BPM owns Exploration Licenses right next door (40km along strike) to Rumble Resources who made the Chinook Lead/zinc discovery. BPM's projects share fundamental geological similarities with Rumble’s tenements in the region.
Opened: 04-Feb-2022
Shares Held at Open: 1,670,000
What does BPM do?
BPM Minerals (ASX:BPM) is an exploration company aiming to make lead-zinc discoveries in the Earaheedy Basin in WA, Australia. BPM also holds other early stage gold-nickel projects across WA.
What is the macro theme?
Lead and zinc are two industrial metals that have moved higher due to an inflation-driven commodities supercycle. Lead is mainly used for Internal Combustion Engine (petrol car) batteries while zinc is primarily used for galvanising steel and making alloys. As fiscal and monetary stimulus increases infrastructure spending - we believe zinc in particular is primed to move beyond its current elevated price to all-time-highs.
Our Big Bet for BPM
BPM will return 10x by making a discovery and defining a deposit significant enough to move into development studies
Why did we invest in BPM?
Assets near Rumble Resources’ Chinook Discovery
BPM owns Exploration Licenses right next door (40km along strike) to Rumble Resources who made the Chinook Lead/zinc discovery. BPM's projects share fundamental geological similarities with Rumble’s tenements in the region.
Cap Structure
At the start of the year, BPM had only 49M shares and 38M options on issue with a market cap of just $13.7M. With ~$4.4M in cash in the bank and an enterprise value of $9.3M it is highly leveraged to a new discovery.
What do we expect BPM to deliver?
Objective #1: First Lead/Zinc drill holes in the Earaheedy Basin.
Milestones
Geochemical/geophysical surveys to generate drilling targets
Drilling permitting
Drilling commencement
Drilling results
Objective #2: Side bets: Drilling at the company’s other projects.
We expect BPM will make drilling progress on the company’s other projects, we are looking for:
Milestones
Drilling program at the Santy gold project
Drilling program at the Nepean nickel project
Drilling program at the Claw gold project
What could go wrong?
Permitting risk
There is always a risk with exploration projects that the necessary approvals or agreements like land access, heritage and native title agreements are not reached and permits can go un-granted.
Exploration risk
BPM's projects are at a very early stage, most are yet to have high-priority drill targets identified, any drilling programs done in the near-term could return no mineralisation.
Delay risk
We originally invested in BPM back in May 2021, hoping they would drill the Hawkins prospect before Christmas 2021… that definitely didn't happen so we now take BPM’s timelines with a grain of salt - timelines may be delayed.
Financing risk
BPM is a junior explorer with early stage projects. They still need to do a lot of target generation work before the projects are ready to drill, markets may lose momentum and funding for early stage higher risk exploration like this could dry up.
Commodity risk
We are primarily invested in BPM for the lead/zinc drilling at Earaheady, but the market may lose interest if lead and zinc prices cool off.
What is our investment plan?
Our investment plan for BPM is the same as for all our early stage, exploration investments:
Disclosure: The authors of this article and owners of Next Investors, S3 Consortium Pty Ltd, and associated entities, own 1,670,000 BPM shares and 850,000 BPM options at the time of writing this memo. S3 Consortium Pty Ltd has been engaged by BPM to share our commentary on the progress of our investment in BPM over time.
Assays in - What does $6.5M capped BPM do next?
Nov 30, 2022
Nov 30, 2022 |
10 min
BPM recently put out their much anticipated lead-zinc project assays, next to Rumble Resources which is capped at $137M. While the company did confirm lead-zinc traces, the grades were not high enough to commit money to another drill campaign. In this article, we uncover what is next for BPM which has a strong cash balance of $5.3M, giving it a tiny Enterprise Value. The company can now turn its focus on its two gold projects (an unloved sector that we think will see some strength in 2023).
BPM Sees Lead-Zinc Along Strike From Rumble, Assay Results Next
Jul 19, 2022
Jul 19, 2022 |
11 min
Today, BPM announced that portable XRF readings confirmed lead-zinc mineralisation across five key areas of interest from depths of only 40-100m.
BPM drilling restarted - tiny market cap leveraged to success
Jun 30, 2022
Jun 30, 2022 |
7 min
BPM is currently capped at $7.8M, has plenty of cash (~$6.8M) and is trying to follow in the footsteps of $184M capped Rumble Resources, which it sits along strike from.
$10M capped BPM drilling now, 40km along strike from $223M capped Rumble Resources
May 10, 2022
May 10, 2022 |
11 min
Yesterday, our exploration investment BPM Minerals (ASX:BPM) confirmed that drilling had commenced at its lead-zinc Hawkins Project which sits along strike from ($223M capped) Rumble’s discovery.
BPM Side-Bet: Nickel EM targets picked up in MLEM surveys - fast tracked AC drilling next week
Feb 16, 2022
Feb 16, 2022 |
9 min
Today BPM Minerals (ASXL:BPM) announced that whilst running EM surveys over its Nickel project in WA it had identified 11 EM conductors. With drill rigs hard to come by in WA, BPM also announced that it had opportunistically moved to secure a drill rig which is expected to start a 3,000m air core (AC) drilling program early next week.
Drilling mid-2023 next door to $1.4BN Capricorn Metals
Mar 8, 2023
Mar 8, 2023 |
47.8 seconds
Our exploration Investment BPM Minerals (ASX: BPM) is planning a drill program at its Claw gold project in WA mid-2023. BPM’s Claw project sits immediately to the south of Capricorn Metals’ (capped at $1.4BN) 2.7m ounce Mount Gibson gold mine.
Drilling planned for Q2-2023 next to $1.7BN Capricorn Metals
Feb 6, 2023
Feb 6, 2023 |
52.1 seconds
New CEO appointed - What’s next for BPM?
Dec 13, 2022
Dec 13, 2022 |
52.8 seconds
WA gold project update & what’s next?
Dec 7, 2022
Dec 7, 2022 |
1 min
Assay results from Hawkins lead-zinc project
Nov 3, 2022
Nov 3, 2022 |
51.0 seconds
Markets showing life after June tax loss selling
Jul 9, 2022
Jul 9, 2022 |
18 min
Markets showing life after June tax loss selling, cap structures explained and we share our internal spreadsheet for tracking cap structures, options and performance shares.
Market Mood Swings, Price Discovery & Enterprise Value
Jun 27, 2022
Jun 27, 2022 |
26 min
Market mood swings. Down on low volumes, now up. What is price discovery? What is Enterprise Value? Current lowest Enterprise Values in our Portfolio. Cash is king. Current biggest cash balances in our Portfolio.
The War Begins, Cybersecurity, Food Security, Energy Independence and Precious Metals
Feb 26, 2022
Feb 26, 2022 |
17 min
The Russian troop build-up had been happening for the last couple of months and we think the market had slowly been pricing in a potential conflict, especially one that could accelerate the “west versus east” tensions and all the ramifications that come with it.
Why we invest in Oil & Gas and Precious Metals
Feb 21, 2022
Feb 21, 2022 |
17 min
Across our portfolios we have investments in battery metals, oil & gas, precious metals, medicinal cannabis, early stage tech, green energy, growth stocks and new energy materials.
The "Lesser Kown" Energy Transition Metals: Copper, Aluminium, Graphite, Helium, Rare Earths
Feb 5, 2022
Feb 5, 2022 |
27 min
We think this investment theme is just getting started and we’re determined to repeat that success across a range of new commodities that are critical to the “energy transition”.
