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HLX - the next 5 bagger cobalt/nickel play?, page-402

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21/09/18

14:18

Post #: 35755790
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Originally posted by Technician ↑

Afternoon everyone,

This is my executive summary on HLX

As mentioned the other day everything on a technical / geological level has been well covered here through out the past year so any prospective or current investors I would suggest going through it again and refresh yourselves quickly as this, now (next couple) months is execution time aka the business end of all the hard work they have done. Ironically yet again I’ll point out we are on the lower end of the long-term trading range and IMO we are strongly undervalued especially for where we are now along with XEC (small cap) and commodity tail winds now emerging.

I want to pull apart and explain an investment case here for helix at this important junction which quiet literally has 5 events in the air at the moment all of which have very strong potential to define the company’s valuation to new levels.

Okay so what do we have?-

Cash- approx. 1million -What market needs to understand and as others have pointed out these guys are not your typical good story telling explorers, fortunately they have invested in a strongly scientific and non-commercial appease approach which has yielded targets which are far more derisked then most and ultimately narrows the risk and increases ROI (return on investment) for every dollar spent over the next two months of drilling. Those people who thought they would trade out thinking a CR was close you have done no favours to yourself IMO as the powerful set of catalysts coming will overwhelm things and increase the likelihood of a CR at much higher prices and not to mention that they have many levers they can pull for cash if the corporate world is not receptive to the cost of capital they want.

The Assets and critical exploration for the rest of the year- As an investor / speculator / trader no matter which of these you are there are two roles you need to remember - what is your potential upside and what is your potential downside and how can you manage or mitigate that. This is where personally I think Helix is in a tremendous situation and carries immense upside potential and very manageable if any downside from current valuation and with low risk of significant dilution that would change these metrics.

Ill try to explain my logic best I can here.

I love when a play has some early strongly successful binary exploration plays drill ready. Yes, they carry risk but their outcome if favourable is huge for a company this size. This is especially true for helix with their exploration hit rate and more de-risked slow scientific approach now about to yield.

Now for the best part of Helix and personally I think it’s very well planned from Mick and the board. It’s all well and good to have 4 HIGH STAKES binary plays in the air with outcomes in the next few weeks but it’s the absolute stroke of genius when you know immediately after them we have mitigated ourselves extremely well from any potential bad binary results through the fact that resource definition drilling at Collerina is in a position now where exploration risk is very low and clearly the tonnage and economy of scale will emerge with the FLEM and the two DHEM targets hence they stated resource estimate H2. Market again massively discounting this presently as I’m expecting between 120k to 200 k contained tons of copper from Collerina alone that’s a good resource given its grade and depth. Market is currently saying not economic until more tonnage therein lies the great opportunity. The economy of scale has further chance of being bolstered by the nearby binary event at yathella.

So, plays in the binary category in the immediate future include: Yathella, Joshua, Mundarlo and Samuel.

Immediate Plays in the advanced well understood tangible resource economy of scale definition stage: Collerina

I just want to make a special comment here regarding Mundalro which I estimate given its one hole 350 meters of RC and 150 Meters of Diamond tail all going well should net a visual result early next week. But remember this if this is what I think it is the whole area and the market will have no choice but to pay attention.

In chronological order:

1. Seven minerals with sizeable background readings at geochemical / samples on surface overlaying a large MLEM plate.

2. First drill holes contacted expected metavolcanics and required 2 holes to be extended another 100 meters. NOTHING that explained the EM response was found but petrology results proved the presence of Chalcocite overprinting Chalcopyrite this is very significant as it may mean this current drilling could contact a supergene oxide zone on top of the potential massive sulphide accumulation of that strong centre its bloody compelling.

3. In pursuit to find out what created the EM response the extra 100 meters was drilled getting us slightly closer the strongest section of the EM. The important confirmation was made that the response was made up of massive / semi-massive sulphides so that lowers significantly the risk we encounter anything like black shale or graphite as we move in on the high intensity EM centre. It also means by default that there are increased chances of it being copper bearing especially with the peripheral copper overprinting evidence.

4. Two days ago, further Lithological, Petrological and geophysical/mapping work further bolstered this and we clearly sit over a nice fault line that connects to the Gilmore fault.

Ask yourself this question what is more likely to be in the centre of a very large MLEM plate with all the right lithological / geophysical / petrological / geochemical traits along with the EM response being confirmed as sulphide related and direct evidence of two copper species, anomalous gold and elevated zinc levels on the periphery directly over a localised fault that feeds into the Gilmore fault zone? And this is all on the bloody periphery, now the drill is down dip going straight into the area of much higher intensity EM wise and we know it’s already sulphide related and there is copper, gold and zinc and the general consensus is that what is found in the periphery is the grade out effect of the EM centre where conductive response is at its highest therefore could correlate to much higher thickness and ore grade than of that found in the periphery which in this case is some distance away as it’s a large EM. The interpreted EM itself looks absolutely text book and has a nice well-structured IP halo around a concentrated and very intense conductive area in the centre.

This is could be very very good.

All the best everyone I have my ticket and we have multiple shots at success 4 high risk and one tangible resource definition backing to underwrite the first four binary outcomes but something tells me at least one of those is going to hit pay dirt any way (Mundarlo?).

Could this be another great Mr Creasy play? I personally think so, and you can’t say he didn’t warn us almost exactly a year ago he made a rare media comment on Collerina and that work that he envisaged is the work they are now about to do on the resource definition side at depth.

All the best.a

Expand

Another excellent post @Technician !
That Mundarlo hole at 500 meters is a very large
vote of confidence.
GLA
Cheers

HLX Price at posting: 3.4¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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