4 August 2023
The Insider: Meet the Fund Manager sessions are a great way to hear directly from leading fund managers. They share their approach to investing, favourite companies and their market view for the year ahead.
An advanced lithium explorer has caught the eye of an outperforming fundie, and the impressive amount of progress the company has made since listing on the ASX just two and a half years ago has earned it a place in the portfolio of many investors, including Emanuel Datt’s fund – Datt Capital. Their two flagship projects are the Manna Lithium Project (MLP) and the Marble Bar Lithium Project (MBLP).
West Australian lithium developer with two projects that make up a combined mineral resource inventory of 50.7Mt @ 1% Li2O. Emanuel notes that Mineral Resources Ltd (ASX: MIN) is on the register with a 9.7% holding in the company, as well as the proximity to well known lithium mines.
Back when Global Lithium Resources (ASX: GL1) listed in May 2021, it was one of few lithium explorers looking to get on the boards and a good 6 months before a supply squeeze lit a fire under any company searching for the critical mineral.
GL1 raised $10 million at $0.20/share with a $26.36 million market cap, and enjoyed a 50% uplift on day one open before reaching $0.38 on its third day of trading. Their share price ended up reaching an all time high of $2.94 in September last year, and their market cap currently stands at over $400 million.
It was a busy few months for the company post listing, as they proceeded to drill out their MBLP while strategically acquiring land around it. The acquisitions boosted the prospective strike from 11km to 25km, and this proved to be a valuable addition that resulted in a material increase in shareholder value.
The company was certainly busy leading up to the listing, having acquired MBLP two years earlier in June 2019. GL1 managed to undertake enough exploration activities during this time to declare a maiden inferred JORC resource of 10.5Mt @ 1% Li2O, which bolstered the valuation of the company at the time of listing.
An aggressive exploration plan post-listing saw the company take MBLP, which is 150km south of the infrastructure-rich Port Hedland, up to 18Mt @ 1% Li2O. GL1 completed almost 50,000m of drilling on the project in 2022, and has another 20,000m planned for 2023.
However, a groundbreaking acquisition and monster equity raise was executed towards the end of last year, when GL1 raised a whopping $121.5 million at $2.25/share to acquire MLP for $60 million from Breaker Resources (ASX: BRB). Existing strategic investors supported the placement, with MinRes and Suzhou TA&A Ultra Clean Technology Co taking up allocations to ensure a 9.9% equity holding on each of their behalves.
Subsequent drilling has boosted the projects mineral resource to 36Mt @ 1.13% Li2O, and GL1 commissioned a definitive feasibility study in the first quarter of this year. Results are expected in the first quarter of 2024, with a final investment decision also made that year. A successful ore sorting trial was completed which has given the company valuable data which is being used to further refine processing strategies. The project contains 406,000 tonnes of contained lithium, and another update to the resource estimate is expected in the first half of 2024.
MLP is not far from MIN’s Mt Marion lithium mine – and the two are connected by the Trans Australian Railway line.
This is especially exciting to Mr. Datt, who stated “We think that over time, this will be quite an attractive bolt on opportunity at some point for one of the existing lithium players. Despite that, it’s actually priced at a significant discount to peers.”
Summarising his thoughts on the company, including their presently aggressive exploration and resource definition drilling program, Emanuel stated “At a $450 million market cap, we think this is attractively priced relative to its peers”.
Click here to view more videos from Emanuel Datt’s The Insider: Meet the Fund Manager session.
Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets’ position. Any advice contained within this presentation is general advice and does not consider your personal circumstances, you should consider whether it is appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.
Past performance is not a reliable indicator of future performance.
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Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.