Little Things Matter, for Smart Investors – Ben Heard (on Nuclear)

Interview with Ben Heard, Founder of Bright New World. Nuclear’s new outlook.

Ben Heard is an eco-modernist based in Adelaide, Australia. He answering the question as to how do societies will deliver the ever increasing amounts of energy needed in an intelligent, ethical and cost-effective way?

Throughout his childhood, Heard held an anti-nuclear viewpoint. His involvement in his local Catholic community, which was active within the Peace Movement, exposed him to plenty of anti-nuclear material. Moreover, Britain was testing nuclear weapons on aboriginal land at the time, further strengthening the anti-nuclear stance held by the Australian government and society.

Heard’s growing interest in environmental ethics led to regular donations to GreenPeace and further anti-nuclear information as a consequence. In fact, Heard was anti-nuclear throughout his 30s. His views were deeply ingrained after decades of indoctrination, and it was uncertain as to whether his views would ever change, even when presented with new data.

Matthew Gordon talks to Ben Heard, 3rd July 2020


Heard had been working in occupational therapy, but he changed lanes to a career better suited to his passion for environmental sustainability. He worked for the climate change team within an engineering company. As part of his role on the team, he worked towards solutions for climate change adaptation and impact mitigation. This sparked one of his most interesting questions: what does it mean to become carbon neutral? He posed this question to energy decision-makers in cities across Australia, helping them define their plans in a more environmentally-friendly fashion.

He even worked on a carbon-neutral desalination plant in the city of Victoria. National droughts have always posed a major issue for the Australian people. The entire society is extremely water-conscious and tries to restrict their consumption. However, desalinated water requires a large amount of energy to produce, and Heard’s calculations, as part of his more senior role, quickly produced an indelible argument: solar and wind power were inadequate for the plant’s carbon-neutral energy needs. This sparked his exploration of nuclear power as an energy solution.

In order to change someone’s stance on nuclear power, it is important to be gentle says Heard. He remarks that in his case it was a gradual transition, and it was one that required a change in identity rather than a mere change in mind. Nuclear power is so polarising within both political and environmental discourse that one has to reassess ones position on all manner of topics.

Barry Brook’s ‘Brave New Climate’ blog was crucial in changing Ben’s identity. The blog made it apparent that believing in climate change and advocating nuclear energy were not mutually exclusive. Once he attended a pro-nuclear debate, it became clear that the articulate, fact-based positions were eminently more desirable than the cherry-picking ramblings of the anti-nuclear lobby.

A nuclear power station

In order to spark nuclear development in the energy space, change is going to have to come from the top down. Decentralised, small-bore solutions at a household level will be insufficient for what society ultimately requires to head towards a carbon-neutral society. The challenge is to balance the need to optimise constantly changing technology, prices and societal demands, with enough prescriptive certainty to actually get things moving. Fossil fuels will not be replaced in Australia. They will be retired. Within the future Australian renewable energy blend, there is a “virtually iron-clad argument for at least 10,000MW of nuclear power.” This is more than enough to get things started. Nuclear isn’t yet on the footing to deliver everything we need right now, but its ability to operate almost anywhere makes it an extremely useful potential solution.

There is still a role for large reactors and they are going nowhere, given the huge global energy requirements in major developed countries. However, for a smaller energy grid, like Australia, and in countries in the developing world, getting the political will to back a new, large, expensive infrastructure is far from easy. When nuclear power first started being operated commercially, it started off small before being ramped up. This can work if nuclear energy is a constant priority for a country. Smaller SMRs appear to move the nuclear reactor away from a construction paradigm and towards a manufacturing paradigm, which has already been extremely beneficial for wind and solar power. Moreover, the smaller scale allows the reactor units to overcome the ‘economies of scale’ requirement to achieve certain outcomes in such a large core size; pumps, valves and motors are bypassed by technology. It also means that manufacturers don’t need to request such large sums of money, making the funding process much more feasible. Many major governments are now looking at SMRs as a means of returning to domestic energy production after becoming so reliant on globalism. Canada and the United Kingdom are prime examples.

The funding for such developments in Australia will remain predominantly private through utilities. However, the government is beginning to understand that it must establish the conditions and do the bridging to help steer crucial industries towards the clean-energy future that it needs to be working towards.

What did you make of Ben Heard? What questions would you like us to ask him next time?

Company Website: https://www.brightnewworld.org/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Predictive Discovery (PDI) – Investment Slow Burn Hots Up Rapidly

Predictive Discovery Ltd
  • ASX: PDI
  • Shares Outstanding: 824M
  • Share price A$0.08 (03.07.2020)
  • Market Cap: A$66M

Interview with Paul Roberts, Managing Director of Predictive Discovery (ASX: PDI).

Predictive Discovery, founded in 2007, is a an Australian mineral exploration company with a project portfolio business model. After 10-years of stagnation, in April, the market was excited by the diamond drill results released for several of Predictive Discovery’s Guinean projects, with the market cap lurching from less than A$5M to over A$50M overnight, quoted in the company’s investor presentation as a 733% gain in a 48-hour period.

The company owns a variety of land packages across Guinea, Côte d’Ivoire and Burkina Faso. This portfolio features five 100%-owned greenfield gold exploration projects in Guinea, 10 ‘prospects’ with potential for multiple large gold discoveries in Côte d’Ivoire, and 8 ‘prospects’ with an established Mineral Resource Estimate in Burkina Faso. The company has a JV with Resolute Mining in Côte d’Ivoire, but the current focus in on the projects in Guinea. The numbers are solid, but Predictive Discovery needs to carry out a more extensive drill programme to uncover its true scale. It aims to deliver a JORC compliant resource towards the end of 2021.

Matthew Gordon talks to Paul Roberts, 3rd July 2020


So far, investors might be frustrated that Roberts and his team have learnt on the job with investors’ money, but this is all too common in the junior mining space. All will be forgiven if Roberts can deliver accretive value for long-suffering shareholders, but he is now under even more pressure to deliver such returns.

