signed a binding deal to buy at least 10,000 tonnes of flake graphite concentrate a year from the Maniry project, for five years from first production.

At the USD $1,448/t average graphite basket price used in Maniry’s DFS, that minimum commitment equates to roughly USD $72 million in gross sales over the initial five-year term.

Roughly a quarter of everything Stage 1 will dig up, now sold before the first sod is turned

Every tonne of it sells at the market price or at a price covering Maniry's production costs and bank payments, whichever is higher.

Evion has spent more than a year in meetings with Europe’s lenders, and we’d wager most of them ended with some version of the same polite brush-off. Lovely project, call us when someone’s agreed to buy the graphite.

Someone just has.

EVG isn't naming the buyer, what they can say is the buyer an established German outfit that has supplied and processed natural flake graphite across Europe and beyond for a long time.

Non-Chinese flake graphite is scarce, and the buyers who need it are locking it in years early.

EVG trades at 2.1 cents, which puts the whole company at around $18 million, a $13 mil EV when you include the near $5 mil cash position. Against what has been signed in the last month, the market has some catching up to do.

The Maniry Project

Maniry is a flake graphite deposit in the far south of Madagascar, 100% owned by EVG. The mining permits arrived in July, nearly four years after the paperwork went in, making Maniry the first critical minerals project approved under the country’s new mining code.

Graphite is the anode, the side of the battery that holds the charge while your EV sits on the driveway. Each electric car carries 50 to 55 kilograms of it, against eight to 13 kilograms of lithium.

Most graphite is synthetic, cooked from petroleum coke at 3,000 degrees on Chinese coal power, which is a strange way to build a clean car.

Natural flake graphite comes out of the ground with a fraction of the carbon footprint, and European carmakers under orders from Brussels to cut battery emissions are paying up for it. Maniry is the natural kind.

The deposit holds 40 million tonnes of ore at 6.5% graphite, with a reserve of 16.2 million tonnes at 6.58% inside it, which is the part proven to be mineable at a profit.

The feasibility study laid out a 21-year mine producing around 39,000 tonnes of concentrate a year in Stage 1, stepping up to 56,000 tonnes from the fourth year. Stage 1 costs US$79.2 million to build and the expansion another US$24.6 million. The study values all of it at US$204.8 million after tax.

The study put a 3.8-year payback on the project, meaning the mine earns back its build cost in under four years and spends the next 17 making money.

Put those figures against EVG’s $18 million market cap, or a $13 mil EV when you include the $5 mil cash, and the gap is wide enough to drive an EV truck through.

What the Germans Signed

Each shipment is sold at the greater of two numbers.

The first is the published market price for comparable concentrate, delivered to German ports. The second is a floor pegged to what it costs Maniry to dig the graphite up and pay the bank.

If Chinese spot rips, EVG gets the market price. If Beijing floods the market again, the floor still covers the bills. The house never loses.

The long-form contract is due within six months. Graphite only ships once the board votes to build the mine, and that vote waits on the funding. The build conditions carry no deadline, which is standard for a deal signed this far ahead of first production.

Around three quarters of Stage 1 is still unsold, on purpose. Round says talks with other customers and strategic partners are continuing (a strategic partner being a customer who invests in the mine as well as buying from it), and they now negotiate against a signed German contract.

The Graphite Market

China mines around 80% of the world's natural graphite and controls close to 98% of the anode market once synthetic is counted.

Beijing restricted exports at the end of 2023 and the West panicked about supply, before Beijing flooded the market anyway. Prices fell and every Western graphite project hunting for finance stalled.

The controls on shipments to the US are suspended until November 27 this year, and nobody knows what Beijing does after that. Probably including Beijing.

That whipsaw is what Maniry's floor price was built for. The producer gets repaid whatever the spot price is doing.

Europe has kept hunting for flake that never touched China, and Brussels named Maniry a strategic project under its Critical Raw Materials Act in June 2025, the only graphite project in Africa on the list. That status brings a seat at the table with the European Investment Bank and KfW, the lending arms of the EU and the German government.

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Building a Mine in Madagascar

Madagascar has dug graphite for more than a century and digs more of it than anywhere on earth (bar China).

