$0.090
Opened: 07-Mar-2022
Shares Held at Open: 845,000
What does ARN do?
Aldoro Resources (ASX:ARN) is a junior exploration company aiming to discover rubidium, lithium and nickel across a portfolio of projects in Western Australia.
What is the macro theme?
Rubidium is currently used industrially in fibre optic cables. It also provides exposure as an up and coming battery metal with its use in sodium-ion batteries. Sodium-ion batteries have lower energy density than lithium-ion batteries, are faster to charge and more resilient to cold temperatures.
Nickel & lithium are critical raw-material in the production process of electric vehicle (EV) batteries. Nickel makes batteries energy dense, so that cars can run further on a single charge. lithium is the primary raw-material used in EV batteries. Nickel can also be found in everything from mobile phones to jet engines.
Our Big Bet for ARN
ARN delivers a 10x return by discovering and defining a significant enough deposit to move into development studies for one of its projects.
Why did we invest in ARN?
Rare exposure to rubidium on the ASX
Rubidium is used in a few high tech applications, and can be used in sodium-ion batteries. Rubidium is more expensive than gold because of how difficult it is to find, we believe it could evolve into a strategically important metal. ARN offers a rare exposure to this commodity on the ASX.
Dr Minlu Fu backing the company
Fu made a strategic investment into ARN via a $2m placement @20c. Dr Fu has been heavily involved in a number of nickel, copper and gold discoveries and was also a strategic investor in another one of our portfolio companies Los Cerros at 3.5c.
Leveraged to a new discovery
ARN’s Nickel-copper-PGE Project in the Murchison Region, sits on grounds synonymous with a specific type of nickel-copper resource that can also include platinum group elements (PGE). Other discoveries made in similar geological settings sold for multiple $B within 1-2 years of discovery. Voisey’s Bay sold for C$4.5BN just two and a half years after it made its discovery. Nova Bollinger sold for A$1.8BN, three years after its major discovery. Chalice’s Julimar discovery saw it reach A$3BN+ valuation.
What do we expect ARN to deliver?
Objective #1: Drilling across the company’s rubidium/lithium projects
With an RC drilling program ongoing at the Niobe project, we want to see ARN go on and drill its other rubidium/lithium project (Wyemandoo) ~40km nearby.
Objective #2: Maiden JORC resource estimate at the rubidium/lithium project
We want to see ARN convert its current exploration target for its rubidium/lithium project (33,000-150,000 tonnes of rubidium oxide grades ranging from 0.07% to 0.15%) into a maiden JORC resource estimate.
Objective #3: Drilling at the company’s nickel project
EM surveys and more rock chip sampling as part of target generation works leading up to the next round of drilling at the company’s nickel project.
What could go wrong?
Exploration Risk
All of ARN’s projects are still only prospects. With no confirmed resource or mineralised system there is a risk that after drilling nothing is found.
Financing Risk
ARN as a junior explorer is heavily reliant on freshly raised capital to finance high-risk drilling programs. ARN is currently in the middle of multiple drilling programs. With this much exploration activity ARN is likely to need to raise capital to finance further exploration later in 2022. Market conditions are also important for ARN, a deterioration in conditions could mean accessing capital becomes a problem for ARN.
Commodity Risk
Rubidium trades in an illiquid spot-market meaning it can be hard to model out a development project. There is also a risk that commodity prices fall and high-risk explorers like ARN fall out of favour.
What is our investment plan?
We have been holding ARN for almost a year now, the share price has performed well since entry so we have free carried, and now intend to hold our position into the 2022 drilling campaigns.
We may look to further de-risk our current position by 20% if the share price re-rates on a lithium or rubidium discovery, and then update our investment memo depending on drilling results and (hopefully) a JORC resource.
Disclosure: The authors of this memo and owners of Catalyst Hunter, S3 Consortium Pty Ltd, and associated entities, own 845,000 ARN shares and 220,000 ARN Options. S3 Consortium Pty Ltd has been engaged by ARN to share our commentary on the progress of our investment in ARN over time.