Starting with the non-core Burkina Faso assets, Roberts is pleasantly candid. The regional security crisis in the Sahel has been well documented by Crux Investors contributors, but Roberts claims that the feasibility of working on a project with an acceptable level of safety it is largely dependent on the specific location within the country that the project is located. Predictive Discovery’s projects are in North-East Burkina Faso, a real terrorist/criminal enterprise hotspot. The tenement package runs over 100km along strike from the Niger border down towards Golden Rim’s gold property. There are several issues for the company in the region. Chiefly, the company is not at a development phase. In order to engage in the earlier stages of exploration, the amount of security that is required becomes problematic. It is NOT POSSIBLE to work up in the North-East of Burkina Faso safely right now. However, further to the South-West of the country, it becomes more feasible, provided a company has a detailed plan and a high tolerance for physical risk. Once a company has a mining operation, securing it becomes possible. Right now, Predictive Discovery is not doing any work right now. He believes these projects may have a place in future development, but he doesn’t think that Predictive Discovery will be the company to deliver this; it simply does not have the tolerance for such a high degree of physical risk. The market attributes 0 value to the projects. There are much safer fishes to fry for Predictive Discovery.

In the Ivory Coast, the current activity is taking place at the Boundiali Project, one of the JV projects shared with Resolute Mining. A discovery was made there in 2016, the Nyangboue Prospect, and 2km of drilling at a 6km soil anomaly through up some “very nice” results. As it stands, the company would define mineralisation of c. 1km. As it stands, it won’t reach 1Moz, but if it could be taken to depth, this number may be reachable. The work that hasn’t yet been done is exploring the 4km to the north: the current activity. Resolute is actively drilling, and Roberts is hoping for some news over the next 1 to 2-months. All in all, the project offers up 19km of gold soil anomalies. Success is in the hands of Resolute Mining and their appetite.

The other JV project is Ferkessedougou North, featuring a 17km-long gold-in-soil anomalous trend. The anomaly of primary focus is the Ouarigue South Gold Prospect. Roberts thinks it is the “most interesting (ore) body” found in the Côte d’Ivoire so far. It is strike limited and “fat,” but the company announced some good drill results on the 16th April, just a day after the Guinea results were announced. New investors have clearly been impressed by the value proposition on offer. Ferkessedougou North’s resource persists at depth. It is a granite-hosted body and a 10km section directly along strike that appears to be on a structure has seen no drilling whatsoever. Continued drilling could throw up some exciting numbers.

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The agreement with Resolute Mining appears to be satisfactory for the major right now, and should “certainly” keep the company interested for the next 12-months. Predictive Discovery “expects” Resolute to go and do more work at Ferkessedougou North in the near future, likely before Christmas. Resolute is also interested in the “unfinished business” at Boundiali. It appears that this is the largest Greenfield investment that Resolute Mining has, so it must be interested in something. However, this is exploration. If Predictive Discovery’s projects can’t deliver the desired scale, at least 2Moz, Resolute is likely to step back, and the projects will need to be reclaimed as a smaller-scale operation. Predictive Discovery is currently a contributing partner in the JV, holding 23.5% equity. A new programme is presented every 6-months, and the company has the option to decide whether to contribute or not. The “dilution phase” ended in June of last year, and the contribution phase has now commenced. The market is not currently attributing much value to the JV.

In Guinea, the 100%-owned exploration projects are Kankan, Nonta, Kaninko and Boroto. Predictive Discovery holds c. 500km2 of prospective landholdings and all projects contain artisanal gold workings, a good indication of the presence of gold. Four of the projects lie within the Siguiri Basin, which hosts Anglogold’s large Siguiri Mine (+10Moz). At Kaninko, the drill results featured broad, high-grade gold mineralisation of up to 46m at 6.58g/t gold from 4m, confirming a discovery with excellent growth potential. 70% of the 24 reported drill holes were mineralised, and there were several high-grade intercepts.

Results from a 24-hole aircore and reverse circulation drill program on the North-East Bankan prospect threw up broad north-trending zones that are at least 450m long and open in all directions. Furthermore, the 46m intersection was 10m at a whopping 26.52g/t from 34m, while an equally impressive result demonstrated 42m at 2.92g/t from 8m. These sorts of anomalous grades aren’t necessarily rare for the area, but they are undeniably encouraging.

After completing its most recent raise on the 6th June, Predictive Discovery has raised roughly US$40-50M over its 10-year lifecycle. Roberts isn’t worried about a potential overhang because he believes the recent turnover of the stock has been “mind-bogglingly” large and most of the tide sellers have gone. Aurora recently sold some of its shares, which hasn’t helped, but Roberts thinks most of it has now washed through, especially with the finalisation of the recent financing.

With the US$9M cash in Predictive Discovery treasury, the bulk of the money will go to Guinea, and the bulk of that will go on Kaninko. This appears to be the key to getting the market excited.

Roberts owns 5.5M shares from the c. 824M outstanding. All were purchased on the open market. Nobody has received a pay rise just yet…

Moving forward, Roberts will need to add some institutional shareholders into the mix to give the stock some stability. Right now, there are very few shareholders with more than 5%. It will be interesting to track the company’s progress; when will the company provide enough substance to the market to attract institutional investment?

What did you make of Paul Roberts and Predictive Discovery?

Company Website: https://www.predictivediscovery.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Kore Potash (KP2) – Size Matters to Investors Says Turnaround Expert

Kore Potash PLC
  • AIM/ASX: KP2
  • Shares Outstanding: 859M
  • Share price GB£0.01 (03.07.2020)
  • Market Cap: GB£10M

Interview with Brad Sampson, CEO of Kore Potash (AIM/ASX: KP2).