Rio Tinto and Sumitomo run the island’s two biggest mines and pay around a quarter of the government’s tax take between them, so the state has every reason to keep its miners happy.

The new government approved a foreign-owned graphite mine within nine months of taking office, under a mining code that lets EVG own Maniry outright and lock the tax regime in five-year blocks.

The Financing Path

A mine this size gets built with bank debt, and a bank lending against a hole in the ground wants to know who's buying what comes out of it.

The Germans just answered.

The feasibility study has been done since 2022. The permits landed in July. The offtake was the piece the lenders kept asking for, and the next thing to land is a loan offer. After that comes a final investment decision, and after that, a 21-year mine.

There's a buyer even closer to home too. Evion's half-owned Panthera joint venture in India has been making a profit selling expandable graphite into the US and Europe since early 2025.

Expandable graphite is flake treated to swell under heat, the material that seals a fire door shut, and it fetches more than double the price of raw concentrate. Panthera can take Maniry's flake as feedstock, so EVG half-owns one of its own future customers.

What we’re watching

The long-form contract is due within six months, so the word “definitive” turning up in an announcement before February is the first thing on the list.

A second buyer is next, and Round says those talks are live.

The big one is a funding announcement from the EIB or KfW. A number or a date on the debt package gives Maniry a build date, and at 2.1 cents the market is still pricing EVG as if the mine may never get built.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (“Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 4,500,000 EVG shares at the time of publishing this article. Equities Club has been engaged by EVG at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services License (AFSL) No 519872.

On Thursday, Australia reached a debt level with an eye-watering 12 zeros on the end, marking a speed-run of IOUs handed out since April 21, 2006.

That was the day perennial PM bridesmaid Peter Costello declared Australia debt-free, calling it “the day we pay off the mortgage”.

It seems almost quaint now, and in stark contrast to our current treasurer being ‘community-noted’ on X in response to his claims of austere fiscal management.

We enter the mire of politics only to re-emphasise what it usually means for gold, which ripped this week to be back above US$4,600. Australia is now paying roughly $18 billion a year in interest, and the US just crossed US$40 trillion in debt (and climbing, adding about $90,000 every second).

It has plenty of investors sprinting to gold as a safe haven, which may soon become a stampede if the rate of borrowing continues.

Outside the shiny stuff, here’s what caught our eye this week:

• ELK turns the rig at Friday with the gold price surging

• MRD patents Selectro, and ZMI chases the same metal out of smelter waste

• Unitree’s 460% IPO, and why the robots need rutile

• Uranium’s term price says utilities are worried about supply

• Copper overtakes iron ore at BHP for the first time in history

• Moderna’s 177% day as ASX biotechs expect a bid

• CSL loses US$2.6 billion and has its best day in 20 years

• DroneShield now the most shorted stock on the ASX

Let’s look at gold first, as Washington leans on its own bond market.

Gold’s Back

Gold clocked its third straight week of gains and its highest price since early June this week, as the US intervened in bond markets to help put downward pressure on the US dollar.

As mentioned, the US is carrying a mountain of debt, and the rate it's paying to borrow hit its highest level since ‘07 this week. To put in context, the interest payments are second only to social security on the US government's budget line items.

In response, the Treasury said it was doubling the rate at which it was buying its own bonds back.

The US borrows money by selling bonds to investors. Now it is buying some of those bonds back, and because it doesn’t have a spare pile of cash sitting around, it is issuing more bonds to help fund it.

Put simply, the US is taking on new debt to buy back old debt.

It’s because buying bonds creates more demand for them, which pushes their price up and their yields down. And lower yields mean cheaper borrowing costs for the US government.

It’s a convoluted way of trying to make America’s enormous debt pile cheaper to service without spending less or taxing more, neither of which politicians particularly like.

Many in the market read it as a government struggling with its own borrowing costs and putting its thumb on the scales instead (i.e. panicking).

Gold ripped in response, while the US dollar and bond yields fell.

In our portfolio we’ve focused on historical mines drilling proven ground that some old-timers never quite finished digging.

We’re bullish on Elk Range Mining (ASX: ELK), which has its rig turning at its Friday mine in Idaho as we type (more on that below).