ARN delivers rubidium assay results, good enough to drill again
Jul 25, 2022
Jul 25, 2022 |
10 min
Last week one of our junior exploration Investments, Aldoro Resources (ASX: ARN), announced assay results from its Niobe Rubidium-Lithium Project in WA.
ARN drilling to define a maiden JORC rubidium/lithium resource
Mar 7, 2022
Mar 7, 2022 |
13 min
Our junior exploration investment Aldoro Resources (ASX: ARN) is chasing rubidium, lithium, nickel and copper. With the lithium price up over 500% this year and trading at all time highs, ARN has picked the perfect time to go in and drill its WA rubidium/lithium projects.
ARN adds Rubidium target in battery metals exploration portfolio
Aug 27, 2021
Aug 27, 2021 |
6 min
ARN is actively running its nickel exploration having already made a promising nickel drill hit. ARN is still drilling targets right now, and has also found some down hole EM conductors during exploration. While we wait for news of more nickel results, ARN has announced today’s rubidium target and also has some interesting hard rock lithium projects it is exploring...
ARN Hits 1.7m of Massive Sulphides - Assays to Confirm Result
Aug 6, 2021
Aug 6, 2021 |
4 min
As shareholders, we welcome news that Aldoro Resources Ltd (ASX: ARN) has hit 1.7m of massive to semi massive nickel-copper sulphides, 212m below the surface during maiden diamond drilling at its flagship Nickel-Copper-PGE project in WA.
ARN Hits 1.7m of Massive Sulphides - Discovery Hole?
Aug 5, 2021
Aug 5, 2021 |
1 min
Aldoro Resources (ASX: ARN) just came out of a trading halt with news of a 1.7m hit of massive to semi massive sulphides, 212m below the surface.
Maiden JORC resource estimate announced
Oct 13, 2022
Oct 13, 2022 |
1 min
Resource drilling ongoing with more pegmatites being intercepted
Aug 10, 2022
Aug 10, 2022 |
54.6 seconds
Purple specs of lithium intersected at lithium/rubidium project
Jun 23, 2022
Jun 23, 2022 |
1 min
More rubidium/lithium drilling to commence in WA.
May 4, 2022
May 4, 2022 |
1 min
More assays from WA nickel project
Mar 18, 2022
Mar 18, 2022 |
50.4 seconds
Nickel, the War and Under Investment in Exploration
Mar 12, 2022
Mar 12, 2022 |
15 min
The commodities bull is being driven by a potent cocktail of inflation, war, growing demand from the energy transition, geopolitical squabbles, declining grades and years of low exploration spend.
Mainstream Media Catching on to the Commodities Supercycle
Mar 5, 2022
Mar 5, 2022 |
26 min
It looks like the commodities supercycle we have been predicting is now underway. We’ve been saying it's coming for a long time but are now seeing firm evidence that it's here across further recent commodity price spikes and mainstream media reports.
Recap of the KNI IPO and share price run
Aug 28, 2021
Aug 28, 2021 |
13 min
Kuniko Ltd (ASX: KNI) is the biggest story of the week after its 20c IPO on Tuesday. Two days later the share-price exploded to as high as $3.60 on massive volume , going into a price query trading halt before re-opening on Friday, where it spent the day pretty comfortably bouncing around the $2 mark on an outrageous ~$64M shares traded.
Market swings back up as small caps scramble towards the end of the year
Aug 7, 2021
Aug 7, 2021 |
10 min
The small cap market has roared back this week after a couple of boring months during “sell in May and go away” and “June tax loss selling”, followed by a pretty limp start to July as many investors were unsure about coming back in.
Why stocks go into "Quiet Execution Mode", how to spot a cap raise, stock "Confession Season"
Jul 24, 2021
Jul 24, 2021 |
15 min
Here’s what happened this week on Next Investors We recently increased our investment in Alexium International (ASX: AJX), Vulcan Energy Resources (ASX:VUL, FWB:6KO) released probably the most significant announcement in its history and more...