Kore Potash is a potash developer with assets in the Republic of Congo. The company’s focus is on bringing its ‘world-class’ potash projects into production. Kore Potash’s Sintoukola district is a globally significant potash basin in the Republic of the Congo. This is for 2 reasons. The first is the extremely high-grade. The deposits are also at shallow depth. The second is scale.

Moreover, this new potash basin is positioned strategically in close proximity to the growing African and South American potash markets. Africa appears to be becoming the next focal point for fertiliser demand and food production and is by far the fastest-growing potash market. However, investors should note that progress may not be rapid because it is developing from scratch.


Let’s start by exploring the potash space. The main use for potash is as an agricultural fertiliser, providing a source of potassium to crops. This is a fundamentally important long-term application and is a strong base driver to turn potash’s demand narrative on. In the global agricultural space, there is a train of thought that is gaining momentum, and it regards environmental efficiency. The rapidly growing global population needs more and more food, and the potash macro story features a global ambition to satiate humanity’s hunger whilst making more efficient use of dwindling arable land via increased yields. Science has not currently plugged this gap, short of providing GMOs to increase yields without fertilisers. Potash is a natural, environmentally friendly solution. The long-term demand thematic ensures that potash is a more stable commodity than many because even in the most unstable of markets, food is a constant consumer good necessity. However, stability isn’t always desirable. It totally depends on what sort of investor you are. While it may not possess the glitz and glamour of gold or the pizzazz of battery metals, potash can make investors money if they pick the right company.

The potash market is around 65Mt pa in size. COVID-19 and the trading stand-off between the US and China has caused the market to take a slight hit. The market is only growing by 2-3% pa. Some investors will view this as stable; some will view it as stagnant, especially considering the sort of growth seen in the gold sector right now. Nobody can claim that 2-3% growth is an exciting figure, and investors will question why to choose this investment class over others. Some investors might argue that we don’t really need another potash company, but buyers are always going to appreciate the additional competition; the quality and total cost at which it produces confirms its potential to compete. The real question is do investors care? Sampson says that multiplier majors have moved into the potash space and acquired big projects for a reason. He believes that despite Kore’s status as a minnow, the company has managed to acquire perhaps the most exciting land package around.

Let’s delve into those assets. There are 3 projects, all in the Republic of Congo, all within the Sintoukola district. The DX Sylvinite project is the highest grade undeveloped potash deposit globally. A PFS was released on 13th May 2020, outlining some impressive economics. The life-of-mine operating cost is just US$87/t Muriate of Potash (MoP) FOB. The operational process is inherently simple and involves single well selective dissolution mining, churning out 400ktpa MoP production over an 18-year lifespan. Kore Potash can forge an accelerated pathway to production in with just a 21-month construction period. Moreover, the project’s strong infrastructure overlaps with the other 2 projects.

First, Kola, Kore Potash’s largest project, is a tier-1 potash asset that is anticipated to be one of the lowest-cost potash producers on the planet. It has a Measured and Indicated Mineral Resource of 508 Mt grading 35.4% KCl, and the industry’s lowest operating cost: US$102/t MoP CFR delivered to Brazil. However, it will require a 4-year construction period and a sizeable US$2.1Bn initial CAPEX.

Secondly, Dougou is a large, thick carnallite deposit with a Measured & Indicated Mineral Resource of 1.1Bn tonnes grading 20.6% KCl. This is an good portfolio of projects in a reasonable mining jurisdiction. This company IS NOT in the DRC, though it is next door.

Sampson expects a fast-tracked DFS for DX in 8 to 12-months time. A front-end engineering and design phase would follow, concluding in construction within 15-months. Sampson is adamant that as he de-risks the projects further, the completely share price should start to rise. We’re yet to see investors take much interest in the potash space, so investors may want to err on the side of caution. He’s going to have to find a way to excite the market as a whole, which is easier said than done when it comes to potash; there is no shortage of supply in the market, and no-one wants a price war.

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Once the cash is flowing at DX, this could enhance Kore Potash’s optionality. The company currently has US$4.7M in the bank and will be heading to the market shortly to push the development of DX over the line. In an ideal world, Sampson will try to avoid dilution. Kore Potash is considering all options. The company is pursuing strategic partners. Sampson claims he “knows” there is significant interest in the company’s portfolio. The current shareholder base appears to be supportive.

Sampson claims that the share registrar doesn’t have a significant overhang. He states that the majority of investors are providing committed support. Kore shareholders own 60-70% of the company. More than US$150M has been spent developing these projects already. Sampson last bought shares himself roughly 6-months ago. The company has raised US$13.5M over the last 2-years. Market cap today in £17.5M. The company has a lot to do before investors start to look their way.

What did you make of Brad Sampson and Kore Potash?

Company Website: https://korepotash.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Element 25 (E25) – Manganese Macro v Strong PFS. Who wins?

Element 25 Ltd.
  • ASX: E25
  • Shares Outstanding: 98M
  • Share price A$0.49 (02.07.2020)
  • Market Cap: A$48M

Interview with Justin Brown, Managing Director of Element25 (ASX: E25).

Element 25 is an Australian manganese developer. Manganese has always been something of an enigmatic commodity, but the market recently got extremely excited about Element 25, doubling the share price overnight. The average trading volume leapt from 40,000 shares to 890,000 shares. The cause of this is the company’s recent PFS for its ‘world-class’ manganese resource at its 100% owned Butcherbird Project.

Matthew Gordon talks to Justin Brown, 2nd July 2020


The aim is to produce high-quality manganese concentrate for export markets, and the strong economics within the PFS demonstrate low capital and operating costs to produce near term cashflows and fuel further growth. The company will be into production by Q2/21. However, it will need to raise some capital to achieve this objective.

What do the numbers look like?