The other one some have forgotten is Black Horse Mining (ASX: BHL), which starts drilling in late September beneath Mt Egerton in Victoria, a mine that produced 1.29 million ounces at around 12 grams per tonne before water shut it in 1906.

With borrowing looking like a runaway train and gold responding in kind, any hits at the above projects could be well rewarded.

ELK Turns the Rig at Friday

Our new addition, Elk Range Mining now has the rods spinning in the Gem State (Idaho), so called due to its abundance of precious and semi-precious minerals.

One historical drill hole from beneath its Friday mine ran at more than five grams of gold a tonne over 110 metres, with that hole ending in 133g/t before the drillers called it a day.

Nobody has been back to find out how much deeper it goes, with Elk now picking up right where they left off.

Phase 1 is eight diamond drill holes for nearly 3,000m of drilling with two more on standby if early results warrant it. ELK will be able to see the veins up close from the solid core it pulls out of the ground, helping it work out which way the gold-bearing structures are heading.

The info gleaned from that then helps decide where Phase 2 drills go later this year, when the rig shuffles underground into tunnels the last owner cut.

Every hit confirming the old numbers also gets Friday closer to its first JORC resource, the ASX standard for how much gold a company can claim is in the ground.

The previous owners spent US$40m on the site before offloading it to ELK for a fraction of that when their ramp-up to production stalled, and the owners before them tallied up the resource under an overseas code.

CEO Edward Keys is on the ground in Idaho, or rather on the mill floor where he’s set up a sleeping bag, and his excitement emanates from his pores in every conversation, such is his confidence after leaving Brightstar Resources to run this new endeavour.

The IPO selling we flagged last week looks to be flushed out with the stock finishing back at 20c on Friday and the screen looking strong.

It’s now a $25 million company with $10 million in cash, drilling a historically producing high-grade system with gold worth more than twice what it was the day the last truck left.

You can read our full drilling write-up here.

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MRD Locks up Selectro

We wrote last week of Selectro passing its first test at Mount Ridley Mines’ Grass Patch project, and now the company has lodged a patent application over the leach process its CTO spent more than a decade developing.

For those who missed it, Selectro pulled 83% of the heavy rare earths, 80% of the scandium, 72.5% of the light rare earths and 56% of the gallium out of raw dirt from Mount Ridley Mines’ (ASX: MRD) project just north of Esperance.

This sits in contrast to the standard hydrochloric acid method, which was run on the same material under the same conditions, and recovered no gallium at all.

MRD owns the technology through its subsidiary Mount Ridley Tech, and the patent filing gives them 12 months to extend protection around the world.

Selectro can be considered a company asset in its own right, pulling four critical minerals out of one feed stream. It also runs on cheaper chemicals than acid leaching and recycles them in a closed loop, so the potential is boundless.

MRD can run the process on Grass Patch or license it to another company’s deposit. Either way, it’s a path to revenue.

Conversations with third parties about test work and collaboration have started, according to managing director Allister Caird, and with the patent lodged MRD can have those conversations without any risk of losing the recipe.

A year ago this was a rare earths explorer with a big deposit near Esperance. Now it has a deposit and a process other people might want to pay for.

Uranium: The Price Nobody is Watching

The rate at which uranium mines are being built is lagging the rate of nuclear reactors by some margin, and is why many are already paying big to lock in fuel for the coming decade.

While uranium spot sits around US$87.75 a pound, almost nobody buys uranium at spot. Power companies buy their fuel in deals that are signed years in advance and lock in deliveries five to ten years before they’re needed.

The price they’re paying for that necessity right now is US$97 a pound, a 10.5% premium.

It shows that utilities don’t think enough uranium will exist in the coming years, and the Bank of America and RBC echo their thoughts, predicting US$130 a pound by 2027, and lifting its long-term target to US$110 respectively.

Supply will stay tight as Kazakhstan produces around 40% of the world’s uranium and is keeping production at current levels, while Cigar Lake in Canada lost output to a sulphuric acid shortage in July.

It comes as the World Nuclear Association says global nuclear capacity will double by 2040, taking annual uranium requirements from about 69,000 tonnes now to more than 150,000.

