Size Does Matter: We Want Small

...and how Rick disagrees

Dear Contrarian,

This is The Next Big Rush, a daily newsletter to keep you informed less confused about the world of mining/energy investing. Where we come together to make sense of the nonsense.

Here's today's sip:

  • Uranium developer wants to raise C$250m

  • ASX Junior Hits Lithium At Surface

  • Size Does Matter: We Want Small

Uranium Developer Wants to Raise C$250m

Nexgen Energy Ltd. (TSX: NXE) has established an ATM equity program. The company said it is doing from now until January 29th, 2025, or as the total amount is reached, whichever comes first.

The Company said it intends to use the funds for continued development and further exploration of its projects, and for general corporate purposes.

Some Twitter folk are thinking this smells like an M&A is on the cards.

The Editor is very, very doubtful.

Here's some unsolicited half sober opinion:

Most obvious M&A move would be to acquire neighbour Fission Uranium. Despite the animosity between the two companies, even if it were to be done, Fission Uranium is a C$600m co. Not enough dough.

Next up could be.... ISO Energy?

At C$320m, also too expensive.

What's left that would move the needle? 🤷🏻‍♀️

ASX Junior Hits Lithium At Surface

In the James Bay province of Quebec, Winsome Resources (ASX: WR1) recently hit a very interesting lithium interval within its Adina project.

Here's the highlight reel:

⛏ A total of 159.7 meters of mineralization found in two separate zones.

⛏ The first zone, starting at 2.3 meters down the hole, (that's as deep as one basketball player, for those wondering) yielded 107.6 meters of 1.34% lithium oxide. (This included intervals of 20.7 meters at 1.52% and 30 meters at 2.21%.)

⛏ The second zone, located at 124.9 meters down the hole, produced 52.1 meters of 0.7% lithium oxide, including 30 meters at 1.08%.

The stock went up an aWinsome 30% on the day.

We're raising a drink to that!

Size Does Matter: We Want Small

If you're a religious disciple follower of mining loan shark financier and gazillionaire Rick Rule, you've heard the saying:

"Go for Tier One deposits (read: big). Everything that can go wrong with a Tier One deposit can and will go wrong with a Tier 2 or 3 deposit, which may be fatal if the project isn't large enough"

Rick Rule

Well, Minera Alamos (TSX.V: MAI) just filed a PEA on gold project Cerro de Oro which shatters this concept.

Their strategy is to recuperate older mines, put them back into production for the cost of a Starbucks coffee with a muffin, and spread the risk out on a few different ones in the same jurisdiction: Mexico.

The result? At $1600 gold...

Capex of under C$30m,

IRR of 111%

NPV10 (!) of C$115m

We like it. We like it very much.

If you are enjoying this free newsletter, please forward it to a fellow investor. You will instantly get street cred points. Don't believe us? Try it.

Go easy on the 🍷 tonight, you have a failing New Year's resolution to maintain!

The Editor

P.S. We ❤️ Rick Rule

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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