  1. Maiden Proved & Probable Ore Reserve of 50.55Mt at 10.3% Mn containing 5.22Mt Mn (4.28Mt Recoverable Mn).
  2. Pre-tax NPV8 of Nominal A$441M.
  3. IRR of Nominal 255%.
  4. Low CAPEX of A$14.5M plus A$9.2M working capital.
  5. Average annual operating cashflow of A$32.1M for years 1-5 in the staged approach.
  6. Simple payback period 6-months from the start of operations.
  7. Full beneficial production scheduled for next financial year.
  8. 42-year life-of-mine.
  9. Annual production and sale of 312,000tpa of medium-grade lump manganese concentrate grading 30-35% Mn.
  10. ‘Complements and enhances the plan’ to develop and Electrolytic Manganese Metal (EMM) plant.

Some encouraging numbers for what is the fastest-growing segment of the manganese market: medium-grade. If phase 1 of the company’s operations is successful, phase 2 will be “just around the corner.” I like phased approaches and early production, because it enables companies to prove a route to market, providing confidence to shareholders, and also to partially or wholly finance developments and optimisations out of cash flow rather than relying on constant dilutionary fund raises in the market. It doesn’t always work but when it does the effect is powerful.

While manganese producers may choose to push the hype surrounding the EV revolution, the primary use of manganese is in stainless steel; in fact, one can’t make stainless steel without it. Stainless steel demand is projected to continue rising and that can only be good news for Element25.

Element25 recently completed a long awaited royalty sale agreement with Canada’s Vox Royalty Corp (CVE:VOX) for a total consideration of A$500,000. Brown claims to have had other options, but he’s happy with the deal; it has given the company a nice boost for working capital purposes. In addition, Element25 has recently raised A$1 million via a controlled placement facility with Acuity Capital, in addition to the company’s RareX share sale. Element25 is now totally out of RareX.

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Now, brown needs to put the project financing in place. It remains to be seen what form this takes, with Brown claiming to be conversing with project financiers, debt facilitators, equity facilitators, off-take-related financiers, etc. Nobody is likely to finance Element25 off the back of a PFS, and a DFS looks necessary to secure anything meaningful. Handily, Element25 has A$5M in the treasury. The company will need to raise money later this year, but it is in control of the timing at this point: a crucial consideration.

The “PFS+” has significantly de-risked the technical side of the Butcherbird Project. The detailed engineering is occurring right now, and only small issues are cropping up. Things look to be running on track. The investment community is beginning to see Element25 as a genuine potential producer.

There are lots of details still to iron out, and the market will be watching to see if Brown and his team can deliver this manganese resource in the accelerated time scale proposed.

What did you make of Justin Brown and Element25?

Company Website: https://www.element25.com.au/site/content/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Canada Nickel (CNC) – High-Grade adds more Excitement to Bulk Production Story.

Canada Nickel Co Inc.
  • TSX-V: CNC
  • Shares Outstanding: 57M
  • Share price C$0.93 (02.07.2020)
  • Market Cap: C$52M

Interview with Mark Selby, CEO of Canada Nickel (TSX-V: CNC).

The difference between good investing and great investing is timing.

The Canada Nickel story has impressed us so far. In just 6-months, nickel-veteran Selby turned the Crawford Nickel-Cobalt-Palladium Project into the 11th largest nickel sulphide resource globally: it has the scale that potential strategic partners will demand. The market responded, with the share price tripling in just over a month. Now, things have settled down a little, with the share price stabilising around C$1.

Selby has been involved with nickel for decades, becoming involved in nickel mining in 2001 as the head of commodity research at Inco. He joined RNC Minerals in 2010 and took the Dumont Nickel Project from an early-stage resource to a fully-permitted construction-ready, bulk-tonnage, low-grade sulphide project. Crawford is extremely similar to Dumont. All of Selby’s learnings and investment at Dumont is now being leveraged to advance Crawford in a more cost-effective accelerated timescale.

Matthew Gordon talks to Mark Selby, 30th June 2020


The EV revolution narrative has taken a hit to short-term demand and prices, but many commentators claim the long-term growth has actually been accelerated by COVID-19. Government subsidies are being discussed and implemented much more aggressively and much sooner than might have been expected.

Nickel is positioned extremely favourably. The fundamental demand that underpins the commodity is stainless steel, but nickel’s status as the largest metal by mass in the cathode of the EV batteries that will power tomorrow is the primary source of growth-related excitement. Indonesia is a big source of nickel supply, but if investors are to step back and look at the macro picture, a significant supply/demand deficit becomes apparent. As Selby remarks, there are “nowhere near enough” nickel projects in the pipeline right now. Moreover, the industrially useful by-product, palladium, and cobalt help make Crawford even more economic.

Ontario is a great mining jurisdiction with a favourable permitting process, and Selby is confident he can time the development of Crawford to hit the next nickel super cycle. Moreover, the great existing mining infrastructure in the region will cut costs and make investors even more optimistic. The community and first nations in the area have historically been very supportive of mining operations.

Canada Nickel commenced its PEA for Crawford in early-June, and there have recently been some drill results for both the East Zone and the higher-grade core in the Main Zone.

East Zone

  1. Multiple holes extend the PGM mineralization, up and downdip, on the East Zone. They exhibit a consistent grade and thickness.
  2. 1.8 g/t palladium + platinum over 4.5m core length in one hole.
  3. 2.0 g/t palladium + platinum over 3.0m core length in one hole.
  4. There are multiple intersections of nickel mineralization with more than 250m core length with a higher grade interval of 0.37% nickel and 0.3 g/t palladium + platinum over 33m core length, which is consistent with a nearby intersection.

Main Zone

  1. The first infill hole on the Main Zone has returned 0.42% nickel over 306m starting at 43m, including 0.51% nickel over 27m starting at 304m.
  2. In its entirety, the hole returned 0.40% nickel, 0.017% cobalt, 0.05 g/t PGM over 361m within the higher-grade core (which varies in true thickness from 40 to 160 m).