The US, Canada and China are all deep in the reactor arms race, with the Americans committing US$17.5 billion to 10 new reactors, Canada planning for the same number by 2040, and China recently approving another eight.

Anyone who makes a uranium discovery in a stable jurisdiction over the next few years will have utilities and financiers lining up, and the market is already rewarding the juniors that look like they might.

We’re actively looking for companies to add to our portfolio.

Unitree Lists, and the Robots Need Titanium

China’s biggest humanoid robot maker made a lazy 460% gain on day one of trading on the Chinese stock exchange on Wednesday.

Opening at US$22 a share, the company finished the day a tick under US$125, and propelled its founder Wang Xingxing to a US$16 billion net worth.

Unitree sells robot dogs from US$2,700, its G1 humanoid for US$13,500 and shipped more than 5,500 humanoids last year.

The cheap humanoids on the market today are built from aluminium and steel, but makers are looking for better options.

Engineers who pulled apart a G1 this year suggested its steel joint parts be swapped for titanium to shed 35% of the weight

Unitree's bigger, higher-performance robot (the GD01), is already built with titanium alloy in the parts that carry the load.

Titanium is preferred for use in robots’ load-bearing joints because nothing else matches its strength for its weight.

Forbes recently cited a forecast of global humanoid shipments that expected them to climb from 20,000 last year to 1.2 million by 2030.

Say each of those carries 2kg of titanium. Making that 2kg takes close to 4kg of natural rutile, the mineral titanium comes from, so 1.2 million robots would need about 4,800 tonnes of it a year.

The whole world digs up around 450,000 tonnes of natural rutile a year, down 44% from 2017. The gap has been filled with processed, lower-grade alternatives, and buyers in aerospace and welding, who need the purest titanium, only use natural rutile.

Robot makers chasing the lightest, strongest parts will want the same high-grade material, and the US produces none of its own titanium metal.

We're backing Fortuna Metals (ASX: FUN), which now sits on one of the six biggest natural rutile deposits in the world at its Mkanda project in Malawi. US investor WNDRCO has already put $8.6 million into the company to get that rutile into American supply chains.

A top-six global rutile deposit with American money on the register and assays due this quarter, all for a $39 million market cap, is the sort of mismatch we spend our time looking for.

Copper is the Main Game at BHP

For the first time in history, copper has made BHP more money than iron ore.

It delivered 54% of the group’s earnings (US$18 billion) for the year to June, with BHP clearing roughly 70 cents of every dollar of copper it sold before the taxman and the accountants took their cut. Iron ore had a record year in the Pilbara and still came second.

It’s all downstream of a ripping copper market, which now sits above US$14,000 a tonne after its seventh straight week of gains. It hit record highs earlier this month, up 45% year-on-year, and could keep going.

Chile, the world’s biggest producer, expects output to fall 2.6% this year because of problems at its mines, and China’s smelters are cutting production because they can’t get enough raw ore to feed them.

BHP is now putting more than half of its future spending into copper, with projects in Chile, Argentina and South Australia lined up to lift production by around half by the mid-2030s.

Rio announced similar in February, leaning on its Mongolian copper mine as Pilbara costs crept up.

For all the copper bulls out there (and us writing this wrap), your argument just got stronger. The two biggest miners on the ASX are steering their money into the same metal and, by all reports, shopping for more because they can't find enough of their own.

Juniors with drills turning on real copper targets are the cheapest way into that shortfall, and we expect the majors to keep paying for discoveries.

CSL Loses US$2.6 Billion and Has its Best Day in 20 Years

CSL reported a US$2.6 billion annual loss this week, the biggest in its history, and the stock responded by jumping 17% before lunch and clocking its best single day move in more than two decades.

It makes no sense on the face of it, but let us explain.

CSL collects blood plasma and turns it into medicines, with a vaccine arm on the side, and is Australia’s biggest healthcare company. It started the week valued at around $65 billion.

This week it wrote US$7.1 billion off the books (most of it against a Swiss kidney business it paid close to US$12 billion for and has regretted ever since), which is where the loss comes from. No money left the company.

The day-to-day business actually made US$3.1 billion in profit, a touch less than last year but more than analysts expected.

CSL also told investors to expect profit to grow around 5% next year when the market had pencilled in 2%, and said its core plasma business grew 7% in the second half.

After two years of bad news and a share price halved, it was the first sign the bleeding may have stopped.

The write-downs were flagged in CSL’s May update so didn’t shock anyone and share prices are usually forward looking, moving on what is expected to come next.

The same thing happens at our end of the market when a stock sells off on a decent drill result because everyone saw it coming.

CSL is still down around 21% for the year, so one good day hasn’t fixed two bad years.

The biggest healthcare name on the ASX turning up is good news for every biotech below it though.

Moderna Just Had the Best Day in Biotech History

Moderna earned worldwide brand recognition during Covid so you’d be forgiven for thinking it had peaked.

On Wednesday, it defied the deniers and put on 177% in a single session, behaving more like a micro-cap who hit it big than a US$25 billion company that skyrocketed to almost US$70 billion by the end of the day.

It was off the back of one groundbreaking trial result.

The trial followed more than 1,100 people who'd had a melanoma removed. Half got the standard drug and half got the standard drug plus Moderna's vaccine, and the vaccine group stayed cancer-free for meaningfully longer.

It runs on the same technology as Moderna’s Covid shot, and it’s the first time the tech has passed the final stage of testing against cancer.

Doctors take a patient's tumour and work out what makes it unique, then Moderna builds a vaccine that teaches that person's immune system to hunt those cells down.

Basically, they may have found a way to stop melanoma coming back once it's been cut out. A remarkable result for all us sunburnt Aussies.

Traders took profits on Thursday and the stock gave back 18%, normal after a move like that. Moderna’s closest rival, BioNTech, rose 22% on the day and the Nasdaq biotech index hit a record high.

Biotech on the ASX has been a hard place to make money this year, with the sector still down about 19% despite rallying 22% off its June low.

A result like Moderna's brings investors back to biotech, and on the ASX the small caps with good trial results and cash in the bank are the first ones that will get looked at.

One to Watch Next Week

DroneShield (ASX: DRO) opens its books on Wednesday and shows the market what it earned in the first six months of the year.

The sales number is already out, $125.8 million, up 74% on the same period last year. What investors will find out Wednesday is how much profit was left after costs.

The company has $206 million of orders already signed for this calendar year, which is close to everything it sold in all of 2025, and it's telling the market to expect $250 million to $270 million by December.

Even so, more investors are betting against DroneShield than any other stock on the ASX. Short sellers borrow shares and sell them hoping to buy them back cheaper, and right now more of DroneShield’s shares are sold that way than any other company in Australia.

Every NATO country is spending at least 2% of its economy on defence and heading for 5%, but DroneShield's share price has almost halved this year while its sales went up 74%, because its profit guidance came in well short of what the market had pencilled in.

We’ve backed our own defence play in KTEK Aerosystems (ASX: KTK), which is setting up to build drone components in the US, where Washington is paying to create a manufacturing base it doesn’t yet have.

Wednesday will show us how much of that defence spend is reaching the companies that make the kit.

The Week Ahead

Gold is the one we’ll be glued to. It’s done most of the heavy lifting for small-cap explorers this year, and with ELK drilling at Friday Gold Mine and BHL weeks away from its own program, we think both could move.

We’ll also be watching the chip space, where the big US names have been setting the tone for every AI play and supplier.

Three IPOs hit the boards this week, one for each of the commodities we’ve been banging on about:

• White Rock brings a big lithium story to market with the price climbing off its lows and EV demand picking back up.

• Powerhaus Uranium lists with uranium running and utilities scrambling to lock in long-term supply.

• Axiant comes to market chasing gold, with the metal near record highs and central banks still buying.

We’ll be paying close attention to all of them.

Till next week.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consult your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst Equities Club Pty Ltd (”Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.

Disclosure

The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 500,000 KTK shares, 625,000 ELK shares, 1,554,000 FUN shares,187,500 Blackhorse shares and 2,083,333 MRD performance rights at the time of publishing this article. Equities Club has been engaged by KTK, ELK, BHL, FUN and MRD at the time of writing.

Confidentiality notice

The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.

Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services Licence (AFSL) No 519872.