So, what do these numbers tell us? The potential for a higher-grade core, initially suspected when the first 4 holes were drilled, has been confirmed. It’s around 15% higher-grade than the average seen at nickel projects like Dumont. Within that, some even higher-grade shelves returned 96Mt at 0.34% nickel, and 28Mt at 0.38% that come “right up to surface.” This higher-grade zone provides Canada Nickel with a unique advantage: incremental free cash flow. This should minimise post-production dilution as much as possible.

In the last few weeks, Canada Nickel announced that it had picked up options on 5 other land packages that have “similar ultramafic” potential. Selby thinks it is about exploring the potential for multiple bulk-tonnage deposits in a large district. The company has locked up what it feels are the best targets in the region. The geophysics has been key to identifying areas with a potentially higher grade.

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Selby expects to deliver a Feasibility Study by the end of 2021, and to be in production by 2025. This is an aggressive, exciting timescale and could offer accelerated returns for astute nickel investors.

Canada Nickel has sufficient cash to complete the Scoping Study by the end of 2020, but it will need to raise between C$10-20M for the Feasibility Study. This will be raised sometime between now and year-end. The key aim is to introduce a strategic investor or large mining fund. Those onbound conversations are already well under way. The shareholder base is predominantly retail. No major mining funds are currently involved in this story, meaning there could be some serious upside that hasn’t been tapped into just yet. There is plenty of room to grow.

We look forward to the news flow during 2020. Selby has learnt from some of the mistakes he made with Dumont, and he is now focussed on hitting deliverables and adding value for shareholders. Let’s keep a close eye on this story. It could be about to get really exciting for EV/nickel investors.

What do you make of Canada Nickel?

Company Website: https://canadanickel.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Banyan Gold (BYN) – Yukon-Based Gold Reset Excites The Market

Banyan Gold Corp.
  • TSX-V: BYN
  • Shares Outstanding: 134M
  • Share price C$0.27 (02.06.2020)
  • Market Cap: C$36M

Interview with Tara Christie, President & CEO of Banyan Gold (TSX-V: BYN).

When a share price climbs almost vertically, it’s time to pay attention. Christie is well-spoken and extremely smart. This is an encouraging junior gold story, but what makes it stand out from the densely packed crowd of junior gold explorers?

Banyan Gold Corp., founded in 2010, is a Yukon-based gold explorer and developer. The company’s focus in on advancing 2 gold properties, the Hyland Gold Project and the Aurex-McQuesten Gold Project.

Let’s start with Hyland. Christie inherited this project when she joined in 2016. And she tried to make it work. With hindsight, possibly her only bad call. The 43-101 Technical Report, announced on May 25th, indicates a mineral resource of 8.6Mt at a grade of 0.85g/t Au eq for 236,000oz gold equivalent with an inferred mineral Resource of 10.8Mt at a grade of 0.83g/t gold equivalent: 288,000oz Au eq at a 0.3g/t Au eq cut-off. The Resource is open at depth and in all directions. The majority of Hyland’s potential is derived from the appositely named ‘Main Zone.’ The issue with Hyland is that the market was expecting more and did not react well when the numbers came out. Christie says the changing gold environment may mean that Hyland becomes interesting again at some point, and they are looking at ways to sell or off-load it. They have minimal obligations on the project. I’d suggest for now that investors attribute no value to this for now.

Matthew Gordon talks to Tara Christie, 2nd July 2020


However, the main focus going forward will be the 9,230 ha Aurex-McQuesten Property, is situated in the Mayo Mining District in close proximity to both Victoria Gold’s Eagle Project and Alexco Resources’ Keno Hill Silver District. That’s some favourable geological potential right there. Banyan Gold believes that Aurex-McQuesten is highly prospective (we’re used to hearing that word from every gold junior on the planet by now though). The orebody appears to contain structurally controlled, ‘intrusion-related’ gold-silver mineralisation, which is in relation to the ‘Tombstone intrusive suite.’ There are numerous gold targets at the property, including the ‘Airstrip’ Gold Target, which Banyan has developed a mineralisation model for. The transportation infrastructure around this target is strong; it is located adjacent to the main Yukon highway and is just off the main access road to the Victoria Gold open-pit. Moreover, the power infrastructure is equally strong, with a 3-phase powerline and Yukon Energy Corp. switching power station providing all the energy the company needs to push forward. There’s even good cell phone coverage… For a location like Yukon, which is often viewed as remote, this infrastructure appears to be quite unique.

Banyan Gold Corp. has C$1.1M in cash, but it has also issued a variety of warrants that investors have indicated they will be exercising. This should be another C$300,000 coming into the treasury. A further C$1.6M could come in if ALL of the warrants were to be exercised. The uptick in the last few weeks is attributed to Christie’s marketing efforts; the company has been getting the story out there to new investors while reminding existing investors of the value proposition. Many CEOs could learn a thing from the storytelling strategies of Christie because they’re working. While junior exploration investment isn’t necessarily attractive right now, Banyan Gold is an attractive proposition in its own right and investors are realising this, with trading volumes reaching 15M shares in 3-weeks: a remarkable figure considering only c. 131M shares have been issued, Moreover, institutional investors, such as Sprott, hold large stakes in Banyan Gold, further emphasising the amount of retail interest in this stock for such volumes to be achieved with less of the pie.

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Banyan Gold has announced a 1,500m phase 1 diamond drilling exploration programme on the Aurex-McQuesten Property. The company has a “very low” overhead and the majority of the company’s money will go into the ground. If additional funds are to come in, it would see Banyan Gold through to September with an upsized drill programme. The company has no problem drilling 10,000m this year.

Christie is the daughter of a PhD-holding structural geologist. She has spent most of her life conducting exploration work, sitting on an environmental assessment board, running a consultant business and running a large-scale mining operation in the Yukon. Remarkably, in her 20s, she took charge of the entire operation, helping the company through some very “lean” gold years. She has certainly earned her stripes and is an expert on the Yukon permitting process. These are safe hands. A private-sector background has enabled Christie to learn the importance of frugality.