Elk Range Mining (ASX: ELK) has wasted no time since listing on the ASX, starting drilling at the Friday Gold Mine in Idaho.

The first hole is already in progress, chasing gold the old drilling already found and pushing deeper to find out how far down the system runs.

Top of the list is the standout hole from the old campaigns, 110m at 5.34g/t gold. The final two-and-a-half feet of that hole graded 133g/t, and the drillers ran out of steel with the grade still climbing.

What’s sitting below that hole is the reason we backed ELK at 20 cents. This program is the first time anyone has gone looking for it.

The rig started there, twinning the old hole to confirm what it hit before pushing well past the old depths to see how far down the gold keeps running.

It’s good timing as gold jumped more than 3% overnight to its highest level in around two-and-a-half months, after the US Treasury moved to pump extra cash into the financial system.

Gold has now ripped above US$4,500 an ounce, and the market is pricing all of this at 18c a share, a $15 million company valuation with $10 million of cash in the tin.

Management told investors the float money would go straight into drilling, and it only took them days after listing to make good on it. CEO Edward Keys flew to Idaho before the stock listed, came home just long enough to ring the bell, then flew straight back. He’s there now, sleeping on the floor of the mill while the rig turns up the hill.

As he put it from site: "We are excited to have rods spinning at Friday and to get down to the work we set out to do."

Why We’re Backing ELK Range Mining

You can find our full write-up on why we’re backing ELK here

What the Drilling is Chasing

The gold system at Friday has sat largely untested for more than a decade, but the drilling crew knows this hillside better than anyone alive. Many of them worked at Friday when it last ran, and a few of them mined it.

Five years after pulling ore out of this ground, they’re back drilling underneath their own workings to find out how much they left behind.

Phase 1 runs to roughly 2,850 metres across eight holes, with two more on standby if the early results look promising.

All of it is diamond drilling, which pulls a solid cylinder of core from the ground. That core shows the veins up close and the angle everything runs at. It comes up with its orientation marked too, so ELK learns which way the gold-bearing structures are heading.

By the end of the eight holes, they’ll have the first proper picture of this system anyone’s had in 100 years of mining it.

That will decide where Phase 2 drills later this year, when the rig moves inside the mine and works from the tunnels the last owner cut.

The old database holds more than 380 holes, and there’s plenty to aim at in it. Historical drilling returned 151m at 2.69g/t gold, including 54.1m at 5.62g/t, and a short interval running 57.6g/t.

Those are down-hole lengths, so the true widths are smaller, but the grades still put Friday in rare company. “Monster grades that were not followed up” is how Keys describes them. He’s a geologist, so we’ll take his word on the monster part.

An intersection as good as that would be the best hole most gold explorers ever drill. ELK is starting with a database full of them and a mine already sitting on top.

However, those old ounces won't count on the ASX until ELK's drilling confirms them and moves Friday towards its first JORC resource, the modern Australian standard for reporting what's in the ground.

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Drilling Under a Mine Already Paid for

Friday is a permitted underground gold mine that was pulling ore as recently as five years ago, before the previous owner parked it and moved on.

That owner sank more than US$40 million into the site along the way, covering the underground development, a processing plant, roads and a camp. The market currently prices the company that owns all of it at $15 million.

So nearly every dollar of the $10 million ELK raised goes into drilling on private, patented ground with every permit already in place.

Buffalo Gulch and Deadwood sit further along the structure that fed Friday, giving ELK district-scale ground to work through once the first resource is banked.

In Short

Friday was last mined with gold near US$1,887 an ounce. Gold has surged above US$4,500, so the same ground is worth more than twice what it was the day the last truck left, and high-grade drill hits get rewarded quickly in this market.

ELK shares sit at 18c, under the 20c float price, while the drilling that float paid for is underway at a historically producing, high-grade gold system with district-scale ground around it.

Executive director Leanne Kite put her own money into 250,000 shares on market within days of listing.

The market rarely lets you in below an IPO price with the rig already turning.

Somewhere on that Idaho hillside, a crew that mined this ground five years ago is now drilling to find out what they walked away from. The first answers will start landing in October.

General advice warning

The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (“Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.

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