The company stands out from the crowd because of the favourable mining jurisdiction, strong management track record, large institutional ownership, existing infrastructure, and, above all else, a promising gold deposit. I’ll be keeping my eye on this year’s exploration programme, hoping for favourable results.

What did you make of Tara Christie?

Company Website: https://www.banyangold.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Cobalt Investors Eye Up Bottom of Market – #2 Joe Kaderavek

Conversation with Joe Kaderavek, CEO of Cobalt Explorer and Developer, Cobalt Blue Holdings (ASX: COB).

COVID-19: an “accidental catalyst?” Joe Kaderavek is a cobalt expert who has established himself through years of work engineering, investment banking, hedge fund operations and as CEO at advanced cobalt developer, Cobalt Blue. His company is aiming to deliver the largest greenfield supply of cobalt in the world to the market: 4,000t of Australian cobalt equivalent. In this interview, we discussed the wider cobalt macro story. COVID-19 has reduce short-term EV demand in China but purchasing has picked up thanks to the Chinese government reintroducing the automotive incentives it had removed prior toCOVID-19. , and all battery metals investors are aware of this. However, what is the long-term prognosis?

Interestingly, Kaderavek thinks there is a huge disconnect in market sentiment between what is a very positive long-term cobalt/battery materials demand story vs a very negative near-term story plagued by cobalt demand destruction and oil price decimation. He’s never seen such a gap before.

Matthew Gordon talks to Joe Kaderavek, 1st July 2020


During this COVID-19 period, there has been an acceleration of trends that were already in place. An example of these trends involves decarbonisation on the renewables side. While there have been no new radical government policies or company behaviours as a result of COVID-19, there are a number of “crossover points” where economics favour the battery outcome. Moreover, a number of policies have been reinstated at a much more aggressive level that could further accelerate this transition.

There has been reduced energy demand this year because of the coronavirus. As a consequence, energy prices have fallen, and some of the incumbent coal has been forced out by cheaper solar and wind power. In fact, for the last 2-months, Britain has been running on ZERO coal. In the US, it is predicted that this will be the first year in history that more power is generated from renewables (minus nuclear) than coal. This crossover point happened last year and has been accelerated by COVID-19. Wood Mackenzie estimates that by the end of the decade, solar and battery will become the lowest-cost peaking power sources in the world. Consumers, producers and funds have all started to focus on the ethicality and environmental friendliness of their supply chain, leading to a wave of momentum in the green energy space.

The scale of EV subsidies is currently so enormous that the purchasing price of mass-market vehicles is becoming “decidedly in favour of an EV purchase.” In Germany, there have been discussion pertaining to a €9,000 subsidy on vehicles up to €40,000. This is an enormous deduction: nearly 24%. The Germans are also considering mandating EV infrastructure at every gas station as part of government policy. It is an overwhelmingly positive idea, though it’s perhaps somewhat unrealistic. The UK government is discussing the potential of offering a GB£6,000 incentive for consumers to convert from an ICE vehicle to an EV. The French have earmarked €8Bn, largely to bail out the automotive industry. €5Bn is being allocated for Renault, and the government will use taxpayer money to develop its vehicle infrastructure into greener ICE vehicles and EVs. COVID-19 is causing countries to make positive decisions that otherwise may have taken several more years to occur. EV investors might be feeling a lot more bullish right now.

Right now, Kaderavek claims that COVID-19 hasn’t really changed Cobalt Blue’s plans; the company’s production philosophy involves a protracted data process of qualifying the company’s cobalt for tomorrow’s EVs, and this is proceeding forward as planned. A new EV takes 4-5 years of engineering and design to get into production, and it takes 2-years to pre-qualify a battery into specific EVs. For upstream players like Cobalt Blue, the company is currently being “tapped for interest” to pre-qualify right now, before eventually pre-qualifying for a specific battery type. For example, the 500,000 unit initial deployment of the Chevrolet Bolt in Europe has involved significant programmes with long lead times. Therefore, for upstream cobalt players, COVID-19 is nothing more than a blip. This is a long-term value proposition and investors need to settle in for the long haul. Contrastingly, copper and zinc, which are sold at a low value into a very liquid market for a variety of applications, have experienced completely different levels of difficulty because of COVID-19.

Investors need to be aware that no one technology will be the winner. Even in the cobalt vs no-cobalt battery space, there is room for both battery times. The LFP (non-cobalt) battery has a certain niche, especially in China, with a lower energy density and a cheaper price. The high-nickel market will also have its own mass-market in a longer range style. In terms of energy storage, a lithium-ion battery doesn’t necessarily have that many advantages, and flow batteries could come into play. There are enough niches and different technologies out there to guarantee that there is no vanilla solution to the energy needs of tomorrow. Do your research on the niche as well as the material you are looking at. Moreover, keep in mind that demand can often be overhyped; this has been exemplified by past expectations being unfulfilled: the EV industry was switched off in China! Be prepared to test the thesis. What happens if the artificial incentive of subsidies is taken away? Will demand remain in place? Is falling battery costs a catalyst on the upside? Carefully consider the risk factor and DO NOT be blinded by the long-term growth rates.

Right now, the short-term effects of COVID-19 are largely applied to price. The long-term picture is still exciting and positive, and investors should remain encouraged.

What did you make of Joe Kaderavek?

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Pure Gold Mining (PGM) – Exciting Gold Story that is Nowhere near its Peak

Pure Gold Mining Inc.
  • TSX-V: PGM
  • Shares Outstanding: 384M
  • Share price C$1.7 (01.07.2020)
  • Market Cap: C$652M

Gold investors want to see gold producers striking while the iron is hot. Pure Gold Mining claims that it is 32-weeks away from commencing production: ‘We’ll pour gold before Christmas.’ This is an exciting, high-grade gold story. Time for another re-rate?

Pure Gold Mining: a Canadian gold development company aiming for production by the end of 2020. Pure Gold Mining’s share price has skyrocketed in the last few months; recently, it looks more like a Tesla stock chart than that of a gold producer. Clearly, the market is appreciating the imminent high-grade gold production after years of slow progress.

Let’s get straight into the asset. The single focus for Pure Gold Mining is on building Ontario’s next major gold mine. The PureGold Red Lake Mine is a high-grade, underground mining operation that has an impressive production rate of 800tpd. An encouraging Feasibility Study was released in February 2019, outlining a 12-year underground life-of-mine (LOM). Pure Gold Mining made a construction decision in August 2019. Let’s expand on some of the excellent economics:

  1. CAPEX fully-funded.
  2. AISC is just US$787/oz. WOW.
  3. The average gold grade is a huge 9g/t, making the PureGold Red Lake Mine the highest-grade development stage gold deposit in Canada today.
  4. It will also place the project in the top 5 grade in Canada: 17th in the world.
  5. The NPV (5%) is US$390M with a 51% IRR and $1.9Bn revenue.

Amazingly, these impressive figures have been calculated at a low US$1,500/oz gold price. With today’s price of over US$1,700/oz gold, the operation could become even more profitable. This is a tier-1 project in a tier-1 mining jurisdiction. In fact, considering the company was founded by Oxygen Capital, it appears to have a tier-1 team too. This is all very exciting, but once phase 1 is concluded, what do investors have to look forward to in phase 2? How will Labrenz deliver growth and accretive value throughout the lifecycle of the resource?

Matthew Gordon talks to Darin Labrenz, 30th June 2020


Phase 1 is to get into early production for cash, as Labrenz sets out on his mission to turn Pure Gold Mining into ‘Canada’s next large-scale, iconic gold producer.’ The technically proficient team is confident it can achieve this with minimal fuss. It’s a consistent orebody that has already been significantly de-risked with 1.3M meters of drilling.

Phase 2 will involve expanding the resource. The orebody persists at depth, and Labrenz is confident it has more to give. It’s nowhere near its peak yet. The brownfield 42km2 land package has a huge mineral system. A structural mineral corridor that bisects the property runs for 70km. There is immense potential at the existing discoveries, and new discoveries in the South provide a further sprinkle of excitement. There are numerous high-grade zones that are soon to be drilled, including the 20-30g/t highly-accessible ‘8 Zone.’ Pure Gold has just initiated a 50,000m drill programme over the next 18-months that aims to convert resources to reserves in the footprint of the phase 1 mine. The next step will be to grow at surface resources and de-risk them. Ultimately, the productivity of the mining centres, and their ability to deliver into a decentralised milling facility, will become the preeminent focus, as Labrenz sets about delivering a high-grade gold mining ecosystem. In the long-run, he expects to more than double the resource. Impressive.

Moreover, eventual M&A opportunities could be aided by the cash flow from getting the PureGold Mine up and running; it will significantly enhance the company’s optionality. Labrenz is far too smart a cookie to allow Pure Gold Mining to remain a single-asset gold player forever, and while he is coy on what exactly he plans to do regarding potential land package acquisitions, it seems clear that once phase 1 and 2 are dealt with in their entirety, there is more to explore. For now, the company has more than enough on its plate and needs to demonstrate it can execute its phased approach properly.

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The company has US$150M available in funding, and US$86M remaining capital expenditure to complete mine construction. This should be more than enough to carry the company through to full production in Q1/21 next year whilst it completes the aggressive exploration process.

Moving forward, Labrenz will continue with his attempts to drive liquidity into the stock as the company evolves through its phased approach and aims to take its spot on the GDXJ.

These are exciting times for the company and for shareholders. The high-grade potential is undeniable, and its being delivered in a systematic, logical fashion. This could be an exciting long-term hold, through investors may want to consider acting now if they want an optimal margin.

Company Website: https://puregoldmining.ca/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Parallels with Last Uranium Cycle Mean Consolidation – #12 Brandon Munro

Brandon Munro, Uranium Market Commentator and CEO of Bannerman Resources (ASX:BMN) calls in for our weekly catch up about the world of Uranium and Uranium investing.

Munro is back. What did we cover this week?

Matthew Gordon talks to Brandon Munro, 22nd June 2020.


New Entrants

Right now, there is a new wave of entrants into the uranium space. Uranium juniors now have a vastly enhanced ability to get financed. These companies have questionable levels of experience and uranium expertise, alongside assets that might not cut the mustard.

One important thing for investors to pay attention to is the current influx of names involved in the uranium space, particularly in Australia. We’re currently seeing some uranium “tragics” bringing product to the market. In addition, there are some big name promoters and brokers, who feature across the entire spectrum of commodities, that are positioning themselves firmly in the uranium space. They are putting their energy into backdoor listings and startups.

On the one hand, this paints the uranium market in a very good light; everyone is interested in uranium right now. However, this increased array of uranium choices carries with it an increased risk. Now, more than ever, investors need to determine how to exercise these new opportunities wisely.

An important component of these new entrants will be their promotional material.

A Necessary Evil

Some of the assets that companies are flouting as flagships right now don’t stack up. Moreover, the skillset needed to get the best out of these assets is extremely rare. If investors aren’t careful, they can be left with an unfinanceable asset in a dodgy mining jurisdiction with clueless leadership at the helm.

While over-promotion is always going to be quite distasteful, promoters themselves still have a critical role to play in the uranium renaissance. To spark price discovery, and to act as a catalyst for excitement in the space, uranium companies need to be rigorously communicating their story to the market. Many have been starved of capital for years, and the cost of capital means that some companies have no way forward. If uranium companies want to develop into stock winners for shareholders, they’ll need to whet the market’s appetite.

U.S. Initiatives For SMRs.

90% of current U.S. initiatives are focussed on the downstream; specifically, SMRs and the competitiveness of conventional reactors within the nuclear supply chain. It will be interesting to see what the government has up its sleeve for the front end in the coming weeks, as American uranium miners look on in anticipation. The current initiatives combined are only a drop in the ocean in a sector crying out for subsidisation. We’ll be delving into the details of SMRs in a coming interview and article.

Uranium Price Volatility Inbound?

As we approach the end of the quarter, Munro is predicting that volatility is around the corner for the uranium price. Right now, it is stagnant with low trading volume. This lack of volume means that single major players can have a large impact on the behaviour of the market. Kazatomprom’s and Cameco’s strategies are likely to become even more significant in the coming weeks. Both have spoken the language of de-stocking, but Kazatomprom’s track record may have investors believing otherwise.

Kazakhstan – Big News For Uranium Investors

Two of Kazakhstan’s senior members of government have contracted COVID-19. These individuals also happen to be integral to Kazakhstan’s uranium industry. What does this mean for the ‘3-month’ suspension of production for Kazatomprom?

For the first time, this is a clear indication that the chance of an extension is significant. Kazatomprom has already previously remarked that it has no intention make up any of the pounds lost from its existing shutdown, but an extension could further tighten the inventories of utilities, sparking a long-term uranium price rise. Uranium producers will be reluctant to return to normal operations whilst such events are unfolding.

Moreover, the health situation in general across the country is showing signs of deterioration. Kazakhstan will impose a two-day lockdown in the northern city of Kostanay and four nearby towns next weekend after a jump in fresh COVID-19 cases. While countries across the world are beginning to ease their lockdowns, Kazakhstan is in the midst of a second wave: a more protracted crisis, which is terrible for human life but favourable for increased uranium prices. There have been numerous new shutdowns and measures which will lead to a curtailment of all forms of activity by this weekend. This appears highly likely to be extended. Are you feeling bullish yet? The existing supply/demand deficit is growing larger by the day, as the missing pounds creep up. The only thing missing is a lack of clarity on how exactly this will impact the price of uranium equities.

The longer the shutdown goes on, the more recovery rates will fall for Kazakhstan’s uranium projects. The amount of deliverable uranium will be tapering rapidly, both for Kazatomprom and its JV partners. The market has not yet felt the crunch of the initial 3-month suspension, but it will be beginning to feel it now. Further shutdowns will have a cumulative effect. This will not cause contractual/commercial issues, but could also shift the sentiment of utility companies that, until now, have been biding their time.

What did you make of Brandon Munro this week? Which topics would you like us to cover next week? Comment below and we will respond.

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Valaurum, Inc. – A New Gold Currency?

Interview with Adam Trexler, President and Founder of Valaurum, Inc.

Valaurum is a private gold technology company that sells the ‘smallest verifiable unit of gold available on the world market,’ the Aurum®. Valuarum has patented nanotechnology that allows them to spray gold onto a film in different denominations (US$3-US$150), with the goal of making gold investment and ownership accessible to everyone, putting gold into a transactable form.

The team is strong. It features a former director of the US mint, Edmund C. Moy, as an advisor, alongside Director, and former GC of the Department of Homeland Security, John M. Mitnick. There are plenty of people formerly from the U.S. treasury onboard too.

Matthew Gordon talks to Adam Trexler, 27th June 2020

Aurum® itself is a thin layer of gold or other precious metal sandwiched between layers of protective polyester. it is easily storable, transportable and collectable. The long-term goal is to make Aurum® an everyday currency for consumers on the high street. This might not be as far away as one might think, given that Valuarum has already had conversations at the federal bank level, as the company climbs the chain of credibility. Not bad for a small company. Ghana is in discussion about issuing legal tender Aurum® notes. Aurum® can be purchased as a true monetary instrumental or a bullion product.

Aurum® is not currently sold as a definitive denomination. It is sold in terms of weight of gold contained. This helps avoid any regulator issues with banks and regulatory authorities. There are private mints throughout the world, and Valaurum is simply a private mint that has a proprietary technology. Any regulation, therefore, falls under minting law.

How does the patented process work? First, the company takes very long rolls of polymer film and puts them into a vacuum. Then, Valaurum sprays individual gold atoms that it builds up on the film. Therefore, the company is allowed to control exactly how much gold is put down at a level that far exceeds a conventional foil. The entire gold laminate is structured in 3D, making the notes extremely difficult to counterfeit. Valuarum continues to make “huge” investments into anticounterfeiting. Coins are a “2000 old technology that struggles with authentication;”. The process of authentication in the US is being established, and requires individuals to take their Aurum® to a local coin dealer. However, outside of the States, it’s still a little complicated.

Trexler expects any potential competitors to find it extremely difficult because his company has a “huge first-mover advantage.” The large barriers to entry could put off some.

Valuarum is currently raising US$1M via direct investment to continue to fund the company’s research & development and continued market expansion. Secondly, the company is looking for a “major partner” who will finance a US$2.5M factory expansion; this will “quadruple production output” while reducing costs. Trexler runs a very tight ship on what is essentially a margin product. It’s a battle of balancing production capabilities against gradually increasing demand. The company has been growing within the limitations of it budget and learning the ropes. We are looking for signals of aggressive plans, but this seems to be hampered by the need to operate in the confines of the regulated market.

Eventually, licencing the technology to existing mints will form part of the overall business strategy. in 10-years, Texler expects major mints to want the technology. The battle thus far has been demonstrating market demand & acceptance, and learning how to scale such an idiosyncratic technology. He believes the company is winning the conversation of being a serious mint that is offering a product that consumers will accept.

Trexler is approaching this whole thing cautiously. He is taking his time and is avoiding making any critical errors. How will Valaurum continue to develop? Trexler has got this company off on the right foot, but it will be very interesting to observe how the market grows over the next few years and whether Valarum is able to secure high-profile and profitable deals

What did you make of Adam Trexler and Valaurum Inc? Comment below and we will respond.

Company Website: https://valaurum.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.